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Jet fuel prices are rising to levels not seen since before the Covid pandemic and it’s set to drive up airfares, United CEO Scott Kirby said Wednesday. “Higher jet fuel prices lead to higher ticket prices,” Kirby told CNBC’s “Squawk on the Street.” “Ultimately, we’ll pass that through.” United forecast average fuel costs of $2.39 a gallon in Q4, when it expects a surge in bookings from the end-of-year holidays and recently loosened international travel restrictions. That’s up from $2.14 a gallon in the third quarter and the $2.02 on average it paid in the fourth quarter of 2019. Kirby said higher demand usually drives fuel prices up. The increase in travel is a welcome trend for an industry that continues to struggle to return to profitability. Kirby credited United’s relatively conservative capacity additions in the last few months when asked why the carrier didn’t have the mass cancellations that have hit competitors, such as Southwest last week. “We didn’t get out over our skis,” he said on a call with analysts and reporters on Wednesday. Kirby also said the Biden administration’s vaccine mandates could pose a risk to the operations of some of its rivals. United says that more than 96% of the company’s staff is already vaccinated against Covid-19 after it implemented its own mandate in August, which put employees at the risk of losing their jobs if they didn’t comply or get an exemption.<br/>

United is looking ahead to a time when international profits are more lucrative than in the past even as numerous national borders remain closed more than 18 months into an unprecedented pandemic. The airline is focusing all of its expansion next year outside the U.S., with plans to boost international capacity by 10% mostly by adding new routes and frequencies to Europe, the Middle East and Africa. Growth in the US, which United described as imbalanced in terms of seat supply and demand, is expected to be flat. “We expect the Atlantic and the Pacific to significantly outperform the domestic market for many years to come, which will turn our current geographic disadvantage during Covid into a sustainable long-term advantage for United’s global network,” CEO Scott Kirby said Wednesday. Andrew Nocella, United’s CCO, said United has a “structural advantage” over other airlines due to its strong presence in international gateway cities such as New York City, San Francisco and Washington, D.C. “In some respects we’re uniquely able to do it as a U.S. flag carrier and we’re going to take advantage of it.” United has the largest international footprint of the Big Four U.S. airlines, and the smallest domestically. The company said traffic across the Atlantic and Pacific remains more than 20% below 2019 levels, while domestic U.S. and Latin American travel has returned to 70%-90% of prior traffic. <br/>

United said Wednesday its Boeing 777-200 planes equipped with Pratt & Whitney engines are expected to return to service as early as in Q1 2022. The carrier had to ground the wide-body jets after a United flight to Honolulu suffered an engine failure and made an emergency landing in February in Denver. The US FAA ordered immediate inspections of Boeing 777 planes fitted with Pratt & Whitney PW4000 engines after the incident. On Wednesday, the regulator said it is still evaluating the manufacturers' proposed fixes and will not approve them until it is satisfied that they address its safety concerns. "Any work performed on the airplanes prior to that time is subject to being affected by any new Airworthiness Directives," the FAA said. Greg Hart, United's executive vice president, strategy and planning, said the company has not heard from the FAA, but it expects the aircraft to return to service in Q1 next year. "We have been working tirelessly with Boeing, Pratt & Whitney and the FAA over the past six months," he said.<br/>

Lufthansa and British peer easyJet on Wednesday gained backing from Europe’s second top court for their acquisitions of insolvent German carrier Air Berlin’s assets four years ago. Lufthansa received the EU green light from the EC in 2017 to buy Air Berlin’s subsidiary LGW in return for giving up some slots at Duesseldorf airport. In another deal, EasyJet secured unconditional clearance from the EU competition enforcer for the E40m ($46.5m) deal in 2017, which included some of Air Berlin’s operations at Tegel airport, leases for up to 25 A320 aircraft and about 1,000 of Air Berlin’s pilots and cabin crew. Polish rival LOT subsequently challenged the EU executive’s decisions at the Luxembourg-based General Court. “The General Court dismisses the actions of Polskie Linie Lotnicze ‘LOT’ against the Commission decisions authorising the mergers concerning the acquisition by easyJet and Lufthansa, respectively, of certain assets of the Air Berlin group,” judges said. LOT can appeal to the EU Court of Justice (CJEU) on points of law.<br/>

Air New Zealand says its runway to recovery for international travel will begin in November with the resumption of flights from Sydney to Los Angeles via Auckland. Air New Zealand suspended the service last year when the spread of Covid-19 caused international travel to collapse. The national carrier said the flights would begin on November 5 as one flight a week before increasing to four flights a week from December 1. The announcement came days after authorities in Australia said vaccinated overseas Australians would be able to travel to Sydney from November 5 without having to enter managed isolation and quarantine. Fares are already on sale with a one-way flight from Sydney to Los Angeles on November 5 costing A$1272. A non-stop Sydney-Los Angeles flight flying Qantas on the same day costs A$1393. The flight, serviced by a Boeing 787-9 Dreamliner, has a three-hour transit at Auckland International Airport. All up the flight takes 18 hours. Air New Zealand chief customer and sales officer Leanne Geraghty said the resumption of the flights was a major step towards the airline reopening to the world. “While there hasn’t been a day we didn’t fly, most of that flying has been keeping cargo moving around the world, so it’s incredibly exciting for us to welcome more customers back on board,” Geraghty said. Customers would need to ensure they meet United States entry requirements, including being fully vaccinated from November 8. Aviation consultant Irene King said the Air New Zealand flights would appeal to money conscious travellers who did not mind spending three hours in transit.<br/>