general

Russia sanctions snarl flights, compound airline industry woes

Airlines are bracing for potentially lengthy blockages of key east-west flight corridors after the European Union and Moscow issued tit-for-tat airspace bans and Washington did not rule out similar action in response to Russia's invasion of Ukraine. Industry officials say the Biden administration would ban Russia from US airspace. The White House said on Monday while barring Russian flights was not off the table, it had yet to make a decision. "There are a lot of flights that US airlines fly over Russia to go to Asia and other parts of the world and we factor in a range of factors," White House spokesperson Jen Psaki told reporters. The issue has been a subject of intense US government discussions in recent days. Senator Dick Durbin, the second-highest ranking Democrat in the US Senate, voiced his support for the ban. "Other countries have done it in Europe and turning the lights out at the airport on those guys isn't a bad idea," he told reporters. A European official, who asked not to be identified, said the EU had full confidence Washington would follow suit. US Representative Carlos Gimenez, a Republican member of the House Transportation and Infrastructure Committee, said on Twitter that he would file legislation this week to ban Russian-operated airlines and private jets from flying in US airspace. A move by the White House to ban Russia's carriers is expected to provoke a response from Moscow, which could affect carriers like United Airlines. The Chicago-based carrier, for example, uses Russian airspace for flights from Delhi. Russia on Monday banned airlines from 36 countries including all 27 members of the European Union after EU ministers agreed to refuse entry to Russian airplanes including the private jets of the country's oligarchs.<br/>

EU airspace ban to Russia has bent aviation rules - Italy's Civil Aviation Chief

The closure of EU airspace to Russian airliners has been decided without respecting international aviation rules, the chairman of Italy’s Civil Aviation Authority ENAC said on Monday. The comments appeared to be one of the first signs of differences in European ranks since the airspace ban was announced on Sunday, but a European official said the decision was lawful. ENAC Chairman Pierluigi Di Palma said the Ukraine crisis brought European countries to decide in favour of the ban in violation of the international procedures. He did not specify what the violations were. “...We see international treaties being violated to some extent with respect to the airspace ban decided by the West against Russia,” Di Palma said. Di Palma said that the airspace ban decided by the European Union and applied by Italy had bent both bilateral treaties and the rules of United Nations’ aviation agency ICAO. “EU sanctions are carefully crafted in line with international law. EU is fully confident of full legality of the measures and their effectiveness,” a European official who asked not to be identified told Reuters. ICAO, whose origin derives from the Chicago Convention in 1944, sets standards for aviation globally.<br/>

US yet to decide on barring Russian flights, White House says

The Biden administration has not made a decision yet on whether to follow the European Union and Canada in barring Russian flights, White House press secretary Jen Psaki said on Monday. “There are obviously a range of options that remain on the table. So, it’s not off the table,” Psaki said. “There are a lot of flights that U.S. airlines fly over Russia to go to Asia and other parts of the world and we factor in a range of factors,” she added. <br/>

European sanctions could strand leased planes in Russia

Western sanctions meant to punish President Vladimir V. Putin of Russia for invading Ukraine may have also dealt a big blow to European companies that leased commercial aircraft to Russian airlines. The majority of commercial aircraft flown by Russian companies are leased, more than half of them from companies abroad. Most of those companies are based in Ireland, a member of the European Union, which banned the sale or leasing of aircraft to companies in Russia as part of its sanctions package. At stake is the fate of hundreds of planes worth an estimated $12b, according to Ishka, a consulting firm that specializes in the aviation industry. Those based in Ireland are particularly exposed, with $4b to $5b worth of aircraft in Russia, it said. The sanctions give companies leasing the planes until March 28 to terminate existing contracts, the Irish government confirmed on Monday. But getting the planes back won’t be easy. The repatriation of leased planes is normally planned years in advance. Airlines in Russia may not cooperate or may be ordered by Putin’s government to throw up obstacles. Another challenge is that Europe and Russia have closed their airspaces to each other’s planes. “The logistics are immense. We are talking hundreds of planes that need to be flown out,” said Phil Seymour, an aviation specialist with IBA, a consulting firm. He listed off the questions that the companies that own the aircraft now face. “Where in the world can they go? Will they play ball? Will there be any edict from above, telling not to cooperate?” he said. AerCap, the world’s largest leasing company for commercial aircraft, said on Monday that it would fully comply with sanctions requiring it to cease leasing planes to Russian airlines. Based in Dublin, AerCap is likely to be the company most heavily exposed to the sanctions, with 152 planes valued at nearly $2.5b in Russia and Ukraine, according to IBA. Nine other leasing companies based in Ireland also have planes in Russia. <br/>

Hundreds of Russia plane leases to be axed after Western sanctions

Aircraft leasing firms are set to terminate hundreds of leases with Russian airlines following Western sanctions over the invasion of Ukraine here that give the sector a month to act. Dublin-based AerCap, the world’s biggest aircraft leasing company, saw its New York-listed shares tumble 12.7% after it said it would cease leasing activity with Russian carriers, while U.S.-based Air Lease fell almost 8%. Russian airlines have 980 passenger jets in service, of which 777 are leased, according to analytics firm Cirium. Of these, two-thirds, or 515 jets, with an estimated market value of about $10b, are rented from foreign firms. AerCap said that by net book value, 5% of its fleet was leased in Russia as of Dec. 31. The company, which recently strengthened its leadership of the specialist aviation leasing industry by buying rival GECAS, has the largest exposure to Russia and Ukraine with 152 planes, consultancy IBA said. Its Russian clients include Aeroflot, S7 Airlines, Rossiya, Azur Air and Ural Airlines, its website showed, involving aircraft worth an estimated $2.5b, according to aviation services firm ACC Aviation. Leasing companies control about half of the world’s fleet and are a vital source of financing for airlines that lack sufficient capital to buy or prefer to pay a monthly rent. The European Union on Sunday gave leasing companies until March 28 to wind up current rental contracts in Russia, presenting lessors with a major new headache hard on the heels of crises over Boeing 737 MAX safety and the COVID-19 pandemic. Russia warned the West it would retaliate against sanctions targeting its aviation industry. Bankers have said Russian airlines have been among the most reliable in paying bills during the pandemic, but leasing companies face the prospect of having to abruptly wind up deals and recover aircraft in an uncertain climate post-sanctions.<br/>

US to extend international minimum flight requirement waivers over COVID

The United States government on Monday proposed extending temporary waivers of international minimum flight requirements at some U.S. airports through late October due to COVID-19. Airlines can lose their slots at some congested airports if they do not use them at least 80% of the time. The waivers have been in place since the pandemic began in March 2020. International passenger air travel in 2021 was down 46% to 61 million over 2019 levels, but up over the 34 million international air passengers in 2020. The FAA said it proposed extending temporary waivers of the requirements at New York’s John F. Kennedy International Airport and LaGuardia airport and Ronald Reagan Washington National Airport that were set to expire in October after petitions from airlines. At four other US airports where the FAA has a formal schedule-review process - Chicago O’Hare, Newark in New Jersey, Los Angeles and San Francisco - the agency proposes to extend credits to airlines for flights that were canceled in the pandemic as though those flights were operated. The FAA said "based on global vaccination rates, changing infection rates and the threat of new virus strains, continued unpredictability of travel restrictions, and the disparity between demand for domestic air travel and demand for international air travel, extending the current limited, conditional waiver for international operations by all carriers, is reasonable." The government said that American Airlines, Delta and United submitted a joint petition to "urgently request continued relief from standard international slot usage rules" during the 2022 summer season.<br/>

US FAA expands use of review boards in certifying airplanes

The FAA said Monday it is expanding the use of independent safety expert groups to review new designs and technologies in certifying commercial aircraft. The FAA said it is expanding use of Technical Advisory Boards (TAB) to help ensure it has a "consistent and thorough approach for all aircraft certification projects." The FAA convened a TAB soon after the second Boeing 737 MAX crash in March 2019 to assist in its review of the grounded airplane. Boeing said Monday it will continue to work transparently through the FAA's "detailed and rigorous processes ... We will continue to engage with the FAA to ensure we meet their expectations and all applicable requirements." The FAA plans to establish the boards earlier in the certification process and use them on aircraft that are largely like current models and typically referred to as derivative aircraft. The FAA has a board in place for the certification review of the Boeing 777X. The boards review numerous issues including identifying new technologies or designs "that could be catastrophic if they failed," the FAA said, and to determine "whether similar systems have caused problems on other aircraft" and to ensure the proper FAA offices were involved in the certification process. Boeing continues to face scrutiny from the FAA following two fatal 737 MAX crashes in the space of five months in 2018-2019 that killed 346 people. FAA Administrator Steve Dickson told Congress last year the agency is delegating fewer responsibilities to Boeing for aircraft certification and "demanding more transparency" from manufacturers.<br/>

Ukraine, energy prices will add to region’s travel challenges: AAPA

The Association of Asia Pacific Airlines (AAPA) warns that the Ukraine crisis and higher fuel costs will hurt the region’s airlines, which are still struggling with travel restrictions. During January, the 40 carriers AAPA tracks carried 2.7m international passengers, says the airline grouping. While this was doubled the number carried in January 2021, it was just 8.7% of the international passengers carried in January 2019, one year before the coronavirus pandemic emerged from Wuhan, China. January’s international ASKs grew 43.4% from a year earlier, and international RPKs doubled, but both metrics were well down from January 2019. January 2021’s ASKS were just 17.9% of January 2019 levels, while RPKs were just 8.9%. The international Passenger load factor for January 2022 rose 13 percentage points to 41.3%. “Travel restrictions along with uncertainties resulting from the rise in Omicron infections dampened the anticipated recovery in international travel at the start of the new year,” says AAPA DG Subhas Menon. “Nevertheless, in the light of increased vaccination rates and the relatively reduced risk of severe illness from the transmission of the Omicron variant, an increasing number of Asian governments have since adapted to living with Covid-19, including reversing or reducing international travel restrictions. As we move into 2022, recovery in international air travel should gain momentum.” The only bright spot at the moment is cargo. January’s international FTKs rose 5.1% from a year earlier. The freight load factor, however, dipped 2.2 percentage points to 69.4%, mainly owing to 8.5% growth in year-on-year freight capacity.<br/>

Hong Kong airport is falling off the radar

Hong Kong’s airport has been a spooky place through much of the pandemic as traveller numbers have dwindled, leaving cavernous arrival halls devoid of their usual bustle. The rest of the world is now opening up to international travel but in Hong Kong, which has some of the toughest Covid-19 quarantines in the world, the airport remains largely empty of incoming passengers. The city has for many years claimed the title of the busiest airport in Asia, and is set up as a vital air bridge to the rest of the Asia Pacific for those coming from Europe, and a passage for business travellers into South China, the country’s economic nucleus. But last Tuesday, when the city’s leader Carrie Lam said the ban on flights from nine countries would stay until at least April 20, a now-unremarkable trickle of 229 passengers arrived, down from the typical tens of thousands daily before the pandemic. The local government says the isolation is necessary as it races to control an Omicron outbreak and keep the city in line with Beijing’s zero Covid policy, but airline bosses in Asia have told the Financial Times the measures are not only having a disastrous impact on business. “A lot of airlines are thinking very hard about the future for Hong Kong — do we still need to fly to Hong Kong?” a North American airline executive said, adding that it was becoming “career suicide” to continue to advocate to their head office for flights to be sent to the Asian financial hub. “I’m quite worried Singapore will replace Hong Kong not just as a financial centre but also as an aviation centre,” the executive said, pointing to Singapore Airlines’ move late last year to add new routes, including to Vancouver and Seattle. Singapore Changi airport and Seoul’s Incheon international airport have overtaken Hong Kong in terms of traffic, and many airlines including Lufthansa, British Airways and Air France have paused direct flights to Hong Kong altogether. The situation could worsen because of the war in Ukraine. Story has more.<br/>