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Airlines are normally able to recoup the majority of a rise in fuel prices through higher fares. But the confluence of the Covid-19 recovery and Russia’s invasion of Ukraine and subsequent surge in oil prices has the industry in uncharted waters. “There really is no precedent for what is going on right now,” United CFO Gerry Laderman said Monday. Historically, the carrier is able to pass on 60% of fuel price spikes to travelers but, with the myriad of crises, it is unable to predict whether that will be the case again, he said. United Treasurer Pam Hendry added that it generally takes around a quarter — or three months — to price an oil price rise into airfares. The price of Brent crude, the global benchmark for oil, closed at $123.11 per barrel on Monday, according to Bloomberg data. That represents a 57% jump since the beginning of the year. The rise in oil prices has many nervous about the fallout for the airline industry. US airline stocks were pummeled on Monday with shares in the Big 3 — American Airlines, Delta, and United — all down double-digits in trading. Shares in Southwest, which has little international exposure, were down 8.6% for the day. “The next few months will be financially concerning, even though traffic is strong,” wrote Cowen & Co. analyst Helane Becker on March 4. US carriers are likely to lower their financial guidance for Q1, which was already hit by the Omicron variant in January and February, and maybe for the year as a result of the run up in crude prices, she added.<br/>

Colombia’s Avianca has ordered 88 Airbus A320neos, with deliveries scheduled between 2025 and 2031. The Bogota-based carrier has also taken options to acquire another 50 of the jets, Avianca says on 8 March. “This order highlights that we continue to make the required investments to grow our network in line with our business plan,” says Rohit Philip, Avianca CFO. The new aircraft will have an updated cabin configuration that will include “Premium”, “Plus” and economy seats, the airline says. Avianca currently has 110 aircraft in its fleet, with “more than 90” A320s being reconfigured with the new seats, which the company introduced last October. The carrier says that by the end of 2022 all its aircraft will have the new interiors. In addition to the Airbus narrowbodies, the carrier also operates A330s, Boeing 787-8s and ATR 72-600s. It serves 120 routes to 65 destinations across North and Latin America, and Europe, with 3,200 flights every week. “The A320neo incorporates the latest technologies including new-generation engines, sharklets and aerodynamics, which together deliver 20% in fuel savings and CO2 reduction compared to previous-generation Airbus aircraft,” says Airbus Latin America chief Arturo Barreira. The company emerged from Chapter 11 bankruptcy protection late last year after restructuring in the wake of the coronavirus crisis that brought the global aviation industry to a near-standstill in 2020.<br/>

Ryanair announced Tuesday that it had been forced to reduce the number of Lisbon-based aircraft from 7 to 4 for summer 2022, causing the cancellation of 5,000 flights and 19 routes from Lisbon in Summer 2022 and the loss of 900,000 passengers. This action is due to the fact that TAP continues to block slots at Lisbon airport, which it cannot and will not use this summer. The cancellations will reduce travel options for all visitors, as well as the loss of 150 high-paying aviation jobs in Lisbon. These cancellations – which could have been avoided – take place after numerous attempts, on the part of Ryanair, to ask the Portuguese Government to intervene in the release of unused slots by TAP in Summer 2022. While Ryanair continues to contribute to growth and investment in Portugal, TAP received E3b in state aid, reduced its fleet by 20%, furloughed thousands of people and freed up only less than 5% of its slots in Lisbon, thus blocking the growth of other airlines. Preventing competitors like Ryanair from using these unused slots has a negative impact on Lisbon’s economy, with 5,000 flights cancelled (more than 950,000 seats less), 3 fewer aircraft (an investment of $300m), the loss of 150 well-paying aviation jobs and over E250m in lost tourist revenue for Lisbon this summer.<br/>

Ethiopian Airlines has partnered with International Djibouti Industrial Park Operation (IDIPO) and Air Djibouti as it looks to develop sea-air operations between China and Africa. Based on a strategic agreement signed between the parties, cargo will be transported from China to Djibouti Free Zone by sea and will then be transported to Djibouti International Airport for onward transportation by air. Sea-air services are typically pitched as being less expensive than a pure air cargo operation but faster than a pure sea transport. Ethiopian said the new multimodal logistics solution will enable African businesses, multinational companies, Chinese companies and other business people to enhance their supply chain management system with the best combination of speed, cost and quality services. Ethiopian Airlines Group said it had experience in providing similar product through Dubai sea and airports. “The markets of China and Africa are highly complementary and the partnership has huge potential in facilitating cost and time efficient logistics solutions for African traders,” the carrier said. <br/>

Airbus finalized a deal to sell seven A350F cargo planes to Singapore Airlines during Asia's largest air show last month in an unusual contract partially modifying a previous agreement to deliver 17 passenger jets. The swap highlights the lengths taken by major airplane manufacturers to meet demand in an Asian market anticipated to post a booming long-term recovery from the pandemic. Meanwhile, Boeing displayed a prototype of its state-of-the-art widebody 777X jet in Asia for the first time at the Singapore Air Show. Airbus and Singapore Airlines sealed their agreement at a signing ceremony held during the expo in mid-February. The carrier will replace a fleet of aging Boeing air freighters averaging 18 years of service. The A350F offers improved operating and fuel efficiency. Singapore Airlines is the first major airline operator to purchase the A350F from Airbus. The European manufacturer previously sold the model to a leasing company. The 17 passenger planes in the original contract totaled an aggregate cost of $2.3b, according to a report by Reuters, which used prices listed in 2018. The order for the cargo jets is estimated to be worth about the same value. The two sides entered into a preliminary agreement in December last year. The final deal includes options to buy five additional A350Fs. Airbus will begin delivering the aircraft in October 2025. "It is a huge endorsement for us," said Christian Scherer, Airbus's CCO. "We expect to see at least 100 or so new freighters in (the widebody) category going into the Asia-Pacific region. I believe this is a conservative number."<br/>

In late January, staff of Cathay Pacific were invited to an online meeting with senior management. It was supposed to be a debrief on the airline’s financial performance, but when the floor was opened to questions, the first was whether Hong Kong’s flag carrier would be taken over by its state-owned shareholder Air China Ltd. Clearly annoyed, Cathay CEO Augustus Tang dismissed the notion, according to a recording heard by Bloomberg News. He called it "really sensational and hypothetical” and "grossly untrue.” The audience of pilots, flight attendants and other employees was unconvinced. That the subject was even raised reflects the level of anxiety and distrust at the 75-year-old airline, which has gone from being a symbol of Hong Kong’s openness to one of its decline. Made a cautionary tale for businesses that didn’t rein in their staff during 2019’s anti-China protests, Cathay has since been hammered by some of the most stringent travel curbs in the world, as Hong Kong’s government strives to toe Beijing’s isolationist line on walling out the virus. The restrictions have decimated Cathay’s passenger business, leaving it more reliant on cargo operations for income. The airline, due to report annual results on Wednesday, is flying at about 2% of 2019 capacity and is bleeding as much as HK$1.5b (US$192m) a month. Cathay’s second-largest investor with a 29.99% share, Air China can’t raise its stake without bidding for the entire company, thanks to a 2006 shareholding agreement. The Beijing-based carrier has downplayed that possibility, with Non-Executive Director Stanley Hui saying in January a takeover "has never been in the minds of anyone in Air China.”<br/>

Japanese airline ANA Holdings Inc plans to launch a new international low-cost carrier in late 2023 or early 2024, joining its rival Japan Airlines in a bet on a revival in tourism as the impact of the COVID pandemic fades. ANA said Tuesday the carrier, Air Japan, would fly mid-range international flights to Asia-Pacific destinations, without disclosing planned routes. ANA already has a separate low cost carrier, Peach Aviation, which flies domestic routes as well as to a handful of short-haul Asian destinations. The launch plan comes as airlines around the world have been hammered by the collapse in international travel triggered by the pandemic, and are now grappling with uncertainty and higher fuel costs sparked by the crisis in Ukraine. Air Japan will fly to destinations more than four hours from its base at Tokyo’s Narita airport to differentiate itself from Peach, said Hideki Mineguchi, Air Japan President, speaking during a news conference. “The new brand (Air Japan) is a new model that combines the best aspects of full service and LCC in terms of offering affordable prices,” Mineguchi said. The carrier didn’t disclose details but said Air Japan customers will be able to pay more for some services on top of the ticket price. The carrier would rebrand Boeing 787 airplanes with around 300 seats that ANA has used for international flights. Target customers would be families and students in Asia who want to visit Japan, as well as those who live in Japan wanting to travel to Asian countries on a budget once the pandemic is over, Mineguchi said.<br/>