general

Airlines will pass on rising oil prices to passengers through higher fares relatively quickly, but the spike in energy costs will worsen the industry's overall outlook in 2022, the head of the International Air Transport Association said on Wednesday. Speaking after JetBlue launched a counter-bid for US budget carrier Spirit Airlines, DG Willie Walsh also said he saw further scope for consolidation among airlines in the United States. "It clearly took the market by surprise," Walsh told a regular industry news briefing. "It is evidence that the financial strength of US airlines does stand out from the rest of the world," he said, adding that consumers had benefited from major investments in new products. IATA said global passenger traffic rebounded in February as the impact of the Omicron variant retreated outside Asia. The war in Ukraine has yet to feed through into monthly data. In February, passenger traffic stood at 54.5% of levels seen in the same month of 2019, up from 50.6% in January but below the 55.1% seen in December. Cargo volumes were at 111.9%. Airlines are grappling with a rise in oil prices which accelerated after Russia's invasion of Ukraine, a move Moscow describes as a "special military operation". The rise has worsened an outlook already expected to include an industry-wide loss in 2022, although some airlines will make a profit as the world stages an uneven recovery, Walsh said. In the past, the rule of thumb was that oil prices would take six months to feed through to airfares, he added. But that could happen more quickly because of the market's dramatic volatility as well as lower-than-usual levels of forward bookings already in the system following the pandemic.<br/>

Air travel disruption caused by staff shortages at airlines and airports is outside the control of those businesses, particularly amid delays in the processing of security clearances for new and re-hired employees, according to IATA director general Willie Walsh. Airlines and airports in the UK are among those reporting staffing issues this week in the lead-up to the busy Easter holiday travel period, with hundreds of flights being cancelled and passengers facing hours-long queues. “We are in for a short period of disruption at airports, as airports and airlines attempt to ramp up their staffing to match the increase in demand that we’re witnessing at the moment,” Walsh says. But he rejects the idea that airlines and airports did not prepare well enough for the return of demand, instead suggesting a that a “combination of factors” is to blame, all outside the industry’s control. Crucially, Walsh cites delays in airports and airlines receiving security clearances for new and re-hired staff as “a big burden”, noting there had been reports of delayed processing times in “a number of countries”. “Those security checks, while very important and necessary, do take some time,” he says. “I know that most airlines were aware of what was going to happen [in terms of recovering demand] and started recruiting some months ago, but the challenge of getting the security clearance is completely outside the airlines’ and airports’ control and does depend on the resources being available in government departments. “In most cases you can’t even start training these people until they’ve got their security clearance,” he adds.<br/>

Jet fuel supplies are draining fast on the East Coast, supporting wholesale prices at near-record highs just when demand for air travel is closing the gap to pre-pandemic times. East Coast jet fuel stockpiles fell for a third straight week to their lowest level seasonally since 1996, as government data reflect what suppliers in the spot market have said for the past two weeks -- there’s very little aviation fuel available. Jet fuel is fetching $7.49 a gallon, nearly double the spot price of diesel in New York and more than 1.5 times that of gasoline. Since fuel accounts for up to a third of airline operating expenses, airfares will likely get a lot pricier. Some carriers have already begun to pare flights due to high fuel costs -- and those decisions were made a month ago, when jet prices were less than half of what they are now. Fuel costs are forcing airlines to scale back at a time when air travel is slowly returning to pre-Covid levels. The number of passengers going through security at U.S. airports averaged 2.08m per day in the first five days of April, around 9.9% lower than the same period in 2019, according to Transportation Security Administration data. March travelers were down by 12.4% compared with 2019. The fuel scarcity is partly a result of U.S. refiners prioritizing diesel in the weeks following Russia’s invasion of Ukraine, which sent Europe scrambling for the fuel. The European Union relied on Russia for about a fifth of its diesel imports in 2019. As jet fuel and diesel share some overlap in the refining process, maximizing diesel meant cutting back on the aviation fuel. <br/>

White House National Economic Council Director Brian Deese said Wednesday the administration is closely monitoring rising jet fuel prices that could threaten the air travel recovery. "Jet fuel is something that we are paying close attention to and monitoring and is a direct bi-product of the impact of Russia's invasion of Ukraine," Deese said at a breakfast with reporters sponsored by the Christian Science Monitor. Costs in the United States for jet fuel have surged, particularly on the East Coast, which largely relies on shipments on the Texas-to-New Jersey Colonial Pipeline for refined products, as well as imports from Europe. High jet fuel prices around the world are hitting air carriers and travelers just as air travel was starting to recover from COVID-19 restrictions in much of the world. Fare hikes risk undermining an air travel recovery that has gained momentum as international border curbs ease. US airlines said last month they had been raising airfares to account for some of the costs of rising fuel prices in the face of strong passenger demand. Fuel is airlines' second-biggest expense after labor, but major US airlines do not hedge against volatile oil prices like most European airlines. The industry typically looks to offset fuel costs with higher fares. The DoT said on Wednesday that in February US airlines used 1.14b gallons of fuel, 5.4% less fuel than in January 2022 and 11.4% less than in pre-pandemic February 2019.<br/>

Eurocontrol is projecting flight activity will end the year at 92% of pre-crisis levels, under a new base scenario forecast for traffic development in Europe for the rest of the year. While it believes traffic could reach as high as 96% of 2019 levels under its best-case scenario, it also cautions that challenges remain, which could result in a lower-growth scenario where flight activity is still only at 83% of pre-crisis levels. Eurocontrol DG Eamonn Brennan says: ”Aviation has continued to recover well over the last few weeks, and there has been a steady climb from 68% in January, rising to 79% by the start of April compared to 2019 levels, even factoring in the impact on the network and on fuel prices of the unprovoked aggression by Russia against Ukraine. “Airlines are adding lots of capacity, and some airlines are already outperforming their pre-pandemic levels,” he says. Under its base growth scenario, Eurocontrol sees flight activity climbing from 79% currently to 88% by July. Growth would then moderate across the second half of the year. ”Hitting 90% or more of 2019 traffic at peak summer moments is firmly on the cards, and we expect holiday destinations and some other parts of the network to exceed 100% of their 2019 levels,” says Brennan.<br/>

Germany's biggest airport operator Fraport said on Twitter on Wednesday it had to cancel flights as it was struggling to hire enough people after massive job cuts due to the COVID-19 crisis, especially in the field of ground handling. A spokesman for the group, which runs aviation facilities in nine countries worldwide and the main airport in Germany's Frankfurt, said the cancellations would be decided by the airlines and were expected as of Friday, April 8. The company did not specify the number of flights that would be cancelled. In late March, Fraport warned about likely delays around Easter due to staff shortages in departments crucial for processing flights, though it aims to hire 1,000 employees in 2022 and took on about 300 people between January and March. Fraport is not the only European company facing a staffing problem. Britain-based low-cost carrier easyJet and British Airways as well as Ireland's Ryanair have also reported issues.<br/>

Dublin Airport has advised travellers to arrive three-and-a-half hours before their flight as long delays continue due to staff shortages. Last week there were chaotic scenes blamed on a lack of security staff, with dozens of people reported to have missed their flights. The DAA, which runs the airport, recently hired 100 security screeners but another 300 are needed. There are warnings the delays could last for months. Graeme McQueen, from the airport, said that the problem "won't be going away overnight" as it can take take up to six weeks to train new staff. "Certainly for April it's going to be an issue," he said. "We are looking at May as well and probably into June. That's just being realistic." He added that the DAA was carrying out 250 interviews with potential staff this week alone.<br/>

Trade unions have condemned the owner of struggling Manchester airport for inflating bosses’ pay by almost a quarter in the first year of the pandemic even as the wages for staff were cut and hundreds of workers were let go. The north-west hub has been hit by weeks of travel disruption and hours-long queues for passengers, leading to the unscheduled departure of the airport’s managing director Karen Smart, who stepped down on Tuesday. However, the annual report of Manchester Airports Group, which also owns London Stansted and East Midlands airports, showed pay for the group’s managers rose by GBP2.8m to GBP12.2m in the year ending 31 March 2021 – the first 12 months of Covid when air travel slumped. This represents an increase of 23% compared with a year earlier. Meanwhile, the highest-paid director at MAG – understood to be its chief executive, Charlie Cornish – was awarded an extra GBP500,000, a rise of 25% taking his total renumeration to GBP2.5m. Aviation was one of the sectors hardest hit by Covid, and MAG said passenger numbers across its three airports fell by as much as 90% between April and August 2020. Since the lifting of almost all coronavirus travel restrictions this year passenger numbers have begun to rebound, and last weekend the start of the Easter break was marred by waits of up to eight hours as airports and airlines across the country struggled to cope with staff shortages caused by Covid infections and layoffs. However, Manchester appears to have been less prepared than most rival airports for the reopening of travel, having suffered problems for a few weeks. In a fight to cut costs during Covid, MAG embarked on a programme of mass redundancies, and held discussions with unions over its plans to cut 900 jobs.<br/>

Greater Manchester's mayor is asking the government to speed up the vetting process for new staff at Manchester Airport amid the ongoing travel chaos. It comes after weeks of criticism over long security queues leading to passengers missing their flights. Mayor Andy Burnham has warned that the disruption would continue "for the next two months". He is calling on the minister for security and borders to prioritise Manchester Airport security checks. Travellers at the airport, which is owned by Greater Manchester's 10 councils and an investment firm, have faced long queues for check-in and security over the past month. The problems first came to light in mid-March when passengers were left waiting for hours, with some forced to queue outside in the car park while others missed their flights. MAG previously apologised and said the industry was "facing staff shortages and recruitment challenges" an on Tuesday its managing director Karen Smart stepped down. Earlier, baggage handling firm Swissport apologised to passengers who have faced long delays waiting for their bags after getting off planes. Burnham, who met with senior management at the airport on Tuesday, said some of the issues had been "beyond their control". However, he said "more should have been done earlier" and communications with passengers "should have been better, as should the management of the queues".<br/>

IATA DG Willie Walsh has expressed confidence in the investigation into the crash of China Eastern Airlines flight MU5735, while praising China’s safety record during an extended period of huge traffic growth. Investigations are continuing into why a China Eastern Boeing 737-800 crashed while operating a Kunming-Guangzhou service on 21 March, killing all 132 people on board. Sending his condolences to those affected by the crash, Walsh stresses during an IATA media briefing on 6 April the importance of waiting for the results of the investigations. “There is no point in speculating,” he says regarding the potential causes of the crash. “I have no doubt we will see a very comprehensive assessment.” He further suggests it is important to “reflect on the fact that the safety record in China has been really, really good”. Indeed, while the crash was China’s deadliest this century, according to FlightGlobal analysis of Cirium data, it was also the first fatal incident in the country since August 2010, when 42 people were killed in a crash involving a Henan Airlines Embraer E190. Cirium schedules data shows that capacity on domestic routes in China more than doubled between August 2010 and the eve of the Covid-19 pandemic, with capacity on international services to the country was around three times higher across the same timeframe. “With the very high levels of growth that we’ve witnessed there, if I look back over the last 10 years, I think the industry, the regulator and the government have done an outstanding job to be able to grow the industry at a significant pace while maintaining a very clear focus on the safety, security and integrity of the operation there,” Walsh states.<br/>

A Boeing 737 MAX meant for China Eastern Airlines subsidiary Shanghai Airlines is flying from Guam to Shanghai on Thursday, flight tracking websites showed, amid uncertainty over when the model will resume flying in China. Flight BOE631 comes more than three weeks after the first 737 MAX bound for a Chinese customer since a 2019 grounding began its journey from Seattle to Boeing's completion plant in Zhoushan. The plane, painted in Shanghai Airlines livery, had been stuck on the ground in Guam since March 15 due to a minor technical issue. It is due to land at around 11:30 a.m. Shanghai local time (0330 GMT), tracking websites showed. Boeing declined to comment on the flight but said it continued to work with customers and global regulators to return the MAX to service. The flight to Shanghai, which is in the middle of a strict COVID-19 related lockdown, comes as Chinese authorities scrutinise China Eastern's safety processes following the crash of a 737-800 on March 21 that killed all 132 people on board. While that model is the predecessor to the MAX, analysts have expressed concern it could set back Boeing's efforts to regain ground in the world's biggest aircraft market and deliver more than 140 737 MAX jets already constructed for Chinese customers. China's aviation regulator in early December provided airlines with a list of fixes required before its return to commercial flying, which it predicted would occur by the beginning of this year. So far, however, there have been only test flights.<br/>

Hong Kong has ceased to function as an international aviation hub as it curbs inbound flights and quarantines arriving passengers, according to a trade group representing hundreds of airlines worldwide. “It’s effectively off the map now, and I think it’s going to be difficult for Hong Kong to recover,” Willie Walsh, director general of the International Air Transport Association, said at a briefing Wednesday. “It’s going to lag significantly behind the recovery that we’re seeing elsewhere and has led to a tough time for all airlines operating there.” Even the city’s shortened isolation requirements for arriving passengers -- quarantine was halved to one week this month -- will deter travelers, Walsh said. The IATA chief said that with much of the rest of Asia reopening he remained optimistic Hong Kong could start to relax its border restrictions. However, Hong Kong is still banning flights even after rolling back some of the world’s strictest inbound travel curbs. There’s been increasing frustration over the city’s closure for much of the past two years due to pandemic restrictions. “The restrictions there have been very severe and have led directly to the cancellation of a lot of services with airlines -- effectively finding it incredibly difficult, if not impossible to operate there,” added Walsh. IATA has warned places that continue to attempt to lock out the disease, rather than managing it, risk missing out on enormous economic and societal benefits through the restoration of international travel. The group represents almost 300 airlines accounting for 83% of global air traffic.<br/>

Less than a week after Hong Kong rolled back some of the world’s strictest inbound travel curbs, at least six airlines have had routes banned, creating havoc for travellers and further undermining the city’s role as a financial hub. Singapore Airlines, Emirates, Cathay Pacific, Qatar Airways, Korean Air Lines and Malaysia Airlines were slapped with week-long bans this month after breaching Hong Kong’s so-called circuit-breaker mechanism. A stoppage can be meted out if three or more Covid-19 cases are found on the same flight, or if there’s one confirmed infection and another non-compliant passenger. The six airlines’ bans occurred within four days, the most rapid flurry since 11 suspensions were levied over four days in January. The current tally accounts for 11% of all airline route suspensions issued so far this year. The bans come after Hong Kong eased a raft of travel measures on April 1 in response to mounting frustration over the city’s effective closure for most of the past two years due to pandemic restrictions. Authorities had lifted an outright ban on inbound flights from nine countries, including the US, the UK and Australia, and reduced quarantine for inbound travelers to one week. Infection rates are dropping as the city exits its largest outbreak since the pandemic began. There were a total of 2,777 new cases reported on Wednesday, the lowest level since Feb 14, and 84 deaths. Seven of the infections were imported, health officials said during the daily briefing.<br/>

Starting in September, passengers departing from Incheon Airport won’t need to take their laptops or liquid items out from their carry-on bags. According to Incheon Airport on Wednesday, it will adopt a smart security screening system to shorten the entire departure process by applying advanced technology that will automatically detect prohibited liquids and hazardous items including weapons, radioactive materials and certain types of lithium batteries. The advanced CT X-ray system can conduct detailed 3D scanning of passengers’ items. It can also automatically detect explosive items inside a bag without needing to open it. Used in conjunction with full-body scanners, which have been used at the airport’s Terminal 2 since 2018, the airport operator said the smart screening devices will more efficiently shorten the duration it takes for passengers’ overall departure process and strengthen the level of security checks. The airport’s Automatic Tray Return System has also been upgraded with an automatic sterilization process. This will allow the workforce at the airport to efficiently handle more loads of passengers’ items for screening simultaneously. The test trial of the smart security screening system will begin in September at departure gate No. 3 at Terminal 1 of Incheon Airport. By 2025, all departure areas and transfer areas will be equipped with the smart screening devices in a gradual move, the airport said.<br/>

Airbus delivered between 140 and 142 aircraft in Q1, up almost 13% from the same period last year, industry sources said on Wednesday. Airbus declined comment ahead of monthly orders and deliveries data due on Friday. The figures imply March deliveries of some 62 jets, at least some of which came from long-term storage, the sources said. Airbus is in the midst of planned production increases of single-aisle jets, but faces growing concern over manufacturing supply chains. Jefferies analyst Chloe Lemarie this week estimated total quarterly deliveries of 139 aircraft but said "production challenges" and demand were under scrutiny. According to an Airbus court filing connected to a legal dispute with Qatar Airways, as of March the planemaker was producing 50 narrowbodies a month, including 27 A321neos. It plans to increase this to 61 a month by end-2022 of which 33 will be A321neos, the filing said, adding that the planemaker ultimately aims to raise production above 70 a month by 2025. "This is clearly a challenging target, and the pressure on suppliers to keep pace is high," it said. Airbus has so far publicly committed to raising output to 65 a month by the summer of 2023, without giving interim steps. It has said it is asking suppliers to be ready for output of 70 a month by the first quarter of 2024, if a decision to raise output again is taken, while exploring rates up to 75 by 2025.<br/>