general

Global airline capacity has surged to its highest level in 2022 this week because of a rebound in Chinese domestic demand despite extended lockdowns in Asia’s biggest aviation market, travel data firm OAG said on Tuesday. Asian jet fuel refining margins, which have more than doubled in the past two months, were at $30.04 a barrel over Dubai crude on Monday, Refinitiv Eikon data showed. Shanghai’s COVID-19 lockdown has dragged into a fourth week and mass testing orders in Beijing have sparked fears that the Chinese capital could be destined for a similar fate. But global airlines have added 2.5m seats in the week to Monday, nearly half of which are in China, OAG data showed. “This reverses the reductions in capacity that have occurred over recent weeks as a consequence of the travel restrictions in the Shanghai area in particular,” the data firm said. Total scheduled airline capacity in Northeast Asia rose 10.8% in the week to Monday from the previous week, according to OAG. The region’s capacity, however, remains about 36% lower than the corresponding week in 2019, before the pandemic. Total global domestic and international airline capacity increased by 3.3% this week to 88.6m seats, about 20% lower than in 2019. OAG said planned capacity over the next three months continued to edge closer to 2019 levels, reflecting confidence in the travel recovery.<br/>

The FAA will meet with major US airline staff next month to discuss ways to improve the flow of air traffic to and from tourism hotspot Florida, where weather delays earlier this month disrupted the travel plans of tens of thousands of passengers. The two-day meeting will be held in person in Florida, the FAA said. Spirit Airlines will attend, according to a person familiar with the matter. Other carriers with big operations in Florida such as American Airlines and JetBlue Airways are also likely to attend. Airlines have been flying more to some of the Sunshine State’s busiest airports. Florida logged a record of nearly 118m domestic visitors last year, according to state data. Miami service is up 113%, Tampa, 107%, and West Palm Beach up 132% over 2019, before the Covid pandemic, according the FAA. More frequent thunderstorms in the state, coupled with high travel demand and thinner airline staffing levels than needed, contributed to the delay or cancellation of more than 9,000 flights earlier this month. “The limiting factor on the East Coast has been weather during a time of peak demand,” the FAA said. Nearly 1,200 flights at Orlando International Airport, or 5%, so far this month have been canceled up from 2% in 2019, while 36% were delayed, double the percentage during the same period of 2019, according to flight-tracking site FlightAware. At Fort Lauderdale International Airport, cancellations are up to 5% of the April schedule from 1% three years ago while delays nearly doubled to 33%. Air travel in Florida is also facing challenges such as increased military operations and more space launches, all while the pandemic slowed air traffic controller training.<br/>

Texas Republican Senator Ted Cruz backed the families of passengers killed in two fatal Boeing 737 MAX crashes and sharply criticizing the Justice Department's deferred prosecution agreement with Boeing. The $2.5b Boeing deferred prosecution agreement, a type of corporate plea agreement, was reached in January 2021 near the end of former President Donald Trump's administration. It capped a 21-month government investigation into the design and development of the 737 MAX following two crashes, in Indonesia in 2018 and Ethiopia in 2019, that killed a total of 346 people. Families of some of those killed in the two crashes asked Texas-based US District Judge Reed O'Connor to declare that the deferred prosecution agreement was negotiated in violation of their rights as crime victims under federal law and determine appropriate remedies. Cruz, who is ranking Republican on the Senate Commerce aviation subcommittee, told O'Connor in a letter made public late Monday that "Boeing engaged in criminal conduct that defrauded government regulators and left hundreds of people dead in preventable plane crashes." Cruz said the Justice Department's position - that the relatives of those killed were not victims under the Crime Victims Rights Act - was "simply nonsensical." The settlement included a fine of $243.6m, compensation to airlines of $1.77b and a $500m fund for crash victims over a fraud conspiracy charge related to the plane's flawed design.<br/>

Aircraft leasing companies have launched a multinational effort to persuade safety authorities to allow grounded planes that were returned from Russia without full maintenance records back into commercial service. Declan Kelly, chair of Aircraft Leasing Ireland, said the trade body had begun an “asset preservation study” with regulators in Europe, the US and Bermuda to “come up with a mechanism of how to repatriate those aircraft into our global system”. Sanctions imposed on Russia following its invasion of Ukraine triggered a global rush among overseas leasing groups to recover more than 500 aircraft worth an estimated $10b that were stuck in the country. Irish aircraft leasing groups are among the worst affected, with planes worth more than $4b leased to Russian airlines. Lessors have been able to recover 41 planes with an estimated market value of $770mn since the start of the conflict, according to estimates by aviation consultancy Cirium. However, Kelly said “many of the aircraft do not have a full suite of maintenance records”. Such records, usually handed back at the end of each lease, are crucial both for validating aircraft value and for obtaining insurance. The Kremlin passed a law last month allowing foreign aircraft leased by its airlines to be added to the country’s domestic register, in effect allowing them to keep flying domestically. Lessors now face the prospect of putting each aircraft through lengthy and expensive maintenance and safety checks to reconstruct its records. Story has more. <br/>

Heathrow, the UK’s busiest airport, has predicted that this year’s surge in demand for air travel is a “bubble” that is unlikely to last past this summer and has forecast another year of losses. The owner of London’s main airport raised its passenger forecasts for this year from 45.5mn to 52.8mn, about 65 per cent of pre-pandemic levels. But it put the rise in passenger numbers down to a “temporary increase in demand” driven by holidaymakers “taking advantage” of relaxed international travel rules. “That is not normal demand, that is a bubble that will work through at some point and will settle down,” said CE John Holland-Kaye. Heathrow predicted the rush of bookings would last all summer, but then could be followed by a “winter freeze”. It said some airlines had cancelled autumn flights because of factors such as higher fuel costs and pressures on the wider economy. Holland-Kaye said there was “a huge amount of uncertainty” over the outlook after the summer and that the airport’s passenger forecasts were based on a “middle ground” of stronger demand lasting until September before tailing off. Heathrow reported a pre-tax loss of GBP191mn in the first three months of the year, compared with a GBP307mn loss a year previously, taking its overall losses since the start of 2020 to GBP4b. Revenue more than tripled to GBP516m in the first three months of the year as passengers flooded back, but the airport does not forecast a return to profit or dividends this year. Heathrow has clashed with airlines after it asked UK regulators for permission to increase the landing fees it charges to help its finances recover from the pandemic. Story has more.<br/>

Jet fuel supplies at one of Africa’s busiest airports, O.R.Tambo International in Johannesburg, are running low after transportation of the product was hit by flood damage to railway lines, South Africa’s oil industry body SAPIA said on Tuesday. The floods, among the worst to hit KwaZulu-Natal province, have left thousands homeless and caused at least 10b rand ($633m) of damage to infrastructure. “The South African Petroleum Industry Association (SAPIA) can confirm that jet fuel stocks at O.R Tambo International Airport are low but not critical,” SAPIA said, adding that on Monday the airport had three days’ stock available. There is enough jet fuel to meet current demand, SAPIA said, but delayed rail deliveries as a result of the flood damage pose a supply risk “in the coming days”.<br/>

China will step up infrastructure construction to boost domestic demand and drive economic growth going forward, state TV reported on Tuesday, citing a top economics meeting chaired by President Xi Jinping. The world's second-biggest economy is at risk of a sharp slowdown as COVID-19 restrictions across a large swathe of the country hit consumer spending, the property market remains mired in a downturn and exports look set to slow further. Investments would be brought forward for infrastructure projects that are beneficial to industrial growth and to safeguarding national security, according to the meeting, and transportation, energy and water resources would be among the focus. The government will speed up construction of green and low carbon energy bases, improve the oil and gas pipeline networks, and build a batch of regional and cargo airports, it added.<br/>

There is a small chance that your next flight will be powered, at least in part, by used cooking oils or agricultural waste. These are among the ingredients of SAF -- Sustainable Aviation Fuel -- a new type of jet fuel that promises to curb carbon emissions by 80% on average, according to IATA, the International Air Transport Association. The first commercial flights using SAF took off in 2011, and it has since grown to become a key element in making air transport more sustainable. The aviation industry has pledged that, by 2050, its global carbon emissions will be half that of what they were in 2005. It then hopes to reach net zero, or the complete absence of emissions, as early as a decade after that. That's an extremely ambitious plan, and one in which SAF accounts for 50% to 75% of the total reduction in emissions, depending on the different scenarios that can play out between now and then. And yet in 2019 -- the last year of business as usual before the pandemic -- SAF accounted for just 0.1% of all jet fuel used worldwide, according to the World Economic Forum. So why aren't airlines using more of it? Story has more.<br/>

Buyer “hysteria” for pre-owned business jets during the pandemic that triggered a recent wave of bidding wars is now easing, with more corporate aircraft coming up for sale, brokers say. The uptick in supply of pre-owned jets from historic lows will be in focus as corporate planemakers Textron Inc, General Dynamics Corp’s Gulfstream and Bombardier Inc unveil earnings in coming weeks, with investors looking for any early signs of softening demand for new planes. While US business jet traffic remains above 2019 levels, the combination of listed planes and aircraft sold through word-of-mouth is giving buyers more choice, while price increases have at least temporarily flattened. “The market is kind of taking a breath,” said Paul Kirby, Executive Vice President at QS Partners, a whole-aircraft brokerage and dealership. “You had this kind of hysteria that some buyers were going to miss the next airplane.” Fueled by a cutback in commercial flights and crowded airports during the pandemic, the rush by wealthy travelers toward private transport was so marked last year and this past winter that some buyers were snapping up second-hand planes before fully inspecting the wares. Story has more. <br/>