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Air Lease warns on Boeing 777X, Lufthansa places order

Boeing was at the centre of a tug of war over the future of its newest jet on Monday as Germany's Lufthansa ordered the 777X Freighter hours after an influential industry leader questioned the delayed programme's viability. The US planemaker last month pushed back first delivery of the world's largest twin-engined jetliner by more than a year to 2025, five years after it was originally due. The cargo version is a recent expansion of the delayed jet project. Asked if he saw risks to the future of the 777X programme as a result of cumulative delays, Air Lease Corp (Executive Chairman Steven Udvar-Hazy, told financiers, "yes." Pressed on whether it was possible the whole programme could be cancelled, Udvar-Hazy, widely seen as the father of the modern leasing industry, said that would depend on what the Boeing board looks like in 18 to 24 months. "What I'm saying is that those decisions whether to continue with the programme or not, it will probably not be made by this board of directors anyway," Udvar-Hazy told the Airline Economics conference in Dublin. A Boeing spokesperson referred to comments last month by Chief Executive Dave Calhoun, who said, "We've got to give ourselves the time and freedom to get this right." Boeing has also said it is highly confident in the 777X family. Udvar-Hazy's warning came days after the head of Dublin-based lessor Avolon told a different Dublin event hosted by Airfinance Journal that Boeing had "lost its way" after a barrage of problems and may need new management. <br/>

Taiwanese carriers swing to Q1 profits

Taiwan’s two major carriers rebounded to the black for the first quarter of 2022, as revenue increase outpaced a rise in operating costs. It is fourth consecutive profitable quarter for China Airlines and EVA Air, both of whom reported sharp increase in revenues for the quarter to 31 March despite a spike in coronavirus infections in Taiwan. China Airlines reported an operating profit of NT$3.6b ($88.4m) for the period, reversing its NT$469m loss in 2021’s Q1. The SkyTeam carrier saw a 34% jump in revenue to NT$37.2b, outpacing a 21% increase in costs to NT$31.7b. China Airlines reported a quarterly net profit of NT$3b, against 2021’s NT$1b net loss. As for EVA Air, it swung to a NT$4.2b operating profit in the quarter, reversing 2021’s NT$1.8b loss. Revenue for the period increased 53% to NT$30.1b, while costs rose 23% year on year to NT$23.6b. The Star Alliance carrier’s net profit for the quarter was NT$3.3b, compared to the NT$2.2b net loss in 2021. Both carriers did not provide any detailed analysis of its financial results in separate filings on the stock exchange. It is, however, understood that cargo operations has been key in lifting the carriers’ earnings through the pandemic. Both China Airlines and EVA Air have in the past few months announced plans to double down on freight operations with fresh orders for Boeing 777 freighters. <br/>

Mega M&As face antitrust hurdles from overseas amid mounting protectionism

South Korean industry leaders’ efforts to marry through M&As have hit a snag as countries with their major foreign competitors have turned stricter in antitrust evaluation amid growing protectionism triggered by the diplomatic and trade war between the world’s two biggest economies – the United States and China. According to the Fair Trade Commission and Korean Air Lines, the Korean Air-Asiana marriage currently requires merger endorsement from six antitrust agencies overseas in the US, the European Union, China, Japan, the UK and Australia. The process is mandatory in four of them – the U.S., the EU, China and Japan – and thus, the merger could fall apart if any one refuses to endorse it. The biggest hurdle is evaluation from China, the US and the EU. China currently focuses on the possibility of limiting competition on five routes Chinese national flag carriers are servicing with a combined market share of above 65% – from Seoul to Zhangjiajie (100%), Xian (96.3%) and Shenzhen (65.3%), and from Busan to Qingdao (100%) and Beijing (66.5%). “The company has submitted required data for about 10 times to the Chinese antitrust agency to actively respond to its review since the filing of the application in January 2021,” said a Korean Air official. The EU also is asking stricter corrective measures than usual, saying approval would be possible when Korea’s two biggest airlines distribute some of their air routes or landing slots to other carriers to address antitrust issues immediately. Story has more. <br/>

Air New Zealand adding 200 call centre staff members as lengthy wait times frustrate customers

Air New Zealand is drastically ramping up the size of its call centre team amid an increasing number of bookings, with customers facing long wait times on the phone. The company has acknowledged it is currently not providing "the level of service we're known for" as some travellers are forced to wait for hours to speak to a consultant. Air NZ is now in the process of adding an additional 200 staff members to its current team of around 250, meaning there will be more than 450 call centre staff once training is complete in around eight weeks. The call centre is under strain as COVID-19 restrictions continue to ease, seeing a dramatic increase in the number of Kiwis organising air travel and a greater proportion wanting to speak with the airline for assistance. The airline's Chief Customer and Sales Officer Leanne Geraghty said these customers should not be waiting as long as they currently are. "I can certainly acknowledge how frustrating that experience will have been for our customers - that level of customer service is not what we want to deliver at all," she said. "We are working full steam ahead to get it sorted out and get resourced up properly, as quickly as we can, and get back to delivering the service standard that we're proud of and known for."<br/>