Higher airfares for now are inevitable, with oil prices high and jet kerosene prices even higher at a time when jet fuel manufacturers have yet to return to pre-pandemic levels of production, said the DG of the IATA. Airlines have had to raise fares by at least 10 per cent just to offset the surge in fuel cost, their biggest expenditure outlay, Willie Walsh said. "Jet fuel prices are leading to very significant increases in costs for airlines. Given the financial performance of airlines, there is just no way an airline can absorb that additional cost," he said at a media briefing on Monday ahead of the Changi Aviation Summit this week. But there is no evidence the higher airfares have deterred people from travelling, Walsh noted. "There is strong pent-up demand for travel. People have saved money and they are prepared to spend that money." Airfares here and globally have surged with air traffic on the rebound. A return ticket on Singapore Airlines (SIA) to London from June 20 to July 10 is now going for about $3,200, up from $1,800 pre-pandemic. The fare increase has ranged from 20% to 80% since Singapore reopened its borders in April, amid passenger volumes doubling at Changi Airport to reach 40% of 2019 levels.<br/>
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More people are flying in premium cabins for leisure trips despite airfares rising on surging oil prices and demand, and that’s helped offset a slower recovery in business travel, according to the IATA. “There’s a strong pent-up demand for travel,” IATA Director General Willie Walsh told reporters in Singapore on Monday. “Consumers had disposable income during the two years of the pandemic. People have, consumers have, saved and therefore they are prepared to spend that money.” A quick recovery is crucial for global aviation, one of the industries hardest hit by the pandemic as governments shut borders and the skies emptied. While travel has started picking up in most markets, some countries, particularly in the Asia-Pacific region, have yet to fully open up. China, for example, is tightening Covid-related restrictions again and discouraging citizens from flying, putting a significant dent in global tourism. “It’s clearly disappointing that China is pursuing this Zero Covid approach,” Walsh said. The country was a very “strategically important market where a lot of airlines were looking at growth opportunities. I think airlines will be reassessing that, given the continued closure of the borders in China.” The war in Ukraine has added another challenge for airlines, as sanctions against Russia have pushed up oil prices by limiting supply, meaning the single-biggest cost item on their balance sheets has become even more of a burden. That has forced airlines globally to raise ticket prices. “Given the financial performance of airlines, there’s just no way an airline can absorb that additional cost,” Walsh said. “It’s inevitable that those higher oil prices will find their way through to consumers in the form of higher ticket prices.”<br/>
After a months-long review, the Biden administration announced Monday it will allow flights to more Cuban cities and reinstate a family reunification program suspended by former President Donald Trump. The decision follows a lengthy review of US-Cuban policy as the communist island nation faces widespread food and medicine shortages. Under the changes, US airlines will now be allowed to fly to cities other than the capital of Havana -- a restriction that had left many Americans with few options to visit their families elsewhere in Cuba. Additionally, the Cuban Family Reunification Parole Program will resume taking cases for the first time since 2016. A $1,000 quarterly cap on money sent to families on the island will be lifted as well. State Department spokesman Ned Price said the goal is to support the Cuban people. "We will make it easier for families to visit their relatives in Cuba and for authorized U.S. travelers to engage with the Cuban people, attend meetings and conduct research," he said. The administration has been conducting a review of Trump's Cuba policies since taking office last year. Candidate Joe Biden promised during the 2020 presidential campaign he would "try to reverse the failed Trump policies that inflicted harm on Cubans and their families." Trump placed restrictions on American business and tourism in Cuba in 2017 to keep US dollars from reaching Havana's military. Senate foreign relations committee chairman Bob Melendez, D-N.J., said the decision "risks sending the wrong message to the wrong people, at the wrong time and for all the wrong reasons."<br/>
Longtime Gol CE Paolo Kakinoff will step down from his post in July, with current COO Celso Ferrer to succeed him as CEO. The Sao Paulo-based carrier says on 16 May that Kakinoff, who became CEO in 2012, will remain with the company as a board member. The management shift comes days after Gol disclosed plans to join Colombia’s Avianca under a holding company called Abra Group, which will be headed by Gol chairman Constantino de Oliveira Junior. He founded Gol in 2001 and was CEO until Kakinoff took over in 2012. “Celso and I have worked side by side for more than seven years. He is an experienced and well-prepared executive, one of the most competent I have known in all my professional career,” Kakinoff says. Ferrer joined Gol in 2003 and has served in numerous roles, including chief planning officer and chief operating officer. He is also a Boeing 737 pilot and holds degrees from the Universidade de Sao Paulo, Pontifícia Universidade Catolica de Sao Paulo and French business school INSEAD.<br/>
The UK government’s “jet zero” plan to eliminate carbon emissions from aviation relies on unproven or nonexistent technology and “sustainable” fuel, and is likely to result in ministers missing their legally binding emissions targets, according to a report. The study from Element Energy, which has worked for the government and the climate change committee in the past, says instead of focusing on such unreliable future developments, ministers should work to reduce the overall number of flights and halt airport expansion over the next few years. The report, released on Monday, was commissioned by the Aviation Environment Federation (AEF) and comes as five regional airports are in the process of seeking approval to expand. In addition, Gatwick and Luton have announced they will be submitting major applications later this year, while Heathrow has not abandoned its plans for a third runway. AEF’s policy director, Cait Hewitt, said the findings showed the government’s plan amounted to “sitting back and allowing both airports and emissions to grow in the short term while hoping for future technologies and fuels to save the day”. “These expansion plans will generate millions of tonnes of additional CO2 each year,” she added. “Until the government sets out a realistic net zero trajectory for the sector, and the industry is on track to outperform it, additional airport capacity should be off the agenda.” The government’s jet zero initiative was launched two years ago and is part of a raft of policies that aim to get UK emissions to net zero by 2050.<br/>
A heavy sandstorm in Iraq, the latest of what Iraqis say is an unprecedented number to hit the country in recent weeks, closed some state schools and offices and halted flights at Baghdad International Airport on Monday. Authorities in Baghdad, including the Education Ministry, declared a day off for local government institutions, with the exception of health services. Hundreds of people across the capital and southern cities went to hospitals with breathing difficulties, medical officials said. Baghdad International Airport said in a statement it was closing its airspace and halting all flights until further notice because of low visibility. At least one sandstorm a week has hit Iraq in the past few weeks in what Iraqis say is the worst such spate in living memory.<br/>
Korean airlines are set to impose record fuel surcharges on international routes in June in the wake of soaring jet fuel prices, industry sources said Monday. Starting June 1, the surcharge for one-way tickets on international routes will range from 37,700 won ($29.4) to 293,800 won, depending on the routes, a Korean Air Lines official said. The planned increase will raise the surcharges to the highest Level 19 from the current Level 17. In April 2021, rising jet fuel prices forced local carriers to begin imposing fuel surcharges after a one-year hiatus. Fuel surcharges on international routes had stayed at zero since April 2020 due to the fallout from the coronavirus pandemic. Local carriers' surcharges vary on the level of jet fuel prices traded on the Singaporean market. If the average jet fuel price on the Singapore spot market rises over $1.50 per gallon during the past month, Korean airlines are allowed to impose fuel surcharges starting one month later. If jet fuel prices drop below the threshold, no surcharge is collected. Jet fuel prices averaged $3.36 per gallon on the Singaporean market for the one month from April 16 to May 15. Meanwhile, fuel surcharges on domestic routes will rise to 17,600 won in the coming month from 14,300 won in May.<br/>
Traffic at Singapore Changi Airport doubled in May compared with March to stand at around 40% of pre-COVID levels, and the airport will restart construction work on a fifth terminal after a two-year hiatus, the Singapore transport minister said. “Given the current and projected recovery in air travel demand, we have a renewed impetus to secure our infrastructural capacity for growth,” transport minister S. Iswaran said in a speech at an aviation summit on Tuesday. <br/>
Japanese-owned SMBC Aviation Capital is to acquire fellow Irish-based lessor Goshawk Aviation under a transaction valued at $6.7b. It will create the second-largest lessor worldwide in terms of aircraft numbers, and the largest to be owned by Japanese interests. SMBC will take over Goshawk following an agreement with NWS Holdings and Chow Tai Fook Enterprises. It will acquire 176 owned and managed aircraft, giving SMBC a total of 709 – although any Goshawk aircraft located in Russia will be excluded from the deal. Another 261 aircraft are on order from Airbus and Boeing, all A320neo-family and 737 jets. “Goshawk is a high-quality business with assets and people that complement our own,” says SMBC Aviation Capital chief Peter Barrett. “The combined business will continue to have a disciplined focus on young, liquid, most-in-demand narrowbody aircraft.” He adds that the agreement is the “right transaction” for the company, enabling it to “better serve” its customers in a “fast-evolving sector”. Twenty-four new customer airlines will become clients of SMBC as a result of the deal. SMBC Aviation Capital shareholder Sumitomo Mitsui Finance and Leasing adds that it is “fully supportive” of the proposed acquisition, which will be financed by a combination of debt and equity. It expects the transaction to close in the second half of this year. The combined entity, with total assets of $37b, will be based in Dublin and have a single corporate structure. Over 80% of the portfolio’s net book value will be single-aisle aircraft. <br/>