Major US airlines are poised to post their strongest earnings since the start of the pandemic when they report quarterly results starting on Wednesday.<br/>But mounting economic worries are unsettling their investors, who are looking for clues to gauge the strength of consumer demand beyond the busy summer travel season. Inflation at a 40-year high and rising interest rates have raised the specter of an economic recession in the United States. With air fares also surging, some analysts are warning of a slowdown in travel spending in the second half of the year. Those worries have battered airline shares even as booming travel demand is driving up the industry’s revenue. The NYSE Arca Airline index has fallen 25% since late May. In contrast, US passenger traffic is up 18% this summer from a year ago and has been averaging about 89% of the pre-pandemic levels since the Memorial Day holiday weekend in May, according to TSA data. Analysts at Jefferies are not sure if the demand will remain as strong in the fall. In a note, they said airline revenue is expected to “materially weaken” in September following a moderation in leisure travel demand. Airline chiefs, however, have played down those concerns. They are betting healthy U.S. household savings as well as strong pent-up demand will help fill flights. Frontier Airlines CE Barry Biffle said his company has not seen any “degradation” in the bookings. If anything, he said the travel demand is only getting stronger. “It’s the best environment we’ve ever had in the industry,” Biffle told Reuters. The industry is counting on an increase in international traffic and corporate bookings to offset any slowdown in leisure bookings, which have been trending above 2019 levels. Online searches by consumers for international travel from the United States, including to Europe, have gone up following the White House’s decision to scrap COVID-19 testing requirements.<br/>
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Airlines and passengers are having the worst day for flight cancellations in a week because of thunderstorms bearing down on East Coast hubs. FlightAware data showed 544 cancellations nationwide as of 7:50 p.m. ET Tuesday. In the New York area, 9% of flights at LaGuardia International Airport had been canceled and 8% at Newark Liberty International Airport. At Washington's Reagan National Airport, 11% of flights had been canceled. The FAA imposed a ground delay program late Tuesday afternoon for flights bound for Newark and LaGuardia. The FAA was also delaying some outbound flights still on the ground. Severe storms moving through the the Northeast and Mid-Atlantic are expected to continue into the evening, according to CNN's Weather team. Severe thunderstorm watches stretch from Virginia to Maine and are in effect through 10 p.m. ET. "Weather conditions have caused LGA Airport flight disruptions," said a Tuesday afternoon tweet from LaGuardia Airport's official Twitter account. "Check with your airline to determine the status of your flight." FlightAware data showed 544 cancellations nationwide as of 7:50 p.m. ET Tuesday. In the New York area, 9% of flights at LaGuardia International Airport had been canceled and 8% at Newark Liberty International Airport. At Washington's Reagan National Airport, 11% of flights had been canceled. The FAA imposed a ground delay program late Tuesday afternoon for flights bound for Newark and LaGuardia. The FAA was also delaying some outbound flights still on the ground. Severe storms moving through the the Northeast and Mid-Atlantic are expected to continue into the evening, according to CNN's Weather team. Severe thunderstorm watches stretch from Virginia to Maine and are in effect through 10 p.m. ET. "Weather conditions have caused LGA Airport flight disruptions," said a Tuesday afternoon tweet from LaGuardia Airport's official Twitter account. "Check with your airline to determine the status of your flight." The number of passengers screened at TSA checkpoints hit a pandemic-era record on the Friday leading into the July 4 holiday weekend -- 2,490,490.<br/>
Flying in and out of the Dubuque, Iowa, airport on the banks of the Mississippi has been a breeze for the 100,000 residents of the county. The airport is small and easy to get through. Parking is free. That all is set to end this September. American Airlines, the only carrier providing regular service to Dubuque, is dropping its routes due to a lack of pilots needed to staff the regional jets serving the airport. The airline is also dropping service in Islip, New York, on eastern Long Island, Ithaca, New York, the upstate home of Cornell University, and Toledo, Ohio, for the same reason. It called the moves a "difficult decision." For most of the residents and businesses using the Dubuque airport, the chief alternative is going to be a three-hour drive to O'Hare Airport in Chicago, which is anything but easy to navigate or park at cheaply. Much of the drive isn't even on interstate highways. Beyond making travel more difficult, the decision is a major blow to the business prospects for the city and surrounding area. "It's certainly disappointing. Obviously, air service is important to the business community," said Molly Grove, CEO of the Dubuque Area Chamber of Commerce. "They depend on it to bring in talent, or having talent fly out to other businesses. The time that is saved by not having to drive somewhere, you can't beat it." But Dubuque and the other affected airports aren't alone. This is a problem hitting more and more cities, and it is likely to be a growing concern in years to come, according to experts. United (UAL) and Delta (DAL), the two other major airlines that use a hub-and-spoke network that relies on regional jets, are also cutting back service to some of the smaller airports they serve. Despite efforts by airlines to hire more pilots, the US shortage is still forecast to get worse. And that will especially be true for the regional airlines serving these smaller cities on behalf of the major carriers. It is mainly those pilots who are being hired away to fly the larger jets. Moreover, this problem is not simply the result of the disruptions in the US airline industry caused by the pandemic and the flood of early retirements that took place as a result.<br/>
The US CDC’s reliance on outdated systems to collect and analyze data on international air travelers continues to hamper its ability to respond quickly to disease threats, according to a new report by the Government Accountability Office. The report said that limitations in how the CDC collects and manages contact information for air travelers makes it difficult to conduct contact tracing and track public health risks. The agency, the GAO found, “is unable to quickly and accurately identify the number of passengers exposed to a specific infected passenger on a flight.” Two and a half years after the coronavirus began to spread across the globe, the GAO said Tuesday that the pandemic “highlighted how unprepared the US public health and aviation systems are to respond to public health threats.” The GAO’s findings carry a sense of urgency this summer, as tourism and travel have begun to approach prepandemic levels even though the Omicron subvariant known as BA.5 is fueling a surge in cases in many countries. In the United States, reported cases have been averaging around 100,000 a day — a figure that is likely to be undercounted given an increasing reliance on at-home testing and the closures of mass testing sites. The GAO did note some changes the agency had made, but said its data systems still needed “substantial improvement.” It said that the CDC had “concurred with the recommendations” in its report, including that the agency redesign its data system or develop a new one. US authorities have made efforts to trace travelers who may have contracted Covid-19 abroad. For example, in late November, when Omicron cases were rising in southern Africa, officials directed airlines to share contact information for passengers who flew from the region into the United States.<br/>
Most Canadians believe the country is in a recession and that prices are going to continue to rise for the foreseeable future, according to a new poll.<br/>A wide-ranging survey by Leger asked Canadians and Americans about issues including travel plans, airport delays and inflation. More than 80% of Canadian respondents said they believe prices will keep going up, and 59% say they think Canada is in an economic recession. That's likely not good news for economists or business owners, said Leger vice-president Andrew Enns. "It's sort of a proxy question for how you feel about the economy," he said. "Between that and the rising inflation and the tightening of household budgets, that probably is not going to be something that's going to encourage much consumer spending." The outlook was similarly bleak south of the border, where 64% said the US is in a recession, while 19% said they didn't know. But only 66% of Americans feel prices will continue going up, and 16% said things are starting to get better. The online survey was completed by 1,538 Canadians and 1,002 Americans between July 8 and 10. Flight cancellations, delays and long lineups have 53% of Canadian respondents concerned about airport travel, while 43% said they're not concerned and only 3% said they were unaware of the problems. A similarly small proportion, 4%, said they weren't aware of long lineups and delays in getting passports — likely evidence of how prominent both issues have been in the news in recent months. Despite the many news stories about passport delays, less than half of Canadians polled said they were concerned about the issue, while 50% said it's not concerning.<br/>
The European Union proposed Tuesday to loosen its rules governing airline takeoff and landing slots as airports struggle to balance a surge in travelers with a shortage of workers. The new rules would allow airlines to cancel flights because of events related to a pandemic, natural disasters or widespread political risk without jeopardizing their access to prized slots. The bloc is proposing to return to the standard slot use rate of 80% starting on Oct. 30 even as it would add new exceptions for airlines facing unexpected disruptions. “Demand for air traffic is clearly back, and the time has come to return to normal slot use rates to ensure the efficient use of airport capacity, with fair and competitive access for airlines, to the benefit of passengers,” EU Transport Commissioner Adina Valean said in a statement. “But we must make sure we are better prepared for the unexpected.” The plan still needs to be approved by the European Parliament and member states. Airports and airlines across Europe are slashing capacity and canceling flights after being caught flatfooted by a surge of demand following two years of virtually no travel. London’s Heathrow airport on Tuesday said it is imposing a two-month cap on daily passenger traffic to cope with the overload. The UK government recently waived rules that require airlines to use takeoff and landing slots or lose them the next season, urging companies to scrap services where necessary.<br/>
Heathrow Airport said on Tuesday that it would limit the number of passengers until mid-September, citing staff shortages that have led to long lines, delays, lost luggage and last-minute flight cancellations. In an open letter to passengers, Heathrow’s chief executive, John Holland-Kaye, called on airlines to stop selling new tickets as critical functions in the airport have been significantly constrained. “We recognize that this will mean some summer journeys will either be moved to another day, another airport or be canceled, and we apologize to those whose travel plans are affected,” he said. In recent weeks, there have been periods when service had dropped to a level that was “not acceptable,” he said. Holland-Kaye said the airport could handle no more than 100,000 departing passengers each day, slightly fewer than the 104,000 he estimated it would be expected to serve on average. He asked airlines to limit the number of tickets they sold to bring numbers back under 100,000. When asked how Heathrow would enforce the capacity limit, a spokeswoman for the airport, Hannah Smith, said this would be overseen by an independent coordinator, Airport Coordination Limited. The airport coordinator said that compliance with Heathrow’s request was voluntary, because there was no mechanism in Britain that allowed it to remove allocated runway slots from airlines. The company said it would calculate the required reduction in passengers for each airline, and airlines could decide which flights to cancel or whether to comply with the request at all. Virgin Atlantic, one of Britain’s largest carriers, said in a statement that it stood ready to deliver its full schedule this summer. “However, we support proactive measures being taken by Heathrow to reduce disruption, as long as action proposed does not disproportionately impact home carriers at the airport,” the airline said. “Action should be based on thorough analysis showing the most effective measures to improve the situation and keep customers moving.”<br/>
The head of a body representing global airlines hit out at new restrictions at London's Heathrow on Tuesday, saying the airport had under-estimated the speed of the recovery and was focused on profits at the expense of airlines that must now foot the bill. Willie Walsh, DG of the IATA, and a former head of Heathrow's biggest operator BA, panned moves to tell airlines to restrict the number of seats they sell to try to limit summer disruption. However, he recognised the measures would give airlines and passengers some opportunity to plan and avoid delays. "I am surprised Heathrow have not been able to get their act together better than this. Airlines have been predicting stronger traffic than Heathrow has been predicting ... they clearly got it completely wrong," Walsh said. He was speaking in an interview after Heathrow said it would cap departing passengers at 100,000 a day this summer to limit delays and cancellations, and urged airlines to stop selling tickets for flights that could be curtailed. "To tell airlines to stop selling - what a ridiculous thing for an airport to say to an airline," Walsh said. "Heathrow are trying to maximise the profitability that they get from the airport at the expense of airlines." Walsh has long been a fierce critic of Heathrow, one of Europe's busiest international hubs.<br/>
Pilot representatives are urging crews to be particularly cautious when conducting approaches to Hong Kong’s new third runway, owing to potential weather effects and the proximity of terrain. The new runway 25R/07L is located to the north of the airport. Hong Kong’s previous northern runway has been redesignated as a centre runway, 25C/07C, and is being closed for reconfiguration work. NOTAM information from the airport informs pilots that the ILS approach from the east to the new 25R is a two-part process consisting of an area navigation transition and an ILS final segment. “This is due to proximity to terrain and possible glideslope interference by terrain,” says the international pilot federation IFALPA in a safety bulletin. It points out that Hong Kong’s highest peak – Tai Mo Shan, which rises to over 3,200ft – lies on the 25R approach path. The area navigation part of the procedure takes inbound aircraft just south of the peak, requiring them to maintain a mandatory 3,800ft over the nearby waypoint SAGNI, before descending to waypoint TOPUN at around 2,700ft, and crossing a point designated VH536 – situated shortly before the final approach point – at a required 1,800ft. But the federation cautions that pilots could find they are above the glideslope at SAGNI under certain meteorological conditions, particularly if temperatures are high and during tailwinds. “Conservative configuration may be required to achieve the published profile while avoiding [ground-proximity] warnings,” it states. The ILS approach commences from the waypoint TOPUN, from where glideslope integrity can be guaranteed.<br/>
Airlines are struggling to control airfares amid high operational costs to maintain positive momentum for the domestic market, urging the government to help lift the financial burden. Nuntaporn Komonsittivate, head of commercial operations at Thai Lion Air (TLA), said the price of fuel is the most crucial factor as it accounts for around 35% of the airline's operational costs, rising from its usual level of 30% before the surge. Global oil prices may have recently started to see a gradual downward trend, but the aviation industry cannot immediately reap the benefit. The airline has to await further updates on prices which could be lower next week. Nuntaporn said the load factor for the upcoming holiday on July 13-17 has already reached over 70%, driven by popular destinations for religious events, such as Ubon Ratchathani which hosts the annual candle festival during the start of Buddhist Lent as well as Phuket and Hat Yai.However, she said low purchasing power might not derail travel decisions because Thais typically plan trips and book cheap flights in advance to save money. The average load factor in July is estimated at 75%, however, the tourism outlook for the whole of the third quarter might be lower than that as the period is still off-peak season. TLA has had to adjust flight frequency to match actual demand and apply campaigns or joint promotions with the Tourism Authority of Thailand to boost the number of trips. However, the airline cannot offer heavy discounts as seen before Covid-19 and cannot set aside a bulk of seats for promotional prices as the available seats have been significantly reduced during the pandemic.<br/>
Ho Chi Minh City's airport will expand its passenger capacity by about 80% in 2024 with a third terminal, embarking on a 11 trillion dong ($470 million) project after years of delay. Vietnam PM Pham Minh Chinh recently visited Tan Son Nhat International Airport and ordered construction to start on the new passenger terminal in September. "Construction work should be done day and night," Chinh said, according to local media. The prime minister indicated that the project would be completed in September 2024 if things go according to schedule. Tan Son Nhat is Vietnam's biggest airport. Its first and second terminal have the overall capacity to process 25m people a year. But the airport has been working well beyond capacity and crowding has gotten worse by the year, with passenger traffic reaching 40 million in the pre-pandemic year of 2019. The third terminal would lift capacity to 45 million people. The government first approved the project about two years ago, but delays in acquiring land and the coronavirus epidemic held up construction. As Vietnam's economy slowly returns to pre-pandemic activity, demand for air travel is picking up. Airlines both foreign and domestic intend to add more daytime takeoffs from Tan Son Nhat, but the limited capacity of the airport has created a bottleneck. Meanwhile, construction is continuing for Ho Chi Minh City's second airport, Long Thanh International in Dong Nai province, which is expected to further relieve overcrowding at Tan Son Nhat.<br/>
The resurgence of COVID-19 is putting airlines and travel industries on their toes as infection rates have been rising fast over the past week, according to industry officials Tuesday. Air carriers and travel agencies are worried that the situation could get worse and have a dire impact on their business operations, they said. According to the Korea Disease Control and Prevention Agency, Tuesday, there were 37,360 new confirmed cases of COVID-19 as of midnight, Tuesday, the highest in 62 days. The airline industry is expected to be hit the hardest if the COVID-19 resurgence intensifies. Although the number of confirmed cases in Korea is increasing rapidly, it is reported that so far there are not many inquiries for flight cancellations. The airline industry believes that the possibility of a full lockdown due to the COVID-19 resurgence is low, as many countries around the world have eased quarantine measures, such as the abolition of the mandatory submission of negative PCR tests upon arrival. Aside from the quarantine situation, airlines are concerned that travel sentiment may shrink, which could dampen travel demand. Travel demand has exploded after the easing of quarantine measures, and the number of monthly international passengers exceeded 1 million for the first time since the COVID-19 crisis began.<br/>
Boeing delivered 51 airplanes in June to bring its first-half tally to 216 jets, up 38% from the same period last year, company data showed on Tuesday. June’s deliveries exceeded the 50 threshold for the first time since March 2019 and included 43 Boeing 737 MAX, which is recovering from a nearly two-year safety crisis. Industry sources said monthly MAX production touched a target of 31 airplanes but had yet to be “stabilized” at that level as aerospace faces worldwide snags in the supply chain. June deliveries included six wide-body commercial freighters but, for the 12th consecutive month, no 787 Dreamliners. Deliveries of the long-haul jet have been halted for a year as Boeing and regulators address production problems. In new business, Boeing won 50 airplane orders in June, including 49 MAX, of which 48 were sold to customers whose names were not immediately disclosed. The one public purchaser was American Airlines. Boeing took cancellations for 35 planes in June, mainly related to airline restructurings, including 29 jets originally earmarked for Norwegian Air. But it also benefited in June from dozens of jets being taken out of limbo and placed back on a list of orders expected to be fulfilled as Boeing reversed some accounting adjustments. In total during the first half, Boeing booked 286 gross orders and took 100 cancellations, leaving a net total of 186 orders after cancellations and conversions.<br/>