Flights, believe it or not, are getting cheaper. Airfares fell a seasonally-adjusted 1.8% from May to June, according to the latest US inflation data, published last week. Fares were one of the few categories to decline at a time when consumer prices rose at the fastest clip in more than four decades. The surge in spring and summer travel — even at sky-high prices — has been a boon to airlines, driving revenue above 2019 levels even as airlines fly less than they did before the pandemic, according to recent reports from major carriers like Delta and American Airlines. Now the question is: How resilient will demand be after the summer peak as carriers and travelers alike grapple with persistent inflation and worries about an economic slowdown? CEOs from Delta to JPMorgan last week said consumers continue to spend voraciously on travel. But rising costs can affect household vacation budgets and companies’ appetite to send employees out on business trips. A jump in costs is already weighing on airlines’ bottom lines and high fares are forcing some travelers to change their plans. Ticket prices often dip when the peak summer travel season fades — children return to school and families wrap up vacations, though business travel often ramps back up. Airlines also adjust capacity for lower-demand periods so they aren’t flooding the market with seats they would need to offer at low fares to fill. US roundtrip flights as of July 14 averaged $375, down from a May peak of $413 but still up 13% from 2019, according to fare-tracker Hopper. Airlines have nonetheless been upbeat about future sales, citing the pent-up desire to travel from both businesses and leisure travelers.<br/>
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Airlines are struggling to get back into the skies following two years of travel restrictions, leaving passengers facing a frustrating barrage of delays and cancellations. But when the disruption clears, the invisible impact of the pandemic will hang over the industry for years to come, as the world’s biggest carriers work to deleverage their balance sheets from billions of dollars in debt accumulated during the crisis. Ten of the leading airlines in the US and Europe have built up $193b in gross debt between them over two years, up from $109b in 2019. “This accumulation of debt is huge. There is no quick fix to this particular problem,” said Izabela Listowska, a credit analyst at S&P Global Ratings. Some airlines with weaker balance sheets have already stumbled. Earlier this month Scandinavian airline SAS filed for bankruptcy protection in the US to allow it to restructure its finances, following rival Norwegian, which went through bankruptcy and debt restructuring in 2020 and 2021. For now, big airlines are in a much stronger position. The major carriers in the US and Europe are insulated by a wall of cash built up from a combination of shareholders, debt markets and in many cases national governments. In the US, some have put up their frequent flyer programmes as collateral to raise money, while in Europe Lufthansa received a E9b bailout from the German government, which it has already paid off. British Airways owner IAG raised E2.75b from shareholders and tapped corporate debt markets, including a GBP2b state-backed loan. "A lot of the cash that was raised through debt is sitting on the balance sheets,” said Jonathan Root, a senior vice-president at rating agency Moody’s.<br/>
San Francisco International Airport said it resumed normal operations after evacuating the international terminal late on Friday following a bomb threat. "Police have cleared the Int'l Terminal. SFO resumes normal operations," the airport said in a tweet on Saturday. The airport terminal was evacuated after San Francisco police said officers had received a bomb threat at the airport and found a suspicious package on investigation. The airport said it has resumed its AirTrain service and that the Bay Area Rapid Transit trains service would restart at 6:25 AM local time. Police had taken a man into custody following the investigation.<br/>
The disorder at Toronto Pearson International Airport was visible from the sky. The pilot on Ted Laking’s domestic flight into the city last week had some unwelcome news: The tarmac was too crowded for the aircraft to descend. It would be another hour of circling around before the runway was clear enough for landing. The trip home on Monday wasn’t much better. Laking, a city councilor in Whitehorse, Yukon, was again greeted by signs of trouble before entering the airport. This time, it was the tail end of a line of travelers spilling through Pearson’s sliding doors. “It feels almost like a postapocalyptic movie, just everybody for themselves,” Laking said. Security lines with unclear endpoints would snake into a new course at the request of airport workers. There was no room to sit and too little staff to handle the irate travelers. All this was happening against the dissonant soundtrack of flight-delay announcements. “People were yelling at each other; the public was getting at each other’s necks,” Mr. Laking said. “You get to the gate, and it was just pure chaos.” These extreme backlogs have resulted in several interventions from the federal government and thousands of flight cancellations in Canada, while airports around the world are grappling with the same sort of problems as travel volumes rebound. On Tuesday, the CE of London’s Heathrow Airport said staff shortages had constrained the airport’s capacity, leading it to limit passengers for the summer. Dublin Airport floundered under the pressure of surging travel demand across Europe in the spring, and thousands of flights at airports in the United States were canceled before the Fourth of July. Sure, even before the pandemic, traveling through Canada’s major airports could be frustrating, and nostalgia for the Before Times may be coloring some of the current criticism on social media by frustrated passengers at Pearson airport. Story has more.<br/>
Several hundred flights were canceled in Italy on Sunday, a peak vacation travel day, because of four-hour walkouts involving employees of low-cost airlines as well as air traffic controllers. A union official, Fabrizio Cuscito, told Italian state TV that some 500 flights were scrapped. Airline workers are seeking better pay as well as improved working conditions, including meals on long shifts, he said. The Italian transport ministry said the strikes were called by workers for Ryanair, easyJet and Volotea airlines. That strike began at 2 p.m. (1200 GMT), while the air traffic controllers’ walkout, which also lasted four hours, started an hour earlier. Compared to airports in other Western European countries, Italy’s airports have experienced less chaos this summer. That’s because in large part when the COVID-19 pandemic paralyzed travel, many airline and airport workers in Italy received government benefits while not working, instead of losing their jobs, as frequently happened in other countries. When travel demand surged this summer, many airlines and airports couldn’t hire enough workers fast enough to serve the customers.<br/>
The travelers’ destinations were varied: a hotly anticipated vacation in Amsterdam, a conference in Ohio, a family reunion in Austria. But to get there, travelers at Heathrow Airport, one of Europe’s busiest, had to navigate long lines, canceled or delayed flights, and crowds. “I’ve never been through this situation,” said Fatima Bergamaschi, who slept in a terminal at the airport on Wednesday after a canceled flight to Brazil from London left her family too tired to book a hotel room. “I love travel, but, nowadays, not so much.” After two solid years of pandemic-induced staycations, travel has come roaring back in Europe, and peak summer vacation season is in full swing. But the return has come with myriad problems as airports and airlines who let employees go during the pandemic are feeling the strain of meeting the recent surge in demand. Long waits to check bags and get through security and passport control have become the norm, with hundreds of flight cancellations reported across Europe. In Britain, the situation has been exacerbated by the country’s departure from the European Union, which has made recruiting staff harder, and by strikes by aviation workers who say they are not being paid enough at a time of soaring inflation. Last month, photographs of luggage piled up at Heathrow Airport circulated on social media, suggesting that arriving at Heathrow was not much better than departing, and this past week, Delta Air Lines said it flew a plane from the airport to Detroit just to deliver 1,000 pieces of stranded baggage. To try to cope, Heathrow followed the lead of other airports, like Schiphol Airport in Amsterdam, and on Wednesday, it made the rare decision to cap departing passengers at 100,000 a day until September. To accomplish this, it asked airlines to stop selling tickets for summer flights. Story has more.<br/>
The boss of Heathrow has laid the blame on airlines for the staffing shortages that have caused the airport to issue an unprecedented passenger cap, warning that carriers were “mandated” to cancel flights and cut passengers numbers in response. John Holland-Kaye wrote to the UK government after Emirates led a backlash against the passenger limits put in place this summer, with the Gulf airline saying it would ignore the move and fly as normal. The UK’s busiest airport this week introduced a daily limit of 100,000 departing passengers for the first time, telling airlines to stop selling tickets over the next two months. Heathrow has told airlines it expects the industry slots co-ordinator to take about two weeks to sort out new schedules. In the meantime, the airport has imposed emergency measures that will run until July 24 to try to force airlines to cancel flights and stop selling tickets for any outbound journeys. Late on Friday, Emirates and Heathrow released a joint statement that said after a “constructive” meeting the airline had agreed to cap new ticket sales on its flights out of Heathrow until mid-August, but that its flights would operate as normal until then. In the letter to the UK government seen by the Financial Times, Holland-Kaye said the airport had been working “intensively” with airlines to try to reduce the number of flight cancellations this summer, such as by reducing the numbers of passengers per plane or moving flights to off-peak times. “Most airlines have already complied, and we are grateful for their rapid action, and we are working with the remaining airlines to finalise their plans. Airlines are mandated to act through our conditions of use,” he wrote. But despite the apparent truce with Emirates, Holland-Kaye blamed airlines for the resourcing problems. He said ground handlers, which are contracted by airlines, were still only operating at 70 per cent of pre-pandemic levels.<br/>
The British government launched an "Aviation Passenger Charter" on Sunday to help passengers know their rights if they are faced with problems at airports after the widespread disruption seen this year. Long queues and cancelled flights caused by staff shortages have caused chaos at times, prompting airlines to cut back their schedules as the industry struggles to keep up with a surge in demand after the COVID-19 pandemic. The new charter will help passengers know what to do if they are confronted by cancellations, delays or missing baggage, the government said, with guidance on how to complain if they feel they have been treated unfairly. "Passengers deserve reliable services, and to be properly compensated if things don't go to plan, and the chaotic scenes we've seen at airports are unacceptable," transport minister Grant Shapps said. "The new charter will help to give UK passengers peace of mind as they enjoy the renewed freedom to travel, whether for holidays, business or to visit loved ones." Last month, the government published a 22-point support plan to avoid further disruption, including telling airlines to run "realistic" summer schedules and promising to speed up security checks. It said these were now being processed in "record time".<br/>
Boeing trimmed its projected industrywide demand for airplanes over the next 20 years, but said it expects deliveries to be stable excluding the Russian market. Boeing projects airlines worldwide will need 41,170 new airplanes over 20 years with half of the deliveries for replacement aircraft, and with single-aisle aircraft accounting for about 75% of planes. Boeing's new market outlook, released on Sunday ahead of the Farnborough Airshow, is down from its previous rolling 20-year-forecast of 43,610 deliveries. The new estimate excludes the Russian market and its projection of 1,540 airplanes, because of the war in Ukraine and uncertainty about when manufacturers could again sell planes to Russian carriers. Boeing slightly boosted its forecast for demand over the next 10 years to 19,575 airplane deliveries -- a higher projection even excluding the Russian market. "That's a function of a depressed environment in 2021 falling off and a new trend year in 2031 being added," Darren Hulst, Boeing vice president for commercial marketing, told reporters in a briefing ahead of the Sunday release. "It comes very close to our 2019" outlook if Russia was included.<br/>
As the aerospace world gathers in southern England next week for the first major commercial show since 2019, the stakes are particularly high for one half of the global planemaking duopoly. As ever, the spotlight at the Farnborough International Airshow will focus on the battle between Airbus SE and Boeing Co. for orders, with rapid-fire, often last-minute announcements providing reassuring parallels to the pre-Covid trade expos that alternate between London and Paris. But never before has the contest been skewed so far in Airbus’s favor. Airbus has grown its heft in the past decade to conquer close to 70% of the narrow-body segment, by far the most widely used aircraft category. Boeing, meanwhile, is battling on multiple fronts: there are quality issues with its 787 Dreamliner, questions over the regulatory approval of its Max 10 aircraft and the need to make sales of the 737 Max after a lengthy grounding following two fatal crashes. The giant successor to the 777 is years behind schedule. That leaves Boeing facing much greater pressure to secure orders in Farnborough, according to Jefferies analyst Sheila Kahyaoglu. “Boeing is starting off a lower base in terms of order momentum,” she said. If Boeing can’t beat Airbus at the show, “it will continue to erode their market share.” Both Airbus and Boeing have already announced a flurry of significant deals this year which may limit how many blockbuster sales there are left to do in Farnborough. IAG SA finally committed in May to a 737 Max order first agreed at the Paris Air Show in 2019, while Airbus got a massive deal valued at $37 billion from four Chinese airlines last month. Kahyaoglu counts almost 800 potential sales still in the pipeline, though she says they’re unlikely to all come together next week. Some of the bigger anticipated deals are tipped to go in Boeing’s favor, including a potential Delta Air Lines Inc. order for more than 100 737 Max, marking the first time the Atlanta-based carrier has bought Boeing’s newest narrow-body jet. Airbus could also scoop up a few commitments from the airline however, if Delta opts to top up its A220 order at the same time. <br/>
Britain’s Farnborough International Airshow will make its long-awaited return next week, with aerospace and defense industry leaders poised to gather against a backdrop of travel chaos and labor unrest. The five-day trade show, which kicks off on Monday, will showcase the most advanced aircraft across commercial and military aviation. Over 70 of the top 100 aerospace companies will be present, although Farnborough International suspended Russian participation, citing the Kremlin’s war in Ukraine. Six key themes have been placed at the heart of the event: space, defense, sustainability, innovation, future flight and workforce. It marks the first time that key players in the airline, defense and space industries will meet face-to-face for a major summer air show since Paris 2019 after cancellations due to the coronavirus crisis. Now, as the aviation industry faces a rocky recovery from the pandemic, the air show is set to provide a global platform for executives to outline what the future holds. Visitors to the air show will see daily flying displays of the most advanced commercial and military aircraft. There will also be the opportunity to view the products up close. Beyond the displays, some 1,200 exhibitors will attend from across 42 countries. Some of the companies expected to take part in the event include Airbus, Boeing, Lockheed Martin, Rolls-Royce and BAE Systems. <br/>
Christophe Gagnon considered quitting his avionics studies as COVID-19 crippled aviation, but the 21-year-old stayed in class and now the industry is desperate for more like him to keep planes flying. Two years after lockdowns nearly grounded the airline industry, repair shops and suppliers are scrambling for students like Gagnon, who received multiple job offers while still at the École nationale d'aérotechnique in Canada's aerospace hub, Quebec. The hiring rush is evidence of a sharper than expected recovery in air travel, but also signals a looming labor shortage that is raising costs and could push up repair times as the industry stages an awkward recovery from its worst crisis. Shortages are on the minds of executives at the Farnborough Airshow near London, this year's largest aerospace expo, which starts on July 18. While a shortage of plane cabin staff has dominated headlines due to recent flight cancellations, finding mechanics also has executives sweating. Roughly $84b is expected in spending this year on maintenance, repair and overhaul of aircraft, according to Naveo Consultancy. "We are struggling in a big way. We can't get enough (workers)," said Abdol Moabery, CE of commercial aerospace company GA Telesis LLC. Despite offering raises upwards of 10%, Telesis is working harder to retain labor as soaring housing prices in the company's South Florida location lead some workers to eye offers in more affordable areas. The high-margin services industry is attractive for planemakers like Boeing, as air travel rebounds. In 2021, the US planemaker forecast the global industry's need for 626,000 new maintenance technicians over the next two decades compared with 612,000 pilots.<br/>
Eve Holding, the electric aircraft unit of Brazil's Embraer, on Sunday announced its first deal to provide a software for air traffic management, and is in talks with other potential customers in the sector. The company signed a letter of intent with UK-based Halo Aviation Ltd to develop and launch its air traffic solution, with operations expected in both the United Kingdom and the United States. Halo had ordered 200 electric vertical take-off and landing vehicles (eVTOLs) from Eve last year, in a bid to enhance the development of the so-called Urban Air Mobility sector. The software will not be focused only on Eve's aircraft as its eVTOLs will share airspace with drones, helicopters, commercial airplanes and other flying taxis, co-chief executive Andre Stein said. "It is an agnostic solution," he said.<br/>