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Air Canada Tuesday missed on earnings as costs rise after posting a smaller quarterly loss and forecasting higher full-year expenses, sending shares down 1% in morning trade. North American carriers are flying more passengers after a pandemic-induced slump, but face rising labor costs and high jet fuel prices, along with staffing shortages and congestion at some airports. Canada's largest carrier has wrestled with complaints over long lines and lost luggage at some hubs, but executives see improvements in baggage handling and demand for international travel as bright spots. Air Canada doesn't see any impact from forecasts of a possible economic turndown. Bookings going into the fourth quarter remain strong, with load factors projected to be in line with 2019 levels. "We're not seeing any evidence of a slowdown," CE Mike Rousseau told a call with analysts. Air Canada expects 2022 adjusted cost per available seat mile to be up about 15% to 17%, above 2019 levels, compared with a previous forecast of 13% to 15% higher. US carriers are also struggling to offset higher costs by raising fares. Air Canada Chief Commercial Officer Lucie Guillemette said the carrier sees strength in sixth freedom flying, where it indirectly flies US passengers to international cities such as London following a stop at one of its Canadian hubs. Guillemette said June represented "a record month for absolute sixth freedom customers in AC's history." The carrier's sixth freedom traffic on Atlantic routes accounted for 6% of total revenues during the second quarter of 2022, compared with 5% during the quarter in 2019. Air Canada reported a second-quarter operating loss of C$253m ($196.87m), compared with a loss of C$1.13b a year earlier. It reported a loss of C$1.60 per diluted share.<br/>

Lufthansa Group has reached a tentative seven-year agreement with energy firm Shell potentially covering provision of sustainable aviation fuel up to the end of the decade. Under the exploratory – and still non-binding – memorandum, Shell would use a broad range of feedstock to produce the fuel. The two sides will “contemplate” negotiating a definitive purchase, for up to 1.8m tonnes of fuel, to be supplied at various airports over 2024-30. Shell says that, if the agreement is firmed, it will be its largest commitment to date for sustainable aviation fuel. Lufthansa Group used 4.3m tonnes of fuel across its aircraft operations last year, but over 10.4m tonnes in pre-crisis 2019. “As an industry we have to work jointly towards making flying more sustainable and to achieve net-zero carbon emissions by 2050,” says the German operator’s head of fuel management supply, Katja Kleffmann. Shell claims that most supply agreements for sustainable aviation fuel rely on just one technological path, but that it is aiming to use four different approved mechanisms. It says the Lufthansa Group pact will contribute to Shell’s aim for sustainable products to account for at least 10% of aviation fuel sales by 2030. Shell Aviation president Jan Toschka says the potential agreement is a “milestone”, adding: “It is encouraging to see large flagship carriers coming to us to discuss sustainable aviation fuel supply deals, knowing there will be a lot of things to be defined and determined at a later stage – including established price markers.”<br/>

Airline safety instruction videos (and in-person demonstrations) are extremely important. But, as Brussels Airlines is proving, they by no means have to be boring. On Monday, the airline unveiled its newest safety instruction video, and right off the bat, it's a total bop, thanks to the iconic Belgian band, Hooverphonic. "When Brussels Airlines asked Hooverphonic to write a song with the text of the safety instructions, I really thought it would be impossible," ​Alex Callier, member of Hooverphonic, shared in a statement. "But at the same time, I love that kind of challenge, and we went for it. I'm glad I persevered. After a few tries, we are now ready for take-off!" The result is a four-minute, ultra moody mashup between actual safety instructions and some of the vibiest visuals we've ever seen in the air, including an artistic homage to the Belgian surrealist painter Magritte. "The safety instructions we give on board at departure are essential. Safety is our priority but that is not a synonym for bland at Brussels Airlines," ​Michel Moriaux, head of marketing for Brussels Airlines, added in the statement. "For years, we have tried to attract the attention of our passengers with humor and creativity. The result of the unique collaboration with Hooverphonic is the perfect example of this. We are very happy that our Belgian pride has taken up the challenge and pulled out all the stops to create a surprising song and clip that will be going around the world from today."<br/>