Airlines are paying the biggest ever premium for jet fuel, putting pressure on their balance sheets and driving up ticket prices for passengers. Jet fuel was 50% higher than Brent crude oil at the start of this month, with airlines paying more than $140 a barrel for fuel even as global oil prices fell towards $90, according to the IATA. “This is at levels I do not recall ever seeing before,” said Willie Walsh, the former boss of British Airways who now runs Iata. “We had expected this spread to reduce as more jet fuel supply became available, but clearly the recovery in demand is stronger than the recovery in production of jet fuel,” he added. The price premium for jet fuel over crude oil averaged 17% between 2009 and 2019, Walsh said. It had risen as high as 60% this year, which had “continued to put pressure on airline costs base”, Walsh said. Russia was among the world’s largest exporters of oil “distillates”, which include diesel and kerosene jet fuel. Europe was already a big distillate importer even before Russia’s invasion of Ukraine changed the dynamics of energy markets, while several refineries in Europe closed during the pandemic. The resulting supply crunch and sharp rise in prices have put further pressure on airlines’ fragile balance sheets: fuel typically accounts for between 20 and 25 per cent of their operating costs. Walsh said the high cost of fuel “ultimately gets reflected in ticket prices”, echoing the sentiments of Ryanair CE Michael O’Leary, who has warned ticket prices are likely to rise for years. Chloe Lemarie, an analyst at Jefferies, said airlines had responded to rising fuel prices by turning to newer and more fuel efficient aircraft, while keeping older jets in storage. “This is a way in which airlines have been able to limit the fuel intensity of their operations,” she said.<br/>
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The US DOT must step up efforts to stop anti-competitive US airline mergers and hold carriers accountable for flight cancellations and poor customer service, an influential Washington-based think-thank said on Wednesday. The American Economic Liberties Project called for increased enforcement in a letter to Transportation Secretary Pete Buttigieg and White House Chief of Staff Ron Klain. The group, led by Sarah Miller, has been instrumental in making antitrust enforcement a mainstream issue in Washington. USDOT has not acted sufficiently on President Joe Biden's executive order last year to address competition across industries and has "refused to bring even a single dollar of fines against any US airlines," the group said in the letter. "The agency's lax regulatory approach has allowed and encouraged airlines to continue destabilizing the air travel industry," the letter said. "The DOT has stood by as airlines excessively cancel flights, sell tickets for phantom flights, and cheat passengers out of required cash refund."<br/>
Employees at Boeing Co. and other manufacturers will be given new protections against company interference as federal regulators continue to tighten oversight of aircraft development following a pair of crashes of 737 Max jets. The latest rules apply to engineers who are deputized by the US FAA to review the safety of aircraft designs. Any concerns they raise about possible interference must be investigated and reported to the agency under an order finalized on Wednesday. Those employees will also be able to communicate directly with FAA at any time. The move is the latest step by the FAA to rein in manufacturers after the crashes in 2018 and 2019 put a spotlight on the longstanding practice of allowing planemakers to use their own employees to act on behalf of the government for some jet-development oversight. Some workers in what is known as Boeing’s Organization Designation Authorization have said that they receive undue pressure, though the company says it’s improving. The FAA is also establishing a panel to review safety practices at companies with ODA programs, the agency said. The panel, required by Congress, will be made up of experts from NASA, FAA, labor unions, independent engineering experts and others. “Boeing fully supports efforts to enhance transparency and independence in the ODA program,” the company said in an emailed statement. “We have and will continue to work with the FAA to ensure our ODA unit members can perform their vital roles without interference through open communication and a supportive environment.”<br/>
Hurricane Kay weakened slightly by Wednesday afternoon, authorities said, as the Category 2 storm headed closer to Mexico's Baja California peninsula, causing flight cancellations throughout the region. As at 5 pm ET (2100 GMT), the storm was located over the Pacific Ocean some 205 miles (335 km) west-southwest from the tip of the peninsula, home to the beach resort Cabo San Lucas, according to the Miami-based National Hurricane Center (NHC). Although it is forecast to continue weakening, Kay is expected to remain a large hurricane when it passes near the west-central coast of the Baja California peninsula, the NHC said. Mexican airlines VivaAerobus, Volaris and Aeromexico said in statements that Kay had prompted cancellations of domestic flights to the popular tourist region of Los Cabos. Kay reached Category 2 intensity earlier in the day, with sustained wind speeds hitting 100 miles per hour (155 km per hour). The NHC said a tropical storm warning had been activated for the Los Cabos area, while a hurricane watch and hurricane warning were in effect for other parts of the state of Baja California Sur, with heavy rains expected through Saturday.<br/>
Greece is considering listing a 30% stake in Athens International Airport, a government official said on Wednesday, after a review of the ownership of the country's biggest airport. Greece owns 55% of the airport and the country's privatisation agency had shortlisted nine investors as part of a tender for the sale of a 30% stake, but the government is now looking at a listing on the Athens stock exchange, Alex Patelis, the Greek prime minister's chief economic advisor, told Real FM radio station. Athens has been reviewing the sale since the COVID-19 outbreak brought world travel to a standstill early in 2020. Greece's stake in the airport is held through HRADF and another state-owned entity. A private Germany-based airport manager, AviAlliance owns 40% of the company's shares.<br/>
Chengdu, the capital of the southwestern Chinese province of Sichuan, extended a lockdown in most of its districts on Thursday, hoping to stem further transmission of COVID-19 cases in the city of 21.2m people. The mega city, which has most recently battled with heat waves, power cuts and an earthquake, was locked down on Sept. 1 after detecting a number of cases, becoming the largest Chinese metropolis to be slapped with the curbs since Shanghai earlier this year. Since then, Chengdu has been reporting largely under 200 new locally transmitted infections per day, a small number compared to outbreaks in other parts of the world. It found 116 new cases for Sept. 7 versus 121 a day earlier, according to local authorities on Thursday. The lockdown was expected to be lifted on Sept. 7, but local government officials said late on Wednesday that there are still risks of the virus's spread in some areas.<br/>
US aviation regulators approved designs for the first flying drone built specifically for shipping packages, a major step forward for the fledgling remote delivery industry. Matternet Inc.’s Model M2, a four-rotor copter capable of carrying a 4-pound (1.8-kilogram) package, is considered safe and reliable, the FAA said Wednesday. Winning regulatory permission for aeronautical designs is one of the major hurdles required before the devices can operate routinely for commercial operations. “It is an important milestone in the FAA’s support for the development of innovative drone technology,” the FAA said. Other restrictions remain before package delivery by aerial drone becomes widespread, such as the need for a low-altitude air-traffic system and rules to allow automated flights. But FAA approval shows the technology is maturing and the agency considers this new type of rotor-powered vehicle to have the equivalent reliability of traditional aircraft. The FAA action, known as a type certificate, is the first granted for an unpiloted vehicle since drones began to be more widely used almost a decade ago. The agency had only given restricted approvals for drone designs in the past. <br/>