Air tickets may become more expensive — thanks to the lack of refining capacity and the financial state of airlines, said William Walsh, the DG of the IATA. The decline in refining capacity during the pandemic, and higher jet fuel prices caused by the increase in demand for fuel are “of concern” to the airline industry, Walsh told CNBC’s Hadley Gamble on Wednesday. US refining capacity dropped by 5.4% in 2022 since it peaked in 2019 — the lowest in eight years. The dip came in the wake of refinery closures and conversions to produce more renewable fuels. Walsh added that while consumers are paying higher ticket prices, airlines are not necessarily making a profit. “And given the financial state of many airlines ... It’s not that airlines are making money, [they] are just passing on a cost that they can’t absorb themselves, and that they can’t avoid,” he said. Airline ticket prices have spiked by 25% in the past year — the biggest annual jump since 1989. In April alone, airfares surged 18.6%, according to the Bureau of Labor Statistics. But another factor could contribute to even higher ticket prices — Russia’s announcement of a military mobilization, said Qatar Airways CEO Akbar Al Baker. Russian President Vladimir Putin on Wednesday announced a partial military mobilization in Russia, placing the country’s people and economy on a wartime footing as Moscow’s invasion of Ukraine continues. Al Baker said that China’s Covid policies are the “smallest of [his] worries,” and that the airlines’ greatest concern is the escalation of the Russia-Ukraine war. “For me, the biggest worry is the conflict spreading, which [will then] fuel inflation, putting more pressure on the supply chain,” he added. “The net result will be less passengers in my aeroplane.” Nevertheless, Al Baker maintained that Qatar will continue flying to Russia as long as it is operationally safe to do so.<br/>
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US passenger airline flight cancellations in July fell to 1.8% from 3.1% in June, although air travel service complaints rose 16.5%, the U.S. Transportation Department said on Thursday. The Transportation Department has been pressing airlines to improve service and boost staffing as summer travel woes snarled tens of thousands of flights. Airlines say Federal Aviation Administration (FAA) air traffic control staffing has been a significant factor in cancellations and delays. The Transportation Department said complaints in July were more than 260% above pre-pandemic levels. "The difference between a normal level of cancellation -- it is never going to be zero with weather and stuff -- a normal level is between 1 and 2%," Transportation Secretary Pete Buttigieg said last week. "If it's 3% we feel it, it's quite bad. If it is 4% that's when you start seeing words like meltdown or chaos or hell in headlines." The union representing federal air traffic controllers says the FAA needs to do a better job of ensuring adequate staffing. The National Air Traffic Controllers Association said the FAA had over 15,000 total controllers in 2011, including over 11,750 fully certified controllers, but said in July that in 2022 "there were more than 1,000 fewer (certified controllers) and 1,500 fewer total controllers on-board." The FAA says it is on track to hire 1,000 controllers this year.<br/>
Boeing reached a $200m settlement with US securities regulators on Thursday to resolve an investigation into claims that the aircraft manufacturer and a former CE had deceived investors about problems with its 737 Max plane that led to two deadly crashes in 2018 and 2019. The company’s CE at the time, Dennis A. Muilenburg, agreed to pay a $1m fine as part of a separate settlement with the Securities and Exchange Commission, although the facts of the case were largely the same. In the settlement agreement, the S.E.C. said Boeing and Muilenburg had misled investors after the first jet crashed in Indonesia in 2018 by suggesting that human error was to blame, and omitting the company’s own concerns with the plane’s flight control system. Boeing made further misleading statements about the safety of the planes after a second plane crashed in Ethiopia a few months later, the S.E.C. said. “In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair and truthful disclosures to the markets,” Gary Gensler, the S.E.C. chair, said in a statement. “The Boeing Company and its former C.E.O., Dennis Muilenburg, failed in this most basic obligation.” The company settled without admitting or denying the facts of the case. Boeing said that it had improved “safety processes and oversight of safety issues” since the crashes and that the settlement was part of a “broader effort to responsibly resolve outstanding legal matters” related to the Max. “We will never forget those lost on Lion Air Flight 610 and Ethiopian Airlines Flight 302, and we have made broad and deep changes across our company in response to those accidents,” Boeing said.<br/>
The new Terminal A at Newark Liberty International Airport will open in November, its main tenant United Airlines told pilots this week in a memo obtained by Airline Weekly. The Chicago-based carrier plans to move into an initial 12 gates in Terminal A on around November 1, its Newark Chief Pilot Captain Fabian Garcia told pilots Wednesday. United will later expand its footprint to 15 gates, or nearly half of the 33 gates in the new $2.7b facility. “Once the [Newark Terminal A] opens, we will increase our schedule accordingly to more than 400 flights” at Newark, Garcia said. United plans to operate narrowbody aircraft, for example Airbus A320 or Boeing 737 Max jets, from the new facility. The new terminal at Newark is one of the more than $13b in airport expansion projects opening across the US in 2022. Others include the new Terminal C at Orlando International Airport that opened on September 20, as well as new facilities at the Boston, Los Angeles, and Seattle-Tacoma airports. And in the New York City area, Terminal A is the latest in a series of multi-billion dollar upgrades to city’s three main airports, JFK, LaGuardia, and Newark. Earlier in September, construction began on the new $9.5b Terminal 1 at JFK, and, in June, Delta Air Lines opened the second phase — a terminal building and one concourse — of its nearly $4b Terminal C redevelopment at LaGuardia.<br/>
Turkish President Tayyip Erdogan was quoted by broadcaster NTV on Thursday as saying that he discussed the start of direct flights from Russia to northern Cyprus with his Russian counterpart Vladimir Putin. The breakaway Turkish state on the northern side of the divided island is only recognised by Ankara. Flights from Russia would provide support for the economy there, given the potential tourism income, Erdogan said. "If direct flights start from Russia to the Turkish Republic of Northern Cyprus, we will of course be pleased," NTV quoted Erdogan as saying. The rise in tourism would lead to a "serious leap regarding the economy," he added. Turkish media reported the Turkish Cypriot transport minister as saying that two Russian airlines were interested in starting flights to the new Ercan Airport, which will be opened on Nov.15.<br/>
A 48-hour strike planned by some staff of French-speaking West Africa and Madagascar aviation safety agency ASECNA starting on Friday, could impact some flight operations in the region, the agency said in a statement on Thursday. ASECNA said two of its six flight information regions could be affected by the strike despite court decisions and government bans on the strike in Togo, Chad, Central African Republic, Congo and Senegal. "ASECNA is under the threat of a strike decided by the Union of Trade Unions of Air Controllers, a clandestine organization which is not recognised by any of the member states of the agency," it said. The 18-member states organisation manages air traffic control in an area covering 16.1m square kilometres of airspace. "The Niamey flight information region is expected to be impacted," ASECNA said, urging passengers to check updated flight information and so-called Notice-to-Airmen (NOTAM) it will publish on its website. It added that a Niger court decision on the legality of the strike was expected.<br/>
Beijing has sent a team of regulatory officials to Hong Kong to assist the US audit watchdog with onsite audit inspections involving Chinese companies, four people familiar with the matter said, as part of a landmark deal between the two countries. A China-US agreement last month allows U.S. regulators, for the first time, to inspect China-based accounting firms that audit New York-listed companies, a major step towards resolving an audit dispute that threatened to boot more than 200 Chinese companies from US exchanges. About 10 officials from the China Securities Regulatory Commission (CSRC) and the Ministry of Finance (MOF) have arrived in Hong Kong and joined the audit inspection, which started on Monday, three of the people said. The officials will assist a team of inspectors from the Public Company Accounting Oversight Board (PCAOB), the US audit watchdog, who are in Hong Kong for the onsite inspection, the four people said. All of the sources declined to be named due to the sensitivity of the matter. Representatives at CSRC and MOF did not immediately respond to Reuters requests for comment. The PCAOB did not respond to Reuters queries sent outside US business hours. The gathering of US and Chinese officials together in Hong Kong marks a major step forward in what was expected to be a fraught process implementing the audit deal, the most detailed agreement the PCAOB has ever reached with China.<br/>
Japan will abolish a slew of Covid border controls from Oct. 11, Prime Minister Fumio Kishida said in New York, in a move that looks set to revive the tourism industry. Individual visitors will be allowed to enter, and Japan will reinstate visa waivers, Kishida said at a news conference Thursday morning in New York. The cap on daily arrivals in Japan will also be ended, he said. Later in the day, at the New York Stock Exchange, Kishida said Japan “will relax border control measures to be on par with the US,” spurring applause from the audience. Japan’s move to scrap most restrictions on foreign tourists comes as the country’s deadliest wave of the pandemic recedes. It also coincides with the yen slumping to its lowest levels against the dollar in almost a quarter of a century, making the archipelago an inexpensive, attractive destination for visitors from overseas. Discounts for domestic travel will be introduced at the same time, Kishida added. After seeing a tourism boom before the pandemic, airlines, hotels and retailers are all seeking to regain the business they lost. Before Covid, Japan let visitors from 68 countries and regions, including the US, stay for as long as 90 days without a visa. Visitor numbers reached a record of almost 32m in 2019, slumping to about 246,000 last year. <br/>
Sustainable fuel startup Air Company has multi-year agreements to sell jet fuel made from captured carbon emissions to carriers JetBlue Airways Corp and Britain's Virgin Atlantic, the companies said on Thursday. Financial terms were not disclosed. Under the memoranda of understanding, JetBlue will buy 25 million gallons of Air Company's sustainable aviation fuel (SAF) between 2027 and 2032, Air Company said in a statement confirmed by the carriers. Virgin Atlantic will purchase up to 100 million gallons of SAF over 10 years. New York-based Air Company said it uses carbon dioxide from a variety of sources, such as ethanol plants, to make SAF. The global aviation industry is under pressure to reduce carbon emissions and find ways to meet the 2050 net-zero emissions target set by the International Air Transport Association (IATA) in 2021. "We're excited to be working with Air Company to reach our 10% SAF target by 2030," said Holly Boyd-Boland, Virgin Atlantic's vice president of corporate development.<br/>
The airline industry's record-breaking scramble to convert older passenger jets to freighters during the travel-starved years of the coronavirus pandemic threatens to bring a glut of cargo space as a dimming global economic picture hits demand. Analysts say aircraft lessors, who helped drive a tripling in annual conversions since 2019, now face not only fallout from falling rates for cargo and freighter leases, but could get stuck with excess freighters or be forced to cancel conversions. "This surge in conversions has raised some concerns about a bubble," said Chris Seymour, the head of market analysis for aviation advisory group Ascend by Cirium, who fears there could be a slowdown by the middle of the decade. AirAsia, Air Canada, Qantas Airways and Vietnam Airlines are among the carriers adding freighters to their fleets in their bids to diversify sources of revenue. But cargo rates have fallen nearly 40% from December's record, with shipping giant FedEx Corp saying a global demand slowdown is set to worsen after an acceleration at the end of August, clouding the peak year-end shipping season. The rapid economic downturn and growing pessimism are a swift reversal from pandemic expectations, when falling aircraft values, combined with a surge in cargo demand, drove lessors and airlines to give used planes new life as dedicated freighters.<br/>