US carriers including American Airlines Group and United Airlines Holdings are enjoying the strongest consumer demand in three years, but analysts and investors question how soon the good times might end as the growing risk of economic recession sparks worries about travel spending. As earnings season starts on Thursday, investors are looking to find out how carriers plan to offset higher costs and protect profit once consumer demand softens. The airline industry, which is facing higher fuel and wage bills, has been relying on robust demand to mitigate inflationary pressure with higher fares. American Airlines on Tuesday forecast stronger profit in the third quarter as it expects higher ticket prices to offset a run-up in operating costs. The Texas-based carrier, however, did not provide any commentary on the booking trends. Airline fares were up 33% year-on-year in August and have been one of the biggest contributors to a jump in US consumer prices. With the Federal Reserve aggressively raising interest rates to tame inflation by lowering demand and slowing economic growth, the industry's pricing power is under threat. Analysts at Jefferies expect a sharp slowdown in the industry's revenue next year. "We struggle to get positive on a pricing story when the Fed is actively targeting airline fares as a component of inflation," they said in a note.<br/>
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A US transportation security agency said Wednesday it plans to issue new cybersecurity requirements for some key aviation systems after several U.S. airport websites earlier this week were hit with apparently coordinated denial-of-service attacks. The TSA said Monday's cyberattacks that were allegedly organized by pro-Russian hackers "did not disrupt airport operations or access to information." TSA noted it previously "updated its aviation security programs to require airport and airline operators designate a cybersecurity coordinator and report cybersecurity incidents, conduct a cybersecurity assessment, and develop remediation measures and incident response plans." TSA added it plans to "soon issue additional performance-based cybersecurity requirements for critical aviation systems." The FAA as a condition of airport terminal grants said in a notice last month to airports they must demonstrate efforts "to consider and address physical and cyber security risks relevant to the transportation mode and type and scale of the project." The FAA added "projects that have not appropriately considered and addressed physical and cyber security and resilience ... will be required to do so before receiving funds for construction." The Government Accountability Office in a 2020 report said the FAA should fully implement key practices to address cybersecurity risks.<br/>
European Union nations backed off from a confrontation over what proportion of takeoff and landing slots airlines should be compelled to use this winter. Member states have agreed to a use-them-or-lose-them level of 75% for the airport slots, up from 64% now, as demand rebounds from the coronavirus crisis, according to a statement from the European Council Wednesday. A majority of EU members had previously sought only a 70% requirement in order to take pressure off their national carriers against a background of soaring inflation and energy prices, the war in Ukraine and a possible resurgence in Covid-19. That clashed with a push by the European Commission, the EU’s executive arm, for a return to the pre-pandemic stipulation of 80%. Slot rules aim to encourage the utilization of capacity at Europe’s crowded airports by stripping airlines of flights the following season if it drops below the set level. The requirement was slashed when Covid upended travel but was gradually increased with the rebound in demand, only for a labor shortage to limit flights over the summer, forcing airports themselves to trim schedules. The council said it expects that legislation will be adopted on Oct. 17, before the winter timetable kicks in from Oct. 30.<br/>
Banning flights on routes with fast rail connections could cut the UK’s emissions from domestic aviation by a third, a report has found. The report by the thinktank Intergenerational Foundation (IF) found that domestic aviation was responsible for the emission of 2.7 megatonnes of CO2 in 2019 alone – the equivalent of the annual emissions from 1.7m petrol cars or the energy to power 700,000 UK homes for a year. If domestic flights on routes with a rail alternative under 4.5 hours were banned, the authors say it would reduce emissions by 885 kilotonnes – a 33% reduction. The reduction rises to 53% when only taking Great Britain into account, as there are no rail links between Northern Ireland and the rest of the UK. The authors of the report call for a domestic flight ban policy similar to the one implemented in France earlier this year. In April, France became the first country to implement a nationwide short-haul flight ban where alternative trains under 2.5 hours were available. The disruption to commuters, would be minimal, the report suggests, as for two-thirds of passengers travelling between city centres, taking the train adds less than 30 minutes to their journey compared with flying, while almost a third of journeys are as fast or faster by train. Angus Hanton, from IF, said: “Now is the moment to challenge the unnecessary use of aviation fuel. This new, un-green government wants to use the current cost of living crisis as an excuse to keep people in planes rather than them taking the eco-option of train travel.”<br/>
The Czech Republic will turn away Russian tourists holding Schengen-zone visas issued by any country from Oct. 25, the foreign minister said on Wednesday, as it joined other European Union member states in tightening entry rules. EU countries had balked at enacting a visa ban for Russians at the end of August when the bloc agreed to put a tougher process in place. Since then, countries bordering Russia, like the Baltic states, along with Finland and Poland, have barred Russian tourists. The Czech Republic had immediately stopped visas for Russians, except on humanitarian grounds, after Moscow's invasion of Ukraine in February. But it had been allowing in visitors at airports who had visas issued by other countries in the EU's Schengen travel zone. The tightening of rules, approved by the government on Wednesday, means even those with EU visas from other states will not be allowed to enter."While Russian rockets fall on a children's playground and on people in Ukraine, up to 200 Russian Federation citizens travel to the Czech Republic via international airports every day," Foreign Minister Jan Lipavsky said. The ban will be for Russians holding visas for tourism, sport or culture, Lipavsky said.<br/>
Taiwan began welcoming back visitors on Thursday after finally ending mandatory quarantines to control the spread of COVID-19, with gifts of cuddly toy black bears for the first tour group that stepped off the plane shortly after midnight. Taiwan had kept some of its entry and quarantine rules in place as large parts of the rest of Asia relaxed or lifted them completely, although in June it cut the number of days required in isolation for arrivals to three from seven previously.While Taiwan has reported almost seven million domestic cases since the start of this year, the government has pressed on with its re-opening, saying life has to return to normal, especially given high vaccination rates. The government welcomed the first arrivals benefiting from the end of quarantine on a flight from Bangkok at Taiwan's main international airport at Taoyuan, outside Taipei. Excited tourists posed for pictures amid a throng of media and officials, and were met off the plane by Tourism Bureau Director-General Chang Shi-chung."This is an opportunity to bring back to life and rebuild cross-border tourism," Chang told reporters. Some rules remain, including a requirement for people to monitor their health for seven days after arrival and perform rapid tests on themselves. Taiwan's two main carriers, China Airlines and Eva Airways, have ramped up flights, returning capacity on routes that were slashed during the pandemic and planning new services to cities like Da Nang in Vietnam.<br/>
A wheel fell off a giant Boeing cargo jet and plunged to the ground shortly after the aircraft took off from Taranto in southern Italy on Tuesday morning. A video posted on Twitter showed a plume of black smoke suddenly spit out from the 747-400 Dreamlifter’s undercarriage and a wheel like a giant bowling ball flying to the runway and bouncing away. The aircraft, operated by Atlas Air Worldwide Holdings Inc., continued with its journey and landed safely about 11 hours later at a Boeing production facility in Charleston, South Carolina. The footage of the takeoff made it the most tracked flight in the world, with more than 10,000 users following its journey, according to data from Flightradar24. The cause of the incident isn’t yet clear. A Boeing spokesperson said the company will support Atlas Air’s investigation. Atlas Air wasn’t immediately available to respond to a request for comment. The Dreamlifter is a modified version of the 747-400 and is mainly used to transport Boeing 787 parts for the Arlington, Virginia-headquartered aircraft manufacturer. While slightly smaller than the Airbus 380, the largest passenger jet in operation, it is still among the biggest specialist cargo planes in the world.<br/>
Airbus CEO Guillaume Faury said high energy prices are weighing hard on suppliers to its jetliner programs and that some smaller firms are having to idle production. While the worst of a supplier crunch triggered by shortages of labor and raw materials may be over, the high cost of power has become a pressing issue for players lower down the chain, Faury said Wednesday in comments at the UK Aviation Club. It’s another challenge for the manufacturer at a time when Airbus has been seeking to crank up output. “We see another thing coming, which is the consequences of energy prices skyrocketing leading to some suppliers trying to adapt, sometimes stop producing, waiting for the situation to normalize,” he said. “That’s very low in the supply chain, but it’s probably something new.” Faury acknowledged that Airbus’s supplier base wasn’t as prepared as it might have been as the group sought to bounce back from the Covid-19 pandemic. At the same time, he said, a goal of producing 75 A320-series planes a month by 2025 remains “likely to happen.” When asked how the UK’s current economic and market turmoil, which has hit the value of the pound, is affecting Airbus, Faury said the company is well hedged and so is not exposed. The CEO said the jetmaker is happy with the support it’s receiving in the UK and that wing production for all of its models will remain focused there. While the Toulouse, France-based group had viewed Brexit as a risk to its British connections, the situation now is positive, with the UK valued for its “innovative, fast ecosystem,” he said.<br/>
Boeing said Wednesday it finalized an order for 10 777-8 Freighters with Cargolux, after the Luxembourg-based cargo airline picked the planemaker's newest freighter to replace its 747-400 fleet. The selection of 777-8 by Cargolux was announced at this year's Farnborough International Airshow. The deal, valued at about $4.1b at list prices, was previously listed as unidentified on Boeing's orders and deliveries website. Boeing has now booked more than 50 orders for the 777-8 model, which was launched earlier this year.<br/>
The head of European planemaker Airbus (AIR.PA) on Wednesday reaffirmed a target of delivering a total of 700 aircraft in 2022 - a task he said was necessary to reach a separate monthly production target of 65 narrowbody jets in early 2024. "There is a lot on our plate ... for the last three months of the year, but it is not very different from what we have done in '17, '18 and '19," CE Guillaume Faury said. "That is for 2022. And we need to get there to be on our way (to) reaching 65," he told the UK Aviation Club. That in turn will help determine whether Airbus can reach a longer-term goal of 75 narrowbody jets a month in 2025, he added in remarks setting out a sequence of interconnected challenges as supply chains grapple with energy costs and labour shortages. A recent decision to delay the recovery of monthly A320-family production to 65 by six months, to early 2024, eased pressure on suppliers, though some small suppliers in Europe have had to pause plans due to high energy bills, Faury said. "Will we get to 65? Of course. Today, early 2024 is the best assessment we have," he said. Eyeing demand for its single-aisle jets, Airbus wants to go beyond this output to 75 jets a month. Faury said Airbus was "likely" to achieve this in 2025 as planned. Engine makers have questioned the timing of the plans, but Faury said they had responded later than others to the recovery by raising output to serve new jet production, since they also needed to keep enough engines to feed the repair market. "We think that 75 is the right place to be for the second half of the decade ... there is more demand than 75, but 75 is a robust place to be from the demand side," Faury said.<br/>
The head of European planemaker Airbus said on Wednesday a recovery in global airline traffic to pre-pandemic 2019 levels was unlikely to take hold fully before 2024. CE Guillaume Faury told the UK Aviation Club that Airbus was still forecasting a recovery between 2023 and 2025 but that 2023 was now looking increasingly unlikely, noting ongoing airline losses and travel restrictions in China. <br/>