Southwest has a problem. America’s largest low-cost carrier has been forced to reduce the number of daily flights because the company does not have enough planes and is also short of pilots to fly them. The airline “sold more flights than they’ve been able to operate”, said Captain Casey Murray, president of Southwest Airlines Pilots Association. It has gone from offering about 5,000 flights a day to a range of 4,000 to 4,300 as it waits for Boeing to deliver jets. “As we move forward and staffing is corrected, airframes will become the issue,” he said. A shortage of new jets is the latest challenge for the global airline industry, which has been grappling with resurgent passenger demand following the pandemic while at the same time facing an exodus of staff and spare parts. Deliveries of new jets have been hampered by severe constraints in the supply chain, particularly for engines, pushing back delivery times for many airlines. Airbus, Boeing’s European rival and the world’s largest plane maker, was this summer forced to slow down an aggressive ramp-up in the production of its best-selling A320 family of jets, citing supply chain disruptions, logistics and energy supplies among its challenges. United Airlines CE Scott Kirby told investors Boeing and Airbus were “probably two to three years away” from making aircraft at pre-pandemic rates. Delta CE Ed Bastian added that manufacturers’ “difficulty with . . . producing aircraft” was one challenge among many facing airlines as demand to travel increases. Derek Kerr, CFO at American Airlines, also said on Thursday that the carrier now expects to receive 19 737 Max jets from Boeing next year instead of 27. The airline has planned its schedule around receiving the planes on a new timetable, and “they need to meet those dates for us to hit the level of [operations]”. Boeing said the company continued “to work closely with suppliers to address industry challenges, stabilise production and meet our commitments to customers”.<br/>
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Markets are convulsing, and inflation is squeezing consumers. But people are still flying. A lot. Travel didn’t slow much after summer ended, and airline executives now say they expect changing and recovering travel patterns to keep them busy through the holidays and into next year. “Many of the demand trends we saw emerge during the pandemic are becoming more consistent and shaping our commercial focus for 2023 and beyond,” Robert Isom, the chief executive of American Airlines, told reporters and analysts on a call on Thursday to discuss the carrier’s quarterly financial results. The airline is feeling “very bullish about overall demand, even in an uncertain economic environment,” he added. Executives at United Airlines and Delta Air Lines share that optimism. One big reason is that the ability to work remotely, full or part time, has allowed Americans to travel more and to combine personal and professional trips — a transformation that appears to be enduring, and one that carriers are planning around, executives say. “There’s been a permanent structural change in leisure demand because of the flexibility that hybrid work allows,” United’s chief executive, Scott Kirby, said Wednesday on a call with reporters and analysts. “This is not pent-up demand. It’s the new normal.” Other trends also contributed to strong financial results for the three airlines in the quarter that ended in September. Lucrative corporate travel and international travel continue to rebound. And even setbacks have a silver lining: Limits on airline growth have kept flights full. The benefits to the industry of travelers’ newfound flexibility extend beyond revenue. Passengers have started to spread out travel, reducing swings in demand between busy weekends and slower days midweek. Holiday travel is spreading out, too, the executives said. Traditionally, Labor Day weekend marks the end of the busy summer season, with travel slow until it picks up for Thanksgiving and Christmas. But flexibility from remote work encouraged people to keep flying last month, United said. Even intraday travel is changing in ways that ease pressure on airlines. At American, travelers long preferred flights that left before 8 a.m. or after 4 p.m., so the airline focused flights at either end of the weekday. But American said it had started to see a small yet notable shift toward travel in the middle of the day.<br/>
Transatlantic travel is booming, driving airline revenue as Americans armed with a strong US dollar fly to Europe and the UK. Revenue at United Airlines from trips between the US and Europe rose 40 per cent in the third quarter compared with the same period in 2019, to $2.5b. The average fare on those trips climbed 30% compared with a year earlier. The strong dollar has been “useful” in prompting US travellers to book trips to Europe, said United’s CCO Andrew Nocella. What was an “incredible” summer season has maintained momentum into the autumn. The airline debuted multiple new routes last summer, flying 14 per cent more seats across the Atlantic than it did in 2019, and it plans to add more routes next year. “It’s full speed ahead across the Atlantic,” Nocella said. All three big US carriers reported an increase in transatlantic revenue compared with 2019, and many European airlines also have benefited from an uptick in demand. Executives and analysts attribute the increase to the rising value of the dollar against the pound and euro. The pound now trades at $1.12, while the euro is at $1.02. The dollar’s influence appears in the direction of travel. Data from Dohop, a flight connections bookings platform used by more than 60 airlines including Spirit, Avianca and Air France, showed that passenger traffic from North America to Europe increased faster throughout the year than the reverse. Outbound passenger traffic between May and August from North America was 2.8 times higher than between January and April. But Europe to North America passenger traffic during the summer was just less than double the level between January and April.<br/>
Major U.S. airlines oppose U.S. Transportation Department (USDOT) plans to update a government dashboard to show if carriers will voluntarily compensate passengers for lengthy delays within airlines control, a trade group told Reuters on Friday. This is the latest effort by the department to prod the airline industry into voluntarily committing to provide compensation and other benefits to passengers impacted by flight problems. Airlines and USDOT sparred over the summer about who was to blame for tens of thousands of flight delays and cancellations. A senior USDOT attorney involved in aviation consumer protection issues asked major airlines in emails to answer by Monday whether they will commit to providing $100, frequent flyer miles or airline travel vouchers for delays of three hours or more when delays are the fault of the airline, according to three people briefed on the matter. USDOT also wants airlines to commit to compensating consumers for canceled flights when it results in at least a three-hour delay. The department then plans to post the results on a government dashboard it released last month, according to the sources. USDOT also asked carriers to commit to rebooking passengers on non-partner airlines.<br/>
A federal judge in Texas on Friday handed a significant victory to relatives of the victims of two deadly Boeing 737 Max crashes who are seeking to overturn a $2.5b legal settlement between Boeing and the Justice Department and to pursue criminal charges against the company. In a strongly worded ruling, Judge Reed O’Connor wrote that “the court finds that the tragic loss of life that resulted from the two airplane crashes was a reasonably foreseeable consequence of Boeing’s conspiracy to defraud the United States.” That being the case, he said, the 346 people who were killed in the crashes in 2018 and 2019 qualify as “crime victims” under the Crime Victims’ Rights Act. “Now we get a chance to go in front of the judge to say the remedy for this is to throw out this rotten deal and try to get Boeing the corporation criminally prosecuted and its leadership criminally prosecuted for its crimes that led to the deaths of 346 people,” said Paul Cassell, a former federal judge who has represented relatives of victims in the case pro bono. A spokesman for Boeing declined to comment on Friday. The Justice Department also declined to comment on the ruling. The relatives of some of the crash victims said the deferred prosecution agreement between the Justice Department and the company violated their rights. The deal, which resolved a criminal charge that Boeing had conspired to defraud the FAA, was struck last year in the waning days of the Trump administration. As a result, Boeing agreed to establish a $500m fund to compensate the families of those who died, pay a fine of nearly $244m and pay $1.77b in compensation to airlines. Attorney General Merrick B. Garland participated in a video call with some of the victims’ families and their representatives in January but has stood by the deal.<br/>
A charter airline contracted by the British government to transport asylum seekers to Rwanda has pulled out of the deal following outside pressure, another blow to Britain’s hard-line immigration plan to send asylum seekers to the small African nation. The British deal with Rwanda came as Western nations are taking tougher stands against accepting refugees, and as thousands of people have crossed the English Channel in small boats this year seeking asylum. Rwanda’s president, Paul Kagame, is aiming to position his country as a solution to the migrant crisis, though critics see the country as trying to benefit financially from the arrangement. Under the deal, Britain would pay GBP120m, or $135m, to Rwanda to finance opportunities for the migrants, including education, job skills and language training. Those who are granted asylum would not be able to return to Britain, and would remain in Rwanda. Privilege Style, the Spanish charter airline that pulled out of the arrangement, operated a deportation flight in June that became the center of a legal and media firestorm and was halted after the European Court of Human Rights intervened. It was the first and so far only attempted flight as part of Britain’s agreement with Rwanda.<br/>
Saudi Arabia is in advanced negotiations to order almost 40 A350 jets from Europe's Airbus as part of strategic efforts to launch a new airline and challenge heavyweight carriers in the Gulf, industry sources said. If confirmed, the purchase by the sovereign Public Investment Fund, worth $12b at list prices, could be announced as early as this week when Riyadh hosts a major forum, the Future Investment Initiative, the sources said. It remained unclear whether Boeing would also seize part of a substantial shopping list for the new airline, which will be named RIA, the sources said. One source familiar with the negotiations cautioned that it was "not over yet." PIF has been negotiating to buy some 75 jets and another source said the kingdom was leaning toward the Boeing 787. Reports have said that the airline may also need narrow-body jets. Neither Airbus nor Boeing had any comment. PIF did not immediately respond to a request for comment. Any commercial deal must still win political approval and also depends n complex engine negotiations, one of the sources said. The choice of supplier is widely seen as politically charged as the Saudi gathering takes place amid deepening tensions between Washington and Riyadh, two industry sources said.<br/>