Airlines are flying back into profitability after racking up big losses during the pandemic. There is a cloud on the horizon, however: sharp increases in the cost to rent a plane. More than half of the world’s commercial aircraft are owned or managed by leasing companies, and their rates are rising. For Airbus’s A320neo and Boeing’s 737 Max — the most sought-after single-aisle aircraft — lease rates have respectively risen 14 per cent and 20% since the lows of the pandemic, according to IBA, an aviation consultancy. The jump in rental fees is another consequence of global central banks’ push to raise interest rates as surging inflation ends an era of cheap finance. Higher interest rates mean that the specialist companies that own and hire out aircraft fleets have more costly debt. Lessors must calculate how to pass on these borrowing costs to carriers that are already dealing with ballooning higher fuel and labour expenses. Air Lease, a Los Angeles-based lessor, last week raised $700m through a bond offering at an interest rate of 5.85% — roughly double the rate of a similar bond issuance in January. The deal, the first such bond offering since Russia’s war in Ukraine, is “somewhat of a bellwether,” said Philip Baggaley, analyst at S&P Global. “They had to pay a lot more than they used to borrow at, but that’s the market reality.” Air Lease executive chair Steven Udvar-Házy said he had not seen the cost of capital increase this quickly since the 1970s, when inflation was rampant. “Airlines are always pushing back,” he said. “I’ve never had an airline say that our lease rates are too low. It’s like a big Istanbul grand bazaar: The leasing company says 100, the airline says 80, and we hope to negotiate at 99 and a half.”<br/>
general
The director general of airline association IATA believes the debate over single-pilot operations in commercial aviation will continue for many years, with no certainty that such practices will ever be adopted by carriers. Former pilot Willie Walsh said that while he would happily fly in an aircraft operated by a single pilot, given he could “take over if necessary”, the debate on the issue is likely to “go on for some time”. “I don’t expect to see a move to single-pilot operation, if ever, but certainly I don’t see it in the next 15-20, even 25 years,” Walsh states. That is despite the former IAG chief acknowledging that the technology in current-generation aircraft is “night and day” when compared with that seen in the Boeing 737-200s he first flew in 1980. Walsh’s comments came after the European Union put forward a working paper at the recent ICAO assembly on the introduction of extended minimum-crew operations (eMCO) and, at a later stage, single-pilot operations (SiPO), highlighting the challenges and opportunities that both concepts bring. The paper notes that the eMCO concept can be seen as ”an early step towards increased automation, ultimately leading to SiPO”. It would see a single pilot in the cockpit for the cruise phase of a flight, while a second pilot rests, meaning only two pilots being on board long-haul flights, versus the three or four currently required to ensure that two are always in the cockpit. <br/>
An airport in Peru has been closed and two people have been killed in violent protests, authorities say. Pictures on social media showed smoke billowing from Andahuaylas airport in the south of the country. Fifty police officers and workers were surrounded by demonstrators at the airport, the transport ministry said in a statement. Protests over the impeachment of President Pedro Castillo have continued in the capital Lima. Police fired tear gas on Sunday to disperse demonstrators in the city. Peru's aviation body Corpac - part of the ministry of transport - said Andahuaylas airport had been seriously affected since Saturday afternoon, experiencing attacks, vandalism and fires being started. It said 50 airport workers and police officers had been surrounded in the airport terminal, and added that some people had been taken hostage. Peru's national police later said officers had been to the airport with state police, and that one officer had been injured.<br/>
A Libyan intelligence operative charged in the 1988 bombing of an American jetliner over Lockerbie, Scotland, was arrested by the FBI and is being extradited to the United States to face prosecution for one of the deadliest terrorist attacks in American history, officials said on Sunday. The arrest of the operative, Abu Agila Mohammad Mas’ud, was the culmination of a decades-long effort by the Justice Department to prosecute him. In 2020, Attorney General William P. Barr announced criminal charges against Mr. Mas’ud, accusing him of building the explosive device used in the bombing of Pan Am Flight 103, which killed 270 passengers, including 190 Americans. Mas’ud faces two criminal counts, including destruction of an aircraft resulting in death. He was being held at a Libyan prison for unrelated crimes when the Justice Department unsealed the charges against him two years ago. It is unclear how the US government negotiated the extradition of Mas’ud. Mas’ud’s suspected role in the Lockerbie bombing received new scrutiny in a three-part documentary on “Frontline” on PBS in 2015. The series was written and produced by Ken Dornstein, whose brother was killed in the attack. Dornstein learned that Mas’ud was being held in a Libyan prison and even obtained pictures of him as part of his investigation. “If there’s one person still alive who could tell the story of the bombing of Flight 103, and put to rest decades of unanswered questions about how exactly it was carried out — and why — it’s Mas’ud,” Dornstein wrote in an email after learning Mas’ud would finally be prosecuted in the United States. “The question, I guess, is whether he’s finally prepared to speak.”<br/>
A provisional agreement on reform of the European Union’s Emissions Trading System (ETS) with regards to aviation has prompted a mixed reaction from airlines. Notably, the deal announced on 6 December would see the ETS continuing to apply only to intra-European flights through to 2026, when the EU will assess whether ICAO’s global CORSIA offsetting scheme – which will cover international flights into and out of the bloc – is sufficient to meet the targets of the Paris Agreement. The proposal states that should the EU deem CORSIA unfit for purpose in 2026, the ETS will be extended to cover all flights departing the bloc. That prompted an angry response from Ryanair, with the giant European low-cost carrier again claiming that short-haul operators are being unfairly targeted by ETS costs. “While the richest Americans, Europeans and Asians on long-haul flights pay zero [environmental] taxes, Europe’s most price sensitive passengers and their families travelling on short-haul flights, many to the peripheral member states such as Ireland, Portugal, Spain, Greece, Malta, and Cyprus, and who have no alternative to flying, are forced to pay all of Europe’s ETS taxes, while they generate less than half of EU aviation emissions,” says Ryanair group CE Michael O’Leary. “This is clearly unfair,” he adds. But airline industry association IATA had earlier in the week said during its Global Media Day that it continued to oppose the idea of the ETS applying to international flights out of the bloc, in line with its belief that CORSIA should be sufficient and that such measures risk putting local carriers at a competitive disadvantage. <br/>
Munich on Friday said it would ban all climate-related gatherings aimed at blocking key roads and other areas for at least a month, a day after some activists glued themselves to the tarmac of the airport of Germany's third-largest city and disrupted flights, according to local media. The general order, running from Dec. 10 until at least Jan. 8, is aimed at ensuring "that the main routes for emergency and rescue vehicles in the city area are kept clear at all times and to avert possible harm ... that could arise due to delays in emergency travel," the city said in a statement. It added that the events in recent days had made such action necessary. Climate activists took their protest against cheap air travel to two of Germany's largest airports on Thursday, including Munich, in the latest effort by activists to raise awareness by blocking runways and streets in Germany. Activists from the Last Generation environmental group in a statement called on the government to stop subsidising air travel and expand cheap train travel offers instead.<br/>
Belgium will impose new taxes on older, noisier planes as well as private jets and short-haul flights in a bid to reduce noise and air pollution, according to a government statement. Currently, aircraft using Brussels Airport have to pay a tax determined by the noise level generated at take-off and landing. Until now, small planes such as private jets have been exempt. The new system of duties, to take effect from April 1, 2023, makes taxes dependent not just on noise, but also on levels of air polluting and greenhouse gas emissions, as well as the destination. Duties will increase for flights shorter than 500 km (310 miles). "The noise pollution experienced by residents near Brussels National Airport, whether they live in Flanders, Brussels or Wallonia, cannot remain as it is," said Georges Gilkinet, deputy prime minister and minister in charge of transport. Business aviation represents 12% of all air traffic in Belgium, according to the European Business Aviation Association.<br/>
French air traffic control centres have started introducing a new-generation air navigation system developed by Thales. Reims area centre, the first deployment site, inaugurated its system – known as 4-Flight – on 8 December, following implementation in mid-June. A second pilot centre, Marseilles, formally implemented 4-Flight on 6 December. French air navigation service DSNA will expand the programme to the three other en route centres – Paris, Brest and Bordeaux – by 2025. Thales says the full roll-out will mean air traffic controllers will operate with a single system across French upper airspace, a region of some 1 million km². The company says the system is intended to “ensure a smoother flow of flights”. It is centred on an advanced flight-data processing system, branded Coflight, which provides controllers with accurate forecasts of four-dimensional flight trajectories. This enables them to optimise routes and increase flight efficiency, with the benefit of reduced fuel-burn, shorter flight duration, and lower emissions. The system is interoperable with equipment controlling neighbouring airspace, and is connected to 10 other air navigation service providers. Thales says 4-Flight is co-funded by the European Union under the Single European Sky modernisation initiative. DNSA and Thales inaugurated 4-Flight at Reims during an event attended by French transport minister Clement Beaune. <br/>
British military personnel are training to carry out passport checks at Heathrow, Gatwick and other airports in case they need to be deployed in response to planned strike action by Border Force workers, the defense ministry said Friday. Prime Minister Rishi Sunak told reporters on Friday that many armed forces personnel were likely to miss Christmas "to help us deal with the disruption from strikes, whether that's manning border posts or driving ambulances." Asked if the military would definitely be deployed, a defence ministry source said they would be "held at readiness". Britain faces an unprecedented number of strikes in the run up to and during the Christmas holiday period, including nurses, ambulance staff and rail workers, as labour unions demand higher pay for their members to keep up with soaring inflation. The PCS trade union, which represents thousands of Britain's Border Force workers at several major airports, said staff would strike for eight days this month in a dispute over pay.<br/>
The UK Civil Aviation Authority has published proposals for an interim price cap on passenger charges at Heathrow airport for 2023, prompting a renewed backlash from airlines including Virgin Atlantic. The CAA announced the interim move as it works towards finalising a five-year price-control settlement for the period ending December 2026 – expected “later in 2023” – and comes with airports and airlines at loggerheads on projections for the pace of demand recovery, and thus likely revenues, as they lobby the regulator over the level of the charges. The proposed interim price cap of £31.57 ($38.74) per passenger for 2023 “is in line with our Final Proposals issued in June 2022”, the CAA said on 8 December, referencing the five-year settlement. It notes that as with the interim 2022 cap, prices will be retrospectively “trued up or down” once that five-year level is agreed. Responding to the news, Virgin Atlantic CE Shai Weiss suggests the CAA is wrong to base its decision on Heathrow’s passenger number forecasts, which airlines claim underestimate the pace of demand recovery. “By maintaining a pessimistic outlook for 2023 passenger forecasts, not only do customers face excessive charges but potentially also a poorer airport experience,” Weiss states. “We expect the CAA to use its powers to course correct, so that accurate and realistic forecasts inform both the 2023 cap and the final determination for the regulatory control period ending December 2026.” He alleges that the proposed cap would put ”the interests of a monopolistic airport and its shareholders ahead of passengers”. Weiss had already said that Virgin’s experiences during recent consultations on higher charges at Heathrow had prompted it to “refine our unequivocal support” for a third runway at the facility.<br/>
All flights have been suspended at Stansted Airport after it was forced to close its runway due to bad weather. Heathrow and Gatwick also cancelled or delayed flights after snow, ice and freezing fog swept the UK. A yellow weather warning remains place for Scotland, London and south-west England until Monday morning, with the disruption set to continue. Trains have also been delayed and drivers warned to take care after several motorway accidents. Stansted said on Sunday night its only runway was closed to allow for snow clearance due to weather conditions and all flights were suspended. "Delays to flights were experienced earlier due to de-icing of aircraft which is a ground handler's responsibility and safety of aircraft and passengers is paramount," a spokesman added. "Passengers are advised to check with their airline for current status of their flights."<br/>
Beijing's COVID-19 gloom deepened on Sunday with many shops and other businesses closed, and an expert warned of many thousands of new coronavirus cases as anger over China's previous COVID policies gave way to worry about coping with infection. China dropped most of its strict COVID curbs on Wednesday after unprecedented protests against them last month, but cities that were already battling with their most severe outbreaks, like Beijing, saw a sharp decrease in economic activity after rules such as regular testing were scrapped. Anecdotal evidence suggests that many businesses have been forced to close as infected workers quarantine at home while many other people are deciding not to go out because of the higher risk of infection. Zhong Nanshan, a prominent Chinese epidemiologist, told state media that the Omicron strain of the virus prevalent in China was highly transmissible and one infected person could spread it to as many as 18 others. "We can see that hundreds of thousands or tens of thousands of people are infected in several major cities," Zhong said. While China has removed most of its domestic COVID curbs, its international borders are still largely closed to foreigners, including tourists. Inbound travellers are subjected to five days of quarantine at centralised government facilities and three additional days of self-monitoring at home. But there are even hints that that rule could change. Staff at the main international airport in Chengdu city, asked if quarantine rules were being eased, said that as of Saturday whether or not one needed to do the three days of home quarantine would depend on a person's neighbourhood authorities.<br/>
Thailand celebrated the arrival of its 10 millionth international visitor of 2022 on Saturday, according to the tourism authority, as the kingdom consolidated the recovery of its Covid-battered travel sector. Thailand welcomed some 40m people in 2019, but then the pandemic hit and travel was decimated as nations tightened border controls to contain the coronavirus. With those restrictions easing worldwide Thailand's travel numbers have begun a slow recovery and the government expects to generate nearly $16b in tourism revenue this year. Traditional dancers and drummers at Bangkok's Suvarnabhumi International Airport on Saturday welcomed passengers arriving on a Saudi Arabian Airlines flight that authorities believe clocked the 10m milestone. "The sky is open," Thai Prime Minister Prayut Chan-O-Cha said in a speech at the airport. "We would like to build confidence that Thailand is still one of the (top) tourist destinations of people around the world."<br/>
Sydney Airport is increasingly being contained to a single runway, boosting delays and cancellations to the chagrin of passengers. The airport, which is Australia’s busiest, was contained to a single runway for a record 81 hours in November due to severe weather conditions, namely high winds, according to data from Airservices Australia, the government body responsible for air navigation safety. There were 18 additional hours that restricted airline teams from accessing the tarmac due to thunderstorms. The delays do not bode well for the industry heading into the busy Christmas season after a year when the sector has experienced ongoing complaints from customers over flight delays. The lack of flight availability and delays have led some consumers to choose to catch the train interstate where possible or to pay increasingly high ticket prices to secure a seat, particularly on services between Sydney and Melbourne and Sydney and Brisbane. Airservices is tasked with reducing airport operations on guidance from the Bureau of Meteorology in the event of dangerous weather. Airlines are then responsible for how flight scheduling will proceed. An Airservices spokesperson confirmed November marked a new record for reduced runway operations at Sydney, but stressed the organisation prioritised safety above schedules.<br/>