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US airlines are enjoying strong demand and ticket sales, a recent analysis by trade group Airlines for America found. But they also face significant inflationary pressures across most key cost categories that could put a damper on earnings. Delta Air Lines and United Airlines both highlighted this in their fourth quarter earnings. Unit revenues, measured by total revenues per available seat mile, increased 19% and 25.8%, respectively, in the period compared to 2019. But unit costs, measured by costs per available seat mile (CASM), excluding fuel were also up dramatically: 13% at Delta and 11% at United. “There’s no question there’s been an industry reset on costs,” United CFO Gerry Laderman said during the airline’s earnings call on Wednesday. But strong travel demand and constrained industry capacity are allowing United and other airlines to charge higher fares — as seen in its TRASM numbers — and recapture those additional expenses. Air traffic constraints were a defining feature of the industry last year. Aircraft delivery delays and understaffing across the sector often forced carriers to cut schedules throughout the year. Ultimately, US airports handled 10% fewer passengers in 2022 than in 2019, according to A4A in its state of the industry report, citing checkpoint data published by the TSA. While leisure travel has fully recovered from the pandemic plunge, corporate travel and longhaul international travel have not.<br/>

A global rebound in air travel has brought pilots back to work after a pandemic-induced slump, but many men and women in the cockpit have concerns over salary, a survey on Thursday said. More than half of pilots have not had a salary increase for five years, according to the global survey by aviation industry specialist Goose recruitment and FlightGlobal. They polled 1,184 pilots during the fourth quarter of 2022. Asia-Pacific is the worst-affected region when it comes to pay, with nearly half reporting lower earnings. By contrast, 73% of respondents in North America reported higher salaries, driven by fierce demand for pilots as traffic rebounds. Almost two-thirds of pilots said they want to change jobs for better pay and conditions in the next 12 months. However, 89% of respondents believe there will be a shortage of pilots over the next five years, up from 66% in 2021. “Pilots will want to see their pay return to what it once was," said Mark Charman, CE of Goose Recruitment. "I predict that 2023 will be a year with more remuneration crisis talks than ever before."<br/>

The FAA said Thursday that a contractor unintentionally deleted files before an outage of a pilot-alert system that delayed thousands of flights last week. “A preliminary FAA review of last week’s outage of the Notice to Air Missions (NOTAM) system determined that contract personnel unintentionally deleted files while working to correct synchronization between the live primary database and a backup database,” the FAA said. Spokespeople for the agency didn’t provide further detail. Those notices give pilots safety information such as runway closures. The FAA reiterated that it hasn’t found evidence of a cyberattack or “malicious intent” and that it is still investigating what occurred. The agency said it updated lawmakers on its investigation on Thursday. Lawmakers from both parties demanded answers about technology vulnerabilities in the U.S. aviation system. Airline executives complained about inadequate funding and staffing for the FAA. “I lay this on the fact that we are not giving them the resources, the funding, the staffing, the tools, the technology they need,” Delta Air Lines CEO Ed Bastian said on “Squawk Box” on Friday. “Hopefully this will be the call to our political leaders in Washington that we need to do better.” United Airlines CEO Scott Kirby said on the company’s earnings call on Wednesday the outage and resulting travel chaos “ought to be a wake-up call for all of us in aviation, something many of us in aviation have been saying for a long time...the FAA needs more resources.”<br/>

A federal judge on Thursday ordered Boeing to appear in court on Jan. 26 to be arraigned on a 2021 felony charge after families of those killed in two fatal crashes objected to a 2021 plea deal. Boeing won immunity from criminal prosecution as part of its $2.5b January 2021 Justice Department deferred prosecution agreement over a 737 Max fraud conspiracy charge related to the plane’s flawed design. The families argued that the Justice Department “lied and violated their rights through a secret process,” and asked US District Judge Reed O’Connor to rescind Boeing’s immunity from criminal prosecution. O’Connor, of the Northern District of Texas, in Fort Worth, ruled in October that people killed in two Boeing 737 Max crashes are legally considered “crime victims,” and family members had urged him to require Boeing to be legally arraigned on the felony charge. Boeing and the Justice Department declined comment. O’Connor directed any lawful representatives of those that identified as “crime victims” who intend to appear to be heard at the proceedings must provide notice and “an appropriate person appear at the arraignment on behalf” of Boeing. The crashes in 2018 and 2019 in Indonesia and Ethiopia, which cost Boeing more than $20b, led to a 20-month grounding for the best-selling plane and prompted the US Congress to pass legislation reforming airplane certification. Both Boeing and the Justice Department oppose reopening the deferred prosecution agreement, which included $500m in victim compensation, a $243.6m fine and $1.7b in compensation to airlines. The Justice Department said in 2021 “misleading statements, half-truths, and omissions communicated by Boeing employees to the (Federal Aviation Administration) impeded the government’s ability to ensure the safety of the flying public.” The Justice Department said in a November court filing it did not oppose an arraignment for Boeing but opposes undoing the agreement, saying it “would impose serious hardships on the parties and the many victims who have received compensation.”<br/>

With their promise of cheaper fares and no unnecessary frills, a flurry of so-called discount airlines has burst onto the Canadian scene in the last few years. But experts say the low-cost airline model is exacerbating an already existing pilot shortage that could become an even bigger problem for this country's aviation industry in the years to come. Start-up discount airlines -- such as Edmonton-based Flair Airlines, Calgary-based Lynx, and WestJet subsidiary Swoop -- have been rapidly expanding across Canada since the COVID-19 pandemic, gambling that there's enough pent-up demand from budget-conscious travellers to support additional capacity. While each operates slightly differently, the basic premise of a low-cost airline is that travellers receive stripped-down service in exchange for low basic fares. Things like carry-on and checked bags, snacks and beverages, and cancellation protection are all considered extras and must be paid for separately. The jury is still out on which, if any, of these upstart airlines will survive in a crowded field. However, experts say the rapid proliferation of new flights and routes is putting pressure on the aviation labour market -- including for pilots. "If I have a new airline that starts up with 10 airplanes, I theoretically need about 200 pilots," said Mike Doiron, president of Moncton, N.B.-based Doiron Aviation Consulting. "And getting new pilots trained doesn't happen overnight, even though the demand for pilots has skyrocketed." A pilot shortage has been brewing in Canada for years, based on a variety of factors including an aging workforce, pandemic-related layoffs and early retirements, and spiraling training costs. (Becoming a commercial pilot can now cost upwards of $100,000, discouraging some young people from entering the profession, experts say).<br/>

Mexican President Andres Manuel Lopez Obrador defended his plan to move all cargo flights from the capital's principal airport to a new site on the outskirts of town Thursday after a draft proposal to do such was made public earlier this week. "An agreement is being reached between the directors of the two airports, with customs, with everyone," Lopez Obrador said in a regular news conference. The draft decree, which was sent by the president and published on a government regulatory body's website, would halt all cargo flights out of the Benito Juarez International Airport, the busiest airport in the country. The decree must be published in the federal gazette to take effect. The nearest airport is the Felipe Angeles International Airport north of Mexico City, one of Lopez Obrador's signature but controversial public works projects opened last March. Lopez Obrador said the government was not seeking to make the change "by force" and that it was looking to have buy-in from cargo operators. Last year, officials moved to limit commercial flights out of the Benito Juarez airport, citing oversaturation.<br/>

Amsterdam’s Schiphol airport is replacing diesel generators with an energy-storage battery system to provide ground power for planes in a bid to reduce carbon emissions. The airport will deploy ESS Inc.’s battery system in the first quarter to recharge trucks that provide power to planes at airport gates, according to Oscar Maan, Royal Schiphol Group’s manager of innovation. The use of diesel is currently responsible for as much as 45% of emissions in Schiphol’s ground operation. “If this pilot is successful, this is a double win as it both reduces our carbon footprint and reduces air pollution,” Maan said. Even as Schiphol aims to make ground services more sustainable, much of the emissions in aviation comes from flying. Carbon emissions from aviation make up more than 2% of the global total. And because passengers, flights and distances are all increasing, it’s one of the fastest-growing sources of greenhouse gases, putting pressure on airlines and airports to decarbonize. Schiphol leads TULIPS, a European collaboration to accelerate the process of making airports and aviation more sustainable. The airport aims to be energy-positive by 2050. Schiphol’s green initiatives comes after the Dutch government said last year it will introduce a capacity cut at the Amsterdam hub from November 2023 to reduce noise and environmental pollution. <br/>

Manchester Airport says operations have resumed after it temporarily closed both of its runways due to heavy snowfall. Snow and ice warnings are in place for western parts of the UK, with below-average temperatures set to continue into the end of the week.<br/>

The commercial arm of French insurer AXA is reducing cover offered to aviation companies as it seeks to protect the multibillion-euro business after heavy Ukraine-related losses, two underwriting and broking sources told Reuters. One of the top 10 players in global aviation insurance, AXA XL is pulling back from underwriting risk on so-called war cover, the sources said, reducing options for airline operators or lessors seeking protection against loss or damage arising from war. The retreat by a major player such as AXA XL will make it more difficult to find this specialist cover, potentially driving up premiums and increasing costs for exporters and travellers. The company has also begun to scale back some of its exposure on marine war cover, three other industry sources said. AXA XL declined to comment. The AXA XL retreat comes as the war in Ukraine nears its first anniversary on Feb. 24 and follows months of massive losses for many of the world’s largest insurers. The conflict, which Russia calls a special military operation, is likely to result in insured losses between $10b and $20b globally, a report by broker Howden said last month. Aviation war cover is one of the classes of business most exposed to “the sizeable losses that have and will transpire”, the report said.<br/>

Sydney Airport has warned Australia’s carriers to unlock more capacity quickly or risk hampering the recovery of our tourism, education and export industries. More than 3m passengers passed through Sydney Airport in December, the first time since before the country shut its borders due to the COVID-19 pandemic, but the airport’s traffic remains 20% lower on the same time in 2019. The airport’s chief Geoff Culbert welcomed the milestone but said there is still a significant amount of work to be done to rebuild Australia’s travel industry. “Our domestic terminals were bustling over the Christmas period as Australians travelled to see friends and family and explore this great country. The recovery is by no means over though, with 411,000 fewer domestic passengers in December 2022 than in December 2019. International passenger traffic is still well behind pre-pandemic levels due to lower flight numbers. There were 1,157,000 international passengers who passed through the airport in December 2022, more than three times the number in December last year but still almost 30% lower than 2019.<br/>

An Anglo-US start-up has successfully completed a test flight of a propeller aircraft partially powered by hydrogen fuel cells in what it hailed as a major breakthrough for the industry. The 10-minute flight by ZeroAvia took place in Gloucestershire on Thursday using a modified 19-seat Dornier 228 propeller plane. It was the largest aircraft powered by a hydrogen-electric engine, according to the start-up. Val Miftakhov, who founded ZeroAvia in 2017, described the test flight as a “historic day for sustainable aviation”, promising that the technology would be in “commercial use in just a couple of short years”.  The aerospace industry is working on a number of different technologies, from “sustainable aviation fuels” to electric batteries and hydrogen. Flying is one of the most difficult industries to decarbonise. Before the pandemic led to the grounding of much of the world’s aircraft, aviation accounted for roughly 2.4% of global emissions. While differences remain about the speed at which the industry can make hydrogen propeller flight a reality, there is a growing consensus that it will have a role to play in powering short to medium-haul aircraft. Since it was launched ZeroAvia has pulled in about $150mn in backing from a range of high-profile investors including Bill Gates and Jeff Bezos, and agreed partnerships with the likes of British Airways, United Airlines and Shell, which is supplying it with the hydrogen. Two-thirds of ZeroAvia’s 150 staff are in the UK, although the business is based in California. The company plans to install its engines on existing airframes to simplify getting regulatory approval and reduce the time to market.<br/>

Greener fuel is the only way airlines will meet strict global carbon emission targets, executives meeting in Dublin this week agreed, but there's little consensus on who should foot the hefty bill to ramp up production. Sustainable aviation fuel (SAF), which uses feedstocks like cooking oils to reduce emissions by up to 80% from conventional fuel, is seen as the carbon saviour for an aviation sector often cast as a villain in the fight against climate change. But the nascent industry makes up less than 1% of fuel used and costs between three to five times more than traditional jet fuel. That has stirred a debate whether governments, airlines or oil producers - or a combination of all three - should fund the expansion of production required to hit a proposed European Union target of 20% by 2035. Aengus Kelly, CE of lease giant AerCap, said SAF was the only option, but cited an estimate that the transition could require investment of $1.5t over 30 years. "That's an extraordinary cost," he told the Airline Economics conference, one of a pair of annual events that bring together the world's largest aircraft owners. Government won't do it all. That's not going to happen." Willie Walsh, head of airline industry body IATA, told the conference airlines shouldn't expect traditional oil producers to meet the industry's needs. "There has to be greater sharing of the burden to ensure that the industry, everybody can make it to net zero," he said.<br/>

By the middle of this century, most cars and buses should be powered by renewable energy, while bikes, electric trains and your own two feet will continue to have little impact on the climate. And if global aviation achieves the goal it adopted last year, then your 2050 flight from New York to Hong Kong will result in “net zero” carbon dioxide in the atmosphere. There’s no guarantee that the industry will get there, but the technologies being developed in pursuit of the target will change aviation, regardless of whether the goal is met. In the years leading up to the pandemic, aviation emitted roughly a billion metric tons of carbon dioxide annually, about as much as the entire continent of South America in 2021. And the figures are bouncing back as passengers return to the skies. But major airlines, including six of the largest US airlines, have pledged to achieve net-zero carbon emissions by 2050, if not sooner. At a meeting in October of the United Nations agency dedicated to civil aviation, delegates from 184 countries adopted net zero by 2050 as a “long-term global aspirational goal.” “Aspirational” is the operative word. Aviation is what experts refer to as a hard-to-abate sector, meaning there aren’t currently any easy, market-ready technologies that can drastically reduce its carbon emissions. And the “net” qualifier attached to the goal means that airlines can account for any CO2 they continue to emit either by using traditional carbon offsets, a practice that has attracted major criticism, or by capturing carbon dioxide directly from the atmosphere. Scientists have also found that contrails — the wispy, short-lived clouds that sometimes appear in an airplane’s wake — affect the planet’s temperature, perhaps even more so than the carbon dioxide they release. It all adds up to a complex picture, especially given that global demand for aviation is expected to double over the next 20 years. But new technologies are in the works, including hydrogen-powered aircraft, fully electric planes and synthetic jet fuel made from carbon extracted from the atmosphere. Story has much more.<br/>