general

The US House of Representatives plans to take up bipartisan legislation next week to establish a FAA task force to improve a pilot messaging database that failed last week, disrupting 11,000 flights. The outage of the Notice to Air Missions (NOTAM) database prompted the Jan. 11 nationwide groundstop of US passenger traffic, the first since the Sept. 11, 2001, attacks. The NOTAM system provides pilots, flight crews and other users of US airspace with critical safety notices. The legislation would require an FAA task force to consider improvements, including updates "to ensure the stability, resiliency and cybersecurity of the NOTAM computer system," said Representative Pete Stauber, a Republican sponsor of the bill. Stauber said the failure shows "the urgent need for updates and improvements... to keep air traffic moving safely in our skies." On Thursday, the FAA's initial review found contract personnel "unintentionally deleted files" disrupting the NOTAM system, adding the issue occurred while personnel were working "to correct synchronization between the live primary database and a backup database." The FAA said it has "found no evidence of a cyber-attack or malicious intent." FAA acting Administrator Billy Nolen held a virtual briefing for congressional staff on Friday but did not identify the contractor involved in the failure. The FAA next week plans to hold a briefing for House lawmakers.<br/>

A Republican congressman who serves on the House Homeland Security Committee said Congress “will be coming for answers” after a hacker revealed the TSA’s no-fly list of known or suspected terrorists was accessible on an unsecured computer server. “The entire US no-fly list - with 1.5m+ entries - was found on an unsecured server by a Swiss hacker,” Bishop said in a tweet. “Besides the fact that the list is a civil liberties nightmare, how was this info so easily accessible?” The North Carolina lawmaker, who sits on the House Homeland Security Committee, indicated Congress will investigate the data exposure revealed on Friday. “We’ll be coming for answers,” Bishop claimed, possibly making the breach the latest in a long list of inquiries House Republicans have pledged to launch now that they have control of the lower chamber. In an earlier statement to CNN, the TSA said Friday it is “aware of a potential cybersecurity incident, and we are investigating in coordination with our federal partners.”<br/>

The US FAA has opened an office in Mexico, the regulatory body said on Friday, a sign the country is looking to aid one of its top travel partners to recover a coveted safety rating after being downgraded in May 2021. The downgrade to a Category 2 safety rating means that Mexican airlines have been unable to open new routes to the United States for the past year and a half and marketing agreements between carriers have been limited. When the downgrade went into effect, then-FAA Administrator Steve Dickson told Mexico that his agency would provide technical expertise and assistance to help regain the top rating. "The agency has sent a team of experts nearly a dozen times since then," the FAA told Reuters on Friday, adding that the new international office "will allow the FAA to keep an eye on operations as travel to Mexico and Latin America from the U.S. continues to increase." US Ambassador to Mexico Ken Salazar first announced the news, saying the office had been opened "to strengthen cooperation between authorities and the private sector." Mexico's transportation ministry in recent months has outlined a series of proposals to recover the Category 1 rating, requesting changes to regulations, budgets and international compliance in personnel licensing, aircraft operations and airworthiness of aircraft. "While respecting Mexico's sovereignty, we believe the implementation of the FAA's recommendations via legislative channels will help our ties in the aviation sector bear more fruit for both countries and help us to be more competitive," Salazar said. A reform to Mexico's aviation law has been sent to the country's Congress, which is not currently in session. The reform sent by President Andres Manuel Lopez Obrador's administration would allow "cabotage," a controversial practice permitting international airlines to operate domestic routes.<br/>

Experts are calling on the agency responsible for enforcing air passenger protection rules to be more aggressive with fines when airlines run afoul of those regulations. The quasi-judicial Canadian Transportation Agency has the ability to fine airlines up to $25,000 if they don't comply with air passenger protection regulations that came into force in 2019. Those rules require an airline to compensate passengers for lost luggage or flight delays and cancellations that are within the airline's control. But earlier this month, the head of the CTA told the House of Commons transport committee that the agency hasn't levied a single fine for failing to compensate passengers. Tom Oommen, DG of the CTA's analysis and outreach branch, said that instead of fining airlines, the agency has focused on resolving passenger complaints. "Resolving passenger complaints puts compensation, puts refunds, put entitlements in the pockets of passengers," Oommen told CBC. "Our enforcement regime doesn't do that. The fines don't go to the passengers." But the agency is grappling with a backlog of more than 30,000 complaints from passengers who believe they weren't properly compensated. Ian Jack, a spokesperson for the Canadian Automobile Association (CAA), a non-profit travel agency, said the backlog offers an incentive for airlines to challenge passengers' compensation claims.<br/>

China will roll out a pilot program to revive the country's outbound group travel services, said a circular released Friday by the Ministry of Culture and Tourism. Starting Feb. 6, travel agencies and online tourism service providers in China will be permitted to provide group tours of 20 countries, including Thailand, the United Arab Emirates, South Africa, Russia and Cuba. Relevant airline ticket and hotel booking services will be resumed as well, said the circular. China's outbound group travel market was halted in early 2020 due to the COVID-19 pandemic. As the country has optimized its epidemic response, measures have been taken to lift the restrictions on Chinese people's overseas trips and promote cross-border personnel exchanges. <br/>

Aircraft leasing companies, which own most of the world's passenger jets, face a tricky balance between risks and rewards after losing 400 planes in Russia, but have made no "knee-jerk" withdrawal from any major market yet, executives said. The lessors took a hit of almost $10b when Russia barred airlines from returning planes hit by Western sanctions to their owners in the West. This has turned the spotlight on other risky markets, most prominently China and Taiwan, where some fear future conflict could cause a similar seizure on a much larger scale. "It's going to have long lasting impacts beyond when this is settled," said Robert Korn, president and co-founder of Carlyle Aviation Partners, which owns or manages 415 jets worth $12b, citing "significant changes" to the availability of insurance. "It's going to take quite a long time for financiers, for lessors, for institutions to truly feel comfortable returning to many of these places," he told the Airline Economics conference, one of two flagship annual conferences held in Dublin, home of most major aircraft lessors. Leasing firms, which together financed more than 60% of passenger jet deliveries globally last year, are currently suing insurers in a bid to recoup their Russian losses. Executives complained of growing insurance costs, difficulty sourcing some coverage and a heightened focus on the small print of contracts. When discussing the Russia losses, most executives speaking at the conference, also touched on China risks. "Clearly the tension between the US and China is a point of key focus and concern," said John Plueger, CE of Air Lease Corporation, who said there was now "much more" concern in the industry about geopolitical risk. "China and Taiwan are very active markets for us. Would I be willing to do 200 more airplanes tomorrow in China or Taiwan? Hmmm I'm not so sure about that," Plueger said. But any political risk assessment would always involve a lot of guesswork, Plueger said. "I mean can anyone here tell me what China's going to do over the next month, two months, year?" Several executives said the loss of aircraft to Russia would simply feed into risk management models and encourage lessors to be careful about spreading their exposure rather than withdrawing from markets altogether.<br/>

While the prospect of global recession casts a long shadow over the snowy peaks of Davos this week, the mood was mostly sunnier at another gathering of executives - the owners of most of the world's planes - 1,700 kilometres away in Dublin. The world's top aircraft lessors - a bellwether for the wider economy - lined up to predict a bumper 2023, buoyed by China's earlier than expected lifting of travel curbs and a belief consumers would continue to prioritise travel amid a cost of living crunch. "Our industry is still climbing out of - call it a 100-year event, call it a macro shock of epic proportions. So a normal recession looks pretty good compared to our entire customer base grounded for two years," said Andy Cronin, CE of the world's third largest lessor, Avolon. "We are bullish and these are the reasons why I suspect there's a disconnect between the Davos in Switzerland and the Davos in Dublin," Cronin said. Cronin was one of many executives in Dublin confident that "revenge travel" - the idea that after years of lockdowns people are determined to holiday - would continue to drive demand and airfares up this year. Aengus Kelly, CE of No.1 lessor AerCap, added on stage that consumers had bought as many flat screen TVs, Xboxes and Peloton bikes as they need. Airlines are continuing to see surging demand with Ryanair (RYA.I), Europe's largest by passenger numbers, reporting two weeks of record bookings this month and predicting a high single digit percentage rise in air fares this summer. Cronin, whose firm owns or manages almost 600 aircraft, said airlines were now much more nimble if they did need to reduce capacity in response to any pockets of weakening demand after many restructured their cost base during the COVID-19 crisis. The recovery has also allowed lessors to push up lease rates on the more than half of the world's airline fleet they control, while many executives acknowledged that inflation is also kind to owners of hard assets, so long as it does not get out of control and lead to wider economic problems.<br/>