Airlines are defying gravity. The global economy is weak and inflation is fuelling a cost of living crisis, yet there is an apparently relentless demand for flying across the world. Low cost airlines in Europe are touting record booking sprees, US carriers cannot find enough planes to meet demand, and Air India has decided now is the time to place one of the biggest aircraft orders in history. Even Primark has been in on the act, trumpeting strong sales of luggage and beachwear this week. Adding to the exuberance, passengers are swallowing high ticket prices, helping to drive major airlines back into profit and leading Ryanair boss Michael O’Leary, the poster child of the bargain fare, to declare the era of the ultra-cheap flight is over. This startling resilience has wrongfooted investors, who sold airline shares in the second half of last year as the economic outlook darkened, safe in the knowledge that carriers have never been completely immune to the rhythms of the wider economy. The industry’s fortunes are typically closely linked to GDP growth and economic cycles, and for months it has felt like some executives and analysts have been on tenterhooks waiting for the first cracks in demand to appear. Yet there are signs air travel could have more room to grow. Most obviously, this is not a normal environment. The pandemic has not dented demand for foreign holidays, however pleasant those staycations were. If anything it has increased it. Or as O’Leary put it at the height of the crisis: “Everyone who has been trapped and gone on holiday to Bognor Regis will want to go to Portugal, Italy and Greece.” Moreover, as analysts at Barclays note, the majority of air travel is undertaken by wealthier travellers anyway, typically people who take multiple trips per year, meaning the industry’s key consumers are insulated from the worst of the cost of living crisis. Put bluntly: a significant portion of the population, many of whom will have been badly hit by inflation, rarely flew anyway. More than a third of people in the UK did not take a foreign holiday at all in 2019, according to ABTA, the travel association. In contrast, fortunate higher earners are still sitting on savings built up during the pandemic. Analysts at Morgan Stanley in January calculated US households spent roughly 30% of their $2.7t “excess savings” in 2022, leaving a considerable buffer against inflation. For now, these factors powering the pent up demand for leisure travel seem strong. But even if these fade, airlines still have two types of traveller to fall back on.<br/>
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A 40-year-old man was arrested this week on federal charges after he checked a suitcase containing an explosive for a flight to Florida at a Pennsylvania airport, the FBI said. The suitcase checked by Marc Muffley, of Lansford, Pa., at an Allegient Air counter at Lehigh Valley International Airport for a flight to Orlando, Fla. on Monday was flagged by an alarm during a TSA screening, Eddie Garcia, a special agent with the Federal Bureau of Investigation, said in a criminal complaint filed in US District Court for the Eastern District of Pennsylvania. Officials with the Transportation Security Administration found a “circular compound” with fuses attached inside the suitcase, and an FBI team determined that it was an explosive, the complaint said. The FBI said that Muffley, who was paged over the airport’s speaker system at about 11:40 a.m. on Monday after the TSA screening, left the airport five minutes after being asked to report to the security desk, security camera footage shows. He was arrested late Monday night and charged with possession of an explosive in an airport and possessing or attempting to place an explosive or incendiary device on an aircraft. The immediate area of the airport was evacuated “out of an abundance of caution,” the TSA said. Mr. Muffley remained in custody on Wednesday, pending a court hearing on Thursday, the FBI said. <br/>
President Biden’s nominee to lead the Federal Aviation Administration, Phillip A. Washington, faced criticism at his confirmation hearing on Wednesday over his lack of aviation experience, with some Republican senators casting him as unqualified for the post. The nomination of Washington, the CE of Denver International Airport, has been clouded with uncertainty in the Senate amid questions about his experience and his entanglement in a public corruption investigation. He was pressed on both topics at the hearing, which was held by the Senate Committee on Commerce, Science and Transportation. “The FAA can’t afford to be led by someone who needs on-the-job training,” said Senator Ted Budd, Republican of North Carolina. The agency has been without permanent leadership since Stephen Dickson, a former Delta Air Lines executive who was appointed by President Donald J. Trump, stepped down nearly a year ago. The void atop the FAA has received more attention during what has been a bumpy stretch for the nation’s air travel system. An operational meltdown by Southwest Airlines around Christmas and an FAA system outage in January caused widespread flight disruptions, and there have been a string of near collisions at airports that have raised questions about aviation safety. Washington served in the Army for 24 years, rising to the rank of command sergeant major. Later, he led Denver’s Regional Transportation District and the Los Angeles County Metropolitan Transportation Authority, and he became chief executive of Denver’s airport, which is one of the world’s busiest, in 2021.<br/>
Airbus is advising customers they’ll face longer waits for its newest jetliner, the long-range A321XLR, according to people familiar with the matter, adding to pressure on carriers trying to source planes to meet surging demand for travel as Covid fades. The delays vary by airline, with deliveries typically sliding by a matter of months, the people said, asking not to be identified because the details are private. Airbus is contending with production snarls in its factories and regulatory scrutiny of a new center fuel tank that gives the narrow-body jet the range to cruise from London to Miami, or Tokyo to Sydney. Airbus had originally targeted bringing the XLR to market by 2023 but pushed back that timing to mid-2024 as European and US regulators probed a potential fire hazard posed by the novel feature. The jet will hold an additional fuel tank that will be fused into its structure behind the wheel bays and directly under passengers’ feet. Privately, buyers are fretting the regulatory review could push back the plane’s market entry to as late as the end of 2024 or early 2025, some of the people said.<br/>
De Havilland Aircraft of Canada, a leading manufacturer of turboprop planes, is aiming to win 80% of India’s small-plane market as the country seeks to bolster connectivity in far-flung corners and over rugged terrain. The company is expecting India to have as many as 120 small aircraft that seat less than 20 passengers in the next 10 years, Yogesh Garg, the manufacturer’s Asia Pacific sales director, said in an interview in New Delhi on Tuesday on the sidelines of the Airline Economics Growth Frontiers India conference. Small planes are key for India, the world’s fastest-growing aviation market, to connect tiny towns, hilly areas and islands that have a budding population of first-time flyers. Airbus SE estimates India will need 2,210 aircraft by 2040, with most of them being smaller jets. De Havilland will face competition from the 19-seater Dornier 228 aircraft. The Hindustan Aeronautics made-in-India plane is used by the armed forces, while Alliance Air has one. Another rival is Textron Aviation Inc., with regional carrier IndiaOne Air using its nine-seater Cessna Grand Caravan EX. Better access to regional travel could help revive tourism and air traffic in India after the pandemic gutted travel. The government has allocated 45b rupees ($544m) under a regional connectivity program to develop 100 inadequately served airports, heliports and water aerodromes, in addition to opening 1,000 new routes by next year. It is also giving subsidies to airlines to offer passengers cheaper fares on regional routes. Budget carrier SpiceJet is in discussions with De Havilland for five Twin Otter seaplanes, typically found in the Maldives shuttling tourists to resorts. SpiceJet could deploy the seaplanes, carrying 19 passengers, to reach remote parts of the country lacking runways and ground transport like Andaman and Nicobar Islands, Garg said. <br/>
People hoping to take advantage of a Hong Kong scheme to give away half a million free airline tickets faced hours-long online queues on Wednesday, as the Asian financial hub bids to woo tourists back. The city in February launched a campaign to reboot its reputation as “Asia’s world city”, after years of strict pandemic-related travel restrictions and a crackdown on sometimes violent pro-democracy protests. On Wednesday, Hong Kong became one of the last places in the world to drop its outdoor mask mandate, which city leader John Lee said is a sign that it was “resuming normalcy”. Tourism once comprised nearly 5% of the city’s economy but visitor figures plunged in 2022 to 600,000 – less than 1% of 2018 levels. Hong Kong-based carriers Cathay Pacific and Hong Kong Airlines were the first companies to launch the government-backed Hello, Hong Kong ticket giveaway, which will be rolled out over several months. Social media users complained of long online queues to register, and an AFP reporter encountered wait times of more than two hours on the Cathay Pacific website. More than 55,000 users were waiting to access the offer, according to the reporter.<br/>
It is still too early to determine how quickly the Chinese international travel market will recover, though it is clear there is “no let-up” in recovery momentum in the greater Asia-Pacific region, according to the Association of Asia Pacific Airlines (AAPA). The association’s director-general Subhas Menon adds that projections indicate the region’s carriers will be close to full recovery by early 2024, with China’s reopening helping to improve prospects. Menon, who was speaking to reporters at the sidelines of the Aviation Festival Asia held in Singapore on 28 February, said airlines should capitalise on the reopening, but notes that some have been “hamstrung” by the sudden nature of Beijing’s decision to scrap most of its ‘zero-Covid’ policies in early January. “You… must remember that until the beginning of December the Chinese government were still sticking to their ‘zero-Covid’ strategy…and nobody expected China to open up even in 2023. So airlines…were not prepared, and they had put capacity elsewhere,” says Menon. According to the AAPA, China used to account for about a fifth of Asia-Pacific international travel demand pre-Covid, but that figure has dwindled to single digits amid the pandemic. On a slower-than-expected capacity recovery to China, Menon says: “I think everyone is managing expectations, but this is a short-term issue. I don’t think it will be around for long.” In wide-ranging comments, Menon also urges airlines to “take advantage of the opportunities” presented by borders in the region being mostly reopened. “[There’s] no point thinking that…the demand won’t last long…you just have to take advantage of [the rise in demand],” he says. <br/>