The air travel boom in the US appears to be fading. Purchases by US consumers directly from major domestic airlines declined across the board in the second quarter, marking the first drop in more than two years, according Bloomberg Second Measure. The data isn’t a full picture, though. It tracks anonymous credit and debit card transactions made with carriers, but excludes booking sites and corporate sales. Americans splurged on air travel over the past year as pandemic restrictions lifted; not even a surge in ticket prices slowed them down. But after facing the highest inflation in decades, consumers have been reducing all kinds of discretionary purchases, including apparel, electronics and sit-down restaurants. Now it appears they’ve added flying to that list. This softness has the potential to derail a rebound that has boosted results across the industry. Delta Air Lines Inc. and United Airlines Holdings Inc. recently raised their annual profit forecasts on continued strength in international bookings. And a record number of passengers are expected industrywide this summer. But Alaska Air Group, which is focused on the US and North America, said it’s bracing for a hit to this quarter’s results as it contends with declining prices and softening demand for domestic travel. Fares that were “really strong” through June have declined from record levels in 2022, but remain above 2019 prices, according to Alaska’s CFO Shane Tackett. Southwest Airlines posted Q2 sales last week that topped Wall Street’s expectations, but worries about how well demand will hold up the rest of this year and the carrier’s plan to boost flying capacity hammered the stock. In July, the shares of the five largest US carriers have all declined, compared to about a 3% gain for the S&P 500. Investors will get more industry insights on Tuesday when JetBlue Airways reports. <br/>
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Nav Canada, the not-for-profit corporation that oversees Canada's air traffic controllers, has launched a new social media account to track and publicize the causes of delays at four major Canadian airports. The account has been active on the X platform (formerly known as Twitter) since Friday. A shortage of air traffic controllers is being blamed for some flight delays at airports. "Nav Canada knows that whatever the cause, delays are frustrating for travellers," the corporation said in a media statement. "This is why we are implementing a new communication protocol … to ensure air passengers have access to accurate and timely information." Nav Canada says it will use the account to release information related to delays at the Vancouver International Airport, the Calgary International Airport, Toronto Pearson International Airport and the Montréal-Trudeau International Airport. The account recently reported delays at the Montreal airport due to weather. "It's a positive move in that it's an attempt by Nav Canada to be more transparent," said Duncan Dee, aviation industry consultant and former COO at Air Canada. "We've seen a disproportionate number of air traffic control delays and so what I think Nav Canada is trying to do is provide greater clarity for the reasons for those delays." Air traffic control delays can be caused by a number of factors, including inclement weather, construction at airports and the operational capacity of airlines and airports. Earlier this summer, Nav Canada admitted some delays are being caused by a shortage of air traffic controllers. "We do certainly acknowledge the fact that we have had some staffing-related challenges," Marie-Pier Berman, Nav Canada's vice-president and chief of operations, said two weeks ago.<br/>
Some of the world's largest aircraft lessors and insurers are aiming to be ready to go to trial in June 2024 over contested insurance claims for aircraft stuck in Russia, a lawyer for one of the lessors said on Monday. Lessors are suing dozens of insurers around the world for billions of dollars after more than 400 planes were unable to leave Russia due to Western sanctions in response to Moscow's invasion of Ukraine that forced the termination of their leases. The world's number two and three lessors, SMBC and Avolon, as well as BOC Aviation, CDB Aviation, Nordic Aviation Capital and Carlyle Aviation Partners are pursuing their claims in Ireland, where more than 60% of the world's leased aircraft are owned or managed. Kelley Smith, a lawyer for Avolon, told a hearing on Monday that all parties involved were aiming for a trial date of June 4 next year, with a number of procedural steps to be completed before then. Those steps include finding a venue large enough for the 180 attendees Smith said were expected at the trial each day. Justice Denis McDonald told a packed hearing last month that no court in Ireland was large enough to hear the case. The world's biggest aircraft lessor, Irish-based AerCap, is pursuing its insurance claims through London's High Court. AerCap's CFO said on Monday that it continued to have discussions with Russian insurers on a potential settlement regarding some of its aircraft stranded in Russia.<br/>
The recovery rate of international air travel in South Korea during the first half of this year compared to the pre-pandemic year of 2019 has revealed significant regional disparities. While the Middle East and Africa routes experienced an increase in passengers from the first half of 2019, China’s air routes were at only one-fifth of the level seen four years ago. Aviation statistics from the Ministry of Land, Infrastructure and Transport reveal that the total number of international passengers from January to June this year came to 29.5m, representing a 64.8% recovery rate compared to the pre-pandemic levels. Among the regions, the Middle East and Africa demonstrated the highest passenger recovery rate at an impressive 111.3%. The Americas followed with a commendable 98.8% recovery rate, while Japan recorded 75.5%, and the rest of Asia, excluding China and Japan, achieved a recovery rate of 73%. In contrast, the Russia route had no passengers due to the aftermath of the war, and China’s recovery rate remained at a mere 21%, indicating a slow increase in passenger numbers. According to the IATA analysis in May, Middle Eastern airlines’ revenue passenger kilometers (RPK) surpassed 2019 levels by 17.2%, signifying a complete recovery of international air travel in the region compared to pre-pandemic times.<br/>
The government will tighten the monitoring of airport transfer areas, terminals and aircraft hangars to fortify security, in a gradual effort to reduce aviation security accidents by 50% by 2027, the transport ministry said Monday. Also being strengthened are in-depth security management education and hands-on training programs for aviation security professionals, and international cooperation with aviation safety bodies. The Ministry of Land, Infrastructure and Transport announced the measures to reduce the rising number of in-flight and on-site accidents at airports amid a resumption of flight routes around the world. The discoveries of a number of hazardous items, including bullets and knives carried by passengers, have inched up over the past few years, as well as cases of individuals scheduled to be deported fleeing from custody. Also, a drone crashed into a local airport, while an unruly passenger opened the emergency door of an airplane before it landed. Other concerning incidents were reports of airport authorities being unaware of safety inspection devices malfunctioning and flight personnel manipulating duty logs. The number of such incidents soared to 252 as of June, up from 85 in 2021. About 79% of air routes have resumed as of June compared to 15.54m in June of 2019. The ministry said security inspections will be expanded to include transfer areas, followed by strengthened in-flight security checks.<br/>
A strong typhoon sweeping towards southern Japan on Tuesday triggered the cancellation of hundreds of flights as officials urged thousands of people to seek shelter. Typhoon Khanun was packing maximum sustained wind speeds of 162km (100 miles) an hour as it crossed the Pacific Ocean and was expected to start battering the Okinawa region late Tuesday. Cities across Okinawa issued non-mandatory evacuation orders to at least 370,000 people as the Japan Meteorological Agency warned waves of up to 12-metres (39-feet) high could pummel the group of islands. The agency said in its 0100 GMT update that the storm, which it described as "very strong" and "large", was about 240 kilometres southeast of the regional capital of Naha. More than 500 flights were cancelled on Tuesday, while regional ferry and bus services were suspended ahead of the typhoon, national broadcaster NHK reported. Japan Airlines and All Nippon Airways said more than 74,000 passengers in total would be affected by flight cancellations on Tuesday and Wednesday.<br/>
The latest issue with Pratt & Whitney jet engines is driving up demand for older aircraft as airlines scour the global fleet for spare capacity, according to the world’s biggest aircraft lessor. The defect disclosed last week by Pratt, a unit of RTX Corp., will affect the supply of aircraft and spare engines for years, AerCap Holdings CEO Aengus Kelly said on a quarterly earnings call on Monday. “With that quantum of engines coming out of the system, that is a lot of lift that won’t be in the system next year, and possibly stretching into 2025,” Kelly said. One result will be greater demand for older planes, he said, adding that operators are buying aircraft that are 18 or 19 years old from AerCap. Pratt’s geared turbofan is one of two engine choices on Airbus SE’s A320 narrowbody, the world’s top selling aircraft. The US enginemaker is likely to resolve the issues disclosed last week, with fixes starting to roll out by year-end, Kelly said. Over the next 12 months, the US enginemaker will need to remove and inspect some 1,200 engines made between 2015 and 2021 due to a rare condition in the powder metal used in some parts of the turbine. While Airbus doesn’t expect the issue to impact output in 2023, CEO Guillaume Faury said last week that “when it comes to ’24, ’25, there’s a lot of work to be done on the indirect potential consequences that a lot of work at Pratt could mean.”<br/>
AerCap raised its full-year earnings guidance on Monday, saying it saw no signs of travel demand abating and that it would take manufacturers "several years" to catch up with aircraft delivery delays and ease capacity constraints. The world's largest aircraft lessor said airlines will have to fly old planes for longer as a result, benefiting lessors who have increased lease rates sharply and sold older aircraft at higher margins since the post-pandemic recovery in travel. AerCap also launched a new $500m share buyback programme on Monday after growing its second quarter revenues by 15% year-on-year to almost $2b. "We see no signs of demand abating and some of the commentary that has come out of one or two of the US carriers in the last week or two about a decline in yields - that's off exceptionally high levels. They do not impact the demand for aircraft," CE Aengus Kelly told analysts. US airline stocks tumbled last Tuesday after investors were spooked by a downbeat forecast from Alaska Air, while Southwest signaled softer pricing for the current quarter two days later. Kelly said even if there is a mild European or US recession, that would not derail the supply-demand dynamic as any weakness would be offset by positive momentum from Asia, where COVID-19 curbs have more gradually lifted.<br/>
Archer Aviation shares jumped as much as 33% on Monday after the air taxi maker entered into a deal to provide up to six of its "Midnight" aircraft to the US Air Force. The deal, worth up to $142m, includes delivery of vertical takeoff and landing (eVTOL) aircraft, pilot training, development of maintenance and repair operations, and share data such as additional flight test and certification-related test reports. The California-based company in May completed the final assembly of its first "Midnight" (eVTOL) aircraft. It can carry four passengers and a pilot and has a range of up to 100 miles (160.9 km). Last month, Joby Aviation (JOBY.N), which also has a deal with the U.S. Air Force, said it would deliver the first two electric aircraft in March 2024 to the Edwards Air Force Base after completing their initial testing. Archer last month hired former FAA acting administrator Billy Nolen as chief safety officer in an effort to collaborate with industry stakeholders and help ensure its plans of commercialization in 2025.<br/>