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The Biden administration is divided over whether to grant a request from the US biofuel industry that would make it easier for sustainable aviation fuel made from corn-based ethanol to qualify for subsidies under the White House's signature climate law, according to two sources familiar with the discussions. The indecision has touched off a lobbying battle between two big stakeholders - Farm Belt backers who view sustainable aviation fuel (SAF) as crucial to ethanol's growth and environmental advocates who say clearing land to grow crops for fuel is counterproductive to solving global warming. At issue is a requirement in last year's Inflation Reduction Act that SAF producers seeking tax credits must demonstrate with an approved scientific model that their fuel generates 50% less greenhouse gas emissions over its lifecycle than petroleum fuel. Midwest ethanol producers have asked the administration to adopt a model that would enable ethanol-based SAF to qualify while environmentalists want standards that would favor inputs like used cooking oil and animal fat. Officials at the Environmental Protection Agency and agriculture and energy departments are divided over which model to use, and White House Climate Czar John Podesta is seeking to resolve the question, according to the sources. A White House official said the administration’s SAF policy seeks to include ethanol, but “we are trying to seek alignment with stakeholders on the question of modeling.” The EPA, Department of Agriculture and Department of Energy did not respond to requests for comment.<br/>

The United States and Mongolia will sign an "Open Skies" civil aviation agreement, Vice President Kamala Harris and Mongolian Prime Minister L. Oyun-Erdene said on Wednesday at the start of discussions focused on Russia, China and economic development. Their meeting in Washington on Wednesday came as the Biden administration works to ease tensions with strategic competitor China and as U.S. relations with Russia show no sign of thawing as the Ukraine war grinds on. Harris underscored the administration's commitment to strengthening ties with Mongolia and other nations in the Indo-Pacific, with a big focus on combating the climate crisis, upholding democracies and human rights, and addressing threats to the international rules-based order. "The American people have a profound stake in the future of the Indo-Pacific," Harris said, noting that she and President Joe Biden had each traveled there three times since taking office. "It is in our vital interest to promote an Indo-Pacific region that is open, interconnected, prosperous, secure and resilient." Surrounded by Russia in the north and China in the south, Mongolia has cultivated allies -- such as Japan, South Korea and the United States -- in a diplomatic strategy aimed at reinforcing its political independence, but its economy has continued to rely heavily on its two giant neighbors. Washington has Open Skies civil aviation agreements with more than 130 countries. They grant airlines from both countries the right to operate in each other's countries, liberalize airline regulation and impose safety and security standards.<br/>

Staffing shortages at air traffic control have delayed passengers in Europe this summer and forced US airlines to cut flights, sparking an industry blame game on both sides of the Atlantic. The shortages, combined with airspace closures in Europe, have fuelled a 37% increase in delayed flights on the continent over the past year, according to air traffic manager Eurocontrol. Air traffic control staffing and capacity issues were responsible for about half the delays in July, during the peak travel period, Eurocontrol added. Across the Atlantic, the US FAA asked airlines in March to cut back flying in New York’s crowded airspace due to air traffic control staffing shortages, while United Airlines chief executive Scott Kirby criticised air traffic control for disruption at the airline’s New York hub. A report in June found widespread staffing shortages, with controllers at some facilities working mandatory overtime and six-day weeks to manage the shortfall. The problems have threatened to dent the airline industry’s recovery from the Covid-19 pandemic. Airlines including British Airways owner IAG and Air France-KLM have recently reported booming profits off the back of high ticket prices and huge demand for transatlantic travel. But air traffic control staffing shortages are costing airlines millions in forgone ticket sales and increased operational expenses. Last year in Europe, delays cost carriers more than E800m, according to Eurocontrol figures. While the scale of the problem is smaller than in 2022, when staff shortages afflicted the whole industry, the combination of increasingly congested airspace and a lengthy training process for air traffic controllers means the problem is unlikely to be resolved quickly. Delta chief Ed Bastian and easyJet CE Johan Lundgren are among several airline executives on both sides of the Atlantic who have voiced their frustration at traffic control problems. “​​We needed a good recruiting and hiring plan coming out of the pandemic,” Bastian said. “The airlines had it. I’m not sure the air traffic control system did.”<br/>

European Union plans to start taxing polluting aviation fuels have hit an impasse as the bloc's 27 member states struggle to agree to make green fuels cheaper and fossil fuels more expensive, diplomats said. EU countries are negotiating an overhaul of energy taxes - which haven't been updated since 2003 - with their new climate change targets. But two years after the EU executive proposed the law to tax aviation fuels for the first time, a deal is still not in sight. Countries are at odds over issues including whether to introduce an EU-wide minimum tax for such fuels, which currently escape levies. "We do not expect the distances between countries to be resolved during the Spanish presidency," said a diplomat from one EU country in reference to Madrid chairing EU talks until the end of the year. Changing EU tax policy is fiendishly difficult because it requires unanimous approval from all EU countries - meaning any one government can block. A spokesperson for the executive European Commission said the revamp would "remove outdated exemptions and reduced rates that currently encourage the use of fossil fuels".<br/>Under the proposal, the minimum tax rate for aviation fuel for flights within Europe would gradually increase over 10 years. Sustainable aviation fuels would get a 10-year tax holiday, to encourage their use. But some countries warn against measures that could raise fuel prices for voters before with European Parliament elections next year. "If they do it before the election, it will be politically suicidal," another EU country diplomat said.<br/>

Strikes by French air traffic controllers have fuelled a sharp rise in flight delays across Europe, creating chaos for passengers and threatening to dent the sector’s recovery. Walkouts by staff have pushed up the number of delayed flights on the continent by 36pc in the year to date, according to figures from air traffic manager Eurocontrol. Air traffic control (ATC) capacity and staffing issues accounted for more than half of the disruption, Eurocontrol has found. Stormy weather and a fire at Catania airport in Sicily also had an impact towards the end of July, while problems have been compounded by airspace closures following Russia’s invasion of Ukraine. Overall, there have been almost 258,000 hours of delays this year, equivalent to around 1,200 hours per day. Eurocontrol said the rise was distorted by increased traffic following Covid-related disruption in 2022. Airlines have been rocked by repeated ATC strikes in France, which began as a protest against President Emmanuel Macron’s plans to raise the pension age. In addition to causing delays and cancellations in France, the industrial action has had a knock-on effect on airspace congestion across Europe. Budget operators Ryanair and easyJet have been forced to cancel thousands of flights this summer as a result.<br/>

Staff who refuel planes at Birmingham Airport are threatening to strike over pay. Unite the Union said about 20 refuelling tanker drivers and operators rejected a 9% pay rise and voted to strike on 15 August. Menzies Aviation, who employ the staff, said negotiations were still ongoing and Birmingham Airport said it did not anticipate flight cancellations. "Menzies can afford to pay and it should pay," Unite said. Unite members want a pay rise which reflects the rising cost of living and a 6% rise they received in 2022 was below inflation, a spokesperson added. Prices began to soar after Covid and the overall rate of inflation reached a 41-year high of 11.1% in October. but has fallen to 7.9% in the year to June. "The company cannot expect these workers to agree to two years of real-terms pay cuts during a cost of living crisis," Unite's general secretary Sharon Graham said. Marco di Mario, from Menzies Aviation, said the firm was "disappointed" with the announcement of industrial action. "The current package of 11.5% is on top of last year's 6.5% pay increase. The vote to strike was initiated despite our commitment for further dialogue," he added. "We are calling for mediation to achieve a more reasonable position and will have robust contingency plans in place to minimise any potential impact should industrial action go ahead." Birmingham Airport's airlines include TUI, Easyjet, Wizz Air, Ryanair, Lufthansa and Emirates.<br/>

Russian avionics specialist Navigator is aiming to deliver the country’s first domestically-built collision-avoidance system later this year. Navigator says the system – known as SPSV – has passed the third of four certification stages for aviation equipment under Russian standards. The fourth stage will finalise the process and confirm that the system meets specified requirements. Navigator director general Sergei Baburov says the company plans to deliver the SPSV for serial Irkut Superjet production by the end of 2023. “The work necessary to obtain a product airworthiness certificate is continuing,” he says. “Since the system is complex and directly related to flight safety…this process is not fast.” Irkut manufactures the Superjet 100 and is embarking on production of the SSJ-New, a successor with more Russian-sourced components. Navigator says it has conducted “dozens” of flights, with varying durations, in order to assess the monitoring of surrounding traffic, generation of warning messages to pilots and manoeuvring recommendations. It states that the system provides transponder and ADS-B surveillance functions, complies with international standards, and is compatible with a range of traditional and high-speed data interfaces.<br/>

Northern Taiwan on Thursday shut businesses and schools while airlines cancelled dozens of flights as the slow-moving Typhoon Khanun skirted past the island's northeast amid warnings of floods and high winds. Typhoon Khanun, categorised by Taiwan's weather bureau as the second-strongest typhoon level, slowly headed towards its northeastern coast with maximum winds of 198 kph. As of 9:15 A.M. Taipei time (0115 GMT), the eye of the typhoon was 360 km off Taipei in the East China Sea, heading in a westerly direction at around 5 kph. The storm was expected to brush past Taiwan's northern coast late on Thursday before making a sharp turn to the northeast on Friday, bringing total rainfall of up to 0.6 meter in mountainous central Taiwan and 0.3 meter of rain on the mountains near Taipei. Northern cities including the capital Taipei shut businesses and schools. Taiwan's stock and foreign exchange markets were also closed. Nearly 40 international flights have been cancelled while all domestic ferry lines were suspended.<br/>

Spirit AeroSystems Holdings shares sank 27%, the most since 2012, after the aerospace manufacturer said its cash flow won’t fully recover next year as it grapples with the aftermath of a strike and the effects of inflation on some money-losing contracts. The company lowered its forecast for deliveries for Boeing Co.’s 737 by about 20 fuselages this year after a strike at its main campus in Kansas, Spirit said Wednesday in a statement. Costs tied to the work stoppage and a 737 vertical fin defect contributed to its negative free cash flow of $211 million during the period. Boeing’s biggest supplier expects to burn between $200 million and $250 million this year, about $100 million more than its previous forecast, executives said after the company reported a wider than expected second-quarter loss. Spirit is dealing with strains within its supply chain and faces mounting losses on the components its builds for Boeing’s 787 Dreamliner and Airbus SE’s A350 and A220 aircraft. The shares plunged as analysts zeroed in on those cost pressures and long-term contracts that appear unsustainable during an earnings call Tuesday. “What spooked the market is the discussion of programs and profitability,” said George Ferguson, an analyst with Bloomberg Intelligence. While demand soars for Boeing and Airbus jets, suppliers like Spirit are struggling with rising costs for goods and labor and contracts with the manufacturers that predate the recent inflationary spike and will need to be revisited later, Spirit’s CEO Tom Gentile said during a conference call. “It’s a broader industry issue,” he added. Boeing, Airbus and the US government “do have to recognize the environment has changed.” The planemakers are propping up Spirit with cash infusions rather than addressing the root problem and easing contract terms that would affect their own profit margins, Ferguson said. It’s going to take Spirit longer to return to generating cash, a concern that’s coming into sharper focus for analysts and investors with some $1.13b in debt coming due in 2025. “We struggle to see a pathway to consistent cashflow generation,” Robert Stallard of Vertical Research Partners, said of Spirit in a note to clients Wednesday. He has a hold rating on the stock.<br/>