JetBlue Airways, Alaska Air Group and other US carriers expected the post-pandemic travel boom to send ticket prices soaring this summer. Instead, they’re getting battered. Travelers are showing an unusually strong preference for international trips, forcing domestic-focused carriers to discount prices. At the same time, many of them are facing higher costs from new labor contracts, flight disruptions and inflation. As a result, JetBlue has slashed its yearly outlook. Southwest and others have signaled they’re under pressure — a reversal from a few months ago when industry leaders promised high demand would endure. While domestic ticket sales may pick up again in a few months, with holidays encouraging people to take trips closer to home, it’s still been a tough reality check and a sign the end-of-lockdown travel frenzy is cooling for some. “If you don’t cater to premium, if you can’t bank on loyalty and if you don’t fly internationally, this year’s third quarter is likely to disappoint,” Jamie Baker, a JPMorgan Chase & Co. analyst, said in a report. There are a number of reasons why travelers have become especially enamored with trips abroad. In particular, looser Covid-19 restrictions mean for the first time in years Americans can visit far-flung destinations without expensive tests and the threat of lengthy quarantines. The shift has been larger than the industry expected, and occurred after plans to boost available seats were already in motion. That’s weighed on prices. US round-trip fares are down about 11% compared with 2022 and 2019, and will remain slightly below 2019 levels until the winter holidays begin and carriers are able to boost fares as demand increases, according to booking app Hopper.com. Adding to the pressure, Frontier Group , a major discount carrier, is increasing capacity by 23% this quarter, compared to a year ago. <br/>
general
With just one year to go before Paris hosts the Olympic Games, one of the city's airports suffered an unprecedented breakdown Thursday that led to a mountain of luggage piling up and delayed flights. A breakdown in the luggage-sorting equipment at terminal four of Orly airport meant that baggage had to be handled by hand. That resulted in many flights leaving late and without the luggage of their passengers on board, according to airport operator ADP and airlines. Luggage clogged the entrance of the terminal as travellers were told to leave their tagged bags behind. The breakdown lasted from the start of operations in the morning until shortly before 7:00 pm (1700 GMT). Airport operator ADP estimated 10,000 passengers on 40 flights were affected. According to Marc Rochet, head of the French Bee and Air Caraibes airlines using the affected terminal, flights took off with delays between one and three hours -- and without luggage that had been checked in. "We didn't have another option, otherwise the whole system would be blocked," he told AFP. The luggage in the terminal will be transferred to a secure hangar and then put on following flights. ADP tried to minimise the disruption by having planes use other terminals at Orly or use Paris Charles de Gaulle airport. Junior transport minister Clement Beaune called the situation "unacceptable", coming just weeks after the government made a series of proposals to improve the quality of service ahead of the Olympic Games next year.<br/>
Spain's Ministry of Consumer Affairs said on Thursday it had opened an investigation into low-cost airlines over hand luggage and other fees, which result in the price most consumers pay being higher than the one that was initially advertised. The probe could result in fines of up to E1m regardless of the profit made from such fees, and as much as eight times the profit obtained, if it is in excess of E1m, the ministry said. It did not name any specific airlines. Budget carriers like Ryanair, easyJet, or their Spanish rival Vueling charge passengers for hand luggage, such as trolley bags larger than a certain size. They also impose an additional fee if a passenger wants a choice in seating. The ministry said that by separating such fees from those traditionally included in ticket prices these airlines "offer in their advertisement very competitive prices". This "does not correspond in most cases with the price that the consumer ends up paying, as a consequence of these practices." It said Internet search engines can also give an unfair advantage to airlines offering tickets that exclude the fees compared to pricier tickets offered by competitors. In 2019, a Spanish court ruled Ryanair's policy of charging a fee for hand luggage was "abusive". However, Ryanair continued with its policy, citing airlines' commercial freedom to determine the size of their cabin baggage.<br/>
An application to bring Gatwick Airport’s emergency runway into routine use has been accepted by the planning inspectorate. The northern runway at the West Sussex airport is currently used as a taxiway or when the main runway is closed. Campaigners said they were "dismayed" the application was accepted, after concerns were previously raised over air quality, congestion and noise. By accepting the application, it can now progress to the examination phase. The latest step comes after the airport submitted an application to inspectors last month. Tim Norwood, Gatwick Airport's chief planning officer, said: “In coming weeks, the airport will let residents and other stakeholders know how they can register their interest in taking part in the examination stage of the planning process, so they can submit comments and feedback on our important proposals." Gatwick said the plan would cost GBP2.2b and help create about 14,000 new jobs. If approved, the new runway would be used for departures only, Gatwick said, with construction starting in 2025 and the runway being in operational use by the end of the decade. A final decision on the planning application is expected by the end of 2024. Local campaign group Communities Against Gatwick Noise said: "We are dismayed that the Planning Inspector has agreed to accept the Gatwick application despite robust objections on the quality of the original consultation from not only GACC but also all the local authorities in the area and MPs .<br/>
Domestic travel in Japan is on track to potentially outpace pre-pandemic figures this summer, with reservations for flights, trains and hotels all surging compared with the same period last year. Bookings for domestic flights during Japan’s Bon holidays in mid-August increased a combined 30% at All Nippon Airways and budget affiliate Peach, according to data released Thursday by parent ANA Holdings. The tally of 1.79m passengers is 3% higher than for the same holidays in 2019 and marks the first time the carriers surpassed their pre-COVID performance for a long holiday period. Japan Airlines said its group's domestic bookings for the Bon holidays increased 16% on the year to 1.16m, or 94% of the 2019 figure. Overall, 11 Japanese airlines logged a year-on-year rise of 23% to 3.68m bookings for domestic passengers. In international flights, ANA saw bookings for travelers departing from Japan during the Bon holidays reach around 50% of the pre-COVID figure -- up from around 30% for the Golden Week holidays in May. JAL reported a 58% increase on the year in international flights to roughly 210,000, or about 70% of the 2019 figure. Train traffic is also expected to surge during the period. As of the end of July, the Japan Railways group had seen bookings across its six operators increase around 50% on the year to 2.7m. This equals around 90% of bookings in 2018. A total of 471 bullet trains are scheduled to run on the Tokaido shinkansen line, which connects Tokyo, Nagoya, Kyoto and Osaka, on Aug. 10 -- a daily record for the Bon holidays. The boost extends to the hotel industry. Hotel reservations for August on the Rakuten Travel website are up around 30% by guest nights from the same month of 2019. Strong demand has led to a surge in hotel prices. The Royal Park Hotel Iconic in Tokyo's Shiodome waterfront district has roughly doubled daily room rates on the year for August, partly on an influx of overseas tourists driven by a weak yen. The average spending for a domestic trip this summer will grow around 10% from the same period of 2019 to 40,000 yen ($281) per person, travel agency JTB predicts.<br/>
More than 4,300 aviation jobs are expected to be filled in the coming year as Singapore positions its air hub for post-Covid-19 growth, Acting Transport Minister Chee Hong Tat said on Friday. After losing about a third of its workers during the pandemic as air travel ground to a halt, the aviation sector has since rebuilt its workforce to about 95% of 2019 levels, Mr Chee said during the opening of the 2023 OneAviation Careers fair at the Suntec City Convention Centre. In May, the aviation workforce was at about 90% of 2019 levels. The acting minister also unveiled a refreshed roadmap to chart Changi Airport’s future as a global aviation hub amid intensifying competition from neighbouring and regional airports. “We must never take our current hub status as a given,” Chee said. He added: “Technology is progressing at a blistering pace, including advances in artificial intelligence... Our ability to adapt and transform with technology will determine if we remain a premier air hub or lose our position to competitors.” Before the pandemic, the Changi air hub and its related industries supported almost 200,000 jobs across Singapore’s economy and formed more than 5% of the nation’s gross domestic product.<br/>
Aircraft lessor Air Lease said on Thursday it expects more demand opportunities from potential delivery delays at Airbus due to Pratt & Whitney engine issues, which could further boost its lease rates. Airlines looking to cash in on a surge in global travel have been struggling with limited supply of jets and are increasingly turning to lessors to augment their capacity. Higher lease rates helped Air Lease post better-than-expected results for the quarter through June, sending its shares up 2.66% after the bell. "We are watching Airbus deliveries carefully in the face of RTX's announcement on manufacturing defects on certain of its gear turbofan engines," CEO John Plueger said on an investor call. Last week, the company had also received a further incremental delay notice from Boeing on its MAX deliveries. The fleet of Air Lease comprised 448 owned aircraft and 80 managed aircraft as of June 30, with 359 new planes on order from Boeing and Airbus set to deliver through 2029. It reported a profit of $1.10 per share for the second quarter, beating analysts' average estimate of $1.07, according to Refinitv data. The lessor also expects record global temperatures to add further environmental pressure on airlines to replace older planes, positioning it to capture the strong demand. Revenue rose 20.7% to $672.9m in the quarter and beat expectations of $660.3m.<br/>
Canada's Bombardier on Thursday reported a quarterly profit that beat expectations, boosted by demand for flying and maintaining private jets, but its free cash flow missed estimates, and its shares closed down 8.49%. The Montreal-based business jet maker reported a Q2 profit of $10m from continuing operations, compared with a loss of $109m in the year-earlier period. Results of corporate jet makers have been powered by demand for private flying over the last few quarters, but companies are wrestling with supply chain challenges. Bombardier reported a cash burn of $222m compared with positive free cash flow of $341m in the same period a year ago, due partly to a build-up in working capital to support higher deliveries. Analysts polled by Refinitiv had expected negative free cash usage of $171m. CEO Eric Martel told reporters Bombardier sees opportunities with fleet operators including key customer VistaJet, part of Dubai-based Vista Global Holding Ltd. An auditor raised a red flag about VistaJet several months ago but Martel said he did not have concerns about the company which has a subscription membership model that makes jets available on short notice without ownership, unlike some rivals that sell shares or fractions in private planes.<br/>
Chinese airframer Comac has reportedly opened a support office in Indonesia, its first overseas location, as a second C919 joins China Eastern Airlines. The Jakarta office of Comac’s service unit – Shanghai Aircraft Customer Service (SACSC) – was opened on 31 July, according to media reports from Indonesia. State news agency Antara indicates that the opening was attended by the secretary general of Indonesia’s Ministry of Manpower, Anwar Sanusi. “Hopefully this cooperation will develop and be mutually beneficial to develop the aviation sector in Indonesia,” said Sanusi. Another news outlet, Kompas, indicates that Comac director He Dongfeng attended the opening. He reportedly said that Indonesia was selected as Comac’s first international office location owing to local carrier TransNusa’s operating of two ARJ21s. Comac director He also indicated an ambition to sell the C919 in Indonesia. The Kompas article indicates that the ARJ21 has operated over 762h in Indonesia and has carried 270,000 passengers. Comac’s Chinese and English websites, as well as its social media channels, made no mention of the office opening. Indonesian carrier TransNusa is the first foreign operator of Comac’s ARJ21 narrowbody, launching services with the type in April. The carrier mainly uses the aircraft on domestic services in Indonesia, and recently started operating the type’s first international route, between Jakarta and Kuala Lumpur. Cirium fleets data indicates that the carrier has two ARJ21s in service, with 28 more on order. Both aircraft are leased from China Aircraft Leasing (CALC). While ostensibly an Indonesian airline, TransNusa has significant Chinese backing. <br/>