unaligned

Spirit Airlines on Thursday warned that its September quarter revenue will suffer as it is being forced to ground seven Airbus’ A320neo jets through the end of the year due to a snag with RTX’s Pratt & Whitney Geared Turbofan (GTF) engines. RTX last week said a “rare condition” in powdered metal meant 1,200 of more than 3,000 engines built for the twin-engined Airbus A320neo between 2015 and 2021 have to be taken off and inspected for micro cracks that would point to fatigue. Spirit CEO Ted Christie said the grounding of seven aircraft will be on top of another seven that are currently out of service due to unscheduled removals of engines. “This new issue is yet another frustrating and disappointing development,” Christie said. Pratt & Whitney’s new engine issue adds to headache for carriers that are already grappling with shortages of pilots, air traffic controllers and new planes, making it harder to add more flights. Spirit Airlines, which is the largest operator of GTF-powered NEO aircraft in the United States, previously cut 2023 capacity estimates due to unscheduled engine removals. “Exposure to this issue is very unique and material for us and is having an impact on our margin,” Christie said on an earnings call. The Florida-based airline has cut its planned capacity in September by 5%. The latest GTF problem is also expected to hurt its efficiency as the company said it will likely be overstaffed and carry more pilots than required into the fourth quarter and early 2024. Overall, various engine issues are estimated to shave off its revenue in the current quarter by about 7.5 percentage points. Spirit, however, said RTX has promised to compensate the airlines affected by the new engine issue. Christie said Spirit has as many as 13 engines out of initial 200 identified by Pratt & Whitney for accelerated inspection. These will be out of service beginning next month. While the timing for inspections of an additional 1,000 GTF engines is not yet known, Christie said they will likely need to be performed before the end of September 2024.<br/>

Stunning photos shot from the cockpit of a JetBlue Airways Corp. plane show how close the aircraft came to colliding on a Boston runway early this year in one of a surging number of airline close calls. The JetBlue aircraft was only 30 feet off the ground, preparing to touch down, when a Hop-A-Jet Worldwide Jet Charter Inc. plane crossed in front of it at high speed, according to a US National Transportation Safety Board report issued Thursday. The agency concluded the crew on the charter jet had caused the runway incident on Feb. 27, one of several that triggered safety warnings earlier this year. An air-traffic controller had told the charter jet’s pilots to wait on the runway, but the crew misunderstood and took off, the board said. The investigators released vivid images from the JetBlue cockpit showing the other plane clearly visible as the airliner neared the ground. The JetBlue pilots aborted their landing and climbed after seeing the other plane. The still image was taken from a video recording made by a person sitting behind the pilots in the JetBlue plane, an Embraer SA EJR 190-100. The case was one of an unexplained surge in high-risk runway incidents that occurred early this year, prompting the creation of a special safety review team by the Federal Aviation Administration to examine the issue. There have been nine serious situations so far this year involving airlines that were rated as severe by the FAA or that prompted NTSB investigations. That’s about twice the annual average since 2018. The FAA convened a symposium in March to get feedback on what’s causing the upsurge and required additional training for its controllers. <br/>

Sun Country Airlines reported a $20.6m profit for the second quarter of 2023 as all three business segments – scheduled passenger service, charter and cargo – posted increases. The Minneapolis, Minnesota-based carrier said on 3 August that revenue during the three months that ended on 30 June rose to $261m, up 19% from $219m in the same period last year. Expenses during the period rose slightly to $225m, up from last year’s $216m. For the first half of 2023, the company said it earned a $58.9m profit, on revenue of $555m, up 25% from last year’s $445m. “During the quarter, revenue growth continued across our scheduled service, charter and cargo businesses, and the second quarter was our eighth consecutive quarter where year-over-year total revenue growth has exceeded total block hour growth,” said Sun Country CFO Dave Davis. The company’s block hours rose by 11.3% during the second quarter, led by charter, which rose 23.9%. About 87% of the company’s charter flying is under long-term contracts, Sun Country says. “As the company continues to normalise its aircraft utilisation, it intends to pursue more ad-hoc charter flying.” Scheduled passenger service block hours rose 7.4% and cargo rose 10.4%. At the end of June, the company had 43 passenger aircraft in its all-Boeing 737 NG fleet, operated 12 freighter aircraft in its cargo operation, and had five aircraft held for operating lease. <br/>

Mexico's move of cargo flights from the capital's main airport to a more distant location is likely behind the pause in a planned joint venture between US carrier Allegiant and Mexican airline VivaAerobus, a Mexican official said on Thursday. U.S. regulators suspended the review of the tie-up on Monday, citing "outstanding questions" regarding air transportation between the two neighbors. Announced in 2021, the Allegiant-Viva deal is awaiting the US Department of Transportation's (DOT) approval to map out up to 250 new US-Mexico routes and would include a $50m equity investment from Allegiant in Viva. In a letter addressed to Mexico Deputy Transportation Minister Rogelio Jimenez, the DOT cited "recent actions the government of Mexico has taken affecting U.S. carrier operations" at Mexico City's decades-old hub, the Benito Juarez International Airport, Latin America's busiest airport. The letter, made public by the US government, did not specify the actions. But the director of the Benito Juarez airport said in an interview that US officials "had to be referring" to switching cargo flights to the newly built Felipe Angeles International Airport some 45 km away. "I imagine it has to do with the cargo move, that (the United States) wasn't satisfied with the agreement reached," said airport head Carlos Velazquez. The Benito Juarez facility is located about 8 km east of downtown Mexico City. Mexico first announced the cargo move in February, though it extended the deadline to September after US Transportation Secretary Pete Buttigieg visited the country. During the visit, President Andres Manuel Lopez Obrador agreed with US transport officials to push the deadline back another two months, added Velazquez.<br/>

Wizz Air Holdings scaled back its growth plans citing engine issues as well as a desire to increase yields, even as it reported fiscal first-quarter results that beat estimates. Wizz reduced its first half capacity growth to 25% compared with an earlier forecast of 30%, according to a statement. The reduction was partly due to newly identified issues with its Pratt & Whitney geared turbofan engines, as well as a desire to improve yields, it said. The airline said last week that 12 out of 400 of its GTF engines required early removal for inspections after RTX Corp. disclosed an issue with the powder metal used in some parts of about 1,200 engines. Wizz said there were no signs the engine problems could negatively impact profitability. Air-traffic control issues and engine problems were the two main challenges for Wizz moving forward, CEO Jozsef Varadi said on a media call. The engine woes were a bigger worry because the scale of the issue was unclear, with six planes initially due to be grounded, Varadi said. The Hungarian low-cost airline reported a E61.1m net income in the three months ended June. That beat the E51.5m average estimates of analysts, according to data compiled by Bloomberg. Wizz is the last of the major European low-cost carriers to report quarterly earnings, following EasyJet Plc and Ryanair Holdings Plc, which both beat estimates. Deutsche Lufthansa AG also reported strong demand this summer in earnings on Thursday, with capacity constraints driving higher fares. Despite the travel boom, some analysts have expressed concern over demand dropping in the winter against the backdrop of inflation and the cost-of-living crisis. <br/>

Wizz Air’s CE has said the extension of an incentive package to help him unlock a GBP100m bonus shows the “prevalence of capitalist spirit” despite significant opposition from some investors. Shareholders on Wednesday approved a resolution that gives József Váradi until 2028, from 2026 previously, to secure the one-off award. The bonus is triggered if the company’s share price, which was about GBP23 on Thursday, hits GBP120. However, the amendment garnered significant opposition, with almost 30% of the airline’s free float voting against it. Proxy adviser Pirc said the plans were “highly excessive” and “not considered to be acceptable”. Institutional Shareholder Services said it was “not fully in line with UK good practice”. “Common sense prevailed,” Váradi said. “[Investors] voted for creating €10bn of shareholder value at [a] 1% commission rate,” he said. “Wouldn’t you do that?” He added the company had “corresponding schemes at all levels”. “Let’s not forget that this is not just the CE’s remuneration, [it] flows through the entire [business],” he said. When Wizz Air devised the scheme two years ago, its share price was more than GBP40. The company has since been hit by unhedged exposure to the price of oil in the wake of Russia’s invasion of Ukraine. The move to increase Váradi’s chances of hitting the payout comes as the airline is also dealing with a reputational crisis in the UK for its handling of customer compensation after last year’s travel disruption. Over the three months to June 30, revenues rose 53% to E1.2b compared with the same period last year, as the airline benefited from a resurgence in air travel, it said on Thursday. It swung to a E61.1m quarterly profit, from a loss of E452.5mn in 2022. Wizz Air said it encountered record traffic at the start of the summer, with passenger numbers reaching 15.3m, boosting ticket revenues by 76%. Net profit was “substantially ahead of consensus” as a result of a better pricing environment and lower costs, analysts at Bernstein said.<br/>