IATA’s latest data for the peak northern hemisphere travel month of July reflects the industry’s continued strong recovery from the Covid-19 pandemic, with both traffic and capacity falling just short of 2019 levels. But its celebration of a strong month for air travel came with a warning about the impacts of government moves to cap capacity at several airports. In the view of IATA director general Willie Walsh, “political decisions” made by some governments are almost certain to “destroy jobs and damage local and national economies”. In particular, he cites a recent proposal by Mexico’s government to further reduce traffic at Mexico City Benito Juarez International airport – the country’s busiest – in favour of the newer but more distant Felipe Angeles International airport. Mexican flag carrier Aeromexico said on 31 August in response to the proposal: “In the first instance, the measure will affect all passengers using that airport, industry employees and the attraction of new investments that depend on having legal certainty and adequate air connectivity.” Walsh also cites the recent decision by the outgoing Dutch government to go ahead with cuts in capacity at its Amsterdam Schiphol airport hub to counter noise pollution. On 1 September, Schiphol’s biggest carrier, KLM, hit out at the decision to press ahead with the flight cuts. “The minister is opting to focus one-sidedly on capacity reduction as a goal in itself,” it said. “We find this incomprehensible.” In late July, IATA similarly voiced its opposition to proposals that would see night flights banned at Brussels airport on the grounds of reducing noise. “The numbers continue to tell us that people want and need air connectivity,” Walsh says of air travel’s strong recovery from the Covid-19 crisis. “That’s why governments should be working with us so that people can travel safely, sustainably and efficiently.” <br/>
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Airline ticket prices will need to be 18% higher in 2050 if the aviation industry is to afford the trillions of dollars it will cost to meet sustainable aviation fuel (SAF) targets and meet decarbonisation goals, according to a new report. Published by LEK Consulting, the research paper – Fuelling the Future of Aviation: Making Sustainable Aviation Fuel a Reality – identifies SAF as the “critical lever” for decarbonising aviation in the period to 2050 and beyond. However, for the sector to achieve its SAF penetration target of 65% by 2050 it will require global production capacity of more than 400m tonnes per annum, a huge increase on the sub-1m tonnes available today. That will only be enabled though the use of more expensive production solutions such as power-to-liquid fuel, the report argues, contributing to SAF remaining around twice the price of standard jet fuel, despite cost decreases associated with volumes of scale. As a result, hitting the 65% target will cost “$3.5-5.5t in excess of a kerosene-only future”, the study suggests. Total spend on kerosene in that scenario would be $8-9t to 2050, it says. If these costs are passed through to customers, ticket prices will need to rise by 18% by 2050, against a jet fuel-only baseline, it adds. “Whilst this is a significant quantum, this cost must be seen in the context of the overall cost of delivering a net-zero future, which has been variously estimated as c.$130-140t over the period 2022 to 2050.” In fact, the SAF cost is just 2-4% of the estimated cumulative investment required to achieve net-zero, the report notes. Provided there is a willingness by customers to pay “and if competitors can operate on a level playing field”, passenger demand in volume terms will only be around 7% lower by 2050. That implies a growth rate of 3-4% per annum – “only c.0.3% p.a. lower than in a no-SAF world.” Story has more.<br/>
President Biden announced on Thursday that he planned to nominate Michael G. Whitaker, who served as the No. 2 official at the FAA during the Obama administration, to become the agency’s next permanent leader. Whitaker currently serves as the COO for Supernal, a Hyundai Motor company that is developing air taxis. He was the FAA’s deputy administrator from 2013 to 2016 and has also been an executive at United Airlines. The FAA has been without permanent leadership since Stephen Dickson, a former Delta executive and an appointee of President Donald J. Trump, stepped down last year. Biden’s first nominee for the post, Phillip A. Washington, the CE of Denver International Airport, withdrew from consideration in March after running into resistance in the Senate. The failure of Mr. Washington’s nomination has prolonged the leadership void atop the agency. The F.A.A. official who served as acting administrator after Mr. Dickson’s departure, Billy Nolen, left the agency in June. Polly Trottenberg, the deputy transportation secretary, has been serving as the FAA’s acting administrator, but she will have to turn over the reins to another temporary leader in late October because of a federal law that limits how long she can run the agency on an acting basis.<br/>
European refiner Varo Energy plans to invest $600m to build a sustainable jet fuel plant in the Netherlands as it continues to expand its biofuels business. The company, owned by trader Vitol Group and private equity firm Carlyle Group Inc., will wholly own the facility that will be able produce 245,000 tons of the green fuel a year. The project is part of Varo’s $3.5b strategy to cut emissions. While hydrogen has been touted as the future for long-haul trucks and electric vehicles to replace the internal combustion engine, the air industry has so far proved trickier to decarbonize. Sustainable aviation fuel is currently the only feasible alternative to traditional jet fuel, but can cost as much as five times more. The Swiss firm will re-purpose existing infrastructure at Gunvor Group’s Rotterdam site, with first production slated for Q4 2026. That will help speed up construction, and a final investment decision is expected soon. “Rotterdam is a neighborhood that has great demand for SAF,” Varo CEO Dev Sanyal said Wednesday. The plant plant will have feedstock capacity of 350,000 tons annually, and will also produce a mixture of bio-naphtha and bio-propane, in addition to SAF. The plan is part of the company’s long-term target of reaching 500,000 tons of biofuel capacity. Demand for green jet fuel is growing fast in the European Union, where new regulations will require airlines to fill planes with a 2% SAF blend by 2025, rising to 70% by 2050. Production from Varo’s facility will deliver as much as 7% of the bloc’s 2030 SAF target, the refiner said. Varo earlier this year signed a preliminary agreement with German airline Deutsche Lufthansa AG to begin supplying volumes of SAF as early as 2026. Sanyal didn’t say if the refiner is in talks with other airlines for similar deals, but the EU’s mandate means that demand is only going to increase.<br/>
Russian airlines’ combined passenger traffic grew 12% year on year from January to August to 70.8m passengers, Federal Air Transport Agency Rosaviatsia said on Thursday.<br/>
A landmark agreement around jets stranded in Russia is positive for insurers, Lloyd's of London CEO John Neal said on Thursday as the commercial insurance market reported a first-half profit of GBP3.9b . Aercap, the world's largest aircraft lessor, this week agreed to settle an insurance claim over Russia's refusal to return 17 jets leased to airline Aeroflot, in a dispute over 400 Western planes stranded in the wake of the Ukraine invasion. The deal, an apparent compromise in an economic war between Moscow and the West, looks set to lower a bill facing insurers, who are locked in court cases over who should pay for the loss of up to $10b. Neal told Reuters that the Aercap settlement was "good news for us too, it means we can sit down and start to have the conversation about what is the claim". Beazley CEO Adrian Cox told Reuters on Thursday that the Lloyd's insurer's exposure to the stranded jets was small, but added: "We have been hearing more noises about settlements being negotiated, it wouldn't be surprising to us if we saw some settlements happen before the trials started." Lloyd's, which recorded a loss of GBP1.8b in the first half of 2022, saw a 22% rise in gross written premiums to GBP29.3bdue to expansion in existing syndicates, the introduction of new syndicates and a 9.1% increase in rates, it said in a statement.<br/>
The remnants of Typhoon Haikui drenched southern China for a third day since making landfall, and airports in Guangdong province cancelled hundreds of flights due to stormy weather on Thursday though winds had weakened. Although storm clouds moved westward towards Guangdong, one of the country's richest provinces, more downpours were still forecast for the southeastern province of Fujian, where state media reported economic losses had reached 5.054b yuan ($690.81m) since the typhoon made landfall on Tuesday. In Guangdong's capital Guangzhou, Baiyun Airport, one of the busiest in China, cancelled 316 flights and delayed 271, according to flight tracking app Flight Master. Shenzhen's Baoan Airport cancelled 176 flights and delayed half of its flights while Zhuhai's Jinwan Airport cancelled 91 and delayed 74. Torrential rain reportedly led to rivers overflowing in the Guangdong town Tangxi, and some villages suffered severe waterlogging. Over 350 people, including elderly, women and children were relocated from low-lying areas, according to state media. The China Meteorological Administration forecast rainstorms in central and eastern Guangdong, the southern part of Jiangxi province, southern areas in Hunan province, the northeastern areas of the Guangxi region, and the central part of the island of Hainan, while northern parts of Guangdong and the southeastern coast of the province were expected to be hit harder.<br/>
Thai airlines are preparing to clarify the situation in response to accusations of expensive tickets, noting that the aviation industry is poised to face another surge in jet fuel prices due to soaring crude oil prices. The Airlines Association of Thailand (AAT) will hold a seminar next week to elaborate on the airfare structure and price regulations under the control of the Civil Aviation Authority of Thailand (CAAT), after consumers cried foul over expensive airfares post-pandemic. Wutthiphum Jurangkool, CE of Nok Air, said the significant increase was seen only during long holidays, when the prices were raised based on growing demand. The price of last-minute bookings usually surge higher than average. However, he said average prices were not excessively raised in order to make more profit as airlines still had to adjust their prices to cope with surging operating costs, mainly attributed to the cost of jet fuel. He said the fuel price has been on an upward trend over recent weeks as it surged to UScopy19 per barrel yesterday, higher than the yearly average of $98.5 per barrel that the International Air Transport (IATA) estimated for 2023. Wutthiphum said amid reduced demand in the low season, it would be difficult for airlines to absorb this cost as they have to avoid incurring losses on each flight. "Airlines cannot get a strong load factor except during long holidays. With no<br/>holiday in September, domestic demand significantly dropped, with the<br/>average load factor lower than 80% for Nok Air, while the average price for domestic routes was lower than 1,000 baht per flight," said Wutthiphum.<br/>
Roughly 165 of the 737 Max 8s in Boeing’s inventory of undelivered aircraft will require detailed inspections and rework to address a recently revealed issue with the jets’ aft-pressure bulkhead. That is according to Boeing CFO Brian West, who on 7 September revealed details about how many 737 Max are affected by the bulkhead issue. On the same day, the CE of Spirit AeroSystems, which supplies Boeing with 737 Max fuselages, including the bulkheads, disclosed more information about the defect. “It will impact about 75% of the 220 airplanes that were in inventory as of the end of the second quarter,” West says during an investor conference hosted by financial firm Jefferies. That equates to 165 aircraft. “The item… in the aft fuselage was a step back from” Boeing’s goal of achieving a more stable production system. Boeing had previously disclosed little about how many 737 Max have the aft-pressure bulkhead issue, which the company first disclosed in August. The problem involves “fastener holes that did not conform to our specifications”, Boeing said. Only 737 Max 8s – not Max 9s – are impacted. Still unclear is how many in-service aircraft might have the defect and require fixes. Boeing insists the problem does not degrade flight safety. During the same conference, Spirit CEO Tom Gentile says the pressure-bulkhead defect resulted from an “automated drilling process, which if not done perfectly could create on oblong hole”. The affected structure has about 1,000 holes, of which about 500 are drilled using the automated process and could therefore “be suspect”, he says. Spirit has 39 fuselages that still require inspections and possible repairs. Addressing the issue requires completing x-ray inspections to identify oblong holes. <br/>