Aerospace suppliers and airlines around the world warned of rising costs and a squeeze on plane capacity after US engine maker RTX disclosed that a rare manufacturing flaw could ground hundreds of Airbus jets in coming years. The problem, a rare powder metal defect that can lead to cracks in some engine components, is the latest trouble for the industry, which has been grappling with shortages of staff and supply-chain woes even as travel rebounded from pandemic lows. RTX said on Monday it would have to pull 600 to 700 of its Pratt & Whitney Geared Turbofan (GTF) engines from Airbus A320neo jets for quality inspections over the next three years. The beleaguered supplier's shares closed down 1.7% after earlier hitting a more than two-year low of $73.66 on Tuesday, but it drew backing from Airbus CEO Guillaume Faury who said at an event in Washington D.C. that the repairs were necessary to ensure safety. "We don't like the situation, but we think that was the right thing to do," he said, adding that the problems are "very unfortunate." Airbus said on Monday it does not expect an effect on its 2023 deliveries. Its shares fell 2.4% in Paris on Tuesday. The engine issue was first disclosed in July, but RTX made the extent of the problem clearer on Monday. The announcement caused waves up and down the industry, from component manufacturers like Japan's Kawasaki Heavy Industries to airline carriers like Germany's Lufthansa that rely on the popular Airbus jets.<br/>
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Airlines are scrambling to find replacements for hundreds of single-aisle jetliners that will be sidelined by a recently discovered engine issue, providing a boon to companies that lease out aircraft and crews. About 3,000 Pratt & Whitney geared turbofan engines powering the Airbus SE A320neo — the industry’s top-selling jet — must be removed and brought in to repair shops over the next three years to check for potentially flawed components made from contaminated metal powder, Pratt parent RTX Corp. said on Monday. The issue will ground hundreds of aircraft for months, depriving carriers of capacity amidst a post-pandemic rebound in air travel. Companies that lease out aircraft and crew on a temporary basis stand to benefit, according to the founder of Avia Solutions Group, which provides aircraft, crew, maintenance and insurance on a short-term basis, also referred to as wet-leasing. Avia, whose customers include Deutsche Lufthansa AG, Turkish Airlines and British Airways, is in talks with airlines about providing temporary capacity while their GTF engines are inspected in workshops, Avia founder Gediminas Ziemelis said in an interview. “This reminds me of the situation when the Max was grounded,” said Ziemelis, referring to the prolonged grounding of the Boeing Co. 737 Max model following two fatal crashes. To fill the void, airlines were forced to seek alternative capacity. Lufthansa expects to wet-lease 40 to 50 aircraft next summer as part of its plan to backfill capacity when its GTF-powered A320s go in for shop visits, the German airline’s CEO, Carsten Spohr, said at an event in the US on Tuesday.<br/>
US airlines on Tuesday expressed growing frustration with Federal Aviation Administration air traffic control staffing (ATC) shortages, which have snarled flights and forced regulators to extend waivers on minimum flight requirements. "In the short to medium term we have to reduce flights in very impacted airports because the system can't cope with the number of flights today," JetBlue Airways CEO Robin Hayes told Reuters on the sidelines of an industry conference Tuesday. "We're selling flights that we know we won't be able to operate because of ATC challenges." Airlines have faced flight woes after a record-setting US summer travel season and voluntary cut flights because of air traffic shortages. They want to add more flights to address demand. United Airlines CEO Scott Kirby, who harshly criticized the FAA this summer, said at the conference that lagging air traffic staffing levels "was two decades in building and it is going to take years to get it addressed." The FAA declined to comment Tuesday beyond a statement it issued in August that said it met its goal of hiring 1,500 controllers in the year ending Sept. 30. But it is still about 3,000 controllers behind staffing targets. Hayes said if the FAA doubled controller hiring - which it cannot - "it would still take us five years to catch up." The FAA has about 2,600 controllers in training. The Transportation Department is seeking $117m to hire another 1,800 next year. Citing ATC staffing issues, the FAA in August extended temporary cuts to minimum flight requirements at congested New York City-area airports and Washington National Airport through Oct. 28. A government watchdog said in June that critical ATC facilities face significant staffing challenges, posing risks to air traffic operations.<br/>
The US Department of Agriculture will spend up to $400,000 to adjust a federal greenhouse gas (GHG) emissions model to ensure that aviation fuel made from corn-based ethanol is eligible for hefty subsidies, Agriculture Secretary Tom Vilsack said at a conference on Tuesday. "We’re working on the modeling to make sure that there’s a broad array of feedstocks that can qualify, including ethanol," he said at a conference hosted by biofuels lobby group Growth Energy. Vilsack's comments are his latest effort to calm a biofuel industry concerned it will be left out of the multibillion-dollar market for sustainable aviation fuel (SAF) airlines and the administration of President Joe Biden see as key to reducing transportation emissions. Last year's Inflation Reduction Act included lucrative tax credits for SAF producers who can show with an approved scientific model that their fuel emits 50% less greenhouse gas than gasoline. The Biden administration is divided over whether to grant a request from the biofuels industry to allow the use of the U.S. Department of Energy’s Greenhouse Gases, Regulated Emissions and Energy Use in Technologies (GREET) model. Environmental groups say it underestimates emissions from the displacement of farmland or vegetation to grow crops for biofuels. Vilsack, who supports the use of GREET, said the USDA is making adjustments to the model.<br/>
American Express is planning to debut a new luxury lounge at Newark Liberty International Airport, part of the credit-card giant’s continued push into travel and entertainment services. The credit-card company is planning to open a new Centurion Lounge in 2026 outfitted with a terrace overlooking the Manhattan skyline, a cocktail bar and individual workspaces, according to releases published Tuesday by American Express and the Port Authority of New York & New Jersey. The perks will be available to Amex Platinum Card users, who, for a hefty $695 annual fee, have access to more than 1,400 airport lounges across 140 countries. Neighboring airports like New York’s LaGuardia Airport and John F. Kennedy International Airport already boast similar facilities. Airport lounges have grown increasingly popular with credit-card companies competing to showcase the flashiest space with the most luxurious amenities. Capital One Financial Corp. opened up a new lounge at Dulles International Airport just outside of Washington DC this month and JPMorgan Chase & Co. is expected to open at least seven US airport lounges before the end of the year. Amex, in particular, has been swiftly expanding its collection of airport lounges in recent years, adding locations in San Francisco, Las Vegas and London. The company has long said the lounges are an important part of why cardholders are willing to pay the $695-a-year fee that comes with the Platinum card.<br/>
A police officer was injured and a suspect was detained after a reported shooting in Mexico City’s International Airport. “A few minutes ago, Mexico City police personnel in an operation to persecute alleged criminals had a confrontation in the vicinity of Carlos Leon Avenue, resulting in one police officer injured and one detained,” the airport said in a statement posted on X, formerly known as Twitter. “The security protocols of the navy, airport security and auxiliary police were activated immediately.” Images broadcast on Foro TV showed people at the terminal crouching behind pillars and airline desks for cover. No passengers or visitors were at risk, according to the statement. Authorities are looking into the incident and police were mobilized around the airport.<br/>
Passenger traffic at Spain's Aena airports exceeded pre-pandemic levels for an eighth consecutive month in August, while traffic in other European terminals still lagged. The number of passengers travelling through Spanish airports in August rose 9.5% from 2022 to 29.8m, state-controlled airport operator Aena said in a statement on Tuesday. It was 1.4% higher than in the same month of 2019.Worldwide airlines continued to benefit from the rebound in leisure travel across the summer, although IAG and Ryanair have recently been lukewarm about demand for the rest of the year as high inflation and rising interest rates squeeze household incomes. Spanish airports rely more on leisure and less on business travel, which has recovered more slowly from the pandemic. Airports Council International Europe said on Tuesday that passenger traffic across the region in July, the peak month of the summer, came closest ever to a full recovery to pre-COVID levels, but still stood 3% below. Globally, traffic in July was at 95.6% compared to 2019, the International Air Transport Association said earlier this month.<br/>
Boeing delivered 35 planes in August, its lowest number since April, as it struggles with time-consuming work needed to correct a manufacturing defect on the bestselling 737 MAX. Overall, the company has handed over 344 planes to customers during the first eight months of 2023, a jump from the same period last year when work was affected by the pandemic. By comparison, European rival Airbus(AIR.PA) has delivered 433 aircraft over the first eight months, 52 of those in August. Last month's deliveries included only 22 narrowbody 737s MAXs, of which one was a Boeing Business Jet. Boeing CFO Brian West said on Thursday that the company would be on the "low end" of its 400-450 target for 737 deliveries this year due to the extensive process used to inspect and fix thousands of misdrilled holes on the 737 MAX 8 aft pressure bulkhead. The company booked new orders for 43 planes after factoring in two cancellations. The total for the month includes a previously unannounced sale of 25 737 MAX 8 planes to aircraft lessor SMBC Aviation Capital. Airbus sold 117 planes in August.<br/>In addition to the MAX, Boeing handed over 13 widebody jets including five 787 Dreamliners, three 767s - including three KC-46 tankers for the U.S. Air Force and two freighters for FedEx - as well as three 777 freighters. Investors closely watch delivery numbers, as airplane makers receive the majority of payment for an aircraft when it is transferred to a customer. Boeing's gross orders since the start of January rose to 624 in August, or 510 net orders after factoring in cancellations and conversions and 737 net orders after accounting adjustments. Airbus has booked 1,257 gross orders or 1,218 after cancellations.<br/>
Global leasing giant SMBC Aviation Capital said on Tuesday it had concluded an order for 25 Boeing 737 MAX aircraft in a deal worth more than $3.7b at current list prices that would support its growth plans and meet customer demand. SMBC, the world's second largest aircraft leasing firm, said the new planes are scheduled for delivery in 2028 and 2029 and will increase its orders of Boeing's more fuel-efficient MAX jets to 81 aircraft. "Our customers have demonstrated clear long-term demand for the 737 MAX and our expanded order pipeline positions SMBC Aviation Capital for future growth against the background of a strong global recovery in air travel," SMBC CEO Peter Barrett said. The Irish-based lessor, which is owned by a consortium including Japan's Sumitomo Corp and Sumitomo Mitsui Financial Group , currently owns or manages 65 MAX aircraft, out of a total portfolio of 711 planes. Boeing said last week that it is set to meet targets to deliver at least 400 narrowbody 737s this year despite a recently discovered production flaw that has slowed deliveries of the best-selling 737 MAX.<br/>