general

Safran CEO Olivier Andries demanded regulators in Europe and the US crack down harder on rogue aircraft parts dealers, as he reacted to the scandal of falsified component records that have led to fake parts ending up on Safran-built engines. The European Union Aviation Safety Agency and the US Federal Aviation Administration should introduce more regulation to rein in middle men in the supply chain, Andries said in an interview in Meaux, outside Paris. Regulators might also consider bringing in digitalization and blockchain technology to increase traceability and eliminate paper-based documentation, Andries said. “The fact that this company was able to establish itself, to prosper and to sell parts with falsified certification documents raises questions,” Andries said referring to AOG Technics Ltd. which has been accused of selling jet engine parts with forged certification documents. Bloomberg News first reported on the suspect parts on Aug. 31 which has triggered a race to identify and remove suspect parts on aircraft at multiple airlines spanning from the US to Australia. EASA has previously said that suppliers are not regulated and therefore has no power to investigate AOG Technics. <br/>

It should be the best of times for US airlines with a travel boom still going strong, but investors are nervous demand may soften as the economy falters, making it harder to protect profits from soaring costs. Those concerns are battering airline stocks even as earnings reports point to a continuing consumer appetite for travel. Shares of United Airlines fell about 10% on Wednesday, dragging down the broader the NYSE Arca Airline index, after the Chicago-based carrier forecast lower-than-expected Q4 profit on rising expenses. "It's really a demand-driven business" said Brian Mulberry, client portfolio manager at Zacks Investment Management. "If there's less demand, then obviously less sales means less profitability." A struggle to get control of operating costs has also called into question rival Delta's goal of generating profit of over $7 per share next year, with some analysts now calling the target aspirational. That is a reason why the airline's shares are down 10% this month even after it posted stronger-than-expected quarterly earnings.<br/>Strong demand from travelers has so far allowed carriers to mitigate inflationary pressure with higher fares. While both United and Delta said travel demand is holding up, double-digit declines in airfares year-over-year suggest airline pricing power has peaked. Falling ticket prices are raising questions as to how airlines will hedge against cost increases. Delta CEO Ed Bastian last week suggested the industry would be able to pass along increased operating costs to consumers.<br/>

The Biden administration on Wednesday declared emissions from airplanes running on leaded aviation fuel a threat to public health — a first step toward stamping out a major source of metal pollution linked to developmental delays, kidney disease, and other health concerns. The so-called endangerment finding from the Environmental Protection Agency zeroes in on leaded aviation fuel used primarily in small piston-engine aircraft, where the metal provides octane critical for performance. Lead isn’t in the jet fuel used by commercial aircraft, and for decades it’s been banned from gasoline used in cars and trucks. As a result, lead emissions in the air have shrunk 99% since 1980, leaving the roughly 220,000 aging, small planes that rely on aviation gasoline containing the metal as the dominant source of that pollution. “Exposure to lead can cause irreversible and life-long health effects in children,” EPA Administrator Michael S. Regan said in a news release. The agency’s declaration allows the administration to “propose new standards to protect all communities from the serious threat of lead pollution from aircraft,” Regan said. The EPA finding doesn’t itself ban or restrict the use, sale or availability of leaded aviation fuel. But it does trigger a legal obligation under the Clean Air Act to propose standards addressing lead emissions from the affected aircraft engines. And the Federal Aviation Administration can move separately to impose requirements addressing fuels and additives that can limit lead emissions. The agencies will announce timelines for those regulatory moves “as soon as possible,” the EPA said Wednesday. Any new standards could have an outsize impact in Alaska, Colorado, Florida and other states where piston-engine aircraft are more prevalent. <br/>

President Joe Biden’s second pick to lead the Federal Aviation Administration was endorsed Wednesday by a Senate committee with no Republican opposition, signaling a clear path to final approval by the full Senate. The Senate Commerce Committee approved Michael Whitaker’s nomination by voice vote. Whitaker was the No. 2 official at FAA during the Obama administration and is currently the COO of a Hyundai affiliate working to build an air taxi aircraft. Sen. Ted Cruz, R-Texas, praised Whitaker for his “extensive aviation experience.” Cruz led GOP opposition to Biden’s first FAA nominee, Denver International Airport CEO Phil Washington, who has spent most of his career working for transit agencies in Los Angeles and Denver. Cruz and others labeled him insufficiently knowledgeable about aviation. The FAA has been without a Senate-confirmed leader since March 2022, even as it has tried to understand a surge in close calls between planes at major airports. The agency has been led by two acting administrators.<br/>

Mexico's government said on Wednesday it concluded a review of alleged labor rights violations of pilots at Mexico City-based cargo airline Mas Air, following a request by the United States under a North American trade accord. Mexican authorities uncovered actions that may go against local labor law and constitute a denial of the right to freedom of association and collective bargaining, though actions to remedy the situation have already been implemented, Mexico's government said in a statement. In August, the US asked Mexico to review whether rights of pilots at the small cargo airline were being infringed upon. Among the actions taken by Mexican authorities to remedy the irregularities found in the review are informing pilots of their rights and reinstating one pilot previously fired, the statement added. US trade officials have launched more than 10 labor rights complaints against facilities in Mexico since the US-Mexico-Canada Agreement trade pact took effect in 2020.<br/>

Europe’s three biggest long-haul airlines are pushing ahead with a series of deals that would transform the aviation landscape in the region by opening up lucrative new routes and the prospect of higher profits. If the deals materialise, it will help turn a fragmented sector with dozens of national flag carriers into a market more like the US, where just a handful of large airlines dominate the skies. British Airways owner IAG, Lufthansa and Air-France KLM are all hoping to gain regulatory approval for deals that would give them a combined share of nearly three quarters of the long-haul market. “Europe airlines need to consolidate,” said Ryanair CE Michael O’Leary. “We will emerge with an industry not unlike America: US groups carrying 200mn passengers annually that have the ability to invest,” he added. If regulators back IAG’s purchase of Air Europa and Lufthansa’s swoop on ITA after Air-France KLM this month took a 20% stake in SAS, then Europe will have taken a major step towards replicating the US market, the world’s most profitable. All three airline groups have also expressed an interest in buying part of Portugal’s national carrier TAP after Lisbon’s government this month announced the start of a privatisation process. At least one major airline group has also considered a push into eastern Europe with a bid for a national airline there, according to a person familiar with the matter. However, winning regulatory approval for cross-border mergers could be difficult in Europe, industry experts have warned. On Tuesday, the new EU antitrust commissioner told the Financial Times that the bloc planned to tighten rules around airline mergers because of competition concerns. “There should and will be more consolidation in Europe, but it is sometimes a daunting challenge . . . traditionally there has always been national interest and identity that has been inexorably linked to the airline industry,” said Dan McKone, senior partner at consultancy LEK.<br/>

Six airports across France were evacuated on Wednesday after emailed “threats of attack”. The evacuations at Lille, Lyon, Nantes, Nice, Toulouse and Beauvais, near Paris, would allow authorities to “clear up any doubts” that the threats might be real, a source said. A statement from Lille airport said: “State security teams are on site.” The evacuations came as a Berlin synagogue was attacked with Molotov cocktails early on Wednesday morning, reflecting an increase in anti-Semitic incidents in the German capital amid the escalating violence in the Middle East. Direction Generale de L’aviation Civile, France’s civil aviation authority, confirmed the existence of “bomb threats” and said the evacuation of airports was under way at Lille, Lyon, Toulouse and Beauvais. Beauvais airport, a hub in the Paris area for Ryanair and other low-cost airlines, released a message on its Facebook site that said “an anonymous threat” was received by several airports. At midday, flight delays were reported in Toulouse, Lille and Beauvais. Lille airport also redirected flights from Marrakesh, Geneva and Constantine. France is currently on its highest state of counter-terrorism alert after the murder of a teacher in a suspected Islamist attack on October 13. On Tuesday, the Palace of Versailles, one of France’s main tourist sites, was closed for a few hours after its second security scare in four days, with the attraction having also been evacuated alongside the Louvre museum on Saturday. The conflict between Israel and Hamas has placed Europe on high alert, with Britain’s domestic MI5 spy agency chief warning that the war has increased the UK terror risk, singling out Iran as a cause for concern. Gerald Darmanin, France’s interior minister, warned on Saturday that a “jihadist atmosphere” in the country was encouraging radical individuals to act via calls from Hamas.<br/>

Airline executives on Wednesday called on Britain to draft new rules to allow carriers to share responsibility with air traffic control and airports for any disruptions to flights so the burden of paying out customers doesn't fall solely on them. "There has to be recourse for airlines ... We can't be the insurer of last resort for everything that goes wrong in our industry," Loganair CE Jonathan Hinkles told the British parliament's transport committee. In August, an air traffic control glitch in Britain caused thousands of flight cancellations and delays in and out of the country, with the head of NATS, the national air traffic controller, promising it wouldn't happen again. Airlines said they were left with the responsibility to pay customers back for the disruption despite it not being their fault. "At the moment, the airlines are taking the pain for it," easyJet CCO Sophie Dekkers said, while Ryanair CE Michael O'Leary argued NATS should repay airlines GBP15m. NATS CE Martin Rolfe said he understood the frustration of airlines but safety, not cost, was the air traffic controller's priority. "NATS' primary purpose is to prioritize safety over all other things ... We're not focused on cost, we're focused on safely fixing and restoring traffic," Rolfe told the committee. Britain has rules similar to the European Union on passenger compensation, which allow customers to claim up to E600 for flight delays of three hours or longer.<br/>

Australia will ask its competition watchdog to monitor domestic passenger flights in a bid to boost competition in a sector dominated by national carrier Qantas, which is under scrutiny for alleged anti-competitive behaviour. The Australian Competition and Consumer Commission (ACCC) will monitor prices, costs and profits in the domestic air passenger sector, according to a joint statement from Treasurer Jim Chalmers and Transport Minister Catherine King on Wednesday. "A competitive airline industry helps to put downward pressure on prices and deliver more choice for Australians facing cost-of-living pressures," the statement said. "ACCC market scrutiny will help ensure airlines compete on their merits, bring to light any inappropriate market conduct should it occur, and provide continued transparency at a time when new and expanding airlines are still trying to establish themselves." The regulator will also monitor route capacity, a topic of some controversy following months of accusations Qantas successfully lobbied the federal government to stop rival Qatar Airways running additional flights to Australia. The airline was embroiled in another scandal in August when the ACCC sued it for violating consumer law by selling tickets to cancelled flights. Days later long-serving CE Alan Joyce brought forward his retirement.<br/>