Aviation war insurers have given notice to cancel cover for some airlines domiciled in Israel and Lebanon because of the conflict in the region, with some cancellations already taking effect, three industry sources with direct knowledge of the matter said. Aviation war insurers based in Europe, the United States and the Lloyd's of London market can issue a 7-day notice of cancellation or other changes to terms and conditions in the event of a major conflict they feel will make the long-term insurance risk too great. Insurers for Israeli flag carrier El Al Airlines, Israir and Arkia have previously said they can issue such notices due to the war between Israel and the Palestinian group Hamas. Israeli airlines have now received the notices, two sources told Reuters, without naming the airlines. "War underwriters' appetite for continuing to cover these risks for no additional reward differs and some are now looking to withdraw cover, especially given the news the Israeli government has provided a backstop to cover flights," said Bruce Carman, chief underwriting officer at Hive Underwriters. Israeli's parliamentary finance committee last week approved a plan to provide a state guarantee of $6b to cover insurance against war risks to Israeli airlines. Spokespeople for Israeli airlines El Al and Arkia did not directly respond to questions from Reuters about whether insurers had served notice but said the government was providing all necessary coverage for them to continue operations safely. A spokesperson for Israir said it had not been served notice by its insurers, but did not provide additional details. A spokesperson for Lebanese carrier Middle East Airlines did not immediately respond to requests for comment. Israeli carriers have continued to fly while most foreign airlines have cancelled flights to Tel Aviv, expanding flights to bring back those travelling abroad and those called up to reserve service for the military. Airlines normally take out two types of policy - an "all risks" policy which covers both regular damage to the hull and passenger liability, and a "war" policy to cover war or terror-related losses to the aircraft.<br/>
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The US State Department issued a rare worldwide travel advisory on Thursday, urging US citizens to “exercise increased caution” because of heightened global tensions and the potential for terrorist attacks, demonstrations and violence “against US citizens and interests.” The alert came as demonstrations and protests tied to the ongoing war between Israel and Hamas have spread throughout the Middle East and Europe, in some cases leading to violent clashes at US diplomatic compounds. Tensions intensified on Tuesday after a deadly blast at a hospital in Gaza left Hamas and Israel trading blame. In Turkey, pro-Palestine supporters tried to enter a U.S. military base in the city of Malatya and demonstrated outside the U.S. consulate in Istanbul. On Thursday, a spokesman for Hamas called for further protests outside of American and Israeli embassies. The advisory calls on Americans to be vigilant while traveling and to stay alert at tourist sites. It also urges U.S. citizens to enroll in the government’s Smart Traveler Enrollment Program to receive information and alerts and to make it easier to be located during an emergency overseas. The worldwide caution notice was last issued in 2022 after the killing of Ayman al-Zawahri, which led the State Department to warn travelers that Al Qaeda might try to attack Americans traveling abroad. Before traveling, visitors should check the State Department’s website for country-specific guidance. The travel advisory for Israel and Lebanon was raised to the highest level this week, warning citizens not to travel to Lebanon and Gaza and to reconsider travel to Israel and the West Bank. Some U.S. government personnel were authorized to depart from those regions.<br/>
Top US airlines posted record Q3 revenue, but rising fuel prices and uncertainty surrounding China travel demand are clouding the outlook for the end of the year. American Airlines on Thursday reported that revenue edged up 0.1% to $13.5b, while posting a $545m net loss that the carrier attributed to one-time payments related to a new labor agreement with its pilots. United Airlines logged a 12.5% revenue gain to $14.5b and net income of $1.1b, up 21% on the year, the company reported this week. Delta Air Lines tallied an 11% rise to $15.5b in revenue for the third quarter with net income of $1.1b, an increase of 59%, it said last week. The results continued a streak of strong earnings following the pandemic reopening, but expectations for the fourth quarter have been dampened by the sharp increase in jet fuel prices since previous three months, as well as uncertainty over the conflict in the Middle East. All three airlines have halted flights to Israel. Asia-Pacific travel continues to drive growth, as it has done since the region reopened for tourism later than its Western counterparts. September brought a slow but steady return of flights between the U.S. and China, with more on the horizon. As domestic revenue growth moderates from the "revenge travel" boom, the airlines are focusing on regions like Asia to drive growth. "Asia is still, however you want to look at it, very strong," said Andrew Nocella, United's CCO. "We're going to focus our efforts where we see that growth, where we see the profitability opportunity. And if you look at our schedules going into next year, you can see that a gigantic percent change in our capacity is, in fact, Asia." Delta's revenue in the Pacific region climbed 65% on the year to $559m, thanks partly to a 70% increase in capacity, both by far the largest increase for any of the carrier's regional operations. The airline said it expects to boost capacity in the region 40%-50% in the December quarter.<br/>
Mexico’s three airport operators agreed to almost double the contributions they pay the government, adding hundreds of millions of dollars in costs, in deal to placate President Andres Manuel Lopez Obrador after he criticized the industry’s profit margins. GAP, OMA and Asur have reached an agreement with the government to modify the tariff structure that had been in place for over two decades, agreeing to hand the government 9% of gross revenue up from the current 5%, the Infrastructure, Communications and Transportation Ministry said in a statement Thursday. Earlier this month, the operators said the government had “unilaterally and without prior communication” changed the fee structure. The announcement sent shares tumbling the most on record as investors interpreted the move as another overreach by Lopez Obrador’s administration. GAP’s total revenues for 2022 amounted to 22.5b pesos ($1.2b), while OMA reported revenue of 11.9b pesos ($654m). Asur’s revenues last year amounted to 14.3b pesos ($786m). “These changes will benefit passengers by reducing the cost of airport services that have an impact on ticket prices,” the government said in the statement, without providing details on how the money would be used or how the move would lower ticket prices. The changes won’t negatively affect the financial or operational situation of the operators, the ministry said.<br/>
Airlines in Spain expect a strong winter season as they planned to have a seat supply almost 13% above pre-pandemic levels, the head of Spain’s airlines industry group said on Thursday. “The positive evolution of air traffic throughout this year, which already exceeds pre-pandemic figures, anticipates recovery in 2023 with the possibility of breaking the air traffic record,” Javier Gandara, head of Spain’s Airlines Association, said at a news conference. Leisure travel has boomed since pandemic restrictions ended last year, despite a squeeze on household incomes from high inflation and rising interest rates. “If we maintain this positive pace, we will surpass 2019 figures. Travelling is still high among people’s priorities”, said Gandara, easyJet’s top executive in Spain. Between April and September, the number of passengers at Spanish airports was 1.2% above 2019 levels, at around 163m. Despite a strong recovery led by travellers from cooler climates visiting Southern Europe, traffic to other European countries was still slightly below pre-pandemic levels. Still, Gandara warned that geopolitical uncertainties, such as the fresh conflict in Israel and Palestinian territories, could lead to oil price increases, which will drive up the costs of fuel and flying and rein in travelling.<br/>
Several regional airports in France were evacuated after threats of attack on Thursday, a day after airports in France and Belgium were evacuated on the same grounds. There was an evacuation due to a bomb threat at the Montpellier airport, regional authorities said in a post on social media platform X. On the same platform, the Lille airport account said at 11 a.m. local time it was being evacuated after a bomb threat. It is now “progressively reopening.” The regional airports of Bordeaux, Nantes, Lille, and Montpellier were evacuated, the Figaro newspaper reported earlier. Beauvais airport, which is used by low cost carriers to serve the Paris region, and Tarbes-Lourdes airport in the southwestern Pyrenees region were also evacuated. The national police said there had been threats at Lille, Nantes, Bordeaux and Nice airport but did not confirm whether they had been evacuated. Nice airport said in a post on X that there had been no evacuation. Paris airport operator ADP said the Roissy-Charles de Gaulle and Orly airports weren’t affected. <br/>
Two out-of-production Airbus SE and Boeing Co. jet series have become hot commodities, with plane values and monthly lease rates soaring for airlines fortunate enough to procure the aircraft. Used Boeing 737NG and Airbus A320ceo single-aisle models are now valued at about $20m or more, according to analysts at Ishka, which specializes in aircraft pricing and valuation. The decade-old planes are experiencing an unexpected surge in popularity at an age when monthly rents and resale prices usually decline. The workhorse aircraft still dominate many airlines’ single-aisle fleets, even as newer 737 Max and A320neo versions enter service. Airlines are starved for planes, partly owing to supply-chain kinks still rippling through from the Covid-19 pandemic. These continue to hold back new-aircraft production, while an even more disruptive issue with popular Pratt & Whitney engines requires time-consuming rework — sidelining younger A320s and worsening repair-shop backups across the globe. Aviation consultancy Cirium Ascend estimates that only around a dozen midlife Boeing 737NGs are available for rent anywhere on the planet. For Airbus A320ceos, the figure is under 25. There are even fewer younger jets available — about 25 across the 737 and A320 families. Carriers like Deutsche Lufthansa AG and Ryanair Holdings Plc are holding onto older aircraft to fill the gap, further tightening supplies. On Thursday, Alaska Air Group Inc. said that American Airlines Group Inc. would purchase 10 of its used A321neos. Some 75% to 90% of scheduled lease expirations are currently being extended, said Rob Morris, global head of consultancy at Cirium Ascend. As a result, lease rates on 10-year-old Boeing 737-800s, for example, are 44% above January 2022 levels — an unheard-of gain — and above prices at the outset of the pandemic, according to Ishka.<br/>