Airlines are struggling to convince investors to back the travel recovery despite reporting booming profits and splurging tens of billions of dollars on new planes. The MSCI index tracking global airlines is trading about 40% below pre-pandemic levels. It has fallen more than 20% since the start of July, even as many airlines including British Airways owner IAG, easyJet and Singapore Airlines have reported record earnings. Carriers have also ordered more than 2,800 new planes so far this year in a multibillion-dollar bet the industry is set for a period of strong growth. Yet high fuel prices have combined with economic fears and continued concerns over consumer spending to unnerve investors, who have anyway long seen airlines as a cyclical sector vulnerable to external shocks, from volcanic ash clouds and pandemics to economic downturns. One investment banker said following the pandemic the industry was seen as “uninvestable” by many investors. Some airlines are still in vogue. Shares in some Asian carriers — including Singapore Airlines — have performed well as the region is still enjoying a post-pandemic surge in travel after opening up slowly. US airlines with less exposure to the slowing domestic market outperformed their peers, while Ryanair has been picked out as a long-term winner in Europe after using the pandemic disruption to its advantage to embark on a period of rapid growth. However, shares in Air France-KLM hit a record low on the same day the company announced a record profit in the third quarter. “Investors are fully looking through the results with an eye on macro risks into the northern hemisphere winter,” Bernstein analyst Alex Irving said. The investor scepticism in Europe comes despite airlines reporting strong demand for travel into the winter, although data released this month showed a hit to bookings globally following the outbreak of war in the Middle East. “There is always this question ‘summer is good but how about winter?’” Wizz Air CE Jozsef Varadi said. “Winter is good too”.<br/>
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Airlines expect record travel demand this Thanksgiving. Executives say they’re prepared for the hordes. The Transportation Security Administration expects to screen 30m passengers from Nov. 17 through Nov. 28, the most ever. The Sunday after Thanksgiving is expected to be the busiest day during that period with an estimated 2.9m passengers taking to the skies. “We are ready for the anticipated volumes and are working closely with our airline and airport partners to make sure we are prepared for this busy holiday travel season,” TSA Administrator David Pekoske said in a travel forecast earlier this week. The year-end holidays are a crucial time for airlines to drum up revenue. Outside of peak holiday or other high-demand periods, carriers have turned to discounting fares or scaling back growth as consumers’ frenetic post-pandemic travel settles back to historical norms. Meanwhile, carriers are facing higher fuel and labor costs that have eaten into their profits. But coveted travel days around the holidays can still command steep fares. And Thanksgiving will be a test to see how the aviation industry handles the year-end holidays while still managing strains like a prolonged shortage of air traffic controllers. The holiday period kicks off nearly a year after a winter storm triggered thousands of flight cancellations around Christmas. Carriers have spent months preparing to ensure that costly missteps don’t reoccur. Weather readiness is particularly key for Southwest, which canceled 16,700 flights late last year and in early 2024 following severe winter weather, while other airlines recovered more quickly. The Dallas-based carrier has been spending on increasing aircraft de-icing capabilities and improving technology to better reschedule crews during flight disruptions. “If your crew is on a three-day rotation and they don’t get out day 1, guess what, day 2, day 3 they’re not there,” Southwest Airlines COO Andrew Watterson told reporters at the Skift Aviation Forum in Fort Worth, Texas, earlier this month. “An airline always has to keep moving. An airline stops moving, and bad things happen.” Prep isn’t limited to Southwest. “We start winter readiness in the summer,” said United Chief Customer Officer Linda Jojo. “We have some of our first meetings when thermometers are at their highest.” United has also been upgrading a series of self-service tools in its mobile app to help customers rebook themselves during flight disruptions, as well as real-time flight information. The carrier last month also launched a new boarding order in economy — window seat, middle, then aisle — that Jojo said will shave about two minutes off of enplaning. Those extra two minutes “just helps that flight and the next flight and the next flight,” she said. The FAA expects Thanksgiving flights to peak at 49,606 on the Wednesday before the holiday, up from the holiday peak last year of 48,192. (The busiest day of 2023 so far was June 29 with nearly 53,000 flights.)<br/>
Following the publication of a damning report on the state of US air traffic control (ATC) operations earlier this week, the Federal Aviation Administration has said it is taking “immediate action” to enhance training and safety reporting. ”Aviation is safe because we are continuously looking for ways to improve,” FAA administrator Mike Whitaker said on 17 November. “The independent safety review team made some excellent recommendations and we are adopting some of them immediately.” A safety review team called into action earlier this year after an FAA safety summit, published a report on 15 November that slammed the US regulator for dragging its feet on numerous issues which could introduce risk into the increasingly complex US national airspace system. Low staffing levels, slow recruiting and training of new controllers, ageing infrastructure and often obsolete technology lead that list. Lack of funding remains at the centre of those issues. In its report, the independent safety review team made 24 recommendations to the FAA, some of which the regulator now says it will act upon right away. The first is that it will “provide additional support to colleges and universities in the Air Traffic-Collegiate Training Initiative Partnership Programme…to ensure that graduates from these programmes have the necessary skills to begin on-the-job training at [an ATC] facility”. In addition, it has promised to step up hiring for experienced controllers from the military and private industry, increase classroom capacity at the FAA Academy, and expand the use of advanced training across the country. The agency also says it will “finish deploying tower simulator systems in 95 facilities by December 2025” and deploy the first system in January 2024. It also aims to provide reports from the Air Traffic Safety Oversight Service to the FAA administrator and aviation safety associate administrator. Ten aviation incidents between October 2022 and February 2023 led to the creation of the safety review team in May 2023. These included an incident in January, when two commercial airliners were on a collision course at New York’s John F Kennedy International airport. An American Airlines airliner took a wrong turn and crossed a runway on which another aircraft had already been cleared to take off. A few weeks later, in Austin, Texas, a FedEx Boeing 767-300ER Freighter was cleared to land on the same runway from which a Southwest Airlines 737-700 had been cleared to depart. The FedEx jet descended as low as 150ft before breaking off its approach with a go-around. Two more close calls – in Sarasota and Burbank – similarly left the industry asking how the links in the safety chain had broken. Coupled with inclement weather, as occurred during one of the busiest travel weekends this past June, the fragile and overstressed ATC systems can break down completely, leading to days of delays and cancellations for thousands of flights. <br/>
European governments will auction 244m EU carbon permits from January to August next year under the bloc's Emissions Trading System (ETS), the European Commission said late Thursday. The European Union's Emissions Trading System (ETS) forces manufacturers, power companies and airlines to pay for each tonne of carbon dioxide they emit as part of Europe's efforts to meet its climate targets. The number of permits member states will sell from September to December 2024 will be decided next year and published on July 31, the Commission said. Further carbon permits will be sold by the EU next year to raise funds as part of programmes to help end reliance on Russian fossil fuels following Russia’s invasion of Ukraine, help economies recover from the coronavirus pandemic, and help countries pay for the energy transition to cleaner power. From January to December, some 87m permits will be auctioned for the Recovery and Resilience Facility; 35m for the Innovation Fund; and 97m for the Modernization fund, the Commission said. First permit auctions for 2024 are expected to start from Jan. 15, the Commission said.<br/>
London Heathrow Airport experienced flight delays on Sunday after staff shortages and bad weather led to limits on air traffic. NATS, the UK’s airspace manager, said in an emailed statement that temporary restrictions were in place at Heathrow because of “short notice staff absence in the tower and strong winds.” Heathrow isn’t the only UK airport that has been impacted by air traffic controller shortages this year. London Gatwick Airport said in late September that it had placed a cap on the number of daily flights through Oct. 1 because of the rising number of sick leaves. Heathrow confirmed the news in a statement, adding that it encourages passengers to check the latest information with their airline. British Airways said it had to adjust some of its short-haul schedule and has apologized to affected customers and offered them the option to rebook their flight or receive a full refund. Its website showed dozens of flights delayed by up to two hours. NATS said it was working with Heathrow and airlines to minimize disruption, and limits such as this were only imposed to ensure safety. The situation at the UK’s biggest airport is expected to improve in the afternoon, NATS added.<br/>
Adverse weather in the United Arab Emirates has caused some disruption to flights at Dubai's main airport, a spokesperson for operator Dubai Airports said on Friday. "As of 10am UAE time (0600 GMT), 13 inbound flights were diverted to neighbouring airports while six outbound flights were cancelled," the spokesperson said in an emailed statement, referring to operations at Dubai International (DXB). "Dubai Airports is working closely with airlines, control authorities and other service partners at DXB to minimise any inconvenience to our customers." DXB is one of the world's busiest airports and a key global transit hub. Heavy rain early on Friday caused significant travel disruption across the emirate, but the Dubai Airshow, a major industry event taking place this week, was scheduled to go ahead as planned on the final day.<br/>
Middle East airlines are gearing up for increased competition after Dubai carriers went on an order spree at the region's largest air show, watched by potential rivals teasing their own deals. As widebody jet orders worth $67b at list prices tumbled out of the Dubai Airshow, Saudi and Turkish national carriers were finalising blockbuster orders from the sidelines. "You can't get a better geographic location than the Middle East, connecting 80% of the world's population within an 8-hour flight," said Darren Hulst, vice-president of commercial marketing at planemaker Boeing, which beat Airbus on orders. Dubai International airport aims to boost capacity to 120m passengers a year by 2026, up from 100m today. Saudi Arabia plans to increase its international routes from 99 to over 250 and more than triple annual passenger traffic to 330m by 2030 from 109m in 2019. The kingdom is spending heavily to transform its aviation sector, moving ahead with plans for a new national airline and massive airport in Riyadh to boost connectivity. The state-led drive to expand Saudi's aviation sector comes amid simmering economic regional rivalry between the kingdom and the UAE. But while Saudi's state-backed start-up Riyadh Air positioned an exhibition in vivid livery on the main concourse, the country's carriers held back from placing firm orders. Turkish Airlines meanwhile, an established player in the lucrative transit market, previewed an order for over 350 planes on the eve of the show. Airbus said there was agreement in principle but sources said nothing formal had been signed.<br/>
A debate over engine performance has exposed a dilemma facing aerospace firms at this week's Dubai Airshow - the hottest part of the jet market is also the hottest part of the world. Airlines want to save on fuel and have the lowest possible maintenance costs. But those forces are pulling against each other in sandy or dusty environments like the Gulf and India. "Therein lies the problem for Rolls-Royce and Airbus, because this is the region that is buying these airplanes and will buy them in big numbers if the engine issue is resolved," Emirates Airline President Tim Clark told reporters this week. The head of the world's largest international carrier was speaking in the midst of negotiations to buy dozens of Airbus A350-1000 jets powered by Rolls-Royce's XWB-97 engine, which have foundered for now over maintenance and pricing issues. Emirates and Rolls papered over differences with a last-minute deal for a smaller quantity of the shorter A350-900, whose engine maintenance is seen as easier to predict. The rare public dispute comes as engine makers want to be rewarded more for investments in new technology given the fuel savings they are offering to airlines on every mile of flight. GE Aerospace set the tone under CEO Larry Culp. "We'll still look to find opportunities to be paid fairly for the value that we create," he told Reuters after half-yearly earnings in July. Rolls-Royce CEO Tufan Erginbilgic, who took over in January this year, has indicated the company will no longer write unprofitable contracts for the sake of winning new deals, having already provisioned GBP1.4b in loss-making contracts.<br/>
Middle Eastern airlines ordered more than 200 passenger jets at this year's Dubai Airshow, putting the annual purchase volume on pace to be the largest in a decade after pandemic lows. Dubai-based Emirates has ordered 90 wide-body Boeing jets in the 777X series, plus five units of the Boeing 787. From Airbus, Emirates ordered 15 A350 wide-body planes. The 777X planes, which are slated to begin commercial operation in 2025, are Boeing's newest passenger jets. "The 777 has been central to Emirates' fleet and network strategy of connecting cities on all continents non-stop to Dubai," said Ahmed bin Saeed Al Maktoum, chairman and CEO of Emirates, in a news release. Emirates is keen on expanding routes using fuel-efficient 777X aircraft. The airline's orders with Boeing are worth $52b. At the air show, which began Monday, low-cost carrier Flydubai ordered 30 Boeing 787s. Egyptair purchased 10 A350s and Turkish-domiciled SunExpress is procuring up to 90 units of the narrow-body 737 Max jet. Turkish Airlines and Saudi Arabia's newly founded carrier Riyadh Air are in talks for major purchases as well. Boeing and Airbus have received orders for a total of more than 400 planes from the Middle East in 2023 -- the highest level in a decade. They also received orders for about 400 aircraft in 2013. But orders declined after crude oil prices slumped in 2014 and 2015 and the COVID-19 pandemic hit in 2020 and 2021. Such airlines as Emirates, fellow United Arab Emirates carrier Etihad Airways and the state-run Qatar Airways have enjoyed rapid growth in recent decades. They have taken advantage of the Middle East's central location between Asia and Europe to build hubs that capture transit demand -- attracting people, goods and money to their home countries in the process. In Saudi Arabia, Crown Prince Mohammed bin Salman is pushing to diversify its oil-dependent economy in part by increasing inbound tourism. <br/>
Brazil joined the World Trade Organization's agreement on trade in civil aircraft on Friday, a move that was celebrated by planemaker Embraer as the pact would ensure tariff-free imports of components from member states. The Brazilian government, which had applied to join the civil aircraft pact in 2022, said its entry had been approved by the 33 member countries at a meeting in Geneva. Brazil-based Embraer is the world's third-largest planemaker, behind Boeing and Airbus, and a global leader in segments such as regional and executive aviation. "Until now Brazil was the only relevant aircraft producer and original WTO member not to participate in the agreement, while the main competitors of Brazilian aircraft were represented," the Brazilian government said in a statement. Brazil's government noted that the country's accession to the deal would bring positive impacts in terms of predictability of input prices and send a positive signal for attracting investments. "Brazil's accession to the agreement is very positive and a relevant milestone to its international trade," Embraer CE Francisco Gomes Neto said in a separate statement. The company said the move would consolidate import taxes on aircraft and aircraft parts at zero, "preventing any tariff barriers from being imposed between the signatory countries".Signatories of the deal, which came into force in 1980, include the European Union, China, Canada, Japan, Switzerland, Norway, the United Kingdom and the United States. Brazil's government noted that the country's accession to the deal would bring positive impacts in terms of predictability of input prices and send a positive signal for attracting investments. "Brazil's accession to the agreement is very positive and a relevant milestone to its international trade," Embraer CE Francisco Gomes Neto said in a separate statement. The company said the move would consolidate import taxes on aircraft and aircraft parts at zero, "preventing any tariff barriers from being imposed between the signatory countries".<br/>
A team of scientists broke new ground when a plane capable of carrying more than 300 passengers landed in Antarctica, with aviators hailing it as a world first. The plane, a Boeing 787 Dreamliner, successfully slipped down in Troll airfield on Wednesday night, while basking in Antarctica's all-day summer sunlight. Carrying a 45-strong team made up of researchers and staff from the Norwegian Polar Institute, the organisation said they managed to bring 12 tonnes of research equipment. "This is a major operation, and a milestone for air traffic to Queen Maud Land," said the institute's director, Camilla Brekke, referring to the location of their research station. "Taking down such a large aircraft opens up completely new possibilities for the logistics of Troll, which will also contribute to strengthening Norwegian research in Antarctica." Troll airfield is a 3,000-metre-long strip of blue ice and operates only between October and March, before winter sets the sun for nearly half a year. While the landing has been hailed as a landmark achievement, there is no indication that commercial flights are planned, as the institute focuses on improved logistics to boost its research. The group says it arranges up to 10 crafts of varying sizes to the continent each year, but the possibility of flying far larger planes could reduce the number of trips needed. "The most important thing is the environmental benefits we can achieve by using large and modern aircraft of this type for Troll," Ms Brekke said. "This can help to reduce total emissions and the environmental footprint in Antarctica."<br/>