Airlines expect record traveler numbers and revenues in 2024 but will continue to be constrained by the high cost of capital and limited capacity, the IATA said Wednesday. The industry group expects the sector’s net profits to reach $25.7b in 2024 on a 2.7% net profit margin, a slight improvement from this year’s upwardly revised projection of $23.3b net profit and 2.6% margin. Total revenues in 2024 are set to grow 7.6% year on year to a record $964b, with around 4.7b people expected to travel in 2024, a figure exceeding the pre-pandemic level of 4.5b seen in 2019. With demand for post-pandemic travel booming in North America, the Middle East and Europe, the airline sector has mostly recovered from the unprecedented hit suffered during the Covid-19 pandemic, when planes were grounded and travel banned for extended periods in most countries around the world. IATA DG Willie Walsh said in the wake of the major losses suffered in recent years, the expected stabilization of profits in 2024 was a “tribute to aviation’s resilience.” “The speed of the recovery has been extraordinary; yet it also appears that the pandemic has cost aviation about four years of growth. From 2024 the outlook indicates that we can expect more normal growth patterns for both passenger and cargo,” Walsh said.<br/>
general
Global aviation industry leaders will meet in January to discuss safety concerns around increased GPS interference by cyberattackers steering planes off course, an International Air Transport Association executive said on Wednesday. Global Positioning System (GPS) spoofing has spiked in recent months, using counterfeit signals to alter perceptions of time or location, posing a threat to planes, ships and the military. A spoofed plane's navigation system will show it as being in a different place - a security risk if a jet is guided to fly into a hostile country's airspace. Spoofing is common around conflict zones and areas with sensitive military targets. "Because it has spiked, we have urgency to find a resolution for this," said Nick Careen, IATA's head of operations, safety and security at a media event in Geneva. He did not specify a date for the industry meeting, but said talks between governments, the military and planemakers have become more pressing. Airline manufacturers have issued guidance in recent months as aviation advisory body OPSGROUP flagged a surge in spoofing targeting private and commercial jets around the Middle East, including Iraq, Iran and Israel, and the Black Sea region.<br/>
The oil and gas sector and alternative fuel producers need to beef up efforts to produce greener aviation fuel to help airlines cut carbon emissions, the chief economist of global aviation industry body IATA said on Wednesday. Aviation accounts for an estimated 2-3% of global carbon emissions and is not an easy industry to decarbonise compared with other forms of transport such as road travel. Sustainable aviation fuel could reduce aviation emissions by up to 80% and is seen as the key green solution for the sector. But it makes up only 0.2% of global jet fuel use, or about 500,000 metric tons of production, which is lower than the aviation industry expected, based on IATA figures. It also costs between three to five times more than traditional jet fuel.Only 3% of global oil and gas capital budgets are invested into SAF production, while profit margins are much higher in the sector than in aviation, which is set to reach a 2.7% profit margin in 2024, IATA chief economist Marie Owens Thomsen told a media event in Geneva.<br/>"This clearly has to change," she said. By 2050, 500m metric tons of SAF will be needed to meet environmental targets, while by 2030, 63m metric tons of SAF is set to be in production, based on an IATA forecast. That investment burden cannot fall to airlines alone, IATA said. Owens Thomsen estimated that airlines could spend up to $2.4b in 2024 on top of their regular costs to secure SAF.<br/>
Shortages of new planes, jet engines and pilots have left US airlines with little choice but to pursue growth through acquisitions - which then puts them in the crosshairs of anti-trust regulators. Alaska Airlines surprised analysts and industry officials with its plan to buy Hawaiian Airlines for $1.9b even before a judge rules on the US Department of Justice's (DOJ) lawsuit aimed at blocking JetBlue's proposed merger with Spirit Airlines. But supply and labor constraints are so onerous that airlines like Alaska will likely keep chasing deals despite the Biden administration's aversion to more consolidation. Currently, American Airlines, United, Delta and Southwest Airlines control 80% of the domestic market, leaving little room for growth. "This is an industry that is constantly looking for an angle," said Addison Schonland, partner at consulting firm AirInsight. "If Alaska didn't move on Hawaiian, what would stop somebody else moving on Hawaiian?" The deal will provide Alaska - primarily a domestic carrier that flies narrowbody planes - Hawaiian's widebody jets, pilots and international networks, opening a runway for growth in long-haul international markets. Alaska CEO Ben Minicucci said it was the right time to do the deal, which he described as "a great investment, a great step change" for the company. Alaska told analysts on Sunday that pursuing long-haul international flying on its own would be much more expensive and much more difficult.<br/>
The FAA has proposed mandatory drug and alcohol testing for employees of aircraft-repair shops in other countries, a move that labor unions and Congress have urged for many years. The FAA said Wednesday that its proposal would affect nearly 1,000 repair shops in 65 countries. However, shops in countries where mandatory testing is against the law can apply for an exemption, according to a notice to be published in the Federal Register on Thursday. Unions representing US aircraft mechanics have long pushed for more scrutiny of foreign shops, calling it an issue of safety and protecting U.S. jobs. In 2012, Congress directed the FAA to write testing regulations covering foreign shops. But the FAA moved slowly, saying that other countries, and the operators of their repair stations, would object to the US imposing conditions on their workers. The FAA has previously said that it lacks enough data to know whether testing foreign workers would have any additional safety benefit. On Wednesday, however, the agency said testing would be “an important step in our overall safety mission” because so few countries require it. Unions representing aircraft mechanics in the US praised the FAA’s turnabout. “This is a great first step toward addressing the scourge of offshoring the vital maintenance of US-flagged passenger jets,” John Samuelsen, president of the Transport Workers Union. “We’ve been fighting this for years.”<br/>
The United States must do more to prioritize the mental health of pilots, air traffic controllers and other aviation professionals, a top safety official said on Wednesday, after an off-duty Alaska Airlines pilot allegedly tried to crash a commercial flight in October. The pilot was charged with trying to disable the engines of a jet in flight and told police afterward he was suffering a nervous breakdown. National Transportation Safety Board Chair Jennifer Homendy said at a day-long forum on the issue that regulators must empower people to get help. "There is a culture right now that you either lie or you seek help. We can't have that. That's not safety," she told reporters. Pilots are required to report certain mental health conditions to aviation medical examiners, who determine fitness to fly. Homendy cited challenges such as controllers being forced to work mandatory six-day work weeks because of employee shortages, and backed amnesty for pilots and others to "come forward and be honest about struggles."<br/>
Air traffic in Germany is recovering much more slowly than in the rest of Europe, the German aviation association (BDL) warned on Wednesday, with direct routes within domestic airports suffering the most. From December 2023 to May 2024, a total of 111.5m seats will be offered on all flights to, from and within Germany, BDL said in a presentation, that is 84% of the pre-pandemic availability. It compares to a forecast of a 10% year-on-year improvement to 98% of traffic for Europe in the same period before the pandemic. Compared with the same period last year, air traffic in Germany will grow by 14% in the next six months, according to BDL. Among long-haul routes, the strongest recovery will be seen to North American destinations, it said, while traffic within Germany will continue to be hit by the shift to road and rail and the increased use of digital communication. Smaller airports will see only slight year-on-year growth, or, in some cases, a contraction, it said. Within Europe, the services of point-to-point airlines such as Ryanair and EasyJet, whose market share is about 37%, will exceed pre-pandemic levels by 9% in the next six months. Seat availability for low-cost carriers in Germany, representing about 23% market share, will only reach about two-thirds of the pre-pandemic figure. By contrast, the offering of network carriers such as Germany's Lufthansa is significantly stronger, with an expected recovery of 88% for European airlines and 99% for non-European ones.<br/>
The UK Serious Fraud Office has arrested one individual and opened an investigation into suspected fraud at an aircraft parts supplier. The prosecutor, along with the National Crime Agency, raided a site in London in connection with alleged fraud at AOG Technics Ltd, the SFO said Wednesday. UK-headquartered AOG has supplied parts to major airlines in Britain and abroad for the world’s best-selling passenger aircraft engine and the most-used cargo aircraft engine since 2015, according to the SFO. Aviation authorities globally, including the UK Civil Aviation Authority and the United States’ Federal Aviation Administration, issued alerts earlier this year over safety issues related to AOG’s parts. The company was ordered by a London court in September to hand over details of its sales to a number of aircraft companies. Some planes have been grounded in the UK and the US, the SFO said. A phone call to a number listed for AOG went unanswered. A barrister who has represented AOG this year said he was no longer acting for the company and didn’t know who is representing them. The raid and arrest was first reported by Bloomberg. The safety issues linked to AOG’s parts relate to the CFM56 engine, which is made by CFM International, the joint venture between France’s Safran and GE of the US. The engine powers some older Airbus and Boeing jets that are gradually being upgraded. Some 22,600 remain in service. CFM said in October it had found 145 engines in the global fleet that were fitted with parts linked with AOG. More than half of these had been removed from service. The company said at the time that it had “completed an exhaustive review of the documentation provided by AOG Technics and shared the results with the relevant authorities”. The AOG Technics investigation is the third probe the SFO has opened since new director Nick Ephgrave took the helm in September. Last month, the agency arrested seven individuals and raided nine sites as it opened a new case into the collapse of law firm group Axiom Ince.<br/>
The Hong Kong aviation sector’s recovery is proving “stronger than expected” and is being driven by initiatives to boost traffic into the city and Greater Bay Area, the head of an international airline trade body has said, with the industry globally expected to post a US$23.3b profit this year. Willie Walsh, director general of the IATA, on Wednesday said Hong Kong was making “considerable progress” as the sector recovered to pre-pandemic levels. “Hong Kong is proving stronger than expected. I think it’s the whole emphasis on – not just on Hong Kong – but on the Greater Bay Area, [and] the initiatives they have there to attract traffic into the region and into Hong Kong,” he said at IATA’s headquarters in Geneva. The “Greater Bay Area” refers to the Chinese government’s scheme to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub. The city has implemented measures to strengthen cooperation for both cargo and passengers between Hong Kong and the Greater Bay Area. They include one launched in August connecting passengers in Macau to the airport’s restricted area directly by bus via the Hong Kong–Zhuhai–Macau Bridge. In July, IATA revised its own projection for Hong Kong’s aviation recovery and forecast the city would reach pre-pandemic passenger levels by the end of 2024, three years earlier than previously predicted.<br/>