general

Southwest is still paying off expenses from Christmas 2022. This week, the US DOT announced it was hitting the airline with a $140mn penalty over last December’s meltdown. Poor weather and operational failures led to nearly 17,000 flight cancellations. The ordeal has already cost the company $800mn in lost revenue and passenger compensation. The regulatory action related to violations of consumer protections laws. Southwest has since been mostly exemplary in managing take-offs and landings. Still, shareholders are grumbling. Southwest’s stock price is down more than a tenth in an otherwise ebullient market. It is struggling to manage cost efficiency amid mixed market signals on how much capacity to offer. The new year is a chance to get that balance right. In the first nine months of the year, Southwest’s “available seat miles” jumped by more than a tenth. Carriers have been quick to add capacity to return to pre-pandemic levels. They are particularly keen to take advantage of leisure travellers taking “revenge” vacations. However the added capacity has come at the cost of fares. Southwest projects in Q4 that revenue per available seat mile will be down a tenth. That coincides with operating costs per mile inching up this year — though they are expected to fall in the last quarter of the year.  Southwest is considered a discount carrier, though it is not in the same ultra low-fare category as Spirit or Frontier. Those carriers have seen their share prices fall sharply. Spirit is seeking to combine with JetBlue, despite the objections of regulators. Alaska Airlines has just announced a deal to acquire the smaller Hawaiian Airlines. Meanwhile, legacy airlines such as Delta have benefited from a boom in international travel. Their stock prices have jumped sharply. Southwest has a plan in mind. It says it will soon curtail capacity growth to maximise return on capital. That is exactly the holiday gift shareholders want.<br/>

The FAA is planning to form a panel to look into the potential risks posed by exhaustion among air traffic controllers, many of whom have been working round-the-clock schedules that have pushed them to the physical and emotional brink. The FAA expects to announce more details about the three-member panel on Wednesday, said Jeannie Shiffer, a spokeswoman for the agency. Michael Whitaker, the FAA administrator, said at a news conference at Ronald Reagan Washington National Airport on Tuesday that “as far as fatigue goes, we’re taking this issue very seriously.” “We’re looking at launching a group to examine fatigue among air traffic controllers in the very short term to identify if there are risks,” he said, “and if there are, we will act accordingly to mitigate those risks.” The FAA is creating the panel in the wake of a New York Times investigation this month that revealed how a nationwide shortage of air traffic controllers had resulted in an exhausted and demoralized work force that was increasingly prone to making dangerous mistakes. Whitaker said on Tuesday that the FAA was trying to address the staffing shortage. “We know we need more air traffic controllers,” he said. “We’re working hard to hire from a variety of sources and keep them moving through the training pipeline.” Investigations published by The Times this year showed how the nation’s vaunted aviation safety system, while still remarkably safe, was under mounting stress. Potentially dangerous close calls have been happening, on average, multiple times a week this year. Some air traffic controllers say they fear that a deadly crash is inevitable. Errors by air traffic controllers have been one major factor. In the fiscal year that ended Sept. 30, there were 503 air traffic control lapses that the F.A.A. preliminarily categorized as “significant,” 65% more than in the prior year, according to internal agency reports reviewed by The Times. During that period, air traffic increased about 4%. Story has more.<br/>

Aerospace supplier CEO Hugue Meloche spends more than C$10,000 for each skilled foreign worker he brings to his company’s Montreal-area factories, but paying those costs is preferable to leaving key positions unfilled while orders boom. As clients like engine maker General Electric boosted production in 2022, the head of Meloche Group hired 20% of its workforce of 500 from countries like Mexico, Tunisia and Brazil to make up for staffing shortfalls. This added at least C$1m ($736,377.03) in costs at a company generating around C$100m in annual revenue. Added costs like those are especially hitting smaller suppliers with limited resources, industry officials said. The suppliers must then cut costs elsewhere or pass on those extra charges to their customers while struggling to meet demands for competitive pricing and higher production from planemakers Airbus and Boeing. The tight manufacturing labor market, following a wave of retirements during the height of the Covid-19 pandemic, has led North American aircraft repair shops and suppliers, especially in Canada, to recruit a small but growing number of workers from abroad. This fills critical positions but puts a fresh burden on small suppliers whose human resources staff normally do not help new arrivals find homes and cars. These challenges are not going away as airline and aerospace executives remain cautious on supply chains and see problems persisting until 2025. Meloche’s company in the Canadian province of Quebec offers loans to recruits, as well as short-term housing. It has four employees dedicated to helping newcomers with everything from finding a new home to buying a car. “We are the help desk,” Meloche said in an interview. “We have huge needs. For us, immigration is not a choice.” Story has more.<br/>

Amsterdam’s Schiphol airport is now warning that it may have to cut capacity next summer due to operational issues, raising the hackles of airlines in what is the latest twist in a saga around shrinking flights at the hub. The move comes weeks after the Dutch government announced it would no longer pursue a flight reduction of 8% at the airport. The state had faced pressure from the European Union as well as the US government, which threatened to retaliate over JetBlue Airways Corp.’s expulsion as part of the cutbacks. Schiphol warned Tuesday that it ultimately may not be able to handle more than 460,000 flights across the summer period due to operational challenges. “On the one hand we understand the desire for airlines to fly more than 460,000 flights, on the other hand those 460,000 flights would already be an increase,” from current levels, said Schiphol spokesperson Stefan Donker. The airport is considering multiple scenarios and intends to provide clarity about capacity slots soon, said Donker. The International Air Transport Association, or IATA, is calling on Schiphol and air traffic control to produce an action plan to ensure that capacity can be set at 483,000 flights. Schiphol cited various reasons for potentially operating at a limit, including insufficient terminal facilities for wide-body jets, inadequate resources for customs and border checks, and lack of air traffic control capacity, the airline lobby group said in a Tuesday statement. The Amsterdam hub has not operated with more than 460,000 flights since 2019.<br/>

International airline association IATA on Tuesday said Amsterdam Schiphol airport's latest capacity proposal for 2024 was "a disgrace" and called for an urgent action plan to restore confidence in one of Europe's main hubs. Schiphol has proposed accepting around 460,000 flights in 2024, which is fewer than the airline industry demands but more than environmentalist and residents' groups would like to see, according to a planning document seen by Reuters. The number of flights at Schiphol has been in doubt since the Dutch government in November was forced to scrap plans for a cap at 452,000 flights amid pressure from the airline industry, the United States and the European Union. "Airlines, travelers, and businesses benefiting from Schiphol's air connectivity breathed a sigh of relief," the IATA said about that decision. "According to the rules, the airport would return to its previous capacity of 483,000 flights. But it now appears that the government’s cuts are being reintroduced through the back door." In a Royal Schiphol Group document seen by Reuters, the company said allowing 460,000 flights in 2024 was its "preferred scenario" and allowing more - up to 483,000 flights - would only be possible if airlines commit to altering schedules. But it said that would increase the risk of logistical breakdowns similar to those suffered in 2022. Before the pandemic, Schiphol handled up to 500,000 flights. Dutch airline KLM, which holds the most slots at Schiphol, declined to comment on the airport's proposals as they were not official yet.<br/>

Transportation Secretary Pete Buttigieg is warning that bad weather could disrupt holiday air travel. “We may see some bad weather around the holidays,” Buttigieg said, alongside FAA Administrator Mike Whitaker during a press conference at Reagan National Airport outside Washington, D.C. “Winter weather may be a challenge, and it will certainly be a challenge in the next few weeks,” Buttigieg said. The FAA has opened military airspace over the holidays and is cooperating with the commercial space industry to limit private launches. It has opened 169 new East Coast routes to keep traffic moving smoothly. Buttigieg stressed that 2023 has seen the lowest commercial flight cancellation rate in the last five years and airlines performed admirably over the Thanksgiving travel rush, but he said he still wants to see the number of delays come down. He told reporters that airlines can’t control weather, but that there’s a “tipping point” where there are additional cancellations and delays that the airlines can control. Buttigieg said he wants to hold them accountable for those disruptions. On Monday, the Department of Transportation fined Southwest Airlines $140m for its massive 10-day-long meltdown that started last December 21 and led to the cancellation of 16,900 flights, stranding 2m passengers. Newly installed FAA Administrator Mike Whitaker said his focus has been air safety since starting the job eight weeks ago. The agency has been repeatedly criticized for the shortage of roughly 3,000 air traffic controllers. “We know we need more air traffic controllers and are working hard to hire them,” Whitaker stated. Whitaker announced in early spring that the general public will be invited to apply to the FAA air traffic control training center in Oklahoma City. Buttigieg also noted that the threat of a government shutdown in January “will imperil all the progress we’ve made” on bolstering air travel.<br/>

Shares of Brazilian airlines rose on Tuesday on investor relief that a government deal to lower ticket prices was not as heavy-handed as some expected, amid President Luiz Inacio Lula da Silva's personal campaign to make airfare more affordable. Carrier Azul rose over 4% in Sao Paulo trading, while rival Gol gained more than 3%, among the top gainers on benchmark stock index Bovespa, which was up 0.6%. Both agreed with Lula's government on Monday to cap prices for millions of domestic tickets. "Our view is the market expected something worse," analysts at Genial Investimentos told clients in a note, adding that the price-capped fares should not "significantly" reduce 2024 yields, an industry pricing gauge. Still, the Ports and Airports Ministry called the pricing agreement the "first step" of a program to bring down fares, and Lula floated the prospect of legislative action to tackle air travel costs at a 14-year high. "That is something both government and Senate will have to address, so that we can try and find a solution," the leftist president told an event late on Monday. "There is no explanation for the prices of airfare in this country." Airlines say the local market reflects a global trend, with heated demand for air travel after the pandemic and supply chain issues affecting planemakers' ability to deliver new aircraft that would increase capacity.<br/>

Lava spewing from a volcano in Iceland appeared to be flowing away from the only nearby town and the intensity of the eruption was dropping, offering hope that homes would be safe even though seismic activity could last months, officials said on Tuesday. The government said flights were unlikely to be affected, quashing international travel concerns lingering after chaos that resulted from the ash cloud caused by an eruption on the north Atlantic island in 2010. The eruption late on Monday on the Reykjanes peninsula in southwest Iceland spewed lava and smoke more than 100 metres (330 feet) into the air after weeks of intense seismic activity. "The eruption does not present a threat to life," a government statement said. "There are no disruptions to flights to and from Iceland and international flight corridors remain open." In 2010, ash clouds from eruptions at the Eyafjallajokull volcano in the south of Iceland spread over large parts of Europe, grounding some 100,000 flights in Europe and beyond, and forcing hundreds of Icelanders to evacuate their homes. Weather forecasting service AccuWeather said this eruption was very different. "If little to no volcanic ash is lofted into the atmosphere, there may be no impact to aviation," AccuWeather Chief Meteorologist Jon Porter said. The 2010 impact on air travel was largely caused by the interaction of magma with the melting water from a glacier, a different scenario to what is happening now. Matthew Watson, professor of volcanoes and climate at the University of Bristol in Britain, said it was "not impossible that there may be some impact on air travel", although it was unlikely. "This type of eruption doesn't generally produce much ash, which is what tends to ground planes."<br/>

Ukraine's Boryspil International Airport, which is closed due to war, saw the departure of a Boeing 777-300 operated by local airline Skyline Express on a technical flight on Tuesday, it said on its Facebook page. The flight was a sign Ukraine's infrastructure remains in working condition and safety can be granted despite constant Russian air attacks. "A technical transfer of the Boeing 777-300 was performed from Kyiv-Boryspil Airport (KBP) to an airport in Europe, as per the request of the operator, Ukrainian airline Skyline Express," the airport said on its Facebook page. Video released by the airport showed a plane taking off and part of runaway, with no sign of damage. The airport said this was the fourth successful departure since airport operations were disrupted due to the war. Ukraine aims to reopen Boryspil as soon as possible once conditions permit, saying its air defence capabilities have become significantly stronger. "Even with the closure of the airspace, Boryspil Airport remains focused on ensuring operational readiness and financial stability, in particular in terms of infrastructure maintenance and maintaining personnel certification," the airport said.<br/>

Next to Changi Airport’s Terminal 2 sits a facility the size of four Olympic-size swimming pools, where an average of 4,200 bags shuttle through a system of conveyor belts stretching over 1.2km every day. Automated cranes sort the bags, which were checked in early, into storage slots by height and weight. When the flight that the bags are bound for is ready for loading three hours before departure, the crane automatically retrieves them and sends them on their way. More travellers are checking in bags early – more than three hours before their flight departs, said airport operator Changi Airport Group (CAG). More than 33,000 people used the early check-in lounge at Jewel Changi Airport in October, up from about 6,000 in January. Passengers can check in at the Jewel lounge as early as 24 hours before their flight, depending on the airline. Regular airline counters open for check-in about two to three hours before a flight. Sixteen airlines currently offer early check-in at Jewel, up from 10 airlines in January. From October 2022 to September 2023, when T2 was partially opened, these early bags had to be moved and removed manually by workers at the terminal’s early baggage facility.<br/>

The FAA has no "specific timetable" to certify the Boeing 737 MAX 7, the agency's top official told Reuters on Tuesday, despite the planemaker previously expecting that to occur by the end of this year. FAA Administrator Michael Whitaker said the agency will certify the smallest variant of the best-selling MAX when "we have all the data that we need and it is safe." Whitaker added that he is making sure he is getting briefed "on status, to understand the issues that are arising in that process" on the MAX 7 and other projects. Whitaker said "the issues are being worked and that will continue." Boeing declined to comment on whether its schedule projections had changed. "We will follow the lead of the FAA as we work through the certification process. The FAA will determine when all certification requirements are met," the company said. In October, company executives said its schedule remained unchanged. Boeing is also awaiting certification of the larger 737 MAX 10. Southwest, the largest customer for the MAX 7, said last month it expected the FAA to certify the plane by April. Boeing is currently pursuing an exemption to certain regulations concerning the MAX 7's engine nacelle inlet structure and engine anti-ice system, which are the same as those used by the in-service MAX 8. The exemption - which would run until May 31, 2026 - would allow MAX 7 certification while Boeing also certifies design changes for both systems, necessary to fix issues involving the overheating of the engine anti-ice system that could cause structural damage to the engine nacelle.<br/>

Airbus and Boeing are rounding out the year with a flurry of major orders, smashing records in one of the most active purchasing periods in recent memory that stretches their production lines well into the next decade. On Tuesday, Deutsche Lufthansa AG said it ordered as many as 200 short-haul aircraft from the two manufacturers, in a deal the German carrier valued at about $9b. The same day, EasyJet shareholders signed off on a 157 plane order for Airbus aircraft that it had announced a few months ago. Orders exceeding 100 aircraft, once a rare occurrence in the industry, have become increasingly commonplace this year as delivery slots become scarce. Airbus and Boeing are now practically sold out for the rest of the decade on their most popular models, raising pressure on carriers to join the frenzy or risk being relegated to the end of an increasingly long line. “It seems like after three years of not having spent too much, the flood gates are open again,” said Tobias Fromme, a research associate at Bernstein. “All the airlines had a super strong year. Yields have been fantastic, demand has stayed strong until 2024. It’s looking pretty good generally.” As it stands now, Airbus has pulled in gross orders for more than 2,000 aircraft this year, comfortably breaking a record it had previously set it in 2014 when it sold almost 1,800 planes. Boeing’s order book stands at about 1,200 aircraft. The purchases from Lufthansa and EasyJet follow a record order placed by Turkish Airlines last week for as many as 355 Airbus jets and a deal for 140 Airbus and Boeing planes from jet lessor Avolon Holdings a few days earlier. Both manufacturers are still trying to close out some large agreements before the year-end, according to people familiar with the matter. While much of the action has been at the short-haul end of smaller aircraft, which form the backbone of the industry, the rush has also started taking hold in the market for larger widebody jets. Boeing walked away with major commitments at the recent Dubai Air Show, where local champion Emirates replenished its longhaul fleet.<br/>

The Airbus A380 made its first commercial flight in 2007. When it debuted, it overtook the long-reigning Boeing 747 as the world’s biggest passenger plane. It has four engines and is a full double-decker that can carry more than 800 people depending on an airline’s cabin layout. The plane’s large number of seats was seen as key in helping to reduce the overcrowding of air traffic at several big airports, such as London’s Heathrow Airport, New York’s John F. Kennedy International Airport and Chicago’s O’Hare International Airport. But orders for four-engine aircraft began to decline alongside the arrival of more fuel-friendly planes such as Airbus’ own A350 and Boeing’s 787 Dreamliner. “What we’ve generally heard from airlines is that when you can fill an A380, the unit costs, as in the cost per seat, are very attractive,” said Mike Stengel of AeroDynamic Advisory. “But of course, you know, consistently filling 550 seats is far more difficult than consistently filling a 350-seat wide-body.“ The Europe-based Airbus announced an end to its A380 superjumbo program just 12 years after it first took to the skies. During the Covid-19 pandemic, the A380 was one of the fleets most heavily affected by the near-halt to international long-haul travel, due to its size and operating cost. Many said it was the end for the superjumbos, but the A380 has been making a comeback, with several airlines pulling planes out of retirement. Airbus says it expects the A380 to be flying for the next two decades, and it is still being operated by 10 airlines, including Emirates, Lufthansa, Etihad Airways and British Airways.<br/>