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Air Canada shares tumbled after the airline warned it may face higher operating costs in 2024 as it works out a new labor agreement with its more than 5,000 pilots. The adjusted cost per available seat mile — a key measure of airline expenses — may increase 2.5% to 4.5% in 2024, the Montreal-based carrier said in its earnings report Friday. Shares of Canada’s largest airline fell as much as 7.5% in Toronto trading, the most in a year, and traded at C$17.86 at 1:49 p.m. CFO John Di Bert said on a conference call with analysts that the company is wrestling with cost headwinds from “lagging inflation” as well as regulatory changes and the pending deal with pilots. “A new agreement with pilots will bring a change in wages and other cost-related items,” he said. “We have factored our best estimates into our guidance with a view of the Canadian market.” Regulatory changes in Canada over customer disruptions and higher airport fees and infrastructure costs might also boost operating costs, Air Canada said. The Air Line Pilots Association, representing Air Canada’s aviators, is in a mediation process with Air Canada until June 1. The union has previously said it was looking to close the pay gap with large US airlines, which have significantly increased their pilots’ pay in the past year. WestJet Airlines Ltd., Canada’s second-largest carrier, agreed to a contract in May that included a 24% compensation bump over four years. Pilots in the US are paid 50% to 300% more than pilots in Canada, the union said in a statement responding to Air Canada’s earnings release. “Air Canada is one of the most profitable airlines in North America, but has yet to recognize the value of its pilots and compensate them accordingly,” Charlene Hudy, the union’s local head, said in the statement.<br/>

A labour union in Germany has called on ground staff for Lufthansa to walk off the job at seven airports on Tuesday following a similar strike earlier this month. The Ver.di union said Sunday that the one-day strike will affect the airports in Frankfurt and Munich, Lufthansa’s two main hubs, as well as Berlin, Duesseldorf, Hamburg, Cologne-Bonn and Stuttgart. It will run from 4 a.m. Tuesday to 7:10 a.m. Wednesday. A 27-hour strike at five of the same airports that started Feb. 7 prompted the airline to cancel hundreds of flights. The union is seeking pay raises of 12.5%, or at least 500 euros ($539) more per month, in negotiations for about 25,000 employees, including check-in, aircraft handling, maintenance and freight staff. Several-hour or one-day “warning strikes” are a common tactic in German contract negotiations. A round of talks on Feb. 12 produced no agreement. More negotiations are scheduled for Wednesday.<br/>

Have you ever considered just packing a bag and catching a flight without knowing the destination? Scandinavian Airlines, a Sweden-based carrier, recently announced the opportunity for members of its EuroBonus loyalty program to book a flight experience they call “Destination Unknown.” The airline says that “within minutes” of the announcement on February 12, over 1,000 members signed up for the surprise flight. Registration closed 24 hours later and those selected for the trip had an additional 24 hours to confirm their seat on the plane and make a payment. The airline is no longer accepting reservations. Instead of money, travelers needed to redeem 30,000 miles for a seat. If someone was selected and didn’t have enough miles or points, they could purchase the remaining ones required. The trip will fly from Copenhagen, Denmark, on April 5 and return to the same city on April 8. There is a waitlist for anyone who signed up but didn’t get a spot. They’ll have the chance to move up on the list and maybe even get a coveted seat if someone cancels. The only clue travelers will get before they takeoff is that the flight will last a few hours. The destination will be announced at some point during the flight. As the date of the mystery flight nears, those with a confirmed spot will get guidance from Scandinavian Airlines on what to pack. “The prospect of embarking on an adventurous and mysterious journey with fellow enthusiasts, finding new connections and friendships along the way, is truly exciting,” Paul Verhagen, EVP & CCO at Scandinavian Airlines, said in a press release. “These are not just trips; they are extraordinary journeys that will stay with you for a lifetime,” he added.<br/>

Air New Zealand warned that earnings will drop in the six months through June amid increased competition from US rivals and slowing corporate demand. Full-year pretax profit could drop to as little as NZ$200m ($123m) from NZ$585m a year earlier, the Auckland-based airline said Monday. The company reports first-half results on Feb. 22 and reiterated earnings will be at the low end of a range from NZ$180m to NZ$230m. “A number of economic and operational conditions have deteriorated further and are increasingly expected to have a significant adverse impact on its performance in the second half of the financial year,” the airline said, adding it will be “markedly lower than the first half.” Air New Zealand has come under pressure as more airlines return to the Pacific long haul routes into the US as global travel revives after the Covid pandemic. Delta Air Lines began a new service into largest city Auckland late last year. “Forward bookings indicate that the increased capacity and further pricing pressure from US carriers is expected to more adversely impact revenue performance for the remainder of the financial year,” Air New Zealand said. At the same time, the company is experiencing ongoing weakness in domestic demand from New Zealand companies and the government, it said.<br/>