U.S. and European airlines will aim to boost profits again this year with higher ticket prices as they try to squeeze what they can from the post-COVID travel boom and mitigate higher costs amid persistent plane shortages, investors and executives say. Major carriers are straining to lay on more flights to meet demand, but are struggling due to delays in new plane deliveries from Airbus and Boeing and the grounding of jets using some RTX engines over potential defects. Tight supplies, in turn, are keeping air fares high, allowing carriers to pass on higher jet fuel, labour and maintenance costs. That has sent average revenues per passenger - known in the industry as yields and a proxy for airline pricing power - to 6.2% last year, its fourth straight year of growth, according to data from global trade body IATA. Yields are set to rise further in 2024, albeit at a slower pace, by around 1.8%, IATA has predicted. European airlines' yields this summer - the busiest time of year - will exceed last year's levels, hitting as high as 8.5%, and increase even more in 2025 as travel demand continues and plane delivery delays persist, according to Bernstein forecasts. Bernstein analyst Tobias Fromme estimates demand will have grown about 15-20% this summer since 2019, while capacity has barely budged. "Higher fares this summer will keep driving profits. Airlines will make more money because customers are still willing to pay more," said Jamie Lindsay, an airline investor at Artemis Investment.<br/>
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Chinese state-owned planemaker COMAC upstaged industry leaders Airbus and Boeing at the Singapore Airshow this week, showing off its self-developed C919 and ARJ21 jets as it pursues international certifications and foreign orders. "A reliable new choice," proclaimed an advertisement on COMAC's large booth in the centre of the show's event hall. Aviation, government and investment professionals thronged to its display, demonstrating the keen interest from trade delegates in learning more about a company with limited public engagement outside its home market to date. The C919, a rival to the Boeing 737 MAX and Airbus A320neo family single-aisle jets, flew for the first time outside Chinese territory. Show attendees said they saw it as a opportunistic coming out for COMAC, which took centre stage with a 50-plane order from China's Tibet Airlines on Tuesday. COMAC was able to seize a moment when the two dominant Western planemakers are dealing with supply chain issues that have frustrated airline customers and Boeing is wrestling with a series of crises, including a mid-air panel blow-out in January. "I generally absolutely welcome COMAC coming to the party," said Michael Szucs, CEO of Philippine budget airline Cebu Pacific (CEB.PS), opens new tab, adding the Chi nese firm had sent a large delegation to visit the carrier eight months ago. "I'd rather it was a three horse race rather than a two horse race," he said. But the predominant view among aviation industry leaders attending Asia's biggest aviation gathering was that COMAC had a long road ahead to become a serious competitor and it would largely operate in China's domestic market in the near term. "I think people will take a second look because of all these delivery problems that Airbus and Boeing are having, but we have to be realistic because the C919 has not been certified by certain authorities so the call to action is limited," said Subhas Menon, director general of the Association of Asia Pacific Airlines.<br/>
Boeing touted its 737 Max aircraft as “the safest airplane” and said China’s latest domestic jetliner Comac C919 is similar to offerings by Airbus and Boeing that are already in the market. Dave Schulte, Boeing’s commercial marketing managing director for Asia-Pacific acknowledged that the 737 Max 9 — which currently faces questions over a midair blowout — “is by far the most scrutinized airplane in the world, in the history of aviation.” However, he insisted it was “the safest airplane that can be out there today.” Speaking to media on the sidelines of the Singapore Airshow, Schulte said he flew on the 737 Max aircraft with his family the last week, and pointed out that the plane was “quite full.” A midflight blowout of a fuselage panel on one of Boeing’s 737 Max 9 operated by Alaska Airlines earlier this year raised concerns about safety after loose bolts were found during preliminary inspections. In January, Boeing recorded a decline in aircraft orders and deliveries. On Wednesday, Boeing announced it will be replacing the head of its 737 Max program. Boeing did not bring any commercial planes to the Singapore Airshow. Instead, it is showcasing its defense capabilities, featuring many of its fighter jets, including the B-52 Stratofortress which will participate in the US Air Force aerial display. The company also had a cabin display of its wide-body 777X passenger plane at the event, which it claims is the world’s largest twin-engine jet. But deliveries for the aircraft, expected from 2025, have been plagued with delays. Without Boeing’s commercial jets at the Singapore Airshow, all eyes were on passenger planes by Airbus and China’s domestic jetliner Comac C919. The Comac C919, which industry experts said could shake things up for the long-standing commercial aviation industry duopoly by Boeing and Airbus, is still in the early stages of entering the race. “It’s still early days to know if Comac can shake up the duopoly. We are not likely to see a C919 overseas order of significance in the near term,” Brendan Sobie of Sobie Aviation told CNBC.<br/>
Aerospace giants including Airbus, Boeing and GE Aerospace on Thursday announced the formation of a coalition that would aim to prevent unauthorized parts from entering the global supply chain. The move comes after jet engine maker CFM International, co-owned by GE Aerospace and France's Safran, last year said thousands of engine components may have been sold with forged paperwork by British distributor AOG Technics. The group, Aviation Supply Chain Integrity Coalition, was launched on Thursday and would include senior representatives from American Airlines, Delta Air Lines, Safran, StandardAero and United Airlines, according to a statement. Former National Transportation Safety Board Chairman Robert Sumwalt and former U.S. Transportation Deputy Secretary John Porcari will serve as coalition co-chairs, the statement added. "Through this coalition, we will work to find lasting solutions that the industry can adopt to improve the overall integrity of the aviation supply chain," Porcari said.<br/>
Promoting the Singapore Airshow on Sunday, the organiser of the event was asked what would be different about this year's aviation and defence jamboree. "Sustainability, sustainability, sustainability," he replied. The sound bite from Leck Chet Lam, managing director of the events business Experia, was a precursor to three days packed with green-focused panels and announcements, often accompanied by the tagline "sustainable aerospace together". Despite the public-facing united front, the air show has exposed deep divides over how the industry can achieve its goal of "net zero" carbon emissions by 2050. Airline bosses, green fuel producers and manufacturers contradicted each other and pointed fingers over the thorniest issue: who is responsible for the slow take up of so-called sustainable aviation fuel (SAF). SAF, a biofuel made from plant or animal materials, such as used cooking oil or agricultural waste, can reduce carbon emissions by up to 80% compared with traditional jet fuel. But it is up to five times more expensive and there is a huge shortage of feedstock needed to make it. SAF is similar in chemistry and performance to fossil jet fuel. Two decades after airlines began pledging to use biofuels, SAF makes up just 0.2% of the global jet fuel market. The aviation industry says that number will rise to 65% by 2050, although environmental groups say there is no credible roadmap to achieve the goal. Willie Walsh, the director general of the International Air Transport Association, said at an event on Monday that the only way to achieve "net zero" was the widespread use of SAF. "Demand is not an issue," Walsh said, adding that airlines use "every drop" of SAF that is produced.<br/>
While the A380 superjumbo is enjoying a steady resurgence after having been on the brink of retirement during the pandemic, its older sibling – another four-engined aircraft from Airbus – seems dangerously close to being grounded for good. The A340 was introduced 30 years ago with Lufthansa and Air France, but only 380 have been produced since, the last in 2012. By comparison, Airbus has already made 565 of its successor, the A350, since its introduction in 2015. Despite the lackluster commercial response, Airbus had high hopes for the A340, which was meant to replace aging Boeing 747s and DC-10s, and was touted as having an unbeatable range. Just after entering commercial service, in 1993, an A340 set records by flying from the Paris Air Show to Auckland, in New Zealand, and then back after a five-hour layover, totaling over 42 hours in the air. It was the first-ever nonstop flight between Europe and New Zealand and the longest-ever nonstop flight by an airliner. In its heyday, the plane was used to operate the longest nonstop scheduled flight in the world, and was for a while the aircraft of choice for heads of state around the world due to its range and size. But its main characteristic – the four engines – soon became a drag as fuel costs started rising and twin-engine jets began offering the same performance with lower operating costs. By the early 2000s, the A340’s main competitor — the twin-engined Boeing 777 — was outselling it 10 to one. It had even taken away the longest flight record, with a nonstop journey from Seattle to Kuala Lumpur in 1997. “The A340 disappeared essentially because twinjets could fulfill its mission more efficiently,” says Gary Crichlow, an aviation analyst at consulting firm AviationValues.<br/>
India’s surging growth has been a persistent and hot talking point during this week’s Singapore Air Show, with focus not just on how far the market has come but how much potential it still has. The subject was a key discussion point during the aviation leaders’ forum at the show, with Steven Townend, chief executive of aircraft lessor BOC Aviation, highlighting the scale of India’s promise and the challenges of meeting demand, and Peter Bellew, COO of Saudi start-up Riyadh Air, lauding significant improvements in India’s aviation infrastructure. Although China and India have similar-size populations, Townend notes, their aircraft fleets are vastly different, China with around 4,000 aircraft and India with 600-700. “There’s huge growth to come there from the Air India Group and IndiGo,” he says, but highlights the limited scale of India’s capital markets as a potential complication for airline fleet investments. “The size of the Indian financial system is 5-10% of the Chinese system,” says Townend, which means airline fleet deals would rely heavily on foreign funding. “Air India and IndiGo are going to be able to access capital,” he says, “but it will be more of a challenge for the smaller guys.”<br/>
Australia's major airlines have improved their performance but travellers are still being subjected to far more cancellations and delays than normal.<br/>Data from the Australian government's Bureau of Infrastructure and Transport Research Economics (BITRE) released today shows less than three-quarters of domestic flights (73.4%) arrived on time in January, and 3.1% were cancelled. While both figures are marked improvements on the December numbers of 63.6 and 5% respectively, they're still well short of the long-term averages of 81 and 2.2%. While last month's cancellation rate is the same as it was for the same period last year, the on-time arrival rate has fallen from 76.7% in 2023. Virgin was the worst of the major airlines when it came to cancellations, scrapping 5.3% of its flights, compared to Qantas at 2.5% and Jetstar at 2.4. Virgin also lagged behind its major rivals when it came to on-time arrivals, with just 67.9% of its flights landing when scheduled.<br/>
As the aviation sector seeks ways to make air travel less polluting and more sustainable, aerospace company Embraer and South Korean automaker Hyundai are among the companies betting on a new form of air travel -– air taxis. Hyundai’s Supernal and Embraer-backed Eve Air Mobility are developing electric aircraft that take off and land vertically. The idea is that such air taxis might provide a sustainable form of air transport for densely populated cities and areas with less developed public transport networks. Experts say they could help offset carbon emissions from the traditional aviation sector, but there are plenty of technological and regulatory challenges to making air taxis commercially viable. Falling battery prices, advancements in technology and the participation of big players like Hyundai mean that such aircraft could soon be a reality, experts say. Hyundai’s advanced air mobility unit Supernal and Embraer-backed Eve Air Mobility hope to officially launch electric-powered air taxis within the next two to four years. “Ground transportation is evolving and improving, but to support all the mobility demands of … people in urban areas, ground transport will not be sufficient,” Supernal's CEO Shin Jaiwon said in an interview. “We have to open the skies above the cities.” Supernal’s S-A2 electric aircraft, equipped with eight rotors, is designed to carry a pilot and four passengers. The battery-powered air taxi will have a range of about 25 to 40 miles and will be able to take off and land vertically. It's similar to a helicopter, but quieter and more sustainable in that it can help offset carbon emissions generated from traditional air travel, Shin said.<br/>