general

The global airline industry has long warned passengers they’ll eventually have to pay some of the $5t cost of decarbonizing air travel. The moment has come. Singapore’s government has announced a tax on air fares to fund purchases of pricey sustainable aviation fuel, while neighboring Malaysia has authorized carriers to charge people a carbon levy from next month. In Europe, airlines this year lose one quarter of their free emissions allowance, the first in a series of reductions that’s already estimated to be adding to ticket prices. “We’ve entered a new era,” said Rico Luman, a transport, logistics and automotive economist at ING Groep NV in Amsterdam. “Flying will turn more expensive.” While the policies differ from country to country, the common goal is to clean up an aviation industry that for a century has relied on fossil fuels to function. Airline chiefs fret that unless they show they’re serious about cutting emissions right now, they’ll face fines, flying limits or — worst of all — be grounded completely. Sustainable aviation fuel, a cleaner-burning liquid made from waste oils or agricultural feedstock, is the industry’s primary means of reaching its 2050 net zero target. But the new fuel is in short supply and can be more than double the price of normal jet kerosene, leaving airlines little choice but to pass the cost onto passengers. It means little price respite for flyers who’ve been whacked by soaring prices since air travel resumed after the pandemic. Now, they’ll have to pay to neutralize aviation’s carbon footprint, too. “That change is expensive,” Kiri Hannifin, Air New Zealand Ltd.’s chief sustainability officer, said in an interview this week. “We do need to start talking to Kiwis about what flying is doing, why it’s impactful, why we’ve got to change.” <br/>

The CEOs of American Airlines, United Airlines, Visa and Mastercard will not testify at an April 9 hearing on credit card competition, the chair of the Senate Judiciary Committee said Thursday. Senator Dick Durbin in February invited the executives of the firms that have fought his legislation seeking to reduce fees charged by Visa and Mastercard on transactions by requiring competition, while airlines say the bill could force them to stop offering rewards credit cards that give consumers frequent flyer miles for making transactions. "They're just too darned busy to come and explain the major source of profits for their businesses," Durbin said, saying killing his bill remains a top priority for opponents who have spent $51m lobbying against his bill. Durbin, a Democrat, said the bill co-sponsored with Republican Senator Roger Marshall could save merchants and consumers $15b annually in fees charge for credit card transactions, while businesses pay more than $100b in so-called swipe fees annually. Durbin's office said he has no plans to cancel the hearing and all options remain on the table to having the CEOs testify. Airlines generate billions of dollars annually in fees for branded credit cards and Durbin called the carriers "basically credit card companies that own some planes."<br/>

The heads of leading U.S. airlines want to meet with Boeing and hear the aircraft manufacturer’s strategy for fixing quality-control problems that have gained attention since a panel blew out of an Alaska Airlines jetliner in January, people familiar with the situation said Thursday. The meeting is likely to take place next week, according to a person who spoke on condition of anonymity to describe private discussions between Boeing and the airlines. Boeing CEO David Calhoun is not expected to meet with the airline officials, and that Boeing has offered to send its chairman, former Continental Airlines CEO Lawrence Kellner, and other board members. Boeing declined to comment. The company's CFO, Brian West, said at an investor conference Wednesday that the slowdown in aircraft production would cause Boeing to burn through $4b to $4.5b in cash flow during Q1, which ends March 31. “We put the customers in a tight spot ... the slowdown has impacted us, and it has impacted them," West said. He said airline customers "have been supportive of everything we are trying to do to enhance safety and quality for the industry.” United Airlines and American Airlines declined to comment on the airlines' request, and Alaska Airlines did not immediately respond to an inquiry. A Southwest spokesman declined to comment on specific meetings but said, “We have ongoing, frequent communication with Boeing, which is not new and will continue.” Airline CEOs have been outspoken in their frustration with Boeing’s manufacturing problems, which have slowed deliveries of planes that the carriers were counting on. <br/>

Federal officials said Thursday they will review how airlines protect personal information about their passengers and whether they are making money by sharing that information with other parties. The US Department of Transportation said its review will focus on the 10 biggest US airlines and cover their collection, handling and use of information about customers. “Airline passengers should have confidence that their personal information is not being shared improperly with third parties or mishandled by employees,” Transportation Secretary Pete Buttigieg said. A spokeswoman for the trade group Airlines for America said, “U.S. airlines take customers’ personal information security very seriously, which is why they have robust policies, programs and cybersecurity infrastructure to protect consumers’ privacy.” In announcing the review, the Transportation Department did not make allegations against any of the carriers or cite any events that might have prompted the move. A spokesman said it is being done “proactively” to help the department determine how to protect passengers' information. The department said it sent letters to each of the airlines — Delta, United, American, Southwest, Alaska, JetBlue, Spirit, Frontier, Hawaiian and Allegiant — about their procedures for collecting and using passenger information, including “monetization of passenger data, targeted advertising, and prevention of data breaches.” The agency also asked airlines if they have received complaints about employees or contractors mishandling personal information. Southwest said it discloses in its privacy policy that it “shares certain customer information with select partners and third parties” but gives customers the ability to opt out of sharing. Delta, United, American and Alaska referred questioners to the Airlines for America statement. Allegiant, which is not part of the trade group, said protecting customer data is a priority, and it welcomes the government review.<br/>

The former Doncaster Sheffield Airport (DSA) could stage a remarkable return to active aviation after the local council signed a lease with the site’s owner, Peel Group. The announcement came 16 months after the South Yorkshire airport saw its last departure. The facility occupies the site of a former air force base, RAF Finningley. It is six miles from Doncaster and 19 miles from Sheffield. The owner, Peel Group, said at the time of the closure: “No tangible proposals have been received regarding the ownership of the airport or which address the fundamental lack of financial viability.” In the autumn of 2022, the then-prime minister Liz Truss vowed to “protect this airport and this infrastructure” but took no actual steps to save it. Now, though, the mayor of Doncaster, Labour’s Ros Jones, has signed a deal for the local council to take over the airport. Jones posted on X: “Today I can announce that we have signed a 125-year lease for the former DSA which will help to ensure the future of the airport site with the ambition to see planes flying once more from Doncaster.” The mayor later said: “This is a major step in the reopening process. The next is appointing an operator and investor who will manage and develop the airport. This process is well under way and I am optimistic that I can announce a partnership later in the spring.” It is not clear which airport operator might be interested in running DSA. Manchester Airports Group, which owns Stansted and East Midlands as well as Manchester, is unlikely to become involved in a project that could dilute its existing business. If and when the airport opens, Doncaster Sheffield could have a new name. When first opened to passengers in 2005, it was known as Robin Hood airport.<br/>

Boeing directors plan to meet with top executives from some of their largest airline customers, who are growing increasingly frustrated about the planemaker’s crisis tearing into their business. Dave Calhoun, Boeing’s CEO, will not participate in the gatherings set to begin next week, said people familiar with the matter. Larry Kellner, the chairman of Boeing’s board, is spearheading the unusual listening tour and will be joined by two to three other directors for each session, although the cast of participants will vary, said the people, who asked not to be identified as the plans are confidential. For Kellner and other board members, the initiative will provide unfiltered feedback from some of the largest airlines in the world as Boeing navigates another crisis centered on its most important product, the 737 Max jetliner. Calhoun is supportive of the sessions, a Boeing official said. The plans underscore the growing customer frustration with Calhoun and Stan Deal, the head of Boeing’s commercial aircraft business, as a crisis centering on the planemaker’s manufacturing quality and safety shows no signs of receding nearly three months after a fuselage panel blew out of an airborne 737 Max. A sweeping audit of Boeing and its suppliers by the US FAA raised concerns about the company’s safety culture, the agency’s top official said earlier this week. Kellner, a former airline CEO, initiated the customer outreach after several top US airline chiefs discussed meeting as a group with Boeing directors during a recent session of the Airlines for America trade group, the people said.<br/>

Boeing’s production problems are reverberating through an airline industry starved for planes, making it harder for carriers to meet red-hot demand for travel and raising the prospect of even higher ticket prices. On Wednesday, Ryanair CEO Michael O’Leary explained why prices have further to climb. “If you have constrained supply (and) strong demand, I think it’s inevitable that you’re going to see air fares bump again this summer… between 5 and 10%,” he told CNN’s Richard Quest. Europe’s biggest airline by passengers had expected to receive 57 Boeing planes this summer, but now anticipates getting between 35 and 40, according to O’Leary. Ryanair is far from the only major carrier with too few aircraft. Southwest in the United States, which flies only Boeing 737 planes, announced last week that Boeing would deliver 40% fewer jets than it had been expecting this year. A critical shortage of planes is also plaguing other airlines — and the problem is not confined to Boeing. According to aviation analytics firm Cirium, about 600 Airbus jets globally have been grounded for at least the last month due to an issue with engines made by US aerospace manufacturer Pratt & Whitney. That’s hurting Lufthansa, the German group that also owns carriers in Austria and Switzerland. CEO Carsten Spohr said Wednesday that it has more than 30 Airbus A320Neos currently grounded. Ryanair CEO Michael O'Leary says issues with both Boeing and Airbus will constrain his airline's capacity this summer. “This industry … suffers from this lack of airplanes,” he added, noting that the shortage was affecting the company’s ability to grow. The grounding of some planes and delayed deliveries of new aircraft will mean that fares in the United States “should stay elevated through 2024, instead of tapering… as occurred last year after May,” according to Robert Mann, founder of R.W. Mann & Company, an airline industry consulting firm in the United States. Mann cited data from Airlines Reporting Corporation, which tracks ticket sales worldwide, showing that fares on US domestic flights booked in February for travel this year were 5%-6% higher than the same month last year, far outpacing overall inflation. The supply constraints helping to keep air fares higher may be around for some time yet. There’s a near-duopoly between Boeing and Airbus in commercial aircraft manufacturing, meaning airlines have almost no option but to wait in line.<br/>

The Biden administration is looking to the skies for government revenue, scrutinizing corporate jets as it tries to get big companies to pay more in taxes and to crack down on rich tax evaders. From Taylor Swift to Fortune 500 CEs, private air travel has for years been portrayed to exemplify lavishness and excess, putting it on the radar of Democrats who want to rid the tax code of incentives that promote its use. Companies have long benefited from laws that allow them to write off the cost of jets more quickly than commercial airlines can, and to pay less in fuel taxes. Included in the $5t of tax increases proposed by the White House were plans to target corporate aviation and ramp up scrutiny of executives who use company planes for private trips. President Biden raised the taxation of corporate jets at his State of the Union address this month and at a campaign event in Philadelphia last week as he laid out his ideas to make big companies “pay their fair share.” At a Senate hearing on Thursday, Treasury Secretary Janet L. Yellen praised the Internal Revenue Service for embarking on a “new initiative to end abuse of corporate jet write-offs.” The ideas have drawn swift backlash from the corporate aviation industry, which argues that the proposals unfairly undercut American companies that rely on private planes to allow their executives to more easily visit factories and remote offices. “We haven’t seen any real justification on why an important and essential American industry is being targeted for tax increases,” said Ed Bolen, president and CE of the National Business Aviation Association. “Proposals have been made, impressions may have been left and we would like to understand the facts behind it.” Biden’s budget, which is unlikely to be approved by Congress, would hit corporate and private jet users in two ways. It would raise the tax on jet fuel to $1.06 per gallon from 21.8 cents per gallon over five years. <br/>