Southwest Airlines plans to offer its pilots reduced hours and, in effect, monthly pay, two people familiar with the matter said, as it grapples with higher costs and overstaffing due to delays in aircraft deliveries from Boeing. The Dallas-based airline, which operates an all-Boeing fleet, has been reeling from the U.S. planemaker's ongoing safety crisis. Last week it warned of a hit to earnings as it expected to receive just 20 Boeing aircraft this year, less than one-fourth of its original plans. Southwest has called the delays "significant challenges" for this year and next as they have forced it to moderate its growth plans. Reduced hours for pilots will help lower Southwest's salary bill without needing to resort to furloughs, the sources said. It is also intended to ensure Southwest's pilots meet the U.S. Federal Aviation Administration's (FAA) requirements to stay in the cockpit, allowing the company flexibility to ramp back up operations when required, they added. The plan is likely to take effect around September and is expected to be offered to hundreds of pilots, one of the sources said. Boeing's crisis - sparked by a January mid-air cabin panel blowout on an Alaska Air - continues to ripple through the industry. Airlines have been forced to adjust fleet plans, cut capacity and manage excess staffing. A Southwest spokesperson said the company has yet to reach an agreement with the Southwest Airlines Pilots Association (SWAPA) that represents its pilots, declining to share more details.<br/>
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WestJet has issued a 72-hour lockout notice to the union representing its mechanics, and warns a work stoppage could happen as early as Tuesday. The Calgary-based airline says in a statement that the decision follows an announcement of a strike vote by the Aircraft Mechanics Fraternal Association, which represents approximately 670 aircraft maintenance engineers and skilled trade groups with the carrier. The union is currently negotiating its first collective agreement with the airline, and has warned travellers in social media posts against booking with WestJet in the near future, "as a work stoppage may result in unwanted delays and disruptions." Wages, outsourcing, scheduling and layoff protection have been cited by the union as issues in the negotiations. WestJet president Diederik Pen says in the airline's statement that the decision to issue a lockout notice wasn't made lightly, but that the union continues to show up to the bargaining table with what he calls "unreasonable demands and expectations." The statement says WestJet has presented an offer to union that would make WestJet maintenance engineers the highest paid in Canada. "With AMFA publicly issuing a strike vote alert last week and publicly directing guests to fly with other carriers, we can't allow the unpredictable nature and lack of progress to continue. We are left with no alternative but to issue a lockout notice in an attempt to bring this to a final resolution," Pen said.<br/>
Scandinavian ad hoc and sub-charter carrier Frost Air has been granted an air operator’s certificate from Danish regulators. The carrier is Swedish, but based in Copenhagen, and has operated under the AOC of Estonian carrier NyxAir for two years. Frost Air uses a fleet of four Saab 2000s which were previously chartered from NyxAir. Danish civil aviation regulator Trafikstyrelsen has awarded the company an AOC as well as a European Union operating licence, with effect from 1 May. Frost Air says the decision is a “significant milestone” and follows and “intensive” year-long preparatory period of “meticulous planning and collective effort”. “It underscores Frost’s unwavering commitment to operational excellence and resilience,” the carrier adds. The company has specialised in event charters for the sports, music and film industries as well as offering VIP and corporate shuttles. Frost says it has also obtained European Part-145 maintenance approval which, it says, will further enhance its operational capabilities.<br/>
Abu Dhabi hub carrier Etihad Airways PJSC has added banks to its planned initial public offering that could raise as much as $1b, according to people familiar with the matter. Abu Dhabi Commercial Bank PJSC, Bank of America Corp., BNP Paribas and Morgan Stanley have been picked as joint bookrunners on the potential share sale, the people said, asking not to be identified as the information isn’t public. Abu Dhabi wealth fund ADQ, which owns Etihad, is targeting a listing for the end of the year, the people said. Representatives of Morgan Stanley, ADQ, Bank of America, ADCB and Etihad declined to comment while BNP Paribas didn’t immediately respond to a request for comment. The fund had already picked Citigroup Inc., HSBC Holdings Plc and First Abu Dhabi Bank as lead advisers for the IPO, Bloomberg News reported in March. Rothschild & Co. is acting as an independent financial adviser to the Abu Dhabi wealth fund. An IPO of Etihad will create the first publicly-traded major Gulf hub carrier and come amid a rebound in international travel following the pandemic. The Abu Dhabi airline reported a five-fold increase in annual profit in March as it expanded its network to tap growing demand for travel. In neighboring Dubai, an IPO of rival Emirates was discussed in 2021 as part of a plan by the business hub to sell stakes in state-owned companies to boost trading volumes. Saudi Arabian low-cost carrier Flynas, backed by billionaire Prince Alwaleed Bin Talal, is also planning an IPO in the kingdom as soon as this year, Bloomberg News has reported. An Etihad listing would be another example of the United Arab Emirates using its national champions to boost the domestic stock market and diversify the economy away from oil. Ownership of the airline was transferred to ADQ from Abu Dhabi’s Supreme Council for Financial and Economic Affairs in 2022, part of an effort to boost the sheikhdom’s status as a transport hub.<br/>
Russian flag-carrier Aeroflot has turned in a Q1 net loss of Rb6.9b ($75.3m), but states that this is its lowest loss for the period in five years. It says the result – under Russian accounting standards – illustrates a “trend of progressive improvement”. Aeroflot says it achieved the performance “without special industry support measures”, pointing out that last year’s Q1 included subsidy income of more than Rb5b. Revenues of Rb145 billion were up by nearly 58%, and substantially exceeded the pre-pandemic Q1 of 2019. Aeroflot attributes this improvement to expansion of its flight schedule and higher passenger load factor – up 2.5 points to 87%. International passenger numbers rose by 40% while domestic numbers were up by nearly 29%. Costs were up 47% to Rb143.6 billion as production increased, bringing increased expenditure on fuel, airport charges, and handling. Aeroflot adds that there was a “significant” increase in maintenance costs with higher charges for spares. “The company continues to perform all necessary technical aircraft repairs, and to adhere to high standards of flight safety,” it points out. Aeroflot says it turned in a gross profit for the quarter of Rb1.46b, contrasting not only with the previous year’s Rb5.9b loss but also with the fact that it typically posts a gross loss in the first three months.<br/>
Tycoon Arif Habib and Gerry’s Group are among the initial ten bidders seeking to purchase a majority stake in state-owned Pakistan International Airlines. Habib and Gerry’s Managing Director Akram Wali Muhammad confirmed that they’ve submitted bids for the carrier in messages sent to Bloomberg. Three private-sector airlines operating on domestic routes have also bid, privatization minister Abdul Aleem Khan said in a briefing earlier without disclosing the exact names. The planned stake sale is a step toward the government’s commitment to undertake economic reforms in exchange for a bailout from the International Monetary Fund. Prime Minister Shehbaz Sharif, who returned to power in March, has said it’s no longer sustainable to prop up the money-losing carrier each year with taxpayer funds. Pakistan’s state-owned airline has become more attractive after the government said it would not pass on roughly three quarters of the carrier’s debt to the eventual buyer, said Khan. Pakistan is looking to sell between 51% and 100% of the carrier, which has failed to turn an annual profit in nearly two decades. The nation’s privatization commission has extended the deadline to submit letters of intent until May 18. Potential suitors had requested more time for due diligence and to coordinate with international companies on potential bids, Khan said.<br/>
Eastar Jet said on Friday that it will operate daily round-trip flights between Incheon and Okinawa from July 19th, 2024, onwards. The flight will depart from Incheon International Airport at 11:30 a.m. local time and arrive at Naha Airport in Okinawa at 2:00 p.m. local time. It will then depart from Okinawa at 3:00 p.m. and return to Incheon at 5:35 p.m. In addition to the Okinawa route, Eastar Jet plans to offer special promotions for its new routes including one to Sapporo. Eastar Jet decided to launch flights to Okinawa, a well-known resort destination in Japan, to coincide with the summer holiday season. The current historic low in the value of the yen has led to a growing demand for travel to Japan, the airline added.<br/>
Philippine Airlines parent PAL Holdings saw Q1 profits decline on the back of cost pressures, but notes that this was “an expected outcome” as travel demand normalises. For the three months to 31 March, the company reported an attributable net profit of Ps3.6b ($62.8m), down 23% year on year. This was despite a 8.5% increase in revenues, to Ps45.8b, led by an increase in passenger travel revenue, which grew about 7% year on year. Still, the rise in revenue was outpaced by a 13% jump in operating expenses, to Ps39b, as the airline increased flying activity. PAL also flagged “the continued industry-wide price hikes” in areas such as maintenance and ground-handling. PAL president Stanley Ng also notes that supply chain challenges “remain and continue to put a strain” on airline operations. <br/>