Americans are flying in record numbers as summer travel season kicks into gear, but traders are betting that airlines won’t be able to capitalize on it. Short interest in the $1.1b aviation industry exchange-traded fund US Global Jets (ticker JETS) accounts for over 27% of the ETF’s free float after touching 30% earlier this month, the highest in data going back to 2019, according to S3 Partners LLC. The lack of faith makes sense based on the performance of airline stocks. JETS is down 13% over the past 12 months and the nine-member S&P Supercomposite Airlines Index has plunged 22%, compared with a 26% surge in the S&P 500 Index. Meanwhile, air travel is booming. US carriers are projected to transport a record 271m passengers from June 1 to Aug. 31, representing a 6.3% jump from the same period last year, according to industry trade group Airlines for America. And globally, airline profits are expected to rise to $30.5b in 2024, based on projections from the IATA, which recently lifted its outlook from the $25.7b it estimated back in December. So what’s the problem for airlines? In a word: margins. Shortages of pilots and cabin crew have forced carriers to increase wages to attract talent. Air traffic control constraints have led to costly disruptions. And airlines are finding that their growth plans were overly ambitious, leading to an abundant supply of available seats and cut-rate promotions to fill planes. Meaning, many of the passengers flooding airports right now are boarding at cheaper prices. “Just because TSA says there’s a heck of a lot of people going through security, that doesn’t mean that we’ve got an industry that’s killing it,” said George Ferguson, a Bloomberg Intelligence analyst. “If I were an investor, I would want record profits, too — and from a margin perspective, we don’t have that.”<br/>
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With broiling hot weather baking much of the country, airline passengers are finding yet another reason to dread flying: airplane cabins that feel like saunas. When planes are waiting at the gate or sitting on an airport runway, temperatures inside can soar, and the air-conditioning may barely function. In 2018, the Association of Flight Attendants, a union representing those workers, petitioned the U.S. Department of Transportation to set minimum standards for cabin temperatures. But the department said this week that it was still studying the issue, and the complaints from passengers and crew members have not stopped. Some of them warn of the dangers of heatstroke and other heat-related illnesses, not to mention the anxiety and the discomfort of feeling trapped in an overheated airplane cabin. “I can tell you as an active flight attendant, this is a major problem,” said Sara Nelson, the international president of the Association of Flight Attendants. “Everyone has a story about being too hot on an aircraft and the horrible things that happen as a result.” Most planes have a cooling system that works when the engines are roaring and the plane is in flight. When the plane is sitting on a hot runway and the engines are off, an auxiliary power unit, which uses jet fuel, can push cold air into the cabin. At the gate, airport workers can connect the plane to an external air-conditioning unit powered by the airport’s electrical system, which can pump cool air into the plane through a hose. The problem, according to Ross Sagun, an aviation consultant who was an airline pilot for 41 years, is that the external air-conditioning units and auxiliary-powered cooling systems don’t always function properly because of maintenance problems or neglect. Story has more.<br/>
Heathrow airport will be forced to trim the landing fees it charges airlines following an intervention by the competition regulator. The UK Civil Aviation Authority on Thursday said charges will be capped at GBP23.73 per passenger in 2025, and GBP23.71 in 2026, about 6% lower than planned. It changed its calculations following a ruling from the Competition and Markets Authority in October, which intervened in a long-running and acrimonious row between the UK’s hub airport and its main airline customers. The competition regulator had given its qualified backing to the CAA’s original decision on charges, but said at the time there were some issues to re-examine, including how pension payments are reflected in the charges. The CAA’s decision on Wednesday marks the end of a years-long dispute between Heathrow and airlines, including British Airways and Virgin Atlantic, over whether the airport should be allowed to increase its fees during the regulatory period that runs from 2022 to 2026. The charges are typically passed straight on to passengers through ticket prices. Heathrow had originally pushed to be allowed to charge much higher fees — as much as GBP40 per passenger — in part to help it recoup some of its losses from during the pandemic, when air travel was curtailed.<br/>
US Senate Commerce Committee chair Maria Cantwell said on Thursday she has asked Boeing CEO Dave Calhoun to appear before her committee as she prepares legislation that would boost Federal Aviation Administration oversight of planemakers. Calhoun appeared before another Senate committee on June 19, but Cantwell told reporters she expects the outgoing CE will also appear for a future hearing before her committee. She said it might need to wait until the National Transportation Safety Board holds an investigating hearing Aug. 6-7 on the Alaska Airlines Boeing 737 MAX 9 mid-air emergency. "Our job here is why did the FAA drop the ball? What is it that we have to do to ensure that the FAA does its job?" Cantwell said. The FAA and Boeing did not immediately comment. Cantwell said she will also soon release proposed FAA legislation to require the agency to use safety management systems (SMS) and that there is a question about why the FAA did not have a more robust system. "It's really important to have an oversight system that does work," Cantwell said. Last month, FAA Administrator Mike Whitaker told the committee the agency was "too hands off" in oversight of Boeing before a mid-air emergency in a new 737 MAX 9, acknowledging inadequate oversight in the Jan. 5 incident in which a door panel blew out during the flight. In April, the FAA said it was finalizing new rules requiring charter, commuter, air tour operators and aircraft manufacturers to implement SMS systems.<br/>
Boeing has notified some 737 Max customers in recent weeks that aircraft due for delivery in 2025 and 2026 face additional delays, another reminder that production of its cash-cow jetliner faces a long road to recovery. The planemaker has cautioned that delivery timelines continue to slip by three to six months on top of already-late handovers, according to people familiar with the matter. In some instances, deliveries scheduled for next year have spilled into 2026, said the people, who asked not to be identified as the discussions are confidential. A Boeing spokeswoman declined to comment, noting that the company is in a quiet period ahead of its July 31 earnings release. Delays have become the norm in aerospace as planemakers and engine manufacturers grapple with disrupted shipments of parts and raw materials, worker turnover and other market turmoil still lingering from the Covid pandemic. The shortage of new jets is expected to be a hot topic when the Farnborough International Airshow kicks off on July 22, a departure from the splashy sales announcements that typically dominate trade expos. Airbus has also been warning airlines of potential delays over the next two years, Bloomberg reported last month, after alerting investors that it would miss its 2024 target for deliveries. The constraints have forced airlines to dial back expansion plans, and spurred a run on used jets that typically would be headed for desert storage yards. One frustrated customer, Steven Udvar-Hazy, the co-founder of Air Lease Corp., noted that nearly half the Boeing and Airbus aircraft that the lessor was due to receive in the first quarter never arrived. “And the aircraft that did deliver were all late,” he said during a May earnings call. “I repeat, the aircraft that did deliver were all late.”<br/>
Sustainable aviation fuel (SAF) is expected to be a key part of the mix in decarbonising the aviation sector and it was a topic that came up at the annual meeting recently of Iata, a trade body for airlines globally. A European Union target of using SAF for 5% of its fuel needs by 2030 generated a lively debate, according to industry publication Air Transport World, with a moderator asking why Iata was backing off this target, for which it had previously pushed. This prompted an intervention and rebuttal by Iata director general Willie Walsh, the Irish man who previously led Aer Lingus, British Airways and International Airlines Group. “We absolutely did not push for 5% by 2030, and the reason is because we don’t believe the fuel companies can achieve 5% by 2030,” he said. “The governments pushed for 5%. I think that governments have a responsibility to assist in the targets that they have set.” SAF is produced from sustainable feedstocks, such as cooking oil and other non-palm waste oils from animals or plants, solid waste from homes and businesses, and food scraps that would otherwise go to landfill or incineration. While airlines are willing buyers, supply is limited and the fuel is expensive. Walsh suggested some policy tweaks that could help boost production.<br/>
Air taxi developer Joby Aviation has completed a flight of its electric vertical take-off and landing (eVTOL) craft fuelled only by liquid hydrogen, demonstrating the potential for emissions-free regional travel. The Santa Cruz, California-based company said on 11 July that the aircraft flew 454nm (841km) over its base in Marina, California, on 24 June. “Traveling by air is central to human progress, but we need to find ways to make it cleaner,” says JoeBen Bevirt, the company’s founder and CE. “With our battery-electric air taxi set to fundamentally change the way we move around cities, we’re excited to now be building a technology stack that could redefine regional travel using hydrogen-electric aircraft.” “Imagine being able to fly from San Francisco to San Diego, Boston to Baltimore, or Nashville to New Orleans without the need to go to an airport and with no emissions except water,” he adds. The test flight, which the company says it believes is “the first forward flight of a vertical take-off and landing aircraft powered by liquid hydrogen”, was supported through the company’s partnership with the US Air Force’s Agility Prime Programme. The aircraft landed with 10% of its hydrogen fuel load remaining. “Agility Prime has been very supportive of hydrogen-powered aircraft development and testing as it aligns with the programme’s goals to advance transformative vertical lift technologies and broader Department of Defense operational energy goals of energy substitution and diversification, and energy demand reduction,” says Jacob Wilson, acting branch chief of AFWERX Agility Prime.<br/>