general

Just as the annual summer vacation gets underway in Europe, airlines in the region are feeling a cold chill wafting over the Atlantic from their US counterparts. On Wednesday, United Airlines Holdings Inc. became the latest carrier cautioning weakening profitability, joining the likes of Alaska Airlines Group Inc. and Delta Air Lines in offering a muted outlook. Airlines have warned of falling ticket prices amid a fare war that’s weighing on their profit, hurting carriers during a time of the year that normally marks an industry peak. Some of that pessimism on display in the US has already taken hold in Europe and beyond. Last week, Deutsche Lufthansa AG cut its profit outlook for the full year and warned that breaking even at its namesake German unit will be challenging. Qatar Airways has cautioned that higher capacity in the market is putting pressure on fares. It’s a reversal from the post-pandemic rush, when ticket prices soared as people splurged on holidays after two years of home confinement, in what was dubbed “revenge travel.” Corporate travel, which typically balances out deal-seeking holidaymakers, also hasn’t rebounded properly post-pandemic, adding more uncertainty to the airlines’ outlooks. As travel trends normalize, and after two years of rising cost of living, people are less willing to pay steep fares go on holiday, and airlines in turn are being forced into discounts to fill extra seat capacity. Adding to the mix in Europe are air-traffic control issues and wage disputes at airlines like Aer Lingus that are creating disruption to schedules and putting people off flying. “The vigorous post-Covid recovery in global demand is now running out of steam,” Oddo BHF analysts Olfa Taamallah and Yan Derocles wrote on Thursday in a note. They cut their ratings on Ryanair Holdings Plc, EasyJet Plc and Lufthansa, saying that more uncertain demand with moderate fare increases and delivery delay issues were behind their adjustments.<br/>

A wildfire that broke out in a forested area near Turkey's Izmir airport forced the airport to shut down and flights were diverted to nearby cities, budget carrier Pegasus said on Thursday. Pegasus said the Izmir Adnan Menderes Airport had been closed temporarily and its inbound flights were diverted to and landed at Bodrum Airport, in a statement on social media platform X. Turkey dispatched 7 planes and 16 helicopters to fight the fire, along with 35 fire trucks, a local governor's office said.<br/>

The head of the Japanese petroleum industry called on Thursday for international airlines to provide flight schedules and jet fuel demand forecasts a year in advance as a solution to a jet fuel shortage at Japanese airports. The jet fuel shortage in Japan in recent months, caused by supply chain bottlenecks, is affecting commercial flights, hindering the expansion of international flight capacity and new routes amid a boom in tourism. "The fact that supply is partly not keeping up with spot demand is the starting point of the current problem," Shunichi Kito, the president of the Petroleum Association of Japan (PAJ), told a news conference. He said domestic airlines did not face refuelling issues because they provide demand outlooks in advance through contracts. "It's extremely important to receive supply requests for overseas flights ahead of time to understand demand and make preparations," Kito said, adding that refiners would hope to get an advance notice of about one year, as practiced by domestic carriers.<br/>

The aviation industry is running out of time to introduce cleaner planes needed to eliminate net carbon emissions from air travel by 2050, according to a study released Thursday. New models that emit net zero carbon dioxide throughout decades of use will need to be flying by the mid-2030s for aviation to reach its mid-century goal, the International Council on Clean Transportation said in the report. In findings released ahead of next week’s Farnborough International Airshow, the climate-change research group called on planemakers to accelerate plans to develop zero-emissions planes, especially those powered by hydrogen. Its study highlighted the decades-long life-cycles of commercial aircraft, a factor that contributes to making aviation one of the hardest industries to decarbonize. “A typical aircraft is in service for about 25 years,” said ICCT researcher Supraja Kumar, the study’s lead author. “If airlines are going to be net zero by 2050, we need planes that burn zero fossil fuels throughout their lifetimes starting around 2035.”<br/>

Aviation leaders gathering in the UK next week have a shot at addressing some of the lingering issues hanging over the industry — from plane production woes at Boeing Co. and Airbus SE that are causing huge order backlogs, to aging fleets that are making it increasingly hard to cut flight emissions. The Farnborough International Airshow, which kicks off July 22, is typically a platform for planemakers to rack up multibillion-dollar deals. But two years on from the pandemic, there’s mounting frustration among airline executives over lengthy waits for new jets, supply chain breakdowns and a lack of spare parts. Bloomberg took a look at some of these issues through a series of charts, analyzing data from aviation analytics firm Cirium and aviation data, intelligence and advisory company IBA. Constraints on the factory floor are more than a headache for two major planemakers and their airline customers. The lack of capacity could impact passengers too, translating into fewer flights and routes, and higher fares. People are also flying on older planes for longer. At the same time, Airbus and Boeing continue to take on new orders as some carriers bet big on air travel demand into the next decade, meaning order books are ballooning even as production remains sluggish. The shortage of new and more efficient jets, which burn less fuel, is also seriously limiting the aviation industry’s ability to cut emissions and reach net zero by 2050. Retirement of planes this year lags previous years as the unexpected grounding of jets forces carriers to extend the life of older, more fuel-hungry aircraft as a contingency. With newer planes not coming into service as expected, the path toward reducing carbon emissions has slowed. In 2024, global aviation industry CO2 emissions are expected to exceed 2019 levels. “These aircraft can’t go on forever, emitting 15% to 20% more CO2 than their planned replacements,” Rob Morris, the global head of consultancy at Cirium Ascend, said. “At some point the deck of cards comes crashing down.” <br/>

Boeing faces fresh questions about the safety of its aircraft after an engine fire on a transatlantic flight from Edinburgh caused an emergency landing soon after takeoff. Flames were seen by passengers briefly shooting from the engine of a Delta Air Lines 767 soon after it took off for New York in February last year, after a turbine blade broke off during takeoff. The flames subsided while the plane was airborne but it made an emergency landing at Prestwick airport south of Glasgow, where ground crew noticed fuel leaking from the plane’s right wing. The Air Accidents Investigation Branch, the UK government agency that investigates aviation safety, has written to the Federal Aviation Administration in the US asking it to take action with Boeing, which has its headquarters in Virginia. The AAIB said the fractured turbine blade damaged five other blades in the engine. Vibrations from the “out of balance turbine” caused a tube carrying fuel in the wing to fracture, leading fuel to escape from the wing’s fuel tank. The fuel was ignited by the engine’s hot air exhaust, with footage of the flames captured by a passenger sitting near the wing. In a statement, the AAIB said: “A safety recommendation has been made to the Federal Aviation Administration that requires the Boeing Aircraft Company to demonstrate that following this serious incident, the design of the slat track housing drain tube on the Boeing 767 family of aircraft continues to comply with the certification requirements for large transport aircraft.”<br/>

The U.S. Justice Department said on Thursday the government has made "substantial progress" toward reaching a final plea agreement with Boeing but does not expect to file the details before July 24. The planemaker on July 7 agreed in principle to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6m after the Justice Department said in May the company had breached a 2021 deferred prosecution agreement. The department plans to file a factual statement supporting its breach determination with the plea deal, which it had initially expected to file by Friday. DOJ said it "will continue to work expeditiously in an effort to file" by July 24. Boeing declined to comment on Thursday. Boeing plans to plead guilty to conspiring to defraud the Federal Aviation Administration after the government said the planemaker knowingly made false representations about key software for the 737 MAX linked to two fatal crashes in 2018 and 2019 that killed 346 people. U.S. District Judge Reed O'Connor in Texas on Monday set a fast schedule to consider the objections to the plea deal from relatives of those killed in the MAX crashes in Indonesia and Ethiopia. As part of the deal, Boeing agreed to spend at least $455m over the next three years to boost safety and compliance programs. Boeing's board will also meet with relatives of those killed in the MAX crashes.<br/>

North American aerospace factory workers seeking to reduce mandatory overtime and lock in four-day work weeks are facing some pushback from planemakers trying to increase production to meet soaring demand for jets. Manufacturers have had to make some concessions due to a tight labor market after a wave of COVID-19-induced retirements, but the big planemakers are not receptive to certain demands. In aviation, improved work-life balance has joined higher pay as key demands from pilots to aircraft mechanics after hybrid work weeks emerged after the pandemic. But big scheduling changes on the factory floor could weigh on manufacturers' efforts to produce more commercial jets. Workers at Boeing currently in negotiations want to end mandatory weekend overtime, but that has emerged as a sticking point in the talks for nearly 33,000 unionized Boeing factory workers whose membership voted on Wednesday for a strike mandate, according to union officials. Boeing's largest union has said members are ready to vote on Sept. 12 to strike if needed. A labor disruption would hamper the U.S. planemaker's expected ramp-up of output of its strong-selling 737 MAX jet to around 38 a month by year-end. “We’ve made some good improvements in limiting the amount of designated overtime, but it's not good enough," said Jon Holden, president of the Seattle-area local union that represents workers on 737 MAX and other jets. Boeing said on average, fewer than 1% of its employees work mandatory weekend overtime. "We know our employees value their time outside of work," it added. Boeing's jet production has slowed sharply this year following increased scrutiny from regulators, airlines and lawmakers following a January incident when a door plug blew off an Alaska Airlines ALK.N jetliner while in mid-air.<br/>

Boeing executives spent years after two fatal 737 Max crashes trying to convince Wall Street, regulators, airlines and the flying public that they had an eagle eye on quality, reliability and safety. Then on Jan. 5, about six minutes and 16,000 feet into a packed flight out of Portland, Oregon, a door plug blew out of a nearly new Boeing 737 Max 9. The panel was missing key bolts that hold it in place, which the company had removed to fix damaged rivets, according to early accident reports. No one was seriously injured, but the harrowing flight jolted Boeing’s leaders back into crisis mode. It also reignited scrutiny and skepticism from the same groups the iconic plane-maker spent years trying to win back after the two Max crashes. Now Boeing’s leaders say they have charted a path forward to fix the company: Better oversight, improved safety and manufacturing procedures, and more robust training for workers, many of them new hires after pandemic-era buyouts and layoffs of thousands of employees. Boeing this month unveiled a long-awaited deal to buy back its troubled fuselage supplier, Spirit AeroSystems , in a bid to help stamp out production flaws. Story has more.<br/>

Brazilian planemaker Embraer said on Thursday it had delivered 47 aircraft in Q2 2024, an 88% increase from the prior year, and reaffirmed its full-year outlook despite ongoing aerospace industry supply chain issues. The world's third-largest planemaker behind Airbus and Boeing delivered 19 commercial and 27 executive jets in the April-June period, as well as one defense C-390 Millennium jet.In a securities filing, Embraer said its firm order backlog reached $21.1b at the end of June, the highest in seven years. The delivery report comes days ahead of the Farnborough Airshow, when planemakers often announce major orders. Investors have been positive about Embraer's demand prospects, with shares in the planemaker up more than 80% so far this year. Embraer has been experiencing strong demand for its next generation E2 jets as carriers face a shortage of larger single-aisle planes from Airbus and Boeing, and has also managed to convert business jet purchase options into firm orders.<br/>