US airline shares sunk further Thursday as quarterly reports from American Airlines and Southwest did nothing to quell investors’ fears that carriers’ plans to expand capacity will lead to lower fares just as the industry faces rising costs. Fears about the resulting hit to bottom lines sent the NYSE Arca Airline Index .XAL down 2.4%. It is down more than 5% since Tuesday, when United Continental surprised the market with unexpectedly aggressive expansion plans through 2020. “The planned elevated capacity growth in 2019/20 will raise concerns about supply and destructive competitive response,” said Raymond James analyst Savanthi Syth in a research note. More competition and cheaper fares are a boon for travelers, but represent a worst-case-scenario for airlines and their shareholders as carriers have only recently begun improving unit revenues after a two-year decline. Fuel prices are at nearly a three-year high and relatively rich labour contracts agreed with pilots and flight attendants have dramatically increased airlines’ unit costs. The three largest US carriers - American, Delta and United - have all shelled out for pricey pay increases to employees after fractious and public negotiations.<br/>
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Britain could be excluded from the EASA after it quits the EU, raising the prospect of increased certification costs for airlines and manufacturers and dashing London's hopes of keeping its membership. EASA ensures airlines respect safety rules and certifies aerospace products across the bloc, helping to bring down the costs of development and production within the industry. In addition, the EU has a bilateral agreement with the United States under which they accept each other's certifications. The EU is preparing its negotiating position for its future relationship with Britain and appears to be taking a hard line on aviation. "UK membership of EASA is not possible," the EC said in slides presented to member states last week which will inform its negotiating position for a transitional agreement and the future relationship with Britain. The EC sketched out a vision of the UK having an aviation agreement with the EU along the lines of those the bloc has with the US and Canada. Membership of EASA is contingent upon accepting the jurisdiction of the Court of Justice of the EU, something Britain has ruled out.<br/>
The long-awaited opening of the intra-African air transport market is slated to become a reality on Jan. 28, when the African Union signs off the final rule-making after a renewed push for liberalisation. The single African air transport market was meant to happen nearly two decades ago, following the adoption of the 1999 Yamoussoukro Decision. After years of false starts, the AU started a fresh push to open the market in January 2015, but the deadline was also missed because of a legal technicality. “The legal department told us that it hadn’t been approved the way we thought. Instead of getting the approval, it was just noted. The difference between ‘noted’ and ‘approved’ cost us almost two years. Then the AU changed its processes, so it was like going back to square one,” said Iyabo Sosina, who heads up AFCAC—the body responsible for making African Open Skies happen. The SAATM is finally expected to go live Jan. 28, when the AU heads of state sign off the consumer protection and competition rules for the liberalized market at the AU Summit in Addis Ababa, Ethiopia.<br/>
Chinese conglomerate HNA Group is planning to float its Swissport unit on the Swiss exchange later this year, the airport ground services business said Thursday. Swissport said the decision to list in its home country underlined its strong Swiss foundation, with the newly listed company seen being run independently in the future. HNA, the only shareholder in Swissport after buying it in 2015, would keep a long term shareholding in the company that handles more than 4.3m tonnes of cargo per year and provides services for 250m passengers. Reuters reported Wednesday that HNA, which also owns Swiss airline caterer Gategroup Holding, was considering the flotation to ease liquidity concerns. Sources said it was hoping to raise at least 2.7b Swiss francs from a Swissport IPO.<br/>