Spirit Airlines said Tuesday it expects US antitrust regulators to decide whether to allow the low-cost carrier to proceed with its $3.8b merger with JetBlue Airways in the "next 30 days or so." "We are now waiting to see whether the Department of Justice (DOJ) filed suit to block the deal or allows us to proceed," Spirit CEO Edward Christie said during an investor call. The DOJ did not immediately respond to a request for comment. JetBlue prevailed in a months-long bidding war for Spirit Airlines after the ultra-low-cost carrier accepted its deal. The merger is expected to face regulatory hurdles with the combination creating the fifth-largest U.S. airline at a time when high energy prices, a tight labor market and swelling demand for travel have sent airfares soaring. Concerns about approval for the combined airline was amplified after the DOJ filed a lawsuit last year asking a judge to break up JetBlue's "Northeast Alliance" partnership with American Airlines, arguing it would lead to higher fares for consumers. Spirit had cited the Justice Department lawsuit as a reason to fear regulators blocking its sale to JetBlue when it was trying to persuade Spirit shareholders to back the deal with Frontier Airlines Holding instead.<br/>
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Spirit Airlines long succeeded by keeping its costs so low that it could afford to charge flyers essentially pennies per mile — plus lots and lots of extra fees — to fly. The pandemic has changed this equation with cost control a pressing issue for the budget carrier, and the larger industry, even as travelers return in droves. The Florida-based company faced cost and productivity headwinds in the fourth quarter. Unit costs, measured by costs per available seat mile, excluding fuel, increased 14% compared to 2019 during the three-month period; the metric was up 21 percent for the full year. A new pilot contract is one factor elevating Spirit’s cost base. In addition, the airline has felt compelled — and at times forced by circumstance — to operate a suboptimal flight schedule. For one, it’s elected to do more of its flying during offpeak periods, simply to alleviate operational stress during busier times and load factors have accordingly suffered. Put another way, Spirit is flying a schedule with more operational buffers, due to what CFO Scott Haralson called Tuesday “continued industry infrastructure constraints.” One of those constraints is air traffic control congestion, notably at the Federal Aviation Administration’s Jacksonville center, affecting the critical Florida market. Spirit is separately managing through frustrating maintenance delays affecting Pratt & Whitney geared turbofan engines used for its Airbus A320neos. “Pratt & Whitney continues to struggle to support its worldwide fleet of neo aircraft as MRO capacity remains constrained and turnaround times for engines in the shop have been nearly three times longer than the historical averages,” Spirit CEO Ted Christie said Tuesday. On top of all that, Airbus recently informed the carrier that some of its A320-family jets will arrive late. As a result, Spirit will have seven fewer new planes this year than expected, forcing it to reduce its planned capacity for the year.<br/>
Southwest’s technology chief says it’s safe to book spring break getaways on the carrier, even though it hasn’t upgraded key software — thanks in part to a backup system based on 100 volunteers. “I have full confidence for spring break and summer and the hurricane season and going into next winter” that Southwest can avoid a repeat of December disruptions, said newly appointed Chief Information Officer Lauren Woods. The airline is testing a new version of crew scheduling software that was overwhelmed during the holiday meltdown that led to 16,700 flight cancellations. The software from GE Digital, a unit of General Electric, could be ready in a matter of weeks, Woods said. In the meantime, Southwest is relying on quicker technology updates, revised processes and a crew of about 100 employees who can be called in to help manually contact pilots and flight attendants with new assignments should another crisis occur. While the company has described them as volunteers, they are salaried workers who have other responsibilities most of the time. “If we should get ourselves into that situation — that’s a huge if; I don’t see it happening — and we don’t have that GE Digital solution yet — then I do think we could activate that volunteer group to come in and help things very quickly,” Woods said. “I don’t foresee us needing to do that.” Southwest is the target of a federal probe into whether the carrier’s scheduling violated rules forbidding unfair and deceptive practices when it left millions stranded during the holiday fiasco. The airline is awaiting the results of a report it commissioned from consultant Oliver Wyman on what went wrong during the late December crisis. <br/>
Ryanair called for immediate action after illegal drone flying near Dublin airport caused disruption on three of four days over a bank holiday weekend, affecting thousands of travelers. Flight operations at the airport were suspended for periods on Friday, Saturday and Monday due to drones spotted on the airfield, forcing several flights to be suspended, delayed, and diverted to other airports on the island. It is illegal for the public to fly drones within 5 kilometers of Dublin airport, the Irish aviation hub said. “It is unacceptable that thousands of passengers have now faced a third day of disruptions due to apparent drone activity at Dublin airport” a spokesperson for Ryanair said in a statement Monday evening. “We are yet again calling on Minister Eamon Ryan to confirm what action is being taken to protect the country’s main airport from repeated disruptions from illegal drone activity.” The transport minister said Tuesday he was working with Dublin airport and police forces to ensure that to try and stop drone incidents. “Anyone doing it is subject to arrest,” he told journalists in Dublin. Ministers will meet with representatives from Dublin Airport Authority, the Irish Aviation Authority, the Department of Justice and the police force this evening, the Department of Transport said in a statement. <br/>
A shuttered South African airline sued Boeing for fraud over its agreement to buy eight 737 MAX planes and seeks damages of at least $83m. Boeing "placed profits over safety and led with a plan of deception," Comair's suit filed Monday in US District Court in Seattle said. Boeing declined to comment. Comair said Boeing committed fraud over its failure to disclose problems with a key flight control system tied to two fatal 737 MAX crashes in 2018 and 2019 in Indonesia and Ethiopia that killed 346 people and led to the MAX's 20-month grounding. Comair operated flights for British Airways and its own brand Kulula.com until it halted operations in June. The airline said Boeing refused to return $45.2m in advance payments it made on seven MAX planes. It had paid for and received one 737 MAX. Polish national airline PLL LOT sued Boeing in late 2021 in Seattle on similar grounds over 737 MAX purchases and the suit is pending. LOT in October asked a US judge in Texas to declare it was a crime victim in the Boeing 737 MAX criminal case and said it has at least $250m in damages.<br/>
Kuwaiti low-cost carrier Jazeera Airways aims to secure $1b from banks to help finance the purchase of new Airbus aircraft, its chairman said on Tuesday, half the amount it had initially planned to seek. The airline placed a multi-billion dollar order with Airbus for 28 single aisle A320neo family passenger jets in November 2021. In October 2022 Jazeera had said it would secure around $2b from commercial banks to fund 70% of the Airbus deal, but Chairman Marwan Boodai told Reuters on Tuesday that it was now seeking to finance only 30% of the deal with bank financing. The rest of the deal will be financed through "sales and lease-back" with aircraft companies, he said, and the airline will study the financing process "case by case... in line with the best cost". The order for 20 A320neo and eight A321neo aircraft would help the company reduce emissions by replacing older A320 models and also power expansion plans including in Europe and the Middle East. Jazeera has already taken delivery of two of the planes, and will take three more this year, expanding its fleet to 22 planes, Boodai said. The airline has already paid $100 million in advance as a pre-delivery payment, he said.<br/>
Kuwait’s Jazeera Airways plans to start flying on more routes this year as higher demand for travel helped the low-cost carrier post record profit. Profit last year surged to 20.1m dinars ($66m) from 7.1m dinars a year ago. That missed the average analysts’ estimate of 26.5m dinars. The airline will maintain a tight focus on costs, with the first quarter of this year “looking very healthy,” CEO Rohit Ramachandran said in an interview on Tuesday. Profit last year was weighed down by an additional burden of 9m dinars in fuel costs. Load factors rose toward the end of last year and remain high this year in excess of 80% on average, thanks to “everything opening up and more people traveling,” Ramachandran said. In-sourcing maintenance has had a positive impact on costs and the airline now has about 60 staff per aircraft on average, he said. Jazeera plans to expand this year, after launching 15 new destinations in 2022, Ramachandran said. “In addition to those, we’ve got a raft of new destinations planned for this year,” with flights to Moscow, which started this month, being “the first of many to come.” The vast majority of new routes Jazeera introduced are previously unconnected to Kuwait, he said. The company, which expects to carry over 4.5m passengers this year, up from 3.6m last year, has zero debt and cash reserves in excess of 50m dinars.<br/>
Jeju Air, Korea's biggest low-cost carrier, said Tuesday it shifted to a net profit in the fourth quarter as eased COVID-19 restrictions unleashed pent-up travel demand. The budget carrier swung to a net profit of 17.4b won ($14m) for the three months ended Dec. 31 from a net loss of 53.9b won during the same period of 2021, the company said. The turnaround comes in 15 quarters after posting net losses in the past 14 consecutive quarters since Q2 2019. "The company preemptively resumed flights to major Japanese cities, such as Tokyo, Osaka and Fukuoka, in October when Japan allowed visa-free travel for inbound passengers. The move helped prop up the bottom line," the statement said. In October, Korea removed a COVID-19 PCR test requirement for inbound travelers on the first day of their arrival. Japan lifted the ban on the number of inbound passengers and resumed visa-free travel for visitors from specific countries, including Korea, on Oct. 11. Jeju Air also swung to an operating profit of 18.72b won in the fourth quarter from an operating loss of 67.31b won a year ago. "The company has operated the same fleet of 37 B787-800 aircraft to seek cost efficiency. It helped offset the impact of the won's weakness against the dollar, high jet fuel costs and high interest rates on the earnings results," the statement said. Sales more than tripled to 299.43b won from 87.91b won during the same period. For the whole of 2022, Jeju Air's net losses narrowed to 172.42b won from 272.28b won the previous year.<br/>
Malaysia’s AirAsia plans to take on lease 15 additional aircraft to meet travel demand from China now that it has reopened its borders, the CEO of the budget carrier’s parent company Capital A said. “We are so bullish on growth that we’re in negotiations now to sign 15 new aircraft from lessors,” Tony Fernandes told Reuters on the sidelines of an event. “The fact that we are talking about new planes means things are coming back.” Fernandes said that Capital A now has three tailwinds: strengthening Asian currencies, prices of oil falling from their peaks, and China’s reopening. “The uncertainty of routes have now gone with China opening...And there’s a clear path to normalcy, to 2019 pre-COVID,” Fernandes said. The 15 aircraft are on top of the 326 planes already on the company’s order book until 2030. Currently, AirAsia has 150 planes in the air and expects to put all 204 of its fleet back in service by August. Fernandes said the company was on track to complete restructuring efforts and resolve its PN17, or ‘Practice Note 17’, status by August. The restructuring will combine AirAsia budget airline business with AirAsia X and take the aviation business out of Capital A. Fernandes said this could kickstart Capital A splitting the other businesses - logistics, aviation services and digital arms - into separate listings. Capital A was in January 2022 classified as a PN17 company by the Malaysian bourse, a tag given to financially distressed firms which can be de-listed if they fail to regularise their finances within a set time frame. “The plan is there,” Fernandes said. “I’m not sure Capital A exists in the future in its present form.”<br/>