International market: Large-scale flight cancellations, airlines may be fined! This airline lays off employees!

Civil Aviation Resources Network, November 5, 2023: What are the latest developments in the international aviation market this week (10.28-11.3)? The Civil Aviation Resources Network will take you to take stock of the relevant news of the past week, so that you can see the important information at a glance.

Market dynamics

GBTA: Business travel in 2024 shows signs of optimism despite ongoing challenges

Despite challenges such as rising prices, economic concerns and the impact of geopolitical events, the latest survey by the Global Business Travel Association (GBTA) suggests that global business travel could usher in a "stronger year" in 2024. The GBTA surveyed nearly 900 buyers and suppliers around the world and found that 84% of respondents believe their agency's business travel has "substantially" or "mostly" returned to pre-pandemic levels in 2023.

Overall, the European region is slightly higher at 87%, with 42% saying their business travel has "mostly" recovered, while 45% said it had "mostly or completely" recovered. Compared to 2019, the level of domestic flight bookings in Europe is still only 70%, which is lower than in other regions, and the level of international flight bookings is 69%.

More UK business travellers are being asked by businesses to fly less

According to a new survey by World Travel Protection, more and more UK business travellers are being asked to fly less frequently to reduce their impact on the environment. The survey, which looked at 500 corporate travelers, found that nearly one in five (18%) were asked by their institution to fly less. A similar proportion (19 per cent) are now discouraged from flying to the meeting venue and returning within a day.

A slightly lower percentage (14%) said their company is urging them to choose sustainability-focused transport providers and hotels, while 5% are encouraged to rent electric vehicles for business trips.

Spain to increase seat capacity by 15% this winter

Spanish airport operator Aena said Oct. 30 that airlines have increased their seat supply by 15% this winter compared to last year for flights to and from Spain, which reached 126.6 million seats this winter, surpassing pre-pandemic levels in 2019.

While high inflation and rising interest rates have put some pressure on household incomes, leisure travel has boomed since pandemic restrictions were lifted. Between April and September, Spanish airports had around 163 million passengers, 1.2% higher than the 2019 level, according to industry data.

Policy management

U.S. senators are asking regulators to address airline frequent flyer programs

On October 30, two U.S. senators questioned the Department of Transportation and the Consumer Financial Protection Bureau about "worrying reports" of unfair, fraudulent practices in airlines' frequent flyer and loyalty programs.

Democratic Senator Dick Durbin and Republican Senator Roger Marshall cited reports that "airlines are changing the points system in ways that are unfair to consumers, including devaluing points, meaning consumers need to use more points than they would otherwise be able to get the rewards that airlines promise them." Durbin, chairman of the Judiciary Committee, asked the CEOs of United and American Airlines earlier this month to answer questions about increased passenger complaints and rising ticket prices and fees.

The U.S. says it must impose fines on Southwest's widespread flight cancellations

The U.S. Department of Transportation told Southwest Airlines that it must be given a civil penalty for the airline's December flight disruption that resulted in 16,700 flight cancellations and flight disruptions for 2 million passengers.

Southwest said in a securities filing that the Department of Transportation notified its government on Nov. 3 that it had determined that Southwest had "failed to provide adequate customer service assistance, timely flight status notifications, and appropriate and timely refunds" and therefore warranted a civil penalty.

The judicial trial for the merger of Jetblue and Spirit Airlines begins, and the United States tries to block the merger

The U.S. Department of Justice appeared in court on Oct. 31 to urge a federal judge to block JetBlue's $3.8 billion plan to buy Spirit Airlines, an ultra-low-cost carrier. The case, which is being filed in federal court in Boston, is part of a broader effort by the Biden administration to keep competition among low-cost carriers in order to ensure air travel is affordable for more American consumers.

The trial will be conducted without a jury, will last approximately three weeks, and will be presided over by U.S. District Judge William Young. The merger of JetBlue and Spirit Airlines, the sixth and seventh largest carriers in the United States, will be the first major U.S. airline merger since Alaska Airlines acquired Virgin America in 2016.

Navigator's yard

With an increase in passenger traffic, LATAM Airlines turned a profit

Thanks to the increase in passenger revenue and the turnaround compared to the same period last year, when it was still in bankruptcy proceedings, LATAM Airlines reported a net profit of $232 million in the third quarter, according to its financial report released on October 30.

The net profit beat analysts' consensus, reversing a net loss of $296 million in the year-ago quarter and a massive 26% increase in passenger revenue. LATAM said the available seat kilometres (ASK) increased by 15 per cent, with the resumption of international flights particularly significant.

Qantas will launch direct flights from Perth to Paris in 2024

Qantas will launch a direct flight from Perth to Paris next summer, just in time for the 2024 Olympics in the French capital. Qantas will launch year-round services on 12 July, initially operating four times a week before reducing to three flights a week from mid-August. The flight will use a Boeing 787 Dreamliner with a flight time of approximately 17 hours.

Qantas already operates direct flights from Perth to London Heathrow and Rome, as well as a Sydney-Heathrow route via Singapore. The launch of the Perth-Paris route will add 75,000 seats per year between Qantas between Europe and Australia.

JetBlue Airways loses summer flight slots at Schiphol Airport

Due to the Dutch government's imminent restrictions on flight capacity at Amsterdam Airport Schiphol, JetBlue has no longer been able to secure flight slots at the Dutch hub for next summer.

The Dutch Airport Coordination Authority (ACNL) said on November 2 that airlines that do not have historical allocation rights at Schiphol will not receive a slot allocation for summer 2024. At the same time, at the beginning of the first phase of the flight capacity reduction, those airlines that have historically served at the airport will receive 3.1% fewer flight slots than before.

Air Canada raises its profit forecast as international travel recovers

Air Canada's third-quarter profit performance beat expectations due to strong demand for international travel. As a result, Air Canada expects core profit in 2023 to be on the upper end of its previous forecast. Air Canada's third-quarter operating revenue rose 19.2% to C$6.34 billion, beating analysts' forecasts of C$6.1 billion.

Despite rising costs, demand for long-haul flights by North American airlines operating international flights continues to improve as the number of people traveling abroad by air increases. Air Canada said Oct. 30 that it sees opportunities to redeploy capacity to the Asia-Pacific region in the coming months to boost travel to Japan and South Korea.

Lufthansa remains cautious in the face of business travel challenges

Lufthansa's quarterly profit reported on November 2 was slightly above analysts' consensus, supported by strong travel demand this summer, with Lufthansa saying bookings remain strong ahead of the busy Christmas holidays.

Lufthansacom reported adjusted profit before interest and tax (EBIT) of 1.47 billion euros ($1.56 billion) in the third quarter, up 31% year-on-year and slightly above analysts' expectations of 1.43 billion euros.

London Stansted Airport receives permission to expand the terminal

London Stansted Airport has received approval from the UK's Planning Inspectorate to expand the existing terminal. The airport, which has recovered quickly from the pandemic and has handled 27 million passengers in the past 12 months, was granted permission after a hearing on Oct. 17.

This means that Stansted Airport will be able to expand the terminal by 16,500 square metres to create a larger departure hall, additional shops, bars and restaurants, as well as more baggage capacity and more security lanes.

Denver International Airport tests new AI security technology for employees to use

Denver International Airport was one of the first airports in the world to test aviation personnel using the new AI screening technology. Airport employees, who can enter restricted areas without going through security checks, are increasingly being used by criminal gangs for drug trafficking and other criminal activities.

Denver Airport announced in late October that it was conducting a week-long test of LibertyDefense's Hexwave system at employee checkpoints on the south side of the concourse. Hexwave uses AI, electromagnetic waves, and 3D imaging technology to scan and inspect dangerous goods, including metals, plastics, 3D printed guns, powders, and liquids. The process is quick and easy, and employees only need to go through a contactless access door without having to remove their keys or mobile phones.

Amsterdam Airport Schiphol will increase airport charges

Amsterdam Airport Schiphol has announced that it will increase airport charges in 2024 due to "revenue loss" in 2022. Airport charges will increase by 14.8% in 2024, up from the previously expected 12% increase.

Schiphol Airport will limit the number of flights from March 31, 2024, in accordance with the Dutch government's noise reduction plan. The airport said the increase in fees was necessary as travel restrictions remained in place and a shortage of security personnel caused airlines to carry out fewer flights in 2022 than planned.

Products & Services

Finnair offers free inflight communications in Europe

Finnair has launched a new in-flight communication service for all European flights operated by the airline's narrow-body Airbus fleet. The service is free for Finnair Plus frequent flyer members and allows passengers to send and receive text-based messages via apps such as WhatsApp, Viber, KakaoTalk, WeChat and iMessage.

Starting in January 2024, the free 30-minute web browsing package for Finnair Plus Gold and Platinum members will also be upgraded to a 30-minute streaming package. Finnair Plus Platinum Lumo members will continue to receive a free in-flight streaming package for the entire duration of their short-haul flights.

Aircraft manufacturing and fleet

Korean Air acquired an additional 20 Airbus A321neo aircraft

Korean Air announced on October 30 that it had placed an additional order for 20 Airbus A321neo aircraft in addition to its previous order of 30 aircraft. The single-aisle aircraft will have two cabins with a total of 182 seats, including eight seats in Prestige class (with lie-flat seats) and 174 seats in economy class.

Korean Air has so far taken delivery of 10 A321neo aircraft. According to it, the "next-generation fleet" will be used on short- and medium-haul routes, serving Southeast Asia, China and Japan.

Norwegian will expand its fleet in the summer of 2024

Norwegian Airlines reported third-quarter profit beating expectations on Nov. 2 and said current ticket sales were "slightly reduced" in the usual off-season for winter travel.

Norwegian's profit (before interest, taxes, depreciation) rose to 2.17 billion kroner ($195.06 million) from 1.03 billion kroner in the same period last year, beating analysts' expectations of 2.02 billion kroner. Norwegian Airlines plans to increase its fleet size from 85 aircraft at the end of the third quarter to around 90 aircraft in the summer of 2024.

Distribution technology

Saudia will use Amadeus' new Nevio sales platform

Saudia will be one of the first airlines to partner with Amadeus to use the technology company's new Nevio aviation retail platform. It said that with AmadeusNevio, it will be able to offer customers a "more relevant and personalized" offering, including its own content and hotel, airport and destination services through other partners.

Using Amadeus' new platform will enable Saudia to offer "segmented" prices to its customers and distribute more advanced offers through different channels, including the NDC booking process. The technology will also provide passengers with more self-service digital options, such as adding and removing ancillary services through a mobile app.

other

Southwest will purchase up to 680 million gallons of SAF

Southwest Airlines announced Nov. 2 that it has entered into an agreement with producer USABioEnergy to purchase up to 680 million gallons of pure sustainable aviation fuel (SAF) for 20 years.

Fuel purchases from the USABioEnergy plant near Bonwell, Texas, could begin as early as 2028. According to Southwest, the agreement also includes other elements that give Southwest the opportunity to purchase up to an estimated 180 million gallons of SAF from planned future production facilities.

Delta Air Lines lays off corporate employees in an effort to reduce costs

Delta said Nov. 1 that it was cutting some corporate jobs to better manage costs, as the airline industry struggled with rising fuel and labor costs. Delta did not specify how many jobs it would cut, but said the layoffs would not affect frontline workers, such as pilots or flight attendants.

Delta lowered its full-year profit forecast in October due to rising fuel costs. It is estimated that the increase in fuel prices will add $400 million to Delta's costs in the second half of the year.