Civil Aviation Resources Network, March 24, 2024 News: What are the latest developments in the international aviation market this week (3.16-3.22)?
Market dynamics
U.S. airline sales exceeded $8.9 billion in February
American Airlines Reporting (ARC) announced on March 21 that U.S. agents sold more than $8.9 billion in tickets in February, about $3 million less than January's record total. However, total sales in February were still up nearly 6.5% compared to the same period last year.
Total travel increased by nearly 8.8% year-on-year to more than 24.3 million, but fell by about 5.2% month-on-month. U.S. domestic travel exceeded 15 million, up 11.3% from February 2023 but down about 6% from January 2024. International travel increased by 4.9% year-on-year to more than 9.3 million, but fell 4% month-on-month.
Policy management
The U.S. Department of Transportation will investigate how airlines manage customer data
The U.S. Department of Transportation plans to launch an investigation into how airlines manage customer data. The Department of Transportation said it will review 10 of the nation's largest mainline airlines this year, including American Airlines, Delta Air Lines, United, Southwest Airlines, Alaska Airlines, JetBlue, Spirit Airlines, Frontier Airlines, Hawaiian Airlines and Allegiant Airlines. The review will focus on how airlines collect, process, maintain and use passengers' personal information.
Airlines collect passengers' personal data during the ticket purchase process and for the purpose of security screening. Airlines are also increasingly making use of other types of data, such as flight history, flight preferences, and viewing preferences for back-seat entertainment systems.
FAA: Boeing has to improve quality before it can ramp up 737 production
Federal Aviation Administration (FAA) Administrator Mike Whitaker said Boeing must first improve its safety culture and address quality issues before the FAA allows it to ramp up 737 MAX production. After an air emergency on an Alaska Airlines Boeing plane in early January, the FAA took the unprecedented action of telling Boeing that it would not be allowed to ramp up 737 MAX production.
In an interview with Reuters, Mike Whitaker said the FAA had not begun discussions with Boeing about increasing 737 production and that the FAA would only allow the increase after Boeing's "quality system is operating safely."
Following a spate of security incidents, the FAA has stepped up oversight of United
In the wake of a spate of security incidents, the Federal Aviation Administration (FAA) is stepping up oversight of United.
Sasha Johnson, United's vice president of corporate security, wrote in an internal memo to employees on March 22 that United will see an increasing number of FAA involvement in United's operations, including a review of United's workflows, manuals and procedures.
The UK's civil aviation regulator has proposed further cuts to Heathrow charges
The UK's civil aviation regulator has said it may further cut charges at Heathrow next year and in 2026, and it has now begun six-week negotiations on the matter.
The UK's Civil Aviation Authority (CAA) said on March 20 that it could reduce the cap on passenger fares paid by airlines to Heathrow by 6% in 2025 and 2026, taking into account its recent findings. The CAA announced last year that it would lower Heathrow's charge cap for 2024-2026, a decision that angered both airports and airlines, with Heathrow saying the lower charges would impact investment and airlines saying airport charges were still too high.
A Dutch court ruled that KLM had misled customers in advertising
In response to an accusation of "greenwashing" brought by environmental groups Fossielvrij and ClientEarth, an Amsterdam court ruled on March 20 that KLM had made misleading statements about its sustainability actions in past advertising campaigns.
The court ruled that KLM's assertion that flying can be sustainable or becoming sustainable, and that the purchase of offset products can reduce or partially compensate for the climate impact of flying, was "misleading and illegal, and that KLM was thereby in breach of the Unfair Commercial Practices Act". In addition, the court also stated that the term "sustainable" used to describe alternative aviation fuels, commonly known as SAF, was also misleading. The court ruled that "while SAF helps to reduce the harmful environmental impact of flying, the word 'sustainable' used here is too categorical and not specific enough." ”
Navigator's yard
Lufthansa Group: 1 million passengers have already opted for "green tickets"
Germany's Lufthansa Group announced on March 19 that more than 1 million passengers have chosen the product about a year after it launched the "green ticket" option in Europe. This represents a significant increase from the 500,000 people announced in November last year when Lufthansa extended the product to some long-haul flights.
Overall, about 3% of passengers chose this product. According to Lufthansa, in Business Class, 11% of tickets booked through the Lufthansa Group portal are "green tickets". The product is "particularly popular" on the Hamburg-Munich, Zurich-London and Frankfurt-Berlin routes. By using sustainable aviation fuel (SAF), which covers 20% of carbon emissions, and donating to "high-quality climate protection projects", which covers the remaining 80%, the product is able to offset the CO2 emissions associated with individual flights. According to Lufthansa, customers have offset more than 77,000 metric tons of CO2 since the launch of the "green ticket".
British Airways has taken steps to reduce ground emissions at Heathrow
British Airways has announced a series of measures aimed at reducing the carbon footprint and sustainability of its ground operations at London Heathrow.
British Airways said it would invest "millions of pounds" to continue retrofitting ground vehicles at Heathrow, including vans, cars, cargo transporters and passenger boarding bridges, gradually replacing them with hybrid or electric models. British Airways added that 90% of its vehicles and ground equipment are already fueled by electric, hybrid or more sustainable hydrotreated vegetable oil (HVO).
Turkish Airlines' low-cost airline subsidiary, AJet, will start operations this month
Turkish Airlines' renamed low-cost subsidiary, AJet, will begin operations on March 31. Previously known as AnadoluJet, the low-cost airline will fly to 41 domestic and 52 international destinations, including flights from the UK.
With a fleet of 95 aircraft, AJet will fly to 44 countries in its first summer of operations, including flights from Istanbul's Sabiha Gokcen to London Stansted, Rome Fiumicino, Paris Charles de Gaulle, Frankfurt, Amsterdam and Zurich airports.
Spanish airports plan an 8% increase in seats this summer
As tourism continues to recover since pandemic-related restrictions were lifted, Spanish airport operator Aena said on March 19 that airlines in its network had increased the number of seats allocated for this summer by nearly 8% compared to last year.
Aena revealed that between March 31 and October 26, the airline plans to put 243 million seats at airports operated by Aena, including departure and arrival seats. European airlines have reported strong summer bookings so far, with optimism about their outlook for 2024 as they benefit from the ongoing post-pandemic travel boom.
Products & Services
United allows customers to share their airline miles with others
Under a new program announced by United on March 21, customers can now share their United accrued travel miles with up to four other passengers. Anyone 18 years of age or older with a MileagePlus membership can link their online account and combine their miles with miles earned by family or friends on previous flights, United said.
Similar to other airlines' loyalty programs, United customers can use the miles they accrue to help pay for future trips. United says there is no limit to the number of miles a group can pool together. According to United, the reason for the program is that more families are expected to want to travel by air as summer approaches.
Aircraft manufacturing and fleet
Korean Air will purchase 33 Airbus aircraft
Korean Air announced on March 21 that it had reached an agreement to purchase 33 Airbus aircraft for $13.7 billion. The order, which includes 27 A350-1000s and six A350-900s, is "not only in line with Korean Air's sustainability efforts, but also seen as its preparation for the integration of Asiana Airlines."
According to Korean Air, the A350-1000 is the largest aircraft in the A350 family, accommodating 350 to 410 passengers in a three-class layout with a range of about 16,000 kilometers. The A350-900 can accommodate between 300 and 350 passengers in a three-class layout and has a range of 15,370 km.
JAL will purchase 32 Airbus aircraft and 10 Boeing 787-9s
Japan Airlines announced on March 21 that it had reached an agreement to purchase 32 aircraft from Airbus and 10 787-9 Dreamliners from Boeing as part of its fleet renewal program. The Airbus order includes 21 wide-body A350-900 and 11 narrow-body A321neo aircraft.
JAL expects to begin arranging the first of its new Airbus A350-900 aircraft for domestic routes in FY2025, with the remaining 20 scheduled for international routes starting in FY2027. The A321neo will be used on domestic routes starting in FY2028. The Dreamliner will be used on international routes starting in fiscal year 2027.
Boeing CFO: 737 production will remain below 38 aircraft per month
Boeing CFOBrianWest told analysts on March 20 that Boeing had made a decision to keep 737 aircraft production below 38 per month and that Boeing's Washington state plant would only accept fully qualified airframes from supplier SpiritAeroSystems.
In the wake of the Jan. 5 incident in which a 737 Max9 aircraft fell off in the air with a door plug, Boeing and its suppliers are facing increasing scrutiny for their manufacturing quality.
LOT Polish Airlines plans to order 84 aircraft
Poland's Ministry of National Assets said March 16 that it would choose between its current supplier Embraer and Airbus to deliver 84 new aircraft, which it plans to buy for regional routes.
Polish Airlines will send tenders to two aircraft manufacturers in the near future, and it is ready to order up to 110 aircraft by 2028, according to the Ministry of National Assets.
Distribution technology
Qantas launches a new NDC portal for travel management companies
Qantas launched a new platform for travel management companies (TMCs) and travel agents to access its NDC content on 21 March. TMCs can now register to access Qantas' distribution platform, but these companies must have a commercial agreement with Qantas to be registered members of Qantas' channel network and connect with one of their certified technology partners, including Amadeus, Travelport, Sabre and Serko.
According to the Qantas website, the platform is a "new option" for accessing Qantas NDC content, which includes an "advanced pricing and merchandising engine" for booking, servicing flights and ancillary products. According to Qantas, agents will also receive a range of special offers directly.
Scandinavian Airlines will increase the EDIFACT surcharge and eliminate the minimum fare in April
Scandinavian Airlines will continue to advance its New Distribution Capability (NDC) strategy, with plans to increase the current EDIFACT surcharge next month and remove the cheapest fare option from traditional channels.
According to the Scandinavian Airlines website, from April 22, the airline will remove GoLight economy fares (which do not include checked or carry-on baggage) for short-haul flights and flights departing from Japan from EDIFACT technology. Scandinavian Airlines' current GDS surcharge of €4.5 for EDIFACT bookings, which was introduced by SAIC when it first announced its NDC strategy in 2023, will also rise to €5.5 from April 22. This surcharge increase will apply to "all GDS providers" except Sabre, for which there is a surcharge of €8.5 for EDIFACT bookings, which is almost double that of others.
other
European airline CEOs say industry consolidation is crucial
European airline executives on March 20 called for further consolidation in the industry as the European Union considered whether to approve the Lufthansa Group's acquisition agreement with Italy's ITA Airlines and pressed the pause button on another IAG-Europa Air deal.
Over the past 20 years, Europe's aviation industry has been gradually consolidating but remains fragmented, with smaller national airlines struggling to compete with larger carriers and often needing costly government bailouts. Speaking at an industry event in Brussels, Ryanair CEO Michael O'Leary said the European Commission should "continue to review and approve these mergers, because ultimately this is the way forward in Europe." ”
The Airbus CEO said Boeing's problems are bad for the industry as a whole
Airbus CEO Ouillaume Faury said on March 19 that Airbus is not happy that its American rival Boeing is plagued by technical problems that have tarnished the image of the entire aerospace industry.
Asked about Boeing's technical problems, Guillaume Faury told Europe 2024 in Berlin: "I'm not happy about the problems my competitors are facing. This is not good for the industry as a whole. In our industry, quality and safety are top priorities. ”
Sources: Boeing's chairman will hold talks with key airline customers without the participation of the Boeing CEO
After expressing concern about Alaska Airlines' doorplug falling off in mid-air and a flurry of production issues, the CEOs of major U.S. airlines plan to hold talks with Boeing Chairman Larry Kellner, which will not include Boeing CEO David Calhoun, according to sources.
The Wall Street Journal previously reported that some U.S. airline CEOs wanted to hold talks with Boeing directors to express their concerns about the Alaska Airlines 737 MAX 9 incident, which the report said was an unusual signal of the airlines' disappointment with the Boeing issue and Boeing's leader Calhoun.
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