International market: American Airlines provides free WiFi on all domestic flights; United Airlines' E175 fleet will install larger luggage racks
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What are the latest developments in the international aviation market this week (3.23-3.29)? The Civil Aviation Resource Network takes you through the relevant news of the past week, allowing you to have a clear overview of important information.
【Policy Management】
1. FAA: United Airlines' future projects may be delayed due to tightened regulations
The Federal Aviation Administration (FAA) warned on March 23 that tightening regulations on United Airlines may mean that United Airlines will have to suspend some of its future plans. This month, there have been more than a dozen incidents on United Airlines flights.
An FAA spokesperson said in a statement: "As a result of recent safety incidents, the FAA is increasing its supervision of United Airlines to ensure that it complies with safety regulations, identifies hazards and mitigates risks, and effectively manages safety. Certification in progress Activities may continue, but future projects may be delayed depending on regulatory outcomes." The FAA also said it would initiate a safety management and compliance assessment of United Airlines.
2. The EU has raised concerns about the impact of Lufthansa Group's acquisition of ITA
The European Commission has formally lodged an "objection" to Lufthansa Group's acquisition of a stake in Italian airline ITA, citing concerns that the transaction may lead to an increase in the price of flights to and from Italy or a "degradation" of air service quality.
The commission also said the deal could "reduce" competition on routes between Italy and central European countries, as well as on long-distance routes from Italy to the United States, Canada and Japan. The commission also warned that the acquisition could strengthen ITA's position at Milan Linate Airport and "make it more difficult for competitors to provide" air passenger services to and from the airport.
3. Scandinavian Airlines parent company applies for reorganization in Sweden
Scandinavian Airlines said on March 27 that its parent company SAS AB had applied for corporate restructuring in Sweden as planned.
"SAS operations and flight schedules will not be affected by the restructuring process and SAS will continue to serve customers as normal throughout the process," SAS said in a statement.
【Airport Airport】
4. Alaska Airlines said the grounding of 737 Max 9 may affect long-term profit growth
Alaska Airlines Group said on March 28 that capacity losses from the temporary grounding of its Boeing 737 Max 9 fleet could push the company's long-term profit growth below its target range of 4% to 8%.
Earlier this month, Alaska Airlines forecast a first-quarter adjusted loss of 45 cents to 55 cents per share, while analysts expected a loss of $1.18 per share. Alaska Airlines said its first-quarter forecast reflects an undisclosed portion of compensation it received from Boeing following a door jam incident in January, as well as a 30-cent-per-share impact from the temporary grounding of MAX 9 aircraft following the incident.
5. Scandinavian Airlines and Turkish Airlines terminate codeshare agreement
Scandinavian Airlines and Turkish Airlines have decided to terminate their code-sharing cooperation from September 1. This means that previously bookable flights operated by Turkish Airlines with SAS route numbers will no longer be available and vice versa).
This decision is intended to minimize disruption to passengers from potential future alliance changes. SAS, a founding member of the Star Alliance, recently announced plans to leave the alliance and join the same SkyTeam alliance as its new owner, Air France-KLM.
6. TAP Portugal's profits in 2023 will be "record", preparing for privatization
TAP achieved a "record" profit of €177.3 million in 2023, almost three times the previous record of €65.6 million set in 2022.
The results released by Portugal Airlines show that it will achieve revenue of 4.2 billion euros in 2023, a year-on-year increase of 20.9%, mainly due to rising fares and increased passenger load factors. Passenger business will account for 91% of TAP Air Portugal's total revenue in fiscal year 2023. TAP Air Portugal said in its financial statements that it wanted to "transform into a structurally sustainable airline" ahead of the Portuguese government's planned sale of its 51% stake.
7. Italian airline ITA: No alternative plan for deal with Lufthansa Group
Antonino Turicchi, chairman of Italian airline ITA, said on March 27 that ITA has no plan B as an alternative to the merger plan with Lufthansa Group (which has the full support of the Italian government and Lufthansa).
Lufthansa is seeking to acquire a 41% stake in state-owned ITA Airlines, but the deal faces obstacles from EU regulators. EU regulators recently warned that the deal could harm competition and push up ticket prices. Lufthansa plans to acquire the Italian Treasury's stake in ITA Airlines for 325 million euros ($352 million). Following the EU's antitrust warning this week, both Lufthansa and ITA said they would work out solutions to get the deal through.
8. Brazil's Azul Airlines raises profit forecast for 2024 due to "strong" demand
Brazilian airline Azul raised its forecast for core earnings in 2024 on March 28 as demand for air travel in Brazil, Latin America's largest economy, remains strong, helping Azul to achieve performance growth even as the industry faces capacity bottlenecks. .
Azul said it expects earnings before interest, taxes, depreciation and amortization (EBITDA) this year to be about 6.5 billion reais, an increase of nearly 25% from 2023 and higher than its previous forecast of 6.3 billion reais. Azul said the increase reflected strong demand, improving fuel prices, expected capacity growth and the addition of more fuel-efficient aircraft to its fleet.
【product service】
9. American Airlines will provide free Wi-Fi on all domestic flights
American Airlines will offer customers free in-flight Wi-Fi on all domestic flights as part of a new advertising sponsorship option it will launch in the coming weeks.
Previously, only select T-Mobile customers could use free Wi-Fi on their phones through the "In-Flight Connection On Us" program. In the future, passengers will be able to get full Wi-Fi service from boarding to disembarking on American Airlines' narrow-body aircraft equipped with Viasat equipment. This free, ad-sponsored Wi-Fi is one of a series of improvements American is implementing to enhance its inflight connectivity and entertainment experience, including several paid options.
【Aircraft Manufacturing and Fleet】
10. Ryanair CEO: All newly delivered 737 aircraft will be inspected within 48 hours
Ryanair CEO Michael O'Leary recently said in an interview with CNN that in the past 18 months, Ryanair has become increasingly worried about the quality problems of newly manufactured Boeing aircraft. He said that Ryanair first became aware of the quality problems in 2022 after the new crown epidemic. The quality standards of new 737 MAX aircraft have generally declined.
O'Leary said: "We found small things like tools under the floor of the aircraft, sometimes missing seat handles, etc., which shows that Boeing has quality issues and a lack of attention to detail." He also said , Ryanair will inspect all new 737 MAX aircraft it receives at its own maintenance facilities before they are put into commercial operation. These inspections will last about 48 hours, and only after Ryan engineers give the aircraft a full clearance can it be allowed to put into operation.
11. EasyJet and Ryanair set aside spare aircraft to stabilize summer flight operations
Despite the current shortage of narrow-body aircraft, European low-cost airlines easyJet and Ryanair have each prepared a spare fleet for the summer of 2024 to ensure operational stability and flight schedule reliability.
EasyJet CEO Johan Lundgren said that he has prepared 14 spare aircraft for the summer of 2024. The total number of Airbus fleets put into operation by EasyJet this fiscal year is 346 aircraft. Six of the spare aircraft will be deployed in the UK, another six in Europe and two in Switzerland. Ryanair CEO Michael O'Leary said he would prepare about eight spare aircraft, accounting for about 1% of Ryanair's 600-aircraft fleet.
12. Spirit Airlines will receive up to US$200 million in compensation for Pratt & Whitney engine issues
Spirit Airlines is expected to receive between $150 million and $200 million in compensation to cover losses caused by problems with Pratt & Whitney engines that grounded some of its planes.
In a regulatory filing on March 29, Spirit Airlines said it had reached an agreement with Pratt & Whitney affiliate International Aero Engines (IAE) to receive monthly credits through 2024 for grounded aircraft. .
13. United Airlines will install larger luggage racks on its E175 fleet
United announced on March 26 that it plans to install larger luggage racks on 50 Embraer E175 aircraft operated by its SkyWest Airlines unit. According to United, the new overhead bins will allow for up to 29 additional carry-on bags per flight, representing an 80% increase in luggage space.
United said its E175 aircraft can seat 76 passengers. In addition, United may expand this program to more than 150 Embraer aircraft by the end of 2026.
【Distribution Technology】
14. Google enhances generative AI travel planning capabilities
Google will make new generative AI-powered tools available in search as part of its ongoing campaign to test the technology to help travelers plan their travels. The new search experience provides users with travel itinerary suggestions, including an overview of hotel and flight options, as well as recommendations for attractions and dining.
According to a Google spokesperson, the current focus is on experimenting and optimizing the travel ideas feature without advertising, but in the future Google will test advertising, such as dedicated advertising space in the search results page and advertising when users ask follow-up questions. .
【other】
15. European aviation safety regulator warns of budget constraints
The outgoing head of Europe's aviation safety regulator has warned of insufficient resources and called for a bigger role in tackling "systemic risks" in the aviation ecosystem. The call comes as the 31-member European Union Aviation Safety Agency (EASA) prepares to respond to near-term safety issues with far fewer staff and resources than the U.S. Federal Aviation Administration (FAA).
"We are in a difficult situation," EASA acting chief Luc Tytgat said in a recent interview with Reuters. EASA currently has about 800 staff and a 2024 budget of €248 million ($269 million). By comparison, the FAA has more than 40,000 staff and a budget of nearly $20 billion.
16. Boeing management changes! CEO to step down at the end of the year
Boeing President and CEO David Calhoun announced in a letter to Boeing employees on March 25 that he will resign from these positions at the end of 2024, which is the latest step in the investigation by the U.S. federal agency following the January 5 incident involving an Alaska Airlines Boeing 737 Max. It is part of a wider executive turmoil at Boeing following an investigation into a door jam that fell off a 9 plane mid-flight.
In addition, Boeing Commercial Airplanes President and CEO Stan Deal announced his immediate retirement, and Boeing said COO Stephanie Pope will succeed him. Pope was appointed COO in January of this year. Previously, she served as president and CEO of Boeing Global Services. At the same time, Boeing Chairman Larry Kellner announced that he will not participate in Boeing's annual shareholder meeting for re-election, and Boeing's board of directors has elected Steve Mollenkopf as the next chairman. Mollenkopf has been a member of the Board of Directors since 2020.
17. Emirates CEO says Boeing's new CEO must have an engineering background
Tim Clark, president of Emirates Airline, one of Boeing's largest customers, said on March 26 that crisis-hit Boeing must ensure that its new CEO has an engineering background to restore its safety standards. Clark told the Financial Times: "To solve Boeing's problems, it will need leadership from a strong head of engineering, coupled with a governance model that puts safety and quality first."
Boeing announced a wide range of leadership changes on the 25th to deal with the intensifying reputation crisis caused by the in-flight door jam detachment of a previous 737 MAX aircraft.
18. Lufthansa Group reaches agreement with unions to end ground staff pay dispute
Lufthansa Group has settled a long-running pay dispute with Verdi, the union representing its ground staff in Germany, after months of strike action and disruption to flight services. Under the new collective pay agreement, Lufthansa ground staff's wages will increase by around 12.5% over two years, with each employee receiving €3,000 in inflation compensation, and trainees' holiday pay and salary packages will also increase.
The agreement will cover approximately 25,000 ground staff, with working conditions between East and West Germany unified and a monthly shift allowance of 3.6% of basic salary restored.