International market: Boeing CEO's $33 million salary approved; Turkish Airlines launches NDC platform
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What are the latest developments in the international aviation market this week (5.11-5.17)? 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.
【Market dynamics】
1. ARC: Air ticket sales increased by 4.2% in April
According to the latest report from American Airlines Reporting Company (ARC), U.S. agent air ticket sales exceeded US$9.1 billion in April, a year-on-year increase of 4.2%, setting a new record for the month. However, the number is down 2.2% from March 2024. After falling 5% last month, the first decline since 2021, U.S. corporate agent ticket sales increased 9.4% year over year.
The total number of passengers in April 2024 exceeded 25.5 million, a year-on-year increase of 8.5%. This number is also basically the same as March 2024. U.S. airlines carried more than 16.1 million passengers on domestic routes, a year-on-year increase of 11.3% and a month-on-month increase of 2.2%. The number of passengers on international routes reached 9.4 million, a year-on-year increase of 3.4%, but a month-on-month decrease of approximately 4%.
2. U.S. airlines predict record summer travel volume in 2024
The Air Transport Association of America (A4A) predicts record travel volume this summer, with U.S. airlines expected to carry 271 million passengers, a 6.3% increase over last year. A4A said on May 14 that U.S. airlines plan to operate more than 26,000 flights per day this summer, an increase of nearly 1,400 flights from 2023, an increase of 5.6%. They carried 255 million passengers last summer. The summer travel season forecast is for the period June 1 to August 31.
American Airlines said it will increase flights by 10% this summer. United Airlines forecasts that a record 3 million passengers are expected to fly during the Memorial Day travel period from May 23 to 28, an increase of nearly 10%. Delta Air Lines said it expects passenger numbers to increase 5% to nearly 3 million during the Memorial Day weekend, May 23-27.
3. US DOT: Flight cancellation rate dropped in February
Flight cancellation rates for the 10 largest U.S. airlines fell year-over-year in February after rising for two consecutive months, according to the latest U.S. Department of Transportation (DOT) Air Travel Consumer Report.
In February, U.S. airlines canceled 0.6% of scheduled domestic flights, down from 1.8% in February 2023 and 3.8% in January 2024. U.S. airlines operated nearly 549,500 flights in February, a year-on-year increase of 4.35% and a month-on-month decrease of 1.95%.
【Policy Management】
4. U.S. President Biden signs comprehensive aviation safety and reform bill
On May 16, U.S. President Biden signed a five-year, $105 billion comprehensive aviation bill. The bill would strengthen U.S. air traffic control staffing, increase funding to avoid dangerous runway approaches and speed up refunds for canceled flights.
The bill reauthorizes the Federal Aviation Administration (FAA), prohibits airlines from charging families to sit together, requires aircraft to be equipped with 25 hours of cockpit recording equipment, and reduces the maximum civil penalty for airline consumer violations from a single The first US$25,000 was raised to US$75,000, and supervision of aircraft production was strengthened.
5. The FAA said it has not approved any route or fleet expansions for United Airlines.
The U.S. Federal Aviation Administration (FAA) said on May 16 that it had not approved any route or fleet expansions for United Airlines and required that when United conducts final inspections of new aircraft that replace older models, the FAA staff are present.
Earlier on the 16th, United told employees that they had received some good news, saying that the FAA had allowed United to start restarting certification activities, including new aircraft and new routes. The FAA said in March that it would strengthen supervision of United Airlines because of multiple safety incidents that had occurred there. Some United Airlines certification activities have also been suspended. The FAA said at the time that it would initiate a formal review to ensure United was complying with safety regulations.
6. Volaris fined $300,000 for violating tarmac delay rules
The U.S. Department of Transportation (DOT) said on May 15 that it would fine Mexican airline Volaris up to $300,000 for violating U.S. federal law through airport tarmac delays. Federal law and government regulations prohibit international flights from being delayed on the tarmac for four hours or more without giving passengers a chance to disembark.
The DOT said that in Houston in 2021, a Volaris flight waited on the tarmac for a long time but did not let passengers off the plane. A similar incident occurred in St. Louis in 2022. Volaris will pay a $150,000 fine and an additional $150,000 if it violates tarmac rules again within a year. The DOT has issued similar fines in recent years.
7. Sources: Without stronger remedies, Lufthansa's acquisition of ITA will face EU veto
According to people familiar with the matter on May 16, Lufthansa's acquisition of a stake in Italian airline ITA will be blocked unless it provides stronger remedies to eliminate competition concerns from EU antitrust regulators.
People familiar with the matter said the remedies offered last week were not enough to allay European Commission concerns that the deal could reduce competition on short- and long-haul routes connecting Italy to other countries and strengthen ITA's market power at Milan's Linate airport. Lufthansa still has time to provide further remedies before the European Commission's decision on July 4.
【Airport Airport】
8. Emirates' annual profit hits record as travel demand soars
Emirates announced on May 13 that its annual profit for the 2023-2024 fiscal year hit a record high of 17.2 billion dirhams ($4.7 billion), an increase of 63% over the previous year. Emirates is benefiting from the ongoing recovery in travel and has been expanding its route network to meet strong demand.
Emirates said in a statement that the latest figures were its best ever, driven by strong demand for travel across all customer segments. Emirates carried 51.9 million passengers in the 2023-24 financial year, a year-on-year increase of 19%. Emirates' revenue increased by 13% to 121.2 billion dirhams, and air capacity increased by 20%, closing the gap with pre-epidemic levels.
9. Qatar Airways will invest in an airline in Southern Africa
Qatar Airways CEO Badr Mohammed Al Meer said on May 15 that Qatar Airways will soon announce an investment in an airline in southern Africa as part of Qatar Airways' expansion of its network in Africa.
Meer told a panel discussion at the Qatar Economic Forum in Doha that we are in the final stages of an equity investment in an airline in southern Africa, adding that the deal could be announced within two to three weeks. Meer said southern Africa represents a gap in Qatar Airways' network coverage on the continent. He added that Qatar Airways wanted to expand the fleet of its partner airlines in Africa to improve connectivity.
10. Brazil's Gol Airlines turned to losses in the first quarter
Brazil's Gol Airlines announced on May 14 that it had a recurring net loss of 130.2 million reais ($25.39 million) in the first quarter, mainly due to the impact of financial expenses. In the same period last year, Gol Airlines achieved a net loss of 136.4 million reais. Net profit in reals.
Gol filed for Chapter 11 bankruptcy protection in the United States in January due to heavy debt due to declining passenger traffic and delayed deliveries of Boeing aircraft during the epidemic. Gol lost its position as Brazil's second-largest airline by market share to rival Azul last month as first-quarter passenger traffic (measured in revenue passenger kilometers) fell 4.1% year-on-year.
11. LATAM Airlines increases the frequency of international flights to Brazil
Chilean airline LATAM said on May 16 that it would increase the frequency of flights on seven international routes connecting Brazil with the United States, as well as European and African countries. LATAM Airlines' local branch in Brazil is currently the Brazilian airline's largest market share in international operations.
LATAM's move comes as Air France-KLM also announced it will add a new route to Brazil. Airlines have been enjoying good travel demand in Brazil, Latin America's largest economy, and are optimistic about the market, despite struggling to add capacity amid an ongoing shortage of aircraft.
【product service】
12. Frontier Airlines cancels most change fees and launches premium and business fare benefits
As part of a broader effort to revitalize the brand, Frontier Airlines is restructuring its pricing mechanism and eliminating change fees on most fare categories. Frontier Airlines has struggled to become profitable in recent years. The changes include simplifying fare categories into basic, economy, premium and business and offering 2,500 Frontier miles to customers who find lower fares elsewhere.
Frontier's new fare structure somewhat mirrors that of more traditional airlines, with a base fare similar to basic economy and passengers paying extra if they want to check a bag or select a seat. Other fare classes include more benefits included in the ticket price. There will be no change fees on economy, premium and business tickets, a significant change for an ultra-low-cost carrier like Frontier Airlines.
13. Milan Linate Airport fully provides facial recognition services
After a successful trial period, Milan Linate Airport has decided to offer facial check-in services to passengers. Face boarding uses a biometric facial recognition system to allow registered passengers (optional participation) to pass through security and board the aircraft. This service is open to all airlines willing to integrate facial check-in functionality into the check-in and boarding process. ITA Airlines and Scandinavian Airlines are the first airlines to join the project.
This service optimizes the passenger's airport experience, allowing registered passengers (either at airport kiosks or directly via mobile devices) to shorten the process of verifying their ID documents and enhance security. As a result, passengers will no longer need to present ID and/or boarding passes at turnstiles and boarding gates before security, as these will become self-service.
【Aircraft Manufacturing and Fleet】
14. Boeing 737 Max deliveries slowed down after the cabin door plug fell off incident
Boeing delivered its lowest number of 737 Max deliveries last month since last year as quality issues forced a production slowdown. Boeing said on May 14 that it delivered only 16 Max aircraft to airlines and leasing companies in April, down from 24 in March and the fewest since September last year. Boeing's total deliveries in April were 24 aircraft.
The decline comes after a door jam suddenly came off a 737 Max operated by Alaska Airlines in January shortly after takeoff. Although the incident did not cause serious injuries to the passengers, it triggered multiple investigations by U.S. authorities.
15. Qatar Airways CEO: Boeing and Airbus need to work harder to reduce delays in the delivery of new aircraft
Qatar Airways CEO Badr Mohammed Al Meer said on May 15 that the two aircraft manufacturers, Airbus and Boeing, need to put more pressure on their suppliers to reduce delays in the delivery of new aircraft, which is preventing airlines from meeting travel demand. .
Meer said: We are doing our best to help Boeing and Airbus and try our best to find solutions for them to ensure that they can deliver on time. Demand for air travel has rebounded since the outbreak, but planemakers are still struggling to return to previous production levels due to supply chain disruptions and Boeing's safety crisis. Meer said Qatar Airways was unable to meet the surge in post-pandemic travel demand due to a shortage of new aircraft.
【Distribution Technology】
16. Turkish Airlines will launch an agent portal and collect GDS surcharges
Turkish Airlines recently announced that it will launch the New Distribution Capabilities (NDC) platform for agents to use on October 1, when it will also charge distribution fees for flights booked through the Global Distribution System (GDS).
According to Turkish Airlines Chief Commercial Officer Ahmet Olmustur, the purpose of the TKConnect platform is to provide advanced technology in a user-friendly manner. Turkish Airlines said the platform will include promotional offers available only through NDC, rich content with visuals and descriptions, differentiated fares and enhanced additional services. Turkish Airlines did not specify what the surcharge will be for GDS bookings on October 1. It said agents can still pay the fee and access legacy content through GDS, but its new content will only be available through TKConnect.
【other】
17. A4A and American Airlines sue Department of Transportation over fee disclosure rules
U.S. court documents show that the lobbying group American Airlines (A4A) and six major U.S. airlines have appealed to the Fifth Circuit against the final disclosure rule issued by the U.S. Department of Transportation (DOT) in April regarding airline additional service fees. The court sued DOT.
This new rule requires airlines and ticketing agents to disclose any additional or additional fees alongside the full price, and requires airlines to provide information on all such fees to companies that are obligated to provide this information. Under the DOT's requirements, individual fees must be disclosed on the airline's online platform and cannot be displayed via a hyperlink. Airlines involved in the lawsuit include Alaska Airlines, American Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways and United Airlines.
18. Boeing shareholders vote to approve $33 million CEO compensation package
Shareholders at embattled Boeing Co. approved a nearly $33 million compensation package for outgoing CEO Dave Calhoun at its annual shareholder meeting on May 17.
This is the highest compensation Boeing has ever paid its CEO, a 45% increase from the $22.6 million he will receive in 2022. Much of the increase came as Calhoun received a hefty stock bonus on top of his salary of more than $1 million. Calhoun, who has led Boeing since 2020, announced in March that he would leave by the end of the year.
19. Lufthansa CEO vented his dissatisfaction with Boeing, saying the losses were huge
In a recent interview with Switzerland's Neue Zurich Zeitung, Lufthansa CEO Carsten Spohr bluntly said that Boeing's aircraft delivery delays were "extremely frustrating" and caused a lot of losses to Lufthansa, but he still said that Boeing should be able to solve these problems. .
Carsten Spohr made the statement in response to a question about how Boeing's recent difficulties and the resulting delays in aircraft delivery have seriously affected Lufthansa. "It's extremely frustrating and it's costing us a lot of money," he said. "But I'm confident that Boeing can resolve these issues."