International market: FFP of the four major US airlines was investigated; one airline fired 186 pilots
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What are the latest developments in the international aviation market this week (8.31-9.6)? The Civil Aviation Resources Network takes you through the relevant news of the past week, so that you can have a clear view of the important information.
Market Dynamics
IATA: European flight demand reaches "historical high" level
According to the latest data from the International Air Transport Association (IATA), Europe's air passenger demand in July increased by 7.2% compared with the same period in 2023. Total flight demand in Europe in July (measured in revenue passenger kilometers RPK) was slightly lower than the global average of 8% year-on-year growth in July, thanks to the continued strong recovery in the Asia-Pacific region.
The growth in demand for European flights was driven by a 7% increase in capacity (measured in available seat kilometers ASK) in July. Globally, airline capacity increased by 7.4% year-on-year in July.
Policy Management
The U.S. Department of Transportation launched an investigation into the loyalty programs of the four major airlines
The U.S. Department of Transportation (DOT) officially launched an investigation on September 5 into whether the loyalty programs of the four major U.S. airlines have unfair, deceptive or non-competitive practices.
The DOT said the investigation will focus on how loyalty programs have been affected by mileage devaluation, hidden and dynamic pricing, extra fees, and reduced competition and choice. DOT Secretary Pete Buttigieg sent letters to American, Delta, United and Southwest asking them to provide records and reports on their loyalty programs, practices and policies.
European regulator orders inspection of Airbus A350-1000 engines
Europe's aviation safety regulator on Sept. 5 ordered an inspection of the engines of Airbus A350-1000 aircraft after an engine fire occurred in flight on a Cathay Pacific passenger plane.
The European Aviation Safety Agency (EASA) said it decided to take steps to prevent similar incidents after consulting with regulators and accident investigators in Hong Kong, as well as Airbus and engine supplier Rolls-Royce. EASA also confirmed that a fault in a hose in the fuel system caused the fire, but that the crew quickly dealt with it.
European airports reinstate 100ml limit on carry-on baggage liquids
According to the European Commission, airports across the European Union have reinstated the 100ml limit on liquid containers on board aircraft. Some airports in countries such as Ireland, Germany, Italy, the Netherlands and Sweden had previously been able to lift long-standing restrictions on liquids in carry-on baggage after installing new security equipment, namely the Explosive Detection System for Cabin Baggage (EDSCB) or C3 scanners.
But these airports were forced to reinstate the 100ml limit from September 1st, following the "precautionary measures" announced by the European Commission last month. The decision applies not only to airports in EU member states, but also to airports in Iceland, Switzerland, Liechtenstein and Norway.
Dutch government adjusts previous plan to cut flights at Schiphol Airport
The Dutch government announced on September 4 that Schiphol Airport in the Netherlands, one of Europe's major aviation hubs, is likely to be allowed to operate 475,000 to 480,000 flights per year, an increase from the previous target of 460,000 to 470,000 flights. The Dutch government said it would seek advice from the European Commission before making a final decision.
The previous Dutch government had estimated that reducing flights to 460,000-470,000 was necessary to reduce noise pollution around Schiphol Airport by 17%. But the current government said more detailed information recently provided by the industry showed that the new target would be sufficient. The revised flight cap is expected to take effect in November 2025.
Sweden to abolish aviation tax next year
Sweden will abolish its airline ticket tax from the middle of next year to reduce prices and improve availability, the government and Sweden Democrats coalition partners said on September 3. The tax was introduced by Sweden's then-ruling center-left government in 2018.
"This will lead to lower airfares and higher demand, which will enhance the competitiveness of airlines," said Sweden Democrats MP Linda Lindberg at a joint press conference with the prime minister and cabinet members.
Airline airports
American Airlines to add five new European routes in 2025
American Airlines will add five new European routes next summer, including resuming flights from Edinburgh for the first time since 2019.
In addition to daily summer flights from Edinburgh to Philadelphia starting May 23, American will add flights from Athens to Charlotte (daily, starting June 5), Madrid to Chicago (daily, starting March 30), Rome to Miami (daily, starting July 5) and Milan to Philadelphia (daily, starting May 23). Edinburgh, Milan and Madrid flights will be operated by Boeing 787-8 aircraft, while Athens and Rome flights will be operated by Boeing 777-200 aircraft.
JetBlue raises revenue forecast due to strong demand and Microsoft Blue Screen related bookings
JetBlue raised its third-quarter revenue forecast on September 5, thanks to its efforts to streamline operations, strong summer travel demand and demand from passengers seeking alternative flight options due to the Microsoft Blue Screen incident.
JetBlue has seen a boost in bookings as it was not significantly impacted by the delays and cancellations caused by a network outage in July (caused by a software update from cybersecurity firm CrowdStrike). JetBlue now expects third quarter revenue to fall by between -2.5% and +1% year-on-year. Previously, JetBlue forecast a revenue decline of between 1.5% and 5.5%.
SAS officially joins SkyTeam
SAS joined SkyTeam on September 1, becoming the newest member of the airline alliance, after exiting Star Alliance at the end of August. The move comes just days after SAS finally exited Chapter 11 bankruptcy protection in the United States as part of its long financial restructuring process.
SAS exits Star Alliance and joins SkyTeam, as existing SkyTeam member Air France-KLM will take an initial 19.9% stake in SAS as part of SAS' restructuring.
Lufthansa seeks to acquire TAP Air Portugal stake
According to multiple media reports, Lufthansa Group is seeking to acquire a 19.9% stake in TAP Air Portugal. Previously, Lufthansa's proposal to acquire ITA Airlines was approved by the European Commission in July, and Lufthansa will initially hold a 41% stake in the latter.
On September 2, Lufthansa CEO Carsten Spohr met with Portuguese government officials and "formally expressed" his interest in state-owned TAP Air Portugal, which triggered market speculation that Lufthansa would launch another merger.
European low-cost airlines hit a record high in passenger traffic in August
European low-cost airlines Ryanair and Wizz Air both broke passenger traffic records in August, the peak travel month. Ryanair carried 20.5 million passengers last month, an increase of 8% from 18.9 million passengers in August 2023. Ryanair said it operated about 111,800 flights in August, with an overall passenger load factor of 96%, the same as in August 2023.
Meanwhile, Hungary's Wizz Air also set a record in August, with 6.2 million passengers on its flights, and a 95.4% load factor helped Wizz Air achieve an overall passenger growth of 1% year-on-year.
SWISS faces aircraft balance issues due to heavier first-class seats
SWISS is facing balance issues on its Airbus A330-300 aircraft due to the increased weight of its new first-class seats, which are part of its "SWISSSenses" suite concept scheduled to be launched in 2025. The pursuit of privacy in premium cabins has led to an increase in seat weight, while economy class seats have become lighter, which has moved the center of gravity of the aircraft forward.
To solve this "top-heavy" problem, SWISS plans to install lead plates to adjust the balance. However, this solution will increase fuel consumption and CO2 emissions, which has raised environmental concerns. Despite the increased weight, SWISS assures that long-haul routes will not be affected.
Aircraft manufacturing and fleets
Sources say Airbus, Rolls-Royce will brief airlines on Cathay Pacific A350 engine incident
Airbus and Rolls-Royce are preparing to brief airlines on the impact of a recent Cathay Pacific A350 engine emergency that has prompted the airline to review its A350 fleet, two sources said, as pressure from airlines for clarification grows.
The manufacturers are leaning against recommending a global inspection without new evidence as investigators examine the fuel system of the plane that was forced to return to Hong Kong on September 2, but the final decision lies with regulators, the sources said. The briefing could come as early as September 5. Some airlines, including Singapore Airlines and Japan Airlines, began preventive checks on their entire A350 fleets after Cathay Pacific said 15 of its 48 A350s needed fuel line repairs.
Airbus aircraft deliveries fall in August, but private customer orders surge
Airbus said on September 6 that its deliveries fell in August after a sharp rise in July. The decline leaves Airbus facing the task of achieving larger year-on-year growth to meet its annual targets. Airbus said it delivered 47 aircraft in August, down from 77 in July, for a total of 447 so far this year. Airbus has set a full-year delivery target of 770 aircraft after lowering its targets in the summer due to delays in receiving engines, cabin equipment and other parts. Industry sources said supply chains remain fragile.
In August, Airbus received 46 new orders, including a previously announced order for 30 A330neos from Cathay Pacific and a rare order from a single "private customer" for three A350-900s and three A320neos, which was worth well over $1 billion at list prices (list prices are usually used for one-time orders without commercial airline discounts).
Boeing delivered nine 737MAX aircraft to China in August, the most in six years
Official delivery figures for August will be released next week, but according to Bloomberg, Boeing delivered nine Boeing 737MAX aircraft to Chinese customers in August. This delivery volume is higher than any month since December 2018.
If this delivery rate continues, it will have the potential to reduce Boeing's aircraft inventory and reduce the storage costs it faces. Each aircraft delivered provides Boeing with funds to improve its financial situation. Currently, Boeing has 64 737MAX8 aircraft in inventory awaiting delivery to Chinese customers. The delivery rate is affected by the ability of airlines to add these aircraft to their fleets. In addition, Chinese airlines have ordered 737MAX7 and 10 models, which are still awaiting FAA certification.
Air New Zealand: Further delivery delays and aircraft groundings exacerbate planning challenges
Air New Zealand is facing a series of fleet issues caused by uncontrollable factors, which complicates its fleet planning and prompts it to make short-term and long-term adjustments.
Air New Zealand has encountered more delays in its Boeing 787 delivery schedule, which will delay its plan to transform to an all-787 wide-body fleet. This has also prompted Air New Zealand to consider extending the retention time of its 777-300ER aircraft. In the short term, Air New Zealand is still dealing with the grounding of multiple aircraft due to engine availability issues. In addition, the cabin modification program for the existing 787 fleet has also been slightly delayed due to supply chain issues.
Distribution Technology
Turkish Airlines Expands NDC Program
Turkish Airlines has enhanced its TKCONNECT program to provide travel consultants with seamless access to its extensive global route network and services.
Turkish Airlines has partnered with leading content aggregators Travelfusion, Verteil, DRCT, Mystifly, Nuua, Nuflights and Theta to enhance its NDC (New Distribution Capability) compliant program. Through these collaborations, TKCONNECT will provide travel consultants with state-of-the-art tools to create customized itineraries, provide exclusive offers and simplify the booking process.
Others
Spirit Airlines Temporarily Lays Off 186 Pilots, Many Take Voluntary Leave
Spirit Airlines temporarily laid off 186 pilots on September 1 due to Pratt & Whitney engine issues that grounded part of Spirit Airlines' fleet, coupled with its decision to postpone aircraft deliveries.
According to Ryan Muller, president of the Spirit Airlines chapter of the Air Line Pilots Association, Spirit Airlines had expected to temporarily lay off 260 pilots, but many pilots accepted voluntary leave.
Air Canada offers pilots a 30% pay raise
According to a report by Bloomberg on September 4, citing people familiar with the matter, Air Canada has offered its pilots a 30% pay raise to avoid strike action.
Air Canada pilots will receive at least a 20% upfront pay raise, followed by annual pay raises for three years. If a deal is reached, a strike that was scheduled to start as early as September 17 and would have disrupted travel across Canada would be avoided.
American Airlines and JetBlue Airways lose bid to dismiss passenger antitrust lawsuit
On September 6, American Airlines and JetBlue Airways lost a U.S. court bid to dismiss a class action lawsuit that claimed that the previous alliance between the two companies caused passengers to pay higher prices for certain flights in the Northeast United States.
U.S. District Judge Ann Donnelly in Brooklyn ruled that passengers have now provided enough information to file charges that the two airlines' agreement violated U.S. antitrust laws. American and JetBlue have denied any wrongdoing. The two companies reached an agreement in 2020 to jointly operate most flights in the Boston and New York areas. The alliance includes flight schedule coordination, revenue sharing and reciprocal loyalty and corporate customer benefits.