International market: Investment in travel technology will increase significantly; Recruitment demand in the aviation industry is expected to decline
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What are the latest developments in the international aviation market this week (3.9-3.15)? Civil Aviation Resources Network takes you through the relevant news of the past week, allowing you to have a clear view of important information.
Market dynamics
Research: It is expected that travel company technology investment will increase significantly in 2024
Amadeus's latest research shows that travel companies are expected to see a 14% increase in technology investment in 2024. The company's "Travel Technology Investment Trends" study found that 91% of surveyed companies expect significant growth in investment this year.
The priorities of the respondents include machine learning, data analysis, and digital payments. In addition, the vast majority of airlines (98%) have initiated plans to use biometric technology at airports. More than two-thirds of travel industry decision-makers expect an increase in technology investment in 2024 compared to 2023. It is expected that airport technology expenditure will increase by 17%, and investment in the travel payment field is expected to increase by about 12%. The technology expenditures of hotels and airlines are expected to increase by 14% and 13% respectively. In addition, respondents indicated that wider use of technology can bring in more income. The airline stated that shifting to modern retail can bring an 18% revenue growth.
Policy management
The US Department of Justice has launched a criminal investigation into the Boeing Max aircraft door stopper detachment incident
The Wall Street Journal reported, citing documents and sources familiar with the matter, that the US Department of Justice has launched a criminal investigation into the door stopper incident that occurred shortly after Alaska Airlines took off a Boeing 737 Max 9 aircraft from Portland, Oregon on January 5th.
Alaska Airlines stated in a statement, "In this situation, it is normal for the Department of Justice to conduct an investigation. We will fully cooperate and believe that we are not the target of the investigation." According to reports, investigators have contacted some passengers and crew members.
EASA: Approval for Boeing will be revoked if necessary
On March 13th, Luc Tytgat, acting director of the European Aviation Safety Agency (EASA), warned that the agency would suspend indirect approvals for Boeing aircraft production if necessary. However, he also told Reuters that he is confident in Boeing's response to its latest safety crisis.
In an interview, Tytgat publicly stated for the first time that the ongoing crisis surrounding Boeing's best-selling 737 MAX series aircraft is a rare test of international cooperation that supports global aircraft production. When asked if EASA is ready to stop recognizing the certification of Boeing aircraft for safe manufacturing in the United States, Tytgat said, "If necessary, yes.".
The EU will make a ruling on the merger of British Airways and Iberia Airlines before July 15th
The EU competition regulator will decide before July 15th whether to allow the $8 billion merger between British Airways and Iberia Airlines, which will create the world's third-largest airline. The European Commission may also require these two airlines to make concessions, such as abandoning airport flight schedules, to alleviate concerns about potential competition impacts.
These two airlines plan to complete their merger before December and hope to better compete with Lufthansa, Air France, and budget airline Ryanair through this move. The merger between the two sides will also pave the way for cooperation with American Airlines. The EU Executive Committee is reviewing the plans of these three airlines to strengthen their global alliance cooperation and is expected to make a decision by the end of July.
Airline Airport
Air New Zealand to Suspend Chicago Route Services
Air New Zealand announced on March 11th that due to ongoing challenges in the supply of available Rolls Royce Trent 1000 engines, the airline will "suspend" services on the Auckland Chicago route from March 31st to October 25th. These engines are used by Air New Zealand's Boeing 787 aircraft.
Air New Zealand stated that customers who have booked flights to Chicago will be rescheduled and will be "delivered to their destination as soon as possible" through transfers at other US airports. Passengers who book directly with Air New Zealand will receive the new itinerary within 72 hours. Customers who book through travel agents should contact their agents to confirm any changes to their itinerary.
Air France will follow up on voluntary SAF donations from customers this summer
Air France will increase its investment in Sustainable Aviation Fuel (SAF) this summer. It plans to follow up on voluntary donations from customers to its SAF investment fund during the upcoming 2024 Paris Olympics and Paralympics.
Air France announced on March 13th that it will follow up on every purchase of its "environmental selection" (through which passengers can donate to Air France's SAF investment fund when booking flights through its website or application). According to Air France, this measure will automatically apply to all flight bookings to mainland France and French Polynesia between July 18 and September 9, 2024.
Despite the impact of the strike, Frankfurt Airport saw a significant increase in passenger traffic in February
Although Lufthansa suspended a large number of flights in February due to a series of strikes, the passenger flow at Frankfurt Airport, Germany's main hub, increased by 12.9% year-on-year, reaching 3.9 million passengers. Last month, Lufthansa cancelled approximately 1770 flights at Frankfurt Airport, affecting approximately 225000 passengers.
Airport operator Fraport stated that the disruption to Lufthansa flight operations was partially offset by additional passenger flow on this year's leap day (February 29), resulting in a year-on-year increase of nearly 13% in passenger flow. However, the passenger flow is still 15% lower than the level in 2019.
London Heathrow Airport saw a surge in passenger traffic, experiencing the busiest February ever
As passenger numbers continue to soar, London Heathrow Airport (LHR), the busiest international airport in the UK, experienced its busiest February ever in 2024. That month, Heathrow Airport served 5.8 million passengers, setting a historical record.
In addition to an increase in passenger numbers, the cargo throughput of Heathrow Airport in February 2024 also increased by 21% compared to the same period in 2023. Heathrow Airport outperformed major European airports and a global average growth rate of 8% in February.
Product Services
Kahang will launch a new first-class cabin
On March 15th, Badr Mohammed Al Meer, the newly appointed CEO of Qatar Airways, revealed in an interview with CNBC that the company is preparing to launch a new first-class cabin. Badr Al Meer stated that the project is already in its later stages and more details will be announced soon.
He stated that on certain routes, "there is a high demand for first-class cabins and it will continue to be so." Badr Al Meer stated that the decision was made in the past few months and has once again become urgent with the final retirement of the Airbus A380.
Istanbul Airport provides treatment dog services to alleviate passenger anxiety
Feeling restless before taking a plane? Now, the treatment dog service provided by Istanbul Airport can help alleviate the anxiety of tense passengers. Istanbul Airport has been implementing this project for the past month.
Abdulkadir Demirtas, the customer experience manager of airport operator IGA, said that after receiving positive feedback from passengers, they hope to expand the project and increase the number of available therapeutic dogs for comforting passengers from 5 to 10.
Aircraft manufacturing and fleet
Delta Air Lines predicts that the delivery of Boeing 737Max 10 aircraft may be delayed until 2027
On March 10th, Bloomberg reported in an interview with Delta Air Lines CEO Ed Bastian that Delta expects the delivery of Boeing 737 Max 10 aircraft to be delayed until 2027.
Since the incident on January 5th when a 737 Max 9 aircraft experienced a door stopper falling off during flight, Boeing is facing increasing scrutiny, which has sparked a new round of concerns about the delayed MAX 10 model certification. The 737-10 is Boeing's largest Max model aircraft, capable of accommodating up to 230 passengers, and is currently awaiting certification from the Federal Aviation Administration (FAA) of the United States. Delta currently does not operate any MAX series models.
Southwest Airlines revealed that there is a 40% gap in the delivery volume of Boeing 737 Max in 2024
Southwest Airlines is the latest Boeing 737 Max operator to announce the scale of delivery delays. It stated in a document on March 12th that the number of new machines it will receive in 2024 will decrease. Boeing has informed Southwest Airlines that they expect to deliver 46 Boeing 737 Max 8 aircraft this year, a decrease from the previously expected 58 aircraft.
The delay in the Boeing 737 Max 7 project has further intensified delivery pressure. This aircraft is the smallest model in the Max series and has not yet been certified by regulatory agencies. Southwest Airlines previously expected to receive 21 Max 7s in 2024, but has now reduced this number to zero.
United Airlines will lease at least 36 Airbus A321neo aircraft
According to Bloomberg, United Airlines is nearing a major agreement to lease 36 or more Airbus A321neo aircraft from leasing companies. On March 12th, United Airlines CEO Scott Kirby revealed the company's interest in acquiring A321 aircraft, but emphasized that he would not pay extra for it.
United Airlines' move is to address the delivery delay of Boeing MAX 10 aircraft. Previously, it ordered 277 MAX 10 aircraft and had an additional 200 option options. In order to mitigate the impact of delivery delays on its operations, United Airlines has negotiated with Airbus to purchase the A321neo. But due to the backlog of Airbus orders until 2030, United Airlines may face challenges in acquiring these aircraft.
Boeing delivers 27 aircraft in February
Due to strict product quality inspections, the delivery pace of Boeing 737 MAX aircraft slowed down again in February. However, Boeing successfully accelerated the delivery of narrow body aircraft to Chinese customers last month.
According to data disclosed by Boeing on March 12th, it delivered 27 aircraft in February, the same number as January, but still far from 2023. Only 18 737 aircraft were delivered in February, lower than the 25 aircraft delivered in January.
Mexican Airlines plans to purchase 20 aircraft before October
Mexican President Andres Manuel Lopez Obrador told reporters on March 12th that Mexican state-owned airline Mexico will purchase 20 planes before October.
This military managed airline encountered difficulties when it began operating flights at the end of last year because it was unable to obtain aircraft. It began operations by using three Boeing aircraft from the military and two BAIC industrial aircraft leased from regional airlines. Lopez Obrador did not specify which aircraft manufacturer or third party the government plans to purchase aircraft from.
Despite the lack of alternative options, airlines are still trying to use Boeing's predicament as a bargaining chip for order negotiations
Airlines executives are dissatisfied with Boeing because its safety crisis has disrupted their business plans. But in the large aircraft market with only two suppliers in short supply, they have no choice but to do business with Boeing.
Despite publicly expressing some concerns, airlines are still negotiating new aircraft orders with Boeing, hoping to use their delivery delays to obtain better conditions. The airline adopts various strategies in an attempt to maintain a business relationship with Boeing, such as ordering one aircraft model first to occupy space, but receiving deliveries may be of other models. They are still in more intense negotiations, hoping to use Boeing's production delay to obtain new order discounts and compensation for financial losses.
Distribution technology
Virgin Atlantic Airlines is committed to all channels, but NDC is coming soon
Virgin Atlantic CEO Shai Weiss stated that the airline is committed to "maintaining omnichannel" content delivery, but "ultimately, we all need to turn to NDC.".
During his speech at the spring meeting of the London Business Travel Association on March 11th, Weiss stated that Virgin Atlantic and its partner Delta Air Lines had taken a "more cautious approach" in introducing NDC compared to other airlines, but he did not specifically point out the aggressive approach adopted by American Airlines towards NDC.
other
Executive of American Airlines: Recruitment growth in the aviation industry will stagnate or even decline
During the pandemic, the US aviation industry has been facing severe labor shortages, from pilots to baggage handlers. Therefore, they attempted to hire thousands of new employees and signed record high paying contracts with the pilot union.
But Southwest Airlines CEO Bob Jordan said at a recent JPMorgan industry conference in New York that it now seems that this recruitment peak is coming to an end, and there may even be some layoffs. The main reason for the slowdown is the delayed delivery of Boeing aircraft and the return of job demand in the aviation industry to pre pandemic levels.
Boeing has instructed the airline to inspect the 787 cockpit seat switches
Boeing informed the airline operating the 787 Dreamliner on March 15th to inspect the cockpit switch after a sudden aerial dive by Latham Airlines caused more than 50 injuries. The aviation industry publication The Air Current reported on the 13th that the movement of the cockpit seats was a key focus of the investigation into the dive incident.
Boeing stated that preventive measures have been taken to remind operators to review a service announcement from 2017, which includes detailed instructions on inspecting and maintaining cockpit seat switches. The Federal Aviation Administration (FAA) stated that in response to the Latham Airways flight accident, they have convened an expert committee to review the information Boeing sent to airlines regarding inspection switches after the incident.
The US government hopes to recruit another 2000 air traffic control personnel by 2025
After a series of dangerous approach incidents, the Biden administration announced on March 11th that it is seeking congressional funding to recruit an additional 2000 air traffic control personnel for the 2025 budget year.
The continuous shortage of air traffic control personnel facing the United States has led to flight delays, and in many places, air traffic control personnel are forced to work overtime and six days a week to cope with staffing shortages. The Federal Aviation Administration (FAA) hopes to receive $43 million in funding to accelerate the recruitment and training of air traffic control personnel.