International market: Lufthansa’s new airline will be launched next year; Amadeus pilots AI retail
What are the latest developments in the international aviation market this week (10.21-10.27)? 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. IATA: Increased demand for digital IDs
Latest results from the International Air Transport Association (IATA) Global Passenger Survey released on October 25 show that travelers continue to prioritize speed and convenience and are increasingly embracing biometrics and off-airport processes to achieve this goal . Overall, IATA believes these findings demonstrate that travelers need a more streamlined process to book flights, get through airports and travel more easily and safely.
The traveler survey, based on more than 8,000 responses from more than 200 countries, showed that three-quarters of travelers said they preferred using biometric data instead of traditional passports and boarding passes. Nearly 90% of travelers said they would share immigration information to speed up the airport arrival process.
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2. U.S. Department of Transportation: Flight operations increased and cancellation rate decreased in August
The latest "Air Travel Consumer Report" released by the U.S. Department of Transportation shows that compared with the same period last year and July, U.S. airlines increased the number of operating flights in August, while the cancellation rate decreased.
Operating flights in August increased by nearly 5.5% year-on-year to approximately 631,000 flights, an increase of 1.2% from July 2023. The cancellation rate for the month was 1.5% of scheduled flights, down from the 2.5% cancellation rates in August 2022 and July 2023. In August, airlines handled 41.1 million bags and reported a baggage handling error rate of 0.61%, down from 0.75% in July 2023 and 0.64% in August 2022.
3. Survey: Europeans plan to travel less in the coming months
European travelers plan to travel less in the coming months, according to a survey of more than 5,000 travelers conducted by the European Travel Council in September. Some 68% of Europeans plan to travel between October 2023 and March 2024, down 3% from the same period last year. About 45% of travelers have partially or fully booked their next trip.
Although travelers plan to travel less, they are reluctant to cut back on spending. The survey showed that despite inflationary pressures and economic difficulties faced by several European countries, some 71% of respondents planned to maintain or increase their usual travel budget in the coming months.
policy management
4. British Civil Aviation Authority: British air traffic control can increase airline fees by 26%
Britain's air traffic controllers have won regulator approval to increase the rates they charge airlines by more than a quarter, weeks after a system glitch stranded thousands of passengers and sparked disputes with airlines.
The British Civil Aviation Authority (CAA) said on October 26 that it will allow the British National Air Traffic Service (NATS) to increase the per-passenger charges per flight for aircraft flying in British airspace within the scope of its regulated operations. To approximately £2.08, the fee will apply from 2023 to 2027. Currently costing £1.65 per passenger per flight, the new charges represent a 26% increase.
5. Mexico may reduce airport usage fees by 8% to 12%
A senior Mexican official told Reuters on the evening of October 25 that Mexico was considering reducing airport usage fees by 8% to 12%. This is further clarification on government plans after airport groups complained about "unilateral" changes to their operations.
Rogelio Jimenez Pons, Mexico's deputy secretary of transportation, said the Mexican government's goal is to reduce airport usage fees, but "the matter is still under negotiation." Mexico's airport usage fees are among the highest in Latin America, and Jimenez Pons said reducing these fees is aimed at easing airfare costs for consumers and promoting air travel in Mexico.
aviation airport
6. Lufthansa’s new short-haul airline will begin operations in 2024
Lufthansa Group announced on October 25 that City Airlines, a new short-haul airline under the group, obtained an air operation certificate from the German Aviation Administration in June this year and plans to start operations in the summer of 2024.
The airline will operate from the two hubs of Munich and Frankfurt and provide connecting flights to Lufthansa. It will operate simultaneously with regional airline Lufthansa CityLine, which also operates at Munich and Frankfurt airports. City Air will start operations with Airbus A319 aircraft, but according to Lufthansa, they are also considering using Airbus A220 and Embraer aircraft.
7. Etihad Airways and Scandinavian Airlines announce codeshare
Etihad Airways and SAS have announced a codeshare agreement that will come into effect at the end of December. Not long ago, Etihad Airways just launched flight services from Abu Dhabi to Copenhagen, Denmark. This new weekly Thursday flight will commence operations on September 29.
Arik De, chief revenue officer at Etihad Airways, said the codeshare would make it "more convenient for guests from the Nordic region to travel to Abu Dhabi and connect via our expanding global network."
8. IAG and Air France-KLM announce “record” third-quarter profits
European airline groups IAG and Air France-KLM reported record third-quarter operating profits on October 27, helped by a busy summer peak season and increased demand on both ends of the transatlantic route.
The report shows that IAG, the parent company of British Airways, Iberia, Aer Lingus and Vueling, its quarterly operating profit before abnormal items increased by 39% year-on-year to 1.7 billion euros; while Air France-KLM's profits increased 31%, reaching 1.3 billion euros. IAG's overall flight capacity increased by 17.9% year-on-year in the quarter, while passenger unit revenue increased by 2.2% year-on-year.
9. TAP Air Portugal’s third-quarter profits soared 62%, reaching a record high
TAP Portugal announced on October 24 that thanks to strong revenue growth and strict cost control, TAP Portugal’s operating profit margin increased, and its third-quarter net profit increased significantly by 62% to 180.5 million euros (192 One hundred million U.S. dollars).
TAP also posted record profits in the first nine months of the year, reaching 203.5 million euros, reversing a loss of 90.8 million euros in the same period last year. TAP Air Portugal said operating revenue in the third quarter rose 12.5% year-on-year to 1.26 billion euros, exceeding pre-epidemic levels in 2019, and ticket revenue increased 18% to 1.18 billion euros, exceeding 2022 levels. According to TAP Air Portugal, passenger traffic in the third quarter reached 90% of the same period in 2019.
10. Passenger traffic is close to pre-epidemic levels, and ADP revenue of Paris Airports Group exceeds expectations.
Paris Airports Group ADP announced on October 25 that operating income in the first nine months exceeded expectations as passenger traffic was close to pre-epidemic levels, but an executive said that passenger traffic from China is not expected to fully recover in 2024. .
Analysts at JPMorgan said ADP is most likely to benefit from the return of Chinese tourists in 2024 as the final travel restrictions are lifted. In the third quarter, Chinese passenger traffic at Paris airports reached 37.3% of 2019 levels. ADP's operating income through September reached 4.12 billion euros ($4.36 billion), beating analysts' average estimate of 4.07 billion euros.
product service
11. Frontier Airlines reformed its frequent flyer program, and passenger rewards are based on consumption amount.
On October 24, Frontier Airlines announced reforms to its frequent flyer program, which will reward passengers based on how much they spend on flights. Frontier Airlines and other low-cost carriers offer low-cost, no-frills tickets, with everything from seat selection to carry-on luggage costing extra. Starting next year, consumption of these additional services will affect the acquisition of premium frequent flyer status.
Under Frontier's current frequent flyer program, travelers earn one frequent flyer mile for every mile flown. Its new dollar-based model is similar to recent changes to frequent flyer programs at other major airlines such as Delta Air Lines and American Airlines. Frontier Airlines said customers will be able to earn Silver Premium Frequent Flyer status after accumulating 10,000 miles, equivalent to $1,000 in purchases. Each level increases in sequence, up to the "Diamond" level of 100,000 miles, but there are accelerators at each level to get more miles.
12. Southwest Airlines adds luggage tracking function
Southwest Airlines announced on October 25 that its passengers can now track their checked baggage, including its loading and unloading on the aircraft, on Southwest’s website or mobile app.
Additionally, Southwest said it recently added the ability for passengers to digitally add checked bags at check-in (up to 24 hours before arrival at the airport) to reduce the steps required to check in a bag at a kiosk. .
13. Swiss International Air Lines expands rail transfer service through Geneva Airport
Swiss International Air Lines announced on October 25 that it has expanded its cooperation network with Swiss Federal Railways (SBB) to add Geneva Airport. Effective immediately, the service will enable passengers arriving from New York's John F. Kennedy International Airport (JFK) to transfer by rail to Lausanne, Friborg or Bern.
Swiss International Air Lines plans to offer daily flights from JFK to Geneva during the upcoming winter. It also said that the SBB QR code has been added to the Swiss air rail tickets now issued to make boarding more convenient.
14. Frankfurt Airport launches facial recognition technology in all terminals
Frankfurt Airport has installed biometric systems in all terminals, with facial recognition technology now available to all air passengers at the German hub. The move follows Lufthansa's biometric pilot, which will enable passengers to scan their faces at every point of their journey through the airport, including check-in, security and boarding.
Fraport said passengers can register in advance via Star Alliance's biometric app or at check-in using a biometric-enabled passport. The registration process only takes a few seconds, after which travelers can pass through a checkpoint equipped with a facial recognition device without having to show any paper documents. More than 12,000 passengers have used the technology at airports for check-in, boarding pass check and boarding gate.
Aircraft manufacturing and fleet
15. Boeing lowers its 2023 737 Max delivery forecast to 375-400 aircraft
Boeing said it will miss its 737 Max delivery target this year and will incur nearly $800 million in charges across its defense operations, including its high-profile Air Force One construction project. Boeing announced that its third-quarter net loss was US$1.6 billion on revenue of US$18.1 billion. Adjusted operating loss per share was $3.26, beating Wall Street expectations of $3.18.
Boeing will deliver 375 to 400 Max aircraft in 2023. The narrow-body jets account for a significant portion of Boeing's sales, and earlier this year, Boeing had set a delivery target of 400 to 450 aircraft before it discovered two separate quality issues with airframes supplied by Spirit AeroSystems.
16. Southwest Airlines ordered 108 Boeing 737s and added more options
Southwest Airlines has ordered an additional 108 Boeing 737 Max 7s and is rebalancing its order book with plans to order more of the planes through 2031. Boeing disclosed the order on Oct. 26 and said the deal brings Southwest's total orders for the smallest Max aircraft to 302.
Also on October 26, Southwest Airlines released an updated fleet plan showing that the airline has orders for 780 737 Max covering between 2023 and 2031 (including aircraft delivered this year) and Option Contract. That's an increase of 216 aircraft from its July forecast of 564 deliveries for the period. The 780 planned aircraft include 302 Max 7s, 110 more than Southwest planned in July, and 271 Max 8s, one more than the previous 270. In addition, Southwest Airlines now holds options for 207 Max 7 or Max 8 aircraft, up from 102 previously.
17. SkyWest Airlines orders 19 Embraer E175 aircraft
Embraer has agreed to sell 19 new E175 aircraft to SkyWest Airlines for use within the United Airlines network, further expanding SkyWest’s fleet of 90 E175s already operating for United Airlines .
These E175 aircraft will fly exclusively for United under a Capacity Purchase Agreement (CPA). The total value of the contract, which has been included in Embraer's third-quarter order backlog, is $1.1 billion based on list prices. These 70-seat aircraft will be delivered in a three-class configuration, and deliveries will begin in the fourth quarter of 2024.
distribution technology
18. Amadeus pilots AI retail system, hoping to make air travel more like Amazon shopping
Amadeus is piloting a new AI-powered retail system aimed at making airline sales more like shopping on Amazon. The new system, called Amadeus Nevio, is designed to help airlines more easily sell their own products as well as other travel products, such as hotels.
For customers, this means tracking everything with one simple app. The long-term goal is to move away from fragmented and confusing systems for airline ticketing, check-in, ancillary ticket products, airport lounge access and other services.
other
19. Retaliation! JetBlue asks U.S. to kick KLM out of JFK
JetBlue Airways said on Oct. 24 it had asked the U.S. Department of Transportation to exclude KLM Royal Dutch Airlines from New York's JFK Airport if planned Schiphol restrictions go into effect because they violate air travel regulations between the U.S. and the European Union. Shipping Agreement.
The Dutch government said last month it would take planned steps next year to limit the number of flights at Amsterdam's Schiphol Airport to reduce noise, a decision that was fiercely opposed by KLM and aviation industry groups. The number of flights will be limited to 452,500 per year, about 10% below 2019 levels and down from the 460,000 previously proposed. In September this year, JetBlue filed a complaint against the Netherlands and the European Union with the U.S. government over the matter.