International market: More people, less money; passengers "enjoy" airports but spending drops
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What are the latest developments in the international aviation market this week (9.14-9.20)? 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
ARC: US corporate air ticket sales fell again in August
According to the latest report from Aviation Reporting Company (ARC), after rebounding in July, US corporate agents (who reported at least 70% of their business was corporate and government) saw their air ticket sales in August fall by 1.5% year-on-year. Previously, this sales increased by 11.2% in July and fell by 7.2% in June. Total US air ticket sales in August exceeded US$8.1 billion, setting a new record for the month, up 0.7% year-on-year and 1.9% from July 2024.
Passenger travel increased by 3.8% year-on-year to more than 24.3 million, up from 24 million last month. Domestic travel was close to 15.7 million, up nearly 4.1% year-on-year and 1.4% month-on-month. International trips were close to 8.7 million, up from 8.4 million a year ago and roughly in line with July's total.
Study: Travelers 'enjoy' airports, but spending down
A record number of passengers passed through TSA security (the highest was on July 7, when more than 3 million passengers passed through security), and most people still seemed to enjoy their time at airports, according to J.D. Power's 2024 North American Airport Satisfaction Study, released on September 18.
Even with widespread flight cancellations and delays, 60% of North American airport passengers said they enjoyed their time at airports. About 59% said they thought airports helped ease the stress of traveling. Still, "We're starting to see a tipping point in consumer spending, with average passenger spending in terminals down significantly from last year," said Michael Taylor, managing director of J.D. Power's travel, hospitality and retail division. Passengers spent $3.53 less per person on food, beverages and other terminal merchandise than they did in 2023. Passengers saw the biggest drop in spending at large airports, with an average reduction of $6.31 per person.
CWT predicts that travel costs will continue to rise in 2025
Travel prices are expected to rise "significantly moderately" in 2025 and enter a "normalized growth" phase, travel management company CWT said in its 10th annual forecast report released on September 19.
Following the sharp rise in prices in 2021 and 2022 after the epidemic, the report predicts that global flight fares, hotel prices and ground transportation costs will rise slightly. The global average airfare is expected to reach $701 in 2024 and $705 in 2025, an increase of 1.9% and 0.6%, respectively.
Policy management
TSA plans to launch "one-stop security" at some international airports as early as 2025
To simplify international travel, the Transportation Security Administration (TSA) is studying a "one-stop security" concept that could be launched by 2025.
The system will allow passengers from certain international airports to bypass additional security checks when connecting to domestic flights in the United States, but only if security standards are kept consistent between the two countries. "This concept will improve efficiency, security and the overall customer experience," said TSA Administrator Pekoske, who expects the initiative to significantly reduce congestion at major U.S. airports.
Airline Airport
Wizz Air expects passenger traffic to grow 15-20% next year
Wizz Air CEO Jozsef Varadi told Reuters on September 16 that it expects passenger traffic to grow 15-20% next year, with its new low-cost routes to the Middle East, such as from Europe to the UAE, providing an additional boost.
"Globally, we expect growth of 15-20%, but I think the Abu Dhabi route will grow faster than that," Varadi said. Hungary-based Wizz Air, which recorded 62 million passengers in the year ending March 2024, formed a joint venture with ADQ, Abu Dhabi's third-largest sovereign wealth fund, in 2019 to operate in the UAE.
AirBaltic in pre-IPO talks with a strategic partner
Latvian AirBaltic is in pre-IPO talks with a strategic investor, CEO Martin Gauss told Reuters on September 16, but declined to comment on reports that the airline had held investment talks with Lufthansa.
"We are in talks with a pre-IPO strategic investor," Gauss said in the interview. He added that AirBaltic could negotiate with other major and cornerstone investors during the IPO preparation stage. Gauss has previously said that he believes AirBaltic will one day become part of a large airline group like Lufthansa, but he reiterated on September 16 that he does not think this will happen in the next five years.
Scandinavian Airlines to launch flights to Seattle
Scandinavian Airlines will expand its transatlantic route network with flights from Copenhagen to Seattle from May 2025. SAS said the new five-times-a-week route is scheduled to start on May 21, with a schedule designed to "maximize connectivity with the rest of the SAS network."
With the launch of the new route, SAS will fly to 11 North American destinations next summer, including the recently launched daily Copenhagen-Atlanta route.
Alaska Airlines Completes Acquisition of Hawaiian Airlines
Alaska Airlines announced on September 18 that it had completed its acquisition of Hawaiian Airlines. According to Alaska Airlines, the next step in merging the two airlines is to apply for a single operating certificate from the Federal Aviation Administration (FAA), which will allow the two airlines to operate as a single airline using an integrated passenger service system. In the meantime, the two airlines will continue to operate independently and there will be no immediate changes to operations. For now, the two airlines will still maintain separate websites, reservation systems and loyalty programs.
Once the transaction is completed, Hawaiian Airlines President and CEO Peter Ingram will resign from his position, and Joe Sprague, current regional president of Alaska Airlines Hawaii and Pacific, will take over the position. Sprague will be responsible for leading all operations at Hawaiian Airlines until the FAA grants a single operating certificate.
Heathrow Airport Retains Title as World's Most Internationally Connected Airport
London Heathrow Airport has been ranked the world's most internationally connected airport for the second consecutive year, according to aviation data provider OAG's latest Megahub Report. After falling to 22nd place in 2022, Heathrow Airport returns to the top of the list in 2023. British Airways continues to dominate Heathrow Airport, operating 50% of the airport's flights.
Kuala Lumpur Airport and Tokyo Haneda Airport ranked second and third respectively in the top 50 global megahubs. The ranking evaluates connectivity by comparing the number of scheduled connections for international flights to the number of destinations served by the airport.
Products and Services
JetBlue to Launch Airport Lounge Services
JetBlue announced on September 19 that it will begin adding airport lounge services by the end of 2025. The first lounge is located in Terminal 5 at John F. Kennedy International Airport and is 8,000 square feet, with a second lounge of 11,000 square feet to open soon after in Terminal C at Boston Logan International Airport.
The lounges are part of JetBlue's efforts to "meet the growing demand for premium services." Access to the lounges will be "primarily" reserved for JetBlue's most loyal customers and premium credit card holders.
Wizz Air launches 'premium' membership program
Budget airline Wizz Air has launched a "premium" membership program that gives customers access to fare discounts and onboard privileges. The Hungarian-based airline said premium membership in the existing Wizz Air Discount Club (WDC) will cost 349.99 euros per year.
Premium members will enjoy all the "benefits" of standard WDC membership - a 10 euro discount on tickets priced at 19.99 euros and above, a 5 euro discount on online checked baggage purchases, and exclusive onboard coupons. In addition, the benefits include priority boarding, premium seat selection and the ability to carry an extra piece of hand luggage on board.
Aircraft Manufacturing and Fleet
Ryanair: Due to the Boeing strike, the number of aircraft received next summer may be 5 fewer
Michael O'Leary, CEO of Ryanair Group, said on September 14 that the prolonged strike by Boeing workers may cause Ryanair to receive 20 aircraft from the originally expected 25 before next summer.
O'Leary said that Ryanair was supposed to receive 30 737MAX aircraft by the summer of 2025, but due to Boeing's operational problems, the number has dropped to 25. However, now that the Boeing workers' strike further threatens Boeing's recovery, O'Leary said that if the strike lasts three to four weeks, Ryanair may only receive 20 aircraft.
The first Airbus A321XLR is expected to be delivered in the second half of October
The first delivery of Airbus' longest-range narrow-body aircraft, the A321XLR, is expected to be delayed until October, which is obviously a few weeks later than Airbus's delivery target.
In response to a Reuters query, a spokesman for Spain's Iberia Airlines said deliveries were scheduled for the second half of October. In July, Airbus said it expected A321XLR deliveries to take place in the "late summer," having previously mentioned deliveries in the third quarter.
Distribution technology
ARC integrates Turkish Airlines' NDC into DirectConnect program
Aviation Reporting Company (ARC) announced on September 17 that it has integrated Turkish Airlines' New Distribution Capability (NDC) product into the ARC DirectConnect program. According to ARC, the partnership enables Turkish Airlines to provide "a more personalized travel experience while providing more options for agents and corporate buyers to manage transactions, reduce risk and track data within the ARC settlement platform."
Meanwhile, Turkish Airlines is preparing to launch its new NDC distribution channel TKConnect on October 1, announcing that from that date it will charge a fee of $24 per ticket for all bookings made through the global distribution system EDIFACT channels (including Amadeus, Travelport, Hitit, Travelsky, Infini and Sirena). Turkish Airlines' content on Sabre was taken offline on September 1 as the two sides have not reached a renewal agreement.
Others
Campaign group calls on UK government to start taxing jet fuel
Campaign group Transport & Environment has called on the UK government to start taxing jet fuel, claiming that if it was taxed at the same rate as road fuel, it would have raised £5.9 billion in tax revenue by 2023.
The group said it was "incredible" that unlike British drivers, freight companies, rail operators and farmers, airlines do not pay taxes on the fuel they consume. "For the sake of the economy and the environment, it is time to end this unfair anomaly that the aviation industry can pollute without paying any taxes," it said.
Alaska Airlines CEO believes Boeing has made "significant improvements" after door plug incident
Alaska Airlines CEO Ben Minicucci said that Boeing, which has been plagued by problems, has made "significant improvements" in recent months after a new 737 MAX 9 aircraft had a door plug fall off in mid-air due to a key bolt missing in January.
"We've seen a lot of significant improvements over the past few months," Minicucci said in an interview. He added that he recently spoke with Boeing's new CEO Kelly Ortberg and praised him as an experienced aerospace industry veteran who was able to "identify the problems that Boeing needs to solve." Minicucci also said that Boeing has more work to do on quality and safety improvements.
Air Canada reaches last-minute deal with pilots union to avoid strike
Air Canada said on September 15 that it had reached a last-minute agreement with its pilots union on a new four-year collective agreement, ending a stalemate over pay and benefits and avoiding a strike or work stoppage in the near future.
As Canada's largest airline, Air Canada was originally prepared to phase out flights within three days and could stop operations completely as early as September 18. Air Canada said the terms of the new agreement reached with the Air Line Pilots Association (ALPA), which represents more than 5,200 pilots, will be kept confidential pending a vote of approval by members (expected to be completed next month).