International market: US reviews airline frequent flyer programs; Atlanta is the busiest airport in the world
News from Civil Aviation Resources Network on December 24, 2023: What are the latest developments in the international aviation market this week (12.16-12.22)? 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: Average U.S. air fares continued to decline in November
According to the latest report from aviation reporting company ARC, the average price of domestic round-trip air tickets in the United States fell again in November compared with the same period last year. November's ticket price is $547, down 2% from October 2022, following a 4% year-over-year decrease in October. Ticket prices also dropped by 2% compared to the previous month.
Total air ticket sales in the United States increased by 3.4% year-on-year in November 2023, reaching nearly US$6.8 billion, but decreased by 6.6% compared with October 2023. The number of passenger trips increased by 7.5% year-on-year to nearly 20.5 million, but it also fell by approximately 5.6% compared with the previous month.
2. Europe's major tourism markets have a positive outlook for 2024
According to Phocuswright's latest travel research report "European Consumer Travel 2023: Key Market Comparisons", the travel outlook for the next 12 months is generally positive for all major European markets. The report reveals four trends:
Nearly all travelers from all countries want to take at least one trip; German travelers are most willing to travel internationally, while travelers from Italy and Spain are most willing to travel domestically; French travelers are less willing to book hotels and flights, possibly because they are more cost-sensitive; conversely, Germans are the least cost-sensitive and are more willing to travel abroad.
3. Research: Half of companies will reduce the number of flights their employees take after the epidemic
Since the outbreak, about 50% of major global companies have reduced the number of business flights taken by their traveling employees by half, according to research from Travel Smart.
Travel Smart said its research showed that of the 217 companies analyzed, 104 companies will reduce business flights by at least 50% in 2022 compared with 2019. Travel Smart's events manager Denise Auclair said it was a "positive situation" that many companies had not so far returned to 2019 flying levels.
【Policy Management】
4. The U.S. Department of Transportation is reviewing airline frequent flyer programs
The U.S. Department of Transportation said on December 21 that it is reviewing the frequent flyer programs of major U.S. airlines to look for potential fraud or unfair practices, which is part of the regulatory agency's efforts to strengthen supervision of the aviation industry.
Two sources said the Department of Transportation has been meeting with passenger airlines in recent weeks to discuss the popular loyalty program, including transparency practices when booking award tickets, the transferability of miles and notification before making changes. Another source said the transportation department is also concerned about the depreciation of frequent flyer miles over time, making it more difficult to book award tickets.
5. The largest fine ever imposed: Southwest Airlines was fined US$140 million.
The U.S. Department of Transportation announced a $140 million civil penalty against Southwest Airlines on December 18 for violating multiple consumer protection regulations during the 2022 holiday flight operations disruption, which resulted in approximately 16,900 flight cancellations. , affecting more than 2 million passengers.
The Department of Transportation determined that Southwest Airlines violated consumer protection regulations by failing to provide adequate customer service assistance, failing to provide timely flight status notifications, and failing to provide timely and appropriate refunds. According to the Department of Transportation, the fine is 30 times larger than any fine it has previously imposed for consumer protection violations.
6. The EU's entry and exit system is expected to be launched in October 2024
According to multiple media reports, the EU's new Entry and Exit System (EES) is expected to finally be launched in October 2024. EES is an automated information technology system used to register travelers from non-EU countries (including the UK) when crossing the EU's external borders. It will apply to short-stay visa holders and visa-exempt travelers.
However, the implementation of the EES has suffered a series of delays, which have also delayed the launch of the associated European Travel Information and Authorization System (ETIAS) for non-EU visitors until mid-2025. EES needs to be launched before the EU launches ETIAS, which will require third-country travelers to pay an electronic authorization fee of 7 euros, which will be valid for up to three years.
【Airport Airport】
7. Iberia will reopen Madrid-Tokyo route in 2024
Spanish airline Iberia will restart flights to Tokyo next year for the first time since the outbreak. Iberia will fly from Madrid to Narita International Airport three times a week starting on October 27, 2024, becoming the only direct flight between Spain and Japan. This route has been suspended since the outbreak of the epidemic in 2020.
This year-round route will fly from Madrid to Tokyo every Thursday, Saturday, and Sunday, and from Tokyo to Madrid every Monday, Friday, and Sunday. Iberia plans to use Airbus A350 aircraft on this route, which can accommodate 330 passengers, including 24 premium economy seats and 31 business class seats.
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8. Lufthansa Group will resume flights to Israel in January next year
Lufthansa Group airlines plan to resume flights to Israel in early January next year after they were suspended due to the Palestinian-Israeli conflict.
The European aviation giant said it will resume flights to Tel Aviv in phases starting on January 8, with 20 flights per week initially, accounting for about 30% of its normal flight schedule.
9. U.S. airlines prepare for busier Christmas and New Year holiday travel
U.S. airlines say they are bracing for busier end-of-year holiday travel than they did a year ago, when snowstorms caused thousands of flight cancellations and congestion.
The FAA predicts December 21 will be the busiest travel day of the week. According to the Transportation Security Administration, the official holiday period lasts from the 21st to January 2nd. The American Air Transport Association (A4A) expects airlines to carry more than 39 million passengers during the holiday season, an average of about 2.8 million passengers per day, a 16% increase from 2022.
10. After canceling the noise reduction plan, Schiphol Airport in the Netherlands increased flight capacity
Amsterdam's Schiphol Airport, one of Europe's busiest aviation hubs, announced on December 21 that it will expand flight capacity for the summer travel season. Schiphol Airport said it will offer 293,000 flights from March 31 to October 26 next year, up from the 280,000 previously announced.
The announcement from Schiphol comes as the Dutch government decides to halt its controversial plan to restrict flights to reduce noise pollution in the face of pressure from the US government and Europe.
11. Atlanta in the United States topped the list of the world's busiest airports in 2023, with more than 61.2 million departure seats.
Atlanta's Hartsfield-Jackson International Airport (ATL) has been named the world's busiest airport in 2023, with more than 61.2 million departure seats, according to the latest report released by OAG on December 20. Half of this year's top ten busiest airports are in the United States.
Only two European airports make the top ten: London Heathrow in fourth place with 49.3 million departure seats, and Istanbul Airport in seventh place with 46.3 million seats. Dubai International Airport is the second busiest airport in the world with more than 56 million departure seats, followed by Tokyo Haneda Airport with more than 52.6 million departure seats. Guangzhou Airport in China ranks last in the top ten, with 43.4 million departing seats.
【product service】
12. Qatar Airways will provide cabin crew with smart technology
Qatar Airways has launched a new digital initiative designed to support cabin crew in providing passengers with a more personalized flying experience. The new internal app assists cabin crew by providing information relevant to passengers traveling with Qatar Airways, including special service requests and preferences, as well as real-time updates on flight information.
Qatar Airways said it expects to reach the first milestone in this phase of its digital initiative in the coming months, with more than 15,000 mobile devices available to cabin crew, and it also plans to extend its reach to Ahmed International Airports and overseas airports and VIP lounges.
【Aircraft manufacturing and fleet】
13. Lufthansa Group orders 80 aircraft from Boeing and Airbus
The Lufthansa Group has reached agreements with manufacturers Boeing and Airbus to order a total of 80 short- and medium-haul aircraft for its airlines. Lufthansa said it has signed an agreement with Boeing to purchase 40 737-8 MAX aircraft and has obtained the purchase rights for an additional 60 aircraft. Lufthansa has not yet decided which of its airlines will use the aircraft once they are delivered.
A separate agreement with Airbus involves the purchase of 40 Airbus A220-300 aircraft for use by its newly formed subsidiary Lufthansa City Airlines, with purchase rights for a further 20 aircraft. The new aircraft will be used on short-haul routes from Frankfurt and Munich. Lufthansa also reached a purchase option agreement with Airbus for 40 A320 series aircraft to seek "preferential conditions for future orders." The 80 new aircraft, worth a total of $9 billion, will be delivered between 2026 and 2032.
14. EasyJet confirms order for 157 Airbus aircraft
EasyJet confirmed its order for 157 Airbus aircraft and obtained "purchase rights" for another 100 aircraft. EasyJet said the deal would further modernize its fleet and continue its growth at Europe's "slot-constrained" airports. The new A320neo and A321neo aircraft will be 13% to 30% more fuel efficient than the models they replace.
EasyJet's aircraft procurement plan was first announced in October this year and was approved by 99.9% of shareholders at the shareholders' meeting on December 19. Under the agreement, 56 A320neo and 101 larger A321neo will be delivered to easyJet between 2029 and 2034.
15. Sources: Airbus aircraft orders are expected to break records in 2023
According to industry sources, Airbus is on track to break aviation industry order records in 2023 due to a buying boom from European airlines and good deliveries so far this month.
EasyJet and Lufthansa ordered a combined total of nearly 200 planes on December 19, as airlines bet on a shortage of aircraft, a figure that is expected to push Airbus' total orders so far this year above the roughly 1,800 in 2014 record, and that was the peak of the previous major cycle. Gross orders, or unadjusted order counts, roughly reflect market activity in a given year, but analysts say the more widely watched metric is "net orders," which excludes cancellations and conversion orders. The figures will not be officially announced until January next year, but sources said Airbus has a good chance of breaking its previous net order record of more than 1,500 aircraft.
16. FAA: There is no "specific timetable" for approval of Boeing 737 MAX7
The head of the U.S. Federal Aviation Administration (FAA) told Reuters on December 19 that there is no "specific timetable" for certifying the Boeing 737 MAX 7. Boeing had previously expected to obtain certification before the end of this year.
FAA Administrator Michael Whitaker said the agency will certify the smallest model in the best-selling MAX series when "we have all the data we need and the aircraft is safe." Whitaker added that he is making sure he gets "status briefings on issues that arise along the way" on MAX7 and other projects. "The issues are being addressed and that process will continue," he said.
17. LATAM Airlines purchased 5 additional Boeing 787 Dreamliners
LATAM Airlines said on December 20 that it had added an order for five Boeing 787 aircraft to its order book. These aircraft will be used for long-haul or higher capacity flights.
In a joint statement with Boeing and engine maker GE, LATAM did not specify which 787 model it had ordered but mentioned the capacity of the more common 787-9. The aircraft will be powered by General Electric's GEnX engines, making LATAM the first South American airline to use such engines.
【other】
18. After years of negotiations, Southwest Airlines and pilots reached a $12 billion agreement
Southwest Airlines and its pilots union reached a preliminary labor agreement on December 18, ending three and a half years of intense negotiations. The five-year contract, worth $12 billion, is one of the largest and provides significant pay increases for pilots.
United Airlines' contract with its pilots union is worth $10 billion, Delta Air Lines' contract is worth $7 billion, and American Airlines' contract is worth $9.6 billion. Southwest is the last of the four major U.S. airlines to reach an agreement with its pilots union.
19. Russia completed the buyout of 92 foreign-owned aircraft
According to aircraft leasing company AerCap, Russia has bought out another 92 aircraft from foreign leasing companies. The aircraft were purchased using funds from Russia's state welfare fund, of which 190 billion rubles ($2.06 billion) were used for this purpose.
Ownership of the aircraft will now be transferred to Russia's state insurance company NLK-Finance, which will hand over the aircraft to the airline.
20. The Court of Justice of the European Union invalidated the EU's decision to approve government assistance to Air France for the new coronavirus epidemic.
The Permanent Court of Justice of the European Union declared on December 20 that the European Commission's decision in 2020 to approve the French government's government assistance worth 7 billion euros ($7.67 billion) to Air France was invalid. At the time, the aid was intended to cushion the economic impact of the COVID-19 epidemic.
The case is one of many filed by Ryanair, Europe's largest budget carrier, over state aid provided across Europe to help airlines survive the pandemic.