International market: US to upgrade air traffic control system; Delta and Korea Airlines acquire WestJet shares
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Civil Aviation Resources Network, May 11, 2025: What are the latest developments in the international aviation market this week (5.3-5.9)? 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
Report: North American Airlines Focus on Cybersecurity and AI Investment
According to SITA's latest "2024 North American Air Transport IT Insights" report, North American airlines focus on AI and cybersecurity in their IT investment priorities. The report found that 77% of North American airlines regard cybersecurity as one of the "top three IT priorities" for investment in 2025. Nearly half of the surveyed airlines (45%) listed cybersecurity as their top priority.
AI is also a focus. 45% of respondents said AI is their primary concern. SITA called this level of attention to AI innovation "significantly higher than the global level." 82% of airlines said they are using or planning to use AI and machine learning for threat detection and analysis. Other cybersecurity solutions implemented by airlines include extended protection and response technology (82% have implemented it), zero trust architecture (82% have implemented it), and security operations centers (82% have implemented it).
U.S. airlines carried 67.2 million passengers in February, down 4.6% year-over-year
According to the Bureau of Transportation Statistics (BTS), in February 2025, U.S. airlines carried a total of 67.2 million passengers (including domestic and international passengers) on scheduled passenger flights. After seasonal adjustment, the number of passengers in February was 4.6% lower than the same period last year, 0.2% lower than January, and 2.6% lower than the all-time high set in December 2024.
BTS reported that domestic and international passenger volumes on U.S. airline flights in February were 58.2 million and 9 million, respectively (not seasonally adjusted data).
Figure: Seasonally adjusted monthly passenger traffic data for scheduled passenger airlines in the United States (domestic + international) from February 2022 to February 2025
Low-cost airlines hit hardest by the decline in travel demand in the United States
All U.S. airlines have been hit by the decline in travel demand due to the U.S. trade war, but low-cost airlines have been hit the hardest. Southwest Airlines, Frontier Airlines and JetBlue Airways all saw sharp declines in operating profit margins in the first quarter. In contrast, Delta Air Lines and United Airlines' profit margins remained stable despite weakening consumer demand.
The profit margin gap between low-cost airlines and full-service airlines is expected to widen further as economic growth slows and the likelihood of rising inflation increases. This may mark a shift from previous economic downturns, when low-cost airlines, led by Southwest Airlines, outperformed the market. Analysts say a surge in demand for premium travel and the increased value of customer loyalty programs have given full-service airlines an advantage.
Policy Management
The United States announced a new air traffic control system plan and will build a new air traffic control center
At a time when the outdated air traffic control (ATC) system and the shortage of air traffic controllers have attracted public attention, U.S. Transportation Secretary Sean Duffy announced a new ATC system plan on May 8. The current ATC system is "outdated" and the new system will be "state-of-the-art" and will improve safety and reduce delays, the Department of Transportation said in a statement.
The specific reform measures include replacing old telecommunications equipment with "new fiber optic, wireless and satellite technology"; "installing new modern software and hardware"; replacing 618 old radars; and building six new air traffic control centers and replacing towers, the Department of Transportation said.
The U.S. Department of Transportation hopes that airlines will cut flights at Newark Airport to reduce ongoing problems
U.S. Transportation Secretary Sean Duffy said on May 6 that the Department of Transportation is working with airlines to cut flights and increase air traffic control staff at Newark Liberty International Airport in New Jersey to deal with the problem of hundreds of flights being disrupted since April 28.
Newark Airport has been affected by runway construction, Federal Aviation Administration equipment failures and air traffic controller shortages, which have prompted U.S. lawmakers to urgently call for an investigation of Newark Airport and new funding support.
U.S. Department of Homeland Security: Passengers without REAL ID can still fly
U.S. Homeland Security Secretary Kristi Noem said that starting May 7, air passengers without enhanced ID cards may face stricter security screening procedures, but they will not be denied boarding. Starting May 7, the Transportation Security Administration (TSA) will no longer accept state-issued identification that does not meet REAL ID standards.
"If they do not meet the requirements, passengers may be directed to a different line and undergo additional steps, but they will be allowed to fly. This is a security issue," Noem said at a U.S. House of Representatives hearing on May 6. The TSA warned in April that air passengers without enhanced ID cards may be denied boarding.
EU considers tariffs on Boeing aircraft
According to a May 7 report by the Financial Times, the European Union intends to propose tariffs on Boeing aircraft, preparing for further retaliation if trade negotiations with the United States fail. The report cited two people familiar with the matter as saying that the European Commission, which is responsible for EU trade policy, plans to include civil aircraft in the list of targeted tariffs on about $100 billion of US imports each year.
The report pointed out that these measures need to be approved by a weighted majority vote of EU member states and will only take effect if the EU-US negotiations fail to make sufficient progress in reducing US tariffs on European goods. EU trade chief Maros Sefcovic said on May 6 that the EU will not be pressured to accept an unfair tariff agreement with the United States
Airline Airport
Delta Airways and Korean Air agree to acquire 25% of WestJet Airlines
Delta Airways and Korean Air announced on May 9 that they will acquire a total of 25% of WestJet Airlines in Canada. Onex Group will continue to retain a majority stake in WestJet. The transaction is subject to approval by relevant regulators.
Korean Air agreed to exchange 10% of WestJet Airlines for $220 million, and Delta Air Lines agreed to acquire 15% of the shares for $330 million. Delta and Korean Air have partnered with WestJet since 2011 and 2012, respectively, and Delta has also formed a joint venture with WestJet.
American Airlines and Qantas Expand U.S.-Australia Service
American Airlines and Qantas are expanding their trans-Pacific network with new flights and frequencies between the U.S. and Australia, including new routes between Los Angeles and Brisbane. Starting December 5, American Airlines will operate three flights per week from LAX to Brisbane Airport, using Boeing 787-9s, until January 2026. The route will be American Airlines' second route to Brisbane after Dallas-Fort Worth International Airport.
Qantas will also expand service, increasing its Dallas-Fort Worth to Melbourne service to daily flights starting December 3 until January 2026. In addition, starting in January next year, Qantas will operate all Sydney to Dallas-Fort Worth flights with Airbus A380 aircraft, replacing the 787-9 currently used on the route.
JetBlue sells venture capital unit to boost profitability
JetBlue announced on May 5 that it was selling its venture capital subsidiary JetBlue Ventures to Sky Leasing, an asset management company focused on aviation finance. The specific details of the transaction have not been disclosed. JetBlue said it will continue to be a strategic partner to JetBlue Ventures and its portfolio companies.
JetBlue Ventures will be able to continue to retain its original name under a brand licensing agreement with JetBlue. JetBlue CEO Joanna Geraghty said the sale of the company's venture capital unit will allow JetBlue to "focus on its core business."
Air Canada lowers annual core profit forecast as U.S. travel slows
Air Canada lowered its annual adjusted core profit forecast on May 8, and reported first-quarter revenue (C$5.19 billion) below analyst expectations, due to a weak Canadian dollar and trade tensions with the United States that led to a decline in cross-border passenger traffic. Air Canada lowered its adjusted EBITDA forecast for the current year to C$3.2 billion to C$3.6 billion from a previous range of C$3.4 billion to C$3.8 billion.
Canadians have begun boycotting American products and canceling U.S. trips after President Trump imposed tariffs on Canada and suggested the country should be annexed by the U.S. Air Canada previously said its U.S. flight bookings for the next six months were down about 10 per cent, similar to an industry-wide drop.
British Airways parent IAG nearly tripled its operating profit in the first quarter
British Airways parent IAG announced first-quarter results that exceeded expectations on May 9 and maintained its 2025 outlook. Driven by strong demand, IAG's profits nearly tripled in the first quarter compared with the same period last year. Despite the global economic uncertainty caused by US President Trump's tariff policy, European airlines as a whole still delivered strong quarterly results.
Fears of a recession cast a shadow on transatlantic routes, which have driven IAG's strong performance in the past few years, but IAG's first-quarter earnings report said that this part of the business remains a "major strength." IAG said that economy class bookings from the United States slowed down, but this was offset by strong performance in premium cabin bookings. IAG CEO Luis Gallego told reporters that bookings to South America were particularly strong, and bookings in Europe and Africa were also solid.
Norwegian Air cuts capacity forecast due to delayed Boeing deliveries
Low-cost airline Norwegian reported a smaller-than-expected operating loss of NOK 610.9 million ($59 million) in its first quarter results on May 8, but it cut its annual capacity guidance.
Norwegian expects overall capacity to be around 37.5 billion seat-kilometers in 2025, up 3% year-on-year. When it previously reported quarterly results, Norwegian had forecast a 4% capacity increase. The cut was due to delayed Boeing deliveries.
Premium demand drives Emirates to record $5.2 billion in annual profit
Emirates reported a 20% year-on-year increase in profit to a record $5.2 billion on revenue of $34.9 billion for its 2024-25 fiscal year (ending March 31, 2025) on May 8.
Thanks to "strong" demand in all cabins and continued investment in premium products, Emirates' passenger volume in fiscal year 2024-25 was 53.7 million, a year-on-year increase of 3%; seat capacity increased by 4%, and the passenger load factor was 78.9%, slightly lower than 79.9% in the previous year.
Products and Services
Alaska Airlines cooperates with Jumio for biometric authentication
Alaska Airlines has integrated Jumio's authentication function into its travel app, enabling international passengers holding US and Canadian passports to verify their identity without queuing at the check-in counter.
Alaska Airlines said that Jumio provides "automated, AI-driven biometric authentication, risk signal and compliance solutions" and accepts and verifies multiple types of government-issued ID documents, including passports, driver's licenses and ID cards. Jumio supports more than 5,000 ID card types worldwide.
Aircraft Manufacturing and Fleet
IAG orders 71 long-range aircraft from Airbus and Boeing
British Airways parent company IAG announced on May 9 that it plans to purchase 71 long-range aircraft from Airbus and Boeing. The new orders announced by IAG include 32 Boeing 787-10s for British Airways and 21 Airbus A330-900neos.
IAG also disclosed for the first time the options exercised in March: six Airbus A350-900s, six A350-1000s and six Boeing 777-9s. The total order volume thus reaches 33 Airbus aircraft and 38 Boeing aircraft. IAG said its A330-900neos will be equipped with Rolls-Royce engines, while British Airways' Boeing 787-10s will be powered by General Electric engines.
Airbus delivers 56 new aircraft in April
Airbus has announced its latest aircraft delivery figures for April, delivering 56 aircraft to customers worldwide that month, 8% less than in April 2024. Last month's total delivery volume brings Airbus' total deliveries to the end of April to 192, 5% less than the same period last year. Data shows that most of the delivered aircraft are narrow-body A320neo series aircraft, among which the A321neo ranks first with 27 deliveries. Airbus also delivered 15 A320neos to multiple customers and one A319neo to China Southern Airlines.
In the wide-body aircraft category, Airbus delivered one A330-900 each to Kuwait Airways and Malaysia Airlines. It also delivered four A350s (including one A350-1000) to Etihad Airways and three A350-900s to Starlux Airlines, Turkish Airlines and Delta Airlines. Overall, the 56 deliveries in April involved 33 customers worldwide.
Qatar Airways will order about 100 wide-body aircraft from Boeing
Bloomberg News reported on May 6, citing people familiar with the matter, that Qatar Airways is finalizing an agreement to purchase about 100 wide-body aircraft from Boeing, with an option to purchase the same number of aircraft.
The deal is expected to be announced during U.S. President Trump's Middle East trip starting next week, which will include visits to Saudi Arabia, Qatar and the United Arab Emirates. The report also said that Qatar Airways is making "final adjustments" to its Boeing wide-body aircraft order.
Distribution Technology
Sabre Adds Air France-KLM NDC Content
Sabre announced on May 6 that it has activated New Distribution Capability (NDC) content from Air France and KLM in its travel marketplace. Agencies connected to Sabre can now access NDC content from Air France and KLM through Sabre's Quote and Order API, Sabre Red 360 Agency Booking Solution, Sabre Red Launchpad, and "a range of online booking tools."
"This integration enables us to offer better fares with consistent pricing, exclusive promotions, extra options and innovative offers like seat and extra SAF bundles," Angus Clarke, Air France-KLM's chief commercial officer, said in a statement.
Others
Newark Airport controllers couldn't see or talk to planes, paralyzing the airport last week
Air traffic controllers lost contact with planes flying to and from Newark Liberty International Airport last week, the National Air Traffic Controllers Association (NATCA) said. NATCA detailed an equipment failure that caused massive flight delays at Newark Airport and raised more concerns about the aging of the nation's aviation infrastructure and the shortage of air traffic controllers.
NATCA said in a statement that on April 28, controllers responsible for guiding flights in and out of Newark Airport "temporarily lost radar and communications with the aircraft under their control and could not see, hear or talk to them." Data shows that more than 1,500 flights were delayed at Newark Airport last week, and delays continued to accumulate due to a shortage of air traffic controllers.