Tag: Airline

Communication Problems Cause Major US Carriers to Ground Flights

Reuters reports that top U.S. airlines including Delta, United, and American, issued ground stops on Friday citing communication issues, as a global outage roiled operations across a wide swathe of industries around the world. American Airlines, however, later said in a statement it had re-established operations. Frontier and Spirit too cancelled directives to ground planes. It was not clear if the groundings reported by the major U.S. airlines were related to outages at Microsoft, and cybersecurity firm Crowdstrike that affected “banking, healthcare and a number of other sectors globally on Friday.”
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American Airlines Exceeds 3Q Profit Estimates

Reuters reports on Thursday American Airlines posted its third-quarter earnings, which “beat estimates for third-quarter adjusted profit.” American “said bookings for the upcoming holiday season have been steady, sending its shares up nearly 5% in morning trading.” According to Reuters, “U.S. airlines with international operations are seeing relentless demand for long-haul flights as a stronger dollar encourages more Americans to plan holidays abroad.” American CEO Robert Isom said, “Domestic demand remains steady, while international demand continues to drive revenue growth led by the Atlantic, Caribbean and Central America.”
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FAA Orders Inspections of 20 Pratt & Whitney GTF Engines

AP reported that “U.S. regulators are requiring immediate inspections and possible repairs to Pratt & Whitney engines on some Airbus passenger jets because of a manufacturing problem that could cause parts to wear out sooner than expected.” The FAA said it would “require ultrasonic inspections of 20 engines on U.S.-registered planes within 30 days. The same flaw affects 202 engines worldwide.” The new FAA rule “replaces a directive from October, which told aircraft operators to have the engines checked at their next shop visit, and followed a disclosure last month by Pratt that about 200 engines around the world would need quick inspections and potential replacement of engine disks.”
Full Story (Associated Press)

Airlines Plan to Add New Routes Hoping for Continued Strong Travel Demand

AP reports that building on strong bookings this summer, American Airlines “said Thursday it will add three new European destinations next summer and revive another international route that it last flew in 2019.” The announcement “comes one day after Delta Air Lines said it will expand service to China later this year.” The news from two of the biggest US carriers “underscores the airline industry’s confidence that its strong recovery from the pandemic will continue and that planes will remain packed.” American said that next summer it “will add flights to Copenhagen, Naples and Nice, France – all new destinations for the airline – from Philadelphia.” It plans to “resume flights between Chicago and Venice that were dropped four years ago.”
Full Story (Associated Press)

US Airline Maintenance Surpasses Pre-Pandemic Levels

Aviation Week reported that a new report by investment bank Jeffries says that American Airlines, Delta Air Lines and United Airlines collectively “spent $2.1 billion on maintenance in the 2023 second quarter (Q2), 47% above the level seen in pre-pandemic Q2 2019.” This reflects an upward trend for the commercial aftermarket with revenue forecast “to be 106% above 2019 levels and engine overhaul demand providing potential upside.” Further capital expenditure revisions “suggest delays in new aircraft deliveries into 2024.” On a trailing twelve-months basis, the three airlines collectively spent $7.7 billion on maintenance, which represents a 31% increase from $5.9 billion in 2019.
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FAA Estimates $26M to Update All Aircraft to Prevent C-Band 5G Interference

FierceWireless reports on the Federal Aviation Administration’s “new directive requiring airplanes in the U.S. to install 5G C-band tolerant radio altimeters or compatible RF filters by February 24, 2024.” The directive “estimates that the total price-tag to make these modifications to airplanes is just $26 million.” FierceWireless reports, “That’s a small price to pay to put an end to what amounted to a multi-year battle between the U.S. airline industry and wireless operators.” The US aviation regulator “estimates that out of 7,993 airplanes on the U.S. registry[,] only about 180 airplanes will need radio altimeter replacements and about 820 will need radio altimeter filters” in order to “eliminate potential 5G transmissions in the C-band spectrum from interfering with airplane altimeters.” Tantra Analyst Principal Prakash Sangam said, “Clearly, if the FAA and FCC were working more cordially and put out this estimate much earlier, the issue would have been resolved without fanfare or public hoopla. … In my view, the direct and indirect cost of all resources, including from the government, stakeholders, and media spent on the issue, is far higher than the paltry $26 million.”
Full Story (FierceWireless)

Labor Cost Increases See Airline Margins Fall

Aviation International News reported that labor costs have steadily increased for US airlines since air travel has started to come back, tracing the increase back to mid-2021. Moody’s Investors Service said that it “sees aggregate labor expense for the eight U.S. airlines it rates increasing by 19 percent in 2023 and another 8 percent in 2024, as the low U.S. unemployment rate continues to create staffing and labor cost headwinds – as will the mandatory retirement age of 65 for pilots if Congress does not pass legislation to raise the limit to age 67.” Moody’s says that while combined revenue for the eight largest US airlines should reach $212 billion this year (a 13% increase from 2022), “capacity shortfalls brought on by shortages of aircraft, spare parts, maintenance capacity, and labor will help support ticket prices well into 2024, even if a recession takes hold and slows demand, said the report’s author, Moody’s Investors Service senior v-p Jonathan Root.”
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American, Southwest Report Profits as Industry Recovers

FlightGlobal reports that airlines are increasing the amount of flights and destinations it is offering as the industry begins to recover from the COVID-19 pandemic and the resulting slowdown in travel. Analysts “still suspect the industry will not fully recover for several years – possibly not until 2023 – and a second wave of Covid-19 infections or another industry shock could set back revival.” In response to the increase in demand, US airlines “have brought about 450 passenger aircraft out of storage since mid-May, bringing the combined US in-service fleet to about 4,000 aircraft, Cirium fleets data shows.” By “comparison, US carriers operated about 6,700 passenger aircraft at the beginning of 2020, before the global downturn, according to Cirium.” US airlines “in June will carry about 29.6 million seats on domestic flights, up 29% from May, though still down 66% from 86.2 million seats in May 2019, Cirium schedules data shows.”
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American Airlines CEO Believes Airline Can Become Much Larger

The Dallas Morning News reports that American Airlines CEO Robert Isom believes the carrier can become “much bigger.” Isom said, “We actually have the assets in place to fly a much larger airline. […] We’d like to get the regional fleet back up as much as we can. We talked about having about 150 planes on the ground in the second quarter, and our goal is to get those flying as soon as we can.” American “and other airlines are struggling with exactly how fast they can rebuild their networks after severe job cuts, furloughs and expense-tightening in 2020 and early 2021. Meanwhile, ticket prices have soared past 2019 levels and airlines are pocketing record revenues despite operating fewer flights.”
Full Story (Dallas Morning News)

Airlines Experiencing Pilot Shortage

Bloomberg reported that US airlines are experiencing an ongoing pilot shortage, “but a purging of employees at the start of the downturn in 2020 has left the industry ill-prepared for a rebound.” American Airlines CEO Robert Ison said, “We don’t have the regional aircraft flying the summer right now [that] we would like.” Ison added, “This is a fantastic opportunity for people that want to come in and fly planes. They can make a lot of money.” United Airlines CEO Scott Kirby said on an earnings call last week, “The pilot shortage for the industry is real and most airlines are simply not going to be able to realize their capacity plans because there simply aren’t enough pilots, at least not for the next five-plus years.” As a result, United likely will not operate 150 regional jets due to a lack of pilots, even though there is demand for flights. Bloomberg said airlines have “scaled back plans for a rapid resumption of pre-pandemic flight schedules,” with United planning to operate 13% fewer flights in the second quarter than in the same quarter in 2019. Likewise, Delta Air Lines plans to operate 16% fewer flights, and American Airlines 8% fewer flights, mostly due to a lack of pilots at regional airlines. Bloomberg added that both American and United are working with Landline Co. to offer bus service between regional airports and larger airports.
Full Story (Bloomberg)

Aviation Industry Coalition Calls for Measures to Prevent Use of Unapproved Plane Parts

CNBC reports, “A report issued by an aviation industry coalition on Wednesday called for new steps to help prevent future unapproved parts from entering the aviation supply chain. The report from the Aviation Supply Chain Integrity Coalition that was created in February called for strengthening vendor accreditation, digitizing documents and improving part traceability. It also proposed adopting best practices for receiving and inspecting parts and scrapping and destroying non-usable material.”
Full Story (CNBC)