Focusing on China Eastern Airlines Smart Aviation

On November 29th, a research report entitled “Research on the Digital Transformation Path of Civil Aviation Industry – A Case Study of China Eastern Airlines and Lufthansa” was published in German, Chinese and English. The report was collaboratively written by senior experts and scholars from the Institute for Technologies and Economics of Lithium (ITEL), Germany and the University of International Business and Economics (UIBE), Beijing. Representatives from Embassy of Germany in China, Chinese Embassy in Germany, the Institute of European Studies of Chinese Academy of Social Sciences, China Eastern Airlines and other organizations attended the conference.

This research report's lead writers are Ulrich Blum, Dean of ITEL and Professor Lan Qingxin, Dean of UIBE Yangtze Delta Region Trade Institute, who have led many important research projects in fields including smart aviation ecosystem, aviation hub construction and smart logistics. The research selected China Eastern Airlines and Lufthansa, the representative civil aviation enterprises of the two countries, as the main research objects, compared the digital development paths of civil aviation in various countries in such aspects as national planning, international environment and technical practice, and probed into the experience and enlightenment of aviation industry in pursuing digital transformation.

As the main research object of this collaborative research, China Eastern Airlines is the seventh largest airline in the world, with its flights reaching 1,036 destinations in 170 countries and regions. The airline has achieved remarkable achievements in many fields, such as in-flight Internet, green flight, and intelligent maintenance and services. Li Zhijun, an executive of the Information Department of China Eastern Airlines, pointed out that the digital transformation of aviation industry must be centered on customer demands.

Recently, China Eastern Airlines organized the 2022 North Bund International Aviation Forum, and discussed the construction of intelligent civil aviation transportation system with more than 150 guests from the global aviation industry. At the forum, the company released major achievements in the endeavors to become a "super carrier" and realize "intelligent aviation". The construction of Smart China Eastern Airlines will greatly boost the brand value of China Eastern Airlines.

New and restored services plus increased frequencies dominate Air Canada's summer 2023 schedule.

Air Canada has announced a new service between Montreal and Fort McMurray that will launch next June as part of the carrier's Canadian summer schedule. For summer 2023, Air Canada is also restoring suspended services and increasing frequencies on popular routes across Canada, as the company augments its Canadian network following the pandemic.

"As the country's flag carrier, Air Canada's increased Canadian summer schedule further reinforces our role in providing critical connectivity to Canadians coast-to-coast. Our new Montreal-Fort McMurray service brings easier access from eastern Canada to one of the critical economic hubs of Alberta. And with the prudent restoration of suspended routes and increased frequencies on others, we are improving our customers' options for domestic travel. We are looking forward to an exceptional summer, with service on 97 domestic routes to 51 Canadian airports, making us the largest Canadian carrier, with the most seats and capacity available for travellers," said Mark Galardo, Senior Vice President of Network Planning and Revenue Management at Air Canada.

"Furthermore, we've built our Canadian summer schedule to synchronize with our recently announced summer international schedule, facilitating connectivity through our hubs for our customers, whether they're travelling within Canada, across the border to the US, or to our many destinations worldwide. "

New service between Montreal and Fort McMurray will begin June 20, 2023. Flights will be operated year-round, three days a week, by Air Canada Rouge using an Airbus A319 aircraft with 136 seats in a Premium Rouge and Economy Class configuration. With its new Montreal and existing Toronto service, Air Canada will be the only carrier connecting Fort McMurray non-stop to Quebec and Ontario.

Flight	Departs	Arrives	Days of Week
AC1943	Montreal 08:15	Fort McMurray 10:38	Tuesday, Wednesday, Thursday
AC1942	Fort McMurray 12:05	Montreal 17:52	Tuesday, Wednesday, Thursday

Air Canada also announced this week, the resumption of several seasonal routes and one previously suspended route. This includes daily Gander-Toronto flights beginning June 1, London, Ontario-Montreal flights beginning June 17, four-times-weekly Fort McMurray-Toronto flights resuming May 1, and three-times weekly Calgary-Quebec City flights starting June 19. In addition, Air Canada is planning daily widebody service on its Ottawa-Vancouver route while also offering multiple options to popular leisure destinations, such as Kelowna and Victoria through its three main hubs.

Frequency Increases

Route	Frequency (Summer 2023 versus Summer 2022)
Edmonton-Montreal	Increases to four times daily from twice daily
Vancouver-Montreal	Increases to six times daily from five daily
Calgary-Toronto	Increases to 13 times daily from 11 daily
Kelowna-Vancouver	Increases to eight times daily from seven daily
Winnipeg-Toronto	Increases to seven times daily from five daily
Saint John-Toronto	Increases to three times daily from once daily
Kelowna-Toronto	Increases to two times daily from once daily
Quebec City-Vancouver	Increases to five times from three times weekly

World's First C919 Aircraft Delivered to China Eastern Airlines

On December 9th, the world's first C919 aircraft, with the registration number B-919A, was delivered to its world’s first launch customer, China Eastern Airlines (CEA).

The C919 is China's first homegrown large passenger aircraft in accordance with international airworthiness standards, and owns independent intellectual property rights.

It features an advanced aerodynamic design, propulsion system and materials, as well as lower carbon emission and higher fuel efficiency. A pattern of a Chinese seal reading "world's first C919" in Chinese is printed in the front part of the plane delivered.

The aircraft adopts a 164-seat configuration that comes with a two-class cabin layout, including 8 business class seats and 156 economy class ones. In the economy cabin, the middle seat in each three-seat row is 1.5 cm wider than its neighbouring ones, which offers more comfort.

With an aisle height of 2.25 meters, the plane comes with an efficient air filtration system, a passenger-centric lighting system and low noise.  Besides, there are twenty 12'' drop-down screens that can play 1080P videos.

On the day of the delivery, a maiden flight of the C919 aircraft was made by three senior CEA pilots from the Shanghai Pudong International Airport to the Shanghai Hongqiao International Airport.

After arriving at the Shanghai Hongqiao International Airport and passing through a water gate, the aircraft was officially commissioned into the fleet of CEA.  It is expected to be put into commercial use in the spring of 2023.

CEA, as the world's first airline operator for C919, boasts a fleet of nearly 800 airplanes. It has rich operational experience and enjoys comprehensive advantages. Passengers will soon be able to catch an early experience of the superior and reliable performance of the C919 with CEA .

China Eastern Airlines takes delivery of the world's first COMAC C919 aircraft (airlinerwatch.com)

Norwegian carried 1.4 million passengers in November

In November, Norwegian had 1.4 million passengers, an increase of 37 percent compared to November last year. The load factor was 79.5 percent and routes to beach destinations in Southern Europe were particularly popular with a load factor of close to 90 percent from Norway.

“We are satisfied with this month’s traffic numbers and associated top-line, and glad to see that a total of 1.4 million passengers chose to travel with us. While we are now in the low-season, demand for air travel continues to be persistent, particularly to our many popular beach destinations. In November, the load factor on routes to sunnier destinations was close to 90 percent from Norway. I am particularly delighted about this month’s punctuality, proving to be the best so far this year and a result of the efforts of our many dedicated colleagues who are doing their utmost to serve our customers every day,” said Geir Karlsen, CEO of Norwegian.

Norwegian had 1,374,828 passengers in November, up 37 percent from November last year. The load factor in November was 79.5 percent. The capacity (ASK) was 2,122 million seat kilometres, while actual passenger traffic (RPK) was 1,686 million seat kilometres. In November, Norwegian operated an average of 64 aircraft and 99.7 percent of the scheduled flights were completed. Punctuality, as measured by the number of flights departing within 15 minutes of scheduled time, was at 90.3 percent in November.

Continued solid demand for air travel

“We are well positioned to respond to seasonal variations. We have adjusted our capacity to meet the lower demand during the winter season and have hedged a total of 15 percent of our estimated fuel consumption for 2023. Looking ahead, we continue to see a pent-up demand for air travel, especially to sunny beach destinations. We recently launched several new routes to destinations across Europe, and we are eager to welcome both passengers and new colleagues during what we expect to be a busy summer of 2023,” said Karlsen.

Norwegian is Norway’s largest airline and one of Europe’s leading low-cost carriers. Norwegian has 4,000 employees and is increasing its staff with additionally 750 employees across the company’s bases in the Nordics and in Europe for the summer of 2023. For the summer of 2023, Norwegian plans for a fleet increasing to 85 aircraft. This will allow Norwegian to offer more departures on the most popular routes, giving the customers even more flexibility as they plan their travels. Norwegian currently has 239 routes for sale in the summer period, running from March to October 2023.

IATA Establishes Modern Airline Retailing Program

The International Air Transport Association (IATA) announced the establishment of the Modern Airline Retailing program to advance customer centricity and value creation in the airline industry. The transformation will be accelerated by a consortium of advanced airline adopters that will work together through IATA. Consortium participants include American Airlines, Air France-KLM, British Airways, Emirates, Finnair, Iberia, Lufthansa Group, Oman Air, Singapore Airlines and Xiamen Airlines. 

In today’s environment, the customer experience is affected by decades old standards, processes and technology and the airline industry must adopt modern retailing practices that will create additional value for travelers and reduce the hassles of increasingly complex passenger document checking requirements.

Modern Airline Retailing will solve this dilemma and unleash value creation opportunities by transforming airline distribution to a system of “Offers and Orders” that will parallel what most other retailers use. 

“Our aim is to create value for travelers by meeting their needs. We know that passengers want a seamless digital experience; and they expect consistent service irrespective of how they purchased their travel. With the strength of a global consortium of leading airlines behind us, the next few years are set to see an accelerated and comprehensive transformation of the customer experience,” said Muhammad Albakri, IATA’s Senior Vice President, Financial Settlement and Distribution Services. 

Transitioning to Modern Airline Retailing 

The Modern Airline Retailing program is built on three pillars:

Customer Identification

• Industry standards, which build on the One ID standard, allow passengers to streamline their journey with advance information sharing and a contactless process at the airport based on biometric recognition. Furthermore, this program will also allow airlines to offer a seamless experience across different channels and touchpoints and have greater visibility into third party travel sellers with whom they are dealing.  

Airlines Cut Losses in 2022; Return to Profit in 2023

The International Air Transport Association (IATA) expects a return to profitability for the global airline industry in 2023 as airlines continue to cut losses stemming from the effects of the COVID-19 pandemic to their business in 2022. 

• In 2023, airlines are expected to post a small net profit of $4.7 billion—a 0.6% net profit margin. It is the first profit since 2019 when industry net profits were $26.4 billion (3.1% net profit margin). 
   
• In 2022, airline net losses are expected to be $6.9 billion (an improvement on the $9.7 billion loss for 2022 in IATA’s June outlook). This is significantly better than losses of $42.0 billion and $137.7 billion that were realized in 2021 and 2020 respectively.

“Resilience has been the hallmark for airlines in the COVID-19 crisis. As we look to 2023, the financial recovery will take shape with a first industry profit since 2019. That is a great achievement considering the scale of the financial and economic damage caused by government imposed pandemic restrictions.  But a $4.7 billion profit on industry revenues of $779 billion also illustrates that there is much more ground to cover to put the global industry on a solid financial footing. Many airlines are sufficiently profitable to attract the capital needed to drive the industry forward as it decarbonizes. But many others are struggling for a variety of reasons. These include onerous regulation, high costs, inconsistent government policies, inefficient infrastructure and a value chain where the rewards of connecting the world are not equitably distributed,” said Willie Walsh, IATA’s Director General.

2022

Improved prospects for 2022 stem largely from strengthened yields and strong cost control in the face of rising fuel prices. 

Passenger yields are expected to grow by 8.4% (up from the 5.6% anticipated in June). Propelled by that strength, passenger revenues are expected to grow to $438 billion (up from $239 billion in 2021). 

Air cargo revenues played a key role in cutting losses with revenues expected to reach $201.4 billion. That is an improvement compared with the June forecast, largely unchanged from 2021, and more than double the $100.8 billion earned in 2019.

Overall revenues are expected to grow by 43.6% compared to 2021, reaching an estimated $727 billion.

Most other factors evolved in a negative manner following a downgrade of GDP growth expectations (from 3.4% in June to 2.9%), and delays in removing COVID-19 restrictions in several markets, particularly China. IATA’s June forecast anticipated that passenger traffic would reach 82.4% of pre-crisis levels in 2022, but it now appears that the industry demand recovery will reach 70.6% of pre-crisis levels. Cargo, on the other hand, was anticipated to exceed 2019 levels by 11.7%, but that is now more likely be moderated to 98.4% of 2019 levels.

On the cost side, jet kerosene prices are expected to average $138.8/barrel for the year, considerably higher than the $125.5/barrel expected in June. That reflects higher oil prices exaggerated by a jet crack spread that is well-above historic averages. Even with lower demand leading to reduced consumption, this raised the industry’s fuel bill to $222 billion (well above the $192 billion anticipated in June).

“That airlines were able to cut their losses in 2022, in the face of rising costs, labor shortages, strikes, operational disruptions in many key hubs and growing economic uncertainty speaks volumes about peoples’ desire and need for connectivity. With some key markets like China retaining restrictions longer than anticipated, passenger numbers fell somewhat short of expectation. We’ll end the year at about 70% of 2019 passenger volumes. But with yield improvement in both cargo and passenger businesses, airlines will reach the cusp of profitability,” said Walsh.

2023

In 2023 the airline industry is expected to tip into profitability. Airlines are anticipated to earn a global net profit of $4.7 billion on revenues of $779 billion (0.6% net margin). This expected improvement comes despite growing economic uncertainties as global GDP growth slows to 1.3% (from 2.9% in 2022). 

“Despite the economic uncertainties, there are plenty of reasons to be optimistic about 2023. Lower oil price inflation and continuing pent-up demand should help to keep costs in check as the strong growth trend continues. At the same time, with such thin margins, even an insignificant shift in any one of these variables has the potential to shift the balance into negative territory. Vigilance and flexibility will be key,” said Walsh.

IATA-McKinsey Study Shows Imbalanced Aviation Value Chain

                                       The International Air Transport Association (IATA) and McKinsey & Company published a study of profitability trends across the aviation value chain showing that profitability varies widely by sector. The study also shows that in aggregate, airlines underperform on the financial return that an investor would normally expect.

While there is no clear path to rapidly re-balance the value chain, the study concludes that there are some key areas—including decarbonization and data-sharing—where working together and burden-sharing will mutually benefit all value chain participants.

Highlights from the Understanding the Pandemic’s impact on the Aviation Value Chain study include:

 

• Capital Destruction: Despite delivering consistent operating profits pre-pandemic (2012-2019), airlines collectively did not produce economic returns above the industry’s Weighted Average Cost of Capital (WACC). On average the collective Return in Invested Capital (ROIC) generated by airlines was 2.4% below the WACC, collectively destroying an average of $17.9 billion of capital each year. 
   
• Value Creation: Pre-pandemic, all sectors of the value chain except airlines delivered ROIC in excess of the WACC, with airports leading the pack in the absolute value of return by rewarding investors with an average of $4.6 billion annually above the WACC (3% of revenue). When viewed as a percentage of revenue, Global Distribution Systems (GDSs)/Travel Tech firms topped the list with average returns of 8.5% of revenues above the WACC ($700 million annually), followed by ground handlers (5.1% of revenue or $1.5 billion annually), and Air Navigation Service Providers (ANSPs) at 4.4% of revenues ($1.0 billion annually). 
   
• Pandemic Changes: Although the pandemic (2020-2021) saw losses across the value chain, in absolute terms airlines’ losses led the pack, with ROIC falling below the WACC by an average of $104.1 billion annually (-20.6% of revenues). Airports saw ROIC fall $34.3 billion below the WACC and generating the largest economic losses as a percentage of revenue (-39.5% of revenues).

“This research reaffirms that airlines improved their profitability in the years following the Global Financial Crisis. But it also clearly shows that airlines, on average, were not able to benefit financially to the same degree as their suppliers and infrastructure partners. Rewards across the value chain are also disproportionate to risk. Airlines are the most sensitive to shocks but have limited profits with which to build a financial buffer,” said Willie Walsh, IATA’s Director General.

“The pandemic saw all players fall into economic losses. As the industry recovers from the crisis, the study’s most important question is: can a more balanced distribution of economic returns and risk be realized in the post-pandemic world?” said Walsh.

Several changes in the profile of airline economic returns are noted in the study:

 

• While network carriers underperformed the low-cost sector (LCCs) pre-pandemic, average economic returns by network carriers exceeded those of the LCCs during the pandemic. The gap between the two, however has narrowed as the recovery progressed.
   
• Airlines solely operating cargo flights has a profitable financial performance with an ROI of nearly 10%. Thus, the profitability all-cargo carriers was the reverse of airlines carrying both passengers and cargo. By comparison, the performance of all cargo carriers is still well below the average ROIC for freight forwarders which began the crisis at nearly 15% of revenues and grew to 40% of revenues by 2021.
   
• Regionally, it was clear that in aggregate North America carriers entered the crisis with the healthiest balance sheets and strongest financial performance. The picture of recovery was less clearcut in 2021, but having fallen the deepest in the crisis, the trajectory of the region’s recovery is also the steepest. 

Why do airlines generate insufficient economic returns?

An updated analysis of the forces shaping airline profitability originally done in 2011 with Harvard Business School’s Professor Michael Porter demonstrates there has been little positive change. 

 

• Competitive Fragmented Industry: The airline industry is intensely competitive, fragmented and subject to high barriers to exit with low barriers to entry.  
   
• Structure of suppliers, buyers and channels: A high concentration of powerful suppliers, the emergence of increasingly efficient alternatives to air travel, commoditized product offerings with low switching costs and a fragmented buyers’ community are characteristics of the operating environment. 

“It is difficult to see how these entrenched forces will change significantly in the near term. In most cases the interests of those in the value chain are simply too divergent to work as partners to drive change that could meaningfully alter the profitability profile across the value chain. That is why IATA will continue to call on governments to better regulate our monopoly or near-monopoly suppliers like airports, ANSPs and GDSs,” said Walsh.

Recent IATA polling shows public understanding of the need to regulate monopoly suppliers. Some 85% of consumers polled in an 11-country survey agreed that the prices that airports charge should be independently regulated, like utilities.

Cooperation

The value chain study also revealed some areas of common interest where greater cooperation would deliver benefits for all. Two of the examples noted in the study include:

 

• Data-driven efficiency gains: Aviation generates vast amounts of data. At the operational level, sharing data to build a more complete picture of how day-to-day decisions impact customers, airports terminals, airline schedules/crew movements, and runway utilization is already helping to drive efficiencies for all industry players at some airports. This same principle can be applied across the industry to make better long-term decisions in areas including infrastructure development, process improvements, and skills development. 
   
• Decarbonization: Achieving net zero carbon emissions by 2050 cannot be done by airlines alone. Fuel suppliers need to make sustainable aviation fuels available in sufficient quantities at affordable prices. ANSPs need to provide optimal routings that minimize emissions. Engine and aircraft manufacturers must bring to market aircraft that are more fuel efficient and take advantage of low or zero carbon propulsion means such as hydrogen or electricity. Those offering service in the airport environment will need to convert to electric vehicles. 

“There is no magic solution to rebalance the value chain. But it is clear that the interests of governments, travelers and other value chain participants are best served by financially healthy participants—and particularly airlines. A combination of better regulation and cooperation in areas of mutual interest could move the needle. And there are at least two areas ripe for collaboration and burden sharing—pursuing data-driven efficiency gains and decarbonization,” said Walsh.

“We are proud to partner with IATA since 2005 on understanding the value created across the aviation value chain. Over that time, the aviation industries have seen several crises and comebacks. But never has the aviation value chain overall returned its cost of capital. Airlines have consistently been the weakest element, even in their best years not quite returning cost of capital. But there are win-wins, and companies across the value chain can work better together to serve customers, and improve value,” said Nina Wittkamp, Partner at McKinsey.

Air Serbia commences direct flights to Ankara, Izmir and Budapest

During the upcoming summer season, Air Serbia will start operating flights between Belgrade and Izmir two times a week, and flights to Ankara four times a week. In the middle of March, the Serbian national airline will also commence direct flights between Belgrade and Budapest, which will be operated up to seventeen times a week during the summer season. Fares for new destinations are already available at the website, mobile application, as well as in Air Serbia stores, at the starting price of 59 euros for one-way flights to Ankara and Izmir in economy class, or 49 euros for one-way economy class flights to Budapest.

"Not a lot of time has passed since we announced the commencement of new services between Belgrade and Istanbul. We are now pleased to announce that starting on 28 March, our company will start flying to Ankara, and as of 15 April, to Izmir as well. Another new destination in our offer is Budapest, to which we are re-establishing operations after a hiatus of several years. Ahead of us is a summer season during which we will start operating flights to four new destinations in Italy, two in Germany, one in France and Sweden each, and we will also surprise our passengers with new summer holiday destinations. We believe that 2023 will be the year in which we will push our limits further, offering direct flights to almost 100 cities around the world", said Bojan Aranđelović, Head of Network Planning at Air Serbia.

Air Serbia will start operating flights to the capital of Hungary, Budapest, on 13 March, 2023. The number of flights will be gradually increased to up to seventeen flights a week. Budapest is located on the Danube, the second longest river in Europe, and is known for its thermal springs and numerous spas. The city landscape is rich with architectural landmarks from different historical periods. The tallest buildings are St. Stephen's Basilica and the Parliament. Andrássy Avenue is on the UNESCO World Heritage List, and it is where the famous Hungarian State Opera and Music Academy are located, and at the very end of the avenue is the magnificent Heroes’ Square.

Swiss Air-Rescue Service Rega orders 12 additional five-bladed H145s for its mountain bases

Swiss Air-Rescue Service Rega orders 12 additional five-bladed H145s for its mountain bases

The Swiss Air-Rescue Service Rega has ordered a second batch of 12 five-bladed H145 helicopters to be operated from its mountain bases. They will replace the current fleet of AW109SP helicopters. This new order follows an initial contract for nine H145s, announced in March this year. By 2026, Rega will operate an all-Airbus fleet consisting of 21 five-bladed H145s.

“To effectively operate life-saving air rescue services in Switzerland, we understand that the ability to perform optimally at altitude is paramount,” says Bruno Even, CEO of Airbus Helicopters. “The five-bladed H145 landed on the Aconcagua in Chile, a mountain that is nearly 7,000 metres high - no other twin engine helicopter has ever achieved this feat. That is why we are especially proud that Rega has put its faith in the five-bladed H145 and decided to make it the only helicopter type in its fleet to perform such critical missions.”

“By selecting the five-bladed H145, we are ensuring that Rega will continue being able to provide its patients with reliable and professional medical assistance by air for the next 15 years,” says Ernst Kohler, CEO of Rega.

The five-bladed H145s will come equipped with a state-of-the-art navigation system, especially tailored to the operator’s needs that will enhance the mission capabilities and the safety of operations. The system will use new capabilities of the Flight Management System GTN750 Xi by Garmin. It will integrate and control a multi-sensor system that provides highly accurate and reliable navigation capacities. Even in the event of GPS signal loss, the helicopter will navigate safely thanks to Thales’ inertial navigation system. This solution will further boost the navigation performance in low IFR conditions and allows the helicopter to be certified as navigation procedure RNP-AR 0.1, which is the most accurate navigation procedure in the helicopter environment. The configuration also includes a new hoist by Vincorion that is being certified on the five-bladed H145, ensuring highest safety standards.

Rega operates 14 HEMS stations in Switzerland. Last year, the helicopter crews carried out 14,330 missions, including transporting 471 COVID patients.

The new version of Airbus’ best-selling H145 light twin-engine helicopter adds a new, innovative five-bladed rotor to the multi-mission aircraft, increasing the useful load of the helicopter by 150kg. The simplicity of the new bearingless main rotor design also eases maintenance operations, further improving the benchmark serviceability and reliability of the H145, while improving ride comfort for both passengers and crew.

In total, there are more than 1,600 H145 family helicopters in service, logging a total of more than seven million flight hours. Powered by two Safran Arriel 2E engines, the H145 is equipped with full authority digital engine control (FADEC) and the Helionix digital avionics suite. It includes a high performance 4-axis autopilot, increasing safety and reducing pilot workload. Its particularly low acoustic footprint makes the H145 the quietest helicopter in its class, while its CO2 emissions are the lowest amongst its competitors. 

Amount of blocked airline funds rising says IATA

The International Air Transport Association (IATA) warned that the amount of airline funds for repatriation being blocked by governments has risen by more than 25% ($394 million) in the last six months. Total funds blocked now tally at close to $2.0 billion. IATA calls on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.   

IATA is also renewing its calls on Venezuela to settle the $3.8 billion of airline funds that have been blocked from repatriation since 2016 when the last authorization for limited repatriation of funds was allowed by the Venezuelan government. 

“Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price. No business can sustain providing service if they cannot get paid and this is no different for airlines. Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is a critical for any economy to remain globally connected to markets and supply chains,” said Willie Walsh, IATA’s Director General. 

 

Airline funds are being blocked from repatriation in more than 27 countries and territories.  

The top five markets with blocked funds (excluding Venezuela) are: 

Nigeria: $551 million 

Pakistan: $225 million 

Bangladesh: $208 million 

Lebanon: $144 million 

Algeria: $140 million 

Nigeria  

Total airline funds blocked from repatriation in Nigeria are $551 million. Repatriation issues arose in March 2020 when demand for foreign currency in the country outpaced supply and the country’s banks were not able to service currency repatriations.  

Despite these challenges Nigerian authorities have been engaged with the airlines and are, together with the industry, working to find measures to release the funds available.  

“Nigeria is an example of how government-industry engagement can resolve blocked funds issues. Working with the Nigerian House of Representatives, Central Bank and the Minister of Aviation resulted in the release of $120 million for repatriation with the promise of a further release at the end of 2022. This encouraging progress demonstrates that, even in difficult circumstances, solutions can be found to clear blocked funds and ensure vital connectivity,” said Kamil Al-Awadhi as Regional Vice President for Africa and the Middle East. 

Venezuela 

Airlines have also restarted efforts to recover the $3.8 billion of unrepatriated airline revenues in Venezuela. There have been no approvals of repatriation of these airline funds since early 2016 and connectivity to Venezuela has dwindled to a handful of airlines selling tickets primarily outside the country. In fact, between 2016 and 2019 (the last normal year before COVID-19) connectivity to/from Venezuela plummeted by 62%. Venezuela is now looking to bolster tourism as part of its COVID-19 economic recovery plan and is seeking airlines to restart or expand air services to/from Venezuela. Success will be much more likely if Venezuela is able to instill confidence in the market by expeditiously settling past debts and providing concrete assurances that airlines will not face any blockages to future repatriation of funds.    

More travel disruption feared as passengers take to the skies this holiday season

8% UK and US passengers experienced travel disruption since COVID 

83% still planning a festive or early 2023 break

66% expect travel chaos to taint their upcoming trips 

55% will boycott an airline if their next holidays are similarly disrupted 

93% of passengers say reputation for arriving on time is a major factor in their decision to buy a ticket

New data from travel technology company IBS Software reveals that despite more than two thirds (68%) of passengers being inconvenienced by disrupted journeys since COVID travel restrictions were lifted and 66% expecting more of the same during upcoming trips, most (83%) still plan on flying for a break in the next six months.

The research, which polled 2000 recent travellers in the UK and US*, warns that holiday providers have one more chance to get it right; if holidaymakers experience disruptions again during their upcoming trips, over half (55%) will avoid booking with the airline in the future. When asked who they blame for their poor experiences, 50% said it was the fault of the airlines when flights were delayed, with just 13% blaming the airport. However, when it comes to lost luggage the jury is out - 42% say it’s the airport’s responsibility and 40% are seething at the airline.

Photo by Markus Spiske on Unsplash

Delayed flights or missed connections was the most common holiday hurdle, affecting over a third of all passengers (35%), followed closely by waiting in longer than normal queues (31%) and cancelled flights (15%). Lost luggage, which dominated the news headlines in the Summer, is confirmed by the research as a major annoyance, blighting nearly 1 in 7 passengers’ holidays over the last 18 months.

Despite a clear desire to travel, passengers won’t accept more disruption without protest. If passengers find out their journey is going to be disrupted, 53% will complain to the airline and 38% will use social media to broadcast their annoyance. And if an airline doesn’t have a reputation for punctuality they’re likely to lose out with 93% of travellers saying this is an important factor when deciding which airline to buy from.

However, there is still an opportunity for airlines to win back the loyalty of their passengers. When terminal turmoil occurs, passengers can be placated by automatic refunds when eligible; proactive customer support to suggest alternative routes; and automatic alerts on their phone when something goes wrong. As one passenger who took the survey commented: “Just actually organise yourselves properly, there’s no excuse for all the disruption”.

Philip Hinton, SVP, IBS Software, comments: “The pent-up desire to travel was always going to put airlines and airports under extreme pressure - and so it proved, with widespread disruption plaguing many long-anticipated journeys. Airlines know this is a major issue but there is a window of opportunity to put a greater focus on improving performance and customer satisfaction. We see that airlines are prioritising operations because the widespread issues have directly impacted business performance.”

About the research

*The survey was conducted online by Censuswide between Monday 28th November and Wednesday 30th November. 1000 consumers who have travelled by air for leisure in the last 18 months in both the US and UK responded.

Airlines 4 Europe statement on EU agreement reforming the Emissions Trading System (ETS) for aviation

A4E statement on EU agreement reforming the Emissions Trading System (ETS) for aviation

During their meeting in Brussels which began on 6th of December 2022, European negotiators agreed on a reform of the carbon market for aviation (“ETS in Aviation”). This reform is part of the broader Fit for 55 package of climate proposals currently making their way through the EU’s legislative process.

 

The decarbonisation of aviation is a global challenge. The deal reached today on the scope of the ETS shows that work towards an effective global carbon price for aviation has only started. This will build on the outcome of the 41st Triennial International Civil Aviation Organisation (ICAO) Assembly in October 2022.

 

We must not forget that airlines have been paying for their emissions through the EU ETS since 2012. The cost of compliance for the ETS is likely to have increased five times in size by 2025 to over EUR 5 billion annually.

 

A4E is extremely disappointed about the decision to phase out free ETS allowances currently granted to airlines by 2026. This is well before truly effective decarbonisation solutions will be available at the scale needed for them to be effective.

 

A4E welcomes the decision to better support decarbonisation in civil aviation. The creation of a novel system of sustainable aviation fuel (SAF) allowances to help stimulate the rapid deployment of SAF and the earmarking of allowances under the Innovation Fund of the ETS are welcome. They will help lower the cost of the energy transition for airlines and give Europe a unique opportunity to become the leader in green aviation.

 

The future competitiveness of European aviation and the European SAF industry is clearly at stake. In a globally competitive environment where countries, such as the US through the Inflation Reduction Act (IRA), are willing to use public funds to incentivise the use and production of clean energies, it is essential that Europe finds the optimum level of incentives in order to maintain a level playing field. It is therefore crucial that the review of the Carbon Border Adjustment Mechanism (CBAM) in 2027 considers the impact of policies such as the EU ETS on air transport services.

easyJet announces new BHX-Milan route

easyJet will begin flying three times a week between BHX and Milan Malpensa Airport (MXP) in June 2023.

Ali Gayward, easyJet’s UK country manager, said: “Whether they’re on their holidays, visiting friends and family or on business, the addition of Milan to our Birmingham network provides yet another convenient direct connection and even greater choice for customers looking to book a great-value trip to one of Europe’s most popular city destinations.”

Tom Screen, aviation director at BHX, added: "We're thrilled easyJet is adding further connectivity between the second cities of Britain and Italy. I have no doubt these regular BHX-MXP flights will be well subscribed by customers from both countries."

This is the UK-based carrier’s 11th route from Birmingham. Its flights to MXP will go on Mondays, Thursdays and Sundays from 26 June 2023.

JetBlue introduces newly revamped TrueBlue Loyalty Programme,

New Program Offers More Choice and Customization With ‘Perks You Pick’ For Everyone From Occasional Travelers to The Most Loyal Customers

JetBlue has today announced a new TrueBlue loyalty program that offers new perks and more choices as an increasing number of customers look to JetBlue as a trusted source for travel beyond just flights. The new program maintains most of TrueBlue’s signature perks that customers have come to love while also allowing TrueBlue members new opportunities to earn perks and status along the way. The more ways customers interact with JetBlue, the more perks they can earn. From JetBlue Vacations hotel and cruise packages, to cars, stays and activities from Paisly, to many JetBlue flight extras and add-ons, and purchases on all JetBlue credit cards, everyone from infrequent travellers to road warriors can find ways to earn and redeem in JetBlue’s loyalty program.

UK Border Force to screw up Christmas for millions of travellers........

Photo by Yolanda Suen on Unsplash

Public and Commercial Services (PCS) union has confirmed that its members working for the UK's Border Force workers will strike at six major UK airports for at least eight days over the Christmas period screwing up travel plans for millions.

The union has called strike action between 23rd and 26th December, and then from 28th to 31st December and will affect the UK's major airports London Heathrow, London Gatwick, Manchester, Birmingham, Glasgow and Cardiff.  A strike will also impact the south coast port of Newhaven, which would have devastating consequences for the only loss-making route to Dieppe by Transmanche Ferries / DFDS.  These dates have been chosen by the union, it says,  to have the maximum impact by causing the most disruption to passengers. 

PCS Mark Serwotka told media that 40,000 of its members were having to use food banks, while 45,000 were claiming in-work benefits. Although, union reps couldn't say how many of those going on strike were included in those numbers.   The union are calling for a 10% pay increase, better job security, with no cuts to pensions or redundancies.  

eGates should remain operational throughout the strikes for those with biometric passports from EU countries, Australia, Canada, Iceland, Japan, Liechtenstein, New Zealand, Norway, Singapore, South Korea, Switzerland or the USA.

Most civil servants have received just a 2% pay rise this year and after a pay freeze for a number of years. PCS said 86% of its 100,000 members across 124 government departments and public sector employers have voted in favour of strike action and promised more strikes - over all departments would be called next year.  So far only a few jobcentres and benefits offices will take strike action in the coming weeks, however, the union is already making plans for most Universal Credit service centres to see crippling walkouts in the new year. 

The Christmas action will affect millions of people who had been planning getaways over the festive period and to reunite with relatives from overseas.  Robert Jenrick, the Immigration Minister called the strike "unjustifiable and will ruin the plans of thousands of families and businesses across the country. - While we are working closely with all UK ports and airports and have robust plans in place to minimise any delays if strike action goes ahead, passengers should be prepared for their plans to be severely disrupted."

Gatwick Airport said it will deploy extra staff on strike days to help with the welfare of stranded passengers and were in consultation with Border Force over mitigation however, delays of between 4 and 6 hours should be expected.  

The Business Travel Association warned  "The entire travel support system will once more be plunged into dealing with cancellations and disruptions rather than bookings with no financial recompense.  - further strike action puts British workers’ Christmases at risk. Hard workers up and down the country will be stranded, struggling to get home."

A spokesperson for London Heathrow Airport claimed that "Our priority is to ensure passengers get through the border safely and as quickly as possible. We are working closely with airlines and Border Force on mitigation plans for potential strike action by Border Force officers and these plans will now be implemented for the notified days."

Manchester Airport said "It is hugely regrettable that the PCS Union has chosen to disrupt one of the most important times of the year for international travel by calling a strike by Border Force officers at several UK ports, including Manchester Airport, for 23-26 December and 28-31 December.  We urge union and Government representatives to work together to find a solution to avert this strike action."

It added: "We will be working with our airlines to provide passengers with as much advance notice of cancelled services as possible, so that people have the chance to rebook their travel around the strike days. Arriving passengers should also be prepared for much longer immigration queues on strike days, owing to reduced Border Force staffing levels.  Those due to travel during the affected period should look out for communications from their airlines over the coming days."