After two years of unprecedented pain brought on by Covid, the airline industry should return to profitable times next year as pent-up demand for travel sustains bookings.<\/p>\n
That\u2019s the prediction of the International Air Transport Association, which Monday at its 78th annual general meeting in Doha said airlines have emerged \u201cleaner, tougher and nimble,\u201d having defied predictions for widespread bankruptcies and failures, according to director General Willie Walsh.<\/p>\n
\u201cIndustry-wide profit should be on the horizon in 2023,\u201d Walsh told the gathering of airline chiefs. \u201cWe are rebounding. By next year, most markets should see traffic reach or exceed pre-pandemic levels.\u201d<\/p>\n
As carriers emerge from the pandemic, they\u2019re facing critical labor shortages, elevated fuel prices and intensifying pressure to reduce emissions. But they\u2019re also enjoying bumper sales as customers flood back following the lifting of Covid curbs, taking leisure trips and catching up with friends and family.<\/p>\n
United\u2019s Kirby Sees High Fuel Costs as \u2018New Normal\u2019<\/strong><\/p>\n United Airlines Holdings Inc CEO Scott Kirby said his company is preparing for higher fuel prices to become the \u201cnew normal\u201d and to impact fares going forward.<\/p>\n Speaking in an interview Monday with Bloomberg Television, Kirby added that a top priority for his airline is to secure additional slots at New York\u2019s JFK airport, specifically to focus on business travel to the West Coast.<\/p>\n Emirates Seeks Faster Airbus A350 Deliveries<\/strong><\/p>\n Gulf carrier Emirates said it\u2019s in talks to take delivery of A350 wide-body jets ordered from Airbus SE over a shorter period amid continuing uncertainty around the handover of Boeing Co.\u2019s delayed 777X model.<\/p>\n With the American plane now not due to commence deliveries until 2025, Dubai-based Emirates is looking to accelerate A350 arrivals once the first example from a 50-strong order is shipped, most likely in late summer 2024, Tim Clark, the airline\u2019s president, said Monday in Doha.<\/p>\n Ryanair Reaches Pay Deal With Pilots<\/strong><\/p>\n Ryanair Holdings Plc\u2019s British-based pilots accepted a new pay deal with the airline, avoiding any potential strike, and giving the carrier some relief amid a wave of action from staff across Europe.<\/p>\n Ryanair members of the British Airline Pilots\u2019 Association voted to accept a revised pay offer from the airline, a union spokesperson said Monday by email.<\/p>\n BALPA had been in talks with Ryanair to restore pay after accepting so-called mitigation measures during the pandemic. Still, Ryanair faces a wave of strikes across Europe on June 25. Pilots and cabin crew in Italy, Spain, Portugal, France and Belgium are all seeking improved pay and conditions.<\/p>\n Airport Chaos May Get Worse This Summer<\/strong><\/p>\n The aviation industry needs to be prepared for staffing issues to get worse this summer, Deutsche Lufthansa AG CEO Carsten Spohr said during a roundtable in Doha on Monday.<\/p>\n The German airline group has also seen a strong rebound in corporate travel, Spohr said, adding that Lufthansa is considering whether to cancel more flights to build up more resilience in the system in coming months.<\/p>\n Ukraine, Oil Pose Demand Risk, Hololei Says<\/strong><\/p>\n The situation in Ukraine, along with rising oil prices and interest rates, is posing a real risk to demand for air travel, Henrik Hololei, director-general of the European Commission\u2019s department for Mobility and Transport, says Monday at IATA\u2019s annual meeting.<\/p>\n Rate Hikes No Match for Demand: Emirates<\/strong><\/p>\n Rising interest rates won\u2019t kill the latent demand that\u2019s built up for travel, Emirates president Tim Clark told Bloomberg TV.<\/p>\n \u201cSo long as there is a restriction of supply, and those quality companies, unable to supply because they have supply chain problems, demand will not shift,\u201d said Clark, who added he\u2019ll stay on at Emirates until it\u2019s profitable again.<\/p>\n Asked about the delay of Boeing Co. 777X jets, Clark said Emirates couldn\u2019t afford to have such levels of uncertainty and therefore was retaining its 777s and all its A380s until probably the mid-2030s.<\/p>\n \u201cI\u2019m not sure the management had eyes where they should have had the eyes,\u201d Clark said of Boeing. \u201cThey need help at the top level, they need to enmesh themselves in the workings of the business, at the shop floor level,\u201d he said.<\/p>\n IATA Appoints Nane as Chair<\/strong><\/p>\n Pegasus Airlines vice-chair Mehmet Tevfik Nane will assume the position of chair of the IATA Board of Governors for a one-year term, IATA said Monday, succeeding JetBlue Airways CEO Robin Hayes, who will continue to serve on the board.<\/p>\n RwandAir CEO Yvonne Manzi Makolo will serve as chair from June 2023, following Nane\u2019s term. Makolo will be the first woman to take on these duties.<\/p>\n The 79th IATA AGM will be held in Istanbul from June 4-6, 2023.<\/p>\n Star Alliance Sees 75% Capacity This Year<\/strong><\/p>\n Star Alliance, the biggest partnership group of global airlines, expects its members to operate at about 75% to 77% of their pre-pandemic capacity this year, chief executive officer Jeffrey Goh said. The optimism among airlines is \u201ccalibrated,\u201d he said.<\/p>\n \u201cMany of our members are looking to see how they can plan this in a way that you don\u2019t put on too much capacity right now, just because the forward bookings look good,\u201d Goh said. \u201cThe last thing I think they all want is once you put in the capacity, and then the demand goes down you\u2019ve got a problem scaling down.\u201d<\/p>\n Air NZ CEO Excited by Speed of Recovery<\/strong><\/p>\n The recovery is moving quickly as more people travel to and from New Zealand, though a degree of patience will be required given the various challenges facing the industry, including high oil prices, Air New Zealand chief executive officer Greg Foran said in an interview with Bloomberg TV.<\/p>\n Fares generally in New Zealand up around 20% to 25%, Foran said.<\/p>\n Airbus Can\u2019t Make Enough Single-Aisle Jets<\/strong><\/p>\n The planemaker is seeing record demand from airlines to replace aircraft, CEO Guillaume Faury said during an interview on Bloomberg Television. While demand for narrowbody jets will exceed supply in most scenarios, that\u2019s not yet the situation for widebody jets because international travel hasn\u2019t fully recovered, he said.<\/p>\n IATA Forecasts Profit in 2023<\/strong><\/p>\n Walsh said that while \u201cthere is no way to sugar coat the bitter economic and political realities,\u201d at the same time, \u201cthe desire to travel and the necessity of moving goods are both solid.\u201d<\/p>\n Losses this year are likely to total $9.7 billion, IATA said, an improvement on the $11.6 billion deficit predicted at the previous gathering last October. IATA also said that 2021\u2019s loss amounted to $42 billion, better than the $52 billion shortfall previously envisioned.<\/p>\n Demand Beating Capacity for Years: Qantas<\/strong><\/p>\n The current recovery in air passenger traffic is sustainable, Qantas CEO Alan Joyce said in an interview with Bloomberg Television on the sidelines of the IATA annual general meeting, adding that if he could \u201cget more aircraft into the air, I\u2019d be doing it tomorrow.\u201d<\/p>\n Average international airfares are \u201ceasily\u201d covering the higher fuel price and load factors – which reflect how full planes are – are \u201cunbelievably\u201d high, Joyce said. \u201cWe think that could be the case for some time. We may be in a situation in a year or two, where we have less capacity than we have demand,\u201d he said.<\/p>\n Malaysia Airlines\u2019 Airbus Fleet<\/strong><\/p>\n Malaysia Airlines is in discussions about the replacement of its Airbus A330s, according to the carrier\u2019s chief executive officer, Izham Ismail. Most of the aircraft being ordered to replace the A330s would be leased as the airline looks to keep its \u201cbalance sheet lean,\u201d Ismail said in an interview on the sidelines of the IATA AGM.<\/p>\n The company is in conversations with \u201cinterested parties\u201d for its A380s, an aircraft that doesn\u2019t feature in its fleet plans going forward, Ismail said. The carrier will only consider expansion after 2024.<\/p>\n Airbus Jets Wait for Engines<\/strong><\/p>\n The delayed arrival of aircraft engines is keeping Airbus from delivering some planes to customers as supply-chain problems weigh on the manufacturer\u2019s recovery from the coronavirus crisis despite strong demand, chief executive officer Guillaume Faury said in an interview.<\/p>\n Twenty narrowbody jets that were fully built by the end of May were still missing engines, which will lead to late deliveries. Faury said that aside from the engine delays, overall supply-chain challenges appear to have stabilized. Airbus plans to ramp up monthly output of its A320 series by 50%, and sees strong demand in coming years.<\/p>\n Air India Said to Consider Large Jet Order<\/strong><\/p>\n Air India Ltd is considering ordering as many as 300 narrowbody jets, according to people familiar with the matter, in what could be one of the largest orders in commercial aviation history as the formerly state-run airline looks to overhaul its fleet under new ownership.<\/p>\n The carrier may order Airbus SE\u2019s A320neo family jets or Boeing Co\u2019s 737 Max models, or a mix of both, the people said, asking not to be identified because the discussions are confidential. A deal for 300 737 Max-10 jets could be worth $40.5 billion at sticker prices, although discounts are common in such large purchases, and likely take years or even decades to deliver.<\/p>\n
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