War for Talent in Airline Industry, Antitrust Cases Could Redefine Airline Competition, and More
Aviation news brief for March 2, 2023
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Here are the exciting aviation industry updates for today. Let’s get started.
Delta pilots' contract sets off "war for talent" in the airline industry
Delta Air Lines pilots have ratified a new contract that includes over $7bn in cumulative increases in pay and benefits over four years.
The deal will be a benchmark for contract negotiations at rival carriers and is widely expected to raise the bar for pilots' contracts in the airline industry.
The new agreement includes a 34% cumulative pay increase, a lump-sum one-time payment, reduced health insurance premiums, and improvements in holiday pay, vacation, company contributions to 401(k), and work rules.
The contract is expected to put greater pressure on American Airlines and United Airlines to conclude their contract negotiations. Read more
Antitrust cases could redefine airline competition in the US
Two high-profile antitrust cases involving JetBlue could redefine how airlines compete in the U.S. and may have significant implications for the industry, allowing for more consolidation or making airlines think twice before merging.
In one case, JetBlue is pushing back against the Department of Justice's efforts to unwind its alliance with American Airlines.
On the other, JetBlue is waiting to hear if the Justice Department will block its $3.8bn merger with Spirit Airlines.
JetBlue argues that getting bigger is the only way it can compete with larger rivals such as American Airlines, United Airlines, Delta Air Lines, and Southwest Airlines. Read more
Lufthansa banks on post-pandemic surge with $7.5 billion Boeing and Airbus order
Lufthansa has ordered 22 long-haul aircraft from Boeing and Airbus, worth around $7.5 billion at list prices.
The German airline has placed orders for 10 Airbus A350-1000s, five Airbus A350-900s, and seven Boeing 787-9s. Lufthansa is also in talks to purchase more long-haul planes.
After travel restrictions and border closures brought international travel to a near standstill during the pandemic, airlines are now struggling to meet the surge in demand for air travel.
Lufthansa plans to reactivate four A380s on US routes in July, and the newly ordered planes will be equipped with the airline's latest-generation cabins and seats. Read more
Leasing vs. buying: how airlines fund multi-billion dollar aircraft deals
Air India plans to fund its recent purchase of 470 new aircraft from Airbus and Boeing using a combination of internal cash, shareholder equity, and sale-and-leasebacks.
While buying an aircraft outright is an option, airlines typically prefer to lease as it frees up capital and offers operational flexibility and improved cash flow.
Around 80% of commercial fleets in India are leased, compared to 53% globally. Aircraft lessors have seen their share in the total commercial fleet grow globally from 25% in 2000 to 48.9% in 2020. Lease arrangements can be dry lease (without crew and support staff) or wet lease (with crew). Read more
AirAsia betting on China for post-pandemic success
AirAsia's parent company, Capital A, expects the reopening of China's borders to international travelers to drive the recovery of its four airlines, which include AirAsia Malaysia, Indonesia AirAsia, Philippines AirAsia, and Thai AirAsia.
The airlines plan to increase capacity to China from less than 1% of 2019 levels in December to 90% by August, and fly 11% more capacity to China in November than four years earlier.
China was the largest source of international visitors to Thailand and in the top three for Malaysia and the Philippines in 2019, making it a critical market for AirAsia's success. Read more
Aviation industry seeks to hire 134,000 skilled workers in the next 20 years
Thirty airline and air freight companies participated in a job fair in western Maryland to recruit mechanics and technicians due to the high demand for skilled workers in the aviation field.
The job fair, organized by the Pittsburgh Institute of Aeronautics, attracted major companies such as Boeing, Lockheed Martin, and United Airlines.
The aviation industry aims to hire up to 134,000 workers over the next 20 years to keep up with the demand and cope with aging aircraft. Both employers and job seekers expressed their excitement for the field and its growth potential. Read more
Flying into the future: Los Angeles startup tests hydrogen-powered plane
Universal Hydrogen, a Los Angeles-based startup, is testing a hydrogen-powered De Havilland Canada Dash 8-300 turboprop, set to take off from Grant County International Airport in Washington State.
It will be the largest aircraft ever flown on hydrogen power if successful. Universal Hydrogen's CEO, Paul Eremenko, believes synthetic fuels and biofuels are inefficient and not very climate-friendly.
The company aims to supply hydrogen-filled modules to airports and regional aircraft, such as the Dash-8 and ATR. The company has almost 250 orders for conversion kits from 16 customers and is backed by Playground Global, Airbus Ventures, JetBlue Technology Ventures, GE Aviation, and American Airlines. Read more
IBS Software and Malaysia Airlines extend partnership with AI-powered crew management platform
Malaysia Airlines has signed a five-year deal with IBS Software to move its crew management systems to the cloud-based platform iFlight Crew.
The platform will use artificial intelligence and machine learning to automate situational awareness and decision-making and facilitate seamless data flow between operations and crew tracking functions.
The solution will factor in complex variables and scenarios to provide optimal crew pairing and rostering solutions while maximizing productivity and controlling costs, adhering to strict industry standards and regulations.
The platform aims to enhance crew well-being, boost cost-savings and upgrade crew management systems. Read more
Up in the air: The art and science of airline route planning
Airlines regularly add and cut routes as part of their growth plans. Airlines have teams that analyze potential routes for demand and profitability.
With high upfront costs to start flights to a new city, carriers carefully ensure sufficient demand exists.
Cities or airports sometimes offer financial incentives or perks to attract new air service, but carriers typically won't stay if the demand isn't self-sustaining. Read more
Spirit Airlines flight diverted after overhead bin battery catches fire
A Spirit Airlines flight was forced to divert and land in Jacksonville, Florida after the crew reported a battery in an overhead bin was on fire.
When the incident occurred, the flight was traveling from Dallas-Fort Worth International Airport to Orlando International Airport.
The fire was believed to have been caused by a guest item in an overhead bin, which was extinguished in-flight.
Emergency services safely removed all passengers from the flight, with ten people taken to the hospital with non-life-threatening conditions. The FAA is investigating the incident. Read more
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