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Airline resumes departures after a data-connection problem led to a pause
Southwest Airlines Co. decrease; red down pointing triangle flight delays persisted Tuesday, affecting over half the airline’s flights as it grappled with fallout from a technology problem that briefly halted its operation earlier in the day.
The Federal Aviation Administration said it had canceled Southwest’s pause in departures, which the airline had requested earlier in the day because of an internal technical issue at the carrier.
Southwest said it temporarily halted flights Tuesday to work through data-connection issues. The airline said a firewall supplied by a vendor went down and “connection to some operational data was unexpectedly lost.”
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Riyadh Air is trying to use its geographic position to attract fliers
Boeing aircraft under construction at a facility in Everett, Wash.
RIYADH, Saudi Arabia—This oil rich kingdom unveiled a new international airline called Riyadh Air, aiming to compete with a handful of other Middle Eastern carriers that have used their geography to build world-class airlines and attract business travelers and tourists.
Saudi Arabia’s sovereign-wealth fund, the Public Investment Fund, is close to committing to a big order of Boeing Co. BA 0.15%increase; green up pointing triangle jets to underpin the new airline, The Wall Street Journal first reported over the weekend. A deal, which could be announced as early as this week, would be a boon for the aircraft maker and a big bet by Riyadh that it can compete in an already-crowded regional aviation market.
The new airline—and the billions of dollars in jet purchases it will require—comes as Saudi coffers swell on the back of higher crude prices. The windfall has helped Crown Prince Mohammed bin Salman push ahead on some of his most ambitious efforts in trying to diversify the economy away from the booms and busts that come with its prodigious oil industry.
Separately on Sunday, Saudi Arabian Oil Co., known better as Aramco, reported record annual profit of $161 billion for 2022, the largest ever by an energy firm. The bumper earnings reflect a turnaround for the industry—and petrostates such as Saudi Arabia—after the Ukraine war lifted oil prices and upended commodity flows.
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Carrier is seeking to reinvent itself as a rival to the world’s biggest airlines
Air India’s order marks the largest deal for commercial aircraft in aviation history.
Air India Ltd. ordered 470 jets from Boeing Co. BA 0.15%increase; green up pointing triangle and Airbus EADSY -1.38%decrease; red down pointing triangle SE, marking the largest deal for commercial aircraft in aviation history and coming as airlines scramble for jets to meet surging demand for air travel.
The airline said it has agreed to purchase 250 Airbus jets and 220 Boeing planes, surpassing a deal for 460 planes by American Airlines in 2011. The deal is aimed at providing more planes to supply India, which is expected to be the fastest-growing major aviation market in the world.
The Boeing orders, based on the planes’ list prices, came in at $45.9 billion, including options. Airbus no longer quotes list prices for its jets. Based on analysts’ estimates, the deal’s total value was around $85 billion before discounts. The previous record—a 2013 order for Boeing 777X jets by Emirates Airline—was valued at about $75 billion. Airlines don’t typically pay list price, instead benefiting from large, undisclosed discounts.
The Boeing order was first announced by the White House, with the Airbus deal unveiled by Indian Prime Minister Narendra Modi and French President Emmanuel Macron at a joint press conference. President Biden later discussed the deal with Mr. Modi, according to the White House.
Airbus, buoyed by the Air India deal, is planning to boost production rates of its two biggest models as it tries to capitalize on resurgent demand for long-haul travel, The Wall Street Journal separately reported. Boeing has pushed back planned production increases because of supplier shortages, though it still hopes to raise output this year.
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The $100 million fund, backed by other big businesses, was accelerated by U.S. climate law
United Airlines has been one of the most aggressive airlines in acting on climate change.
United Airlines Holdings Inc. red down pointing triangle is launching a fund backed by several big-name aerospace and financial companies to invest in startups aiming to produce sustainable aviation fuel, in one of the largest efforts yet to lower emissions from air travel.
Created through United’s venture investing arm, the new fund will start with more than $100 million from the company and partners including Air Canada ; red down pointing triangle, Boeing Co., green up pointing triangle JPMorgan Chase & Co., Honeywell International Inc. red down pointing triangle and General Electric Co., decrease; red down pointing triangle United said Tuesday.
Last year’s climate law spurred United to accelerate the fund, which will be capped at $500 million, the company said.
United, Air Canada and other airlines that participate are expected to sign clean-fuel supply agreements with the startups they back. Companies that invest alongside United could share in the carbon credits tied to the production of that sustainable aviation fuel, the company said.
The new fund will be one of the largest sources of cash in the nascent industry of making low-carbon jet fuel. Its launch highlights the pressure faced by the airline industry to reduce emissions. It is part of a recent move by large companies toward startup investing to develop green-energy technologies.
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Aircraft order would add Boeing 787s to new airline Riyadh Air and Saudi Arabia’s existing carrier Saudia
Boeing’s 787 Dreamliners, under construction at a company facility in South Carolina, are popular for their fuel efficiency.
Two Saudi Arabian airlines are nearing a deal to buy a total of about 80 Boeing Co. BA 0.15%increase; green up pointing triangle 787 Dreamliners with options for some 40 more, people familiar with the matter said, another significant order for the American aircraft manufacturer.
Riyadh Air, a new airline launched by the Saudi sovereign-wealth fund over the weekend, is expected to commit to purchasing 39 of the wide-body jets, while existing carrier Saudia is expected to buy the same number of jets, these people said.
The agreement, which is expected to be announced as early as Tuesday, is expected to come with options to buy about 40 additional Dreamliners among the airlines, these people said.
The Wall Street Journal over the weekend reported that the Boeing aircraft order was valued at about $35 billion, according to people familiar with the matter. It couldn’t be immediately determined whether that included the typically steep discounts aircraft makers give their customers, or whether that figure included the jets for Saudia too.
The wide-body jets are popular among the world’s airlines for their fuel efficiency and ability to profitably carry passengers on long-haul international routes. Each carries a list price of about $300 million before typical discounts, according to Boeing’s latest publicly available list prices.
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It is looking like Emirates Airline will need most if not all its A380s after all, opening an opportunity for investors in an obscure corner of the London stock market.
Emirates Airline has gradually brought mothballed Airbus A380s back into service.
The Airbus decrease; red down pointing triangle A380, the white elephant of the skies, could be getting a new lease on life. Among its merits: Unlike the Boeing BA 0.75%increase; green up pointing triangle 777X, it already exists.
One of the best-performing stocks in London in 2022, having more than doubled, is a tiny company that owned a single asset: one of the Airbus A380s in the Emirates Airline fleet. Most of the gains came in July, when the Dubai-based carrier agreed to buy the plane for about £25 million, equivalent to about $30 million, once its lease expired. The deal, which closed the week before Christmas, massively improved the expected liquidation value of the investment company, called Doric Nimrod Air One DNA 3.23%increase; green up pointing triangle (ticker: DNA).
By extension, the deal also lifted expectations of two sister vehicles, Doric Nimrod Air Two DNA2 0.47%increase; green up pointing triangle and Doric Nimrod Air Three DNA3 0.87%increase; green up pointing triangle, which between them own 11 Airbus A380s leased to Emirates on contracts that start to expire next October. Among the investors who spotted an opportunity is Elliott Management, which has disclosed stakes of roughly 11% and 14% in DNA2 and DNA3, respectively, as well as a 6% stake in a more complex vehicle, Amedeo Air Four Plus, which owns A380s as well as other planes leased to Thai Airways.
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Long-awaited return to skies for the jetliner is a significant step for Boeing, which counts China as a major market
SINGAPORE—China returned Boeing Inc.’s BA 0.57%increase; green up pointing triangle 737 MAX to its skies Friday after almost four years, a significant milestone for the U.S. company, which relies on China as a major market.
Two of the jets, operated by China Southern Airlines ZNH 3.27%increase; green up pointing triangle, took off from the southern city of Guangzhou in what industry experts say are the first commercial flights since March 2019 by a Chinese airline using the aircraft.
The first left at 12:46 p.m. local time, landed two hours later at Zhengzhou and was scheduled to return later Friday, according to China Southern’s website. The other left later for Wuhan, also the first leg of a round-trip, the website showed.
The resumption of 737 MAX flights is a major step for Boeing. Before the pandemic, China was one of the biggest and most important buyers of airplanes in the world. Amid U.S.-China trade tensions, Boeing has sought to resume deliveries of new aircraft to China, including 737 MAX jets.
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New York State Comptroller asks the carrier how it will prevent another widespread operations failure
Southwest Airlines Co.’s LUV -1.19%decrease; red down pointing triangle holiday meltdown has drawn the attention of a large public pension system with a history of shareholder activism.
New York State Comptroller Thomas DiNapoli, who oversees the state’s pension system, has asked the Dallas-based carrier how it will prevent another widespread operations failure and rebuild trust with the flying public and its own employees.
“Clearly this crisis has resulted in profound customer dissatisfaction and is expected to generate significant costs to the company,” Mr. DiNapoli, a Democrat, said in a letter Friday to Southwest Chief Executive Bob Jordan.
A Southwest spokeswoman said Monday that the airline received the Jan. 6 letter and is in the process of responding to the comptroller’s office.
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