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Southwest Airlines Says Delta Variant Is Hurting Its Business

Carrier sees bookings slow and cancellations rise in August as Covid-19 surge continues

Southwest Airlines Co. LUV 2.01% said the recent surge in Covid-19 cases is causing bookings to slow and cancellations to rise, showing how quickly the Delta variant is denting economic activity.

The airline said Wednesday that while demand for the key Labor Day weekend remained healthy, the recent slowdown would make it difficult to turn a profit in the third quarter, excluding the impact of government payroll assistance. That is even after a fare sale designed to stoke the return of business traffic in the fall.

Southwest’s move reverses airline executives’ bullish tone just a few weeks ago, with rising Delta-variant infections prompting the cancellation of festivals and trade events such as the New York Auto Show planned for later this month.

Some consumers are reconsidering activities like travel and eating at restaurants as the surge leads certain retailers and municipalities to reimpose mask mandates.

Excerpt from WSJ

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Can Supersonic Flights Really Succeed?

A supporter says we’re ready for a new leap in aviation. A critic says there won’t be enough passengers.

The supersonic Concorde jet made its last commercial passenger flight on Oct. 24, 2003. The Anglo-French plane was a wonder to watch, but could never overcome its high costs and concerns over its noise.

Is supersonic travel ready for its next act?

In June, United Airlines Holdings Inc. said it would buy 15 small supersonic jets being developed by Boom Technology Inc. Boom hopes to fly a scaled-down prototype of the so-called Overture jets later this year, with the full-size jet ready by the end of the decade.

Boom says the jets would be able to fly at Mach 1.7, or 1.7 times the speed of sound, enabling passengers to fly from London to Newark, N.J., in 3½ hours; it currently takes over six hours. A flight from San Francisco to Tokyo would take six hours, down from over 10 hours.

Excerpt from WSJ

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FAA to Review Boeing Employee Reports of Pressure Over Safety Issues

Regulator faults aerospace giant after surveyed employees reported interference and transparency issues on safety matters

The Federal Aviation Administration is launching a broad review of how Boeing Co. BA 0.25% employees handle safety matters on the agency’s behalf after some company engineers said they face undue pressure, according to an agency letter and people familiar with the matter.

An FAA survey conducted this year found 35% of a small sample of certain Boeing employees reported problems including pressure and hurdles to transparency, according to an Aug. 19 agency letter to Boeing. Some surveyed employees, who are part of a group empowered by the agency to assist its work, said they encountered difficulties in being transparent with regulators, according to the letter, which was viewed by The Wall Street Journal.

U.S. aviation regulators have long relied on aerospace-company employees to act on their behalf for performing certain tasks, such as signing off on certain safety assessments or approving aircraft for delivery. The problems cited by Boeing employees in the survey “indicate the environment does not support independence” of those who are empowered to act on the agency’s behalf, according to the letter, which was signed by Ian Won, acting manager of the FAA’s Boeing oversight office in the Seattle area.

A Boeing spokeswoman said the company takes “these matters with the utmost seriousness” and is working to bolster the independence of its employees who work on the FAA’s behalf.

Excerpt from WSJ

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Planes Grounded by Covid-19 Largely Avoid the Junkyard—for Now

SYDNEY—After the coronavirus pandemic grounded air travel, many of the thousands of aircraft that were parked at storage facilities around the globe seemed destined for the scrap heap.

That hasn’t happened. Instead, aircraft owners are junking fewer planes than just before the pandemic.

About 440 large commercial jetliners were scrapped in 2020, a roughly 15% decline compared with 2019, according to aviation-analytics firm Cirium. This year, the number of aircraft being junked is currently some 30% below last year’s volumes, said Rob Morris, Cirium’s global head of consultancy.

The slow pace highlights the challenge airlines face as they navigate out of the coronavirus pandemic. Domestic travel is returning faster than international in some markets, but the pace of the recovery will differ from region to region, and airlines must retain the ability to ramp up quickly. Airlines struggling to afford new aircraft may also need to keep older models for longer.

Another factor: prices for spare parts are low because many planes are grounded and don’t need extra components. Aircraft owners generate revenue from parts taken out of scrapped planes, so they may wait until demand for spares rises before junking their planes.

Excerpt from WSJ

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