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Airline Recovery Boosts Jet Engine Makers

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Published: Monday, 01 May 2023 15:09

GE and Pratt & Whitney deliveries surge as travel rebounds and airlines prep for busy summer

General Electric’s aero-engine models on display at an exhibit in Shanghai late last year. GE, helped by growing engine deliveries, recorded sales and profits that beat expectations. PHOTO: CFOTO/ZUMA PRESS

Global airline passenger traffic this year is set to surpass 2019 levels despite recessionary fears, providing a boon for jet-engine makers.

General Electric Co. and Raytheon Technologies Corp., RTX 1.98%increase; green up pointing triangle the two biggest makers of plane engines, on Tuesday disclosed stronger quarterly financial results, reflecting the continued recovery in air travel and China’s relaxation of pandemic-driven restrictions.

Airlines preparing for a busy summer travel season are driving sales of spare parts at GE GE 1.53%increase; green up pointing triangle, Raytheon and other suppliers. Aircraft manufacturers Boeing Co. BA 1.75%increase; green up pointing triangle and Airbus SE are also delivering more jets following a surge in orders. Boeing reports quarterly results Wednesday.

“The recovery has strengthened as the world is eager to travel,” said GE Chief Executive Larry Culp on an investor call Tuesday.

Global air passenger traffic climbed 70% last year as more countries lifted restrictions, and big domestic markets such as the U.S. experienced a surge in business that left airlines and airports struggling to keep up. The rise in airfares driven by demand and higher fuel prices isn’t cooling growth, especially in regions such as Asia where traffic has been slower to improve.

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Airlines Get Ready for Busy Summer as Travel Ramps Up

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Published: Thursday, 27 April 2023 15:06

American, Southwest project busy travel season after winter slowdown

Airlines say that travel demand is picking up heading into the critical summer travel season, fueling their expectations for profits after what was in some cases a more lackluster winter.

Southwest Airlines Co. decrease; red down pointing triangle reported a quarterly loss of $159 million as the impact of the airline’s winter meltdown bled into the first months of the year. The airline said it saw a $325 million hit to revenue due to cancellations of “holiday return travel” and slower bookings in January and February but said bookings turned around by March.

Over the winter holidays, storms overwhelmed Southwest’s operation and crew-rescheduling software couldn’t keep pace to reset the airline.

American Airlines Group Inc. increase; green up pointing triangle reported a profit of $10 million on record first-quarter revenue of $12.2 billion.

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Several rivals posted losses during the first quarter, which is typically the weakest time of year for airlines. Lucrative corporate travel, which has yet to return to prepandemic levels, didn’t fill in for the typical drop-off in vacation travel after the winter holidays. At the same time, carriers grappled with higher costs for fuel.

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Southwest Airlines Delays Thousands of Flights Amid Technology Issue

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Published: Monday, 17 April 2023 15:06

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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Saudi Arabia Unveils New Airline Amid Jet Talks With Boeing

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Published: Monday, 03 April 2023 17:18

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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