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Boeing wants the US to intervene in record EU loan to Airbus
Boeing asked the U.S. Government to pressure the European Union on transparency regarding a EUR3 Billion ($3.43 Billion) loan package?to Airbus. This resurfaced trade tensions following the two sides?extending a tariff truce?over jet subsidy. Airbus is reportedly planning to develop a new aircraft as early as 2030. This could spark a new wave of competition on the global jet market. After a 17-year fight at the World Trade Organization, both sides achieved partial victories over their mutual claims about aircraft subsidies. This led to a transatlantic wave of tariffs that hit other industries. The ceasefire, which was due to end on July 6, is now indefinitely extended as both sides retreat from a new trade war in the aerospace industry. Boeing, in a letter sent to U.S. Trade Representative Jamieson Greer and seen by, said that it was surprised to learn of the European Investment Bank's announcement on June 29, announcing its largest corporate loan ever for Airbus. It asked the USTR for a "full account of the terms of the loan" and why it was in line with the 2021 truce accord, which required an "open and transparency process." Greer said to?CNBC that the USTR was looking at the loan with "great care" and he raised the issue with his EU counterpart. Greer stated that "we cannot accept a scenario where Boeing is forced to compete with an Airbus which receives unfair loans, and where Boeing must operate in a market-based system." These comments echoed the 17-year WTO dispute, in which Airbus claimed victory over Boeing and both accused each other that they were benefited by?unfair assistance. The WTO referred to earlier EIB loan as 'Airbus subsidies' but rejected U.S. allegations about their role. Boeing, however, noted that the announcement of the initial tranche of EUR1billion came only four days after the EU had adopted the decision to prolong the standstill agreement. Boeing stated in its letter that "at a minimum, this loan's timing is surprising." The EIB denied that it offered Airbus any unusual assistance. A spokesperson explained that this is a regular loan with interest as part of EIB’s overall financing activities. Thomas Toepfer, Airbus' Chief Financial Officer, told London reporters that the loans were taken "completely on market level". Boeing declined to comment. The USTR, European Commission and other agencies did not respond immediately to requests for comments. AEROPLANE DEVELOPMENTS The EIB announced that the loan package would support Airbus long-term investment through 2030. Boeing pointed out that Airbus CEO Guillaume Faury said Airbus planned to start the development of an A320neo replacement in the same year. Faury revealed the code word "eAction" for the project in an interview with Aviation Week, ahead of the Farnborough Airshow. Boeing's letter sent to the USTR stated that "the timing of this significant loan coincides with Airbus leadership publicly committing to launch date for a new aircraft, which further raises doubts about the size and intent of this historic package of economic assistance." Boeing said that the market conditions were not right yet for a new plane generation, but analysts expect both companies to "start the next development by the mid-2030s." Boeing's letter reveals a wariness about competitor funding, on both sides of this duopoly in the jet market. However, tensions have decreased since the WTO subvention battle. After briefly imposing tariffs, the Trump administration agreed last year to exempt aerospace from tariffs. Washington hasn't officially announced that it will extend the separate truce over tariffs related to the Airbus and Boeing dispute. But four people who are familiar with the issue said that both sides have effectively put the marathon WTO dispute behind them for now. The Trump administration is seen to be reluctant to use WTO tools, which would implicitly acknowledge multilateral rules that the president opposes. Trump has called for a meeting with his trading partners this month to discuss the impact of foreign jet imports.
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Alaska Air forecasts quarterly profit below estimates as jet fuel prices stay high
Alaska Air forecast third-quarter profits below Wall Street expectations on Tuesday as fuel prices rose due to renewed U.S. - Iran?fighting. Seattle-based airline Alaska Airlines expects its third-quarter adjusted profits to be between $0 and $1 per share. According to data compiled and analyzed by LSEG, analysts had on average estimated a profit per share of $1.38. In extended trading, shares of the airline fell 3%. U.S. airlines will face additional fuel costs of billions of dollars this year due to the increased oil and jet-fuel price caused by the war in Iran, and the prolonged disruption of shipping through the Strait of Hormuz. United Airlines alone anticipates an additional $6 billion in fuel expenses for '2026 compared to its original plan. After a fragile ceasefire between Washington and Tehran, prices of jet fuel fell sharply from their spring highs. However, after the hostilities resumed in July, the prices rose again. Alaska's economic fuel costs are expected to average $3.75 a gallon during the?July-to-September period. This is lower than the $4.43 it paid per gallon in the previous quarter. About a quarter or so of airline operating costs are fuel-related. This volatility has led carriers to increase fares, reduce flying and seek additional cost savings. Alaska is especially exposed to West?Coast markets where limited refining capacity and pipeline capacities can cause prices to be more volatile and expensive. It is trying to diversify by importing more fuels from Singapore. However, Singapore's refining margins have also risen earlier this year. Alaska currently sources about a fifth (or a little more) of its fuel from the United States and says it will eventually increase that percentage to 30-40%. Delta ?Air Lines earlier this month gave a stronger-than-expected third-quarter outlook, ?while United Airlines' forecast fell short of Wall Street estimates. Both carriers claimed that higher fares and strong demand helped offset the 'increased fuel prices, with premium travel remaining especially robust. Alaska's adjusted loss?of 92c per share was narrower than the analysts' average estimate, which was 99c per share. Data compiled by LSEG. (Reporting by Nandan Mandayam in Bengaluru; Editing by Pooja Desai)
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Hawaiian Airlines increases capacity on inter-island flight
Hawaiian Airlines announced 'Tuesday it will retire a total of 19 'Boeing 737s that are more than 20 years older and replace them with larger 737 Next Generation jets in order to keep up with the growing demand for inter-island short flights starting in 2028. The 737 NG has around 160 seats compared to the?717s' 128. Hawaiian CEO Diana Birkett Rakow said in an interview that the airline needs extra capacity for the middle of each day. Alaska Airlines, the parent company of Hawaiian Airlines, announced it would be leasing four 737-800 freighters to nearly double its capacity. Alaska Airlines will use the jets in 2028, increasing its freighter fleet from five to nine aircraft. (Reporting from Dan Catchpole, Farnborough England; editing by Nick Zieminski).
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Aircraft startup Electra invests $850 million in Ohio factory
Hybrid-electric airplane?startup Electra announced Tuesday that it would invest $850 millions to?build a facility to assemble nine-passenger, hybrid-electric aircrafts in Springfield. The company, backed up by Honeywell 'Aerospace, Safran, and other major investors said?the move would help get the EL9 Ultra Short out of development and into significant commercial production, and create 1,975 new jobs. The EL9, a fixed-wing aircraft with hybrid-electric propulsion that can take off and land as quickly as 150 feet, is designed to provide air travel on point-to-point distances up to 250 miles. This would otherwise require cars. The timing of investment is determined by a clear understanding of the market. Marc Allen, CEO of Electra, said in an interview with the Farnborough?airshow that "the product and demand are there". "We are on the FAA certification path, and making good progress." It's time to start a factory. Allen stated that 32 million trips are made across the U.S. each day between 50 and 250 miles, with only 0.6% of those being by air. They can land anywhere because they don't need a large runway. The company hopes to fly in 2027 or 2028. Initial phase capacity will be up to 400 aircrafts per year. The companies are investing billions in next-generation solutions for air mobility, such as flying air taxis or electric vertical takeoff and landing aircraft. Electra's investors include?Lockheed Martin Ventures and Honeywell. Electra announced last week that it had signed a production contract with Safran Helicopter Engines, which?includes a first order of 250 turbogenerators. Turbogenerators are a combination of a gas turbine and one or more generators, as well as a voltage and power regulation system. Electra is one of the 'companies' selected by the U.S. Government pilot program to speed up the deployment of flying air taxis, and other advanced technology in air mobility. Electra wants to have the EL9 enter service by 2030. Electra is awaiting delivery of 2,200 aircraft that 63 customers have ordered. (Reporting and editing by David Shepardson)
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Middle Eastern airline executives project stability at Farnborough, despite conflict
The Middle East's aviation industry is open for business, aviation executives from regional companies, including Emirates President?Tim Clark on Tuesday, sought to calm fears about spiralling conflicts. Clark said on Tuesday that as long as the current situation is manageable we can continue with our work. The airline is flying at 90% capacity, and premium cabins are full. Iran attacked U.S. targets in Bahrain, Kuwait, and Jordan on Wednesday, tearing apart a fragile interim agreement signed last month. Last week, Europe’s aviation safety regulator issued an advisory to avoid airspace in this region until July 29. Air France-KLM suspended flights from and to Riyadh, Saudi Arabia as well as Dubai on July 27. Middle Eastern carriers are seeing their traffic fall since the Israel-U.S. War on Iran began? on February 28. Some have cut capacity to protect themselves from spiraling costs. At Farnborough regional leaders stressed that the Middle Eastern aviation industry is booming. Paul Griffiths CEO of Dubai Airports said, "I think that the closer you get to the Gulf operation the more normal things seem." CANCELLATIONS BUT CALLS TO POSITIVITY Airline Analyst John Strickland noted that the region has weathered many crisis in the past. However, it is unlikely that airline profits will remain untouched. Strickland said, "It will hit the bottom-line, of course. It has an impact." They will want their hatches to be battened as much as possible to avoid loss of cost when things get tough and return to profitability. Qatar Airways canceled its attendance to the show following the death of the former emir, Sheikh Hamad Bin Khalifa Al Thani. Etihad's Chief Executive Antonoaldo Neves likewise opted out of the airshow. As Emirates' Clark said, the sector must "think positively, act positively, and be positive" when it comes projecting the recovery of the?region. Clark said that the airline has no plans to delay orders, and that its ambitions to open "a new airport" in the United Arab Emirates by 2032 are still on track. Griffiths confirmed the Dubai airport would still be opening on its scheduled date. In recent years, many of the largest regional carriers have placed substantial orders for aircraft. Marc Nichols said that their presence at the show reflects more on strategic priorities and maturity in fleet planning, than a change in confidence and growth ambitions.
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Abra orders 28 E2 jets from Embraer
The Brazilian planemaker Embraer announced on Tuesday orders for 28 E2 aircraft at the Farnborough Airshow, England. These included 20 jets ordered by South 'American airline group Abra Group and orders placed by existing clients Luxair and?Binter?. Abra's purchase of E195-E2 aircraft marks the first Embraer aircraft purchased by the group which controls Brazilian airline Gol, and Colombian carrier Avianca. Both airlines' fleets are currently Boeing and Airbus. Abra has not yet revealed how the aircraft will be allocated, but Gol would join rivals Azul and?LATAM as Embraer jet operators in the home market of the planemaker if Abra added them to its fleet. Azul has been an Embraer customer for many years, and LATAM ordered a plane last year. Embraer and Gol have been discussing a possible order for some time, as the Brazilian government has been pushing all major Brazilian carriers to fly Embraer jets. Abra's agreement includes 10 options to purchase and 15 rights to purchase. The first aircraft delivery is anticipated to be in late 2027. Unclear Product Plans Arjan Meijer, CEO of Embraer Commercial Aviation, told reporters that the company has not yet decided on its future product plans. "We are a very competent company, but first we have to decide what we want." Embraer expects to see its record-high order backlog continue to grow. "A larger backlog?gives us greater security for future sales." Meijer stated that they wanted to expand the business. We're going to sell more in the future and we are seeing a?continued need. Embraer announced an order for five E195E2?jets from the Spanish airline Binter. Luxair, the flag carrier of Luxembourg, converted its purchase rights for three E190E2 jets into firm orders while also securing a second purchase right. Embraer announced that Japan's Fuji Dream Airlines ordered two E175 first-generation aircraft. Itau BBA analysts estimated that?firm orders are worth about $1.3 billion assuming a discount of 50% off list prices. This compares to Embraer’s backlog of $32.1 billion at the end the first quarter. The analysts sent a client note that stated, "Positive news from Embraer could keep the?sentiment surrounding the Farnborough Airshow elevated throughout the week." (Reporting and writing by David Shepardson, Gabriel Araujo and Maria Rugamer; editing by Andrew Heavens, Rod Nickel and Andrew Heavens)
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Boeing and Airbus seal orders at Farnborough Airshow
Airlines have announced nearly 300 orders for planes at the Farnborough Airshow, in?the United Kingdom. Boeing has a slight advantage over European rival Airbus as they race to close deals. Industry sources, however, said that they expected dealmaking to fall below some ambitious expectations?of 800 or more aircraft, as planemakers?continue to struggle with supply-chain restrictions and production bottlenecks. Here are the key deals that have been made so far. SMBC AVIATION CAPITAL Boeing and SMBC Aviation Capital have announced that they have ordered 100 737-MAX aircraft, 60 737-10 jets and 40 737-8. SMBC announced that it had placed a firm 100 Airbus A320neo family aircraft order, including 65 A321neos and 35 A320neos, with deliveries to begin in the first decade of the new century. RIYADH AIR The Saudi airline exercised options?for a total of 28 Boeing 787 Dreamliners, from an order placed for 2023. Twenty of these aircraft were converted to the larger 787-10 version. The firm also confirmed an additional order for six Airbus A350 1000 aircraft, bringing its total A350 1000 order book up to 31 aircraft. PHILIPPINE Airlines announced that it had placed a new order with Boeing for 20 widebody 787-10 Dreamliner twinjets, which consists of 15 firm orders plus five options. The airline has also secured the purchase rights of five additional Airbus A350s. It expects to take delivery of its first Airbus A350 in early 2030. UGANDA AIRLINES Uganda Airlines has announced that it will be ordering four Boeing 737MAX narrowbody aircraft and four Boeing 787 widebody planes. SHOHIN AERLINES The Tajikistan-based airline Shohin Airlines has ordered four Airbus A320neo family aircraft. MSC AIR CARGO Boeing announced that MSC Air Cargo has acquired five 777-8 freighters. LUXAIR According to IBA, an aviation intelligence and advisory firm, Luxair ordered two Boeing 737-10s worth $124m, based upon estimated prices, after discounts. FUJI DREAMS AIRLINES Embraer, the Brazilian planemaker, announced that Japan's Fuji Dream Airlines had placed a firm two-jet regional order. Embraer has already included the order in its backlog. ABRA GROUP The South American carrier group has ordered 20 Embraer E2 aircraft, the first time the Brazilian planemaker has received an order from this airline group. BINTER Embraer announced that Spanish regional airline Binter has ordered five more E2 aircraft from the Brazilian planemaker, increasing its fleet of latest-generation regional jets. OTHER DEALS Japan Skymark 'Airlines' has signed a lease agreement with Aviation Capital Group for seven Boeing 737 MAX 10-narrowbody twinjets. Deliveries will begin in 2028. The first 'Airbus' order at the show was a commitment from the UK National Police Air Service for two additional H135 helicopters. Delivery is expected to begin in 2028. Leonardo, an Italian company, said that Saudi Arabia's The Helicopter Company ordered 11 helicopters. The deliveries are expected to take place between 2027 and 2028. ENGINE ORDERS British Airways has announced that it will be using Pratt & Whitney GTF engine for up to 63 incoming Airbus A320neo aircraft. Singapore-based BOC Aviation has placed the largest engine?order ever for up to 300 CFM International?engines?to support their expanding Airbus/Boeing narrowbody fleet. IndiGo, India's largest airline, has signed an agreement with CFM International for over 1,000 LEAP-1A engine. This would be a record-breaking deal for CFM International which has been criticized by the industry for its maintenance delays.
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Airlines protest 'double whammy" of proposed EU carbon tax on certain international flights
Emirates' president said that a European proposal to impose carbon charges on some international flights would hit carriers?twice. He was speaking as more airlines gathered behind a global deal to halt pollution. The European Commission released proposals on Friday for the implementation of costs for emissions on international flights that depart Europe, measured at a certain point in central Europe and land in countries as far away as 5,000 km (3100 miles). If approved, the proposal will 'exclude direct flights from the U.S. to the Middle East and North Africa, but some flights from the Middle East to Turkey, for example, would be affected. This would begin in 2029. The United States and the airlines' trade association IATA have denounced the proposal, while UN's Aviation?agency has warned that it will undermine the global CORSIA agreement which requires most airlines to offset their rising emissions on international flights. "This is double-whammy, because we already have CORSIA in place," Tim Clark, Emirates President told reporters on Tuesday at the Farnborough Air Show. The aviation community supports it and sees this as the best way to address the issue. Emirates, based in Dubai, has already bought credits to support rainforests in Guyana as part of the global deal brokered by the International Civil Aviation Organization?in 2016. Airlines for America, the trade group that represents U.S. airlines, stated on Monday, in a?statement, that it did not support "a fragmented approach" to taxing emissions from international aviation. A4A said that "expanding the scope of international flights outside the European region" violates international agreements. A spokesperson for the European Commission declined to comment citing a Belgian public holiday. (Reporting by Allison Lampert and Joanna Plucinska from Montreal, Additional reporting by Makini Brrice in Paris. Editing by William Maclean.
Worldwide air financiers see jet lacks dragging on as values soar
The world's biggest airplane lessors forecast on Monday that producing delays would drag out up until the end of the decade at least, keeping prices high and restricting the entry of brand-new gamers into a market that controls half of the world's jets.
The world's leading lessors, all amongst the biggest buyers of Boeing and Airbus aircraft, traded stories of crippling hold-ups and sky-high lease rates paid by airline clients at the yearly Airline company Economics conference in Ireland, where most of the market is based.
Neither Jet nor Boeing have actually had the ability to satisfy any - and I say any - of their production targets. Therefore the shipment delays are cascading and have a domino effect, said Steven Udvar-Hazy, executive chairman of Air Lease and among the creators of the leasing industry.
We don't think that this recovery will be any shorter than 3 or four years to get back to normalcy.
Leasing business have actually seen leasings and resale worths for jetliners increase as airlines try to satisfy new need at the same time as planemakers are having a hard time to recuperate from the COVID-19 pandemic.
For now, that indicates great earnings for lessors and lots of airlines, since scarcities push up need and fares. However there are issues over access to effective brand-new airplane as supply chains do not have parts and labour. Older second-hand airplanes have actually been in strong demand to fill the space.
The main question for the market is the speed at which makers will be able to ramp up shipments. That will determine a lot of other things, said independent aviation adviser Bertrand Grabowski.
Delegates are split on how long the lack will last.
Several lessors and observers believe the marketplace can return to an excess of capacity after three years or so, Grabowski stated. Others think the removal of some 4,000 jets left unbuilt throughout the pandemic will keep airline companies except jets for longer.
Airbus and Boeing did not instantly respond to e-mails requesting comment.
Airplane is targeting production of 75 A320-family jets a. month in 2027, having pushed back the objective repeatedly due to. supply concerns. Boeing is edging back towards 38 of the contending. 737 MAX a month - an interim ceiling enforced by regulators. following the blow-out of a door plug on a 737 MAX a year earlier.
TARIFF TALK
A number of the roughly 3,000 delegates heading to the Irish. capital were attempting to weigh the possible impact of the change. of power in the United States, a week before President-elect. Donald Trump is sworn in for a 2nd term, with some executives. expressing optimism in his pro-business credibility.
Trump has guaranteed to impose sweeping tariffs, which some. experts think could affect supply chains of aerospace and other. industries while moistening air cargo demand.
The head of the world's second-largest lessor Avolon, Andy. Cronin, said any effect on supply chains would be unhelpful at. a time when airplane factories are having a hard time to fulfill demand.
While Avolon surged onto the scene in 2010, going public. four years later, a number of speakers made the point that the need. for an investment-grade ranking and the big delays in securing. aircraft orders implied that the market was most likely to. combine around a handful of big players.
It's simply a larger industry. It's more commoditized ... I think consolidation is unavoidable, stated Peter Barrett, CEO of. Top 3 lessor SMBC Aviation Capital.
In December, airline companies body IATA predicted record passenger. numbers in 2025, with earnings set to reach more than a trillion. dollars. However a healing of travel from China and by company. travellers has actually been slower than anticipated.
(source: Reuters)