Travel News

(Bloomberg) -- This year was supposed to herald air travel’s big comeback, with China reopening, airlines ramping up flight schedules and airports going on a hiring spree to handle the surge. 

But a potential bottleneck to that growth is looming in form of a shortage of aircraft engines and spare parts, particularly on workhorse Airbus SE and Boeing Co. jets. The shortfall is being exacerbated by the fact that more carriers are flying with the latest-generation turbines that — while as much as 20% more fuel efficient — also have been prone to far more frequent maintenance cycles than their more robust predecessors. 

As a result, airlines around the world have been forced to ground hundreds of airplanes just as they gear up for what stands to be a busy summer travel season. Air Baltic Corp AS says 10 of its 39 Airbus A220s are currently out of service due to engine issues. In the US, budget carrier Spirit Airlines Inc. warned it would scale back growth plans due in part to a spate of malfunctioning engines. And India’s IndiGo is seeking compensation for about 30 planes it has had to ground due to parts shortages, some of which are tied to engines. 

Supply-chain constraints were rippling through the industry even before the pandemic, and in its aftermath engine makers have struggled with a lack of skilled mechanics and component shortages. 

The latest engines from Raytheon Technologies Corp. and a General Electric Co.-Safran SA venture feature exotic metal alloys, coatings and composites needed for them to operate at furnace-like temperatures. Airlines say turbine components are wearing more quickly and being sent to the shop earlier than initially expected.

“The engines are running hotter, and the materials used for that are not withstanding the pressure, so there are more engine-related problems than we used face previously,” said Qatar Airways Chief Executive Officer Akbar Al Baker.

Turnaround times for engine repairs have tripled as waits for certain parts drag on for more than a year in some instances. Supplies of engine components are further stretched as Airbus and Boeing clamor for higher output of new engines as they strive to pump out their best-selling single-aisle aircraft models in record numbers.

“Right now that’s hotter than hell,” Cliff Collier, a Texas-based aviation consultant, said of the engine sector. “There are parts shortages left and right and it’s impacting MROs badly,” he said referring to maintenance and repair organizations.

The growing pressure on jet-engine makers will be in the spotlight Thursday when GE’s chief executive officer, Larry Culp, lays out the company’s future for investors as a standalone aerospace manufacturer. Its executives also will be pressed about the durability of the Leap turbine made by the GE-Safran venture, called CFM International, for Airbus’s A320neo aircraft family and Boeing’s 737 Max. 

Airlines complain of even poorer reliability for a rival engine manufactured by Raytheon’s Pratt & Whitney division.

Closing the Gap

Pratt’s latest turbofan models are flying an average of about 10,000 hours before they need to be removed for overhauls. That’s only about half the so-called time-on-wing of its predecessor engine, despite multiple fixes and upgrades to boost longevity, Raytheon CEO, Greg Hayes, said at a Barclays conference last month. Closing that gap will be a challenge over the next five years, he said.

CFM said in a statement that its Leap engine’s time-on-wing is “comparable” to that of its predecessor, the CFM56, at the same point in its service life, about six years after its first commercial flight. Engines being sent to repair shops are going in order to address specific issues that can be completed faster than more substantial overhauls, it said.

“We have made significant progress in increasing Leap time-on-wing, and we remain committed to continuing to work with customers to pro-actively plan shop visits,” a CFM spokesperson said.

Around 370 Airbus A320neos and A220s, along with 737 Boeing Max jets, are currently classified as stored, according to data from Cirium. The aviation data and analytics company defines such aircraft as those that are idled for 30 days or more for any of a variety of reasons. 

Airbus said it’s closely monitoring the performance of engines on its aircraft. Boeing had no immediate comment.

Many airlines keep a cache of spares on hand, but there simply aren’t enough replacement engines available to keep pace with repairs. Carriers may be forced to keep older craft longer than anticipated and fly each plane more hours per day. In a pinch, they might even bring planes out of their pilot training fleets and put them into regular flight service. The shortage could crimp industry plans to expand the number of flights offered in 2024 and beyond. 

Production Target Risk

Airbus and Boeing are counting on rising output of turbines to keep their A320 and Max assembly lines humming. The glut of engine repairs looks likely to extend into next year or even 2025, raising the risk of too few power plants to meet planemaker production targets, said Paul Dolan, CEO of Aviation Technical Services, a large US maintenance provider.

Introduced a little over a decade ago, the new engine options for the A320 family and the 737 helped spur an unprecedented surge in demand. Fuel is often among the single largest expenses for airlines, so any reduction in consumption instantly feeds through the bottom line. 

Pratt’s powerplant, which is used on models including Airbus SE’s best-selling A320neo family and the smaller A220, as well as Embraer SA’s E2 regional jet, struggled with teething pains after it was introduced, with multiple carriers reporting inflight shutdowns. Pratt subsequently said it had resolved the issues, but some carriers say they continue to struggle.

The Pratt engine “has experienced diminished service availability, an issue that has been steadily increasing” since mid-2022, Spirit CEO Ted Christie said on an earnings call Feb. 7.  “This is not just a Spirit issue.”

Some A320neos have had engines removed after just 2,000 to 3,000 hours in operation, while A220s have had engines come off after only 1,000 hours, according to Doug Harned, an aerospace analyst with Bernstein. 

Harned calculated that 18% of A220s and 13% of A320neos powered by these engines were out of service as of early March. CFM’s Leap has performed better, although 4% of A320s and 5% of Max jets are grounded — much to the consternation of customers, he wrote in a March 2 report.

A Raytheon spokesperson disputed those estimates for the Pratt-powered planes, saying less than 10% of those jets are parked. The company declined to comment further on the issue.

Frequent Shop Visits

The GE-Safran Leap model also has faced issues. A build-up of carbon around the fuel nozzle has resulted in inspections after 1,000 hours of flight, Harned said. The engine’s high-pressure turbine shroud has been redesigned over the last few years “but is still leading to a degradation in engine performance” and consequently more frequent shop visits, he said.

CFM said it introduced a new configuration of the high-pressure turbine shroud that went into production in 2019 and is retrofitting the remainder of the Leap engine fleet with the change.

Once engines are opened up for repairs, airlines face another costly hassle: Long waits for spare parts. Collier, the aviation consultant, said he’s seen lead times for forged parts stretch out a year or more. 

“What we’re seeing is basically a queue building up due to insufficient maintenance capacity,” said Andy Cronin, the chief executive officer of Avolon Holdings, a major aircraft lessor. “It was simply never intended that the engines would need this much maintenance at this stage in the program.”

The situation underscores how supply chain woes continue to weigh on aerospace manufacturers. Airbus last year cut its target of delivering 700 planes as a result of these issues. But it failed to meet even that reduced goal. 

GE’s engine venture has had to pare back its own production goals. CFM International still aims to boost Leap deliveries this year by 50% to about 1,700 engines, but that’s down from an earlier target of 2,000.

By Victoria Ojeme

The British government has appointed Richard Hugh Montgomery as its new high commissioner to Nigeria.

He takes over from Catriona Laing who had been the high commissioner in the country since 2018.

His appointment was announced in a statement by the United Kingdom government on Tuesday.

Montgomery is expected to begin his new role in April 2023.

According to the statement, Laing will be transferred to another diplomatic service appointment.

The high commissioner is the UK government’s representative in a Commonwealth nation.

They are responsible for the direction and work of the consulate, including political relations, trade, investment, press and cultural relations as well as visa and consular services.

Montgomery served as the counsellor (development) and Head of Office, Department for International Development, DFID, Abuja, from 2009-2013.

He holds a PhD in social anthropology from the University of Cambridge, alongside other research-related qualifications from GKW Consult Mannheim and Manchester University.

The diplomat was, most recently the UK Executive Director for the World Bank Group in Washington.

He has also held executive development roles in Zambia, Bangladesh, India and Pakistan.

Britain on Thursday said that it was planning to ease access to visas to help address labour shortages, which have been partly sparked by its tighter post-Brexit immigration rules.

The government adopted a points-based immigration model following its exit from the European Union in January 2021.

“We work… to ensure our points-based system delivers for the UK and works in the best interests of the economy, by prioritising the skills and talent we need and encouraging long-term investment in the domestic workforce,” a government spokesperson said.

“This includes reviewing the shortage occupation list to ensure it reflects the current labour market.”

The shortage list seeks to relax visa access for professions in short supply.

Many British companies have long called for the government to ease its visa policy.

The hospitality, road haulage and agriculture sectors have been hit particularly hard by European labour shortages sparked by Brexit and exacerbated by Covid fallout.

The UK currently has about one million unfilled jobs, according to recent data from the Office for National Statistics.

That figure has been pushed higher by including numbers of Britons choosing to leave the labour market as a result of long-term illness or early retirement.

The ONS published survey data Thursday showing that more than a quarter of UK firms with 10 or more employees were experiencing shortages in late February. That was broadly the same as in late January.

“Many (businesses) will have little option but to increase wages to attract and retain staff,” said Susannah Streeter, head of money and markets at stockbroker Hargreaves Lansdown.

“This piles on yet more pressure at a time when higher energy costs and rising prices of goods are still causing headaches.”

The UK government and the Bank of England have urged employers to show restraint, warning that big pay hikes would jeopardise attempts to tame inflation.

Strikes have, however, multiplied in Britain in recent months as workers protest over salaries that have failed to keep pace with decades-high consumer price inflation, worsening a cost-of-living crisis.

WASHINGTON (AP) — President Joe Biden is sticking with a blue-and-white color scheme for the exterior of the replacement Air Force One aircraft, the first of which is expected to be delivered in four years.

The Air Force said late Friday that the light blue on the new model of the modified 747s that transport the president will be a little bit deeper and more modern in tone than the robin's egg blue on the versions of the aircraft currently in use.

Boeing is modifying two of its 747-800 aircraft that will use the Air Force One call sign when the president is aboard. They will replace the existing fleet of two aging Boeing 747-200 aircraft the president currently uses.

The choice of the plane's exterior colors follows an earlier decision by the administration to scrap a red-white-and-blue design favored by Donald Trump, Biden's immediate predecessor. An Air Force review had suggested the darker colors would increase costs and delay delivery of the new jumbo jets.

In 2018, Trump directed that the new jets shed the iconic Kennedy-era blue-and-white design for a white-and-navy color scheme. The top half of the plane would have been white and the bottom, including the belly, would have been dark blue. A streak of dark red would have run from the cockpit to the tail. The coloring was almost identical to the exterior of Trump's personal plane.

Formally known as the VC-25B, the new aircraft will replace the current fleet, known as VC-25A, which the Air Force said face capability gaps, rising maintenance costs and “parts obsolescence.” Modifications to the successor aircraft will include electrical power upgrades, a medical facility and a self-defense system, the Air Force said.

Delivery of the first of the new airplanes is projected for 2027, followed by the second aircraft in 2028, the Air Force said.

The current generation of planes first carried President George H.W. Bush, who served from 1989-1993.

Darlene Superville, The Associated Press

MONTREAL — Airports and airlines prepared for a surge in passengers this week ahead of spring break after a year where the industry has struggled to cope with peak travel times.

As March break kicked off in Ontario this weekend, travellers hoped to avoid a repeat of the snaking lines, lost luggage and hundreds of thousands of flight cancellations that beset them last summer and during the winter holidays.

March is typically a busy time for the airline industry as provincial spring breaks fall throughout the month and families use the time to travel.

Severe staffing shortages and high worker attrition rates were among the factors conspiring to snarl air travel as the sector began recovering from COVID-19-related travel restrictions in 2022 — with fears they could foil vacation plans yet again.

Last month, the percentage of on-time departures in Vancouver, Toronto and Montreal was well below that of airports in Seattle, Chicago, New York City and Boston, according to statistics from travel data company OAG.

"It doesn't bode well, given that February is traditionally a quiet time of year, that in the case of the three largest Canadian airports somewhere in the vicinity of four out of every 10 flights were delayed," said former Air Canada chief operating officer Duncan Dee.

Jessica Ng, who was waiting at Pearson with her two children and husband Friday morning, said they realized after entering the terminal that their U.S.-bound Air Canada plane was delayed for about two hours because the incoming flight had also been held up.

“I have been delayed quite often by Air Canada before as well, so I am not surprised,” she said.

But fear of losing her luggage remained top of mind, so Ng resorted to an increasingly common tactic.

“I added an extra AirTag in my checked luggage, just in case if they are lost, then I know I can track my luggage,” she said, referring to Apple's electronic tracking device.

Ng said her confidence in Canadian airlines and airports is not strong.

"But do we have a choice?"

Last week, Toronto's Pearson airport announced it would cap the number of flights during high-traffic hours in order to "flatten out" daily peaks and smooth the flow of passengers.

Airlines and the two federal agencies responsible for airport security screeners and border officers say they are adequately staffed to handle the flood of spring travellers, though some hedged their confidence.

"While we are well staffed and prepared for the spring and summer travel seasons, it’s important to note that wait times at any airport can occur for various reasons, even when staffing levels are optimal, and can fluctuate throughout the day based on passenger volume/number of flights," said Suzanne Perseo, a spokeswoman for the Canadian Air Transport Security Authority (CATSA), in an email.

She said the agency has nearly 530 fewer screening officers than in 2019, when it employed 8,284 screeners, though some 700 recruits are in various stages of the certification process." At the country's four largest airports — Toronto, Montreal, Vancouver and Calgary — staffing levels are at or above pre-pandemic levels, she said.

Air Canada boasted a head count of about 37,000 at the end of February compared with 35,680 in December and just over 31,000 a year ago.

"The Canadian job market is very competitive so attracting and retaining talent is a challenge for all companies," said airline spokesman Peter Fitzpatrick in an email.

Flair Airlines CEO Stephen Jones said this week that staff turnover is one of the biggest hurdles in an industry that requires substantial training and skills across much of its workforce, from flight crews to air traffic controllers.

"Pilots are heavily in demand, and mobile ... The other part really is the airport labour force, whether it's the baggage handlers or check-in — not so much attracting people necessarily, but the level of attrition," he said at a press conference.

"Mechanics are another that's very much in demand — the maintenance engineers" — who typically need a four-year college diploma or apprenticeship program as well as several years of on-the-job training.

Customer service agents receive "abysmal" training and unsustainable schedules at some airlines, said Leslie Dias, director of airlines at Unifor, which represents nearly 9,000 agents.

“We have some airline workers whose entire training happens virtually. They never even step into an airport until essentially their first day of work. So I think you can imagine what that means in terms of assisting passengers," she said.

"And you can have a shift that’s from 3 a.m. to 7 a.m. or some crazy time that’s late at night. And they’re not always stable hours" — resulting in further turnover — she said.

Security screeners' attrition rate in the three months between July and September was about 10 per cent countrywide, though it's "trending down," CATSA said.

David Lipton, a spokesman for the United Steelworkers union that represents some 2,000 screeners across 44 Canadian airports, partly agreed, pointing to wage hikes in recent collective agreements: "The situation is still difficult in terms of retention and recruiting, but it is improving."

The number of scheduled flights by Air Canada and WestJet jumped 31 per cent to 47,362 this month from 36,062 in the same period a year earlier, according to flight data firm Cirium.

The most sought-after destinations included Paris, New York City, London, Fort Lauderdale and Orlando, Fla., and Las Vegas, according to travel search engine Kayak.

— With files from Sharif Hassan in Toronto.

This report by The Canadian Press was first published March 10, 2023.

Companies in this story: (TSX:AC)

Christopher Reynolds, The Canadian Press

ROME (AP) — Italian Premier Giorgia Meloni unveiled her right-wing government's plans to crack down on people smugglers following a Cabinet meeting she led Thursday in the southern town near the beach where a wooden boat packed with migrants broke apart 11 days earlier, killing scores and leaving many missing.

By holding the meeting in Cutro, Calabria, instead of the capital, Rome, Meloni said she was stressing her resolve to “combat the slavery of the Third Millennium.”

She announced that her Cabinet had approved a decree establishing a new crime — people smuggling that results in death of migrants — punishable by up to 30 years in prison, an exceptionally stiff sentence for crimes involving facilitating illegal immigration.

According to details of the approved decrees, provided by Meloni's office Thursday night, the punishment for the death of a sole migrant could bring up to 24 years in prison.

Many of the dead and survivors in the Feb. 26 tragedy had fled Afghanistan, Iran, Pakistan and Syria, hoping to join family members in Italy and other Western European countries.

Earlier this week, a 72nd body was recovered from the shipwreck. The overcrowded boat smashed into a sandbank just off Steccato di Cutro beach, started taking on water and splintered apart.

Eighty people survived, many of them staggering ashore on the beach after swimming from the wreck. Dozens are still believed to be missing because survivors said the boat had set out from Turkey with around 180 passengers.

"Our task is to find solutions to the problem, and today, as I said, the best way to honor those victims is to do what one can so that this tragedy isn't repeated,'' Meloni said.

The Cabinet decree must be converted into law by Parliament, where Meloni's right-wing coalition holds a comfortable majority.

The decree also empowers Italy to pursue smugglers even if the crimes are committed "outside our national borders,'' Meloni said.

Justice Minister Carlo Nordio told reporters that Italy will affirm its jurisdiction in cases where a deadly shipwreck, or other loss of life or injury to migrants, happens in “waters not under anyone's (territorial) control.” That will apply when the smugglers’ vessel is headed to Italy.

The same decree will be wielded against those who finance the operations behind the smuggling, Nordio said.

Opposition politicians quickly criticized the government for failing to establish a more robust system of humanitarian corridors, so those fleeing war and persecution wouldn't turn to people smugglers.

Instead, in a move apparently aimed at satisfying business lobbies that support Meloni's government, her Cabinet approved devising a system that would facilitate foreigners trained abroad in programs recognized by Italy to obtain jobs as migrants as well as for seasonal farm workers.

Meloni said her government also intended to establish quotas for legal entrance by migrants “from those countries which work with Italy to crack down on traffickers and educate their citizens on the risks” of embarking on smugglers' unseaworthy vessels.

Opposition leaders and humanitarian groups have decried the Italian authorities' decision not to quickly dispatch coast guard rescue boats after a Frontex patrol aircraft spotted the wooden vessel about 40 nautical miles (72 kilometers) off Calabria's coast hours before the pre-dawn wreck in rough seas.

Frontex is the European Union's border and coastal protection agency.

Pressed by reporters, Meloni in Thursday stuck by her interior minister's account to lawmakers earlier this week that Frontex — in its communication to Italian authorities late Feb. 25 — hadn't indicated any sign of distress.

“We're talking about a boat that navigated for three days and ... never had a problem,'' the premier said. ”It arrived in front of the Italian coast, 40 meters (yards) away. There wasn't and there couldn't have been any sign of a possible shipwreck" in the offing, she contended.

Meloni blamed the smugglers for waiting for an opportune moment to disembark the passengers and elude Italian authorities. Instead, the boat rammed the sandbank.

Prosecutors in Calabria are investigating whether Italy should have launched rescue operations following the aerial sighting by Frontex.

Meanwhile, hundreds more migrants have stepped ashore on the southern island of Lampedusa in recent days.

Many arrived without needing rescue. Italy's coast guard and border police boats plucked dozens of others to safety this week in the central Mediterranean. Among them were 45 migrants, including five newborns, rescued on Wednesday, and 38 saved by the coast guard after their boat sank in Malta's rescue sector.

In another Italian coast guard operation, 20 migrants were saved when their boat ran into trouble after setting out from Sfax, Tunisia, and a woman's body was recovered, Italian state television said.

By Thursday afternoon, more than 1,300 migrants had reached Lampedusa by sea in the past few days.

Dozens of townspeople turned out on Thursday in solidarity with migrants in Cutro, a town of 8,000, which closed schools and cordoned off the area as part of security for the Cabinet meeting.

So far, the body of a migrant from Afghanistan has been buried in Calabria, that of a Tunisian victim was sent to Tunisia, a victim from Afghanistan was transported to Germany while four bodies were sent back to Pakistan. On Wednesday, seven bodies were transported to Bologna's Muslim cemetery, while still others were prepared to be sent to Germany and Afghanistan.

The trapped funds belonging to foreign airlines operating in Nigeria have reached $743,721,097 from $662m in January 2023.

The International Air Transport Association, IATA, on Tuesday, disclosed this in a letter addressed to the Minister of Aviation, Hadi Sirika, signed by the Area Manager West and Central Africa, Dr. Samson Fatokun, and obtained by our correspondent in Abuja.

According to the letter, IATA and the global airline community seek an invention from the minister for the resolution of airlines blocked funds issues in Nigeria.

“For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world. Please find attached the comparative table of airlines’ blocked funds by country.

“Moreover, as of January 2023, airlines’ blocked funds in Nigeria have increased to $743.721.092 from $662m in January 2023 and $549m in December 2022.”

LAGOS, March 16 (Reuters) - Nigeria is withholding $743 million in revenue earned by international carriers operating in the country, the highest amount owed by any nation, a spokesperson for the global airlines industry association said on Thursday.

Nigeria faces severe shortages of foreign currency, leading to restrictions on imports and meaning investors cannot convert local currency to repatriate their profits.

International Air Transport Association (IATA) spokesperson Katherine Kaczynska said governments around the world owed $2.2 billion to airlines. Nigeria had the highest amount of blocked funds, followed by Algeria and Lebanon, which owed $165 million and $146 million respectively.

"Enabling the efficient repatriation of revenues is critical for any economy to remain globally connected to markets and supply chains," Kaczynska said in emailed response to questions from Reuters.

Dubai's Emirates suspended flights to Nigeria last year after failing to repatriate ticket sales. Last month, President Muhammadu Buhari directed the central bank to increase the amount of foreign currency allocated to Emirates after speaking to UAE President Sheikh Mohamed bin Zayed Al Nahyan.

Emirates has yet to resume flights to Nigeria, which is Africa's most populous nation and is responsible for a large share of the continent's air travellers.

Industrial-scale theft of crude of oil, Nigeria's single biggest earner of foreign exchange, has greatly reduced the country's flow of dollars in the last year.

Apart from Nigeria's $743 million debt, Kaczynska said countries under the West African Economic and Monetary Union owed $132 million while Zimbabwe, which has perennial dollar shortages owed $80 million.

Reporting by MacDonald Dzirutwe; editing by Barbara Lewis

•As IATA announces traffic recovery in air travel demand

By Shola Adekola | Lagos 

Nigerian airlines have witnessed an upsurge in traffic in January following the challenges of insecurity laced with bad roads which has made travellers to jettison road transport for air travels despite the high fares in the face of cash crunch. 

(Bloomberg) -- Ethereum’s next major software upgrade, which could make crypto’s biggest commercial highway more attractive to investors and developers alike, will take place around April 12. 

Called Shanghai, it will let people who pledged their Ether tokens to order transactions on the Ethereum blockchain to withdraw them. Currently, some 17.5 million of such so-called staked Ether, worth about $29 billion at current prices, can’t be accessed on the network, although the coins do earn their owners a yield.

Ethereum software developers have been working on Shanghai for months, and have finally been able to set the date after deploying a final software test earlier this week. Developers confirmed the target date during a call on Thursday.

Once Shanghai launches, that’s expected to kick off a wave of withdrawals, though they will be limited to ensure the network’s continued security. Waiting in line to withdraw could take weeks or months. However, many investors stake through crypto platforms such as Lido, which already give them some flexibility with their coins.

“I doubt we’ll see a surge of withdrawals to sell the underlying Ether,” said Henry Elder, head of decentralized finance at Wave Digital Assets. “Stakers, especially the earliest and most illiquid ones, are generally the most committed participants in the Ethereum ecosystem.”

Still, Shanghai will give investors choosing to stake their Ether more flexibility — and could potentially make Ether a more attractive investment.

“I think there could be some short-term disruption in ETH prices as the market tries to decipher withdrawal data, but ultimately this is a positive catalyst,” Elder said. “It de-risks ETH by allowing withdrawals.”   

Since users were first able to stake in late 2020, Ethereum’s price has been on a roller-coaster ride, as it roughly doubled. But many users who purchased Ether at its peak in late 2021 are deep under water and still can’t withdraw staked coins.

Ethereum went through the Merge — a software upgrade to allow staking on the main network — in September.