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Travelport has renewed and expanded its agreement with Virgin Atlantic to include New Distribution Capability content through the Travelport Plus platform, the travel technology company announced Thursday. No date was announced for when the NDC content would be available, only that it was “subject to implementation.”
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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An independent, not-for-profit sustainable aviation fuel certificate registry was launched at the United Nations COP28 climate change conference in Dubai, clean energy nonprofit RMI announced Wednesday. The founders include RMI and the Environmental Defense Fund in collaboration with the Sustainable Aviation Buyers Alliance and digital solutions developer Energy Web.
The SAFc Registry connects corporate consumers, airlines, freight forwarders and clean fuel producers in a “universally accessible platform that will spur the use of SAF via the purchase of SAF certificates,” according to RMI. The SAF certificates allow companies to directly buy the “auditable, credible emissions claims” that represent a volume of SAF displacing the same volume of conventional jet fuel for climate disclosures, and they can be issued and retired in the company’s name on the registry.
Bank of America, Boom Supersonic, Boston Consulting Group, JPMorgan Chase and Meta have already grouped together to collectively purchase SAF certificates through SABA. “Future procurement efforts can use the SAFc Registry to ensure the delivery of SAF certificates and sustainability assurances to buyers,” according to RMI.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Lufthansa Group has agreed to pre-purchase from Airbus “verified and durable” carbon-removal credits of 40,000 metric tons of CO2 over a four-year period, the airline company announced Wednesday. The credits will be issued by Airbus through its Airbus Carbon Capture Offer service, and the certificates will be available beginning in 2026. The value of the pre-purchased credits was not disclosed.
The carbon emissions will be removed from the air using high-powered fans, then stored underground “in geologic saline formations,” according to Lufthansa. The carbon-capture technology also will be a “building block for the production of next-generation sustainable aviation fuels.”
The credit program is based on Airbus’ partnership with U.S.-based company 1PointFive, which includes the pre-purchase of carbon-removal credits of 400,000 metric tons of CO2 to be delivered over four years, according to Lufthansa.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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As airlines have added capacity and “the leisure demand that drove record carrier revenues in 2023 softens,” 2024 economy- and business-class airfares throughout the world are projected to stabilize, “with prices falling on some routes,” according to a new American Express Global Business Travel Air forecast, released Wednesday.
The fare trends take into account a range of factors, including airline capacity, local inflation, foreign exchange and fuel surcharges, according to the American Express Global Business Travel Air Monitor 2024.
The travel management company projects 2024 business-class fares within North America to increase 0.8 percent year over year, with economy-class fares inching up 0.3 percent. Fares within Europe also are projected to rise only slightly, with business-class up 1.1 percent and economy-class up an even 1 percent.
Asia and Australia each are forecast to see prices rise 3 percent compared with 2023 for business-class fares and 3.1 percent for economy-class fares. South America was the only region where a price drop was projected, with business-class fares anticipated to decline 3.1 percent and economy-class fares to remain even with 2023 levels.
Business-class fare projections from North America to other regions are mixed, with fares to Central America projected to decline 5.7 percent year over year and those to Asia also forecast to decline by 3 percent. Fares to Europe, however, are projected to increase 3 percent compared with 2023 while flights to South America could tick up 0.1 percent.
Most economy-class fares from North America are expected to decline. Fares to Central America are projected to decline 7.8 percent year over year, to Asia by 7.5 percent and to Europe by 3.5 percent. Only prices to South America are projected to increase, at 1.3 percent.
Amex GBT noted that despite “signs of moderation, the wider outlook is uncertain,” and that geopolitical tensions could affect the global economy and “dampen already moderate growth prospects.” It also cited headwinds that include cost pressures from volatile fuel prices, labor fees and debt servicing that could impact airfares. In addition, there could be a wind-down of “revenge travel” in certain areas “as consumer preferences fall prey to high interest rates,” along with supply-chain issues and aircraft delivery delays.
The report also called out New Distribution Capability technology transforming the way airlines sell their products. NDC’s dynamic pricing could mean fares are subject to change as airlines evolve their pricing strategies, while continuous pricing has “significant impacts for price transparency,” with reference fares not available, according to the report.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Total October air traffic as measured in revenue passenger kilometers increased 31.2 percent year over year, according to the International Air Transport Association. That total was 98.2 percent of 2019 levels, up from 97.3 percent in September. Total capacity was up 29.4 percent versus October 2022.
Domestic October traffic was up 33.7 percent compared with a year prior and was 4.8 percent above 2019 levels, a slight tick below last month’s 5 percent. Domestic capacity was up 31.8 percent from October 2022. International traffic increased 29.7 percent year over year, and was 94.4 percent of 2019 levels, up from the 93.1 percent reported in September.
“October’s strong result brings the industry ever closer to completing the post-pandemic traffic recovery,” IATA director general Willie Walsh said in a statement. “Domestic markets remain above pre-Covid levels. International demand is recovering, but more slowly. In particular, Asia-Pacific carriers’ international demand is 19.5 percent behind 2019. This could reflect the late lifting of Covid restrictions in parts of the region as well as commercial developments and political tensions.”
[Report continues below chart.]
Despite Asia-Pacific’s lag in traffic recovery versus other regions, it led total October air traffic growth rates with an increase of 90.9 percent year over year. it also led capacity growth with a 77.9 percent increase over the same period. North America had the lowest traffic growth rate at 10.5 percent year over year, coupled with a passenger load factor decline of 2.4 percentage points to 83.6 percent.
For domestic markets, China’s October traffic grew 252.8 percent year over year, with capacity up 188.2 percent. Australia had the lowest growth rate for traffic at 7.5 percent compared with October 2022, while for capacity, Japan reported a decline of 2.3 percent while all other regions posted gains.
Internationally, Asia-Pacific again posted the highest growth rates year over year for both traffic and capacity, at 80.3 percent and 72.5 percent. Europe had the lowest traffic growth rate at 16.1 percent versus October 2022, as well as the lowest capacity increase at 14.5 percent.
“People assign a high value to the freedom to travel,” Walsh said. “The strong demand we’ve seen all year confirms that. And aviation is committed to ensuring that people can continue to enjoy this freedom. To do that in the long-term, we must also meet our commitment to achieve net zero carbon emissions by 2050. Last month, the Third Conference on Aviation Alternative Fuels agreed [to] a global framework to promote sustainable aviation fuel production with the aim that aviation fuel in 2030 is 5 percent less carbon intensive than fossil fuel used today. Now, governments need to support that target by immediately putting in place policies to stimulate SAF production. It bears repeating: Last year, every drop of SAF that was produced was purchased. The same thing will occur this year. But, with a few notable exceptions, governments are not living up to their obligations to ensure SAF is plentiful and affordable to support the industry’s energy transition.”
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Travelport is now offering Lufthansa Group’s New Distribution Content offers and servicing capabilities in the Travelport Plus platform, the technology company announced Tuesday. The Group’s carriers include Lufthansa, Austrian Airlines, Brussels Airlines, Swiss and Air Dolomiti.
Lufthansa Group’s NDC content is first available in Austria, Ireland, the Netherlands and the United Kingdom. Access will expand to additional European countries “in the coming weeks,” and then to customers in the Americas, Middle East, Africa and Asia-Pacific regions in early 2024, according to Travelport.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Air Canada has added new air-to-rail booking options with four European rail providers, the carrier announced Tuesday. Through the carrier’s existing partnership with Lufthansa Express Rail product and new collaborations with AccesRail and WorldTicket, customers can book an air-and-rail itinerary for destinations in France, Germany, Switzerland and Austria.
Via Germany’s Deutsche Bahn, Air Canada’s rail connections have increased to more than 5,600 stations from airports in Frankfurt and Munich from the 24 stations previously available only from Frankfurt, according to the carrier. TGV-SNCF Voyageurs will provide rail services from Charles de Gaulle Airport to 22 destinations in France. Customers flying to Zurich or Geneva will have 11 station-connection options via Switzerland’s Swiss Federal Railways, and Austria’s ÖBB rail system will offer connections to nine stations.
In addition, Air Canada in 2024 plans to launch a codeshare with Deutsche Bahn—which in August 2022 became the first non-airline partner of Star Alliance—via the Lufthansa Express Rail product.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Etihad Airways and TAP Air Portugal on Dec. 5 launched a codeshare partnership, “unlocking enhanced connectivity … on a range of destinations within each other’s networks,” the airlines announced Tuesday. The codeshare enables customers to make a single booking with one check-in process and baggage transferred to their final destinations. It also enables customers of each carrier to connect to each other’s network through Frankfurt and London Heathrow, according to the carriers.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Sabre Corp. plans to roll out globally in 2024 New Distribution Capability offers for its Lufthansa Group carriers to Sabre-connected agents, the technology company announced Monday.
Lufthansa Group carriers include Lufthansa, Austrian Airlines, Brussels Airlines, Swiss and Air Dolomiti.
The NDC content currently is available to agents in Italy upon activation of Lufthansa Group’s NDC Partner Program through Sabre Offer and Order APIs, Sabre’s Red 360 agency booking solution and its GetThere online booking tool. The global rollout is expected to happen during the first half of 2024, according to Sabre.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Alaska Airlines has agreed to acquire Hawaiian Airlines in a deal valued at $1.9 billion, including $18 per share in cash, the carriers announced Sunday. Each airline will retain its customer-facing brand, while integrating into a single operating platform “behind the curtain,” Alaska CEO Ben Minicucci said during a Sunday investor call.
The acquisition is “something we have looked at for a while,” Minicucci added. “Simply put, we are acquiring a hub in a premium global leisure market that has the potential to approach Seattle in size.”
Honolulu would become a key hub for the combined entity—”second only to Seattle,” according to Alaska CFO Shane Tackett—with expanded service to the continental United States and new connections to Asia and throughout the Pacific.
The proposed combination would expand the fifth-largest U.S. airline to a fleet of 365 narrowbody and widebody aircraft and create a combined network of 138 destinations. It also would offer more than 1,200 destinations through the Oneworld alliance, of which Hawaiian would become a member.
Hawaiian customers also would have access to flights made available through Alaska’s partnership with American Airlines, the “West Coast International Alliance,” which began in 2020 and has featured increased codesharing, reciprocal loyalty program benefits and Alaska’s entry into Oneworld.
Alaska acquired Virgin America in 2016, and an analyst asked why acquire Hawaiian now, after Alaska spent the past several years resettling its product and fleet. Alaska this year became a single-aircraft fleet after divesting the planes acquired with the Virgin America deal, and will inherit 37 narrowbodies and 24 widebodies from Hawaiian, according to Tackett.
“The opportunity came to us, and when we really looked at the Hawaiian market, it’s an $8 billion market, where this combination allows us to be the clear market leader … and it will be our second-largest hub,” Minicucci said. “It’s a step-change for us to accelerate not only our financial performance but the growth of our network.”
The acquisition is subject to federal regulatory review. When asked about the pending $3.8 billion JetBlue-Spirit Airlines deal, currently in court in Boston after the U.S. Department of Justice sued to block the merger, Minicucci said “there is no relationship with what we are doing, and frankly, we’re not even watching it that closely.”
The Alaska-Hawaiian transaction has been approved by both company boards, according to Alaska. Hawaiian shareholders are expected to vote on the merger during the first quarter of 2024, and pending government approval and other customary closing conditions, the anticipated close date is in the next 12 to 18 months, according to Alaska.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Air Canada has enhanced its mobile app to enable customers traveling within Canada to track the progress of their bags and mobility aids in real time, the carrier announced Friday. Key check points include check-in, handling, on the aircraft, through connections and arrival.
The app now can tell customers at which carousels to collect their belongings, as well as if there is there a delay. Customers also can file a delayed baggage report from the app. Air Canada plans to expand the tracking feature to the carrier’s U.S. flights next year, and, over time, to “select international destinations.”
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Cancellations in September from U.S. reporting air carriers declined for a second month in a row, according to the latest U.S. Department of Transportation Air Travel Consumer Report. Airlines canceled 1.2 percent of their scheduled flights, down from the 1.5 percent rate from a year prior and from August 2023’s 1.5 percent.
Operated flights in September were up 4.5 percent year over year to more than 597,000 but were down 5.3 percent compared with August 2023.
The carriers with the lowest rates of canceled flights were Alaska Airlines Network (0.3 percent), Allegiant Air (0.3 percent) and Southwest Airlines (0.6 percent). Those carriers with the highest rate of cancellations included JetBlue (3.4 percent), Frontier Airlines (2 percent) and Spirit Airlines (1.6 percent). Networks include branded codeshare partners.
Airlines in September handled 37.4 million bags and reported a mishandled baggage rate of 0.53 percent, lower than the 0.61 percent in August 2023, but higher than the rate of 0.48 percent from September 2022.
DOT’s September complaint data was delayed, as has been the case each month for all of 2023. Earlier in November, the department released complaint data for March, April and May, which showed that complaints had surged for those months. DOT on Sept. 29 received an $8 million grant to use for updating its complaint application system. The agency anticipates the new system will be operational in January 2024.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Average airfares are set to decrease globally in 2024 as the recovery loses “upward momentum,” according to a new BCD Travel forecast, which also projects global hotel rates to increase from 2023 levels.
It’s part of a 2024 global travel industry outlook that is “complex,” according to the travel management company’s Travel Market Report, released Thursday.
According to BCD Travel, the broad “uncertainty” shrouding its 2024 outlook—which includes geopolitical issues and “persistent” high interest rates—will have “direct implications” for air travel and pricing next year. Russia’s invasion of Ukraine, increased tensions over Taiwan and conflict in the Middle East have impacted air travel in 2023 and could continue to do so next year, according to BCD.
BCD also cited supply chain issues, increased fuel and labor costs and varying global travel demand as additional pressures on the airline industry in 2024.
“Airlines will do all they can to shield themselves from such uncertainties and challenges. Thanks to the sophistication of their revenue management systems, they possess the power to manage their inventory and pricing like at no other time in their history,” according to BCD Travel.
BCD Travel projects global average ticket prices to fall by 0.8 percent year over year in 2024. Regional fares are forecast to fall by 0.9 percent and intercontinental fares by 0.5 percent.
“Asia, Europe, Latin America and Southwest Pacific can expect to see ATPs fall by more than 2 percent,” according to BCD. “Higher average airfares are only likely in Africa and North America, but the increase in ATPs in these two markets looks set to be less than 1 percent,” according to the forecast.
Average fares in 2023 were 3 percent to 6 percent below 2019 levels, according to BCD.
Hotel Outlook
BCD projects average global hotel rates to increase by 6.8 percent year over year in 2024, according to the forecast.
“Even as the pace of the recovery shows some signs of slowing, demand should continue to outpace available supply in many markets,” according to BCD. And while hotel development and conversion pipelines have been robust across the globe, those will “take time to come online,” according to BCD.
To that end, hotels have shifted their focus from pushing occupancy to raising revenue per available room and average daily rate, according to BCD.
“Instead of trying to fill every room, hotels seem more prepared to accept lower occupancy, limiting availability and then holding out for higher rates,” according to BCD, adding the shift in focus could benefit hotels’ bottom lines through lower housekeeping costs.
BCD forecasts 2024 ADR in the U.S. to increase 4.3 percent year over year, while it increases 6.5 percent in Canada and 8 percent in Mexico.
In Europe, BCD forecast ADR to increase 7 percent year over year, while it increases 8.2 percent in Latin America, 6.3 percent in Asia, 5.2 percent in Africa and 3.1 percent in the Southwest Pacific, including Australia.
BCD projected 2024 ADR in the Middle East to rise 14.4 percent year over year. Expected gains in this region are primarily driven by high expectations in Turkey, according to BCD.
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aplatas@thebtngroup.com (Angelique Platas)
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American Airlines plans to make high-speed Wi-Fi available on nearly 500 dual-class regional aircraft operated on behalf of the carrier, the airline announced Thursday. The carrier is working “to extend its relationship with” service provider Intelsat” and plans to begin installing the upgraded service on regional jets in 2024. The carrier anticipates it will take about two years to complete the project. American currently has more than 900 mainline aircraft with satellite connections.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Lufthansa Group, beginning Nov. 30, will offer what it calls a test of its Green Fares on 12 long-haul flights, with Lufthansa, Austrian Airlines, Brussels Airlines and Swiss carriers participating, the company announced Thursday. The Group also offers Green Fares for routes with connecting flights.
The company’s Green Fares include compensation for carbon emissions within the ticket price. This is achieved through a combination of use of sustainable aviation fuel and contributions to climate protection projects, according to Lufthansa.
U.S. routes with Green Fares now available include Zurich-Los Angeles and Frankfurt-Miami. The remaining 10 routes are between European gateway cities and destinations in Africa and Asia.
For the long-haul routes, a traveler’s CO2 emissions for that flight are reduced by 10 percent through the use of SAF, with the remaining 90 percent offset by contributions to climate protection projects, according to the company. Lufthansa began offering Green Fares in Europe in February after a pilot in the Scandinavian market. The short-haul flights are compensated with 20 percent use of SAF and 80 percent offsets.
Since the expansion earlier this year, “more than half a million passengers have already opted for a Green Fares flight,” according to the company.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Bill Gates’ Breakthrough Energy Catalyst, a cooperative in which American Airlines has invested, has committed $75 million to an electrofuels provider that plans to convert waste carbon dioxide and renewable power into sustainable aviation fuel, American announced Wednesday.
American in September 2021 invested $100 million in Breakthrough Energy Catalyst, which invests in companies using emerging climate technologies to reduce emissions, as an anchor partner in the company.
The investment into Infinium’s Project Roadrunner includes an offtake agreement with American for Infinium SAF. “The agreement provides one model for how airlines can use offtake agreements to help promising new SAF technologies attract investment dollars,” according to American.
Further, the carrier and Citi separately have agreed to transfer the associated emission reductions to Citi “to support the scaling” of this technology and “help reduce a portion of Citi’s Scope 3 emission from employee travel,” according to American. Citi also is a partner of Breakthrough Energy Catalyst.
American Invests in Gates’ Consortium to Speed Up Green Tech
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Alaska Airlines has enabled direct bookings for 20 Oneworld and additional partner airlines through its website, the carrier announced Wednesday.
Members of Alaska’s Mileage Plan loyalty program can earn 100 percent of the miles flown on partner airlines when booking through Alaska’s website, with at least 100 percent of the miles flown as qualifying toward elite status for flights on or after Jan. 1, according to the carrier. Saver and basic economy tickets are excluded. In addition, there are no change or cancellation fees when booking direct through Alaska.
The carrier recently also lowered its 2024 loyalty redemption levels.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Abra Group, the holding company of Avianca and GOL airlines, has named current Avianca CEO Adrian Neuhauser as CEO of the holding company, Abra announced Tuesday. Meanwhile, Frederico Pedreira will replace Neuhauser as CEO and president of Avianca. The changes are to take effect beginning January 2024.
Neuhauser, who joined Avianca in 2019 as CFO, will retain his position as executive vice chairman of Avianca. Pedreira in September became deputy CEO of Avianca after having served as chief operating officer since 2021.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Southwest Airlines effective Dec. 1 is making several changes to its roster of senior executives, “to provide additional focus and clarity to support the company’s strategic priorities,” the carrier announced Monday.
Justin Jones will become EVP of operations, reporting to chief operating officer Andrew Watterson, after having served as VP of operational strategy and design since December 2021. He will be responsible for daily ground operations, technical operations and air operations, as well as the operations strategy and design team. He joined Southwest in 2001.
Tony Roach will be promoted to a new role of SVP and chief customer officer, reporting to EVP and chief commercial officer Ryan Green, who will now report to Watterson, according to Southwest. In addition to overseeing the customer experience team, Roach will provide executive leadership to the marketing, digital experience, travel products, innovation, customer engagement, and customer support and services departments. He has been with the carrier for more than two decades and most recently was SVP of marketing and customer experience.
Among additional changes, Elizabeth Bryant was named SVP and chief people officer, and Whitney Eichinger was named SVP and chief communications officer. Both positions will report to Southwest chief administration officer Linda Rutherford. Further, Jason Van Eaton will be promoted to SVP and chief corporate affairs officer, reporting to EVP and chief legal and regulatory officer Mark Shaw.
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dairoldi@thebtngroup.com (Donna M. Airoldi)
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Singapore Airlines has named David Lau as regional vice president of the Americas, effective Nov. 6, the carrier announced Monday.
Lau is based in Los Angeles and is responsible for the airline’s regional sales, marketing, finance and administration, in addition to Singapore Airlines’ cargo and passenger operations at the carrier’s gateways at airports in New York, Newark, Houston, Seattle, San Francisco and Los Angeles. A 35-year veteran of the carrier, he most recently served as regional vice president of West Asia and Africa, according to Singapore Airlines.
Lau replaces Joey Seow, who has been named regional vice president of Europe, according to the carrier. Seow had headed the Americas region since October 2019, according to LinkedIn. The airline did not immediately clarify Seow’s European start date.
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