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<ul class="summary-list"><li>An influx of cheap economy-class seats hitting that market in recent months has depressed airfares.</li><li>This has weighed down airline earnings despite strong demand for flights.</li></ul>It may not feel like it, but there are a lot of cheap flights to be had this summer — and the influx of low-priced, often money-losing economy seats has airlines scrambling."The unprofitable capacity is just not sustainable," <a target="_blank" class="" href="https://www.businessinsider.com/american-vs-delta-united-airlines-economy-compared-flight-review-2024-7">United Airlines'</a> chief commercial officer Andrew Nocella told investors Thursday.Despite reporting a 23% increase in second-quarter profits over the prior year, United's earnings guidance for the upcoming third quarter fell short of Wall Street expectations."This is a quarter where industry capacity growth has exceeded still solid demand," CEO Scott Kirby said on the earnings call.In recent months, airlines have flooded the market with <a target="_blank" class="" href="https://www.businessinsider.com/united-basic-economy-review-carryon-middle-seat-new-york-denver-2024-7">economy-class seats</a>, leading to lower airfares as carriers cut prices to fill their planes as travel demand soars.<div type="image" title="United Airlines CEO Scott Kirby speaks during a joint press event with Boeing at the Boeing manufacturing facility in North Charleston, South Carolina, on December 13, 2022." height="683" width="1024" msid="111845420" hostid="261" sizebytes="33648"></div>According to the Bureau of Labor Statistics, average ticket prices in June were the cheapest in 15 years, excluding the COVID-19 pandemic years of 2020 and 2021. And in July, TSA screenings hit a record.But as labor, fuel and other overhead costs remain high, airlines — <a target="_blank" class="" href="https://www.businessinsider.com/spirit-airlines-says-flyers-spending-less-extras-like-food-baggage-2024-7">especially low-cost carriers</a> — have sold seats at a loss in a desperate attempt to generate as much revenue as possible."The pressure other US airlines are experiencing today is due in large part to their <a target="_blank" class="" href="https://www.businessinsider.com/why-airlines-are-struggling-despite-record-travel-demand-profits-revenue-2024-6">unprofitable flying in many domestic markets</a>," Kirby said.Nocella added: "In the past, the magnitude of the worst flying has never been this bad for the lower-margin airlines," the United CCO said.<h2 id="97bdff66-347d-4129-8071-e980028f9b1c">Low-cost airlines are bearing the brunt of the pain</h2><a target="_blank" class="" href="https://www.businessinsider.com/delta-air-lines-ceo-questions-financial-strategy-low-cost-carriers-2024-7">Delta CEO Ed Bastian</a> also questioned the long-term financial viability of the business strategy of low-cost carriers during the airline's earnings call last week."You cannot, if you are on the lower end of the industry's food chain, continue to post losses, particularly given the health of the demand set we've seen over these last couple of years," Bastian said. The carrier kicked off a series of bad news for airlines earlier in June, posting disappointing earnings that sent the entire sector down.<div type="image" title="Ed Bastian" height="2964" width="4332" msid="111845415" hostid="261" sizebytes="343154"></div><a target="_blank" class="" href="https://www.businessinsider.com/southwest-changes-activist-investstor-free-bags-open-seating-fees-2024-6">Southwest Airlines,</a> for example, lost $231 million in the first quarter of 2024, while fellow low-cost carriers <a target="_blank" class="" href="https://www.businessinsider.com/spirit-frontier-fees-bags-seats-snacks-how-to-avoid-paying-2024-6">Spirit</a> and <a target="_blank" class="" href="https://www.businessinsider.com/i-bought-frontiers-all-you-can-fly-gowild-pass-downsides-2023-7">Frontier </a>lost $143 million and $26 million, respectively, during that same period.The most effective and direct method of addressing this issue for airlines is to slow the introduction of additional seats for sale. Something airlines are quickly working to do."It was inevitable that carriers would begin to cancel this unprofitable flying, and you see that happening in earnest in the second half of August," Kirby said, echoing similar projections by Delta.Based on upcoming flight schedules, Kirby said the airline expects domestic capacity growth across the industry to decrease by 5% by the fourth quarter of 2024.<div type="image" title="United Airlines Polaris business class seat." height="768" width="1024" msid="111845413" hostid="261" sizebytes="59182"></div>In addition to <a target="_blank" class="" href="https://www.businessinsider.com/jetblue-cutting-20-routes-leaving-5-cities-see-list-2024-3">capacity reduction</a>, the US mainline carriers are leaning on their premium, higher-margin cabins to help cover the losses.United reported an 8.5% revenue increase during the second quarter from its premium cabins, such as <a target="_blank" class="" href="https://www.businessinsider.com/flying-on-united-polaris-great-game-changer-2023-8">Polaris business class</a> and domestic first class.Delta is also banking on its premium cabins, which accounted for 56% of its second-quarter revenue.<a target="_blank" class="" href="https://news.alaskaair.com/guest-experience/alaska-airlines-more-first-class-and-premium-seating/">In addition, Alaska Airlines</a> announced this week that it's retrofitting its Boeing 737 fleet to add 1.3 million first-class and premium economy seats annually. The retrofit starts in September and will ensure that each Alaska Boeing 737 has 16 first-class and 30 premium economy seats.American Airlines will report its second-quarter performance on July 25.

Airlines are scrambling to fix the unsustainable crisis caused by too many cheap flights

By Quaid Najmi The tottering <keyword id="528556" type="General" weightage="20" keywordseo="Indian-aviation-sector" source="Orion">Indian aviation sector</keyword> hit fresh turbulence when early this month, another flourishing private airline was suddenly grounded owing to various problems, making it the 11th in a decade to �fall from the skies. Throwing their hands up, the <keyword id="11252024" type="General" weightage="20" keywordseo="go-first" source="Orion">Go First</keyword> budget airline's owners -- the Wadia Group -- filed voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT) sending shockwaves through the entire <keyword id="34990" type="General" weightage="20" keywordseo="airline-industry" source="Orion">airline industry</keyword>. Go First was plagued by a peculiar problem -- the purported failure of the jet engine manufacturer, Pratt &amp; Whitney, USA, to supply engines/spares for its aircraft that grounded nearly 40 percent of the fleet for several months before it was compelled to totally suspend operations from the first week of May 2023. While the <keyword id="6354787" type="General" weightage="20" keywordseo="DGCA" source="Orion">DGCA</keyword> slapped a show-cause notice on the carrier for its abrupt actions that created havoc with thousands of flyers, Civil Aviation Minister Jyotiraditya Scindia seemed sympathetic to Go First grappling with the engine problems. While assuring that the government was helping out as best as possible, Scindia also called upon Go First to make alternative travel arrangements for its flyers to avoid inconveniencing them. According to Go First the application under the IBC came after the "ever-increasing number of failing engines supplied by PW" which led to the grounding of around 25 of its 61-strong Airbus A-320neo aircraft, or almost 40 percent of its fleet by April 30, 2023. Go First said in a statement that the groundings due to faulty PW engines increased from 7 percent of its fleet in December 2019 to 31 percent in December 2020 and 50 percent in December 2022, and blamed PW for giving assurances but failing to meet them. In view of this, the beleagured carrier suffered a whopping loss of nearly Rs 10,800 crore and even demanded Rs 8000 crore as compensation from the PW which could help Go First to meet its financial commitments/obligations. Besides, Go First had also coughed up Rs 5,657 crore to its lessors in the past couple of years comprising Rs 1,600 crore as lease rent for the non-operational grounded aircraft. Go First was also hampered by the PW reportedly not honouring the March 2023 award of the Emergency Arbitrator in Singapore to immediately provide the airline with at least 10 serviceable spare leased engines by April 2023 and 10 more per month till December 2023 to enable the carrier to resume full operations, financial rehab and survival. An aviation official said that after the NCLT processes the Go First application, it could appoint an interim Resolution Professional to take over and re-start operations, adding that a similar exercise in 2019 with another grounded private carrier failed to take-off. Though Go First's promoters have pumped in around Rs 3,200 crore in the past three years, coming to a total investment of nearly Rs 6,500 crore, plus support from the government's emergency credit line guarantee, all this failed to help as the airline kept incurring 100 percent of its operational costs and with a total loss of Rs 10,800 crores, it �succumbed'. In the NCLT plea, the 17-year-old airline which operated over 32 flights to 29 domestic and 10 international destinations, has sought several interim directions including restraining the lessors from taking back their aircraft, any adverse action by the DGCA, suppliers of essential goods-services, etc. Since launching low key operations in November 2005 as �GoAir', Go First gradually climbed up to become the fifth largest private carrier, consistently profitable and expanding till the PW �engine troubles' started from December 2020, hitting its operations and forcing it to ground in May 2023. However, the owner-promoters have already made it clear that they are keen to revive and not sell the venture or even exit this sector, which has witnessed many ups and downs with the practical �demise' of another 10 airlines in the past 10 years - or average one per annum! The Go First imbroglio came at a crucial juncture for the country's aviation sector which was soaring to pre-Covid 19 levels after the harsh pandemic and the ongoing peak summer holidays - and its full impact on the industry remains to be seen. (Quaid Najmi can be contacted at q.najmi@ians.in) SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sustainability/news/buried-toxic-waste-from-old-mining-operations-could-destroy-ecosystems-as-warming-thaws-the-arctic-permafrost/articleshow/100394167.cms">Buried toxic waste from old mining operations could destroy ecosystems as warming thaws the Arctic permafrost</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sustainability/news/53-of-largest-lakes-worldwide-losing-water-storing-capacity-due-to-global-warming-and-unsustainable-human-consumption/articleshow/100394475.cms">53% of largest lakes worldwide losing water storing capacity due to global warming and unsustainable human consumption</a>

Go First Gone: 11th private airline to 'drop' out of skies in a decade

<ul class="summary-list"><li>This post originally appeared in the Insider Today newsletter.</li></ul>Happy Friday! Be careful what you wish for, Chipotle fans. The chain might turn to robot workers to address the complaints about its portion sizes. But good luck making those <a target="_blank" href="https://www.businessinsider.com/chipotle-portion-size-inconsistencies-robots-automation-human-employees-2024-7">last-second tweaks to your order</a>.In today's big story, Southwest ditching its unassigned seat policy is a sign of the <a target="_blank" href="https://www.businessinsider.com/the-end-of-budget-airlines-southwest-jetblue-frontier-spirit-2024-7">end times for budget airlines</a> as we know it.What's on deck:<ul><li>Markets: Goldman Sachs <a target="_blank" href="https://www.businessinsider.com/goldman-sachs-new-logo-and-website-before-and-after-2024-7">has a new logo</a>… sort of.</li><li>Tech: OpenAI basically just <a target="_blank" href="https://www.businessinsider.com/openai-searchgpt-search-engine-prototype-declares-war-with-google-2024-5">declared war on Google</a>.</li><li>Business: Pop stars got millions in pandemic aid that <a target="_blank" href="https://www.businessinsider.com/nksfb-svog-blowback-rich-musicians-pandemic-relief-2024-7">raised red flags for their accountants</a>.</li></ul>But first, that's going to cost extra.If this was forwarded to you, <a target="_blank" href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h3 id="0642bd0e-e971-4663-bff4-7c413bf24f3d">The big story</h3><h2 id="8e8b25cf-af5c-4ba5-823b-ade7efe8b096">Seating-as-a-Service</h2><div type="image" title="seats getting more expensive" height="750" width="1500" msid="112047658" hostid="261" sizebytes="69922"></div>You are no longer free to move about the cabin.Southwest Airlines is <a target="_blank" href="https://www.businessinsider.com/southwest-is-getting-rid-of-open-seating-on-all-flights-2024-7">ending its open seating policy</a>, opting for assigned and premium seating options. It's a substantial change for the budget airline that has let passengers pick their seats after boarding since its <a target="_blank" href="https://www.businessinsider.com/southwest-airlines-history-2021-8">founding more than 50 years ago</a>.But tradition takes a backseat when the bottom line is suffering. Despite a record $7.4 billion in revenue for the second quarter, the airline's quarterly profit ($367 million) was almost cut in half compared to the same period last year.Meanwhile, activist investor Elliott Management's $1.9 billion stake in Southwest has it <a target="_blank" href="https://www.businessinsider.com/southwest-airlines-call-for-changes-new-leadership-ceo-elliott-management-2024-6">calling for big changes</a>. And the airline manufacturer Southwest relies on <a target="_blank" href="https://www.businessinsider.com/boeing-airplanes-awaiting-parts-delivery-clog-up-parking-spaces-2024-7">is going through its own crisis</a>. So yes, something had to give.A timeline on when the change will occur wasn't announced — more details are coming in September — but the impact is already estimated to be big. Between paid seat assignments and premium seating, Southwest could add as much as $3 billion in new revenue, according to one analyst.Southwest isn't alone in its struggles. Prior to the announcement, the S&amp;P 500 Passenger Airlines index was down almost 9%. The issue? Despite an influx of demand, there are simply <a target="_blank" href="https://www.businessinsider.com/airlines-united-delta-scrambling-fix-crisis-too-many-cheap-flights-2024-7">too many cheap, economy-class seats on the market</a>, writes Business Insider's Benjamin Zhang.<div type="image" title="Image of Southwest plane landing at San Diego airport." height="1280" width="1920" msid="112047667" hostid="261" sizebytes="91194"></div>The real pain of the current travel landscape is being felt by budget airlines.High labor and fuel costs are difficult to navigate for all airlines, but it's especially tricky for ones trying to do it at a much lower cost than their rivals.That's why Southwest's decision to end its open seating policy <a target="_blank" href="https://www.businessinsider.com/the-end-of-budget-airlines-southwest-jetblue-frontier-spirit-2024-7">could be a sign of the end of budget airlines</a> as we know it, writes BI's Taylor Rains and Pete Syme. The shift shows how low-budget airlines are rethinking their business models as they face an uphill battle not following their high-priced peers' footsteps.Southwest CEO Bob Jordan has been adamant these are changes customers want. But there is an undeniable financial factor to the move.Similar changes from Southwest could ultimately upend the way a good chunk of the country travels. Southwest, American, United, and Delta make up the country's Big 4 airlines. But only Southwest markets itself as a budget airline.In the meantime, you might need to start paying for that window or aisle seat on your next Southwest flight.Or don't. After all, <a target="_blank" href="https://www.businessinsider.com/airplane-middle-seat-not-bad-aisle-window-travel-2024-1">the middle seat really isn't that bad</a>.<h2 id="e7ad5a04-e409-4b8e-a5a6-9c0198f1ef94">3 things in markets</h2><div type="image" title="Photo illustration of Goldman Sachs logo changes over time" height="731" width="1300" msid="112047665" hostid="261" sizebytes="12540"></div><ol><li>New logo, who dis? Goldman Sachs is <a target="_blank" href="https://www.businessinsider.com/goldman-sachs-new-logo-and-website-before-and-after-2024-7">launching a new logo</a> that's a partial callback to a design the bank used for decades before largely retiring it in 2020. But some insiders questioned if the time and money spent on the overhaul was worth it.</li><li>The US economy had a huge second quarter. US real GDP growth was <a target="_blank" href="https://www.businessinsider.com/gdp-gross-domestic-product-second-quarter-2024-us-economy-2024-7">2.8% at an annualized rate</a>, well above the 2.0% forecast. It also doubled its growth from the first quarter (1.4%). But the "perfect report for the Fed," as it was described by one expert, likely won't lead to a rate cut next week. What's worse, it might be <a target="_blank" href="https://www.businessinsider.com/next-recession-outlook-forecast-interest-rate-cuts-sahm-rule-unemployment-2024-7">too late to avoid a recession</a>, according to one former central bank president.</li><li>This sector isn't sexy, but it's worth your investment. America's infrastructure is crumbling, and Bank of America expects an uptick in restoration and building projects in the next decade. That's a <a target="_blank" href="https://www.businessinsider.com/invest-old-school-us-crumbling-infrastructure-ai-industrials-materials-bofa-2024-7">huge growth opportunity for investors</a>.</li></ol><h2 id="62bb4334-a805-49b4-89b9-d7825f87b766">3 things in tech</h2><div type="image" title="Collage of stock prices and a broker looking at a screen." height="1500" width="3000" msid="112047659" hostid="261" sizebytes="188136"></div><ol><li>The AI hype train is still running at full tilt. Just don't ask where the profits are. Although AI enthusiasm super-powered some US equities, <a target="_blank" href="https://www.businessinsider.com/ai-hype-train-profits-valuations-startups-google-openai-2024-7">investors are starting to question Big Tech's big spending</a>. They <a target="_blank" href="https://www.businessinsider.com/big-tech-investors-wary-high-ai-spending-markets-selloff-nasdaq-2024-7">grilled Google's parent company on AI initiatives</a> and are likely to focus on it when Meta, Amazon, Apple, and Microsoft report earnings next week.</li><li>Tech can still be a lucrative career choice. Despite the industry's recent layoffs, some people have successfully made the move into tech. One former teacher broke into the field with a coding bootcamp, and <a target="_blank" href="https://www.businessinsider.com/break-into-tech-quit-teaching-coding-boot-camp-2024-7">now makes six figures</a>. Another shared the <a target="_blank" href="https://www.businessinsider.com/resume-landed-product-manager-job-microsoft-facebook-chris-hsiao-2024-7">résumé that helped him land a job at Microsoft</a>.</li><li>OpenAI is coming for Google's lunch. In a virtual declaration of war against Google, OpenAI just confirmed <a target="_blank" href="https://www.businessinsider.com/openai-searchgpt-search-engine-prototype-declares-war-with-google-2024-5">it's launching SearchGPT</a>, bringing it a step closer to its own search engine. Though just in a testing phase, the temporary product will directly compete with Google's Search Generative Experience.</li></ol><h2 id="3c244a91-acbf-4e23-8cde-90d1f2a8f4a7">3 things in business</h2><div type="image" title="Chad Kroeger, Post Malone, and Chris Brown photo collage" height="1000" width="2000" msid="112047663" hostid="261" sizebytes="256724"></div><ol><li>Behind-the-scenes worries about music stars' COVID cashouts. Los Angeles accounting firm NKSFB helped stars like Nickelback and Chris Brown secure COVID relief cash from the federal government. The stars got millions in taxpayer money — even though NKSFB initially <a target="_blank" href="https://www.businessinsider.com/nksfb-svog-blowback-rich-musicians-pandemic-relief-2024-7">fretted that they could be breaking the law</a> by applying, court documents say.</li><li>How moguls like Rupert Murdoch control their companies without owning them. The Murdoch family is headed for a fight over Fox and News Corp that would make "Succession" writers proud. Though both are publicly traded companies, they're built on a stock structure that lets one family wield enormous power. <a target="_blank" href="https://www.businessinsider.com/murdoch-moguls-media-tech-dual-class-stock-control-how-2024-7/">They're not the only ones</a>.</li><li>The US job market teeters near the "danger zone," according to a famed economist. Claudia Sahm is the creator of the highly accurate recession indicator Sahm Rule. She warned that <a target="_blank" href="https://www.businessinsider.com/recession-outlook-job-market-layoffs-unemployment-rate-hiring-economy-2024-7">the job market is in the "yellow zone"</a> as unemployment ticks higher.</li></ol><h2 id="b691d3d2-a3d7-4ee3-8890-aa84cf68a80c">In other news</h2><ul><li><a target="_blank" rel="noopener" href="https://www.businessinsider.com/barack-obama-endorses-kamala-harris-for-president-after-a-delay-2024-7">Barack Obama finally endorses Kamala Harris</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/real-estate-investors-experts-passive-income-long-term-rental-properties-2024-7">Real estate investors weigh in on how passive rental income really is: 'It's like having an expensive puppy.'</a></li><li><a target="_blank" href="https://www.businessinsider.com/lululemon-breezethrough-leggings-criticized-pulled-stock-plunged-tiktok-youtube-reviews-2024-7">Lululemon just released new leggings. Shoppers and shareholders are mad.</a></li><li><a target="_blank" href="https://www.businessinsider.com/how-donald-trump-could-replace-jd-vance-vice-president-poll-2024-7">How Trump could replace JD Vance if the Ohioan's terrible polling continues</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/mybeasts-friend-accused-of-messaging-minors-steps-away-from-channel-2024-7">One of MrBeast's oldest friends quit his operation in a scandal. It could hurt him too</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/quiet-vacation-mouse-jiggler-quiet-quitting-2024-7">I'm a quiet vacationer. Here's how I used a mouse jiggler to take a monthlong trip to Italy without telling my boss</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/donald-trump-fbi-christopher-wray-bullet-assassantion-attempt-shrapnel-2024-7">FBI director says there is 'some question' whether Trump was hit with a bullet or shrapnel</a>.</li><li><a target="_blank" href="https://www.businessinsider.com/sam-altman-strategy-china-competition-2024-7">Sam Altman says the US has to do 4 things to prevent China from taking the AI throne</a>.</li></ul><h2 id="265f2581-0e55-4ab6-8ce7-1a67b2d79f37">What's happening today</h2><ul><li>Donald Trump meets with Israeli prime minister Benjamin Netanyahu at Mar-a-Lago.</li><li>Paris Olympics Opening Ceremony.</li></ul>The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Annie Smith, associate producer, in London. Amanda Yen, fellow, in New York.

Southwest ditching its unassigned seat policy shows how budget airlines' business models are getting upended

Mumbai, The domestic air passenger traffic is expected to surpass the pre-Covid levels of 141.2 million and reach 150-155 million this fiscal, registering an estimated growth of 8-13 per cent, credit ratings agency <keyword id="19908266" type="General" weightage="20" keywordseo="icra" source="keywords">Icra</keyword> said on Wednesday. Icra also projected a significant reduction in industry's net loss for the next two fiscals and was also of the view that supply-chain challenges and engine failure issues may remain near-term headwinds. Icra maintains a "stable" outlook on the domestic aviation industry, amidst the continued recovery in domestic and international air passenger traffic, and relatively stable cost environment, it said. The momentum in traffic growth is expected to continue in FY2025 as well, with a similar estimated year-on-year growth, aided by rising demand for both leisure and business travel and improving airport infrastructure, it said. The international passenger traffic for Indian carriers surpassed the pre-Covid levels in FY2023, although it trailed the peak levels of 25.9 million witnessed in FY2019, according to Icra. It is expected to cross this level in the current fiscal, with an estimated 25-27 million passengers, representing a <keyword id="19921444" type="General" weightage="20" keywordseo="yoy" source="keywords">YoY</keyword> growth of 7-12 per cent, the ratings agency said, adding the same is expected to further grow by 7-12 per cent to 27-29 million in FY2025. "The industry has witnessed improved pricing power, as reflected in increase in yields and thus the spread between revenue per available seat <keyword id="20544428" type="General" weightage="20" keywordseo="kilometre" source="keywords">kilometre</keyword>-cost per available seat kilometre (RASK-CASK) for the airlines. "The same is expected to remain favourable, aided by a decline in aviation turbine fuel (ATF) prices and the relatively stable foreign exchange rates," said <keyword id="20849526" type="General" weightage="20" keywordseo="suprio-banerjee" source="keywords">Suprio Banerjee</keyword>, Vice President and <keyword id="20225498" type="General" weightage="20" keywordseo="sector-head" source="keywords">Sector Head</keyword> for corporate ratings at Icra. The industry is thus estimated to report a significantly lower net loss of Rs 300-4,000 crore (Rs 30-40 billion) in FY2024 and FY2025 compared to Rs 170-175 billion in FY2023, he added. According to the ratings agency, the ATF prices and indian rupee-US dollar movement have a major bearing on the airlines' cost structure. The average ATF price stood at Rs 103,547/KL in the April-February period of FY2024, which is a YoY decline of 15 per cent compared to Rs 120,978/KL in FY2023, it said. However, this was 60 per cent higher compared to an average of Rs 64,715/KL during FY2020, as per Icra. Fuel accounts for around 30-40 per cent of the airlines' expenses.

Domestic air passenger traffic to surpass pre-Covid levels to reach 150-155 mn this fiscal: Icra

<ul class="summary-list"><li>Sanction-hit Russian airlines are getting plane parts delivered in hand luggage, per the Financial Times.</li><li>A Middle East company has sent $1.5 million of goods to Russia's S7 airline, the FT reported.</li></ul>Passengers are carrying plane parts in their luggage to get them to sanction-hit Russian airlines, <a target="_blank" href="https://www.ft.com/content/f8d61a5d-708f-47c4-8dbd-0e80452dea5a">according to the Financial Times</a>.Russian airlines are obtaining plane parts through a vast network of small suppliers, many of which are based in the United Arab Emirates, the FT reported.The outlet highlighted one incident from mid-2022 when staff at a Moscow airport found a $40,000 plane part in a passenger's luggage. The equipment was destined for Russia's second-largest airline, S7, the FT reported, and was one of 11 similar parts sent in passenger bags to Moscow that year, all of them reported in customs forms.In the wake of Russia's full-scale invasion of Ukraine in 2022, Western countries imposed heavy sanctions and export controls on Russia's aviation sector.The sanctions have made it difficult for the country's airlines to get their hands on new planes or parts to maintain their existing aircraft.They have also opened up more unorthodox supply routes.The FT cited Turboshaft, a UAE-based provider and exporter of aircraft parts run by a Russian-born businessman.According to customs data seen by the outlet, Turboshaft has shipped $1.5 million of goods to S7 since the start of the war.Turboshaft didn't immediately respond to a request for comment from Business Insider, but a spokesperson for company boss Timur Badr told the FT that it had stopped providing plane parts to Russia in February 2022 and that it was "aware of, and respectful of, the international sanctions regime."According to data collected by the FT from various sources, S7 and its subsidiaries saw their imports of plane parts drop from over $100 million a month in December 2021 to less than $25 million a month in April 2022.Meanwhile, the number of flight safety incidents involving Russian planes has more than doubled, from 37 in 2022 to 81 in 2023, <a target="_blank" href="https://www.businessinsider.com/russian-planes-safety-incidents-maintenance-sanctions-spare-parts-2024-2">according to the Jet Airliner Crash Data Evaluation Centre</a>.Those figures also only reflect known cases, the center's founder and CEO, Jan-Arwed Richter, <a target="_blank" href="https://www.businessinsider.com/russian-planes-safety-incidents-maintenance-sanctions-spare-parts-2024-2">told</a> The Telegraph earlier this year, adding: "There is still a dark figure of unreported incidents."

Passengers are carrying plane parts in their luggage to get them to sanction-hit Russian airlines: report

<ul class="summary-list"><li>Cathay Pacific is one of just 10 airlines rated five stars by Skytrax.</li><li>It reportedly surveyed business-class passengers about sustainability initiatives.</li></ul>One of the best airlines in the world is considering asking business-class passengers to bring their own cutlery on board, the travel news site <a target="_blank" href="https://viewfromthewing.com/cathay-pacific-considers-new-rule-business-class-passengers-must-bring-their-own-forks-for-meals/">View From The Wing</a> reported.<a target="_blank" href="https://www.businessinsider.com/cathay-pacific-planned-worlds-longest-flight-at-over-10000-miles-2022-4">Cathay Pacific</a>, the Hong Kong flag carrier, is one of just 10 <a target="_blank" href="https://www.businessinsider.com/business-class-five-star-airlines-compared-2023-10">airlines rated five stars</a> by Skytrax. All of them are based in Asia.View From The Wing reported that Cathay Pacific sent a survey to some members of its "Cathay Lab" community, and that it was aimed at those who travel in business class.Of the four questions, perhaps the most noteworthy was asking whether passengers would "Bring your own cutlery set."It also questioned if they would pick up empty plastic water bottles and recycle them, whether they would hand said water bottles to a flight attendant, or if they'd bring their own bottle on board.As it's just a survey, it's not clear whether any of these ideas will ever be implemented — but it shows Cathay Pacific is looking into some unique ideas for sustainability.Much of the aviation sector's discussion about sustainability has focused on the likes of <a target="_blank" href="https://www.businessinsider.com/transatlantic-flight-green-fuels-takes-off-campaigners-say-gimmick-2023-11">sustainable aviation fuel</a>, or building more fuel-efficient jets.But looking into changing the amenities for business-class passengers is a different step. It also seems unlikely that many customers would be happy to bring their own cutlery.After all, one of the perks of <a target="_blank" href="https://www.businessinsider.com/first-class-on-cathay-pacific-2017-3">flying upper class</a> is better food — served on proper plates with metal cutlery. Although as one of the world's most respected airlines — which carried 42% more passengers last month compared to March 2023 — it perhaps has more room to experiment.Cathay Pacific did not immediately respond to a request for comment from Business Insider, sent outside local working hours.

One of the world's only 5-star airlines seems to be considering asking business-class passengers to bring their own cutlery

Indian <keyword id="34984" type="General" weightage="20" keywordseo="airline" source="Orion">airline</keyword> <keyword id="6354887" type="General" weightage="20" keywordseo="industry" source="Orion">industry</keyword> is expecting to prune its <keyword id="9317682" type="General" weightage="20" keywordseo="net-losses" source="Orion">net losses</keyword> to Rs 3,000-5,000 crore in this fiscal from an estimated Rs 17,000-17,500 crore in FY2023 on the back of improved yields and stable cost environment, credit ratings agency <keyword id="6354972" type="General" weightage="20" keywordseo="icra" source="Orion">ICRA</keyword> said on Tuesday. At the same time, ICRA also estimated that domestic air passenger traffic will expand by 8-13 per cent each in FY2024 and FY2025. The <keyword id="164127" type="General" weightage="20" keywordseo="rating-agency" source="Orion">rating agency</keyword> has also maintained its stable outlook on the industry in view of healthy passenger traffic growth, improved yields and a stable cost environment. Building on the fast-paced recovery in FY2023, ICRA at a webinar on Tuesday said it is expecting the domestic air passenger traffic to grow by 8-13 per cent in the ongoing financial year, thereby reaching 150-155 million and surpassing the pre-Covid levels of 141.2 million seen in FY2020. The Industry's net loss (is expected) to shrink to Rs 30-50 billion in FY2024 from an estimated Rs 170-175 billion in FY2023, aided by improved yields and stable cost environment, ICRA said. "The air passenger traffic momentum witnessed in the current fiscal is expected to continue in FY2025, though further expansion in yields from the current levels may be limited. Thus, the industry is estimated to report a similar net loss of ~Rs. 30-50 billion in FY2025 as well," said Suprio Banerjee, Vice President &amp; Sector Head, Corporate Ratings, ICRA Limited. The momentum in air passenger traffic growth is expected to continue in FY2025 as well with a similar estimated year-on-year growth, aided by rising demand for air travel and improving airport infrastructure, ICRA said. During the first eight months of this fiscal, domestic air passenger traffic stood at 100.7 million, witnessing a 17 per cent year-on-year growth, and 5 per cent higher than the pre-Covid levels (8M FY2020) of 95.7 million. Further, the international passenger traffic for Indian carriers, at 23.9 million in FY2023, surpassed the pre-Covid levels, although it trailed the peak levels of 25.9 million in FY2019, ICRA said, adding the same is expected to cross this level in the current fiscal, with an estimated 25-27 million passengers. Moreover, the airlines witnessed better pricing power, as reflected in improved yields and in the spread between revenue per available seat kilometre and cost per available seat kilometre (RASK-CASK) for the airlines, it said. While capacity addition for the industry will continue with the total pending aircraft deliveries of around 1,500, supply chain issues at the aircraft OEMs also mean that the addition could be gradual, ICRA said. Also, a large part of these is towards replacement of old aircraft with new fuel-efficient ones, and with the expected continued growth in passenger traffic, ICRA expects the demand-supply balance to be maintained in the medium-term. Furthermore, a sizeable part of the fleet addition by airlines will also be meant for expanding international operations, it said and added that in FY2023, the share of Indian carriers in international traffic (to and from India) stood at around 42 per cent. This offers adequate growth potential for Indian carriers to gain traction in international traffic over the medium term, the rating agency noted. However, despite a healthy recovery in passenger traffic and improvement in yields, the movement of the latter will remain monitorable amidst elevated ATF prices and depreciation of the Indian Rupee vis-a-vis the US Dollar compared to pre-Covid levels, both of which have a major bearing on the airlines' cost structure, the rating agency noted. The average ATF (aviation turbine fuel) prices stood at Rs 103,189/KL in 9M FY2024, which were 59 per cent higher compared to an average of Rs 64,715/KL during FY2020, albeit a decline of 17 per cent compared to Rs 121,013 /KL in FY2023, it observed. Fuel accounts for 30-40 per cent of the airlines' expenses, while around 35-50 per cent of the airlines' operating expenses 'including aircraft lease payments, fuel expenses, and a significant portion of aircraft and engine maintenance expenses ' are denominated in US dollar terms. "More recently, the Indian aviation industry has been facing significant supply chain issues, resulting in around 20-22 per cent of the total fleet being on the ground currently. "The recent issue related to powder-coating related concerns in engines manufactured by Pratt &amp; Whitney (P&amp;W) is expected to lead to additional aircraft to be grounded by Q4 FY2024 of this fiscal 'amounting to approximately 22-24 per cent of the industry capacity," said Banerjee. This will result in high operating expenses towards cost of grounding, increase in lease rentals due to additional aircraft being taken on lease to offset the grounded capacity, along with increasing lease rates and lower fuel efficiency, which adversely impact the airline's cost structure, and thus overall cash flow generation," he added.

Indian airlines likely to prune losses to Rs 3,000-5,000 cr this fiscal: ICRA

<ul class="summary-list"><li>Ukrainian low-cost airline SkyUp has not stopped flying despite the <a target="_blank" href="https://www.businessinsider.com/6-of-russias-deadliest-moments-in-the-ukraine-war-2023-11">war with Russia</a>.</li><li>The airline is surviving off of cargo flights and leasing contracts with foreign operators.</li></ul>Ukraine's aviation sector came to a screeching halt when Russia invaded in February 2022, with Ukraine forced to indefinitely close its airspace and cancel all passenger service.Even before the attack, aircraft lessors started repositioning their planes out of Ukraine and into places like Estonia, Spain, and France.The empty skies and depleting fleets left the country's home airlines with few options, and many soon collapsed — including flag carrier Ukrainian International Airlines, which is currently crumbling under more than $500 million in debt, <a target="_blank" href="https://forbes.ua/news/pershiy-kreditor-mau-prosit-sud-viznati-ii-bankrutom-aviakompaniya-kolomoyskogo-vinna-pozichalnikam-bilshe-20-mlrd-grn-01112023-17003">per Forbes.</a>But young budget airline SkyUp, which was founded in 2018 and already successfully weathered one tidal wave that was the <a target="_blank" href="https://www.businessinsider.com/best-airline-to-fly-in-2021-during-pandemic-travel-review-2021-4">coronovirus pandemic</a>, managed to survive.<a target="_blank" href="https://www.businessinsider.com/skyup-airline-swaps-heels-sneakers-uniform-policy-change-2021-10">Famous for allowing its female flight attendants to ditch heels</a> and skirts for pants and sneakers, SkyUp — and Ukraine's aviation market as a whole — was on the rise before the war started.After launching in 2018 as a charter carrier, <a target="_blank" href="https://skyup.aero/en/news/rekord-perevezen-chempionska-forma-ta-bilshe-mojlivostei-podorojuvati-skyup-pidbiva-pidsumki-2021-roku_416">Skyup</a>, as a scheduled passenger airline, carried more than 2.5 million people across some 16,000 flights in 2021.It was right on the heels of veteran <a target="_blank" href="https://worldairlinenews.com/2022/02/11/ukraine-international-airlines-reports-on-its-results-for-2021-continues-to-operate-normally/">UIA's</a> 2.8 million passengers the same year, making it one of the fastest-growing airlines in Europe. But when the war halted everything, SkyUp had to pivot its strategy.CEO Dmytro Seroukhov told Business Insider that without the cash flow from selling passenger seats, SkyUp has turned its focus to cargo, charter, and so-called wet leasing contracts, where the airline leases its aircraft and crew to a customer.<h2>SkyUp is banking on the lucrative aircraft-leasing market</h2>While global airlines commonly own a large chunk of their fleet, many also wet-lease from <a target="_blank" href="https://www.insider.com/airlines-flight-attendants-uniforms-gender-neutral-2023-6">airlines like SkyUp</a>. In this case, that involves the Ukrainian carrier supplying aircraft, crews, maintenance, and insurance, or ACMI for short, to foreign operators.Seroukhov told BI that the ACMI market was new to SkyUp and that it had to adjust quickly as wartime set in. The carrier has since established agreements with close to 20 different airlines, <a target="_blank" href="https://skyup.aero/en/news/5-vershin-skyup-airlines-za-5-rokiv-u-nebi-polit-trivaye_461">like</a> Air Albania, Air Moldova, and Hungary's Wizz Air.The ACMI business was able to quickly kick off because nearly all of SkyUp's <a target="_blank" href="https://www.businessinsider.com/aircraft-leasing-companies-recall-planes-from-russian-airlines-eu-sanctions-2022-2">planes had been evacuated from Ukraine</a> ahead of time, giving it room to shift its operations."We had alarms from insurance companies and other partners that something should happen. We didn't know when or exactly what, but we needed to be prepared where possible," Seroukhov told BI. "So, we re-built our schedule and re-based our aircraft outside of Ukraine."Meanwhile, one of its planes got left behind and was eventually <a target="_blank" href="https://skyup.aero/en/news/skyup-evakuyuvav-litak-u-ramkah-spivpraci-z-derzhavoyu_456">rescued</a> from the war-torn country in April 2023, which Seroukhov said took approximately 1,000 people to accomplish.<div type="image" title="SkyUp female cabin crew wear sneakers and pants instead of heels and pencil skirts." height="3367" width="4580" msid="106219939" hostid="261"></div>With its once-stranded plane back in operation, SkyUp now has a 10-strong <a target="_blank" href="https://www.planespotters.net/airline/SkyUp-Airlines?refresh=1">fleet</a> of Boeing 737 aircraft to power its ACMI business, Seroukhov said.In the seven months between April 1 and November 1 of this year, SkyUp's ACMI business <a target="_blank" href="https://skyup.aero/en/news/acmi-kontrakti-skyup-u-litnomu-sezoni-2023_470">carried</a> more than 1 million passengers across 43 countries and 440 different routes. And it was among the 20 largest ACMI providers in Europe for June 2023, according to SkyUp.The CEO stressed the importance of continued partnerships to ensure SkyUp's employees — who Seroukhov said stretch from Canada to Australia, but are primarily located in Ukraine — continue to have jobs."If our team continues to work they may have a salary, and if they have a salary, they can support themselves and their families," he said. "It is key not just the operations, but support for our people, and, in parallel, the support of Ukraine."<h2>SkyUp is looking for a future in Malta and North America</h2>With its survival hinging on continued ACMI and charter contracts, <a target="_blank" href="https://skyup.aero/en/news/skyup-prodovzhuye-masshtabuvatisya-u-pivnichnij-americi-pereviznik-otrimav-kanadskij-sertifikat-faoc_467">SkyUp</a> has since secured operating certificates in the US and Canada as it looks to expand into the lucrative North American market. "We are in negotiations with several possible partners," Seroukhov said.The airline does not plan to stop there. Earlier this year, SkyUp received permission to operate as an official EU carrier based in Malta.The airline has since set up a subsidiary called <a target="_blank" href="https://skyup.aero/en/about">SkyUp Malta</a> and offers leasing contracts, but plans to also launch charter services and passenger flights to leisure destinations starting in 2024.<div type="image" title="One of the aircraft registered to SkyUp Malta." height="2577" width="3864" msid="106219941" hostid="261"></div>With the war with Russia still raging, SkyUp will have further challenges to face, including getting more aircraft and expanding its operating licenses to more nations.But Seroukhov said the company's strong culture and the resiliency of its people will get it not only through the conflict but also allow it to one day return to Ukraine."When the war is finished, and Ukraine wins, SkyUp will restart with absolutely new intentions," he told BI. "Before, the intention was to open Ukraine to the world and open the world for Ukrainians. Tomorrow, the idea will be to connect, and to bring home a lot of Ukrainians."

Ukraine's largest airline is still flying despite the war with Russia. Here's how.

In order to enhance <keyword id="182124" type="General" weightage="20" keywordseo="safety-standards" source="Orion">safety standards</keyword> in the <keyword id="34987" type="General" weightage="20" keywordseo="aviation-industry" source="Orion">aviation industry</keyword>, Directorate General of Civil Aviation on Wednesday said that a total of 542 <keyword id="6641634" type="General" weightage="20" keywordseo="enforcement-actions" source="Orion">enforcement actions</keyword> were taken in the year 2023 which was a 77 per cent increase as compared to the 305 enforcement actions carried out in 2022. In a statement, <keyword id="6354787" type="General" weightage="20" keywordseo="dgca" source="Orion">DGCA</keyword> informed that, in a significant move towards enhancing safety standards in the aviation industry, DGCA has taken stringent measures to ensure compliance with regulations through the conduct of <keyword id="1808201" type="General" weightage="20" keywordseo="surveillance-activities" source="Orion">surveillance activities</keyword> on airlines, aerodrome operators, approved organisations, and aviation personnel under its regulatory control to meet laid-down safety obligations. Extensive surveillance mechanisms play a pivotal role in safety by mitigating potential safety risks and enhancing safety margins across the industry. During the year 2023, DGCA intensified its safety oversight efforts and conducted a staggering 5745 surveillances (4039 planned surveillances, 1706 spot checks and night surveillance), which is an all-time high. This marked a notable increase of 26 per cent in surveillance activities compared to the year 2022, emphasising the commitment to ensure compliance and safety within the aviation landscape. Consequent to the findings of the surveillance conducted, enforcement action on non-compliant personnel, airlines, and other operators was taken. A total of 542 enforcement actions were taken in the year 2023 witnessing a 77 percent increase as compared to the 305 enforcement actions carried out for the year 2022. Significant enforcement actions for the year 2023 included the suspension of the Approved Training Organisation of Air India and financial penalties on airlines like Air India, Air Asia, Indigo and Spice Jet for various non-compliances. Enforcement actions were also taken against erring pilots and cabin crew, ATCOs, non-scheduled airlines, flying training organizations and aerodrome operators. DGCA's unwavering commitment to enforcing compliance underscores the critical importance of adhering to safety regulations within the aviation sector to ensure safer skies.

DGCA took 542 enforcement actions on Airlines in year 2023 to enhance safety standards

<ul class="summary-list"><li>Birgir Jónsson is the CEO of Play, an Icelandic airline offering cheap transatlantic flights.</li><li>He played drums in a metal band until 2018, and has held several other jobs outside aviation.</li></ul>Birgir Jónsson is well aware of how a budget airline's fortunes can quickly turn around.From 2014 to 2015, he was the deputy CEO of <a target="_blank" href="https://www.businessinsider.com/what-its-like-to-fly-on-budget-airline-wow-air-2017-1">Wow Air</a>, an Icelandic ultra-low-cost carrier that went bankrupt in 2019. Shortly afterward, two former Wow executives set up its spiritual successor, Play. Jónsson was brought on as CEO in 2021.Play is now one of, if not the <a target="_blank" href="https://www.businessinsider.com/new-european-low-cost-carrier-entering-us-market-spain-iceland-2021-12">cheapest way to fly transatlantic</a>. It made headlines in 2022 for $99 flights between the US and Europe — but that was only for one leg of a roundtrip.Looking at flights for next month, a roundtrip from New York to London starts at around $450.It costs at least $560 for the same journey with <a target="_blank" href="https://www.businessinsider.com/flying-saga-premium-class-on-icelandair-review-worth-it-2023-5">Icelandair</a> — the country's flag carrier which Jónsson calls its main competitor since both would include a connection in Reykjavík.For <a target="_blank" href="https://www.businessinsider.com/norse-atlantic-flight-review-paris-new-york-2023-6">Norse Atlantic</a>, the low-cost airline that instead uses widebody jets for direct flights, return tickets in April start around $400. Although with varying prices, Play is still cheaper on some days.<a target="_blank" href="https://www.businessinsider.com/play-icelandic-airlines-budget-red-eye-flight-photos-2023-4">Play</a> is run by a CEO with an unconventional medley of experience.Speaking to Business Insider over a video call while wearing a black t-shirt and jacket, Jónsson was modest in saying: "I'm not an interesting guy."His foray into the sector began as CEO of Iceland Express, which was acquired by Wow. But unusually for an airline boss, he has also had several jobs outside aviation.Jónsson's LinkedIn lists him as the co-owner of a Reykjavík perfumery and, until 2018, the drummer for a metal band called Dimma. YouTube <a target="_blank" href="https://www.youtube.com/watch?v=ry3x4pQai8A">videos</a> show his tattoo sleeve on display during concerts.He told BI his past jobs included turning around the Icelandic Post Office and running a Romanian printing company."I've done a lot of things, but it's always the same things," he said. "Running companies, creating a team, building a good culture, and getting shit done, basically."<div type="image" title="Birgir Jónsson, CEO of Play, wears a navy suit and black shirt with his arms crossed." height="4917" width="7371" msid="108370145" hostid="261" sizebytes="503350"></div><h2>How the budget airline keeps costs low</h2>With a fleet of only 10 jets covering 41 destinations (some of which are seasonal), <a target="_blank" href="https://www.businessinsider.com/play-airline-flying-between-iceland-us-with-airbus-a321neo-2022-4">Play</a> is able to operate the low-cost model across the Atlantic thanks to Iceland's geography: it's two hours closer to New York than London is.It's a similar airline to the likes of Southwest and Ryanair in the sense that it's strictly no-frills. There's no in-flight entertainment, minimal legroom, and it flies to smaller airports like <a target="_blank" href="https://www.businessinsider.com/see-inside-new-yorks-nearly-abandoned-stewart-airport-play-2022-6">New York's Stewart International</a>, a nearly-unused facility about 60 miles from Manhattan.Costs are also saved on training and maintenance by only using one type of jet: the Airbus A320neo and <a target="_blank" href="https://www.businessinsider.com/see-inside-airbus-a321neo-pioneering-long-haul-single-aisle-trend-2022-1">A321neo</a>.Plus the fleet is almost constantly in the air — around five flights a day for a total of 12 or 13 hours, Jónsson said."That's the only way to make money in this game, you know," he added. "The aircraft, they're meant for flying."Transatlantic flights aren't the only part of the business model. Jónsson also pointed to the flow of tourists between Iceland and mainland Europe.<h2>Icelandic tourism</h2>He told BI the average Icelander travels abroad two or three times a year because "it's a relatively affluent place."The island nation with a population of 370,000 — about the same as New Orleans — has a long history with aviation.Back in the 1960s, Icelandair started offering connecting customers the opportunity to extend their <a target="_blank" href="https://www.businessinsider.com/iceland-first-visit-what-surprised-me-no-trains-mcdonalds-population-2024-1">stay in Iceland</a> for no extra cost — a benefit also offered by Play. That helped put it on the map as a tourism destination.Tourists are also drawn by the country's incredible scenery and volcanic activity. Iceland sits on the meeting point of the North American and Eurasian tectonic plates.Volcanic activity is dangerous for planes: if ash gets into the engines, they can stop working, as in the case of <a target="_blank" href="https://www.businessinsider.com/captain-announcement-after-all-four-engines-failed-2013-2">British Airways Flight 009</a> back in 1982.But Jónsson says volcanic eruptions are great for the country's image because tourists "want to experience brutal nature, ice and fire.""This is what we're selling, as long as we don't lose any people or lives," he added.Jónsson pointed to the <a target="_blank" href="https://www.businessinsider.com/eyjafjallajokull-ash-crisis-business-2010-4">2010 eruption of Eyjafjallajökull</a>, which caused huge disruption to European air travel."That made Iceland a household name everywhere and started a massive tourist boom," he told BI. "So that was the greatest marketing campaign ever done by a destination in the history of the world, basically."<div type="image" title="Ash plume from Iceland's Eyjafjallajokull crater during it's eruption, spewing tephra and ashes that drift toward continental Europe, Seen from a Cesna aircraft on May 15, 2010 near Reykjavik, Iceland" height="3744" width="5616" msid="108370150" hostid="261" sizebytes="601826"></div>"So we are not doing anything new. We are doing the same business model that has been operating here in Iceland for decades," Jónsson said. "We just knew that if we could do this with a lower cost and offer lower fares, we would be successful."However, Jónsson is also wary not to repeat the mistakes of Wow Air.He pointed to different financing and bad business moves. Wow was privately owned by one person whereas Play is listed on the Nasdaq stock exchange. Wow, the extinct airline increased spending by using three Airbus A330 jets to expand its offerings to the likes of India and Los Angeles — instead of keeping to one type of plane like most budget airlines.Play's jets are all part of Airbus' single-aisle A320 family, and Jónsson said it's also eager to order the <a target="_blank" href="https://www.businessinsider.com/airbus-a321xlr-will-be-a-game-changer-2023-7">A321XLR</a>. The extra-long-range version of the A321 could open up California and Dubai as destinations, without the need to retrain pilots, he added.<h2>Building an airline during the pandemic</h2>Another advantage for Play is that it has the youngest fleet in Europe. Born out of the pandemic, it was able to start on a more even footing as other airlines suffered lower demand, as well as getting good deals on new aircraft."We were able to get the neos, the latest generation Airbus, brand new at exceptional prices," Jónsson said. "They're probably 30, 40% more expensive now."Play was also in the rare position of benefiting from sanctions against Russia. While other airlines had to avoid the country's airspace — <a target="_blank" href="https://www.businessinsider.com/russia-closed-airspace-adds-hours-flight-times-united-ba-finnair-2023-8">lengthening journey times</a> — Play got planes at discount prices."I think we got one of the aircraft that were confiscated from Russia, so we even got that on very good terms," he told BI.Jónsson said last year came with "unbelievable" pressure on Play as it expanded: hiring 200 new people, adding 30 destinations, plus a "really big hurry" to get to 10 aircraft."So we are all here — I'm not gonna say taking a breather — but we're focusing on our daily jobs, and not just always on growth," he added."That's what I'm excited about. Actually, we will emerge from this year stronger than before."

Meet the heavy metal-drumming CEO bringing back cheap transatlantic travel, and learning from the mistakes of his airline's failed predecessors

<ul><li>India’s largest airline InterGlobe Aviation (IndiGo) has much to gain if its peer Go First fails to land safely.</li><li>Cooler crude, more passengers taking to the skies, and the grounding of Go First have set the airline’s growth on a higher altitude.</li><li>IndiGo also expects a 15% growth in its revenue per available seat kilometre (RASK), a key metric for airlines, in FY24.</li></ul>India’s largest airline InterGlobe Aviation (IndiGo) has a lot to cheer if its peer Go First fails to land safely – with domestic and international market share up for grabs. If the troubles of the budget airline which has <a href="https://www.businessinsider.in/business/news/go-first-suspends-sale-of-tickets-till-may-15-dgca-asks-airline-to-process-refunds-for-passengers/articleshow/99982706.cms">filed</a> for insolvency compound, competition will ease in the low-cost segment giving IndiGo more control over air fares. IndiGo’s shares have surged by over 7% since May 2 when Go First announced that it had filed a voluntary insolvency petition with the National Company Law Tribunal (NCLT). Despite the recent surge, IndiGo is flying light – literally and figuratively – with its valuations being attractive, according to brokerages. On the back of robust fleet utilization rates and the Indian aviation sector being on an upswing, IndiGo expects its revenue per available seat kilometre (RASK), a key metric for airlines, to grow at 15% in FY24. Now, new tailwinds like the grounding of Go First and the softening of crude oil prices are expected to give it a further boost. “The bias is positive towards airline stocks, predominantly IndiGo, for the next 9-12 months,” said a report by Motilal Oswal, adding that the airline is well positioned to improve its realisations and margins too. An average of brokerage estimates suggests that there is an upside of 17% over the next 12 months, with a target price of ₹2,536 per share, as compared to the current market price of ₹2,164. <div type="image" title="InterGlobe Aviation share price 01_01_23 to 05_05_23." msid="100009463" hostid="261" caption="&amp;lt;p&amp;gt;IndiGo share price in 2023&amp;lt;/p&amp;gt;"></div> <cmsannotation type="cmsannotation" annotationid="Dominance will play to its advantage" comment="subhead" text="Dominance will play to its advantage">Dominance will play to its advantage</cmsannotation> There is daylight between the market share of IndiGo and its rivals – the company has a market share of 55% domestically. Air India and Vistara, owned by the Tata group come in next, with a share of 8.9% and 8.7% respectively. IndiGo’s dominance will play to its advantage, according to analysts, not only helping it boost its margins, but also increase its market share. “Go First accounted for 8% of domestic traffic and 5% of international traffic (among Indian carriers). If this capacity goes out of the system, industry-level load factor and pricing environment can improve substantially,” said a report by IIFL Securities. Analysts at Credit Suisse explain that bringing an airline back from the brink of a collapse is difficult, as evidenced by Jet Airways’ troubles. “Go First filing for bankruptcy can benefit IndiGo in many ways,” the brokerage said. <cmsannotation type="cmsannotation" annotationid="IndiGo’s flight gets bigger wings" comment="subhead" text="IndiGo’s flight gets bigger wings">IndiGo’s flight gets bigger wings</cmsannotation> While <a href="https://www.businessinsider.in/business/corporates/engines-omicron-more-the-timeline-of-troubles-at-go-first/slidelist/99987425.cms">Go First</a> was India’s third largest airline, the Covid-19 pandemic hit the company hard when Pratt &amp; Whitney engines started failing, leading to the airline grounding half of its fleet. The company <a href="https://www.businessinsider.in/business/news/go-first-suspends-sale-of-tickets-till-may-15-dgca-asks-airline-to-process-refunds-for-passengers/articleshow/99982706.cms">voluntarily filed</a> for insolvency seeking interim relief from NCLT to stop lessors from possessing its fleet. IndiGo too was a customer of Pratt &amp; Whitney once. But, when its engine troubles surfaced in 2016, it signed on a competitor – another US-based engine manufacturer CFM, and escaped this fate. With a diverse and young fleet, the airline now boasts over 1,800 daily departures with more than 300 aircraft. Further, to cater to the growing demand, IndiGo is also looking to expand its fleet by 500 more aircraft, from Boeing and Airbus. This was right after its rival Air India run by the Tata group <a href="https://www.businessinsider.in/india/news/of-total-840-aircraft-order-470-is-for-planes-while-the-rest-370-are-options-says-air-india-executive/articleshow/97978085.cms">placed</a> a mega order of 470 aircraft. <cmsannotation type="cmsannotation" annotationid="Flying high" comment="subhead" text="Flying high">Flying high</cmsannotation> Overall, brokerages are bullish about IndiGo’s prospects, stating that the softening crude oil prices will further help the airline improve its margins. A surge in domestic passenger traffic also bodes well for the Indian aviation sector, with April witnessing 15% higher traffic of 4.3 lakh passengers per day, than the FY23 average of 3.73 lakh. All in all, IndiGo’s numero uno position in India, cooler crude, more passengers taking to the skies, and the fall of Go First all set the airline’s growth on a higher altitude. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/hdfc-bank-hdfc-market-capitalisation-falls-after-msci-tweak/articleshow/100006092.cms">HDFC Bank, HDFC market capitalisation falls nearly ₹88,000 crore after MSCI tweak</a> <a href="https://www.businessinsider.in/business/corporates/news/adani-enterprises-q4-net-profit-more-than-doubles-yoy-to-722-crore/articleshow/99990510.cms">Adani Enterprises Q4 net profit more than doubles YoY to ₹722 crore as airports and roads businesses pick up pace</a> <a href="https://www.businessinsider.in/business/auto/news/hero-motocorp-q4-net-profit-beats-estimates-rises-37-yoy-to-859-crore/articleshow/99989966.cms">Hero MotoCorp Q4 net profit beats estimates, rises 37% YoY to ₹859 crore</a>

The skies are clearer for IndiGo stock to surge further as Go First’s troubles mount

<ul class="summary-list"><li>Last summer, a couple was flying home when their connecting Lufthansa flight in Germany was canceled.</li><li>When they attempted to rebook, their reservations kept disappearing from their accounts.</li></ul>In October, Emma Giantisco and Dylan Marton breathed a sigh of relief.It was more than two months after the couple had <a target="_blank" href="https://www.businessinsider.com/couple-says-united-lufthansa-failed-rebook-canceled-flight-multiple-times-2023-8">gotten home after a hectic few travel days</a>. In August, they were flying home from Singapore on United Airlines when their <a target="_blank" href="https://www.businessinsider.com/family-says-flight-booking-issue-led-to-days-long-journey-2023-8#:~:text=Andrew%20Spector%20said%20his%20family,later%20than%20scheduled%2C%20he%20said.">Lufthansa Airlines connection</a> between Germany and New Jersey was canceled, Giantisco told Business Insider.When the couple attempted to rebook the canceled flight, technology errors repeatedly caused the pair's reservations to disappear from their accounts.After spending three days stranded in Munich with no scheduled flight home, the couple gave up trying to rebook through the airlines for free and purchased their own tickets. They said they spent over $4,400 out of pocket to get home.Since then, Giantisco and Marton have tried to get a refund. After submitting their request, United Airlines gave the couple $82 for clothes they purchased after their luggage was lost and told them that Lufthansa was responsible for the rest.Finally, in October, they thought the whole ordeal might be over when they received an email from Lufthansa stating they would get a refund for their flight between Munich and New Jersey.Five months have gone by, and the couple said they've yet to receive anything from Lufthansa, though Giantisco did receive 44,000 miles from United — valued at $528, according to <a target="_blank" href="https://www.nerdwallet.com/article/travel/calculator-should-you-book-a-flight-with-cash-or-miles">Nerd Wallet</a> — a week after BI reached out to the airline for comment on March 11. Marton hasn't received any miles or money.Lufthansa did not respond to a request for comment."More than anything, we need the money we spent trying to get home at the last minute and being stuck in Munich," Giantisco said.<div type="image" title="Lufthansa plane" height="2262" width="3264" msid="108885428" hostid="261" sizebytes="312478"></div><h2>Bad weather and technology landed the couple in this situation</h2>After traveling around Southeast Asia for two months last summer, the couple embarked on a trip back home to Lambertville, New Jersey.They booked their return flight months in advance with <a target="_blank" href="https://www.businessinsider.com/how-to-redeem-credit-card-points-for-travel-2024-2">United using miles</a>. Their scheduled flight would take them on a United plane from Singapore to Munich. In Munich, they'd board United's partner airline, Lufthansa, for a flight home.The couple made it to Germany and boarded their connecting flight. But <a target="_blank" href="https://www.businessinsider.com/aviation-experts-why-its-a-nightmare-to-fly-2023-9">bad weather delayed the departure</a>. When the crew timed out, the flight was canceled.At the time, Giantisco remembers thinking they'd easily be rebooked on the next flight to New Jersey.They contacted Lufthansa's customer service department, where a representative told them the next available flight wasn't for two days. The couple agreed to the rebooking since that was the only option offered.That's when trouble started. Later, when the couple opened their Lufthansa and United accounts, there weren't any upcoming reservations.Giantisco called United, and a representative attempted to rebook them on two separate flights home — different from their Lufthansa rebooking.That reservation was deleted from their account, too.Giantisco said it spiraled into a situation where both airlines blamed the other. Reservations would be made over the phone but disappear from their accounts hours later.In a statement sent to BI at the time, a Lufthansa representative said that "after the original onward flight LH412 from Munich to Newark was canceled on August 17, Lufthansa immediately booked an alternative train from Munich to Frankfurt and a flight from Munich to Newark for August 19, which, unfortunately, was deleted by United Airlines."United told BI that "after receiving a new itinerary from their canceled Lufthansa flight, the customer called United to explore their options, and we rebooked them on a new flight the following day. When the customers did not show up for this flight, they reached out to Lufthansa instead."Giantisco and Marton said that's far from what happened. Instead, they longed to get home, but with no active reservations on their accounts, there was no way to board the flights and trains the airlines claimed to have booked them on."One time, we went to the airport, but we had no way to check into the flight or any way to say that we were on the flight because they deleted everything," Giantisco said.Marton said after the sixth or seventh failed rebooking, there was "a heart-sinking feeling.""The more it happened at later and later dates, it just felt more and more like we were never going to get home," he added.According to the <a target="_blank" href="https://europa.eu/youreurope/citizens/travel/passenger-rights/air/index_en.htm#reimbursement-cancellation-1">European Union air passenger rights</a>, airline passengers can choose between a reimbursement, rerouting, or return if their flight is canceled. In this case, Gianstico and Marton chose to be rerouted, which requires the airline to book tickets at "the earliest opportunity." Giantisco said the airline failed that do that.So, after three days in Munich, the couple gave up on rebooking and purchased new tickets with United Airlines.They flew from Munich to London on a Lufthansa flight and from London to New Jersey on United. The tickets cost $3,153.50. Adding in costs for hotels, food, local transportation, and clothing — the airlines lost their luggage, too — the couple said they spent $4,430.79.<div type="image" title="Emma Giantisco and Dylan Marton on their two-month trip." height="3024" width="4032" msid="108885430" hostid="261" sizebytes="963050"></div><h2>United refunded the couple $82 and issued Giantisco miles months later</h2>Once home, Marton and Giantisco were determined to get their money back. That became a challenge when they discovered their original flight information had been removed from their United flight history. BI viewed more than 15 pages of screenshots the couple took throughout their attempted rebooking process.They contacted both airlines, unsure which airline was responsible for the reimbursement.The couple received a refund of $82 from United for the clothes they purchased in the US once they arrived home without their luggage.In an email sent to Gianstico, a United representative said the Star Alliance partnership agreement states that the operating carrier is responsible for refunds after a canceled flight.Initially, Lufthansa denied the refund, but the couple pushed back. In October, the airline sent them an email, viewed by BI, that stated, "We would like to offer you a refund for the tickets you still have open."The couple is unaware of any tickets they have open with the airline or how much that refund would be. They haven't received money from Lufthansa since the email.In a statement sent to BI in mid-March, a United representative said, "As a goodwill gesture, we reimbursed some expenses from their unexpected overnight stay and are working with Lufthansa to refund the miles used for the canceled flight."A week later, Giantisco received 44,000 miles in her United account. But Gianstico and Marton agree that the miles don't begin to help the $4,430 missing from their bank account."Both of us work in education, so we're a solid middle-class household. I would say this is the first year that I've felt a lot of stress about money," Giantisco said. "All of these strains would have felt more manageable if not for this loss of money."They also believe that the airlines need to take accountability for what happened."I don't think there's any other sort of company or sector that can promise a service, cancel the service, strand you, promise to repay you, and then ghost you for 7 months," Giantisco said. "It's unfathomable behavior."Do you have a travel nightmare to share? Business Insider would like to hear from you. Email <a target="_blank" href="mailto:mhumphries@businessinsider.com">mhumphries@businessinsider.com</a>.

A couple lost $4,400 when their Lufthansa flight was canceled. The airline promised them a refund, but 5 months later, they still haven't received the money. 

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