Hospitality Ireland presents a round-up of global airline, travel and aviation news.
Airline Passengers Can Claim If Flight Brought Forward - EU Court
Passengers in Europe are entitled to compensation not only if their flights are delayed but also if they are brought forward by more than an hour, the European Union's top court ruled on Tuesday December 21.
Under EU rules, passengers can claim damages if their flights are cancelled less than 14 days before departure or arrive more than three hours late or if they are denied boarding because of overbooking.
Compensation, ranging from €250 to €600, depends on the distance of the flight, with a possible 50% reduction if the airline offers in advance to re-route the passenger so they arrive only a few hours late.
The Court of Justice of the European Union (CJEU) determined that a flight should be regarded as cancelled if it was brought forward by more than an hour.
Judges reasoned that passengers could suffer the same degree of inconvenience as in the case of a delay, having to adapt their plans and even potentially missing the flight.
The compensation should also be the same as that due for a cancellation or delay, with no right to reduce the amount by 50% on the grounds that it has offered to re-reroute a passenger so that they arrive without delay at the final destination.
Airlines can still offer to re-route passengers if they do so sufficiently in advance.
The court also found that a passenger has a "confirmed reservation" not only if they have a ticket but also if a tour operator, through which the passenger has booked, has provided assurances of transport on particular flights.
The case came to the CJEU from courts in Austria and Germany relating to flights operated by Azurair, Corendon Airlines, Lufthansa subsidiaries Austrian Airlines and Eurowings, as well as Laudamotion, now owned by Ryanair.
U.S. Travellers Stay Closer To Home As Omicron Looms
Carla Benton, a Chicago-based book copy editor, was preparing for a Christmas trip to Europe when the Omicron variant of the coronavirus began to make headlines in late November.
She quickly cancelled her international travel plans due to rapidly changing travel restrictions and testing requirements, initially opting to stay in the United States and visit her sister in Houston, Texas instead. Benton ultimately decided to cancel all travel and stay home in Chicago for the holidays.
"I’d initially hoped to be able to play some of my trip by ear," Benton said. "While I’m fully vaccinated and following precautions here in Chicago, I was worried about the potential for a surprise positive test and quarantine abroad."
The Transportation Security Administration has screened more than 2 million people daily for the past four days, but it still remains down about 15% over pre-pandemic levels. TSA said it expects to screen 30 million people between Monday and Jan. 3 even as U.S. COVID-19 cases spike and Omicron spreads.
Airlines have in recent weeks reported some uptick in cancellations. Still, millions of Americans are expected to hit the highways and board flights to celebrate with family and friends over the holidays.
Delta Air Lines Inc said last week that Omicron had slowed international bookings as many countries imposed new travel restrictions.
However, the airline's chief executive officer, Ed Bastian, told CNBC that "Omicron (is) not going to impact our holiday bookings."
United Airlines is flying its busiest schedule this month since the start of the pandemic, with more than 4,000 flights per day on average during the year-end holidays. The airline said it added more than 200 daily domestic flights to meet holiday travel demand.
Similarly, Southwest Airlines said on Monday December 20 the airline is encouraged by holiday demand trends.
American Airlines incoming Chief Executive Robert Isom told Reuters the airline's domestic business remained strong but the new travel restrictions had dampened demand in some international markets.
Nationally, COVID cases rose 9% in the past week but are up 57% since the start of December, according to a Reuters tally.
The spike in U.S. COVID-19 cases is causing some worry about the future of travel.
Omicron fears and new travel restrictions have prompted a rise in global hotel cancellations, according to online hotel search firm Trivago.
As cases continued to climb, investors pushed airline and travel stocks lower on Monday December 20. United Airlines dropped 3.3%, while Royal Caribbean Group slipped 3.4% after 48 people on its Symphony of the Seas cruise ship tested positive for COVID-19.
And Carnival Corp said on Monday December 20 Omicron is already hitting the cruise line's near-term bookings.
But more than half of Americans still did not intend to cancel their holiday travel plans as of early December, according to a poll from market research firm Ipsos released Dec. 7, when Omicron was already spreading in the United States.
The American Automobile Association still expects this year to bring holiday travel in line with 2017 volumes, following the dramatic decrease in 2020.
"Our forecast focuses on domestic travel, which we do not expect to be affected to the extent that international travel might," said Ellen Edmonds, public relations manager at AAA.
Major U.S. airports, preparing for a surge in holiday travelers, are maintaining their existing COVID-19 safety protocols like mandatory masking and extra cleaning.
Denver International Airport spokesperson Alex Renteria said the airport still expects an uptick in travel over the holiday period, in line with high passenger volume since Thanksgiving.
In the first half of December, passenger traffic at Miami International Airport was up 9% compared to the same period in 2019, according to communications director Greg Chin. Travel through the Florida airport is surpassing even pre-pandemic levels, with the average number of daily departing flights up nearly 12% compared with December 2019.
Travel Ban On Southern Africa 'Inefficient' But EU States Oppose Lifting - Top Official
Brussels is pushing to lift an "inefficient" travel ban on southern African states over the Omicron variant, but European Union nations are reluctant to drop it, the EU's commissioner for justice Didier Reynders told Reuters on Tuesday December 21.
Late in November, EU states agreed to impose travel curbs on seven southern African countries after they reported several cases of the Omicron variant.
Reynders said the ban had become inefficient because the EU had other tools, including quarantines and tests, to manage the flow of travellers from countries with several Omicron cases.
In addition to that, the spread of the variant to many other countries in the world, including EU states, further weakened the rationale for that measure.
But EU states remained reluctant to lift the ban, he said, noting that a new request by the Commission made at a meeting of EU experts on Monday had been rejected by EU governments.
"We will continue to push not only for diplomatic reasons, but also because is becoming inefficient. We have other tools," he said, citing "huge pressure" from South Africa to remove the ban.
Reynders also said the European Commission was not in favour of measures adopted by seven EU governments that require vaccinated travellers from other EU nations to present a negative test, even if they have a valid COVID-19 certificate.
He added the measures appeared to be partly justified by fears over the spread of the Omicron coronavirus variant, but that the executive Commission was still assessing whether they were proportionate and necessary.
"We prefer to use for the free movement in Europe only the certificate without additional measures," he said.
Despite this partial setback, the EU certificate was increasingly used across the world.
"It's becoming a global standard," Reynders said.
He added that more than 30 countries across the world were using the EU's travel pass, in addition to the 27 EU states, and over 80 more were also asking to use it.
FACTBOX-From San Francisco To Munich, Key Players Developing Flying Taxis
Electric vertical takeoff and landing aircraft (eVTOL) maker Eve, part of Brazilian planemaker Embraer, is planning to go public in the fifth such debut as investors bet on environmentally friendly urban air travel.
That comes after Vertical Aerospace saw its shares surge 19% in a New York debut on Friday December 17.
Following are some of the leading eVTOL developers, some of which aim to start their "flying taxis" before mid-decade.
Vertical Aerospace - The Bristol-UK-based manufacturer was founded in 2016 and launched its eVTOL VX4 in 2020. - It is backed by investors such as American Airlines Group Inc and Honeywell International Inc. - It says it has the largest sales with pre-orders for up to 1,350 aircraft. VX4 can fly at a top speed of 202 miles per hour and can carry 5 people at a time including the pilot.
Joby Aviation - The California-based company started in 2009 and is now worth more than $3.9 billion. - Backed by Toyota Motor Corp, Joby has developed an eVTOL supported by six electric motors and operated by a pilot. It can carry four passengers and go at 200 miles/hour. - Joby aims to get certification in 2022. Archer Aviation - The San Francisco-based company was founded in 2018 and went public in September after merging with Atlas Crest Investment. It is now worth $1.7 billion, according to Refinitiv data. - Archer is backed by United Airlines Holdings and Stellantis NV. Its eVTOL named Maker will be piloted, with a capacity of four passengers and a speed of 150 miles/hour, powered by 12 motors and six independent battery packs. - Archer has received FAA approval for ground tests. Volocopter - German air taxi startup Volocopter began making its eVTOL in 2011. It has raised 322 million euros ($363.92 million) and is looking to go public via a SPAC deal. - The startup counts Daimler AG and BlackRock among its investors. The two-seater eVTOL Volocity is battery-powered, supported by 18 motors and will have a maximum airspeed of 110 km/hour (68 miles/hour). Wisk - The San Francisco-based autonomous air taxi developer was established in 2019 as a JV between Boeing and Kitty Hawk Corp, which is backed by Google's Larry Page. - Wisk's eVTOL, Cora, is a two-seater aircraft designed with a speed of 100 miles/hour and has 12 motors. - Cora has an experimental airworthiness certificate from both the New Zealand Civil Aviation Authority (CAA) and the U.S. FAA. Lilium - German air shuttle startup Lilium has been developing its electric aircraft since 2015. The company listed on the U.S. stock market via a reverse merger with Qell Acquisition Corp. It has a market cap of more than $1.9 billion. - Its seven-seater eVTOL can fly at 175 miles/hour. The jets rely on a single-stage rotor system driven by an electric motor. - The company is pursuing concurrent certification of the 7-seater jet with EASA and FAA. CityAirbus - CityAirbus was unveiled by Airbus in September 2021 after its fixed-wing, V-tail design was picked as the planemaker's eVTOL offering over a rival demonstrator. - CityAirbus NextGen is a four-seater aircraft with a cruise speed of 62 miles/hour. It entered a detailed design phase in 2021, with the prototype's first flight planned for 2023. Eve Urban Air Mobility - Brazilian planemaker Embraer's eVTOL unit was spun off from innovation subsidiary EmbraerX in October 2020. - It has agreed to go public with blank-check firm Zanite Acquisition Corp in a deal valuing Eve's equity at $2.9 billion.
Suspects In Dutch Trial "Fully Responsible" For MH17 Downing, Prosecution Says
Dutch prosecutors on Tuesday December 21 said three Russians and a Ukrainian were "fully responsible" for shooting down Malaysia Airlines flight MH17 over Eastern Ukraine in 2014 and should be found guilty of murder.
The men - all of whom remain at large - could face sentences of up to life imprisonment if found guilty of helping to supply the missile system used by Russian-backed rebels to fire a rocket at the passenger jet as it flew from Amsterdam to Kuala Lumpur.
"The four suspects together are fully responsible for shooting down flight MH17, which caused the death of the 298 people on board, and the murder of those on board," prosecutor Thijs Berger told judges.
In the second day of presenting their closing arguments, the prosecution said the evidence showed that the suspects -- Russians Oleg Pulatov, Sergey Dubinsky and Igor Girkin and Ukrainian Leonid Kharchenko -- pulled the strings in the area where MH17 was shot down.
The four were identified by a special international Joint Investigative Team which looked into the crash of flight MH17 and were later named by Dutch prosecutors.
According to prosecutors, the men, who are all linked to Russian-backed rebel groups, made the shooting down of MH17 possible by arranging for a Russian-made Buk missile to be brought to the area.
Under Dutch law it does not matter that the suspects did not ultimately pull the trigger, because someone who makes someone else commit a crime can be convicted as a perpetrator of that crime, prosecutors said.
A sentencing demand is expected on Wednesday at the end of the 20-month trial.
None of the defendants were present in court. One suspect, Pulatov, has sent lawyers to represent him. The others have never cooperated with the court and are being tried in absentia.
Prosecutors Say Italian Firm Produced 4,000 Flawed Parts For Boeing
An Italian supplier at the centre of recent industrial snags on the 787 Dreamliner airplane produced more than 4,000 non-compliant parts destined for Boeing Co over five years, a preliminary report from Italian prosecutors shows.
Initial results of an investigation launched earlier this year suggest that Manufacturing Process Specification (MPS), or its now-bankrupt predecessor company Processi Speciali, produced flawed parts between 2016 and 2021, according to the document.
According to the report, seen by Reuters, the suspect titanium parts made it into 35 Boeing 787 fuselages.
It added that the Brindisi-based supplier also made parts for the Boeing 767, a freighter model which is now also used as the basis for a U.S. Air Force tanker.
The investigation aims to establish whether MPS or its predecessor firm produced flawed components that could threaten air safety, a risk that has been denied by Boeing.
Boeing declined direct comment on the prosecutors' document, parts of which were first reported by Italian daily Il Corriere del Mezzogiorno. It reiterated, however, that airworthiness had not been affected.
"While our assessment is ongoing, this does not present an immediate safety of flight concern," a spokesperson said.
In October, Boeing said some 787 Dreamliner parts supplied by MPS had been improperly manufactured over the previous three years, marking the latest in a series of industrial snags to hit the airliner.
Italy's Leonardo, which was the immediate customer for parts made by MPS and has said it too is a victim of the suspected failure to meet specifications, declined comment.
A lawyer for former MPS Chief Executive Antonio Ingrosso, as well as for the former chief executive of its now-bankrupt predecessor Processi Speciali, also declined to comment.
The U.S. Air Force did not immediately respond to a request for comment on whether suspect parts had reached any of its 767-based KC-46 tankers, the first of which was delivered in 2019.
The report emerged days after Italian prosecutors ordered the seizure of components intended for Boeing 787s from a Leonardo plant in Grottaglie, southern Italy.
MPS was a sub-supplier until this year for two sections of 787 fuselage made by Leonardo, known as sections 44 and 46.
In the report, prosecutors alleged that MPS or Processi Speciali made 4,189 parts using "titanium and aluminium of different quality and origin" from those ordered by the customer, breaching the relevant technical specifications.
In particular, they said, it produced components using so-called 'grade 2 titanium' instead of a titanium alloy, they said, adding that the metal used had "mechanical and structural strength properties far inferior to those of the alloy".
The affected parts included a clip for the doorframe of the left-side cargo door of the 787, the document said. It did not provide details of any suspect parts made for the older 767.
Prosecutors allege MPS chose cheaper non-compliant metals to save costs and speed up production, resulting in a reduction of additional margins built in to the design to ensure safety.
Eight individuals, including the former head of MPS and the former head of Processi Speciali, are under investigation for fraud and for actions threatening the safety of air transport.
Prosecutors have said the two companies are also under investigation. Leonardo, which filed a lawsuit on Dec. 7, is being viewed by prosecutors as the injured party.
The assets and factory of MPS will be put on sale at the beginning of next year as its predecessor Processi Speciali is being wound up, another court document seen by Reuters showed.
Administrators for the companies did not reply to a request for comment.
Prosecutors said on Saturday December 18 initial findings suggested MPS and Processi Speciali used non-compliant metals and violated technical specifications. They did not respond to Reuters request for comment on details of their preliminary report.
Embraer Shares Soar On Announcement Of Eve Deal With SPAC, NYSE Listing
Shares of Brazilian planemaker Embraer SA soared on Tuesday December 21 after the company said it had agreed to combine its electric aircraft subsidiary Eve with Zanite SPAC and list it on the New York Stock Exchange.
The transaction values Eve's equity at $2.9 billion and will include the combination with Zanite Acquisition Corp and an additional investment by a group of investors that includes Embraer, Zanite, financial investors and strategic partners such as Azorra Aviation, BAE Systems, Republic Airways, Rolls-Royce and SkyWest Inc.
After the transactions, Eve - which will be listed on NYSE under the ticker EVEX - will have a $512 million cash position that will be used to develop its flying taxi. The firm is expected to start trading in the second quarter of 2022, after the closing of the deal with Zanite.
Eve already has an order pipeline of more than $5 billion. Among the customers with pre-orders are lessors, helicopter operators and ride-sharing companies.
After announcing Eve's listing, Embraer also disclosed new orders. Florida-based Azorra, one of the Eve investors, ordered 200 electric vertical take-off and landing (eVTOL) aircraft from Eve. Republic Airways, also an investor, placed an order for up to 200 eVTOLs, aiming to implement an eVTOL network throughout the U.S. Central and East Coast markets.
Skywest ordered 100 electric aircraft looking to develop a regional chain in the U.S., while BAE Systems will work with Eve to explore the development of its eVTOLs for the defense market. Both are also part of the same investor group.
Brazil-traded shares in Embraer skyrocketed after the announcement, closing up 16% at 23.10 reais. U.S.-listed shares of the company also jumped to close at $16.07, a 15.6% rise.
Embraer will own more than 80% of Eve after the SPAC combination and additional investment from the group. Eve's cash position is expected to be enough to fund the flying taxi development through its certification, expected for 2025, Embraer CEO Francisco Gomes Neto told Reuters.
Itau BBA analysts said the deal beat their own projections, noting that Eve's $2.9 billion valuation implies a ratio of $12 per U.S.-traded Embraer share, which is 110% more than the $5.7 per share they had incorporated in their $21 target price for Embraer shares at the end of 2022.
"Our calculation was based on a $2 billion (valuation) for Eve and a 50% stake from Embraer," they said.
Gomes Neto said in an interview that Eve will probably have multiple production sites to deliver to customers in different continents, but the locations have not yet been chosen. Gomes Neto expects Eve to reach $4.5 billion in revenue by 2030, with around 15% of the global urban air mobility market.
The production phase will probably be funded by debt, said Eve's co-CEO Jerry DeMuro, former BAE Systems CEO. Eve's other co-CEO is Andre Stein, an Embraer executive for two decades.
Embraer will provide infrastructure to Eve, including the allocation of engineers to the projects, testing grounds and simulation equipment.
"This will allow us to lower the costs," DeMuro said in an interview.
Analysts at Guide Investimentos, also calling the deal positive for Embraer, said they expected the transaction proceeds to be used to finance operations, support the company's growth and for corporate purposes in general.
Cathay Pacific To Cancel Some Passenger Flights In January Amid Tougher Curbs
Hong Kong's Cathay Pacific Airways Ltd will cancel some passenger flights in January because of operational and travel curbs at a time when the Asian financial centre has tightened quarantine requirements, the airline said on Wednesday December 22.
"The new consolidated schedule will result in several flight cancellations," the company said in a website notice, without giving details.
The carrier declined to comment on the routes involved, but said it would immediately reach out to all affected customers and try to make alternative flight arrangements for them.
A travel industry source who was not authorised to speak publicly about the matter told Reuters the cancellations included many long-haul flights to and from Australia, North America and Europe.
Cathay's Australian website said it would only fly to Sydney from Hong Kong in January, with no flights to Melbourne, Brisbane or Perth, which had been destinations in December.
For December, Cathay planned to fly no more than 12% of its pre-pandemic passenger schedule, having cancelled many flights because it could not find enough crew members to volunteer for tough rosters involving five weeks locked in hotel rooms.
Hong Kong has tightened travel rules since the Omicron coronavirus variant emerged, and arriving passengers from many countries are limited to citizens and residents who are now subject to three weeks of managed quarantine even if fully vaccinated.
The Hong Kong government has a "zero-COVID" policy in line with mainland China as it hopes to persuade Beijing to allow cross-border travel.
Portugal's TAP To Compete Globally Despite Tough Rescue Plan - Minister
Portugal's government said the country's ailing flag carrier TAP will be able to compete on a global level but will need partners after the extensive restructuring imposed by a Brussels-approved rescue plan worth €3.2 billion.
Over the past six months, EU antitrust regulators have been examining whether the plan, which involves thousands of job and pay cuts, is proportionate and complies with state aid rules, and whether it affects competition.
The European Commission approved it on Tuesday December 21 but imposed safeguards to limit distortions to competition.
"TAP will capitalise, and will be able to continue to operate and compete in a highly competitive global market," Infrastructure Minister Pedro Nuno Santos told a news conference late on Tuesday December 21.
But he warned that the airline, which is 72.5% controlled by the Portuguese state, "could not survive alone" and must look for partners.
The government is now authorised to inject €2.5 billion into the airline, and it hopes the cash can help "make the company viable" in the future, he said.
TAP has already received €1.2 billion euros from that amount, and the state will guarantee 90% of a 360 million euros loan and inject another €990 million.
EU regulators also approved a €569 million state aid package to compensate the airline for the impact of the pandemic in 2020, and are expected to approve further compensation soon to cover the first half of 2021, Nuno Santos said.
As part of the restructuring plan, TAP has already reduced its fleet size, cut more than 2,900 jobs and reduced the salaries of most workers up to 25%, with pilots facing a 50% pay cut, the minister said.
"No more layoffs were imposed (by Brussels), no more wage cuts, no more fleet reduction," Nuno Santos said.
AMERICAN AIRLINES - INTERNATIONAL TRAVEL RESTRICTIONS HAS A DAMPENING EFFECT ON DEMAND IN SOME PLACES
AMERICAN AIRLINES- DOMESTICALLY, DEMAND IS VERY STRONG AND HAS BEEN FOR A WHILE NOW
AMERICAN AIRLINES - INTERNATIONAL DEMAND WILL COME BACK WHEN RESTRICTIONS ARE LIFTED
AMERICAN AIRLINES - WE HAVE SEEN STRONG DEMAND OVER THE HOLIDAYS
EU Proposes Three New Taxes To Repay COVID-19 Recovery Fund Borrowing
The European Commission proposed on Wednesday December 22 three new EU-wide taxes to help to repay the joint government borrowing in the 27-nation bloc for their €800 billion COVID-19 recovery fund.
The first measure will introduce a levy on CO2 emitted by fuels for buildings and cars under a new carbon market, while using the EU's existing carbon trading system to impose CO2 costs on ships and increase existing payments from airlines.
A quarter of such CO2 revenues, which currently largely go to governments, would in future go to the EU budget, providing €12 billion annually on average from 2026 to 2030, according to the Commission's proposal.
The second would impose carbon costs on imports of goods from countries with weaker CO2 emissions standards, with three quarters of those proceeds going to the EU budget, providing €1 billion per year on average over 2026-2030.
The third tax would give the EU budget a 15% share of the residual profits from large multinational companies that will be re-domiciled in EU countries under a G20 and OECD agreement on a re-allocation of taxing rights.
Those revenues could amount to between €2.5 billion-€4 billion per year.
The COVID-19 recovery fund is to be paid back by 2058.
EU budget commissioner Johannes Hahn said governments had a strong incentive to agree to the new levies, to avoid having to pay more into the next EU budget to repay that debt.
The Commission proposals must be negotiated by the European Parliament and EU countries. A second package of similar proposals is due in 2023.
But countries are already squabbling over the plans.
Polish climate minister Anna Moskwa told a meeting of EU ministers on Monday December 20 that the new carbon market was unacceptable as it would impose an increased burden on vulnerable citizens.
The Commission has said part of the new EU levies should form a fund to shield low-income households from potential costs, for example by subsidising home renovations to curb energy bills.
Ryanair Doubles Annual Loss Forecast Over Omicron
Ryanair on Wednesday December 22 more than doubled its annual loss forecast and cut its January traffic estimate by 33% due to travel restrictions imposed in the wake of the emergence of the Omicron variant of COVID-19.
The Irish airline, Europe's largest by passenger numbers, said in a statement it expects a net loss of between €250 million and €450 million in the 12 months to the end of March.
That compares with a previous forecast of a loss of between €100 million and €200 million.
It cut its December passenger forecast to a range of €9 million to €9.5 million, from €10 million to €11 million.
It blamed last weekend's ban on British arrivals into France and Germany, and the suspension of all EU flights to and from Morocco.
The airline cut its January traffic forecast to between 5 million and 7 million, from 10 million.
It said it would wait to revise its February and March schedules until January, "as more scientific information becomes available on the Omicron variant, its impact on hospitalisations, European population and/or travel restrictions".
Ryanair said it now expects to fly just under 100 million passengers in the year to the end of March from an earlier forecast of just over 100 million.
"These figures are hugely sensitive to any further positive or negative COVID news flow," it said.
EU Approves Further COVID Aid For Portuguese Airline TAP
The European Commission approved on Wednesday December 22 a further, smaller aid measure from Portugal's government for the country's ailing flag carrier TAP, having also signed off on a €2.55 billion rescue plan for the airline this week.
The Commission approved €71.4 million in state aid to compensate TAP for damage suffered in the first half of 2021, as a result of COVID-19 pandemic-related travel restrictions.
"Because of these travel restrictions, TAP Air Portugal incurred significant operating losses and experienced a steep decline in traffic and profitability over this period," the Commission said in a statement.
The aid will comprise a capital injection or a loan. The Commission said the compensation did not exceed what was necessary to address the damage, and the measure did not breach EU antitrust rules.
The smaller chunk of aid comes after Brussels on Tuesday approved an overall rescue plan for the airline, but imposed safeguards to limit distortions to competition.
The €2.55 billion restructuring plan for TAP, which is 72.5% controlled by the Portuguese state, involves thousands of job and pay cuts.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
