Shareholders of Allegiant Air and Sun Country are expected to vote on 8 May on the merger of the two carriers, which was announced in January and won US regulatory approval in April. "Assuming a favourable vote at each entity, the transaction should close around May 13," said Rob Neal, Allegiant's chief financial officer, during the first-quarter earnings call of parent Allegiant Travel held 30 April. The Las Vegas-based carrier is already in a "very strong financial position", which will only grow stronger as it joins forces with Sun Country, chief executive Greg Anderson adds on the call. Allegiant ended the first quarter with $1.2 billion of liquidity. In the current volatile fuel-price environment, the combination with Sun Country will be a boon, not a burden, the executives add. Sun Country's charter and cargo businesses have "contractual fuel pass-through structures" and both airlines "own their aircraft" and have complementary fleet strategies. "In a market where managing capacity is crucial, owners have greater flexibility than those who lease," Anderson says. "We look forward to completing the merger and demonstrating the value of the combined companies in the coming quarters." Once the deal closes, the combined entity will own 163 of the 172 aircraft in its passenger fleet, Neal says. Amid the current operating environment, Allegiant is still seeing strong leisure demand, as shown by its "robust cash sales", Anderson says. He adds: "We had many record sales days in the quarter and continue our double-digit growth over [the] prior year." Jet-fuel costs, which Anderson describes as "the main pressure point", have "risen sharply", with crack spreads nearly tripling to about $1.70 per gallon in early April but have since dropped to $1.20, he says, noting this is "still about twice as much as the pre-conflict level of roughly $0.60". While fares remain healthy overall, Allegiant is reducing off-peak capacity "where margin pressure is most acute" and reducing service on some of its longer stage-length routes "where the hurdle on fuel cost is higher". "We are not seeing any reasons to pull back on our peak flying," Anderson says. Allegiant is looking forward to taking delivery of its Max orderbook, since that aircraft, Anderson says, offers "more than a 20% improvement in fuel-burn efficiency". Allegiant ended the quarter with 123 aircraft in operation, taking delivery of one 737 Max and retiring one A320 during the period. Cirium fleets data shows Allegiant Air has orders for 33 aircraft, including 10 Max 8s and 23 Max 7s. Boeing's Max 7 is awaiting certification from the US Federal Aviation Administration. "As we move to the second quarter, we expect to take delivery of three 737 Max and to retire one A320," says Neal. Neal adds: "Fleet flexibility underpinned by aircraft ownership continues to be a key competitive advantage for Allegiant, notably in a high fuel environment because we retain the optionality to accelerate retirements of older aircraft if elevated fuel prices persist." Anderson says Allegiant continues to "closely monitor the evolving geopolitical environment and will adjust our operations as conditions warrant". He adds: "While we have already taken some modest schedule actions, our flexible model and agility still give us ample time to refine these decisions as the year unfolds. "The sharp rise in fuel prices will weigh on near-term industry profits. We are not immune… That said, a silver lining is that the gap between efficient, well-run airlines and weaker operators is widening. Allegiant and Sun Country are on the right side of that gap."

The price of jet fuel in Europe fell slightly lower in the week to 5 May as a flurry of imports from the USA and increased refinery runs in Asia helped to keep the market supplied. Yet participants warned that "underlying fundamentals remain tight", with European product stockpiles at six-year lows and imports unable to compensate for the loss of supplies from the Middle East. Energy information provider ICIS, which like Cirium is owned by RELX, assessed the price of jet fuel for delivery to northwest Europe at around $1,472 per tonne, compared to a yearly peak of roughly $1,900/t in early April. Before the war in Iran, it was around $750/t. "Europe’s jet fuel market is currently described as balanced in the prompt but remains structurally fragile heading into peak summer demand," observes ICIS, adding: "Liquidity is low, and market activity remains relatively calm as participants seek clearer direction." It notes that there has been a surge of imports from the US Gulf Coast which has kept the market supplied, helping to offset the loss of flows from the Middle East. However, there were expectations that another surge in pricing could occur from the third week of May as seasonal demand intensifies. Jet fuel stockpiles in northwest Europe fell by a further 4.7% in the week to 30 April, to stand 19% below the average for April and 30% below last year, according to Insights Global data. ICIS also notes recent improvements in Asian availability, including the restart of Taiwanese production, has helped to soften sentiment although it does not materially alter the broader supply picture. In Singapore, ICIS assessed jet fuel at around $166 per barrel, down by $7.38 on a week earlier. In New York, prices were at $4.14 per gallon, up 4.5 cents on last week.

Emirates purchased 35 widebodies following the conclusion of their leases during its last financial year. The Dubai-based carrier says it bought 29 Airbus A380s and five Boeing 777s in the year ended 31 March. Data shows that Emirates has 116 A380s and 144 777s in service or storage. Emirates is listed as manager of 60 of the A380s and 82 of the 777s. The airline says it took delivery of 20 aircraft during the year to end-March. To support its fleet programme, it raised Dh10 billion ($272 million) in aircraft financing via local and international markets, including Japanese operating lease, insurance-supported, French tax lease and ECA-backed structures. At the end of March, Emirates SkyCargo's fleet comprised 13 777Fs, eight more of which were pending delivery.