ARC NEWS
Airbus sticks to deliveries target despite supply-chain squeeze
October 31, 2022
Airbus has described its fourth-quarter commercial aircraft deliveries target as "challenging but doable" despites its expectation that the supply chain will take "up to the middle of 2023" to normalise. Chief executive Guillaume Faury said during a 28 October earnings call that third-quarter deliveries has been "not so strong", resulting in "a significantly backloaded end of the year" in which the airframer aims to deliver "close to 265 planes". Faury says Airbus is "less dependent on supply-chain deliveries" as it closes in on November compared with one to two months prior. "This gives us more visibility on what we can do from a supply-chain perspective, but it is a lot of planes to deliver in the last two months. It is now mainly on Airbus's shoulders to a very large extent. Engine makers are delivering against their previous commitments. So on one hand, we have more visibility on the supply chain, but on the other, we know the challenges that are about to come," he says. Airbus has maintained its delivery target of "around 700 commercial aircraft" for 2022. Across the first three quarters of the year, it delivered a total of 437 aircraft, versus 424 in the same period of 2021. "As of today, the supply chain remains fragile, resulting from the cumulative impact of Covid-19, the war in Ukraine, energy supply issues and constrained labour markets," says Faury. "We expect it will take up to the middle of next year to normalise, therefore 2023 is expected to be another backloaded year." Despite some signs of the situation "potentially getting better", Faury highlights that things overall "remain very difficult". He observes that while managing resources "quite adequately on the blue-collar side", Airbus is finding it "quite challenging on the white collar [front]". "Mid-sized and smaller companies in other regions of the world continue to experience a lot of difficulties to recruit in numbers and in specific skills. So this will continue to be a headwind for the ramp-up [in production], and I think it will take time before it gets better, especially on the labour markets," he adds.


Canada raises antitrust concerns with WestJet bid for Sunwing
October 28, 2022
Canada's federal Competition Bureau has warned that the proposed merger of WestJet and Sunwing Airlines "would likely result in increased prices, less choice and decreases in service for Canadians", as a government review of the transaction moves to the next stage. The regulatory report published on 25 October will inform Transport Canada's public interest assessment, due on 5 December. The transaction would create a powerhouse of leisure travel to destinations in Central America and the Caribbean. Calgary-based WestJet in March proposed the merger of WestJet Vacations and Sunwing Vacations, which would operate as a new business unit, spearheaded by Sunwing chief executive Stephen Hunter and with a Toronto headquarters supplemented by a Quebec office in Laval. The bureau states that the combination would "result in a substantial lessening or prevention of competition in the sale of vacation packages to Canadians" on 31 routes from the country to Mexico or the Caribbean. "The transaction also represents a merger of the only two integrated airlines and tour operators offering nonstop service on 16 of these routes," the bureau adds. "It would also likely result in a significant reduction in travel by Canadians on a variety of routes where their existing travel networks overlap." Canada's third-largest carrier Air Transat has also expressed concern about the proposed deal. Final regulatory approval will be decided by Canada's Governor in Council based on the forthcoming recommendation of transport minister Marc Garneau. WestJet is Canada’s second-largest airline, while Toronto-based Sunwing is fourth based on capacity scheduled for March, Data shows. WestJet and Sunwing in 2019 operated around 50% of capacity to sun destinations from Canada. Flag carrier Air Canada is more than twice the size of WestJet, which has agreed to codeshares with Transat and other airlines in a bid to compete against its larger rival.


Etihad completes first flight using Japanese supplied SAF
October 28, 2022
Etihad Airways has completed its first flight with sustainable aviation fuel (SAF) procured in Japan. The SAF-powered flight departed from Tokyo Narita airport on 27 October under a partnership with ITOCHU Corporation and Neste announced earlier this year, the Middle Eastern carrier says. Under the contract, ITOCHU supplied approximately 40% blended MY Sustainable Aviation Fuel produced by Neste for the flight. This represented the first delivery of some 50,000 gallons of SAF, to be used over a number of flights in coming weeks, the Abu Dhabi-based carrier says. With this flight, Etihad notes that it has become the first international airline to procure and use Japanese supplied SAF on flights departing Japan. "The flight reduced CO2 by approximately 75.2 tCO2, based on the estimated fuel volume (20,000 US gallons) at a blend of 39.66% SAF," it says. Etihad's vice-president of procurement and supply chain Cassie Mackie states: "Etihad is committed to achieving net zero emissions by 2050 and reducing our 2019 emissions by 50% by 2035. The industry must get serious about decarbonisation and this type of collaboration between governments, corporates and the aviation sector, which increases SAF supply and availability at airports, helps pave the way for broader adoption." In December 2021, the Japanese government announced the goal of replacing 10% of aviation fuel consumption by Japanese airlines with SAF by 2030. To achieve this goal, ITOCHU established a SAF supply network at Japanese domestic airports across the country for Japanese domestic carriers, which is now being expanded to international carriers, starting with Etihad.


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