Latvian carrier Air Baltic is evaluating the potential introduction of up to five Airbus A321XLRs as a first step to establishing long-haul operations. Chief executive Martin Gauss advised that Air Baltic is looking at narrowbodies that can operate longer routes than its all-A220-300 fleet. "As we can already fly seven-plus hours, the normal A320[neo] would not do much more. So therefore, only the XLR can do more," he says, adding: "We always had that [long-haul] in mind, but we don't want to go to widebodies. We believe that we can do best what we do [today]. That's why the XLR now is in discussion." Introduction of long-haul-capable narrowbodies would not represent a strategic change for the carrier, in Gauss's view. "We are not changing our plan to go to the full A220 fleet and keep a simplified business model. So that is not comprised. It would be something new." Data shows that Air Baltic has 36 A220-300s and is scheduled to receive another 14 by 2024. The carrier holds options and purchase rights on a further 30 A220s. Gauss does not rule out converting options to the A321XLR: "Everything is possible today." But he adds that the talks with Airbus are not at that stage yet. They cover aircraft performance, delivery slots and availability at leasing companies. "The lead time for this new aircraft are normally two to three years when it is available, and therefore we will have to look at it now if we in the future want to do something." As a potential alternative, Air Baltic is looking at the A321LR, which entered service in 2018. "Maybe that is enough. First numbers show not, but we are in discussions to see if that is a future aircraft for us,” says Gauss. Airbus targets certification of the A321XLR in 2024. Air Baltic envisions a need for three to five aircraft to serve an initial set of long-haul destinations, Gauss says, adding: "That would be the start of it, and then of course you build on it." The talks with Airbus on long-haul ambitions are not exclusive. "Let’' see what Boeing has on offer to do such an operation," he says. In any case, a long-haul aircraft order would depend on state-owned Air Baltic's plan to become a publicly listed company, because it cannot count on the government to grow its fleet beyond aircraft currently on order. "We need to go to stock exchange to return the money to the Latvian state," Gauss says. "We need to have the equity available to us to be able to invest, and then we would exercise options and continue the business model. "The first target now [is] to get to 50 aircraft, do the IPO and in line with that we would be announcing the new orders, whatever it will be, or exercising the options." Air Baltic's last A220 delivery is scheduled for 2024. "We cannot stop and say this was it for Air Baltic," says Gauss.

The Australian Competition and Consumer Commission (ACCC) has disclosed that Qantas Airways' proposed acquisition of Alliance Aviation Services has raised preliminary competition concerns. "We are concerned that this proposed acquisition is likely to substantially lessen competition for air transport services to and from regional and remote areas in Queensland and Western Australia for corporate customers," ACCC chair Gina Cass-Gottlieb says in a statement today. In Australia, Qantas and Alliance provide air transport services to regional and remote areas for corporate customers, the commission says. The airlines closely compete in the supply of these services to mining and resource companies who need to transport fly-in fly-out workers in Queensland and Western Australia. Qantas currently owns just under 20% of Alliance and is said to be its biggest customer, wet leasing up to 18 Embraer aircraft that Alliance operates on the carrier's behalf on a number of routes. In May, Qantas announced it had reached an agreement to fully acquire Alliance. "This merger would combine two of the top three operators of air transport services in Queensland and Western Australia," Cass-Gottlieb adds. The proposed acquisition would remove Alliance as the only competitor to Qantas on the Brisbane-Moranbah regional passenger transport route, it adds. The commission is considering the level of competition provided by airlines such as Virgin Australia and Cobham Aviation's regional services arm National Jet Express. The latter was recently purchased by Regional Express. The ACCC is also considering how the removal of Alliance's aircraft leasing services would impact the ability of current and new entrants to compete against Qantas on regional routes. Cass-Gottlieb further adds: "Our preliminary view is that there are already significant barriers for airlines who want to enter or expand their operations in regional and remote areas, including access to pilots, airport facilities and infrastructure, and associated regulatory approvals. The removal of Alliance as a supplier of wet-leases or the increase in price of wet-leases for Qantas' competitors is likely to significantly increase these barriers." In response to this, Qantas has reaffirmed its view that its acquisition of Alliance Aviation would not lessen competition in Australia's highly competitive charter segment.There are a significant number of charter operators of different sizes and that makes it an extremely competitive segment," Qantas Group executive of associated airlines and services John Gissing says in a statement today. "We're confident our acquisition of Alliance does not substantially lessen that competition and we'll work through the ACCC's process to support that position and address their initial concerns." The ACCC is seeking submissions from interested parties in response to the statement of issues by 1 September. The final decision is scheduled for 17 November.

Sustainable aviation fuel will become less expensive for airlines in the USA to purchase under a new SAF tax credit programme included in the US Inflation Reduction Act, which was signed into law by President Joe Biden on 16 August.
From 1 January 2023, a $1.25 per gallon tax credit will be available for SAF blends that reduce lifecycle greenhouse-gas emissions by at least 50%. The tax credit will rise by one cent for each percentage point by which the fuel's lifecycle GHG reduction exceeds 50%, up to a maximum of $1.75 per gallon. The credits will be available in this format until the end of 2024. From the beginning of 2025 until the end of 2027, the Clean Fuel Production Credit will be introduced for all low-carbon transportation fuels including aviation. Under this programme, SAF credits of up to $1.75 per gallon will still be available – up to 75 cents per gallon more than the amount other forms of transport will be eligible to receive. In September 2021, the Biden administration set a "Sustainable Aviation Fuel Grand Challenge", aimed at increasing the production of SAF in the USA to at least 3 billion gallons a year by 2030. The new SAF tax credits are aimed at helping that goal come to fruition. IATA has welcomed the signing into law of the new credit. "We definitely welcome it and believe it will spur SAF production in the US, and thereby support the industry's commitment to net zero by 2050," the association says. The Inflation Reduction Act also includes incentives for the production of clean hydrogen and grants for SAF producers.