Jet-fuel prices have nosedived in Europe on the back of soft purchases, although weak import levels mean that values could swing higher towards the end of the month. Data issued by energy information service ICIS – a corporate sibling of Cirium within RELX – shows that the price of jet fuel delivered to northwest Europe by barge declined from $660 per tonne at the start of January to around $540 on 28 January, a fall of 18%. There were similar downward movements in the USA and Asia. "Outright prices in the European spot jet kerosene market fell considerably this week, primarily due to fluctuations in upstream Brent crude futures coupled with slowing demand," writes ICIS in the 28 January report. Few large-scale purchases of jet fuel were made over the week, in line with the soft seasonal flying period. Mild winter weather also subdued demand for related heating kerosene, helping to push prices lower. "That said, supply-side woes pertaining to relatively lower imports schedule for the last week of January and first week of Feb, coupled with disruptions caused during France strikes, have led to drawdown in stocks supporting upswing in differentials," notes ICIS. Still, significant price rises are not likely until holiday-season flying ramps up in the second quarter. One "major airline operator" notes that so far there is little impact on jet-fuel demand from the recent coronavirus outbreak in China, although weak travel demand combined with the Chinese New Year celebrations could lead to rerouting of jet-fuel supplies from Asia to Europe and the USA. In the USA, jet-fuel inventories have increased on ample supplies, weak demand and ongoing mild weather, which could indicate subdued prices going forward.

Source: Cirium

Boeing anticipates its 737 Max production rate will return to previously expected levels several years after the company restarts Max production, which could come within the next several months. Executives laid out that timeline during Boeing’s 29 January earnings call, signalling Max production rate will remain significantly less than rival Airbus’s A320-family production rate for the foreseeable future. “We’ve assumed we will resume 737 Max production at low rates in 2020… Then we expect to gradually increase to previously planned production rates over the next few years,” says Boeing chief financial officer Greg Smith. Boeing declines to say at which rate it intends to restart production or to provide timelines for rate increases. “When the supply chain has stability, we will make the next rate increase,” Smith says. Prior to the March 2019 grounding, Chicago-based Boeing produced 52 737s monthly and anticipated hiking production to 57 aircraft monthly in 2019, followed by possible further rate hikes. Airbus produced about 53 A320-family aircraft in 2019 and plans to boost production to 63 aircraft in 2021. After the grounding took effect, Boeing continued Max production, albeit at a reduced rate of 42 aircraft monthly. Finally, this month, with the certification timeline still uncertain, Boeing temporarily halted Max production. Boeing expects FAA certification will come by mid-year, meaning production could restart within several months, Boeing chief executive David Calhoun said recently. During the grounding Boeing had stockpiled produced Max at several US airfields. The company has not disclosed exactly how many Max are in storage. But the number stands to be more than 400 based on a 42-aircraft monthly production rate from March to December 2019. Once regulators do clear the Max to fly, Boeing faces the massive task of getting all those aircraft into service. “Return to service… will be a one-and-a-half-year programme based on the [aircraft] in inventory,” says Calhoun on 29 January.

Source: Cirium

Citing a significant drop in load factors, United Airlines has suspended some of its flights to China, which is reeling from the spread of the novel coronavirus (2019-nCOV). "Due to a significant decline in demand for travel to China, we are suspending some flights between our hub cities and Beijing, Hong Kong and Shanghai," the airline states 28 January. "We will continue to monitor the situation as it develops and will adjust our schedule as needed." The Chicago-based airline says 24 flights have been removed from its schedule between 1 and 8 February. United will still operate flights between the USA and China during this temporary reduction. United operates 11 routes to China, Cirium schedules data shows: four to Shanghai Pudong International airport from San Francisco International, Newark Liberty International, Chicago O’Hare International and Los Angeles International; one route to Chengdu Shuangliu International from San Francisco; four routes to Beijing Capital International airport from Newark Liberty International, San Francisco, Chicago and Washington Dulles International; and two to Hong Kong from San Francisco and Newark. Delta Air Lines, which operate seven routes to China, tells Cirium, "We are monitoring the situation, but don’t have anything to announce at this time." The Atlanta-based airline operates routes to Shanghai Pudong from Detroit Metropolitan Wayne County airport, Los Angeles, Seattle Tacoma International, Atlanta Hartsfield-Jackson International and Las Vegas McCarran International. Delta also operates routes to Beijing from Detroit and Seattle. American Airlines, which operates six routes to China, did not disclose to Cirium any plans to suspend flights to China. Like many other airlines that operate routes to China, American has expanded its travel waiver for customers who have already booked flights. The Dallas-based airline operates two routes each to Shanghai, Beijing and Hong Kong from Dallas/Fort Worth International and Los Angeles.

Source: Cirium