American Airlines pilots, represented by the Allied Pilots Association (APA), have filed a lawsuit seeking an immediate halt to the carrier’s flights to mainland China. This came shortly after the World Health Organization (WHO) declared the coronavirus outbreak in China an international public health emergency on 30 January. The union represents 15,000 pilots flying for the carrier. It notes in its lawsuit that American currently operates about 56 monthly flights between Dallas/Fort Worth International airport and China. Furthermore, the carrier’s plans to suspend flights between Los Angeles International airport and China do not take effect until 9 February. Cirium schedules that shows that for the month of January, American Airlines scheduled 108 direct flights between Dallas Fort Worth and Los Angeles to Beijing Capital and Shanghai Pudong airports in China. This currently stands at 98 in February and 121 in March. APA estimates that each American crew member working a trip to China needs to be on the ground for approximately 32 hours between flights to comply with federal rest regulations. “We estimate that as many as 300 passengers and crew travel to Dallas/Forth Worth alone from Chinese cities on each American Airlines flight. To us, that level of risk is unacceptable,” says APA president, Eric Ferguson. The union also refers to warnings issued by the US Centers for Disease Control and Prevention (CDC) and advisories by other health organisations against all non-essential travel to China. It notes that other carriers have suspended flights to China “out of an abundance of caution”. “The APA leadership has asked American Airlines management to follow suit, but to date they have not cancelled any US-China flights. We are therefore compelled to seek injunctive relief,” says APA. In a 30 January statement, Ferguson implored APA members to decline assignments to China “Due to the known and unknown risks associated with traveling to China right now, concurrent with the filing of our lawsuit, we are directing all American Airlines pilots assigned to flights between the United States and China, other than those on return trips to the United States, to decline the assignment.”

Source: Cirium

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