19 Jun 2017

USA Aviation Industry Newsletter 19 June

Alitalia files for Chapter 15 bankruptcy to secure US operations Italian flag carrier Alitalia has filed for Chapter 15 bankruptcy protection in the US, in an effort to keep its leased terminal gates at New York JFK. The temporary relief will allow Alitalia to continue operations to the US. According to ATW Flights to the US generate 30% of Alitalia’s overall revenue. The SkyTeam member operates up to three daily flights from New York JFK to Rome Fiumicino and one daily flight to Milan Malpensa. Flights to JFK generate about 15% of its current revenues. Gulf airlines brought nearly 1.7 million visitors, $7.8 billion in spending to US Emirates, Etihad and Qatar Airways contributed significantly to US job and economic growth last year, according to a new analysis from the US Travel Association. A study of the 14 US cities served by Gulf carrier flights found that, in 2016: Gulf carrier flights brought nearly 1.7 million additional visitors to the US, secondly these additional visitors spent nearly $7.8 billion during their trips. Their spending supported nearly 80,000 additional US jobs Additionally, spending by visitors who arrived in the US on a Gulf carrier flight generated nearly $1.8 billion in state and local tax revenue. Moody's: US airports will be pressured by expansion plans, but airlines have the capacity to absorb costs Capital expansion plans at large US airports will increase leverage and drive airline partners' costs higher, Moody's Investors Service says in a new report. While these developments will place credit pressures on the sector, the increase in costs incurred by airlines to fund the expansion projects will be modest relative to their total operating expenses. Moody's estimates that by 2021 they will represent a modest 1.5% to 2.5% of the airlines' operating expenses as they continue to expand their fleets to respond to strong demand. More Flight Delays, Cancellations for U.S. Airlines in April Cancelled and delayed flights rose in April on the nation's leading airlines, and so did consumer complaints, according to figures released by the U.S. Department of Transportation. The rate of cancelled flights nearly doubled to 1.6 percent in April compared to the same month in 2016. Delta Air Lines accounted for nearly half the cancellations — it was crippled for days by a one-day storm in Atlanta. About 78.5 percent of flights arrived within 14 minutes of schedule, down from the 84.5 percent on-time rate in April 2016, according to the latest figures available from the government. Trump’s Cuba policy could cost U.S. airlines President Donald Trump on Friday reversed Obama-era policies aimed at restoring diplomatic relations between the U.S. and Cuba, a move that could disrupt air travel to the communist country amid heightened restrictions on tourism. Engage Cuba said in an statement that “Our best estimate is that rolling back expanded travel will cost airlines $512 million annually, or almost $2 billion over four years, based on the average ticket fare.” Between January and May 2017, U.S. visitors to the island nation who were not of Cuban origin totaled 284,565, according to statistics from the Cuban government. Additionally, the number of U.S. travelers to the country who were not of Cuban origin more than tripled from 91,254 in 2014 to 284,837 in 2016. Acumen Aviation © 19 June All Rights Reserved.