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Carriers Blame Supply Chain Problems for Soaring Airfares

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Soaring Airfares

Passengers will see little respite from soaring airfares as carriers face a shortage of planes, labour and spare parts that will prevent them meeting booming travel demand.

In a report on the outlook for global aviation, ING Bank NV depicted an industry hamstrung on several fronts by lingering supply-chain constraints. Air travel is likely to exceed pre-pandemic levels this year, though manufacturing woes at Boeing and defects on Pratt & Whitney engines are limiting the availability of aircraft and taking the shine off the recovery.

There’s a record backlog of orders at Airbus SE and Boeing, and demand for second-hand aircraft is also rising, ING said. That’s driving up leasing rates for planes, especially workhorses like Boeing 737s and Airbus A321s. Meanwhile, a shortage of qualified workers means retrofits or refurbishments of older aircraft are also being delayed, the bank said.

Airlines across the world are rethinking growth plans, and even cutting flights, due to the ongoing supply chain problems. In the Asia-Pacific region alone, Singapore Airlines, Qantas Airways and Air New Zealand have been hit by aircraft delivery delays, unplanned engine maintenance and other snarls.

“The global airline fleet hasn’t managed to keep up with demand and that’s not over yet,” ING sector economist Rico Luman and credit strategist Oleksiy Soroka wrote in the report. “Against the backdrop of capacity constraints, pricing power remains with carriers.”

Travelers paying the high airfares

So far, passengers seem willing to foot the bill for the soaring airfares. Globally, air ares are likely to remain elevated and in Europe ticket prices outpaced inflation by 15% in early 2024, the report said.

“People across the world are seemingly keen to travel and prioritise their trips despite more expensive tickets,” it said.

Delivery delays, extra maintenance, extreme weather, geopolitics and labor tensions will weigh on airlines’ profitability this year.

Industry’s emissions will likely end up close to pre-pandemic levels this year. Despite increased awareness of aviation’s emissions, few people want to give up flying, especially among the younger generation.

India’s growing population and rising wealth will make the country a “powerhouse for future airline growth”.

Sustainable jet fuel promises amount to “Green Washing”

Hopes that airplane replacement fuels will reduce carbon pollution are misplaced, and backing for these alternatives may exacerbate the climate catastrophe, according to a new analysis.

According to a report by the Institute for Policy Studies, there is currently “no realistic or scaleable alternative” to standard kerosene-based jet fuels, and touted “sustainable aviation fuels” are far from replacing them in the time frame required to avert dangerous climate change, despite public subsidies.

“While there are kernels of possibility, we should bring a high level of skepticism to the claims that alternative fuels will be a timely substitute for kerosene-based jet fuels,” the report stated.

According to Chuck Collins, co-author of the paper, “Bringing these fuels to the scale needed would require massive subsidies, the trade-offs would be unacceptable, and resources would be diverted from more urgent decarbonization priorities.”

“The aviation sector has engaged in extensive green washing. It’s magical thinking to believe they’ll be able to do this.”

In the United States, Joe Biden’s administration has set a goal of producing three billion gallons of sustainable aviation fuel by 2030, using non-petroleum sources such as food waste, woody biomass, and other feedstocks.

The administration claims that this will reduce aviation’s greenhouse-gas emissions by 20%. Globally, flying accounts for approximately 2% of all emissions, with the world’s wealthiest people being the primary perpetrators of this type of pollution.

According to the latest analysis, meeting this sustainable fuel aim will necessitate a massive 18,887 percent increase in production this decade, based on 2022 levels.

This is despite significant recent taxpayer backing – last week, the US Congress decided to extend the Federal Aviation Administration’s authorization for another five years, including increased money for sustainable aviation fuel development. Tax reductions for producing these fuels are also available under the Inflation Reduction Act.

Several airlines have included goals for sustainable aviation fuels in their pledges to reduce pollution. Last year, Virgin Atlantic made headlines by flying the first transatlantic flight utilizing only these fuels, rather than a blend with standard jet fuel.

The CTNNews editorial team comprises seasoned journalists and writers dedicated to delivering accurate, timely news coverage. They possess a deep understanding of current events, ensuring insightful analysis. With their expertise, the team crafts compelling stories that resonate with readers, keeping them informed on global happenings.

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