Lufthansa, the renowned German flag carrier, recently delivered a sobering update on its financial outlook for 2024, citing a confluence of challenges ranging from labor strikes to capacity constraints. This development sent shockwaves through the market, reflected in a notable dip in its share price.
Earnings Downgrade and Strike Woes
The airline now anticipates adjusted earnings before interest and taxes (EBIT) of €2.2 billion for the year, a downward revision from its previous forecast. This adjustment underscores the magnitude of the hurdles Lufthansa faces in maintaining its profitability amidst a turbulent operating environment.
Labor unrest, epitomized by a series of strikes, emerged as a significant factor contributing to Lufthansa's diminished earnings outlook. The disruptions resulting from these strikes have dealt a substantial blow to the airline's bottom line, with an estimated impact of around €350 million on earnings.
First Quarter Losses and Market Response
Lufthansa reported a staggering first-quarter loss of €849 million, a stark contrast to the previous year's figures. This substantial loss further underscores the extent to which external factors have disrupted the airline's operations and financial performance.
The market responded swiftly to Lufthansa's profit warning, with its share price plummeting by over 4% to a five-month low. This decline reflects investor concerns regarding the airline's ability to navigate the challenges ahead and restore investor confidence.
Labor Settlements and Geopolitical Tensions
In an attempt to mitigate further disruptions, Lufthansa recently reached agreements to increase the pay of its flight attendants and ground staff, effectively ending the spate of labor stoppages that had plagued its operations.
Adding to its woes, Lufthansa, like several other airlines, has had to contend with geopolitical tensions impacting flight operations. Tensions in the Middle East have led to the cancellation of flights to and from the region, exacerbating the airline's operational challenges.
Outlook for Second Quarter and Conclusion
Looking ahead, Lufthansa anticipates a challenging second quarter, with an expected decline in operating results compared to the previous year. Factors such as resolved wage disputes and capacity constraints are likely to continue exerting pressure on the airline's financial performance in the near term.
Lufthansa's downward revision of its 2024 earnings outlook serves as a stark reminder of the fragility of the aviation industry in the face of external disruptions. As the airline strives to navigate these challenges and restore profitability, stakeholders will keenly await further developments, mindful of the turbulence that lies ahead.
With Inputs from Reuters
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Italy's antitrust regulator, AGCM, has ordered Ryanair to cease its alleged practices of limiting or blocking the sale of flight tickets by travel agencies. This move comes amidst a broader investigation into the budget carrier's market dominance and its impact on competition and consumer welfare.
The Allegations and Ryanair's Defense
AGCM's probe, initiated in September, focuses on Ryanair's potential abuse of its leading market position in Italy. The regulator is concerned about the airline's tactics that allegedly hinder the ability of travel agencies to sell its tickets, potentially harming competition and consumers.
Ryanair contends that its direct booking policy benefits consumers by offering cheaper fares and greater flexibility in managing bookings and refunds. The airline argues that unauthorized online travel agencies often impose additional fees and fail to share crucial booking details, disadvantaging both passengers and the carrier.
Legal Battles and Disputes
The conflict extends beyond AGCM's investigation. Ryanair is also embroiled in a dispute with the Italian government over efforts to regulate domestic flight prices, particularly to key islands during peak periods. The airline asserts that its pricing strategy is fair and supports lower fares for Italian travelers.
Court Rulings and Counterarguments
Ryanair points to a ruling by the Milan Court of Appeal in January, which upheld the airline's direct sales policy as reasonable and beneficial to consumers. The company accuses online travel agencies of misleading AGCM and continues to highlight the advantages of booking directly through its website.
Implications and Future Plans
The outcome of AGCM's investigation and the ongoing legal battles could have significant implications for Ryanair's operations in Italy. The airline has expressed interest in expanding its presence, particularly if more airport slots become available through potential partnerships involving ITA Airways and Lufthansa.
Conclusion
As Ryanair faces scrutiny from Italian regulators and legal challenges, the airline's business practices and market dominance are under intense scrutiny. The resolution of these issues will not only impact Ryanair's operations in Italy but could also set precedents for competition and consumer protection in the aviation industry.
With Inputs from Reuters
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Delhi Airport was the 9th busiest hub in 2023, according to Airports Council International (ACI) ranking in a list led by Atlanta Hartsfield-Jackson International Airport, Dubai and Dallas Fort Worth
Delhi Airport saw 21% more passengers last year compared with the year before at 7.2 crore, Atlanta got 10.5 crore passengers followed by Dubai (DXB) at 8.7 crore and Dallas Fort Worth at 8.2 crore.
ACI World Director General Luis Felipe de Oliveira said: “Global air travel in 2023 was chiefly fuelled by the international segment…. While perennial leaders from the US continue to dominate the top 10 busiest airports for passengers, there are notable shifts. Dubai International Airport jumped to second rank for the first time, while Tokyo Haneda International Airport witnessed a remarkable ascent from 16th position in 2022 to fifth in 2023. Additionally, the unwavering strength of Istanbul and New Delhi airports keep them in top ranks, marking significant progress over 2019.”
ACI serves 757 members, operating 2,109 airports in 191 countries.
Mumbai’s land-constrained CSMIA airport handled over 5.1 crore passengers in CY 2023; 3.8 crore in 2022 and 4.7 crore in 2019.
“Preliminary figures indicate 2023 global total passengers’ figure is close to 8.5 billion, 27.2% higher than 2022 or a recovery of 93.8% from pre-pandemic (2019). While the domestic market grew by 20.2% (or a recovery of 96.8% of the 2019 level), the international market drove recovery with a 36.5% growth rate (or 90.4% of the 2019 level). The top 10 airports representing close to 10% of global traffic (806 million passengers), witnessed a gain of 19.8% from 2022 or a gain of 0.7% vis-à-vis their 2019 results (801 million pax in 2019),” ACI said.
ACI says the biggest jump in the top 10 rankings was recorded for Tokyo Haneda, leaping from 16th position in 2022 to the fifth spot last year. Five of the 10 busiest airports were in the US.
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IndiGo has announced daily direct flights between Delhi and Jharsuguda, Odisha, effective from May 15.
These flights will provide a direct gateway between the emerging industrial centre and the capital of India, the airline said.
Vinay Malhotra, Head of Global Sales, IndiGo, said, “We are pleased to announce direct connectivity between Jharsuguda and Delhi. As an emerging industrial hub in Odisha, Jharsuguda holds immense potential for business and trade, and these new flights will unlock newer opportunities in the region. This will not only promote interstate connectivity and regional accessibility, but also serve as a gateway to a plethora of domestic and international destinations through our vast network. As India’s leading carrier, we continue to deliver on our promise of affordable, on-time, courteous, and hassle-free travel experience across an unparalleled network.”
Jharsuguda is a city located in the western part of the Indian state of Odisha. Known for its thriving industrial sector, Jharsuguda is a hub for power plants, manufacturing, and mineral resources. Embodying a mix of industrial growth and environmental serenity, the city is also blessed with several scenic locations and tourist attractions, such as the nearby Hirakud Dam and Reservoir, Koilighughar waterfall, Ram Chandi Temple, Jhadeswar Temple, Pikolgughar Stream, Guja Pahad, Ulapgarh Hill forts, and Babadera cave.
Flight 6E 0458 departs from Delhi at 15:20 and arrives in Jharsuguda at 17:10 daily while flight 6E 2274 departs Jharsuguda at 17:40 and arrives in Delhi at 19:40 daily.
In November IndiGo started a direct route from Veer Surendra Sai Airport in Jharsuguda to Bengaluru as well with an inaugural flight led by Captain Rahul Leekha, a resident of Jharsuguda, alongside co-pilot Payal Agarwal from Sambalpur,
With its fleet of 350+ aircraft, the airline is operating around 2000 daily flights and connecting 85+ domestic destinations and 30+ international destinations.
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Mumbai's Chhatrapati Shivaji Maharaj International Airport (CSMIA) will close the primary runway 09/27 and the secondary runway 14/32 temporarily on 9th May for pre-monsoon maintenance & repair work for around six hours.
The temporary closure will be from 1100hrs to 1700hrs. A NOTAM (Notice to Airmen) has been issued in this regard to enhance runway resilience and ensure smooth operations, particularly during the monsoon season, the airport said.
All operations will resume as usual post 1700hrs. The scheduled temporary runway closure is a yearly practice and a contingency plan on the same will help maintain operational continuity and ensure passengers' safety, the airport added.
Mumbai's airport has a network of runways, taxiways and aprons encompassing nearly 1033 acres. Thus, to ensure operational continuity during the monsoon months, timely checks and repair work on the runways and associated facilities is critical to maintain its health and operational continuity, it noted.
The yearly practice of runway maintenance work involves specialists in engineering and airside teams inspecting the runway surface for micro-texture and macro-texture wear and tear that may have occurred due to day-to-day operations and help strengthen the airside strip.
Runway 09-27 spans 3448m x 60m, and runway 14-32 spans 2871m x 45m and this activity ensures the durability and longevity of the runway infrastructure by addressing concerns such as waterlogging and ensuring safe landings and take-offs during monsoon. Furthermore, the maintenance work will include repairing any damage to the runways that may have occurred due to regular use.
As a collective goal to ensure zero inconvenience to its passengers, CSMIA has intimated all its relevant stakeholders six months in advance. This has also helped airlines to plan their flight schedules accordingly, it added.
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Air India has won top honors for its mobile app in the 11th annual Asia-Pacific Stevie Awards announced recently, the airline said in a statement.
The Air India mobile app bagged the Gold Stevie Award for Innovation in General Utility Apps across the Asia Pacific region.
Air India is the first airline from India to receive this honor. Nicknamed the Stevies for the Greek word for “crowned,” the Stevie Awards are widely considered to be the world's premier business awards, conferring recognition for achievement in diverse business-related programs. More than 1,000 nominations from organizations across the Asia-Pacific region were considered this year across various categories.
Post its acquisition by the Tata Group, Air India has completely revamped its mobile app, with a focus on guest experience. A host of innovative features that help guests and provide timely information in an easy-to-consume fashion have been added, along with an overhaul of its design by Air India’s in-house teams in Kochi and Silicon Valley, the airline said.
These features include a dynamic splash screen with information most relevant to customers, easy-to-access information about upcoming trips, including the dining menu onboard, timely notifications, an intuitive loyalty portal, a GenAI virtual assistant and a pioneering ‘flight status’ feature that even provides information about the incoming aircraft for the flight.
“The Air India mobile app is our flagship digital channel through which we connect with our guests and delight them on the day of travel. It is a true embodiment of our technology approach - customer-obsessed, design-rich, cloud-only, mobile-friendly, data-driven, and AI-infused. Our app features path-breaking innovations such as the airline industry’s very first generative AI virtual assistant ‘AI.g.’ The app is on a journey of continuous improvement and more industry-leading innovations are on their way. We sincerely appreciate this recognition by the Stevie® awards,” said Satya Ramaswamy, Chief Digital and Technology Officer, Air India.
Other features like an easy-to-use baggage tracking capability and comprehensive computer-vision capabilities are in the pipeline. The app has a 4.7 rating in the Apple iOS app store in India, which is the best rating of any airline from India and is among the best global airlines in their home markets, Air India said.
“We are impressed by the Air India app's dynamic splash, whisking users away to exotic destinations. The Flight Status feature shines as the showstopper, transforming travel uncertainties into reassuring snapshots of real-time information. With AI.g as a virtual concierge and personalized journeys through My Trips, the app elevates the travel experience, making it not just a journey but a rich narrative waiting to unfold,” observed the Jury member team selecting the winners.
Air India is navigating through a major five-year transformation roadmap under the aegis of Vihaan.AI, with an ambition to become a world-class airline. The first phase of this transformation, the taxi phase was recently concluded and focused on fixing the basics. These included bringing back to service many long-grounded aircraft, the addition of talent across flying and ground functions, rapid upgradation of technology and strengthening of customer care initiatives amongst others.
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