Aviation Industry Updates: Jan 16, 2024

JetBlue CEO Stepping Down

KEY POINTS:

• CEO Robin Hayes will step down next month, the company said Monday. The airline’s chief operating officer, Joanna Geraghty, will take the helm.
• The departure comes as JetBlue tries to acquire budget carrier Spirit Airlines, a nearly $4 billion combination that the New York-based carrier argues will help it grow and better compete against larger rivals such as Delta and United
• The U.S. Department of Justice sued to block the merger last year. A decision by a federal judge in Boston is expected in the coming weeks after a trial that wrapped up late last year.
• Hayes, a more than three-decade airline industry veteran, cited the high-pressure nature of the job in announcing his resignation via a company statement.
• “It’s bittersweet to retire from this airline I love, but I will always feel a part of the JetBlue team and be rooting for its continued success,” Hayes said. “However, the extraordinary challenges and pressure of this job have taken their toll, and on the advice of my doctor and after talking to my wife, it’s time I put more focus on my health and well-being.”
• Hayes will remain on the board of directors until he leaves his post on Feb. 12, at which point he will stay on as a strategic advisor and Geraghty will join the board.

Shipping Disruptions Typically Help Cargo Airlines | FedEx Hasn’t Seen an Impact

KEY POINTS:

• U.S. parcel delivery giant FedEx Corp (FDX.N) said that it hasn't seen much of a shift to air freight due to disruptions in the Red Sea that have tacked on nearly two weeks to shipping transit times. 
• "Shipping over the ocean makes up 90% of global commerce so even a small change would have an impact, but we haven't seen much yet," CEO Raj Subramaniam said at the National Retail Conference on Sunday. Subramaniam, who took over the reins as CEO in June 2022, said air freight rates have remained stable. 
• Iran-backed Houthi militia attacks on container ships in the Red Sea have forced some retailers to stock up on goods before China's Lunar New Year holiday by seeking air or rail alternatives to transportation via the Red Sea in a scramble to avoid empty shelves this spring, executives and experts told Reuters.

Reuters

Boeing 737 Max Issues | This Could Impact Pilot Hiring Numbers

KEY POINTS:

• Revised inspection instructions mean it will take even longer before the Boeing 737 Max 9 planes are cleared to fly again after an emergency exit door flew off one of its aircrafts last week.
• The Federal Aviation Administration announced on Tuesday that Boeing would be updating its instructions for inspections after receiving feedback on the initial set of instructions issued.
• The FAA said it will "conduct a thorough review" after Boeing submits the revised inspection instructions.
• "The safety of the flying public, not speed, will determine the timeline for returning the Boeing 737-9 Max to service," the FAA said in its update.
• Boeing CEO David Calhoun told employees on Tuesday that the company would first be "acknowledging our mistake" and that they would "approach it with 100% and complete transparency every step of the way," per the Wall Street Journal.
• Alaska Airlines Flight 1282 — a Boeing 737 Max 9 — returned to Portland International Airport shortly after takeoff this past Friday after a "plugged" emergency exit door flew off, exposing passengers to open air, Axios' Alex Fitzpatrick reports.
• Over the weekend, the FAA ordered a "temporary grounding of certain Boeing 737 MAX 9 aircraft operated by U.S. airlines or in U.S. territory."
• The FAA then announced on Monday that the Boeing 737 Max 9s would remain grounded until "operators complete enhanced inspections."

Axios

Delta Orders Up To 40 Airbus A350-1000 Widebody Planes

KEY POINTS:

• Delta's CEO Ed Bastian said the planes will replace Boeing (BA.N) 767s.
• "These planes complement our fleet strategy and will offer a world-class customer experience for international travelers with more premium seats, higher gauge and great customer amenities," he said on the company's earnings call.
• Delta has positioned itself as a premium airline and seeks to attract travelers willing to pay for something other than just a seat. Its revenue from premium cabins has been outpacing those from low-cost seats since the pandemic.
• While the Atlanta-based carrier placed an order for 100 Boeing (BA.N) 737 MAX 10 jets in 2022, it has primarily been an Airbus customer.
• At the end of September, the company had 65 Airbus A330 and 28 A350-900 widebodies, with commitments to purchase another 16 each.
• The twin-aisle jets are expected to help the company to grow its network in the Asia-Pacific region, which has lagged behind the U.S. and Europe in a global travel demand recovery after the pandemic.

Reuters

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