Tag: Airlines

Why you should be obsessed about collecting air miles

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Frequent flyer miles are one of the most genius marketing creations of the century. Use them correctly, and you would save tonnes of money on your travel. But they are not always easy to use, and people I talk to seem to be intimidated with the concept of collecting airline miles. Sometimes, they think it’s not worth it, and others think they don’t fly enough to collect miles.

Let me help you debunk both these notions today. As somebody who has earned and burned millions of miles, for fancy first class flights on board Etihad’s Apartments and Singapore Airlines Suites class on one hand, and run of the mill economy class flights on the other hand, I have seen more than enough value in investing my time in collecting miles and then redeeming them for dream vacations, including my honeymoon in the islands of Bora Bora in French Polynesia many years ago.

Air miles, frequent flyer miles, whatever they call them, are simply notional points offered by loyalty programs. While back in the day, you could earn them only by flying on airlines, now there are tonnes of ways to earn miles. Swiping credit cards, renting a car, shopping, dining out, buying petrol, booking hotel stays, buying magazine subscriptions are some of the many ways you can earn them these days.  Once you have enough, you could use them to buy redemption tickets on airlines.

Different Airlines, Different Miles

Having said that, it isn’t as easy as pulling out cash to buy these tickets. Different airline miles are valued differently. And earned differently as well. For example, JetPrivilege will award you miles for flying on Jet Airways and 25 other airlines such as Delta, Etihad, Air France, KLM and others. When flying Jet Airways, the class of your ticket (Deal, Saver, Classic, Flexi) determines how many miles you get for the same flight. On Vistara, these are directly linked to the cost of your ticket. So, Club Vistara would give more miles for an expensive ticket and less for a cheap ticket.

Since each airline offers a different assortment in terms of miles, burning them is differently valued as well. For instance, on the popular Mumbai – Delhi route, while JetPrivilege (Jet Airways) offers an economy class redemption ticket for 8500 JPMiles, Air India’s Flying Returns program offers an economy class ticket for 10,000 miles. On the other hand, you could redeem the same seat for 5000 Club Vistara points as well.

If it all sounds confusing, it isn’t the case. A bit of flexibility is warranted in the case of looking for redemption tickets with frequent flyer programs. Limited seats are marked on each flight for redemptions, and it may be the case that someone else took them before you came looking.

But there are still many a use cases as I hinted above, and I’d like to share a few of them. There have been times in the recent months when last minute tickets between Mumbai and Delhi, two cities I frequently shuttle between, cost over 10,000 rupees. However, with a redemption, for instance on Vistara, I would end up paying 5,000 points and 500 rupees for the ticket.

And it is not just limited to value on domestic routes. The first time I redeemed miles was back in 2011 to travel all the way between India and the US on Jet Airways’ business class. That 16,000 miles of flying would have usually costed me at least Rs 2.5 lakh, but I only paid 188,000 miles and some cash for that ticket. That was great value to be had, for minimal out-of-pocket costs. Since then, I’ve redeemed miles for first class tickets for two between India and the US multiple times, on airlines such as Singapore Airlines and Etihad, which would have cost me over Rs 8 lakh rupees when paid in cash, but only Rs 16,000 when I bought them with miles. And in the case of Singapore Airlines, well, I could just transfer credit card points to my Krisflyer mileage program and get this outsized value.

Many Happy Returns

Even for an investor, these are the best kind of returns on their time and money. So, I hope I have been able to convince you about the value there is still to be had with considering the impact of earning miles on the cost of your vacations. If you aren’t collecting miles, you are leaving a lot of value on the table which is rightfully yours.

Ajay Awtaney is a business travel & aviation journalist based in Mumbai, and the founder of the Indian frequent-traveller website Live From A Lounge (www.livefromalounge.com).

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why I still fly full service airlines

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As a seasoned traveler, on the road for over 15 years, I’ve seen the evolution of travel in India. Personally, I moved from a frequent train traveller to a frequent flier over the course of these years.

The travel came a lot from work and visiting family and leisure travel in that order. Time is money, and it helped a lot to be able to have more time on the ground rather than being on the road.

Back in the day, Air Deccan disrupted travel for me with their 1 Rupee tickets, just like they did for everyone else I am sure. This really helped me fly more frequently, visiting new places and old anew. It also unleashed in India, the era of “yield management.”

Before Air Deccan, airlines used to sell tickets at fixed prices. After Air Deccan, air travel became really affordable. Simply speaking, if you booked far ahead, you could afford to get a cheaper ticket, and fares would become more expensive as you come closer to the day of travel.

There are multiple airlines that have been launched in India after Air Deccan. Most of them are no-frills carriers but are commonly referred to as low-cost carriers. Globally, the terms are interchangeable, however, in India, it hasn’t worked out exactly the same.

They provide the service of air travel between two cities, along with a minimum amount of check-in baggage allowance, and charge for everything else, including meals and other facilities.

In return, they try and charge lesser than their full-service peers, and the difference in price is significant. However, since in India, the airlines share the same airports, they keep their prices at the same level as full-service airlines.

For instance, to fly on June 16 between Mumbai and Calcutta, here are the lowest prices of an Economy Class ticket on various airlines:

• Air India: Rs. 9,956
• IndiGo: Rs. 9,957
• SpiceJet: Rs. 10,022
• Jet Airways: Rs. 10,243
• GoAir: Rs. 10,650

And here are the lowest prices if you wanted to book a ticket for travel after a month out (on July 31) between Mumbai and Delhi, for instance.

• Air India: Rs. 2,627
• Vistara: Rs. 2,749
• SpiceJet: Rs. 2,762
• IndiGo: Rs. 2,820
• GoAir: Rs. 3,047
• Jet Airways: Rs. 3,240

The point I am trying to make is a simple one, if you haven’t noticed it already. Everyone charges roughly the same amount of money on the ticket. Which makes it easier for me to decide to fly a full-service carrier such as Vistara or Jet Airways almost 95% of the times.

If you are a number cruncher like me, it makes sense. Every time I fly a full-service airline, the experience starts right away after booking the ticket. Vistara doesn’t charge for seat selection yet, and being a Jet Airways Platinum-tier frequent flier, I get to select any seat on the plane for free.

I can check-in on the internet 48 hours prior, much before it is open for everyone else. Which means, another opportunity to select the best seat for free. On a no-frills carrier, I’d be paying anything between Rs. 99 to Rs. 999 for the privilege of selecting a seat.

At the airport, as a frequent flier with Vistara and Jet Airways, I am able to skip the long queues and check-in at the business class counter. For those who don’t fly often enough, once you have a web check-in done, you could also collect your boarding pass at the airport check-in counter and drop your bag in the Bag drop counters, quicker than the rest of those who haven’t checked in yet.

Sometimes, I may really have had a long day. Those days, work travel policies don’t change to accommodate my tiredness, but these airlines would take care of me. Some days, they’d move me to another earlier flight free of cost. On other days, I have the means to buy myself an upgrade to business class via the miles or vouchers these frequent flier programs offer me.

While the value of that upgrade may be 5 times the price of my original ticket, the value of the rest I need to get on those days is priceless.

And those frequent flier programs offered are not just numbers on a card. There have been times that ticket costs have been unaffordable, but I still could redeem miles from my mileage balance and afford to fly without breaking the bank. Imagine buying a ticket worth Rupees 20,000 for 8,500 miles and some cash towards the taxes and surcharge.

On a day full of meetings, I’ve many a times eaten all my meals on a plane. Breakfast on the way to a meeting in a different city, and dinner, on the way back on the evening flight. Flying no-frills airlines, I’d be paying money out of pocket buying those meals, but here, it comes a part of the package. That is another 250 Rupees saved.

The bottom-line then is, that all things being equal, a full-service airline doesn’t want more money out of your pocket after you pay for the ticket, and give you a complete package, including food, transport, baggage and miles accumulation, for a similar cost as the no-frill carriers. So, why not get more value for the money spent rather than just buy the cheapest.

Ajay Awtaney is a business travel and aviation journalist based in Mumbai, and the founder of the Indian frequent-traveller website Live From A Lounge (www.livefromalounge.com).

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India airlines spread their wings to escape airfare war at home

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian airlines are turning to the international market in search of better returns as the intensifying fight for a bigger share of the world’s fastest growing domestic market – where price is king – drives down profits.

While global airlines’ profits have been strong since 2015 – though with wide regional variations – Indian carriers are struggling to remain profitable, despite filling nearly 90 percent of their seats and benefiting from a more than doubling of domestic passenger numbers over the last four years.

“It is an incredibly tough domestic market, very price sensitive,” said Stephen Barnes, chief financial officer of Singapore Airlines, which operates an Indian carrier, Vistara, in a joint venture with the Tata Group.

“Commanding a premium for a premium product is hard to do. From our perspective we invested in order to see the business grow internationally. If you look at the results of Indian airlines their performance is better internationally.”

Promotions such as $50 one-way tickets on the two-hour flight from Mumbai to Delhi are easy to find and, with airlines expected to take delivery of more than 500 aircraft over the next five years, pressure on fares and profits is increasing.

India is one of the cheapest domestic airline markets in the world, with an average fare of 13 cents per kilometre flown, according to data from travel firm Rome2Rio, less than half the 27 cents per km average in China and the United States.

Airlines including Vistara, SpiceJet Ltd and InterGlobe Aviation Ltd’s IndiGo are in talks to buy or lease widebody aircraft as they firm up international growth plans to boost profitability.

International Opportunities

There is huge potential for international travel from India, where the domestic aviation market has grown about 20 percent annually in recent years.

Only 0.3 percent of the 1.3 billion population currently travel abroad for a holiday every year, a fraction of the estimated 100 million Indians who could potentially afford to do so, according to an analysis of household income by aviation consultancy, CAPA.

The international market is dominated by foreign carriers but the market share of Indian airlines including Air India and Jet Airways has been climbing, helped by policies that limit access by foreign carriers, and reached about 38 percent in 2017, up from 31 percent a decade earlier.

Foreign airlines such as Emirates and Hong Kong’s Cathay Pacific Airways have reached the limit of flights into India allowed under bilateral agreements and New Delhi has not extended additional rights, creating an opening for domestic carriers to grow, said Binit Somaia, director for South Asia at CAPA.

“Demand is there, income levels are rising and people want to travel internationally,” he said.

Jet Airways is considering launching new flights from Mumbai to Sydney, two sources with knowledge of the matter said, while Vistara is planning to order six Boeing Co 787 aircraft and will expand its narrowbody fleet of Airbus A320neos as it starts international flights, sources have said.

A Jet Airways spokesman said the airline “continuously reviews its fleet and network plan … to realise greater synergy with its business strategy.”

Domestic Competition

In the domestic market, which provides crucial connections for international flights, airlines have been jockeying for position at a time when one-time leader Air India has been losing market share to rivals with far lower costs, such as IndiGo.

The Indian government last month failed to attract a single bidder by the deadline for its 76 percent stake sale in the loss-making national carrier.

Revenue per available seat kilometre, a measure combining airfares and seats filled, has been falling at Indian airlines due to stiff competition at a time when the oil price has risen nearly 50 percent in the last year.

IndiGo last month reported a steep fall in quarterly profit due to higher fuel prices and continued pressure on yields, a proxy for airfares.

IndiGo has lifted the proportion of its capacity dedicated to international flights to 15 percent, from 11 percent, in the last year and is seeking regulatory approvals needed to operate long-haul flights, Rahul Bhatia, the company’s chairman, said during an analyst call.

SpiceJet and IndiGo are the only two listed Indian airlines to post a profit for the last 13 quarters consecutively.

Analysts say SpiceJet has achieved this by maximising its aircraft utilisation and also flying less competitive routes where it can have a better control over fares, helping protect yields.

Even so, it plans to expand its international flights as it starts taking delivery of its Boeing 737 MAX aircraft from August. The planes, which have a range of six hours and can reach destinations such as Singapore, Hong Kong and Bangkok, will mainly be deployed on international routes.

Infrastructure constraints at major Indian airports like Mumbai and Delhi, where daytime slots are hard to get, also make going international a better option as airlines can utilise night-time slots, a SpiceJet official told Reuters.

“International is the only way out,” the official said.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Fewer complaints, but airfare turns into a big grouse for passengers

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Airline passengers have filed fewer complaints during the year 2017-18 as compared to the previous fiscal. There were 7,919 complaints filed by the passengers, down 20% as compared to 9,820 complaints, a year before, according to the data released by Directorate General of Civil Aviation (DGCA).

On an average, 22 passenger complaints were lodged against all airlines every day in 2017-18, with maximum inconvenience faced, while travelling by Air India and Jet Airways.

On an average, seven out of 10 passenger complaints were against these two airlines in the last fiscal.

While, the passenger grievances against the state-owned airline has substantially increased since 2015-16, other airlines managed to reduce their share in the number of complaints lodged during the same period.

Most considerable improvement was seen in the case of budget carrier SpiceJet. The airline saw its share in number of complaints reducing from 13% in 2015-16 to 6% in the last fiscal.

Other major airlines such as Indigo and GoAir also managed to reduce the number of complaints against them.

Only 14% out of all complaints lodged during 2017-18 were against Indigo, despite having the highest market share of around 40%.

While national carrier Air India topped with maximum number complaints, but its redressal ratio is very poor as compared to its peers. Around 30% of the complaints raised against Air India are still unresolved.

The year 2017-18 also witnessed a sharp rise in complaints related to airfares.
Though only 10% of complaints were related to fares and refunds, there was a substantial rise in its share in overall passenger complaints in last three years. Fare and refund related complaints constituted around 7.4% in 2015-16.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IATA tells Indian govt to stop taxing international air tickets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Calling attention to India’s practice of taxing international tickets, the International Air Transport Association (IATA) called for governments to facilitate the growth of global connectivity by avoiding creeping re-regulation and maintaining the integrity of global standards.

“India taxes international tickets in contravention of ICAO (International Civil Aviation Organization) resolutions,” the airline group said on Monday.

India helped develop ICAO resolutions prohibiting tax on international tickets, IATA’s Director General and Chief Executive Officer Alexandre de Juniac said adding that it is unacceptable that global standards are being ignored by the very governments that created them.

Taxing international tickets is against rules of ICAO, a specialised body of the United Nations.

Yet it persists in taxing international travel, de Juniac said, apparently referring to the imposition of Goods and Services Tax (GST) and enhancement of its rates on international air tickets, especially business class.

The Indian government had announced the implementation of GST from July 1, 2017. The tax covers airline products and services including tickets, ancillary, change, refund and other products and fees.

“Smarter regulation needs to counter the trend of creeping re-regulation. Global standards must be maintained by the states that agreed them,” said de Juniac.

De Juniac was presenting a report on the air transport industry at the opening session of the 74th IATA Annual General Meeting and World Air Transport Summit, which began on Monday.

The IATA, which represents about 280 carriers, said the industry is expected to post a $33.8 billion profit this year, 12% below a previous forecast of $38.4 billion.

But passenger yields, a proxy for air fares, are expected to rise by 3.2% this year, the first annual gain since 2011 as a stronger global economy drives growth in demand, IATA said.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

AirAsia India’s operating loss more than doubles to Rs 97 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The operating loss of the Indian unit of Malaysian airline AirAsia Bhd more than doubled to Rs 97 crore in the first quarter of 2018 due to an increase in aircraft fuel expenses as well as aircraft maintenance costs. AirAsia India had reported an operation loss of Rs 40.49 crore in the March 2017 quarter.

However, the airline recorded a 76% increase in revenue to Rs 483 crore in its first quarter.

AirAsia Bhd, the airline’s Malaysian parent’s net profit for the three months to March 31 jumped 85% to 1.14 billion ringgit ($286.50 million) on revenue up 14.8% to 2.56 billion ringgit,  it said in a bourse statement on Thursday.

It saw two one-off gains totaling 884.7 million ringgit from the disposal of its interest in Ground Team Red Holdings Sdn Bhd which was completed in January.

“The gain however was partially offset by current and deferred taxation charges of 104 million ringgit in the current quarter,” the airline said.

AirAsia reported an unchanged unit cost for the quarter despite a 9% rise in average fuel price to $83 per barrel and higher maintenance expenses during the quarter, helped by higher aircraft utilization and route rationalization.

To mitigate cost pressures, the group said it is driving more ancillary sales and ensuring better performance by all associate airlines.

Its passenger volume rose by 16% but lagged a 19% increase in capacity, knocking its load factor by 2 percentage points to 87%, in line with expectations for the season.

AirAsia also projected an average load factor of 87% for the second quarter.

“In order to better serve the growing demand in the region, the group is also planning for a net increase of additional three aircraft through operating leases in the second quarter,” the airline said.

Group CEO Tony Fernandes said in a statement that the group will be undergoing a secondary listing exercise for its Indonesia operations this year. “We are also on track to list AirAsia Philippines in the second half of 2019.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Airlines caving to Beijing despite White House protest

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Global airlines are obeying Beijing’s demands to refer to Taiwan explicitly as a part of China, despite the White House’s call this month to stand firm against such “Orwellian nonsense.” The Associated Press found 20 carriers, including Air Canada, British Airways and Lufthansa, that now refer to Taiwan, the self-ruled island that Beijing considers Chinese territory, as a part of China on their global websites.

There are just three days left for dozens of foreign airlines to decide whether to comply with Beijing’s orders, or face consequences that could cripple their China business, including legal sanctions. Many have already sided with Beijing.

The spread of “Taiwan, China” on the drop-down menus and maps of airline websites represents another victory for China’s President Xi Jinping and his ruling Communist Party’s nationalistic effort to force foreign companies to conform to their geopolitical vision, even in operations outside of China. Critics say China’s incremental push to leverage its economic power to forge new international norms — in this case regarding Taiwan’s status — creates worrying precedents.

Beyond fiery missives there is little Washington can do to unify a fractured global response and effectively push back against Beijing’s demands.

“What’s at stake is that we’re allowing a revisionist regime with a terrible track record on freedom of speech to dictate what we say and write in our own countries,” said J. Michael Cole, a Taipei-based senior fellow with the China Policy Institute and the University of Nottingham’s Taiwan studies program. “If Beijing does not encounter red lines, it can only keep asking for more.”

For Beijing, there is only one China and Taiwan, which has been a democracy since the 1990s, is part of it. The People’s Republic of China and Taiwan separated during a civil war in 1949. Washington officially recognizes Beijing rather than Taipei, but despite the lack of formal ties, the US is legally bound to respond to threats to Taiwan and is the island’s main supplier of foreign military hardware.

“We strongly object to China’s efforts to bully, coerce, and threaten their way to achieving their political objectives,” Taiwan’s Ministry of Foreign Affairs said in a statement to the AP. “We call on all countries around the world to stand together to uphold the freedom of speech and freedom to do business. We also call on private firms to collectively reject China’s unreasonable demands to change their designation of “Taiwan” to “Taiwan, China.”

Xi has warned a Taiwanese envoy that the issue of unification cannot be put off indefinitely, and the People’s Liberation Army has sent fighter planes near Taiwan’s coast. As China steps up efforts to isolate Taiwan diplomatically, the list of multinationals that have bent to Beijing’s will is long — and growing.

US clothing retailer The Gap apologized this month for selling T-shirts with a map of China that omitted Taiwan and pulled the offending merchandise from stores around the world. In January, Delta Airlines, Marriott, Zara and medical equipment maker Medtronic all publicly apologized for referring to Taiwan as a country.

“You can’t just say ‘no,'” said Carly Ramsey, a regulatory risk specialist at Control Risks, a consultancy in Shanghai. “Increasingly, for situations like this, non-compliance is not an option if you want to do business in and with China.”

The day after Delta apologized for “emotional damage caused to the Chinese people,” the Civil Aviation Administration of China published a notice on its website saying it requires foreign airlines operating in China to avoid referring to Taiwan, Hong Kong and Macau as countries.

Some foreign carriers began changing drop-down menus on their websites from “country” to “country/region.”

But Beijing wanted more.

On April 25, the Civil Aviation Administration of China sent a letter to 36 foreign airlines ordering them to explicitly refer to Taiwan as a part of China. The regulator did not respond to requests for comment.

In a strongly-worded statement 10 days later, the White House called that demand “Orwellian nonsense.”

“China’s efforts to export its censorship and political correctness to Americans and the rest of the free world will be resisted,” it said.

China’s foreign ministry hit back the next day, saying Taiwan, Hong Kong and Macau are “inalienable” parts of China’s territory and foreign companies operating in China “should respect China’s sovereignty and territorial integrity, abide by China’s laws and respect the national sentiment of the Chinese people.”

A growing number of airlines have heeded Beijing’s call.

The AP found that Air Canada, Lufthansa, British Airways, Finnair, Garuda Indonesia, Asiana Airlines, and Philippine Airlines all have changed the way they refer to Taiwan to bring their global websites in line with the Chinese Communist Party’s vision. SAS airlines, Swissair, Malaysia Airlines, Cebu Pacific Air, Aeroflot, Italy’s Alitalia, Austrian Airlines, Air Mauritius, Etihad Airways, Spain’s Iberia, Israel’s EL AL, MIAT Mongolian Airlines and Russia’s S7 Airlines all also refer to Taiwan as part of China, but it was not immediately clear how long they had been using that formulation.

Lufthansa, British Airways, Air Canada and Finnair said they abide by laws and regulations internationally and in the jurisdictions in which they work.

“This includes taking customs of the international clientele into consideration,” Lufthansa said in a statement, adding that we “seek your understanding for the situation.”

Finnair said a decision was taken to amend the website earlier this year and “in line with the general view taken in Europe, Taiwan is not shown as an independent country in our list of destinations.”

Major US carriers have not yet caved. United Airlines, American Airlines, Delta and Hawaiian Airlines, as well as Australia’s Qantas Airways — all of which received April letters from the regulator — did not refer to Taiwan as part of China on their websites as of Tuesday.

The airlines told AP they were reviewing the request.

But the sweep of concessions will likely make it harder to resist Beijing’s call.

“If they make individual corporate decisions, they will likely accede, individually but entirely, to Chinese demands,” said Robert Daly, the director of the Kissinger Institute on China and the United States at the Woodrow Wilson International Center for Scholars. What Washington could do, he added, is “launch and sustain a global discussion of the implications of Beijing’s insistence on the worldwide jurisdiction of Chinese law. That kind of effort would require a commitment to global leadership and strong alliances that this administration has not yet demonstrated.”

In one apparent exception to Beijing’s rules the national flag carrier Air China seems not to have gotten the regulator’s memo. On its US site, Taipei is a part of “Taiwan, China.” But its Taiwan website lists it as “Taipei, Taiwan.”

Air China did not immediately respond to requests for comment.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rolls-Royce and airlines grapple with further Dreamliner engine issues

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Rolls-Royce requires more money and more inspections to fix problems with Trent 1000 engines on Boeing 787 Dreamliner planes, leading to further disruption for airlines and testing relations between Rolls and its customers.

Problems with engine turbine blades wearing out sooner than expected have hampered a restructuring programme prompted by the engineering company’s declining older engine programme and plunging demand for oil equipment.

It said on Friday that more regular inspections are required and would lead “to higher than previously guided cash costs being incurred during 2018”.

“We sincerely regret the disruption this will cause to our customers,” CEO Warren East said in a statement.

Airlines have already been forced to alter schedules or lease other aircraft, but the latest issues could be more far-reaching.

The US Federal Aviation Administration (FAA) plans to reduce the amount of time the affected planes can fly on a single engine after a failure of the other. The time limit would drop as low as 140 minutes, compared with the current window of 330 minutes, a source familiar with the plans said.

This effectively curtails operations across oceans or remote areas.

The European Aviation Safety Agency (EASA) will also order increased inspections of affected engines in line with actions outlined by Rolls-Royce. Currently inspections must be carried out after every 200 flight cycles.

The two advisories are due to be issued on Friday, the source said.

Rolls said it would reprioritise spending to mitigate the costs and kept its 2018 free cash flow guidance unchanged at about 450 million pounds ($643 million), give or take 100 million pounds.

Shares in Rolls, one of the biggest names in British manufacturing, were down 1.3% by 1251 GMT.

It announced the need for stepped up inspections after liaising with authorities over a separate issue with the compressor on Trent 1000 Package C series engines. Rolls said there were 380 such engines in service.

Boeing said that about 25% of the Dreamliners flying were powered by the engine and it was deploying support teams to help to manage service disruptions.

General Electric engines used on some Boeing 787 Dreamliners are not affected.

Engine Shortages

The need to inspect and repair Trent 1000 engines has led to an industry-wide shortage.

CEO East said Rolls was working with Boeing and airlines to minimise the disruption.

“Our team of technical experts and service engineers is working around the clock to ensure we return them to full service as soon as possible,” he said.

Norwegian Air, which has the engines in 15 of its 27 Boeing 787s, said it hopes to have inspected all of its engines before May 26 and that it had already found one problem that required an engine to be replaced.

“It’s disappointing and frustrating that our new aircraft don’t work the way they are supposed to,” spokesman Lasse Sandaker-Nilsen said, adding that it had cancelled a flight from Paris to New York next week as a result.

“We have an ongoing dialogue with both Boeing and Rolls-Royce and we have been told this problem has their full attention.”

Virgin Atlantic has up to four 787s grounded at any one time while it sources replacement engines with Rolls and has also leased three Airbus A330-200s to help to cover its flying program.

A Virgin spokeswoman said it had been aware of the increased inspections announced on Friday and that the cover it had in place would be sufficient.

British Airways, Japan’s ANA, Air New Zealand and Thai Airways, which also use Trent 1000 engines, were not available for immediate comment.

Scoot, a budget carrier owned by Singapore Airlines, said it expected some impact on operations.

In December the EASA ordered airlines to replace some Trent 1000 engines.

In March, Rolls said the cash hit from the problem should peak at 340 million pounds in 2018 before falling in 2019.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow