Airlines

Qantas says cost to fly may rise, Due to Soaring Jet Fuel Prices

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Qantas has been absorbing a $200 million increase in fuel costs, the airline warned that if prices continue to rise, the costs may be passed on to customers and it may raise its already high ticket rates.

The airline reported in a market update that fuel costs have gone up 30% since May of this year, including 10% just in the past month. “This is driven by a combination of higher oil prices, higher refiner margins, and a lower Australian dollar,” Qantas stated.

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But Qantas asserted that it will keep an eye on fuel costs in the upcoming months and “look to adjust its settings” if they continue to be this high. Any modifications would aim to strike a balance between the need for reasonably priced travel in a situation where tickets are already high, according to Qantas.

Qantas and competing airlines use methods of hedging to control erratic pricing changes. An effort to win back consumer support that included an apology from the airline’s new CEO, Vanessa Hudson, and a commitment to rebuild the airline’s reputation after a “humbling period” is in jeopardy as a result of the warning about ticket prices.

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Analyst Owen Birrell with RBC Capital Markets predicted that the firm will likely accept the higher fuel costs “until its target margins come under pressure, and then would seek to claw back those costs through capacity cuts and higher fares.”

Given the increased competition, expanding consumer and corporate cost pressures, and incoming reinvestment in the product/platform, we don’t think a substantial earnings shift is possible going forward.

Source

Airlines

Sanctions & Engine Issues Ground Half of Russia’s A320neo fleet

Russia’s aviation sector, already strained by Western sanctions, faces another setback as nearly half of its Airbus A320neo family aircraft are grounded due to unresolved engine issues.

This development highlights the growing challenges for russia commercial aircraft in maintaining their fleets under the weight of global restrictions and limited access to spare parts.

Out of the 66 Airbus A320neo and A321neo jets in Russia, 34 are now out of service, according to the Kommersant business newspaper. These planes are powered by engines manufactured by Pratt & Whitney, a subsidiary of RTX Corporation.

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The engines are affected by a previously identified defect in the metal used for certain parts, prompting accelerated inspections and maintenance.

Sanctions have compounded the issue, blocking the supply of essential components from major manufacturers like Boeing and Airbus. Without proper maintenance, experts warn that these aircraft may face decommissioning as early as 2026.

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Airlines like S7, which operates a significant portion of these grounded jets, plan to conserve the engines for future use during peak travel seasons. However, reports suggest that over 20 of S7’s Airbus planes have engines that have already reached the end of their operational lifespan. Recently, russia seeks assistance from kazakhstan’s airlines to bolster its domestic flights.

While some A320neo and A321neo planes in Russia are equipped with French-made LEAP engines, which are seen as less problematic, the challenges remain daunting.

The situation underscores the long-term impact of sanctions on Russia’s aviation sector and the increasing difficulties in keeping its modern fleets operational.