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Record numbers of people are flying. So why are airlines’ profits plunging?

New York

CNN

A record number of passengers are expected to pass through US airports this holiday travel week. You’d think this would be a great time to run an airline.

You’d be wrong.

Airlines face numerous problems, including higher costs, such as fuel, wages and interest rates. And problems at Boeing mean airlines have too few planes to expand routes to support a record numbers of flyers. Strong bookings can’t entirely offset that financial squeeze.

The good news for passengers is they will be spared most of the problems hurting airlines’ bottom lines — at least in the near term. Airfares are driven far more by supply and demand, not their costs.

But in the long run, the airlines’ difficulties could mean fewer airline routes, less passenger choice and ultimately a less pleasant flying experience.

Profit squeeze

Industry analysts expect airlines to report a drop of about $2 billion in profit, or 33%, when they report financial results for the April to June period this year. That would follow losses of nearly $800 million across the industry in the first quarter.

Labor costs and jet fuel prices, the airlines’ two largest costs, are both sharply higher this year. Airline pilot unions just landed double-digit pay hikes to make up for years of stagnant wages; flight attendant unions now want comparable raises.

Jet fuel prices are climbing because of higher demand in the summer. According to the International Air Transport Association’s jet fuel monitor, prices are up 1.4% in just the last week, and about 4% in the last month.

Adding to the airlines’ problems is the crisis at Boeing, as well as the less-well-publicized problems with some of the jet engines on planes from rival Airbus.

Since an Alaska Airlines Boeing 737 Max jet lost a door plug on a January 5 flight, leaving a gaping hole in the side of the plane 10 minutes after takeoff, the Federal Aviation Administration has limited how many jets Boeing can make over concerns about quality and safety.

As a result, airlines have dramatically reduced plans to expand their fleets and replace older planes with more fuel efficient models. In some cases, airlines have asked pilots to take time off without pay, and carriers such as Southwest and United have announced pilot hiring freezes.

In addition to the problems at Boeing, hundreds of the Airbus A220 and A320 family of jets globally have also been grounded for at least a month or more to deal with engine problems. Just about all the planes with those engines have been out of sevice for at least a few days to undergo examinations. And Airbus has also cut back the number of planes it expects to deliver to airlines this year because of supply chain problems.

Problems for flyers

For now, competition in the industry remains fierce: There are 6% more seats available this month compared to July of 2023, according to aviation analytics firm Cirium. And that’s helped to drive fares down — good news for passengers, but more bad news for airlines’ profits.

Southwest announced in April that it would stop serving four airports to trim costs — Bellingham International Airport in Washington state, Cozumel International Airport in Mexico, Syracuse Hancock International Airport in New York and Houston’s George Bush Intercontinental Airport. Many more cities lost air service during the financial hard times of the pandemic.

While upstart airlines are driving prices lower for travelers, those discount carriers might not survive long term. As the major carriers are making less money, many of the upstarts are flat-out losing money.

Israeli strike kills 16 at Gaza school, military says it targeted gunmen
CAIRO/GAZA, July 6 (Reuters) - At least 16 people were killed in an Israeli strike on a school sheltering displaced Palestinian families in central Gaza on Saturday, the Palestinian health ministry said, in an attack Israel said had targeted militants. The health ministry said the attack on the school in Al-Nuseirat killed at least 16 people and wounded more than 50. The Israeli military said it took precautions to minimize risk to civilians before it targeted the gunmen who were using the area as a hideout to plan and carry out attacks against soldiers. Hamas denied its fighters were there. At the scene, Ayman al-Atouneh said he saw children among the dead. "We came here running to see the targeted area, we saw bodies of children, in pieces, this is a playground, there was a trampoline here, there were swing-sets, and vendors," he said. Mahmoud Basal, spokesman of the Gaza Civil Emergency Service, said in a statement that the number of dead could rise because many of the wounded were in critical condition. The attack meant no place in the enclave was safe for families who leave their houses to seek shelters, he said. Al-Nuseirat, one of Gaza Strip's eight historic refugee camps, was the site of stepped-up Israeli bombardment on Saturday. An air strike earlier on a house in the camp killed at least 10 people and wounded many others, according to medics. In its daily update of people killed in the nearly nine-month-old war, the Gaza health ministry said Israeli military strikes across the enclave killed at least 29 Palestinians in the past 24 hours and wounded 100 others.
China will reach climate goal while West falls short
There has been constant low-level sniping in the West against China's record on climate change, in particular its expansion of coal mining, and its target of 2060 rather than 2050 for carbon zero. I have viewed this with mild if irritated amusement, because when it comes to results, then China, we can be sure, will deliver and most Western countries will fall short, probably well short. It is now becoming clear, however, that we will not have to wait much longer to judge their relative performances. The answer is already near at hand. We now know that in 2023 China's share of renewable energy capacity reached about 50 percent of its total energy capacity. China is on track to shatter its target of installing 1200GW of solar and wind energy capacity by 2030, five years ahead of schedule. And international experts are forecasting that China's target of reaching peak CO2 emissions by 2030 will probably be achieved ahead of schedule, perhaps even by a matter of years. Hitherto, China has advisedly spoken with a quiet voice about its climate targets, sensitive to the fact that it has become by far the world's largest CO2 emitter and aware that its own targets constituted a huge challenge. Now, however, it looks as if China's voice on global warming will carry an authority that no other nation will be able to compete with. There is another angle to this. China is by far the biggest producer of green tech, notably EVs, and renewable energy, namely solar photovoltaics and wind energy. Increasingly China will be able to export these at steadily reducing prices to the rest of the world. The process has already begun. It leaves the West with what it already sees as a tricky problem. How can it become dependent on China for the supply of these crucial elements of a carbon-free economy when it is seeking to de-risk (EU) or decouple (US) its supply chains from China? Climate change poses the greatest risk to humanity of all the issues we face today. There are growing fears that the 1.5-degree Celsius target for global warming will not be met. 2023 was the hottest year ever recorded. Few people are now unaware of the grave threat global warming poses to humanity. This requires the whole world to make common cause and accept this as our overarching priority. Alas, the EU is already talking about introducing tariffs to make Chinese EVs more expensive. And it is making the same kind of noises about Chinese solar panels. The problem is this. Whether Europe likes it or not, it needs a plentiful supply of Chinese EVs and solar panels if it is to reduce its carbon emissions at the speed that the climate crisis requires. According to the International Energy Authority, China "deployed as much solar capacity last year as the entire world did in 2022 and is expected to add nearly four times more than the EU and five times more than the US from 2023-28." The IEA adds, "two-thirds of global wind manufacturing expansion planned for 2025 will occur in China, primarily for its domestic market." In other words, willy-nilly, the West desperately needs China's green tech products. Knee-jerk protectionism demeans Europe; it is a petty and narrow-minded response to the greatest crisis humanity has ever faced. Instead of seeking to resist or obstruct Chinese green imports, it should cooperate with China and eagerly embrace its products. As a recent Financial Times editorial stated: "Beijing's green advances should be seen as positive for China, and for the world." The climate crisis is now in the process of transforming the global political debate. Hitherto it seemed relatively disconnected. That period is coming to an end. China's dramatic breakthrough in new green technologies is offering hope not just to China, but to the whole world, because China will increasingly be able to supply both the developed and developing world with the green technology needed to meet their global targets. Or, to put it another way, it looks very much as if China's economic and technological prowess will play a crucial role in the global fight against climate change. We should not be under any illusion about the kind of challenge humanity faces. We are now required to change the source of energy that powers our societies and economies. This is not new. It has happened before. But previously it was always a consequence of scientific and technological discoveries. Never before has humanity been required to make a conscious decision that, to ensure its own survival, it must adopt new sources of energy. Such an unprecedented challenge will fundamentally transform our economies, societies, cultures, technologies, and the way we live our lives. It will also change the nature of geopolitics. The latter will operate according to a different paradigm, different choices, and different priorities. The process may have barely started, but it is beginning with a vengeance. Can the world rise to the challenge, or will it prioritize petty bickering over the vision needed to save humanity? On the front line, mundane as it might sound, are EVs, wind power, and solar photovoltaics. The author is a visiting professor at the Institute of Modern International Relations at Tsinghua University and a senior fellow at the China Institute, Fudan University. Follow him on X @martjacques.
Audi RS e-tron GT intelligent cockpit innovation analysis
RS e-tron GT: Shares J1 platform with Porsche Taycan. The iconic closed hexagonal "big mouth" is quite a brand recognition, and the rear of the car uses a decorative design shaped like a diffuser. Although the difference between it and the regular e-tron GT is very limited, the "RS" nameplate on the rear of the car means that it is not an ordinary person, of course, low-key is also the style of AUD-Sport. The center console continues the family design of the Audi brand, the lines are simple and refined, and the center control screen, the front air conditioning control panel and the function keys below are obviously tilted to the driver's side, echoing the product positioning of the driver's car. Sports seats, leather fabrics with red stitches, etc. appear in the configuration table of the car, rendering the interior sports atmosphere just right, and the overall beauty of the cabin has been affirmed by the reviewers. Although the official model of the cockpit chip selected by the car has not been announced, it has a high score in the evaluation items such as the cold start speed of the car, the start speed of the core application and the navigation search speed, which shows that the car performance is good. In addition, in terms of specifications and accuracy, the car received full marks in the touch accuracy and screen sharpness evaluation, and the daily high-frequency interaction experience is excellent. Of course, if you optimize the voice car control ability, its intelligent experience will be a higher level.
When Amazon also started upgrading "refund only"
Amazon official said that the freight from the Chinese warehouse will be lower than the traditional FBA(Fulfillment by Amazon) fee, similar to the domestic air delivery small package service, which will undoubtedly greatly reduce the logistics costs of sellers. In addition to logistics, Amazon is also responsible for promotion and traffic, of course, sellers can still independently carry out product advertising, pricing and promotion activities, to maintain the personalized and independent brand. Many industry insiders said that Amazon launched the "low-price store" move to fight China's cross-border e-commerce platforms Temu, Shein, AliExpress and so on. Although it provides another platform for China's e-commerce to go to sea, many sellers said that the cost of settling in Amazon cross-border e-commerce has become lower, and they have asked about the conditions of settling in, but the rules look down, in fact, it is not so friendly for sellers.
World's deepest diving pool opens in Poland, 45.5 meters deep
The world's deepest diving pool, Deepspot, opened this weekend near the Polish capital Warsaw. The 45.5-meter pool contains artificial underwater caves, Mayan ruins and a small shipwreck for scuba divers and free divers to explore. Deepspot can hold 8,000 cubic meters of water, more than 20 times the capacity of a normal 25-meter swimming pool. Unlike ordinary swimming pools, Deepspot can still open despite Poland's COVID-19 epidemic prevention restrictions because it is a training center that provides courses. The operator also plans to open a hotel where guests can observe divers at a depth of 5 meters from their rooms. "This is the deepest diving pool in the world," Michael Braszczynski, 47, Deepspot's director and a diving enthusiast, told AFP at the opening yesterday. The current Guinness World Record holder is a 42-meter-deep pool in Montegrotto Terme, Italy. The 50-meter-deep Blue Abyss pool in the UK is scheduled to open in 2021. On the first day of Deepspot's opening, about a dozen people visited, including eight experienced divers who wanted to pass the instructor exam. "There are no spectacular fish or coral reefs here, so it can't replace the ocean, but it is certainly a good place to learn and train safe open water diving," said 39-year-old diving instructor Przemyslaw Kacprzak. "And it's fun! It's like a kindergarten for divers."