US Airlines Under Fire for Multi-Billion Seat Fee Revenue and Pricing Tactics, and More

Dear readers,

Welcome to AviationOutlook Newsletter, your one-stop source for the most relevant Aviation & Aerospace news briefs and industry insights.

Here are the important updates for today. Let’s get started.

US Airlines Face Congressional Oversight on Seat and Baggage Fee Practices

A Senate investigative panel says that it has uncovered concerning practices in airline fee structures, revealing that major carriers generated $12.4 billion (between 2018 and 2023) in seat fees alone and employed sophisticated algorithms for dynamic pricing.

The panel will summon executives from American Airlines, United Airlines, Delta Air Lines, Spirit Airlines, and Frontier Airlines for testimony on December 4.

Key Findings

• United Airlines earned $1.3 billion from seat fees in 2023, exceeding their checked baggage revenue of $1.2 billion.
• Ultra-low-cost carriers Frontier and Spirit allocated $26 million for staff incentives to enforce baggage policies.
• Frontier offers gate agents up to $10 commission per checked bag at the gate.
• Airlines use customer data and algorithms to determine variable pricing for fees.
• Some carriers may be avoiding federal transportation excise taxes through fee categorization.

What It Means

This investigation signals intensifying regulatory scrutiny of airline industry practices.

Senator Blumenthal's push for greater fee transparency and the DOT's involvement suggests further regulatory scrutiny that could impact airline pricing strategies and consumer protection measures.

The focus on algorithmic pricing and staff incentives reveals the sophisticated systems airlines use to maximize ancillary revenue, which could lead to new disclosure requirements and fee structure regulations.

Other key Aviation and Aerospace Industry updates for today 👇

China Southern To Offload Its 787-8 Dreamliner Fleet

China Southern Airlines plans to sell its entire fleet of 10 Boeing 787-8 Dreamliners and two spare engines through open bidding.

The aircraft, averaging 11 years in service, will be delivered to the buyer between 2025 and 2026.

The airline cites oversupply and sluggish recovery, particularly on routes to Europe and North America, as reasons for this decision. However, this move reflects a broader trend among Chinese carriers to focus on narrow-body aircraft and retire older wide-body planes.

Lockheed Martin Lands Massive $870 Million F-35 Contract Amid Global Defense Surge

Lockheed Martin secured an $870 million contract from the U.S. Navy for F-35 fighter jet components and support. The deal, set to conclude by May 2031, covers materials for the 20th production lot, benefiting U.S. military branches and foreign allies.

The F-35 program continues to be in high demand globally, with 1,040 units delivered as of September 2024.

Streamlined Aircraft Servicing: Qatar Airways Technic's New Growth Strategy

Qatar Airways Technic is prioritizing reduced maintenance turnaround times to enhance aircraft availability and support the airline's expansion.

The MRO unit, operating a 95,000m² facility at Doha Airport, is implementing AI, drones, and automated systems while exploring joint ventures with major OEMs for engine overhaul capabilities.

Vertical Aerospace Secures Fresh Round of $50M Financial Boost for eVTOL Development

Vertical Aerospace, a UK-based eVTOL startup, secured a $50 million lifeline from Mudrick Capital, averting potential bankruptcy.

The deal includes a $25 million upfront investment, $25 million in future funding, and a debt-to-equity swap. Founder Stephen Fitzpatrick's stake reduces from 70% to 20%, while Mudrick gains 70% ownership.

The funding extends Vertical's cash runway to late 2025, supporting VX4 aircraft development.

The company's VX4 aircraft recently achieved untethered, piloted thrustborne flight in testing.

Hong Kong Airlines Revamps: New Routes, More Jobs, Bigger Fleet

Hong Kong Airlines unveils a strategic plan to return to long-haul markets in early 2025, resuming routes to Gold Coast and Vancouver.

The airline will expand its A330 fleet, increase flight frequencies, and grow its workforce by 60% in 2025.

With a current network of over 30 destinations and an 85% load factor, the carrier aims to strengthen its international presence and enhance passenger services.

FAA Approves Nextant's Starlink Kit for Bombardier Global 5000/5500 Aircraft

Nextant Aerospace, Flexjet's engineering arm, has received FAA certification for Starlink connectivity on Bombardier Global 5000/5500 aircraft. This follows their previous certifications for other Bombardier and Gulfstream models.

The Starlink system offers high-speed, low-latency internet worldwide, enhancing in-flight connectivity for private jet passengers.

Flexjet anticipates releasing STC kits for Bombardier's Super-Midsize Challenger fleet by the end of 2024.

FAA Approves Able Aerospace's Safety Management System (SMS) for Aircraft Maintenance

Able Aerospace Services Inc. has received FAA acceptance of its new Safety Management System (SMS) implementation plan for aircraft and component maintenance.

The SMS program includes a voluntary reporting tool to enhance safety and quality standards.

Able Aerospace, a Textron company, provides repair, overhaul, exchange, and approved replacement parts for fixed- and rotor-wing customers worldwide.

Miami Startup Expands Cargo Delivery with Autonomous eVTOL Drones

UrbanLink Air Mobility, a South Florida-based AAM company, has partnered with Traverse Aero to add 40 Orca hybrid-electric eVTOL cargo drones to its fleet.

The Orca, designed for palletized cargo, has a 600-mile range, 550-pound payload capacity, and reduces CO2 emissions by 80%.

UrbanLink plans to deploy these drones in Puerto Rico and Miami for relief operations and cargo transport, furthering its mission of sustainable transportation.