France Leads Coalition Pushing For More Flight Taxation

US to Lift Engine Export Restrictions on Chinese Aircraft Maker COMAC The United States government has announced the removal of export restrictions on General Electric (GE) engines destined for the Chinese aircraft manufacturer COMAC. This policy reversal, reported by Reuters, signals a possible easing of trade tensions between Washington and Beijing. The decision permits GE Aerospace to resume shipments of CF34 engines for the C909 and CFM International LEAP-1C engines for the C919, COMAC’s flagship narrow-body jet. Background and Implications for the Aerospace Industry The export embargo was originally imposed as a retaliatory measure following China’s restrictions on rare earth material exports, effectively halting the delivery of critical engine components to COMAC. Lifting the ban is expected to benefit GE Aerospace by allowing it to regain access to a significant segment of the Chinese aviation market. However, this development may also provoke competitive responses from established aerospace giants such as Airbus and Boeing, who are likely to intensify efforts to counter COMAC’s expanding international footprint. Market reactions to this policy shift will be influenced by broader economic factors, including ongoing trade negotiations between the US and China and the potential ramifications for global aerospace supply chains. While the move could enhance commercial ties, it also raises important questions about the future competitive landscape of the global aviation sector. Industry Context and Future Prospects Neither COMAC nor General Electric has officially confirmed the resumption of engine deliveries, and both declined to comment when approached by ch-aviation. CFM International, the manufacturer of both the CF34 and LEAP-1C engines, is a joint venture equally owned by GE of the United States and France’s Safran Aircraft Engines. Headquartered in Cincinnati, Ohio, CFM produces engines in facilities located in both the US and France. Although COMAC assembles its C909 and C919 aircraft domestically in China, many critical components, including engines, continue to be sourced from American and European suppliers. Concurrently, China’s state-owned Aero Engine Corporation is developing the CJ-1000A, a domestically produced engine expected to serve as an alternative powerplant for the C919 in the future. The US decision to lift export restrictions represents a significant milestone in the evolving global aerospace industry, with far-reaching implications for competition, supply chain dynamics, and the broader trajectory of US-China trade relations.

Air India Pilot Collapses in Cockpit Before Bengaluru-Delhi Flight An Air India pilot experienced a medical emergency in the cockpit just prior to operating flight AI2414 from Bengaluru to Delhi early on Friday morning. The pilot collapsed while preparing to sign mandatory documents, prompting immediate medical intervention. Airline officials confirmed the incident, noting that the pilot was unable to proceed with the flight and was promptly taken to a local hospital. The pilot is reported to be stable and remains under medical supervision. The medical emergency caused a delay to flight AI2414, which was subsequently operated by a different pilot. Air India emphasized that its foremost priority is to support the pilot and his family to ensure a swift recovery. Context and Industry Implications This incident occurs amid heightened scrutiny of Air India and the broader Indian aviation sector, following the recent crash of Air India Flight 171. The proximity of these events has intensified concerns regarding the airline’s safety protocols and operational procedures. These challenges come at a critical juncture for Air India’s ongoing transformation efforts and India’s aspirations to become a major global aviation hub. Industry analysts highlight that the airline’s transparency and responsiveness in managing these incidents will be pivotal in shaping public confidence and sustaining operational momentum. The recent developments are also anticipated to influence the aviation insurance market, potentially leading to more stringent and costly coverage conditions for Indian carriers. Investor sentiment towards Air India and the wider sector may be affected, with increased focus on regulatory oversight and safety enhancements. Competitors and stakeholders within the aviation industry are closely observing Air India’s response, as these events are likely to trigger broader discussions on safety standards and regulatory measures across India’s aviation landscape. As investigations proceed and the pilot continues to recover, Air India has reaffirmed its commitment to supporting its personnel and maintaining the highest standards of safety.

AirAsia Commits to 50 Airbus A321XLR Jets Amid Restructuring Progress AirAsia has formalized a memorandum of understanding with Airbus to acquire 50 A321XLR long-range aircraft, with options to convert an additional 20 jets from its existing order portfolio. This agreement marks a significant milestone as the Malaysia-based low-cost carrier nears the completion of a comprehensive restructuring process. The deal, confirmed on Friday, follows reports that Tony Fernandes, CEO of Capital A Group—the parent company of AirAsia—was engaged in advanced negotiations for a substantial order of Airbus’s latest narrow-body model. AirAsia, one of Asia’s largest budget airlines and a major Airbus customer, currently holds orders for approximately 360 aircraft. Fernandes revealed that the airline intends to place an additional order for 150 aircraft within the coming month, thereby finalizing its fleet strategy for the foreseeable future. While specific models have not been disclosed, ongoing discussions include a significant acquisition of smaller jets, potentially the Airbus A220 or Embraer E2 regional aircraft. Strategic Expansion and Market Implications AirAsia’s fleet expansion plans emerge amid a rapidly evolving competitive environment. Recent large-scale aircraft orders by carriers such as ANA Holdings and Riyadh Air are reshaping market dynamics, potentially prompting strategic responses across the industry. Analysts suggest that AirAsia’s new order could trigger competitive reactions, including the introduction of new aircraft models or enhanced service offerings, as rivals strive to protect market share. These developments may also lead to adjustments in pricing and operations as airlines respond to shifting demand and increased capacity. Capital A was designated as financially distressed by Malaysia’s stock exchange in 2022 due to the impact of pandemic-related travel restrictions. The company is now preparing to exit its PN17 status, a process expected to conclude soon following the planned sale of AirAsia’s aviation business to its long-haul affiliate, AirAsia X. This consolidation aims to unify both long- and short-haul operations under the AirAsia brand. Upon completion, the expanded AirAsia will remain publicly listed in Malaysia and plans to issue its first bond in October, with two credit rating agencies currently evaluating the company. Operating a fleet of 255 aircraft, AirAsia has been actively restructuring its order book after enduring severe financial challenges during the COVID-19 pandemic. The airline primarily operates economy-only, narrow-body aircraft typical of low-cost carriers. Fernandes also noted ongoing negotiations with Airbus concerning a historic order for 15 A330 wide-body jets, although no cancellations have been made. Looking forward, AirAsia aims to extend its network to North America and Europe while maintaining its budget fare model. The long-range capabilities of the A321XLR are central to this strategy, despite the inherent range limitations of single-aisle aircraft. To overcome these constraints, AirAsia is exploring the establishment of hub airports in the Middle East, Europe, and the Asia-Pacific region. Discussions are underway with four Gulf cities, including locations in Saudi Arabia and the Emirate of Ras Al Khaimah, with Bahrain also under consideration. As AirAsia finalizes its restructuring and fleet expansion, its strategic moves are poised to influence regional competition and market dynamics, highlighting the intensifying race among carriers to capture the resurgence in post-pandemic travel demand.

Aircraft Lessors Initiate $30.9-Million Lawsuit Against Flair Airlines Over 2023 Aircraft Repossessions In a significant escalation of a legal dispute that has captured industry attention, four Irish aircraft leasing companies have filed a $30.9-million counterclaim against Canadian carrier Flair Airlines. The lawsuit arises from the repossession of four Boeing 737 aircraft in March 2023, a move that Flair previously challenged as unlawful and “draconian.” Background of the Dispute The lessors—Columbia Lights Aviation, Corvus Lights Aviation, Mam Aircraft Leasing, and Airborne Capital—lodged their counterclaim in Ontario Superior Court as part of their defence against an earlier $50-million lawsuit initiated by Flair Airlines. Flair’s original suit accused the lessors of breaching contract terms by seizing the planes. In response, the lessors contend that Flair repeatedly failed to meet its financial obligations under the lease agreements, with outstanding payments reaching as high as $3.5 million at the time of repossession. According to the lessors’ statement of defence, Flair ignored multiple default notices and missed monthly payments between September 2022 and March 2023, with arrears fluctuating between $1.8 million and $3.5 million. The lessors assert that they incurred substantial costs related to repossessing, repairing, and subsequently re-leasing or selling the aircraft. They are seeking damages to cover lost rental income, maintenance, marketing expenses, and taxes. Details of the Repossession and Legal Arguments The repossession occurred on March 11, 2023, when agents representing the leasing companies took control of the aircraft at airports in Toronto, Waterloo, and Edmonton. At the time, Flair’s then-CEO Stephen Jones acknowledged delays in lease payments following a challenging winter period but estimated the amount owed to be closer to $1 million. The lessors reject Flair’s allegations that they induced the airline to breach its contracts or conspired to transfer the aircraft to other operators at inflated rates. They maintain that the lease agreements explicitly granted them the right to repossess the planes in the event of default. Industry Implications and Legal Context This high-profile case underscores the growing complexities and risks inherent in aircraft leasing arrangements. It has prompted increased scrutiny within the aviation sector, with competitors and market participants reevaluating their approaches to mitigate financial exposure related to aircraft repossessions. Recent judicial decisions, including rulings favoring insurers compensating for seized aircraft, are reshaping the legal and commercial landscape. These developments are influencing negotiations between lessors and airlines and highlight the evolving nature of aircraft leasing, where legal outcomes carry significant consequences for all parties involved. Flair Airlines has not yet responded to requests for comment. Further updates will be provided as the case advances.

Why India’s Airline Startups Are Investing in Hybrid Fleets India’s emerging airline startups, including Lucknow-based Shankh Air, Gurugram’s FlyBig, and Goa’s Fly91, are challenging the conventional leasing-dominated model by adopting hybrid fleet strategies that combine both leased and owned aircraft. Industry insiders suggest this approach is designed to balance financial risk, appeal to cautious lenders, and build sustainable long-term value amid intense market competition. Leasing has traditionally been the cornerstone of Indian aviation, with over 80% of commercial jets leased—significantly higher than the global average of 53%, according to analyses by Primus Partners and PwC. However, these startups argue that partial ownership enhances their credibility with banks and investors, potentially unlocking more favorable financing terms and signaling greater operational stability. Anurag Chabbra, co-founder and executive director of Shankh Air, explained, “We are pursuing a well-calibrated growth strategy that blends leasing and direct acquisition, aligned with the evolving dynamics of the Indian aviation sector.” Supported by $50 million from its parent company, Shankh Trading Pvt. Ltd., the airline plans to launch with two aircraft and expand to at least seven by the end of 2026, focusing on metro hubs while establishing Lucknow as its operational base. FlyBig, which recently resumed operations after a temporary suspension, currently serves around 20 cities. The airline has attracted significant investment, with travel platform EaseMyTrip acquiring a 49% stake. FlyBig reported revenues of ₹128.75 crore in FY24 and operates four DHC-6-400 aircraft—one owned and three leased. Both FlyBig and Shankh Air are positioning themselves to capitalize on the upcoming Noida International Airport (Jewar airport) as a strategic growth hub, although they face stiff competition from established carriers such as Akasa Air and IndiGo, which have secured early access through memoranda of understanding. Regional Focus and Operational Challenges Unlike legacy low-cost carriers that have retrofitted regional operations, FlyBig was conceived specifically to serve underserved markets. Chander Bahadur, vice president of FlyBig, noted, “Our very inception was aligned with the UDAN mission, and over the past four years, we’ve amassed deep operational expertise in navigating the nuanced demands of underserved and remote destinations.” The UDAN scheme, a government initiative, subsidizes flights to unserved and underserved airports to enhance air travel accessibility. Bahadur views Jewar airport as a vital gateway to improve connectivity across populous states such as Uttar Pradesh, Uttarakhand, and Bihar. Nevertheless, India’s regional aviation market remains fraught with challenges, including volatile and seasonal demand patterns that complicate revenue forecasting. Pragya Priyadarshini, vice president at Primus Partners, highlighted that “these fluctuations place immense pressure on airlines to overfill planes during peaks and absorb large losses during lean months.” Startups also confront significant obstacles related to the high upfront costs of acquiring and maintaining hybrid fleets, alongside navigating India’s complex regulatory environment for such aircraft. Infrastructure deficiencies at smaller airports—such as limited night landing capabilities, refueling, and maintenance facilities—further complicate operations. Priyadarshini added, “Without reliable ground operations, airlines risk flight delays, diversions, or cancellations—factors that impact traveller confidence and reduce repeat demand.” Market and Industry Reactions Investor and customer skepticism persists regarding the long-term viability and efficiency of hybrid fleet models. Established carriers like Air India and IndiGo continue to focus on traditional fleet strategies while closely monitoring the performance of these new entrants. Meanwhile, major aircraft manufacturers such as Boeing and Airbus may adjust their approaches to accommodate the growing interest in hybrid fleet technologies. As India’s aviation sector continues to evolve, the success of these hybrid fleet strategies will hinge on startups’ ability to manage costs effectively, navigate regulatory complexities, and deliver reliable service in a demanding and competitive market environment.

Supply Chain Bottlenecks Disrupt Global Trade Impact on Aviation and Cargo Sectors A global shortage of critical components is significantly disrupting the aviation industry and related sectors, with far-reaching consequences for airlines and logistics providers. At Lufthansa, for instance, pilots trained for the anticipated arrival of new Boeing 787 aircraft find themselves in a state of uncertainty as deliveries are delayed due to seat certification issues. In Frankfurt, operational challenges are compounded by the fact that one in five long-haul aircraft remains grounded as a reserve, while older planes, more prone to mechanical failures, continue to strain the airline’s capacity. This bottleneck extends beyond passenger airlines into the cargo sector, where the delayed introduction of newer aircraft—expected to enhance cargo capacity—has left logistics companies struggling to meet growing demand. These operational difficulties are further exacerbated by broader challenges in global trade, including rising tariffs and the imposition of new trade barriers, particularly in industries such as clean energy. Analysts note that these obstacles are intensifying uncertainty and complicating supply chain management on a global scale. Market Reactions and Industry Responses The repercussions of these disruptions are already evident in various markets. Price increases and shortages are emerging across multiple sectors, exemplified by the potential wine shortage in the United Kingdom following a strike at a bottling plant. In response, companies are reassessing their sourcing strategies, adjusting production timelines, and investing in technological solutions to mitigate risks. However, the effectiveness of these measures is limited by the fact that only 23 percent of supply chains currently employ a comprehensive artificial intelligence strategy, according to Gartner. Lufthansa Technik, the airline’s maintenance division, has experienced heightened demand for maintenance and overhaul services due to the aging global fleet and ongoing issues with new-generation engines. Yet, it too faces significant challenges, as a shortage of spare parts hampers its ability to maintain aircraft operational. This situation highlights how supply chain disruptions can impact even those sectors positioned to benefit from increased demand. Challenges Ahead for Global Logistics As global logistics networks contend with these complex challenges, the industry is entering a period marked by heightened uncertainty. The interplay of component shortages, trade-related obstacles, and limited adoption of advanced technologies underscores the intricate nature of restoring stability to global trade.

CIASL Launches ₹50 Crore MRO Hangar Project to Develop Kochi as an Aviation Hub Cochin International Aviation Services Limited (CIASL) has unveiled a ₹50 crore project aimed at establishing Kochi as a premier aircraft maintenance hub in India. The initiative, inaugurated with a stone-laying ceremony led by CIASL Chairman S. Suhas, involves the construction of the company’s third Maintenance, Repair, and Overhaul (MRO) hangar alongside a covered parking facility at Cochin International Airport. Expanding Infrastructure to Meet Diverse Aviation Needs The new hangar, covering 53,800 square feet, is expected to be completed within eight months and will be situated adjacent to the forthcoming CIASL Business Park. Unlike conventional MRO facilities that primarily service narrow-body commercial aircraft, this hangar is designed to accommodate a broader range of aircraft, including business jets, helicopters, and seaplanes. This reflects the evolving dynamics of India’s aviation sector. The facility will also feature 7,000 square feet of dedicated office and workshop space, equipped with advanced component repair and non-destructive testing capabilities. In addition to the hangar, the project introduces Kerala’s first covered aircraft parking facility, spanning 3.5 lakh square feet and capable of housing up to 13 narrow-body aircraft. This infrastructure is critical for protecting valuable aircraft from the region’s monsoon rains, heat, and corrosive coastal winds, while also enhancing privacy and security for corporate and charter operations. Strategic Significance and Competitive Landscape Currently, India’s major MRO hubs are concentrated in Nagpur, Hyderabad, and Kolkata. Many Indian airlines continue to send aircraft abroad for maintenance, primarily to Singapore, the UAE, and Sri Lanka, resulting in substantial foreign exchange outflows. CIASL’s expansion seeks to reverse this trend by providing a competitive, high-quality domestic alternative, positioning Kochi as a key MRO destination for both Indian and international carriers. “This hangar is part of our mission to establish a complete aviation ecosystem in Kerala,” stated S. Suhas, Chairman of CIASL. “It supports our goal of self-sufficiency in aircraft maintenance, brings foreign exchange earnings, and creates high-skilled jobs for the state.” Despite the promising outlook, CIASL faces increasing competition within the Indian MRO sector. New entrants such as Inavia Aviation, which plans a facility in Bhopal with notable logistical advantages, may challenge market share. Existing providers in the region are also likely to respond with expansions or service enhancements. The success of the Kochi project will depend not only on its physical infrastructure but also on its capacity to integrate advanced digitization solutions—such as those offered by Ramco Systems—to efficiently manage complex MRO operations. “We aim to complete construction in eight months. This third hangar, with its enhanced capacity and unique covered parking, will deliver unparalleled services to airlines. We are also preparing for a second phase of development worth ₹150 crore,” said Santosh J. Poovattil, Managing Director of CIASL. As India’s aviation sector continues to grow, CIASL’s investment in Kochi is expected to attract increased interest from airlines seeking regional maintenance solutions, while setting new standards for quality and innovation in the country’s MRO landscape. _Published on July 4, 2025_

AirAsia Expands Long-Haul Fleet with Order for 50 Additional A321XLR Aircraft AirAsia has announced a substantial expansion of its long-haul fleet by placing a firm order for 50 additional Airbus A321XLR aircraft. This strategic move highlights the airline’s determination to solidify its presence in the increasingly competitive low-cost, long-haul market. Strategic Fleet Expansion and Market Positioning The new order, one of the largest for the A321XLR in the Asia-Pacific region, is designed to support AirAsia’s ambitions to launch new long-distance routes while enhancing capacity on existing services. The A321XLR, renowned for its extended range and fuel efficiency, is expected to enable the airline to connect a broader array of destinations across Asia and beyond. This expansion aims to provide passengers with greater travel flexibility and more affordable options, reinforcing AirAsia’s commitment to accessible long-haul air travel. Challenges Amid Industry Headwinds Despite the promising outlook, AirAsia’s expansion occurs against a backdrop of significant operational challenges. The airline must contend with ongoing supply chain disruptions that have affected aircraft deliveries across the aviation industry. Rising fuel costs also continue to exert pressure on profit margins, complicating the financial landscape. Furthermore, the competitive environment is intensifying, with both low-cost carriers and established airlines accelerating their own long-haul growth strategies. Market Response and Competitive Landscape Investor reaction to AirAsia’s announcement has been predominantly positive, reflecting confidence in the airline’s long-term growth trajectory. Industry analysts interpret the fleet investment as a clear signal of AirAsia’s commitment to post-pandemic recovery and future network development. Meanwhile, competitors are actively responding to shifting market dynamics. ANA Holdings has recently confirmed orders for a diverse mix of Airbus, Boeing, and Embraer aircraft, indicating its own expansion plans. Riyadh Air has also placed an order for up to 50 Airbus A350-1000s, further intensifying competition within the long-haul segment. As AirAsia advances with its fleet expansion, the airline faces the challenge of navigating these operational and market pressures to fully capitalize on its long-haul strategy. The additional A321XLR aircraft are poised to play a pivotal role in AirAsia’s efforts to capture a larger share of the growing demand for affordable, long-distance air travel throughout the Asia-Pacific region and beyond.

BBGA, EBAA, and RAeS Advocate for Unified Aerospace Representation The British Business and General Aviation Association (BBGA), the European Business Aviation Association (EBAA), and the Royal Aeronautical Society (RAeS) have collectively underscored the pressing need for a unified voice to represent the aerospace sector. These organizations contend that a coordinated approach is vital to effectively address regulatory challenges, promote industry interests, and ensure robust advocacy in an aviation landscape undergoing rapid transformation. Leadership Changes and Strategic Uncertainty at EBAA Efforts to establish unified representation face considerable obstacles, particularly within the EBAA, which is currently experiencing a significant internal transition. The recent resignations of Chief Operating Officer Robert Baltus and Secretary General Holger Krahmer highlight a strategic shift aimed at enhancing the association’s effectiveness and adaptability. This leadership upheaval coincides with the EBAA’s decision to postpone the announcement of the location for the European Business Aviation Convention & Exhibition (EBACE) 2026 until late July, reflecting ongoing strategic reassessment. The uncertainty surrounding EBAA’s future direction has led industry stakeholders to reevaluate their engagement with the association as it seeks to realign its priorities. Competitors within the aerospace sector may perceive this period of transition as an opportunity to consolidate their own influence and strengthen their positions. Calls for Collaboration Amid Industry Challenges Despite these challenges, BBGA and RAeS continue to champion increased collaboration, emphasizing that a unified industry voice is essential to advancing common objectives and responding effectively to regulatory and market pressures. As EBAA works to stabilize its leadership and clarify its strategic vision, the broader imperative for cohesive aerospace representation remains a critical issue for the sector. The coming months will be decisive in determining whether these leading organizations can surmount internal difficulties and present a consolidated front to policymakers and stakeholders across Europe and beyond.

Swiss Prepares for Peak Summer Operations Amid Emerging Challenges Navigating Operational Complexities Swiss Airlines is intensifying preparations for its peak summer season amid a series of emerging challenges confronting the global aviation industry. The carrier is proactively implementing strategies to mitigate potential disruptions in supply chains and address rising operational costs, issues that are anticipated to affect airlines worldwide throughout 2025. As travel demand surges, the sector faces increased logistical complexities and the imperative to scale operations efficiently. Swiss Airlines is focused on ensuring seamless service during the busy summer months while managing these multifaceted operational pressures. Commitment to Sustainability Amid Economic Pressures Despite the operational and economic hurdles, Swiss Airlines remains steadfast in its commitment to sustainability. The airline continues to collaborate with prominent travel brands, including Lufthansa and British Airways, in supporting initiatives with Swiss carbon dioxide removal company Climeworks. These partnerships highlight the aviation industry's ongoing dedication to reducing its environmental impact, even as it contends with mounting financial and logistical challenges. Swiss Airlines’ efforts to balance reliable service delivery, cost management, and environmental responsibility exemplify the broader trends within the air transport sector, where adaptability and innovation are critical to navigating an evolving landscape.