faa ata shortage & virgin orbit bankrupt

FAA Shortages Pleads with Airlines & Cautions Travel

JetBlue Airways plans to reduce its summer flight schedule in New York – with more airlines expected to follow – in response to the FAA’s concession that it lacks enough air traffic controllers to handle the expected seasonal air travel peak. 

Attempting to avoid the congestion, delays, and cancellations that plagued US airports during the chaotic 2022 summer travel season, the FAA recently took the unusual step of allowing carriers to temporarily vacate some allocated take-off and landing slots at major Northeast hubs during upcoming summer months. 

JetBlue has already said it will cut flights to New York due to the ATC shortage. JetBlue’s chief executive Robin Hayes recently told national media that “the system is not going to be workable this summer” if airlines do not cut flight schedules in the region. 

Airline operations to and from New York could particularly impact JetBlue, which is based in the region. In March, the airline made nearly 6,000 departures from JFK alone, according to Cirium data. "We need to reduce flying and make sure we can operate what we've got," JetBlue CEO Robin Hayes said on reduced flights.

FAA indicated that air traffic controller staffing is only slightly above 50% of the levels needed for the New York metropolitan area. 81% is the level of staffing that is normal without flight reductions at JFK, LGA, and EWR; by airlines, roughly 45% of all flights in and out of the region could be delayed this summer. 

The FAA and air traffic controllers have been under the spotlight following several near misses at airports around the United States, and in recent months, planes have narrowly avoided disasters at airports around the country. 

The FAA has allowed airlines to idle for up to 10% of their slots at JFK LaGuardia and runway timings at Newark from May 15 to September 15 to alleviate congestion. A spokesman for American Airlines said Monday that the carrier, the fourth largest in the New York area, would "temporarily reduce frequencies on select routes" from LaGuardia and Newark. The decrease in overall flights will likely be higher than the decline, and available seat airlines will choose what flights to cancel. Removing flights with smaller occupancy, such as regional jets, will have a more negligible impact on overall capacity throughout the New York metro area than pulling an aircraft with a lot more seats or bigger capacity. In addition, moving more flights by small plane would mean smaller destinations could bear the most significant impact of this potential summer problem A Delta spokesman said: "Delta is reviewing our networks, ensure the best customer experience throughout summer travel season, and we are committed to working with the FAA on measures to ensure the safety and efficiency of operations at the New York New Jersey airport."

“The recent cuts appear to impact routes between smaller cities to hubs and, in some cases less flights between major hubs,” says Mike Arnot, an airline industry commentator and spokesman for Cirium. “Does the airline need 15 flights a day when nine might do?”

So what does this all mean for fall, especially holiday trips? “It means generally the flights that do fly this holiday season will be more full, with fewer opportunities to upgrade, for example, and higher fares,” says Arnot. Fuller planes also mean it will be more challenging to rebook passengers on alternate planes when, for example, bad weather causes flight delays and cancellations—a pattern behind many flight disruptions this past spring and summer.

The best advice for staying ahead of any air travel turmoil this holiday season? “As always, book early,” Arnot says. You’ll find cheaper fares (for the most affordable Thanksgiving tickets, book at least before Halloween), and you could even help the airlines firm up their schedules. “The airlines will try hard to fly their schedules,” says Arnot. “They don’t make money cutting back for peak periods.”

IATA Report 04/04 - North American carriers’ traffic climbed 67.4% in February 2023 versus 2022. Capacity increased by 39.5%, and the load factor rose 12.8 percentage points to 76.6%. While CNN reported that half of the world’s ten busiest airports for 2022 are in the United States. 

Aviation Shortage Help Coming from Washington?

House Proposes Enabling 529 Funds For Aviation Career Education Options Last week, the House of Representatives introduced the bipartisan Aviation Workforce Development Act, designed to stimulate training for more new pilots and aircraft technicians. The lynchpin of the proposed legislation is enabling potential aviation career seekers to use tax-advantaged 529 investment plans to fund their educations.

When initially approved, 529 plans only enabled tax-free savings toward college tuition and expenses. Over time, the list of educational options has grown to include vocational schools and apprentice programs, but to date, aviation career education has yet to be eligible for the 529 savings.

Virgin Orbit Bankrupt 

Virgin Orbit, the company, founded by a British billionaire Sir Richard Branson in 2017, has officially filed for bankruptcy. The decision comes after a failed satellite launch in January and difficulties raising funding prompted by staff reductions. 

The company says it will continue doing business as it searches for a buyer. “We have taken great efforts to address our financial position and secure additional financing, we all ultimately must do what is best for our business," read a statement from CEO Dan Hart. 

Virgin Orbit failed to complete the first satellite launch from Western Europe after a fuel feed, line dislodged and cause an engine to overheat a few months later. Virgin paused operations amid reports that are for load a majority of its staff as it saw additional funding. The company stated it would cut 675 jobs, or about 85% of its staff, to reduce expenses after failing to secure funding. Virgin Investments has committed $31.6 million in financing to help version orbit continue operations as it looks for a new owner. 

"You deserve better than this" Tony Gingiss chief operating officer, wrote in a companywide email Monday, which was obtained by CNBC "you have been part of something audacious, challenging and fulfill full, but you simply did not have the leader ship or opportunity to demonstrate to the world what you can fully do and how this product can be enduring force in the market" Gingiss said in an email that appears to call out virgin orbit, CEO, Dan Hart, although not by name and offers an apology to employees that they "have not heard from the person who should be saying" Gingiss went on to say in the email "I'm sorry that I was not able to convince our leader and the board to take a different path to give us more time to figure things out" 

The company was created as a subsidiary of Virgin Galactic, which was founded by Branson in 2004 to develop commercial space tourism.

Unlike Virgin Galactic, which aims to take paying passengers on suborbital flights, Virgin Orbit is focused on launching small satellites into orbit. The company's main product is LauncherOne, a two-stage rocket that carries small payloads into orbit.

Virgin Orbit has also been involved in efforts to support COVID-19 relief efforts, including using its expertise in 3D printing to produce face shields for healthcare workers. The company has also partnered with the UK government to develop a new spaceport in Scotland.

A virgin orbit spokesman did not immediately respond to a comment request regarding the bankruptcy filing.

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