Sustaining Improvements in NATS’ Performance and Financial Resilience into the Future

The UK Civil Aviation Authority has today published for consultation its price control proposals for the En Route part of NATS’ air traffic control business (NERL) for Control Period 3 (CP3), which will run for four years from 2011 to 2014. 

The proposals give NERL strong incentives to sustain into the future the much improved delay performance it has achieved in the current control period (CP2). The CAA proposes a target average level of performance at 12.5 seconds per flight with additional incentives to reduce the delay of the most delayed flights. This compares with average flight delays of around 25 seconds for most of the current control period. NERL will also be required to meet service quality standards during the period of the Olympics and Paralympics when several thousand additional flights are expected. To ensure NERL is able to sustain this high level of performance into the future the CAA is allowing for investment of £563m (outturn prices) for CP3. This is intended to deliver new systems that will enhance NERL’s capacity to handle traffic growth, as well as enabling it to play a full role in European technological development. This follows the significant capital expenditure programme in recent years culminating in the consolidation of operations at just two air traffic control centres in Swanwick and Prestwick. NERL has reduced its operating costs in CP2 and for CP3 the CAA is proposing an allowance for operating costs some three per cent tougher than NERL’s March 2010 Business Plan. The CAA is proposing a pre-tax real cost of capital of 7.5 percent which is 150 basis points below NERL’s estimate. However, some of NERL’s costs such as pensions are forecast to rise significantly in CP3 which, along with traffic levels in 2010 being lower than anticipated, will have the effect of causing an initial price increase in 2011. Thereafter prices would return to a downward path and by 2014 would be seven per cent lower in real terms than at the end of CP2. Commenting on the proposals, Dr Harry Bush, CAA Group Director of Economic Regulation, said, “The CAA’s CP3 price control proposals will be implemented around a decade after the part-privatisation of NATS and the subsequent financial and risk sharing arrangements (known as the Composite Solution) which followed the exceptional events of September 11, 2001. These arrangements have enabled NERL to fund its investment programme and deliver improved service quality for the benefit of customers whilst maintaining strong financial resilience. “The current economic climate and operating conditions highlight the importance of maintaining this financial resilience. The CAA is proposing to do so by imposing direct controls on the extent of NERL’s gearing, a shift away from the emphasis that has previously been placed on credit ratings.” The CAA is making these proposals before European regulatory arrangements under a Single European Sky (SES II) have been finalised. The CAA will take these European developments into account and expects to issue an update in July. Given the environmental and other benefits from having a flight efficiency metric, NERL has accelerated its work programme in this area and the CAA is hopeful that a metric incentivising environmental efficiency can be developed in time for CP3. The CAA expects to publish its proposals regarding the introduction of a flight efficiency metric in late August, following NERL’s work. 

 

Source: Air Transport News

 

 

English High Court Permits Air Transport Association Legal Challenge to EU Emissions Trading Scheme to Proceed

The Air Transport Association of America (ATA), the trade organization for the leading U.S. airlines, said today that it was pleased that the English High Court will allow ATA permission to proceed with its legal challenge to the unilateral extension of the EU emissions trading scheme to international aviation. The High Court will shortly refer the case to the European Court of Justice (ECJ) in Luxembourg for a ruling on the validity of the EU law. 

“The High Court decision to refer this case to the European Court of Justice is an important step, as only the ECJ has the authority to rule on the Europe-wide directive that applies the European Emissions Trading Scheme to our airlines. The unilateral extension of the EU ETS to international aviation is contrary to international law both as an extraterritorial action and an improper tax or charge. It also clearly stands in the way of an appropriate and effective global solution,” said ATA Vice President, Environmental Affairs, Nancy Young. ATA is challenging the EU directive extending the existing emissions trading scheme (ETS) to airlines from around the world engaged in international aviation activities. ATA and its member airlines are committed to reducing greenhouse gas emissions from aviation. ATA’s view is that the unilateral approach taken under the EU ETS not only violates critical international law principles, but also imposes costly policies on international aviation that siphon away from the airlines the very funds they need to continue to improve their strong record of continuous environmental improvement. ATA and its members have joined other airlines around the world in supporting a global framework for greenhouse gas measures under the International Civil Aviation Organization (ICAO), the United Nations body charged with establishing environmental and other standards for international aviation. “The legal case is important as a means of addressing what is wrong with the European scheme, but also as an opportunity for us to continue to pursue an approach that is appropriate for this global industry. The U.S. airline industry has adopted a set of measures and targets as part of the worldwide aviation industry commitment to a global framework on aviation emissions,” Young said. “Through this commitment, the U.S. airlines alone will save more than 16 billion metric tons of greenhouse gas emissions through 2050 on top of substantial savings already achieved.” For more on the ATA climate change commitment, see www.airlines.org/Environment/ClimateChange/Pages/21stCenturyAviation-ACommitmenttoTechnology,EnergyandClimateSolutions.aspx 

The case is R (on the application of the Air Transport Association of America, Inc. and Others) v. Secretary of State for Energy and Climate Change. ATA brought the case on behalf of all of its members; American Airlines, Inc., Continental Airlines, Inc. and United Air Lines, Inc. also are participating directly as they have been designated by the European Commission as falling under UK jurisdiction. The U.S. commercial aviation industry improved fuel efficiency by approximately 110 percent between 1978 and 2008, resulting in 2.7 billion metric tons of carbon dioxide (CO2) savings – roughly equivalent to taking more than 19.5 million cars off the road each year. 

Source: Air Transport Association of America 

European LCCs now carry a third of all pax. Can full service airlines confine damage to short-haul?

As European LCCs such as Air Berlin, Ryanair, easyJet, Vueling and Wizzair expanded their capacity and traffic in 2009, their full service competitors have been in contraction mode, as they sought to reduce losses.The members of the Association of European Airlines (AEA) handled 20 million fewer passengers in the year, a reduction of nearly 6%. Within Europe, where they compete directly with the short haul LCCs, cross-border traffic was down 5.3%. the members of the European Low Fare Association (ELFAA), by contrast, increased passenger numbers by 8.7%, to 13 million.

Low cost airlines, as defined by OAG, now occupy a capacity share of 36.1% within EU states. Europe’s Big Three LCCs - Ryanair, easyJet and non-ELFAA member, Air Berlin - handled over 9.7 million passengers in Feb-2010 between them, a 7.4% year-on-year increase, preceded by growth of 7.3% to 9.5 million passengers in Jan-2010, for year-to-date passenger numbers exceeding 19 million.  

The three carriers between them handled over 139 million passengers in 2009, a 7.7% year-on-year increase and a massive 80% increase from 2005 levels, showing their importance not only within the LCC sector, but within the overall European air transportation market in general. LCCs accounted for some 36% of seats within Europe last year.

LCC capacity (seats) share within geographical regions: 2009

Source: Centre for Asia Pacific Aviation & OAG

For the most recent month, Feb-2010,  the bulk of the 7% growth seen among Europe’s three largest LCCs was attributed to easyJet (not the usual Ryanair). easyJet reported double-digit year on year passenger growth in the month (of +12.3% to 1.4 million), while Ryanair and Air Berlin both reported single-digit growth, of 6% and 3.1%, respectively.

However, Ryanair, with its 4.4 million passengers in the month, remains by far the largest European LCC, with more than three times the number of passengers as easyJet (at 1.4 million) and more than double the size of Air Berlin (with 2.0 million passengers, including those travelling on the acquired TUIfly routes). This relegates easyJet to the third largest European LCC, after Ryanair and Air Berlin.

Rerouting full service airline strategy

The implications of the LCCs’ market expansion potentially transcend merely the local intra-European services. In our report, Airline structural change in Europe: a major turning point – if labour allows it,

we noted the various ways – often with a common theme – that the major European carriers were adapting to combat the inroads made by the low fare operators.

As the full service airlines’ intra-European market share is eroded, they not only suffer financial losses in head to head competition, but also lose valuable parts of their connecting services into long haul operations – where, for the time being, they are generally free from low cost operator competition.

That immunity is gradually being threatened. Long haul remains largely the preserve of major network flag carriers, but, as the European market becomes crowded, LCCs will look increasingly towards a refined model of the traditional long haul operation. This offers not only fresh pastures in their own right, but also valuable feed into their now-powerful short haul European services – often along with the promise of higher yields.

Long haul low cost operations from Asia Pacific are establishing a trend, with AirAsia X and, soon, Jetstar, offering service into Europe with a lower cost base. Each has already established the economics of long haul operations within their own region.

Meanwhile, in Europe, Air Berlin is offering another model, as it evolves into much more than a short haul low cost operator.

Connecting into international routes: following AirAsia X and Air Berlin

Air Berlin’s strategy is to focus on maintaining profit margins over building market share although the carrier, with the acquisition of the TUIfly routes, has so far managed to grow market share and unit revenues concurrently.

By taking over an established network, as opposed to growing it organically, Air Berlin was able to make a quantum leap into a whole different operation, while maintaining its low cost profile. TUIfly’s international network embraces a very cost-efficient array of routes to north America, the Caribbean, northern and southern Africa and Asia.

The more cautious and route-strategic approach of this increasingly powerful competitor is not escaping the attention of its peers. 

With their well-entrenched European networks – usually together with the advantage of multiple “hubs” – it is surely a matter only of time before several of the larger European LCCs link into long haul international services.

Whether they do it organically, using their own aircraft, or whether they seek low cost partners (as many of the Asian and north American carriers already are); whether they adopt formal interlining and connectivity, or simply make it easy to self-connect at busy hubs, it would appear that the nightmare for full service airlines is still unfolding.

Many network airlines still have the underlying power which membership of a global alliance brings. These undoubtedly help preserve their legacy advantages. But sustained low cost operations have been shown to have remarkable resilience, usually far beyond traditional expectations.

So any full service airline now undergoing a substantial restructure of its short haul operations would do well to have provisional plans in place for modifying its long haul thinking as well. Hoping against hope that all that nice premium traffic will return to the fold no longer offers a suitable strategic foundation for the long term.

Source: Centre For Asia Pacific Aviation

Asdhes slow down Recovery from the global economic recession

The International Air Transport Association (IATA) announced international scheduled air traffic results for April 2010. Passenger demand slumped by 2.4% as a result of massive flight cancellations centered in Europe during the six days in April following the eruptions of an Icelandic volcano. The fall in traffic interrupted the industry’s recovery from the global financial crisis. 

International scheduled cargo traffic, less impacted by the cancellations, saw the pace of its recovery slow to 25.2% growth in April (down from the 28.1% improvement recorded in March).

“The ash crisis knocked back the global recovery - impacting carriers in all regions. Last month, we were within 1% of pre-crisis traffic levels in 2008. In April, that was pushed back to 7%,” said Giovanni Bisignani, IATA’s Director General and CEO.

International Passenger Demand
The ash crisis accentuated the asymmetrical nature of the economic rebound.

• European carriers posted an 11.7% demand drop in April (compared to a 6.2% increase in March). Uncertainty of service reliability in the aftermath of the ash cancellations and major unrest in Greece as a result of the currency crisis added to the weaker European demand during the month. Limited GDP growth expectations of 0.9% continue to dampen demand across the continent.
• North American carriers posted a 1.9% decline in demand, primarily as a result of the impact of the ash crisis on North Atlantic routes. This is a major step backwards from the 7.8% growth recorded in March. This fall in demand was less than half the 4.5% cut in capacity, pushing load factors to 80.2%.
• Asia-Pacific carriers saw their strong growth slow to 3.5% (from the 12.9% growth recorded in March). Robust GDP growth of 7% (Asia excluding Japan) is supporting the strong recovery.
• Middle Eastern airlines recorded the strongest traffic growth at 13.0%, which is about half the 25.9% increase of the previous month. 
• African carriers also saw their recovery slow to 8.6% growth in April, down from the 16.9% growth recorded during the previous month. 
• Latin American carriers posted a 1.2% increase for the month, a quarter of the 4.6% growth recorded in March, which was already a weak month as a result of the Chilean earthquake.
  

International Cargo Demand
Air freight was also impacted by the ash crisis, although less dramatically than passenger traffic. The global purchasing managers’ index rose to its second highest level ever in April, indicating that the fundamentals of the air freight business were not impacted by the crisis. We are, however, nearing the end of the inventory cycle and would expect freight growth to slow down over the rest of the year.

• European carriers showed the weakest growth at 8.3%, down from the 11.5% growth recorded in March. Poor economic performance prior to the ash crisis had seen European airlines lagging behind the rebound experienced by other regions.
• North American carriers recorded a 23.8% increase. While impressive, this was still below the 29.0% recorded in March.
• Asia-Pacific carriers, which make up 46% of international cargo operations, recorded growth of 33.2%, slightly below the 35.4% recorded during March.
• Middle Eastern carriers saw their growth rate slow to 25.9% from the 35.5% recorded in March.
• Latin American carriers saw the largest increase in cargo demand for the second straight month with a 63.0% increase - an improvement on the 47.9% recorded in March.
• African carriers also showed an improvement, from 51.4% in March to 54.6% in April.

“The ash crisis was a shock. While there is always a danger of the consequences of renewed volcanic eruptions, the impact on passenger confidence should be limited. Unfortunately, we are trading ash for two additional uncertainties - strikes and a growing currency crisis - both of which are also focused on Europe,” said Bisignani.

“The labor unrest plaguing Europe this year is unbelievable. It’s a tough competitive world. Airlines need to reduce costs to be competitive. Labor must realize that their pay checks are supported by the performance of the company. The middle of a very fragile recovery is not the time to be asking for salary increases or improved conditions. This mentality is divorced from reality,” said Bisignani.

Source: IATA

Ashes don't pay: Court rejects passenger compensation claim in sweden

Ryanair today (26thMay) welcomed the decision of the Svea Court of Appeal in Stockholm which declared that passengers are not entitled to compensation in cases where extraordinary circumstances apply, as the court overturned the decision of the District Court of Nykoping which awarded two passengers compensation (even though it accepted extraordinary circumstances were present) in breach of the provisions of EU261. 

Ryanair again called on the ARN and RAD&RON to properly apply the EU261 regulations and stop misleading Swedish passengers on compensation claims. Ryanair called for an end to its blacklisting for not paying compensation when EU261 confirms that passengers are not entitled to any such payments in extraordinary circumstances. Ryanair’s Stephen McNamara said:   “This decision of the Svea Court of Appeal reinforces the provisions of the EU261 which provides that no compensation is due to passengers in cases governed by extraordinary circumstances which are beyond an airlines’ control. We understand that cancelled flights can be frustrating. However, airlines must always take decisions which prioritise the safety of our passengers, crew and aircraft over convenience. We now call on the ARN and RAD&RON to adhere to properly apply the EU261 regulations and stop misleading passengers with incorrect advice about compensation payments which passengers are not entitled to in cases of extraordinary circumstances.” 

Source: Air Transport News

A-SMGCS enters operation in Hamburg, facilitating improved traffic control on the apron, and enhanced ground mouvements traffic efficiency and safety

The ground situation monitoring system of the future has a name: A-SMGCS. And at Hamburg Airport, the future has already begun. The innovative “Advanced Surface Movement Guidance and Control System” has successfully entered operation at Hamburg Airport. The three project partners, DFS Deutsche Flugsicherung GmbH (German Air Traffic Services), DLR Deutsches Zentrum für Luft- und Raumfahrt e.V. (German Aerospace Center) and FHG Flughafen Hamburg GmbH (Hamburg Airport) presented their joint project, unique in Europe, at a press conference at Hamburg Airport. 

Michael Eggenschwiler, CEO of Hamburg Airport: “We are really delighted that our cooperation with German Air Traffic Services and the German Aerospace Center, which began in 2008, is bearing fruit today. Hamburg Airport is one of the first airports in Europe where the visionary A-SMGCS ground radar is in operation. The simultaneous installation of a test environment linked with operative systems is unique in Europe. A-SMGCS supports the work of apron controllers with optimised visual representation of the situation, contributes to increased security in ground traffic control and facilitates more efficient traffic management. This not only saves costs, it also benefits the environment. A-SMGCS will enable us to reduce airside emissions by a total of 10 percent.” The head of DFS, Dieter Kaden, praised both the new system itself and the strong, close cooperation between the airport, research & development, and air traffic control. “Only by working together can we master the challenge of making sure that air travel remains not only the safest but also the most punctual means of transport, even with future increases in traffic volume.” Prof. Dr Joachim Szodruch, the DLR board member responsible for aviation research, emphasised that “this new ground traffic management system and the associated test environment mean that we have created something that is to date unique in Europe: the possibility of optimising ground traffic movements, to organise processes in a safer way, and to decisively reduce the burden of apron controllers. This exemplary test environment is currently being utilised within the framework of the “Efficient Airport 2030” flagship project, thereby having a definitive influence on further research work within the field of Total Airport Management.” 

Source: Air Transport News

Aviation Organizations Launch Safety Information Exchange

Montreal – The International Air Transport Association (IATA), along with three governmental aviation safety organizations, took the first step to creating a global information exchange to improve aviation safety.

IATA, together with the International Civil Aviation Organization (ICAO), the US Federal Aviation Administration (FAA), and the Commission of the European Union (EU), has signed a Declaration of Intent to exchange safety data. The signing took place during the ICAO High-Level Safety Conference in Montreal.

“Today’s milestone agreement marks the first time the global aviation community has come together to work on a global safety information exchange. Data must drive our actions so that we can focus our joint efforts on reducing the greatest risks,” said Giovanni Bisignani, IATA’s Director General and CEO.

“Working together with governments using global standards, safety has improved tremendously. In 1945, there were 9 million passengers and 247 fatalities. In 2009, 2.3 billion people flew with 685 fatalities. Every fatality is a human tragedy and reminds us that we must do better. Today’s agreement is one more important step to make a safe industry even safer,” said Bisignani.

Audit data will be a key element in the project. IATA, ICAO, the FAA and the EU conduct audit programs that collect complementary safety information. “We must understand safety trends, not just from the handful of accidents each year, but by bringing together and analyzing data from millions of safe flights. With this we can take more effective action to reduce risks and improve safety performance,” said Bisignani.

“There is no competition when it comes to safety. Cooperation is the way forward. We have a common goal of zero accidents and zero fatalities. The safety data from audits and oversight programs contains important parts of a whole picture. Agreeing to put this data together is a major step forward,” said Bisignani.

The four organizations will now start work on a way to standardize safety audit information and ensure compliance with local privacy laws and policies. This is targeted to be completed within 12 to 18 months.

The 2009 global accident rate, measured in hull losses per million flights of Western-built jet aircraft, was 0.71. This is a significant improvement of the 0.81 rate recorded in 2008. Compared to 10 years ago, the accident rate has been cut 36% from the 1.11 rate recorded in 2000.

Source: IATA.org

January Demand Shows Further Improvement - Industry to Remain in the Red For 2010 -

Geneva - The International Air Transport Association (IATA) anounced last week that January 2010 demand for international scheduled air traffic showed continuing improvement. Compared to the previous year, January passenger demand was up 6.4%. Against this improving demand, a 1.2% increase in passenger capacity in January pushed load factors to 75.9% (up from the 72.2% recorded for January 2009). 

International cargo demand showed a 28.3% improvement with only a 3.7% increase in capacity. This pushed the cargo load factor to 49.6% which is a significant change from the 40.1% recorded in January 2009.

The large increases in year-on-year comparisons reflect a steady improvement from the precipitous fall in demand that characterized the early part of 2009 rather than a dramatic improvement in January. Compared to December 2009, and adjusting for seasonal variations, passenger demand grew by 0.5% while air freight volumes increased by 3.0%.

“Airlines have lost 2-3 years of growth. Demand is moving in the right direction. The 3.0% increase in freight volumes from December to January is particularly encouraging. We can start to see the future with some cautious optimism, but better volumes do not necessarily mean better profits. Passenger yields are still 15% below peak. And we expect 2010 losses to be US$5.6 billion,” said Giovanni Bisignani, IATA’s Director General and CEO.

There are large geographical differences in the improvements. The strongest upturns have been seen in markets where economic recovery from the recession has been strongest—Asia, Latin America and the Middle East.

International Passenger Demand
Compared to the low point in the cycle (February 2009) international passenger traffic is up 8.6%. The market has not yet recovered from the losses of 2008 and early 2009. Demand must improve by a further 2% to return to the peak levels of early 2008.

• Asia-Pacific carriers experienced a 6.5% increase in demand compared to the previous year. Of the improvement in demand seen since the early 2009 low point, 31% has been realized by carriers in the region which is leading the global economic recovery.
• Carriers in North America and Europe saw demand increase by 2.1% and 3.1%, respectively. Although both regions have gained 6% from the early 2009 lows, they remain 4-6% below the early 2008 peak levels. This reflects the jobless recovery from the recession in which consumers are focused on paying down debt.
• Middle Eastern carriers grew throughout the recession. Growth accelerated to 23.6% in January.
• Latin American carriers saw demand increase by 11% in January on the back of a strong regional economy.
• African carriers recorded a 6.3% improvement in January, assisted by robust regional economic activity.

International Cargo Demand
Compared to the low point in the cycle (December 2008 - January 2009), international freight traffic has regained about 28%. This is still 3-4% below the early 2008 peak level.

• The sharp improvement in air freight, which accelerated to 3.0% in January compared to December, is being driven by businesses re-stocking depleted inventories. This part of the inventory cycle will not last much longer. Durable air freight growth will require consumers to start buying again and businesses to return to making investments. While these improvements are beginning to be seen in Asia, Europe and North America lag behind.
• With an 11.6% improvement in January compared to the previous year, carriers in Europe stand out for their sluggish demand recovery. Freight volumes are only 7% above the December 2008 low and 15% below the cycle peak.

“We are starting to see some encouraging signs in demand, albeit with large differences among the regions. Unfortunately, the constraints of the archaic bilateral system limit airlines from being able to respond as normal businesses to market opportunities. Political borders limit opportunities for consolidation. And we still require governments to negotiate open markets,” said Bisignani.

Under the auspices of IATA’s Agenda for Freedom initiative, in November 2009, seven governments (Chile, Malaysia, Panama, Singapore, Switzerland, the United Arab Emirates, and the United States) and the European Commissions signed a multilateral statement of policy principles focused on liberalization of the air transport industry. Premised on maintaining a level playing field, the policy principles support liberalization of ownership, market access and pricing. Its latest impact can be seen in the recent signing of an open skies bilateral agreement between Panama and Colombia.

“With each open skies bilateral, we take a step in the right direction. Recovering from the years of lost growth as a result of this crisis is a long and hard journey. Governments should not make it any more difficult by maintaining policies that restrict airlines ability to do business,” said Bisignani.

Source: IATA

EUROCONTROL and IATA en-route for a collaborative approach to ATM Safety and Navigation

08/03/2010

EUROCONTROL and IATA are combining forces in the field of ATM Safety and Navigation. Close partnership between stakeholders is essential in these two areas and will contribute to reaching Single European Sky objectives of safety, flight efficiency and reduced CO2 emissions. 

In the field of safety, the partnership will concentrate on Voluntary ATM Incident Reporting. The core part of the work will relate to data collection, analysis and identification of main concerns and experts will ensure follow up with the proper solutions. The two Organisations will make better use of safety data available on the European level, sharing databases, data related to the aircraft equipment as well as networks and projects. “The partnership between IATA and EUROCONTROL is part of a proactive approach to safety. It will allow the two Organisations to react quicker, better and together on a number of safety issues,” said the chairman of the EUROCONTROL Safety Team, Erik Merckx. Navigation is the second area covered by the partnership. Performance Based Navigation (PBN) is key to making better use of en-route and terminal airspace. 

 

The joint efforts of IATA and EUROCONTROL will speed up the PBN programme and ensure that the right priorities are set. Through the precision obtained, more direct routes and continuous descent approach (CDA) will be designed, increasing as a result flight efficiency, reduction of fuel consumption, CO2 emissions and safety of flight operations. “The Single European Sky creates a major opportunity for the ATM industry to work much closer together than today, resulting in better targeting, synergies and major savings.

 

 I am convinced that partnerships between various stakeholders are a must, at national as well as international levels,” said David McMillan, Director General of EUROCONTROL. “Safety is our industry’s number one priority. Improving environmental performance is a shared responsibility for all industry players. And efficiency is a matter of survival for airlines that, as an industry, have lost US$5 billion a year for a decade. Effective air traffic management plays a role in all three of these critical areas. Our enhanced partnership with Eurocontrol will help us to take advantage of the opportunities created by an effective Single European Sky to make flying safer, greener and more efficient,” said Giovanni Bisignani, IATA’s Director General and CEO. 

 

Source: Air Transport News

FAA confirms examination of Southwest maintenance

Maintenance at Southwest Airlines is again under investigation by the US FAA.

The agency has confirmed an investigation is underway, but explains it cannot comment while the examination continues. A report in the Dallas Morning News indicates the probe is focusing on fuselage repairs carried out at a repair station in the Seattle area.

Southwest has experienced two highly publicised maintenance investigations during the last two years. The first instance in 2008 occurred after the discovery that Southwest operated 46 Boeing 737s on 59,761 flights after the carrier missed fuselage inspections required under an airworthiness directive issued in September 2004.

In 2009 unapproved parts were discovered on 82 of Southwest's 737s.