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Satellite company SES revenue increases by 80% due to the growth of airplane connectivity
SES, a Luxembourg-based satellite operator, reported its first-quarter results on Tuesday. The results were in line with expectations and the company reiterated their yearly guidance. They also noted a strong performance in aviation and European infrastructure. The quarter's revenue was 847 millions euros ($996million), up 80% on the year at constant currency. Over the last three months, 306 million euros worth of new contracts and renewals were signed by the company. In a press release, CEO Adel al-Saleh stated that the aviation business had been a strong performer. More than 40 aircraft were committed to?Japan Airlines. SES and Boeing have also achieved a significant milestone in achieving a factory-line-fit solution for the multiorbit system on all Boeing aircraft, said Al-Saleh. Al-Saleh stated that "during the quarter, the Aviation business benefited from the fact that nearly 600 aircraft are now equipped with the SES Multi-Orbit inflight connection system, providing fast, reliable internet access to millions passengers." SES and the European Union 'Agency for the Space Programme' extended the EGNOS -GEO-1 satellite based?service agreement until 2030. This will help maintain high precision navigation services for aviation, and other critical users across Europe. SES continues to work closely with the European Commission in order to validate the?project costs, technical requirements and delivery timelines. The company stated that it remained committed to the vision of the European Union for a space-based, sovereign connectivity infrastructure.
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The battle for Hormuz could spark the next Iran conflict: Bousso
The Strait of Hormuz is now the main battleground in the Iran conflict. The passage of a few oil and gas tanks in recent days with Tehran's apparent consent, suggests a tacit acceptance of Tehran's control. This signals a dangerous new phase of what is rapidly turning into a Hormuz War. The global energy market has been shook by the near-complete closing of the vital trade artery in Tehran since the joint Israeli and U.S. airstrikes took place on February 28. The sudden loss of 13% of the global oil supply, and a fifth of the liquefied gas flow, has caused a lot of concern, especially in Asia. According to Kpler data, it was reported that three VLCCs, each carrying around 2,000,000 barrels of Iraqi crude oil bound for Asia, passed through the last week without their tracking systems on. Some indications suggest the transits may have been coordinated with Tehran. Qatar has also sent its first two LNG cargoes after the start of the war. The LNG is being sold to Pakistan - the primary mediator in ?U.S.-Iran negotiations - under a government-to-government deal, according to sources familiar with the matter.They said Iran had approved the shipment to help build confidence with Qatar and Pakistan. Other vessels, such as 'oil tankers', may have also transited the Strait with their transponders turned off in recent weeks. Uncertain is whether these passages were sanctioned or if shipowners paid informal fees to ensure safe passage. Some, however, seemed to have travelled along shipping routes close to Iran's coast. This trickle of cargoes is a welcome relief for import-dependent countries, but it does not mean that the global energy market is returning to its normal state. These movements are a fraction of the 140 vessels which crossed the Hormuz every day before the conflict. This means that global markets are still tight and vulnerable. They also point to a new world order. Iran is now dictating not just whether Hormuz will be 'open or closed', but also who can use it. This arrangement could last beyond the current conflict while laying the foundations for the next. PATTERNS CHANGE Gulf exporters such as Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait and Bahrain - whose economies rely on an unhindered hydrocarbon flow - will be concerned by any system where Tehran decides which cargoes are sent to global markets, and at what price. The buyers will also be uneasy. Asian importers are already suffering from supply disruptions and will resist any framework which gives Tehran direct control over their economic and energy stability. The U.S. will not tolerate any settlement which gives Tehran such political and economic leverage. Donald Trump insisted on a return to the pre-war transit status for any ceasefire. Permitting Iran to control the Strait of Hormuz would undermine Washington's declared war goals and render any claims of victory hollow. Iran will not want to give up its control of the chokepoint and, by extension the global economy. Tehran's strongest weapon is its nuclear program. The U.S. Blockade has reportedly cost the?Iran around $3 billion to date. It will also need revenue from selective transit fees. STASIS DEVELOPS INTO CONFLICT The logic leads to a grim conclusion. This selective transit pattern, mediated by Iran, could become a norm that persists even if there is a ceasefire. Tehran may agree that the strait be reopened in exchange for concessions from the United States, but full and unconditional freedom of movement is unlikely. This?stasis is inherently unstable, and would institutionalise disruption instead of resolving the problem. As all sides test the limits to control the energy flow through the strait, a renewed confrontation between Tehran and Washington and possibly with Gulf states would become more likely. U.S. military aims have changed repeatedly in recent years. The 'conflict' has been largely centered around one defining question, who controls the Strait of Hormuz. This answer will shape the future Gulf. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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California county sues Meta over scam ads
Santa Clara County in California has filed a lawsuit against Meta 'Platforms', alleging that it profited off of Facebook and Instagram ads promoting frauds. This is in violation with California's laws on false advertising and unfair business practice. The lawsuit, filed on Monday at Santa Clara County Superior Court in California on behalf of California residents, accuses social media giant Facebook of tolerating fraudulent advertising worldwide. The lawsuit seeks civil damages, restitution and an order that Meta refrain from unfair business practices. The complaint cites leaked internal documents that were first reported last year and alleges that the company earned as much as $7 Billion in revenue annually from "high-risk scam ads" which clearly show signs of fraud. Meta, according to the county, did not crack down on fraudulent advertisers but tolerated it and even set up "guardrails" that would block any scam reduction efforts should they be too expensive. Meta has stated that it will defend itself. Andy Stone, Meta's spokesperson, said: "This claim is based on reporting that distorts or motives of ours and ignores all the actions we take every day to combat scams." "We fight aggressively against scams both on and off our platforms, because they are not good for us or those who rely on our service." All the more allegations Santa Clara claims that Meta contributed materially to the epidemic of fraud. It alleges that Meta allowed middlemen to sell ads protected from enforcement and targeted scam ads to users who clicked on similar bogus offers in the past. The county claimed that Meta's artificial intelligence systems, which are based on 'testing', often help unethical marketers create?ads to scam. Tony LoPresti, County Counsel for the county of San Diego, said: "The misconduct by Meta has reached a new level and must stop." As civil prosecutors, we in Silicon Valley have a duty to hold tech companies accountable. The county claims that Meta's assurances about its?antiscam efforts are a component of its alleged misconduct. The county claims that Meta misled the public by claiming that its anti-scam initiatives are top priority, and that it reviews ads rigorously for violations of platform policy. Santa Clara's filing says that Meta, based on information and belief can adjust the amount of scam ads allowed on its platforms to help it achieve its revenue goals or smooth out its earnings. Santa Clara County Counsel has partnered with three law firms to assist in the lawsuit against Meta. These are Renne Public Law Group, Bishop Partnoy, and Bernstein, Litowitz, Berger and Grossmann. LoPresti stated that the county would retain control of the decisions made in the case and that the firms would only be paid for winning the case.
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As power bills rise, the US governor of a state pushes for grid improvements
Wes Moore, governor of Maryland, urged reforms 'in PJM Interconnection - the largest U.S. energy market - including long term power contracts and a requirement for data centers to pay for costly infrastructure required to serve them. PJM Interconnection is a 13-state network that covers the Midwest and Mid-Atlantic region. It also contains the largest concentration of data centres in the world. The market's supply shortage has led to a sharp rise in household electricity bills and increased political scrutiny. Moore said in an address to the annual PJM Interconnection meeting that "for too long, affordability has been framed as a competing goal... that keeping the lights on for tomorrow means working families have to pay crushing costs today." "That's a false decision." PJM is evaluating major changes in order to rein in the data center?demand, and rebalance the regional electricity supply. For the past two years, the demand for server warehouses from Big Tech has exceeded the?additional new supplies in the grid. PJM’s capacity payments have risen by?approximately 1,000% in the past two years. These payments act as insurance to keep lights on during times of high demand. Moore was part of a group that successfully pushed for a temporary price cap?last summer. One of the central pillars of PJM’s proposed reforms is long-term, fixed-price contracts between suppliers and data centres. Moore and PJM members, including utilities and power plant builders, were in agreement on the general outline of reforms. However, they disagreed about the reasons for the volatility of the market. PJM stated that during a panel, the varying policies of states, such as clean energy goals, which have favored wind and solar power plants over coal and gas power plants, as well as government interventions in its markets, had scared away investors from making the long-term investments needed to build new electricity plants in this region. Moore and other governors - in PJM - have argued the grid operator is too slow at adding new 'generation, while approving expensive transmission 'projects which they claim have not benefited their states. PJM acknowledged the pressure created by rising electricity bills in the area and said that it was working to accelerate the addition of additional electricity supplies to grid. "This is a generational problem that no organization, state or sector can solve on its own. It will require coordination between policymakers, grid operators and utilities, as well as large energy consumers to evolve the 'grid' at the pace and scale that this moment demands," said PJM spokesman Jeff Shields. Moore will sign Tuesday the Utility RELIEF act of the state, which aims to provide financial relief to utility users through set-aside fund and other measures including capping utility executives' salaries.
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LOT Polish Airlines claims Boeing hid 737 MAX concerns in order to sell jets
Boeing hid'safety issues with its 737 MAX when LOT Polish Airlines chose the popular single aisle jet in 2016 to anchor its plans for recovery from a'significant financial crisis at the time. LOT's plans have been derailed by regulators who grounded MAX jets in 2019. This was after two accidents that exposed serious safety issues with a portion of the flight-control system. LOT filed a lawsuit against Boeing in 2021 to seek damages for the revenue losses that it suffered as a result of the MAX groundings. LOT's lawyer, Anthony Battista, stated during the opening remarks on Monday that the case was about Boeing's deception, lies, and financial harm. Boeing engineers grappled with the tendency of jetliners to 'pitch up their noses under certain conditions. It created the Maneuvering Characteristics Augmentation System, a software feature which automatically pushed the nose of the plane down when those conditions were met. MCAS IS AT THE CENTER OF THE DISPUTE Boeing misled the Federal Aviation Administration about the extent of MCAS, and the difficulties it had in flight tests, so that regulators wouldn't require extensive training for the pilots who already flew?the previous 737 model. The MAX jets would have cost customers more if they had to undergo extensive simulator training. At the time, Boeing's A320 family jets were fiercely competing for orders from around the globe. Maciej Wik, a former LOT executive who testified in court Monday, said that switching to the A320 would require "extensive", and costly simulator training. He said that the 737 MAX pilot training was the most important promise. Unaware of MCAS safety issues, LOT committed itself to leasing 15 aircraft over the next two years. MCAS was a key factor in two crashes in which 346 people were killed - Lion Air Flight 601 in October 2018 and Ethiopian Airlines flight 302 in March 2019 LION AIR & ETHIOPIAN TRAGEDIES Boeing executives assured the public that the MAX is safe in public statements made after the first crash. Boeing salespeople assured LOT in the same way that 'there were no safety issues with the jet. LOT, like other airlines, continued to fly MAX aircraft until regulators in various countries grounded them after the 2019 crash. This was when the role of MCAS in the crashes became apparent. After a thorough review of the MCAS design and after additional pilot training, 20 months later regulators were able to allow the plane to take off again. LOT and other airlines with 737 MAX aircraft on their fleets have resumed flights. Boeing's attorney? accused LOT on Monday of "crying fraud and foul out of one mouth" in courtroom, while continuing to fly MAX every single day. "Is this how a multimillion dollar fraud victim behaves?" According to previous statements, the U.S. planemaker has already paid billions to families of victims of two crashes. The company also settled out of court with airlines that were affected by the MAX grounding. The amount has not been made public. LOT is the only airline that has taken the company to court in a case related to the MAX crash. (Reporting from Seattle by Dan Catchpole; Editing by Matthew Lewis).
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S&P 500 closes at a higher level, AI fervor ends Iran impasse
S&P 500 ended slightly higher on 'Monday. AI optimism was fueling the upward momentum, even though the earnings-driven fervor that fueled the recent rally waned a bit 'in the final stretch of the reporting season. Semiconductors outperformed other sectors, as the artificial intelligence-related momentum remained unabated. Chipmakers also outperformed the wider market. Ross Mayfield is an investment strategy analyst with Baird, based in Louisville, Kentucky. "There's such a rush to invest in these names and so much excitement that it almost seems divorced from any kind of headline or announcement." The first-quarter reporting period is almost over. 440 companies from the S&P 500 have already reported. According to LSEG IBES, 83% of those companies have exceeded earnings expectations. Analysts estimated that the S&P 500's earnings would grow 28.6% in the first quarter of this year, compared to 14.4% as of April 1. This is nearly twice the estimated 14.4% growth for the first quarter as of April 1. The strength of the rally is largely a function, said Terry Sandven of U.S. Bank Wealth Management, Minneapolis, of the earnings growth. Market watchers are looking forward to next week when big-box retailers release their quarterly reports to see if consumer spending habits have changed since the soaring gas prices. As earnings season approaches its end, the focus shifts to macroeconomics. Donald Trump's dismissal of Iran's response in response to an American peace proposal caused crude prices to rise, and raised concerns that a long-term conflict would continue to drive up inflation, especially at the gas pump where consumers feel the pinch. Investors will be paying close attention this week to economic indicators, especially the Consumer Price Index from the Labor Department and the Retail Sales Report of the Commerce Department. They are looking for any signs that the current surge in energy costs is spreading into inflation or impacting consumer spending. This week's economic calendar also includes information on industrial production and producer prices. Trump will meet with his Chinese counterpart Xi Jinping later this week in Beijing to discuss a wide range of 'issues including the Iran War, trade, Taiwan, nuclear weapons and artificial intelligence. The preliminary data shows that the S&P 500 rose 14.62 points (or 0.20%) to 7,413.55 while the Nasdaq Composite rose 25.88 points (or 0.10%) to 26,272.96. The Dow Jones Industrial Average increased 100.46 points or 0.20% to 49,709.62. Cisco, a tech networking giant, and Applied Materials - a semiconductor equipment manufacturer - are among the companies that will report this week. Nvidia and Walmart will report at the end of the month. Intel's stock rose on Monday, adding to Friday's 14% gain following reports of an agreement for the production of chips with Apple. Qualcomm, meanwhile, jumped up to a new record high. Fox Corp. rose after exceeding revenue expectations for the third quarter. Some airline stocks fell as the rising price of oil threatened to squeeze profit margins.
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Modi's five-nation trip to include UAE begins amid Middle East crisis
The Indian 'Prime Minister Narendra Modi' will embark on a 'five-nation tour' taking in the United Arab Emirates and Europe from May 15-20. Modi will visit the UAE in May and then travel to the Netherlands and Sweden, Norway, and Italy. Modi's trip comes after he urged a number of measures including a reduction in travel and a decrease in imports, due to a rise in energy prices. Indian shares dropped on Monday and the rupee suffered its biggest drop in over a month, ending at its lowest closing level ever recorded following Modi’s call for austerity. India is a net energy importer. Higher oil prices are a serious risk to the country. They could widen its current account deficit, slow down growth, and increase inflation. The statement stated that Modi and the?UAE president?Mohammed bin Zayed Al Nahyan would exchange views on bilateral topics, in particular, energy cooperation. The statement stated that the European leg will be to 'deepen India's?trade and?investment relations with these countries, in order to follow up on the India-EU deal signed earlier this year. Reporting by Kanjyik in Barcelona, Editing by Alistair Bell
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US Senators urge Trump to stand strong' in discussions with Xi on shipbuilding
Bipartisan senators from the United States urged President Donald Trump on 'Monday to stick to the trade remedies proposed by his Administration to rebuild U.S. Shipbuilding and to not 'offer concessions to Chinese President Xi -Jinping. In a letter to President Trump, Democratic Senators Tammy Baldwin from Wisconsin and Mark Kelly from Arizona as well Republicans Tim Scott and Todd Young sent on Monday said that China's efforts to "decimate American Shipbuilding" over the past decades demanded that U.S. Trade measures be used to their maximum extent. Trump and Xi met in South Korea, in October. They agreed to pause tit for tat fees for a full year on the ships of each other. This will save an estimated $3.2 Billion annually in fees, for large Chinese vessels sailing into U.S. port. The U.S. fee will resume on Nov. 10, unless another pause has been agreed. After a U.S. investigation concluded that China’s dominance of the maritime, logistics, and shipbuilding industries was fueled by unfair practices. Trump and Xi will meet in China on May 14-15, for a'summit that will be dominated 'by?the Iran War which has further strained U.S. - Chinese ties. China is still the largest buyer of Iranian crude oil, despite the pressures from the Trump administration. The senators said in a letter first reported by that "the United States is at a pivotal point and cannot cede any additional ground to China." "We urge you stand firm during these negotiations, as we work to enact and advance the SHIPS for America Act in order to level playing fields." The White House did not immediately comment. The legislation was introduced last year in the U.S. Senate as well as in the House of Representatives. It would provide tax credits to investors in domestic shipyards. China's share in the $150 billion shipbuilding industry has risen to more than 50% by 2023, from 5% in 2000. This is largely due to government subsidies. Meanwhile, once dominant U.S. Shipbuilders are seeing their share drop below 1%. South Korea and Japan are the second largest shipbuilders. Last spring, the threat of U.S. charges led to a drop of 25% in Chinese shipyards' orders. However,?orders recovered later in the year, after the fees were delayed, wrote the senators. The senators stated that the sudden drop in Chinese shipping orders "shows that the global maritime industry will pay attention when your Administration takes action on this issue," calling the port charges "an urgent and critical step necessary to grow the U.S. Industrial base, expand the U.S. economy, and protect national security." (Reporting and editing by David Gregorio; Andrea Shalal)
Plan B: The new summer must-have item for the Iran war
Greg Abbott plans his summer vacation with a half-eye on the Iran War. He is planning to stay close to home, in Europe.
The 54-year old Australian, who lives in Britain, is planning to go on a cycling tour with his friends in Austria. He also plans to attend a music festival in Barcelona as well as a possible yoga retreat in France. But he is not looking to travel too far.
"We will almost certainly do short-haul Europe and almost certainly use trains because they are powered by electricity," said Abbott. The head of operations at a broadcasting firm added that cost was the main factor in deciding whether to take longer trips.
The prices are crazy right now.
In Europe and beyond, travelers are changing their plans due to the high cost of jet fuel, the tight supply, and Middle East conflicts that disrupt popular routes. Many people are booking later to allow for flexibility.
Susanne Dickhardt is the co-founder of Roadsurfer, which rents motorhomes and campervans.
She said that most people are choosing to adapt rather than cancel, and they do this by staying closer to home, driving, and selecting formats which keep costs low.
'PEOPLE GET NERVOUS'
The tourism and aviation sectors are the most vulnerable to war. Slow-moving talks indicate a prolonged standoff that will affect Gulf Airlines and popular hubs like Dubai while almost doubling jet fuel costs.
"You have a war going on - a major 'war,'" said Jean-Francois Rial CEO of Voyageurs du Monde. He added that his company had seen its business fall by around a quarter during March and then ease to a 10% drop in April.
People get nervous and don't want travel anymore.
Airlines warn that profits are under pressure. Air France-KLM's jet fuel bill is expected to increase by $2.4 billion in this year. Lufthansa, British Airways and IAG expect increases of around $2 billion.
Spirit, the U.S.'s low-cost carrier, went bankrupt this month. This stoked fears that others could follow. Wizz Air, airBaltic and other European budget carriers that have thin margins, limited fuel hedging and are vulnerable to Spirit face similar challenges.
He said that "summer is the most lucrative period for airlines and any disruption in volumes or costs will have an impact on earnings".
Last-Minute Bookings
Delay in making decisions is a common practice among travelers. Jerome Vayr of France's Vacances Bleues said that plans are often made a few days in advance and trips are shorter.
He said that last-minute bookings were up by 15%. "I believe people are waiting to find out what inflation will do, and whether they'll be able travel abroad."
Airlines and officials claim that demand is resilient overall, but the destinations are changing, with domestic travel on the rise.
Ricardo Fernandez Flores is the head of Spanish online travel company Destinia. He said that Spain, Greece, and Portugal are considered safer choices, with more holiday self-drives.
The data shows that travellers are shifting their destinations, not slowing down. Jay Wardle is the president of travel data group Sojern. He highlighted well-connected and stable Mediterranean markets.
Gabriel Escarrer is the CEO of Spain's largest hotel group Melia. He expects strong bookings to be made in "safe haven" areas.
He said that Spain and the Caribbean were far enough away from conflict zones, and close enough to important source markets, to provide a safe haven this summer.
WAITING FOR "THINGS" TO 'CLEAR-UP'
Rail is on the rise. Alvaro Ungurean of Trainpal reported that Eurostar ticket sales have increased by 25%, and nearly twice as many Britons are looking to travel in France by train this year.
Charlie Sultan, SAP's president of Concur Travel, stated that even business trips are changing, as rail bookings have increased.
Alice Woodhouse from Hong Kong plans to stay and offset the rising fares.
"Ticket prices are so high that I have been looking at how I can use my air miles." She said that Southeast Asia, or perhaps Taiwan, is the most likely.
Some are delaying booking. Diego Dutra from Portugal who runs a relocation company is not flying to visit family in Italy and instead may choose a road trip.
He said, "We will just postpone the meeting until things have settled down a little bit."
(source: Reuters)