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Heatwave and low water levels on the Danube disrupt shipping
The Danube River in Hungary is experiencing unusually low water levels, affecting the shipping industry, agriculture and local ecosystems. This river is Europe's second longest river and a major transport route. Budapest's temperatures reached 35 degrees Celsius this week, as Europe blasted in a heatwave that has been linked to at least eight deaths in the region. Warsaw's Vistula River was at a record-low, while the Rhine river in Germany was unusually low. Attila Benedick, vice president of the Hungarian Shipping Association said that due to the low water level, cargo ships are forced to leave more than half their cargo behind and can only work at 30-40% of capacity. He said that shipping rates could increase up to 100% if a ship is not able to sail at full capacity. Attila zegi, deputy spokesperson for the Hungarian Directorate of Water Management said that such low water levels are not uncommon, but usually occur in August. Szegi stated that rain is expected to fall in the Danube catchment region next week. This should result in a slight increase in water levels, and a better shipping situation. HungaroMet, the Hungarian meteorological state institute, said that the rainfall in June this year was 17% less than the average. This makes it the driest month since 1901. Gyorgy Mattavovszki, who was paddling his kayak in a town called Szob north of Budapest, said that June is usually one of the wettest months of the year. It is beautiful because it is so clear and easy to paddle on ...,, but it's also worrying. (Reporting and writing by Krisztina Feyno, editing by Alex Richardson).
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KLM union: wage offer insufficient; strike continues
The CNV union announced on Friday that KLM's wage proposal this week did not meet the needs of the ground staff of the Dutch branch of Air France-KLM. A strike at Amsterdam Airport scheduled for July 9th will take place. This means that the consultations have not yet resumed and that the strike that was announced for next Wednesday will still continue. Souleiman Amallah said in a press release that CNV had informed KLM. KLM announced wage proposals for Wednesday, including a payment of 1,177 euros in 2025 as well as a structural increase of up to 2,5% by July 2026. This was after CNV (one of KLM's main unions) announced the strike on July 9. Next week, school holidays will begin in some parts of the Netherlands. This means that the eight-hour strike planned would occur at a busy time. "(KLM’s new proposals) don't offer enough points of departure to resume discussions. KLM makes a move, and claims to have listened to the workers. Amallah: "I fear KLM still hasn't quite grasped it." Air France-KLM announced plans to increase their stake in Scandinavian carrier SAS to 60%, which is the latest step to consolidate Europe's fragmented aviation sector. Carriers are seeking to improve their positions against competitors.
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France and Britain are hoping that a 'taxi-boat' plan for migrants will help slow the record Channel crossings
A dinghy was seen in the early morning hours of this week motoring along a large beach in northern France. It stopped every few hundred meters to pick up migrants heading for Britain. Four French police chased the migrants, but they failed to catch them before they reached the water's edge. The dinghy was soon chugging along the sea with around 70 people aboard, adding to the record number of migrants who have crossed the Channel in this year. Right-wing opponents of British Prime Minister Keir starmer have taken the data and reminded him that he had promised to "smash the trafficking groups". France and Britain are hoping to announce measures next week at their summit that will allow French police officers to intercept these 'taxi boat's - a brand new phenomenon – up to 300 meters (yards) away from the shore, rather than only when lives are in danger as they do now. The police, migrants and activists interviewed were skeptical that such a plan could work. "I don't think this will ever be done," said Julien Soir a representative of the police union in Lille, a city located in northern France. "Getting it running is impossible." He claimed that the police had already been stretched to cover 180 km (1112 miles) and lacked the training and equipment needed for seaborne missions. The police also worry about drowning in the event that they drop heavy equipment into the water. They may also be held personally liable if migrants are killed or injured while on an intervention. Angele Vettorello is a coordinator for the Utopia 56 charity, located in Calais. She said that despite increased French police patrolling the beaches, and even using drones sponsored by Britain, numbers are still increasing. She said that the proposed measures will only make an already dangerous crossing more dangerous - 73 migrants lost their lives last year while navigating one of the busiest shipping routes in the world. She said that if implemented, the plan would "lead even more deaths... more distress." Right-Wing RISE In polls, the influx of migrants helped Nigel Farage’s Reform UK to surpass Starmer’s Labour Party. Farage, who is a long-time immigration hardliner and right-wing populist, proposed that the Navy intercept migrant boats and bring them back to France. Lawyers claim that this would only be possible if France consented. This year, nearly 20,000 asylum seekers arrived in Britain by small boat. That's a 50% rise compared to 2024. The French and British authorities attribute the increase to unusually warm weather. Peter Walsh from Oxford University’s Migration Observatory said that maritime interception could stop more migrants, but it would not have any impact on the long-term trends driving the surge of migrants, such as multiple conflicts and Britain’s allure to English-speaking people. Britain wants to also negotiate a return agreement with France that it had before leaving the European Union. In a filthy camp of migrants near Dunkirk I spoke to several migrants unaware of this new proposal. They said that it would not stop them from crossing. Israrullah, a 26-year-old Afghan man, left Afghanistan in 2021 when the Taliban became angry about his family's involvement with the U.S. Army. He failed to cross the border three times. Twice he was stopped and once, his boat had a problem. Lodin yearned to work in a UK fulfillment warehouse. He would do anything to get there. He said, "We don't fear death." "I must reach my destination." Nisarahmad, an Afghani, was a migrant for almost his entire adult life. He left his native region of Nangarhar, four years prior, and had lived in the city ever since. He made two unsuccessful attempts to cross the border, both of which were foiled by the police. He said, "I will try until I succeed." I've been on many dangerous roads. "I will pass through this one as well." (Additional reporting from Mohammad Yunus Yawar, in Kabul, Marco Trujillo and Manuel Ausloos in Calais, Abdul Saboor in London, Gonzalo fuentes in Calais, Michael Holden in London, Richard Lough, Philippa Fletcher, and Philippa Lough)
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French air traffic controllers strike for second day disrupts flights
The strike of French air traffic controllers, now in its second day, caused further flight delays and cancelations at the beginning of Europe's busy travel season. The civil aviation agency DGAC has told airlines that 40% of flights will be cancelled at three of Paris' main airports this Friday due to the strike. Air traffic controllers claim the strike is caused by a lack of staff and outdated equipment. DGAC also said that up to half of the flights at France's airports in other regions, mainly in the south, had been affected. The French Transport Minister Philippe Tabarot deemed the strike as unacceptable. In an interview with CNews, he stated that the goal was to upset as many people possible. DGAC warns that even with cancellations, passengers may still experience delays and disruptions. Airlines for Europe (A4E), a lobby group, announced late Thursday that 1,500 flight cancellations had occurred during the two-day walkout, affecting 300,00 passengers and causing delays. (Reporting and editing by Makini brice)
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Alstom wins 2 billion euro deal from New York Metropolitan Transportation Authority
Alstom, a French train manufacturer, announced on Friday that it received a $2.45 billion order from the New York Metropolitan Transportation Authority for M-9A railcars to be supplied to the Long Island Rail Road (LIRR) and Metro-North Railroad. Alstom announced that the contract, which MTA announced in June, would be booked during the second quarter 2025/26 fiscal years. MTA announced last month that Alstom pilot railcars would be delivered by 2029, and will enter service on Long Island Rail Road as passenger cars in 2030. It added that all 316 railcars included in this order would be delivered by the year 2032. There are 160 cars for Long Island Rail Road, and 156 cars for Metro-North Railroad. MTA Chairperson and CEO Janno Lieber stated in June that this deal was a first step in the agency’s plan to buy nearly 2,000 railcars in its $10.9 billion capital program.
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Air France-KLM acquires majority stake in Scandinavian Airlines SAS
Air France-KLM announced on Friday that it intends to increase its stake in Scandinavian Airlines SAS from 19.9% to 60.5% by acquiring stakes currently held by Castlelake and Lind Invest, the top shareholders. Air France-KLM stated that the purchase is subject to regulatory approvals and should close in the second quarter of 2026. The company said that the value of the investment will be determined by closing based on SAS’s most recent financial performance including EBITDA, net debt and other metrics. The Scandinavian carrier welcomed the announcement and called it a "defining" moment that marked Air-France KLM’s commitment to strengthening SAS. Anko Van der Werff, SAS CEO, said: "It will not only bring stability but also deeper industrial integration as well as the full support of one of the leading airline groups in the world." Together, we'll be better positioned for greater value to customers, colleagues and the region. SAS has said that it will continue to invest in the fleet and network. Air France-KLM's CEO Ben Smith said in March that his company is looking to increase its stake in SAS as the airline was meeting all the required milestones. This included integration into SkyTeam, an alliance of airlines which Air France KLM also belongs to. Since summer 2024, the two carriers have had a successful commercial relationship. Air France-KLM said that a control of SAS would enable it to expand on the Scandinavian market, and create value for its shareholders. Smith said that "SAS has performed well following their successful restructuring and we're confident the airline will continue to grow as it is integrated deeper into the Air France-KLM Group." Executives are looking to consolidate the fragmented European airline industry in order to compete against U.S. and Middle Eastern competitors. SAS had 138 aircraft on service last year and transported more than 25 millions passengers, generating revenues in excess of 4.1 billion euro. The group will have the majority of the seats in the SAS board, while the Danish government will retain its 26,4% stake and its seats. Reporting by Dominique Patton and Bart Meijer; Editing and production by Margueritachoy and Lincoln Feast.
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Air France-KLM acquires majority stake in SAS
Air France-KLM announced on Friday that it intends to increase its stake of Scandinavian airline SAS from 19.9% to 60.5% by acquiring stakes currently held by Castlelake and Lind Invest, the top shareholders. It said that the purchase is subject to receiving the necessary regulatory approvals and should close in the second quarter of 2026. The company said that the value of the investment will be determined by closing, and will be based on SAS’s most recent financial performance including EBITDA, net debt, and other factors. Air France-KLM's CEO Ben Smith said in March that his company is looking to increase its stake in SAS as the airline was meeting all the required milestones. This included integration into SkyTeam, an alliance of airlines which Air France KLM also belongs. Since summer 2024, the two carriers have had a successful commercial relationship. Air France-KLM said that a control of SAS would enable it to expand on the Scandinavian market, and create value for its shareholders. Smith said that "SAS has performed well following their successful restructuring and we're confident the airline will continue to grow as it is integrated deeper into the Air France-KLM Group." Executives are looking to consolidate the fragmented European airline industry in order to compete against U.S. and Middle Eastern competitors. SAS had 138 aircraft on service last year and transported more than 25 millions passengers, generating revenues in excess of 4.1 billion euro. The group will have the majority of the seats in the SAS board, while the Danish government retains its 26,4% stake and its seat on the board. (Reporting and Editing by Marguerita Chy)
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Air shipments from China to the US are disrupted by the end of the tax-free loophole.
Trade groups and analysts reported that the volume of air cargo shipments from Asia has decreased by double-digits since early May when the U.S. canceled a tax exemption for low value packages coming from China. Data from the International Air Transport Association showed that air cargo demand from Asia into North America fell 10.7% in May, compared to the same month one year ago. This "shows the dampening effects of changing U.S. Trade Policies," said IATA Director-General Willie Walsh in a Monday report. Tax exemptions for shipments under $800, often sent via air to U.S. clients of low-cost online platforms like Shein and PDD Temu, are known as de minimis or "too small to matter". After a trade agreement between the U.S., China and China in mid-May, however, these shipments from China and Hong Kong are taxed as low as 30 percent. The two sides continue to negotiate trade. This week, the U.S. relaxed export restrictions to China on software, ethane, and aerospace, in advance of the U.S. reimposing a wide range of tariffs that will target multiple countries on July 9. Industry experts reported that the volume of low value e-commerce shipping from China to America in May was particularly sharply down. Air cargo consultancy Aevean estimates that such shipments decreased by 43% from the previous month in May, but increased to other major export markets, including Europe and South-East Asia. Marco Bloemen said that it is unclear whether the dramatic drop will continue. Businesses had expected the de minimis stop and the tariff rate has been lowered in the middle of the month. Will those ecommerce players return to the U.S., now that they pay 30% duty instead of zero duty? Bloemen stated. He said that companies turning to other markets because of the uncertainty surrounding U.S. Trade Policy is likely to have a negative impact on shipment volumes. "We expect that trend to continue. More e-commerce to Europe is expected to take place in June, as well as to other markets such Latin America." Air cargo consultancy Rotate stated that e-commerce platforms are focusing on alternative markets to replace the lost U.S. market, with significant growth in exports to Europe and Asia-Pacific. Shein and PDD didn't immediately respond to requests for comment. CARGO CUTBACKS As a result, the cargo business of airlines has seen a boost as low-value ecommerce from Asia is taking a larger share of air freight worldwide. Aevean data shows that in 2018, only 5% of the goods from China were shipped to the U.S. via air. Industry experts say that as demand for trans-Pacific freighter flights fell in May due to the decline of Asia-to-U.S. routes, airlines began moving them elsewhere. They said that some of this demand is now returning as companies are taking advantage of tariff pauses in the U.S.-a number of other countries. However, flight frequencies have been reduced. Cirrus Global advisors, an e-commerce consulting firm, said that some of the bigger players who were chartering 3 flights per week had reduced this to 2. Rotate data revealed that direct freighter capacity between China & the U.S. was 11% less in June compared to the previous month, erasing the growth of capacity in the last year. Dimerco Express, a freight forwarder specializing in Asia, estimated that its online bookings fell by 50% between May and June. In a recent report, the company said that scheduled freighter flights are still being cancelled. The de minimis regulation, which dates back to 1938, was criticized by American legislators as a loophole allowing Chinese products to avoid U.S. tariffs, and allowing illegal drugs and precursors used to create opioid fentanyl, to enter the U.S. without being screened.
The Indian Rupee-Trimmed Fed Rate Cut Bets Pull Forward Premiums Off One-Month Peak
The Indian rupee, and the dollar-rupee premiums fell from their one-month highs on Friday. A stronger-than-expected U.S. employment report reduced bets on Federal Reserve rate reductions. Traders were also watching a looming U.S. trade deadline.
The rupee fell to 85.50 near the start of trading after hitting a peak for one month on Thursday. It then pared losses and quoted at 85.33, little changed.
The rupee was helped by a drop in the dollar index after a previous rise. Asian currencies were mostly in choppy territory.
The implied yield on the dollar-rupee 1-year note fell by 5 basis points, to 2.02%. Traders noted that the near forward premiums may also be under downward pressure, as the central bank has not increased the amount of liquidity they intend to withdraw from banks.
Many market participants were surprised by this, as they had anticipated a higher quantum due to an increased surplus.
The U.S. employment data caused traders to almost wipe out bets on a Fed cut in July. Odds of a cut in September dropped to less than 75%, from nearly 94% prior to the data.
The market is waiting for tariff news, said a Mumbai-based trader. He was referring to a deadline of July 9 for countries to reach trade agreements with the U.S.
Bloomberg Television reported that the U.S. Treasury secretary Scott Bessent predicted a "flurry of" trade agreements to be announced before the deadline.
DBS stated in a report that it is possible to reduce the umbrella tariff on India from the current 10% to a baseline rate of 10% by taking cues and agreements with other countries.
As part of the "Liberation Day", reciprocal tariffs on April 2, U.S. president Donald Trump threatened to impose a duty of 26% on Indian goods. This was temporarily reduced to 10% in order to buy more time for negotiations. (Reporting and editing by Jaspreet K. Kalra)
(source: Reuters)