Latest News
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Bloomberg News reports that Airbus is closing in on a widebody order by a Scandinavian airline
Bloomberg reported that Airbus was 'closing in' on a large-scale order from Scandinavian Airlines, SAS AB. The order includes a mixture of Airbus A330neos and more advanced A350s, with 15 to 20 aircraft being considered, according to the report. The airline is expected to 'finalise' the deal within the next few weeks, and it will receive the aircraft in the first decade of the new century. According to the report, "people familiar with the matter" were quoted. Airbus and 'SAS AB' did not respond immediately to a comment request. The report could not be verified. Reports said that the carrier was also in talks?with Boeing regarding a large order for widebody jets, but chose to go with the European planemaker instead to maintain "fleet uniformity" and keep costs down. SAS AB, one of the first airlines to reduce flights in March due to the "sharp" and "sudden" increase in fuel prices triggered by U.S. - Israel's war against Iran.
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Brazilian airline Azul is planning further frequency reductions as the fuel shock bites
Brazilian airline Azul will increase 'capacity reductions' amid increased jet fuel prices related to the Iran War. The carrier will also continue reducing flying in order to save money and protect cash flow, according to CEO John Rodgerson. Rodgerson said that the largest companies in the industry were cutting capacity to better match demand and higher costs, and Azul was following suit. The company would go beyond the earlier cuts, as the conflict continues. "When we first made our?cuts, I thought that the war would have been over by now," said he in an interview Friday in preparation for a global airline chiefs meeting in Rio de Janeiro. "But the problem is continuing. We'll continue to cut frequencies opportunistically, to make sure that we only fly things that are sensible." Rodgerson stated that the majority of Azul's reductions in the second quarter were on international routes. Further adjustments would focus on domestic frequencies, rather than pulling out entire cities. "Do you fly from Curitiba to Rio six times per day?" With these fuel prices it might be better to fly four times a day. He added that the airline prioritized its hubs at Campinas and Belo Horizonte. "We haven't yet pulled cities, but it's always an option." You must first reduce frequencies and?utilization. You don't want an aircraft operating 13 or 14 hours per day at a time when fuel costs double. Rodgerson stated that Azul's strong balance sheet following a major restructuring of debt put it in a better position to adapt than its peers. In February, it exited Chapter 11 proceedings with the backing of United Airlines and American Airlines. Azul expects that pricing will remain under pressure in the second quarter, which is traditionally weaker, but he believes there's room for higher fares as demand increases into the third and forth quarters. (Reporting and editing by Andrew Heavens; Additional reporting and editing by Luciana magalhaes).
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Rio Summit: Airline executives grapple with fuel crisis, fare tests
The Iran 'war' is driving up fuel prices and disrupting?airspace?, while carriers are trying to cushion the impact with higher fares. The International Air Transport Association's (IATA) annual meeting, which takes place from June 6-8, coincides with the fuel crisis and another issue that airlines are unable to quickly solve: a lack of new aircraft. Boeing and Airbus delays forced many carriers into keeping older, less fuel efficient jets in service longer. This increased maintenance and fuel costs at a time when oil prices were rising. IATA, the trade association for more than 370 carriers that account for 85% of the global air traffic, predicted a record-breaking $41 billion in net profit for the industry this year before the war. Analysts and industry executives expect the outlook to be revised downward at the meeting. The 'Deloitte Survey of 21 Global Airlines CEOs, published this week, found that fuel prices volatility and inflation are the two biggest risks facing the industry. This has led to the carriers focusing more on financial health and cost control. The survey stated that "together, they have turned what was meant to be a?record year? into a battle for margin." Fuel and labor are the two main costs of an airline. Fuel increases are difficult to absorb when tickets are purchased weeks or even months in advance. The longer routes are also more fuel-intensive and less efficient for aircraft and crews. It's a question of how much fuel cost can be passed onto travelers before the increased fares begin to dampen demand. FARE POWER Travel demand is holding up in several large markets, particularly among corporate and premium travelers. This gives carriers more room to increase fares. According to Raymond James, the domestic published fares in the United States as of 25 May showed a robust demand for air travel and a successful pass-through?of higher fuel prices. One-week out fares were up 35.8% on an annual basis, and four-week out fares were up 39.4%. Alexandre Lefevre is Air Canada's vice president for network planning and global sale. He said, "The willingness to pay premium prices has been very strong in recent years, whether there was a crisis or not." There are still limits. The higher fares may help airlines recover some of their fuel costs, but at the same time they risk driving out those with smaller budgets. This risk is higher in regions with weak currencies, where consumer spending is under stress or where airlines lack the pricing power that large network carriers have. Some carriers are still planning growth. Singapore Airlines has been reported to be in discussions for at least fifty large wide-body planes. Qantas may also order 20 Airbus and Boeing wide-body planes. (Reporting from Rajesh Kumar Singh in Rio de Janeiro and Allison Lampert; editing by David Gaffen).
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Texas grid warns of risks when data centers and crypto sites fail voltage testing
According to the Texas grid operator, several large data centers and crypto-facilities planning to connect to the Texas power grid ahead of summer peak demand failed to pass 'key reliability tests. This increases the risk of power failures just as electricity usage reaches its seasonal high. Data centers are causing power grids to be stressed across the United States. Data centers, unlike traditional industrial customers who tend to draw electricity steadily, are designed to disconnect from the grid as soon as there is a problem to protect equipment and maintain services. This makes them a potentially unstable and unpredictable force on grids that are already under pressure due to rising demand. The Electric Reliability Council of Texas, in a report dated 21 May, said that four groups of large electricity consumers, including data centers, were abruptly disconnected during a test of their ability to handle voltage disturbances. It can cause wider outages when large customers suddenly reduce their electricity use. ERCOT, which manages electricity in most of Texas said that it had reviewed approximately 20 gigawatts from large customers who wanted to connect to its system. This included eight projects, totaling about 3.9 gigawatts, which were aiming to begin before July 1. The company said that it had identified four large groups of power users who could trigger a demand trip of more than 5,000 Megawatts under certain fault conditions. These abrupt drops in demand were equal to the electricity consumed by a large city like Boston. ERCOT is currently reviewing test failures to develop plans for protecting the grid against?disruptions. ERCOT has made voltage ride-through failures a priority, as they are a growing risk with more data centers and crypto miners connected to the grid. ERCOT has recorded at least 26 instances since 2023 where data centers and crypto mining facilities were abruptly disconnected from the grid due to their inability to handle disruptions in electricity flow. A failed transformer in a west Texas substation caused 400 crypto-miners, oil and gas production and data centers to be unplugged without warning. According to ERCOT, the mass disconnection caused a surplus of nearly 1,700 megawatts, or 5% of total grid demand. It also forced 112 Megawatts to be shut down. ERCOT has tightened interconnection requirements and performance standards, and new rules have been introduced to ensure that such facilities are able to ride through voltage and frequencies disturbances without being disconnected. (Tim McLaughlin in Boston; Editing by Sanjeev Miglani)
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Finland suspects four persons in breach of subsea cables
The Finnish police, who are investigating the damage done to two subsea cables in the Baltic Sea last year, said that four people were suspected of a crime. Prosecutors will decide whether or not charges should be brought. Finland has seized a cargo ship, Fitburg, on December 31, 'while it was en route to Israel from Russia. They suspected that the cables from Helsinki to Estonia across the Gulf of Finland had been damaged. This is one of many incidents of this nature in recent years. The police?on Saturday said that they had investigated suspected aggravated crimes, attempted aggravated crimes, and aggravated interferences with telecommunications. They were referring the case to prosecutors in order to determine if any charges should be filed. The police said in a press release that the investigation had concluded with four suspects. Three of them remain under a travel restriction. After a series of power outages, telecommunications failures, and gas pipeline disruptions since Russia invaded Ukraine in 2022, the Baltic Sea region has been on high alert. NATO has increased its military presence by adding aircraft, frigates, and naval drones. (Reporting and editing by Terje Solsvik, Essi Lehto)
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Norway opposes tariffs and rejects US claims about forced labour
Norway's foreign minister has rejected a U.S. assessment that the Nordic country?failed? to prevent forced labor, adding?that?the allegation?was unfounded?and shouldn?t be used?by President Donald Trump?to justify new tariffs. The Trump administration proposed Tuesday tariffs of up to 12.5% on imported goods from 60 countries including Norway after concluding that they failed to curb the?trade in products made with forced labor, an assertion that many U.S. trading partners rejected. In a statement issued late on Thursday, Norwegian Foreign Minister Espen Barth Eide stated that "we strongly disagree" with the U.S. authorities' assessment of Norway not doing enough to stop forced labour. The Transparency Act was the first legislation in the world to prevent forced labour from being used to supply chains. Barth Eide said that he had told the U.S. authorities about this. Experts, business groups, and some human right groups say that Trump's threat to slap new tariffs on trading partners will not do much to combat?modern slave trade -- and may even make matters worse. (Reporting and editing by Terje Solsvik, Jagoda Darlandak)
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Brokers bet on winners of various sectors as the World Cup soccer tournament kicks off
Analysts predict that the 2026 FIFA World Cup in host countries will bring billions of dollars to their economies. This will be driven by an unprecedented surge in consumption, which will boost sectors as diverse as retail, athletic wear and tourism. The tournament is set to be held from?June 11, to July 19, and will be the biggest soccer event in history. It could drive consumer spending during a period when broader demand is fragile. According to FIFA's analysis of the socioeconomic impact, which was conducted in conjunction with the World Trade Organization (WTO), the first three-nation World Cup (WC), which includes the United States, Canada, and Mexico, is expected to bolster the global GDP by approximately $41 billion. Here are the stocks and sectors that brokerages believe will benefit from this once every four years event: HOTEL OPERATORS B. Riley estimates that a total 13.1 million World Cup visitors, including both ticketed and unticketed attendees generated 21.3 million hotel room nights across all online travel platforms. Analysts say that U.S. hotel chains Marriott, Hilton, and Hyatt, as well as the online travel platforms Airbnb and Booking Holdings, as well as Expedia, are likely to benefit from this event. Marriott expects World Cup momentum to continue into the third quarter. Airbnb predicts that hosts in New York, New Jersey and Boston will earn the most money during the World Cup. Airline Tickets Goldman Sachs thinks WC could have a?net positive' effect on U.S. Airlines. Goldman stated that "June tends to be a lower season for inbound leisure travel and corporate travel, while a significant portion of the peak outbound travel season occurs after the WC has ended." The war in Iran has caused a sharp increase in the price of jet fuel, forcing U.S. airlines to raise fares, which is causing budget-conscious Americans delay or cancel their summer vacations. BEER STOCKS Jefferies estimates that more than 1 billion pints will be consumed worldwide during the holiday season. This represents a 0.3% increase in?volumes for the industry. Markets such as the U.S.A., Mexico and Brazil are expected to improve. Analysts at Jefferies said that after five years of volatile beer prices, the market should improve in 2026. The timing of the tournament is also a plus. Roughly 75% of matches will be played in the U.S. while 84% of the matches involving participating countries are in the beer-drinking-friendly time zones, the analysts added. Bernstein, Goldman and Jefferies believe that Corona beer maker Anheuser-Busch InBev will be the main beneficiary. Anheuser-Busch InBev is the official beer sponsor of the WC. Heineken, world's second largest brewer, will also benefit from the exposure it has in Latin America and Europe. US RETAIL AND 'SPORTSWEAR Goldman predicts that a surge of merchandise demand by fans will push sales up at Dick's Sporting Goods, and Academy Sports. Analysts said that sportswear brands like Adidas, Puma, and Nike could benefit from increased brand exposure and marketing during the World Cup. Goldman pointed out that Adidas, the official sponsor of match balls, has sponsorship deals with multiple teams. This allows it to gain global exposure at the event. FOOD, RESTAURANTS, AND DELIVERY Citi said that traditional?grocers like Albertsons and Kroger as well as larger retailers such Walmart and Target are likely to benefit during the World Cup from increased household spending. Tourism and group viewings are expected to support a rise in restaurant demand. This could lift McDonald's Pizzas, Domino's Pizzas, Wingstops, and Chipotles, as well as food distributors like Performance Food Group, US Foods, and Sysco. MEDIA AND DIGITAL ?PLATFORMS Deutsche Bank analysts stated that they expect the men's World Cup in 2026 to generate the largest US advertising revenues ever. Morgan Stanley estimated that the tournament would generate between $300 and $400 million in advertising revenue to Fox, the broadcaster of the English-language rights. Deutsche Bank pointed out that Comcast's?Telemundo which holds the Spanish-language broadcast rights is another potential beneficiary. Citi stated that internet companies like?Alphabet?s YouTube and Meta Platforms?s Instagram could benefit from an increase in user activity. BETTING OPERATORS The World Cup is expected to increase overall betting volumes, and Deutsche Bank expects Flutter Entertainment to outperform DraftKings. Macquarie predicted that global wagers would exceed $50 billion, or nearly $0.5 billion each match. This is compared to the 35 billion dollars for the previous tournament in 2022.
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Argentina recommends awarding the dredging contract to Jan de Nul, and local partners, despite US concerns
The Economy Ministry announced that the Argentine government had recommended awarding an important?dredging contract in Argentina to Belgian dredging firm Jan De Nul, and its local partner Servimagnus. Rep. Brian Mast, chairman of the U.S. House Foreign Affairs Committee, warned in May about the "malign influence" of China in the bid to win the major contract for Argentina. Jan De Nul, and its local partner Servimagnus, denied any Chinese ties. * The recommendation is for the concession to dredge the Parana River and maintain it, as this river carries 80%?of?the trade of the country. In a late-Thursday statement, the ministry recommended that DEME, a Belgian competitor company, be rejected. *?Jan de Nul - Servimagnus? scored 66.20 in the technical evaluation stage, compared to 42.14 points for DEME. The statement said that both firms had submitted identical tariffs and received the maximum score for the economic component. DTA Engenharia, a Brazilian company, was declared inadmissible after failing to provide the required bid-maintenance guarantees. Before a final?award, a seven-day period has been opened for formal 'challenges' to the recommendation. The ministry added: * "The awarding of the contract will end the process and bring an end to the deadlock in the construction work on the waterway." * The waterway is a 3,400-kilometer natural river transport route that runs along the Parana River and the Paraguay River. It's essential for importing soybeans to Argentina, which are used in the production of oil, meal and other products.
Germany's leading tidy energy source set to slow growth rate in 2024: Maguire
Wind generation in Germany is set to grow by just 1% in 2024, the slowest growth pace in 3 years, as low wind speeds together with a downturn in internet generation capacity construction blunt the development of the country's top source of electrical power.
Sluggish growth in the country's main source of power might require energies to increase generation from nonrenewable fuel sources in late 2024, particularly if commercial power utilize broadens simply as need for home and industrial heating climbs over winter.
Higher fossil fuel-fired generation by Europe's biggest economy may in turn reverse the pattern of power sector pollution in the country, which up until now in 2024 has actually decreased to its least expensive levels in more than a decade.
WIND'S PLATEAU
Wind farms surpassed coal-fired power plants as the main source of German electrical power production for the very first time in 2023, and wind stays the primary source of power for the country so far in 2024.
Wind power accounted for around 28% of Germany's. utility-scale electricity generation through the very first seven. months of 2024, according to information from energy think tank Coal.
That share is up from around 27% for 2023 as an entire, and. surpassed coal's 19.5% and solar's 17.5% shares up until now this year.
Overall electrical energy generation from wind farms dropped to its. lowest level in over a year in July due to low wind speeds,. which downturn every summer due to fairly still conditions at. turbine level during the hottest season.
Wind generation levels are anticipated to rebound from. September onwards as weather conditions alter and wind speeds. get, which need to permit wind farms to further broaden their. share of general electrical energy generation later on in 2024.
Nevertheless, forecasts by LSEG suggest total wind generation. from September onwards might fall listed below prior-year overalls, and. lead to a 12% decrease in net generation during the final. quarter from the same months in 2023.
ALTERING FORECASTS
LSEG's most current wind generation forecasts reveal that Germany's. wind power will be 13,438 megawatt hours (MWh) in September,. which would mark a 4,200 MWh or 46% gain over the generation. total of September 2023.
Nevertheless, LSEG's forecasts for generation over the remaining. months of the year appearance set to regularly fall listed below the. year-before totals, by approximately nearly 12% for the final. quarter of the year.
If understood, those projections would equate to a full-year. generation overall of 196,189 MWh for 2024, which is up just 0.9%. from 2023's full-year tally of 194,432 MWh.
The less than 1% growth in wind generation compares to a. 12.4% annual development rate in 2023 and a 11.2% growth in 2022,. and so might be considered as a dissatisfaction by clean energy. advocates.
And LSEG projections are bound to alter as wind speeds and. local weather conditions progress.
However significant modifications to Germany's wind generation. facilities so far in 2024 also indicate only modest development. possible for the year as a whole.
CAPACITY DROPS & & STREAMS Over the very first half of 2024, the German wind sector had. practically 900 new turbines with a cumulative generation capability of. 5,021 megawatts (MW) approved for connection to the nation's. grid, according to federal government data.
That capability figure was a record, and suggests federal. authorities stay committed to keeping tidy power growth.
However, the number of operational turbines in Germany. really diminished over the opening half of 2024, as 252 brand-new. turbines were connected to the grid while 282 turbines were. decommissioned.
The brand-new turbines out-muscle their shut down peers in terms. of capability, bringing 1,310 MW online to replace the 380 MW of. shuttered capability.
Yet the actual generation potential of this newly. reconfigured fleet stays unclear and at the mercy of wind. speeds across essential farms.
Presently, LSEG's projections call for generation to slightly. go beyond long-term generation levels over the near term, but then. drift consistently below average output rates later in the year. due to slower-than-normal wind speeds.
EMISSIONS IMPACT
If those wind generation forecasts prove considerably. precise, then total German wind output might post just modest. year-on-year development in 2024, regardless of the connection of newer and. bigger turbines.
To offset any power supply shortage that might emerge,. German power manufacturers might be forced to boost output from coal. and gas-fired plants, which have played just small roles in the. generation mix so far however remain essential to Germany's general. energy system.
Through the very first 7 months of 2024, German fossil-fuel. fired generation contracted by 14.5% from the exact same months in. 2023 and was the most affordable for that period on record, Coal data. shows. German power sector emissions from fossil fuels dropped to a. record low of 85.3 million metric tons of carbon dioxide as a. outcome, from 105 million heaps throughout the very same duration in 2023.
However those emissions levels could increase steeply if power firms. are obliged to balance out any power shortfalls from wind farms with. greater coal and gas-fired output, which stay the main go-to. power sources whenever wind output stalls.
<< The opinions revealed here are those of the author, a. writer .>
(source: Reuters)