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After a bumpy flight, Lufthansa catches up with European competitors
After another year of mixed results under Carsten Spohr, the German airline group has vowed that its ambitious turnaround plan will become a reality in 2026. The group's share price has fallen by around a third since Spohr became CEO in 2014. The stock rose in 2017 but was then hit by the Covid-19 Pandemic. It has since struggled to recover, becoming a laggard among European airlines. According to LSEG, if you had invested the day Spohr took over as CEO, you would have lost 18%, including dividends. That's 1.7% annually. LSEG data shows that although its shares have closed their gap with its rivals over the past few months, they still underperformed because Lufthansa's financial and operational performance lags behind its competitors. Lufthansa's shares have risen 26% over the past six months. This compares to British Airways owner IAG, which has seen its share price rise by 35% and Air France-KLM up 44.6%. LUFTHANSA TRYING to WIDEN ITS MARGINS Investors are concerned that the struggles of Lufthansa with its cost structure and labour force is affecting their confidence and margins. Analysts predict that the group operating margin will be 4.8% by 2025, down from 7.6% last year. This is lower than IAG or Air France-KLM. Spohr has made changes, such as cutting 4,000 administrative positions over five years and retiring older planes in order to achieve an operating margin of 8% to 10% by 2030. This has impressed a few investors. Lufthansa wants to simplify its complicated structure that includes six hubs, nine passenger airline 'brands' ranging from Italian flag-carrier ITA Airways up to budget offering Eurowings. Transatlantic travel is softening, but global headwinds are increasing. Lufthansa could be slowed down by problems with the supply chain for its long-awaited Boeing planes, and also by difficult union negotiations.
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Optus' September outage review in Australia flags gaps for urgent protocol
Optus, Australia’s second largest telecoms services provider, announced on Thursday that a?independent review of its September outage? found gaps in process, accountability and protocols for information. The review "highlighted challenges in Optus' culture that have impacted decision-making and response times," the Singapore Telecommunications-owned company said in ?a statement. Review revealed that 75% out of 605 emergency calls made on September 18 failed to connect. This led to the deaths of two people. The outage, which was caused by an issue with the network firewall, lasted for?13 hours, and affected hundreds of customers. The telecom carrier claimed that the failure was caused by a deviation from standard procedures during a network update. This prevented customers from calling triple zero ("000") in an emergency. The firm said that at its December 16 meeting, the board of?Optus accepted all recommendations and "agreed" to implement them quickly. John Arthur, the board's chairman, said that "the board will take further action in relation to individual accountability arising from the incident. This may include financial penalties or termination where appropriate." Optus stated that the independent review made 21 recommendations. It said this was based on its multi-year transformation, and changes already implemented after deficiencies were identified in their initial incident response. Reporting by Shivangi lahiri from Bengaluru, Editing by Alan Barona and Rashmi aich; Subhranshu Sahu.
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US admits responsibility in fatal helicopter crash involving American Airlines jet
The?U.S. The?Justice Department announced late on Wednesday that the federal government is liable for the deadly collision between an Army Black Hawk helicopter, and American Airlines Regional Jet which killed 67 near Reagan Washington National Airport. The government acknowledged that it had "a duty of care" to the plaintiffs which it breached -?thereby proximately leading to the tragic accident. It also admitted that the pilots on the Army helicopter as well as the regional jet failed to maintain "vigilance to avoid each other". According to the Justice Department, a Federal Aviation Administration (FAA)?air traffic controller also failed to comply with an FAA directive and that as a result both agencies' conduct was liable. The FAA refused to comment. Robert Clifford said that the lawsuit was filed by the family of a victim of the crash. The filing shows "the United States admits its responsibility for the needless deaths in the crash... as well as FAA's failures to follow air-traffic control procedures." Clifford said that the government "rightfully acknowledges it is not alone responsible for this deadly crash and that, in fact, its conduct was only one of many causes of the deaths that evening." American Airlines filed a motion Wednesday to dismiss the case. The airline said it sympathized with the families "desire to seek redress for the tragedy", but that the "proper recourse was not against American." The United States government is the one to be blamed. The court should dismiss American from the lawsuit." In March, the FAA restricted helicopter flights after the National Transportation Safety Board stated that their presence near Reagan National posed "intolerable risks" to civilian aircraft. The FAA banned the Army in May from flying helicopters around the Pentagon following a close call which forced two civilian aircraft to abort their landings. The U.S. Senate passed a bill to tighten the rules for military helicopters on Wednesday.
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Optus's September outage review in Australia flags urgent protocol gap
Optus - Australia's second largest telecoms service provider - said that an independent review of a?September?outage had found gaps in the process, accountability, escalated communication, and information protocol protocols. These need urgent attention. In a statement, the firm said that "the independent review highlighted challenges in Optus’ culture which have affected decision-making and response times." Optus' technical failure on September 18 disrupted emergency services, affecting 600 people. Four people died. The?telecom company said at the time that a deviation?from the standard processes during an upgrade of the network caused the technical failure which prevented customers from making triple zero ("000") emergency calls. Optus said that its board met on Tuesday, 16 December and accepted all of the recommendations. They "agreed?to move quickly with their implementation", according to a statement released on Thursday. Chairman John Arthur stated that "the 'Board will take further action regarding individual accountability resulting from the incident. This may include financial penalties up to termination in appropriate cases." Optus stated that the independent review made 21 recommendations. It said this was based on its multi-year transformation, and the changes it had already implemented after shortcomings in its initial response to incidents were identified. Reporting by Shivangi lahiri from Bengaluru, Editing by Alan Barona & Rashmi aich
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Mayor of Rostov, Russia says that Ukrainian drones killed people when they hit a tanker at the port in Rostov.
The?mayor of Rostov-on-Don was quoted early on Thursday as saying that Ukrainian drones had hit a tanker, killing and injuring several people, and sparking an fire. Skriabin was quoted by Russian news agencies as saying: "Emergency Teams are extinguishing?fire' on the tanker which was struck while docked in a drone attack." A leakage of oil products has been avoided. "Unfortunately, there are dead or injured." Yuri Slyusar, the regional governor of the region, first reported the Ukrainian attack on the ship?in port and the casualties suffered by the crew. Slyusar said that two homes in a nearby city were also destroyed by fire, and parts of an apartment building under construction in the city was damaged. Ronald Popeski reported; Chris Reese, Muralikumar Aantharaman and Chris Reese edited.
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The architect of Delta Air Lines premium strategy will retire in February
Delta Air Lines announced on Wednesday that Glen Hauenstein will retire from his position as president in February. Hauenstein is the architect of Delta's "premium focused strategy". Hauenstein, 64 years old, has been president of the Atlanta-based airline since 2016. Hauenstein, 64, joined the Atlanta-based airline?in 2005 and has served as president since 2016. He promoted high-end products, and convinced travelers to pay for seats such as first class that were previously given away as upgrades. The strategy delivered'strong results': premium products accounted 43% of Delta passenger revenue in the last quarter, up eight percentage points compared to pre-pandemic levels. Executives expect that revenue from premium cabins will surpass main cabin ticket sales by 2026. Ed Bastian, Chief Executive of Delta Airlines, said that Glen's vision and strategic mind-set were essential to the transformation of Delta into "the leading global carrier we are today". Analysts at Jefferies say that under Hauenstein, Delta generated more revenue per passenger than any of its competitors, and more than double the average for the industry. Its success has compelled rivals United Airlines and American Airlines, who have invested heavily in upgrading cabins and providing luxury experiences on the ground to attract high-paying passengers. Hauenstein was also responsible for the change in loyalty programs, which now reward total expenditure rather than actual miles flown. This model is now common among all major U.S. airlines. Robert Mann, an ex-airline executive and consultant, said: "It is hard to tell if you are lucky or good. But I'd say that he had been good before he became 'lucky'." Hauenstein played a key role in expanding Delta’s global footprint. He built a network that spans six continents, and formed joint ventures with carriers such as Virgin Atlantic and Air France-KLM. He will retire from Delta on 28 February, but he will remain as a strategist adviser until 2026. Joe Esposito was named executive vice president and chief business officer by the airline. Esposito is a senior vice president in network planning. Esposito is responsible for revenue management, sales and the SkyMiles program. (Reporting and editing by Chris Reese; Rajesh Kumar Singh).
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US agency and consortium sign $553 Million Loan for Angola Railway Reconstruction
The?U.S. The?U.S. The U.S. Lobito Corridor is a high-profile project that will link copper and cobalt mining to the Atlantic Coast. It's part of Washington’s global push for access to strategic metals, and its efforts against Chinese influence in Africa. The DFC, under the agreement signed in Washington at a ceremony, will provide funding to the Lobito?Atlantic Railway consortium, which includes Portugal's Mota Engil and commodities trading firms Trafigura, as well as rail firm Vecturis SA. The deal was announced last year, but only finalised now. The DFC released a statement that said the agreement "underscores United States commitment to advance strategic Infrastructure that promotes regional Trade, Mutual Economic Growth, and Long-term U.S. Africa Cooperation". WASHINGTON? TAKES ON CHINA in AFRICA The?development agency stated that the funds would also be used to support the rehabilitation and operations of an existing minerals port at Lobito. This will increase the transportation capacity by ten times to 4.6 millions metric tons, and reduce the cost to transport critical minerals up to 30%. LAR, who in 2022 won a contract to operate the Benguela Rail Line for three decades, also stated in the past that it would use the loan to increase rolling stock and train staff. The Lobito Corridor Project aims to counter the China-backed revival of the Tanzanian-Zambia rail corridor. It will connect copper mines in Zambia and cobalt in the Democratic Republic of the Congo with Angola's Lobito Port on the Atlantic coast by railway. The project includes the construction of rail lines of 515 km in Zambia, and 315 km in the Democratic Republic of Congo. These will be connected to the existing Benguela line of 1,300 km (808 miles) in Angola. After completing a feasibility report, the Lagos-based Africa Finance Corporation (AFC), the lead developer for the corridor, requested proposals from contractors to build the Zambian leg of the new rail. A senior AFC official said in September that the developers planned to "finalise" more financing deals before the end of 2026. China Civil Engineering Construction Corporation said it would invest $1.4 billion in rehabilitating the rival Tanzania-Zambia rail that uses Tanzanian port to ship minerals. Reporting by Duncan Miriri, Nairobi; Miguel Gomes, Luanda. Editing by Karin Strohecker & Joe Bavier.
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The price of the largest US power grid auction has reached a new record due to a supply crunch
Payments to power plant in the largest U.S. market for electricity, PJM Interconnection hit a price 'cap' and set a record on Wednesday, as?demand?from data centers in 13-state area grows faster compared to?construction of new electricity supply. The expansion of Big Tech data centers in PJM has driven so-called capacity price in PJM up by around 1,000% in the last year-and-a-half, increasing concerns about energy affordability. This grid serves one in five Americans living in the U.S. Mid-Atlantic - and Midwest. Prices in the latest PJM?auction for capacity reached $333.44 per megawatt-day, compared with $329.17 at an auction held in August. The auction shows that the demand for electricity by data centers continues to exceed the supply. PJM, the company that operates the grid for the most energy-intensive data centres in the world, conducts auctions to determine how much energy companies are paid to ensure they can run their power plants if needed. The last auction in July saw the capacity payments reach their highest levels due to the rapidly rising electricity consumption in PJM and the stagnant addition of new power stations. A group of PJM governors including Pennsylvania Governor Josh Shapiro negotiated a floor and ceiling price for PJM. This 'price ceiling' was in effect at the last auction held in July and extends through the latest bidding rounds. Shapiro, among others, is now calling for a price limit to be applied to future auctions. The so-called PJM capacity market includes generators that are on-call to protect against blackouts and other disruptions when demand for electricity spikes. High prices are intended to encourage developers to increase their supply.
Canadian insurance company Manulife names insider Witherington as CEO, Gori to retire
Manulife Financial stated on Monday that its Asia head Phil Witherington will prosper CEO Roy Gori, who will retire next year after more than seven years at the helm of Canada's biggest life insurer.
Gori, who ended up being Manulife's chief executive in 2017, will step down from his role reliable May 8, 2025 however continue as an advisor through Aug. 31, 2025 to support the transition.
Witherington, who has been part of the business's executive leadership team given that 2017, is presently CEO of the Asia organization. He had actually formerly worked as Manulife's chief monetary officer for five years.
This news comes as a surprise to us as it was not clear to us that Gori would step down from his current role so soon, RBC Capital analyst Darko Mihelic stated.
Mihelic kept in mind that Gori, 54, had actually just served for seven years on top compared to the common period for CEOs of financial services business of ten years or more.
Witherington, who has more than 25 years of experience in insurance coverage and monetary services worldwide, invested a years with accounting company KPMG previously in his career. He also worked with London-headquartered bank HSBC and Hong Kong-based insurer AIA for numerous years.
As both our chief financial officer and now as CEO of the Asia section he has regularly demonstrated the ability to navigate complexity, deliver on dedications and drive modification, Manulife board Chair Don Lindsay said in a declaration.
Manulife has actually focused on shedding risk through a variety of transactions that has actually assisted free up capital for more stable, higher-return organizations.
At the same time, the business has actually prioritized Asia, a secret market for Canadian insurance providers, where it anticipates half of its profits to come from by 2027.
We would not expect any remarkable modifications to Manulife's. strategy, Jefferies analyst John Aiken stated.
Under Gori's tenure, Manulife's shares have risen 93% while. peer Sun Life increased 90% and the more comprehensive Toronto Stock. Exchange was up 60%.
Manulife's shares were down 0.6% on Monday morning.
(source: Reuters)