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Poland offers assistance to Ukraine after Russian attacks on its energy infrastructure
Radoslaw Skorski, the Polish Foreign Minister, said that Ukraine has access to generators, additional electricity and a LNG terminal, despite Russia's continued attacks on Kyiv's infrastructure. In recent weeks, Moscow has increased its attacks. After Russian airstrikes, Kyiv was plunged into darkness early on Friday morning. Around 600,000 Ukrainian households also lost power. Sikorski said that Poland discussed how it could support its eastern neighbor when he visited Lviv, in western Ukraine. During a joint press conference with his Ukrainian colleague, he stated: "Generators and extra electricity are at your disposal, as is the accelerated construction between Ukraine and Poland of power lines." "This is a new escalation because we know the reason for it. He added that the purpose of this is to intimidate people before winter. Orlen, a Polish refiner, said in August that it would continue to supply 100 million cubic meters (mcms) of gas to Ukraine every month after having delivered 430 mcms this year. The fuel is shipped from Swinoujscie to Ukraine via Poland.
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Porr purchases Fresenius VAMED parts as Strabag withdraws
The companies announced on Friday that Austrian Strabag has withdrawn from the deal and Porr will be acquiring the Austrian project-development business of VAMED as well as the Austrian thermal bath holdings. Porr stated that the purchase price is one euro ($1.16). The VAMED Group added that it would capitalise each company in accordance with the liabilities. Strabag announced that it would terminate its joint purchase agreement with VAMED for certain parts as the deal was not implemented as planned. Strabag announced that it would continue separate discussions to acquire the remaining Vamed Austrian operations including the AKH which manages Vienna General Hospital’s facilities and projects from Fresenius subsidiary VIACAMA. Fresenius stated that dividing the sale into independent steps simplified the divestment and accelerated it. Originally, the deal was concluded by a joint-holding company between Strabag & Porr.
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Asia spot prices rise on colder weather in Europe and Russian strikes against Ukraine
The Asian spot price of liquefied gas (LNG), which is a liquefied form of natural gas, rose this week for the first gain in almost a month. This was due to colder weather than expected in Europe, and also because Russians struck Ukrainian gas infrastructure in advance of winter. Average LNG price for delivery to Northeast Asia in November Industry sources estimate that the price per million British Thermal Units (mmBtu) was $11.00, up from $10.60/mmBtu in the previous week. Estimated price for December delivery is $11.20/mmBtu. Siamak Adibi is the director of gas and LNG supply analysis at FGE. Europe experienced a cooler October with some unusual cold spells. He said that Europe's gas stock buildup had slowed in recent days while the send-outs of regassification stations have remained high. The Asian market remains weak. The seasonality of LNG demand is also affecting other markets, such as the Middle East and Latin America. "Europe remains the key to shaping market sentiment in this winter." In Europe, S&P Global Commodity Insights set its daily Northwest Europe LNG Marker benchmark price for cargoes to be delivered in November ex-ship at $10.322/mmBtu. This is a $0.63/mmBtu reduction from the November price at Dutch TTF hub. Spark Commodities estimated the price to be $10.330/mmBtu. Argus set it at $10.36/mmBtu. Aly Blakeway is the manager of Atlantic LNG for S&P Global Commodity Insights. She said that due to the colder temperatures and the recent Russia-Ukraine conflict, which has knocked down around 30% of Ukrainian natural gas production, the withdrawals from European infrastructure began in October. Blakeway said that Europe would need to increase its bids to get more LNG shipped by water over the winter, as storages are over 11% less than they were at this time last season. Prices may be further supported by the anticipated pull of Central and Eastern Europe as Europe tries to meet the demand for winter with lower inventories. Alex Froley is a senior LNG analyst with ICIS. He said that the drop in Chinese demand in September, and a weaker than expected appetite in Egypt, could help offset extra LNG requirements from colder weather across Europe. Max Glen-Doepel, Spark Commodities analyst, says that the U.S. Front-Month Arbitrage to Northeast Asia via Cape of Good Hope still only narrowly encourages U.S. cargoes delivered to Europe. He added that the rates for LNG freight in the Atlantic fell to $22,000/day last Friday while rates in Pacific dropped to $24,000/day.
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Handelsblatt reports that Germany has ordered over 600 short-range Air Defence Systems.
The Handelsblatt reported Friday that the German government intends to order over 600 Skyranger 30-short-range air defence system from Rheinmetall by the end of this year. It cited sources in the defence ministry and the industry. Handelsblatt reported that the contract for turrets and vehicles, in this instance the Boxer wheeled armored vehicle produced jointly with Franco-German Defense Company KNDS, was valued at over nine billion euros. Boris Pistorius, the German Defence Minister, said last week that Germany will begin the procurement of Skyranger tanks within the next few months. So far, 19 Skyranger tanks have been ordered. When asked Friday about the 600-tank order, a German Defence Ministry spokesperson said: "I don’t want to discuss numbers." A request for comment from Rheinmetall was not responded to immediately. Skyranger is a mobile air defence system developed by Rheinmetall to protect against low-flying items. In Europe, air defence is a hot topic amid growing concerns that Russia may be behind the recent increase in drone incursions in the airspaces of Ukraine's European Allies. The Kremlin denied any involvement. The Kremlin has denied any involvement.
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Spirit's problems expose the limits of low-cost carriers' premium strategy
Spirit Airlines' financial problems reveal that going upmarket is not the panacea to the challenges faced by low-cost carriers. These carriers are struggling with rising operating costs, changing consumer preferences, and stiff competition coming from the Big Three U.S. Airlines. Spirit Airlines, which emerged from bankruptcy in March, tried to rebrand and target more wealthy travelers to help turn around its business. In just six months the Florida-based carrier filed for bankruptcy a second time, highlighting the limitations of a strategy being replicated in the low-cost sector, with similar mixed results. The cost advantage of low-cost carriers has been eroded by the post-pandemic increase in aircraft lease costs, wages and other operating expenses. Inflation has also hit the core customers of low-cost airlines harder. Meanwhile, the Big Three, Delta, United and American, have expanded their basic economy offerings and deployed larger aircraft to compete for price-sensitive travellers. This squeeze is felt on both sides: increasing costs and shrinking share of the market. Spirit Airlines' strategic shift was designed to take advantage of the rising demand for high-end travel, and to build a revenue stream with a high margin to offset rising costs. Frontier Airlines, Frontier's closest competitor, has also expanded loyalty benefits and added first-class seating. Breeze Airways was founded by JetBlue veteran David Neeleman and offers larger seats, bundled amenities, and lower prices than legacy airlines. Spirit's revenue for the quarter fell by 20% due to a steep drop in passenger numbers, and a surge in non-fuel costs. The airline reported a loss of $246 million in the quarter ending June. Frontier lost $70 million. Spirit's operating costs in the second quarter of 2019 totaled 118%, compared to 84% in 2019. Frontier's expenses reached 108%, which is a 24 percent increase from the period before the pandemic. Cost pressures are also affecting full-service carriers, but the diversification of their revenue streams has helped them to protect margins and perform better than other carriers. Breeze Airways CEO Neeleman attributed the problems of budget airlines to direct competition from legacy airlines. In an interview he stated that smaller carriers such as Breeze Airways and Allegiant are making money because they operate on nonstop flights with no competition. BIG THREE MUSCLE IN Delta, United and American use larger aircraft for domestic flights to better compete with budget-conscious passengers. Basic economy fares are now a major part of their ticket sales. United's basic economy accounted for 15% of its domestic sales in 2018, up 2 points since 2023. Andrew Nocella is the chief commercial officer of the airline. He has described the basic economy offer as a "homerun" for United. Neeleman said that the proliferation of basic economies was what really hurt. Frontier CEO Barry Biffle, at a hearing in Congress last month accused legacy carriers using loyalty programs to subsidise basic economy fares. He urged lawmakers remove barriers that prevent low-cost airlines from competing equally. He said that "too many doors and gates are closed." PREMIUM PIVOT RUINS LOW-COST SIMPLICITY Spirit's tiered fares include priority boarding, free snacks and drinks and streaming Wi-Fi. These features were previously unthinkable from a carrier that was known for its bare-bones services. Frontier has also upgraded its services and simplified customer service. Analysts say that the change in policy adds complexity to the operations and reduces the simplicity which made low-cost carriers attractive. They also offer premium services that are inferior to those offered by legacy airlines. Have you ever seen an example where an airline has tried to reposition themselves up the value chain, and managed to survive? John Grant, Senior Analyst at Travel Consultancy OAG said. Spirit and Frontier declined to give interviews for this article. Brand perception is still a drag Discount airlines face a difficult branding challenge in courting the high-end traveler, as they've built up a reputation of "nickel and diming" their customers. Spirit and Frontier were ranked last by J.D. Power's survey of customer satisfaction this year. According to a U.S. Senate Report, both airlines paid staff $26 million between 2022-2023 in incentives for enforcing bag policies. Michael Taylor, Senior Managing Director at J.D. Power, said: "The only reason people buy them is that they are basically coupons clipped." Power. Both carriers have taken measures to improve their image. Spirit and Frontier have eliminated the standard cancellation and change fees for many fares. Frontier has extended the validity of flight credits, simplified boarding and restored live phone support to elite loyalty members. Still, some travelers remain unconvinced. Lesly Simmons, an SF-based tech marketer, claimed to have paid twice for her checked bag on Frontier flights and never received a reimbursement. "I could not imagine why I would choose to fly with an airline who hasn't treated me well in the past, rather than an established airline which has," said Simmons. He frequently flies United.
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What can airports to do prevent drone incursions?
In recent weeks, drones have disrupted the airspace in Europe. This has caused airport closures and flight cancellations. As tensions between the West and Russia have increased over its conflict in Ukraine, finger-pointing has occurred. However, Moscow denies any involvement while investigators continue to gather evidence. Governments and regulators face pressure from the public to find solutions. Why are Drones a growing problem at airports? Monitoring service Enigma has detected at least 18 drones in Denmark, Sweden Norway and Germany since September 16. Many, but not all, were in close proximity to airports. Since 2005, drone incursions in Britain have affected airports such as Gatwick and Heathrow. However, this year there has been an increase in the number of incidents. The data shows persistent activity for several weeks and possibly coordinated incursions at specific dates, said an Enigma spokesperson without providing any further details. Airport drone spottings have been particularly disruptive. Airport closures are costly and affect the entire aviation system, causing delays across Europe. Ourania Georgoutsakou said that the increasing number of incidents would "accelerate" the implementation of protocols in order to minimize disruptions within an "overstretched, fragmented European Airspace". Protocols include frequency checking, monitoring and jamming. Both civilians and investigators have been trying to determine what types of drones were flying, their capabilities and who was controlling them. Chief executive of Dyami Eric Schouten, a security advisory firm, said that the chaos caused by recent incidents could be an indication of hybrid warfare tactics. Ursula von der Leyen, President of the EU Commission, said that recent drone incidents and other violations of airspace show Europe is now facing hybrid warfare. It must respond to this with measures beyond traditional defense. She stated that Russia's goal is to "sow a division" in Europe. What technology do airports have to fight back? On the market are a variety of technologies, such as microwaves, lasers, and missiles. The capabilities range from drone detection to jamming frequencies used by drones and shooting down. What is the challenge? The challenge? The European Aviation Safety Agency will issue guidance in 2021 on how to deal with drone disruptions. Some national governments have also enacted regulations that limit drone flights. Airports purchased counter-drone devices from companies such as Dedrone Thales and DJI Aeroscope. However, the majority of these tools only offer detection technology. Germany's federal government is proposing a law that would allow police to shoot drones down if necessary after drone sightings disrupted Munich Airport earlier this month. However, introducing lasers or missiles to shoot down drones within civilian airspace has its own set of safety concerns. These include the potential for damage to civilian aircraft as well as wider infrastructure. You must be certain that the object is hostile. Then you can intervene. "There are many ifs and buts," explained Dutch drone expert Wiebe De Jager. He warned that most drone alarms are false alarms. Experts say that any major action would require a clearer policy from the government. For now, airports will mainly stick with detection tools. WHAT'S NEXT? Experts predict that drone incursions will increase in frequency across Europe. Airports aren't the only places where drones could cause disruption. Drones can also target prisons, seaports and nuclear facilities. Experts said that although the disruptions highlighted the vulnerabilities, the recent incursions will bring greater clarity and action by authorities. They will also force them to coordinate countermeasures across sectors. Stijn Willekens is the Chief Executive of Active Drone Security Solutions. "I hope that it does really shake things up," he said. (Reporting and editing by Joe Brock, Mark Heinrich, Ilona wissenbach, Toby Sterling; reporting by Joanna Plucinska).
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Sources say that Russia's oil exports to western ports will remain near record levels in October.
According to industry sources, calculations and sources, oil exports and transit through Russia's western port are expected to remain close to the record levels of September due to increased refinery activities. According to industry estimates, the number of barrels shipped of Urals, Siberian Light and KEBCO grades in the ports of Primorsk and Ust-Luga, as well as Novorossiysk could drop by around 200,000 bpd from last month, to approximately 2.3 million bpd. The growing OPEC+ quota in Russia and the ongoing refinery repairs support exports despite a projected increase in domestic processing. The October OPEC+ quota for Russia increased by 93,000 bpd compared to September, reaching 9.457 millions bpd. Sources said that the record-breaking refinery outages of August and September drove last month's exports up to a new high of 2.5 million bpd. Meanwhile, Russia's idle refining capacities in October are expected to fall below August levels allowing for a higher throughput at home. However, drone attacks on refineries -- including a fire at Kirishinefteorgsintez on October 4 -- may prompt upward revisions to export plans, while attacks on pipeline infrastructure could limit export capacity. Interfax reported that the Deputy Prime Minister Alexander Novak stated on Wednesday that Russia had been steadily increasing its oil production, and was close to meeting the output quota set by the OPEC+ oil producing group last month. (Reporting and Editing by Susan Fenton).
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Lufthansa continues talks with the pilots' union despite a possible strike
Both parties announced on Friday that Lufthansa would continue to negotiate with the German Pilots' Union VC regarding a pension dispute. This will prevent a strike for now at its main airline. The union members had voted for a walkout in order to press Lufthansa to agree on a more generous deal with pensions. Both parties have said that they will explore the possibility of new dates and further negotiations after Thursday's constructive discussions. A spokesperson for VC or Vereinigung Cockpit said that while Lufthansa had not made a new proposal, it was possible to find a solution. Lufthansa's spokesperson said, "We remain committed to finding a strike-free solution." The union wants higher contributions from the employer to the company pension plans of the 4,800 employees in the cockpits at the Lufthansa brand and its cargo subsidiary Lufthansa. Lufthansa has no financial room to maneuver, since its core brand is overspending and hasn't made any money in the last year. It has threatened to shift more jobs to its less expensive subsidiaries, Discover and City Airlines. (Reporting and writing by Ilona wissenbach, Miranda Murray editing by Ludwig Burger).
Wall Street Journal - Dec 4
The following are the leading stories in the Wall Street Journal. Reuters has actually not validated these stories and does not attest their accuracy.
- U.S. President-elect Donald Trump is thinking about dropping his candidate to lead the Pentagon, Pete Hegseth, and nominating Florida Guv Ron DeSantis in his place.
- South Korean President Yoon Suk Yeol stated on Wednesday he would lift a surprise martial law statement he had actually imposed simply hours previously, pulling back in a standoff with parliament which roundly rejected his effort to prohibit political activity and censor the media.
- U.S. President-elect Donald Trump's option to lead the Drug Enforcement Administration, Chad Chronister, said on Tuesday he was withdrawing from factor to consider, ending up being the second Trump pick to do so not long after being chosen.
- Wells Fargo is checking out the sale of the San Francisco building where its head office are located.
- Prudential Financial said Executive Chairman Charles Lowrey will step down as chief executive next year and be succeeded by an executive vice president at the company.
- Logistics providers GXO Logistics CEO Malcolm Wilson notified the board of his choice to retire in 2025.
(source: Reuters)