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Turkish Airlines expects Pratt engine problems to last until mid-2027
Turkish Airlines (THY), its chief financial officer said on Monday, expects the bottlenecks that have caused dozens of Airbus jets to be grounded for months or longer will continue another two years. Due to Pratt & Whitney's unusually long repair wait times, the Turkish state carrier expects 45 Airbus aircraft will be grounded by 2025. The Turkish state carrier started the year with only 35 jets idle. "Next year it will be the same," Murat Seker, CFO of the International Society of Transport Aircraft Trading told a European Aircraft Conference hosted by ISTAT. He added that, in the last year, an average of 40 Airbus A320neo family jets were grounded because of maintenance backlogs. I think this will last at least until mid-2027. "We will have to ground a large number of aircraft." THY is not the only carrier affected by longer than usual repair turnaround times. Wizz Air in Hungary has also been affected. Seker stated that the average turnaround time was 200 days. He added that THY received "reasonable compensation" from Pratt & Whitney (part of U.S. aerospace company RTX Corp.). RTX didn't immediately respond to a comment request. RTX Corp's CEO Chris Calio said at a September conference that the number of aircraft grounded due to Pratt engine problems has stabilized and is expected to decrease, but "clearly, we have more to do". The company expects its maintenance, repair, and overhaul services to increase 30% over last year. According to industry sources, the jet shortages are causing a rise in air fares and prices for engine spares, which has led to difficult negotiations on maintenance contracts. Last month, THY announced a deal to buy 225 Boeing jets, including 150 of the 737 MAX. However, it said that this deal was contingent on a deal involving engines from French-US CFM. (Additional reporting from Allison Lampert, editing by Edward Tobin.)
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Urals differs stable, OPEC+ opts for modest production increase
Urals crude differentials remained unchanged on Monday after OPEC+’s planned production increases for November appeared to be less modest than expected. OPEC+ said that it will increase oil production by 137,000 barrels a day (bpd) from November, opting for a similar modest monthly rise as in October amid persistent concerns about a looming glut of supply. The oil price rose about $1 on Sunday, easing some supply concerns, but a weak outlook for the near term is likely to limit gains. Two industry sources reported on Monday that the Kirishi oil refining plant, one of Russia’s largest, had halted its most productive crude distillation unit (CDU-6), following a drone strike and fire on October 4. The unit’s recovery is expected to take a little over a month. A government official said on Monday that there is sufficient supply of Russian crude oil on the market for Indian refiners, as Ukraine's attack on Russia's energy infrastructure has reduced its refining capability and made more crude readily available. PLATTS WINDOW On Monday, there were no bids or offers made on Urals, Azeri BTC Blend or CPC blend in the Platts Window. Authorities in the region said that a drone from Ukraine targeted the Rosneft controlled Tuapse refinery, located in southern Russia's Krasnodar Region, overnight. The drones caused a fire to break out at a building used by security personnel, but it was quickly put out. (Reporting and Editing by Matthew Lewis).
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Citigroup prefers Banamex's IPO plan despite new offer from Grupo Mexico
Citigroup said it still intends to pursue an IPO of its Mexican retail division, despite receiving a fresh offer from mining and transportation conglomerate Grupo México. Citi Last month, Banamex sold a 25% stake to Fernando Chico Pardo - a local billionaire who is the chairman of airport operator ASUR - for 0.8 times its book value. The bank stated that "we remain committed to realizing Banamex's full value for our shareholders and that the agreement with Fernando Chico Pardo, as well as the proposed IPO, continues to be our preferred way to achieve this outcome." "We will, of course, review Grupo Mexico’s offer responsibly and take into account, among other factors, the ability to receive required regulatory approvals, and the certainty that a proposed transaction can be closed." Citi will also be contacting top Mexican investors over the next few months. Buy minority stakes It said that its size was smaller than Pardo’s last month. German Larrea's Grupo Mexico has offered to purchase Citi's retail division more than two years since it scrapped its previous plans. Larrea retracted the offer at the time due to tensions between the administrations of Andres Lopez Obrador and the then-president. Grupo Mexico said that under its offer it would buy 25% of Banamex for 0.85x its book value and the remaining 75% for 0.80x its book value. This would be a slightly higher price than the Pardo offer. In late morning trading, Grupo Mexico's shares dropped more than 15 percent. According to a source familiar with previous negotiations who declined to identify themselves, even before the tensions with government, Larrea's talks had been delayed repeatedly. Source: Citi is aiming for a higher IPO than the valuation set by Pardo. This is seen as a minimum price of the shares. The slightly higher price offered Grupo Mexico will not be a deciding element. Citi paid $12.5 Billion for Banamex back in 2001. Bradesco analyst Rodolfo RAMOS wrote in a Bradesco report that the offer could spark a bidding battle. Ramos writes that "Larrea’s size of wallet reduces the likelihood Chico will have to counter-offer, perhaps with other business groups. But Citi's next step will likely determine how we move forward from here." The media perception of the two billionaires has been clear. Both have avoided public scrutiny and were less visible. However, Larrea never gave up a legal battle, while Chico is only known to those who closely follow Mexico's aviation industry. Ramos said that if Larrea increases its bid for Grupo Mexico, the shares could become volatile. (Reporting and editing by Lananh Nguyen, Nick Zieminski, Diego Ore, Mexico City)
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Embraer completes sale of military cargo aircraft to Sweden as part of NATO's latest push
The Brazilian planemaker Embraer signed a deal with Sweden on Monday for the sale of four military cargo aircraft to replace Sweden's aged aircraft. This is the latest in a program to procure planes jointly with other countries from the region. Sweden has decided to purchase Embraer C-390 Millennium aircraft, after choosing the model in 2011. The Netherlands is leading the agreement as the agent and representative of the other countries involved in the strategic partnership. Bosco da Costa junior, Embraer's head of defense, said in an exclusive interview: "Under this contract the Netherlands added seven additional aircraft for allies." "This government-to-government process speeds up the purchasing process here in Europe." The shares of the Brazilian planemaker rose by around 3% during the afternoon trade, making it among the top gainers in Brazil's Bovespa Index. Analysts at BTG Pactual called the Swedish order a "positive shock" because it included an option to purchase seven more aircraft. Brazil, meanwhile, is increasing its fleet of Gripen jet fighters made by Swedish planemaker Saab. Since 2023, Saab has been working with Embraer to produce Gripens in Brazil. Costa said that the first made in Brazil Gripen will be delivered early next year. Embraer is working to expand the defense market abroad, mostly through C-390 sales. Costa stated that he hoped to make new announcements very soon. Brazilian Defense Minister Jose Mucio suggested that Finland and Turkey may purchase Embraer aircraft. Costa commented, "Minister Mucio says always wise things." "I hope that he's right again this time." U.S. INTENTIONS Embraer is longing to break into the U.S. Market, but tariffs on its planes imports could derail those plans. Although U.S. president Donald Trump exempted Brazilian aircraft from a tariff of 50%, the 10% previously imposed on them still stands. The planemaker lobbied for tariff relief after a U.S. and European Union aircraft deal. Embraer, as part of its bid to be exempted from the tax, has proposed building a $500 million U.S. Assembly Line for the KC-390 if the country decides to buy the military jet. The KC-390 is in direct competition with the C-130 Hercules, which is manufactured by Lockheed Martin. Costa stated that "we have been very vocal in expressing our interest in assembling and manufacturing the KC-390 here in the U.S." Northrop Grumman has the ability to assist Embraer in developing the aircraft here in the U.S., as the executive previously stated. Maybe we can announce the partner to the market before the end of the calendar year. Costa stated that this is what they are working towards. (Reporting and Additional Reporting by Isabel Teles, Writing by Kylie Madry, Editing by Richard Chang).
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US announces that subsidies for rural airlines service will expire on Sunday
A partial government shutdown is causing the Trump administration to announce that funding for a U.S. Government program that subsidises commercial air service at rural airports will expire on Sunday. The U.S. Transportation Department has said that the subsidies under the Essential Air Service Program are set to expire on Sunday, after it transferred funding unrelated from the Federal Aviation Administration in advance. The Department is currently in the process to notify carriers of the shortfall, and alert communities of potential impacts. About $350 million is allocated to the government annually. In May, the White House cut funding for Essential Air Service by $308 millions. This service is very popular among Republican legislators because it offers services in rural areas, which are largely Republican. The White House had proposed to kill the Essential Air Service Program during the first Trump Administration, but Congress chose to increase funding. The program usually subsidises two round-trips a day on aircraft with 30 to 50 seats, or more frequent flights with smaller aircraft. According to the department, under the program, approximately 65 Alaskan communities receive service as well as 112 other communities in the 49 states and Puerto Rico who would not otherwise receive airline service. At a recent press conference, Transportation Secretary Sean Duffy stated that "every state in the nation will be affected." He also noted bipartisan support. "We do not have the funds to continue this program." (Reporting and editing by David Shepardson)
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Petrobras, Brazil's gas importer, purchases natural gas for the first-time from Argentina
Petrobras, Brazil's state controlled oil company, announced on Monday that it had imported its first non-conventional gas from Argentina's Vaca Muerta Reserve in the Neuquen Basin. The firm said in a press release that the gas, which was produced by POSA and Pluspetrol, its subsidiaries in Argentina, was transported via pipelines on Friday. This initiative is in line with the Brazilian President Luiz-Inacio Lula Da Silva's aspirations. He has been pressing Petrobras for years to increase domestic natural gas supply, to lower prices for consumers. This solution is a logistical and commercial one that opens up a new option for importing gas to Brazil. It reflects Petrobras commitment to increase supply and sustainable development of the gas market. The company stated that under an agreement signed between the two companies, Petrobras can import natural gas up to 2,000,000 cubic meters on a discontinuous basis. Over the last year, the transportation of natural gases from Argentina to Bolivia involved extensive negotiations that included the governments of both countries. Petrobras is not the only Brazilian company to import goods. TotalEnergies imported a similar product in April. Gas from Vaca Muerta is piped to Matrix Energia, in Sao Paulo. This transaction involved a daily average of 500,000 cubic metres over a 10 day period. Reporting by Isabel Teles, Marta Nogueira and Fernando Cardoso; writing by Fernando Cardoso and editing by Franklin Paul and Chris Reese
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FedEx completes the leadership team for its upcoming freight division with the appointment of CFO
FedEx announced on Monday that it had appointed Marshall Witt, a former executive of the company, as finance chief for its freight trucking division. Witt will take up his new position effective October 15. This completes the leadership team in the division which is due to be spun off in 2026. The parcel carrier announced that Brad Martin, an insider, would be the new chairman of its less-than truckload division and veteran executive John Smith will serve as its CEO. The appointment completes soon-to-be-independent FedEx Freight's leadership lineup. Analysts have said that the segment has been undervalued by FedEx despite its dominance of the U.S. LTL market. Witt was CFO at TD Synnex, a technology company for 12 years. He managed the spin-off 2020 of Concentrix. He held a variety of roles at FedEx for more than 15 years, mostly in the freight finance division. FedEx is attempting to streamline its operations in order to focus more on its core parcels and express business. FedEx Freight is a service that caters to businesses in manufacturing, retail, and distribution. Citi analysts estimate its value at between $30 billion and 35 billion dollars. The unit consolidates multiple shipments of different customers heading to similar destinations on a single truck and generated $8.89 Billion in revenue in FY25. FedEx Freight employs approximately 40,000 people in North America and operates 355 service centres. It handles nearly 90,000 shipments per day. (Reporting from Abhinav in Bengaluru, editing by Vijay Kishore.)
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Source: Turkey's southern highway project gets 1.7 billion euro funding
A source familiar with this matter reported on Monday that Limak Holding, a Turkish company, has received a loan of 1.7 billion euros ($2 billion) from 14 institutions to help build a highway connecting Antalya and Alanya. The source told that 87% of the sustainability-linked credit, with a 14-year maturity, was provided by foreign-capital financial institutions. The agreement for financing was set to be signed in Ankara at a special ceremony on Monday. Source, who spoke on condition of anonymity before the ceremony, stated that the project should be completed in three years. Source: The funding process attracted 2.1 more requests than was required. The highway will reduce travel time between two popular tourist locations on Turkey's south coast from 2 1/2 hours to 36 min. Limak, a construction-to-energy conglomerate, will work with a financing consortium including the Asian Infrastructure Investment Bank, Islamic Development Bank, Silk Road Fund, Akbank, Deutsche Bank, Garanti Bank and Ziraat Bank, the source said. The Antalya - Alanya Highway is 122 km long (76 miles) and will include 84 km of highway, 38 km of connecting road following a corridor at the foothills the Taurus Mountains. $1 = 0.8578 Euros (Reporting and Writing by Ebru Tunicay; Editing by Jonathan Spicer; Ros Russell, Aidan Lewis).
Financial Times - Oct 1
The following are the leading stories in the Financial Times. Reuters has not verified these stories and does not vouch for their precision.
Headings
- Simon Case steps down as UK cabinet secretary
- EY selects Anna Anthony as UK employer after three-way race
- Roche prepares to launch drugs and slash advancement expenses
- LVMH offers Off-White streetwear brand name established by Virgil Abloh
- Qatar Airways accepts buy 25% stake in Virgin Australia
Summary
Simon Case, Britain's a lot of senior civil servant, has revealed he is stepping down as cabinet secretary at the end of the year as he gets treatment for a neurological. condition.
EY has selected monetary services employer Anna Anthony as its. new UK managing partner after a three-way race to lead the Big. 4 accounting company's British and Irish companies.
Roche is planning to introduce 20 medicines by the end. of the years and cut research study expenses for new drugs by a 5th,. according to a technique upgrade.
French high-end group LVMH has offered the streetwear. brand Off-White established by the late designer Virgil Abloh to a. brand management company.
Qatar Airways has actually agreed on an offer to purchase stake in. Australia's second-largest carrier Virgin Australia, the most recent. in a variety of international acquisitions by the Gulf airline company.
(source: Reuters)