Latest News
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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.
Asia's airline companies blame supply chain concerns for interfered with operations
A siaPacific travel demand has recuperated from the pandemic, but profits at the region's airlines are under pressure from supply chain issues interrupting operations and exposing them to strengthening consumer defense rules, industry executives say.
A lack of parts, labour and brand-new aircrafts as the aviation market emerged from the pandemic has accompanied higher-than-expected repair work required on the latest-generation engines.
The supply chain concern is the biggest difficulty the market is dealing with, Subhas Menon, the director general of the Association of Asia Pacific Airlines (AAPA) stated at the trade body's annual conference in Brunei this week.
Turnaround times for engine maintenance are at record lengths, with airline companies having to cut flights, relocation parts around and lease stop-gap engines or aircrafts to keep operations ticking.
Thai Airways CEO Chai Eamsiri stated servicing the Rolls-Royce engines on its Boeing 787 jets utilized to take around three months, however that has blown out to about 6.
We need to extend the airplane. We utilized to run 12.5 hours a day, now we have to extend it to 13 plus, he told Reuters on the sidelines of the event.
SUPPLY CHAIN AGGRAVATION
The heads of significant carriers consisting of Thai Airways, Singapore Airlines, Malaysia Airlines and Kazakhstan's. Air Astana expressed aggravation with maintenance. times and stated federal governments trying to improve customer. protections ought to stop positioning the blame on airlines for. delays.
The origin is originating from the supply chain ... However we are. the one facing the consumer, Eamsiri informed the meeting.
Malaysia, Australia, Thailand and the Philippines are amongst. the nations beefing up airline company customer protections to need. refund options when it comes to delays and cancellations, as is. the United States, though the rules are not as difficult as EU. guidelines requiring payments to affected guests.
Aviation makers have to get their act together, Air. Astana CEO Peter Foster said.
Amidst a lack of planes, labour and parts, Malaysia. Airlines suffered a string of service interruptions this year and. cut its network capacity by 20% from September.
Malaysia's civil aviation regulator cut the period of the. provider's air operator certificate to one year from 3 years. after an examination.
All airlines are wringing the neck of our suppliers,. Malaysia Airlines CEO Izham Ismail told attendees.
Engine servicing used to take around 55 days before the. pandemic, today it requires 100 or more, Ismail stated.
Representatives of Plane and Rolls-Royce said. independently they were working to deal with supply chain snags,. consisting of enhancing providers' access to financing.
AIRFARES FALLING
Travel in the Asia-Pacific area, which accounts for around. 32% of international guest traffic, recovered later than other. parts of the world due to a belated lifting of pandemic travel. restrictions, especially in China.
In September, guest volumes for 40 Asia-Pacific based. providers balanced 97.5% of the corresponding month in 2019,. according to AAPA data.
Airline companies internationally have actually been seeing stable need but. airfares are declining as a post-pandemic travel boom abates and. most planes are back in the skies.
Singapore Airlines, seen as a bellwether for the area,. last week posted a 48.5% plunge in interim net profit,. reflecting stiff competition, and flagged its earnings would. remain under pressure regardless of robust travel need.
(source: Reuters)