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California Judge blocks efforts to restart Santa Ynez Oil Pipeline
A California judge on Monday sided with state government, and tentatively ruled in favor of the state against Houston-based Sable Offshore’s request to restart a crude oil pipeline that draws crude oil from the Santa Ynez off-shore oil project. The tentative decision of Judge Thomas Anderle at the Superior Court for Santa Barbara County is a major setback for Sable whose entire business revolves around the Santa Ynez Project. In extended trading, its shares dropped over 20% to $14 per share. In May, the company restarted production at one of three offshore platforms that are part of this project. It had been shut down for a decade due to an oil leak under Exxon Mobil's previous ownership. Sable also repaired a subsea pipe that takes crude oil from an offshore platform. It hoped to sell the oil in California, but the California Coastal Commission refused its restart citing problems with Sable’s permits. Sable filed a petition with the Santa Barbara Superior Court, arguing that the Coastal Commission lacked the authority to issue a cease and desist. Anderle's tentative ruling stated that the company had not met its burden of proving the commission abused its discretion. Anderle will conduct an hearing on Wednesday, before making a final decision. Sable will also likely change its marketing strategies for crude oil produced on the Santa Ynez platform. Last week, the company said that delays in the re-start of the Las Flores system would force it to switch to tankers for the transportation of crude oil from Santa Ynez. Sable said that it has asked the federal government to support the tanker route and submitted last week an updated Santa Ynez development and production plan detailing this route to the U.S. Department of Interior's Bureau of Ocean Energy Management. Shariq Khan, New York; Chris Reese, editing.
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Spirit Airlines targets a net profit of $220 million in 2027
Spirit Airlines announced on Tuesday that it would fully implement its transformation by the end 2027. By then, the bankrupt airline expects to generate about $220 millions in net profit. In a regulatory filing the discount airline estimated that its adjusted operating losses in 2025 would be $819 million. After filing for bankruptcy a second consecutive time in August, the ultra-low cost carrier has cut its network and fleet size, and is planning to lay off pilots and flight attendants in order to get on a more solid financial footing. Spirit Airlines said that its EBITDAR, a measure for operating performance, is estimated to reach $900 million at the end of 2027. Two furloughs are expected to save the carrier $211 million, of which one has already taken place. Spirit stated that fleet reductions would result in an estimated $400 million in annualized rent savings and a decrease in lease liabilities of over $3 billion. Reporting by Rajesh Kumar Singh in New York and Doyinsola Oladipo; editing by Chris Reese, Deepa Babington
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Next week, the US Senate Committee will vote on legislation relating to aviation safety.
The U.S. Senate Commerce Committee will vote on aviation safety legislation on October 21, following a deadly January crash between a regional American Airlines jet and an Army helicopter at Reagan Washington National Airport that killed 67 people. The Senate Commerce Committee chair Ted Cruz, along with several other senators, are set to introduce legislation that will require military helicopters flying near civilian aircraft to use ADS-B technology for tracking, and all civilian aircraft to use ADS-B. At the time of the collision in January, the helicopter that was involved did not use ADS-B. First reported the planned vote next week that will mark the first major step toward aviation safety reforms following the U.S. plane accident which killed more than 200 people. Cruz, a Republican senator, has been working with Maria Cantwell, a Democrat, to try and reach a bipartisan agreement before the hearing on legislation relating to aviation safety. Sean Duffy, Transportation Secretary and members of both parties in Congress, has questioned the Federal Aviation Administration's failure to take action for many years regarding close calls with military helicopters near Reagan. Cruz's bill, dubbed ROTOR Act, would also require that the Army Inspector General's Office initiate a safety audit after declining to do so. Cantwell, along with other Democratic Senators, proposed legislation in June requiring an audit of helicopter operations and passenger operations on major airports. The bill also mandated new FAA safety assessments after fatal passenger airline crashes and required ADS-B usage. Cruz's spokesperson said that he had been working with the families of those who were injured in the accident and was committed to making sure this kind of accident never happens again. The spokesperson said that the bill "requires all aircraft, both military and civil, to use ADS-B out and ADSB in and seeks accountability for the Army failures which may have contributed to this crash." In April, the FAA announced that government helicopters would be required to use ADS-B near Reagan National. And in May, the Army was barred from flying helicopters around the Pentagon following a close call. The FAA changed helicopter routes earlier this month at the Baltimore/Washington Thurgood Marshall International Airport, and Washington Dulles International Airport in order to "add additional buffer between aircraft" and "increase the separation between helicopters flying into and out from each airport." (Reporting and editing by Nia William and Aurora Ellis; Reporting by David Shepardson)
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NDTV reports that at least 19 people have died after a bus catches on fire in India's Rajasthan.
According to the Indian broadcaster NDTV, citing police, at least 19 people were killed on Tuesday when a private vehicle in the state of Rajasthan, located in western India, caught fire. Smoke was seen coming from the back of the bus as it traveled from Jaisalmer towards Jodhpur. NDTV reported that the driver stopped the vehicle along the roadside, but within seconds flames engulfed it. According to the report, police suspect that the fire was caused by a short-circuit. NDTV reported that 15 passengers, including 2 children, suffered serious burns. Some of the victims had up to 70% of their skin burned off. Details of the report could not be independently verified. Rajasthan Police did not respond immediately to our request for comment. "Distressed at the loss of life due to an accident in Jaisalmer (Rajasthan). In this difficult time, my thoughts are with those affected and their families," Indian Prime Minister Narendra Modi wrote in an X-post. The Prime Minister also announced that the National Relief Fund of the Prime Minister will provide 200,000 Rupees (2,253) for the families and injured.
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Azeri BTC and Urals are both down on weaker demand
As November-loading cargoes began to trade, the differentials between Russia Urals and Azeri BTC remained stable, but traders reported that Azeri BTC volumes had been offered at lower premiums on a bearish oil market. The demand for Russian Urals Oil remained strong, and cargoes to be loaded in November began to appear on the market. The traders tried to estimate the volume of exports for November, as the ongoing attacks on Russian oil refining facilities and the news of an increase in Russian oil production suggested a higher availability of this grade. Traders said that the high availability of alternative oils on the market has put pressure on premiums for Azeri BTC. PLATTS WINDOW Azerbaijan SOCAR offered to load 650,000 barrels Azeri BTC Oil from Ceyhan on November 4-8 at plus $1.95 Brent Dated, but the offer failed to find a purchaser, despite being below recent price estimates. The United States, China and other countries began to charge additional port fees for ocean shipping companies that transport everything from holiday toys or crude oil. This is a major front in the trade dispute between the two world's largest economies. The International Energy Agency reported on Tuesday that Russia's revenue from crude oil, refined products, and other petroleum products dropped again in September. Exports of these products plummeted to their lowest level in over a decade, excluding April 2020 when COVID was a problem.
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US Judge to hold trial in 2027 for fatal helicopter and plane collision lawsuits
A federal judge set a trial date of April 2027 for lawsuits filed over the collision between an American Airlines regional plane and a U.S. Army chopper that claimed 67 lives near Ronald Reagan Washington National Airport this year. U.S. district judge Ana Reyes set the date for a hearing in Washington with attorneys representing victims, defendants such as American Airlines and U.S. Government. Reyes stated at the hearing that "we will not dishonor those who have lost their lives and their families and friends and we will not dishonor employees of defendants who are working hard to ensure safety" by dragging the matter along. American Airlines, Federal Aviation Administration and U.S. Army didn't immediately respond to comments. Plaintiffs' lead attorneys either refused to comment or didn't respond immediately to a request. At least two lawsuits have been filed against American Airlines and U.S. Both lawsuits were filed in September and name PSA Airlines as a defendant. PSA didn't immediately respond to an inquiry for comment. American Eagle Flight 5342, on its approach to Reagan, collided with a U.S. Army Black Hawk Helicopter over the Potomac River at night. The helicopter was flying above the published altitude for helicopter routes. American Airlines defended their safety record in a previous statement and stated that they would "defend American Airlines and PSA Airlines from any legal actions claiming that the airline caused or was involved in this accident." The U.S. airline disaster was the deadliest in over 20 years. (Reporting and Editing by Bill Berkrot.)
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Chinese airlines oppose Trump's plan to stop flying above Russia on US routes
On Tuesday, major Chinese airlines urged the Trump Administration to abandon its plan to ban them from flying above Russia on U.S. flight routes, claiming that it would increase flight times, increase air fares, and disrupt some routes. The U.S. Transportation Department last week proposed that Chinese airlines be banned from flying over Russia in routes between the United States and China, claiming the shorter flight times put American carriers at an unfair disadvantage. China Eastern, which was one of the six Chinese airlines to send a letter, stated in a USDOT filing that this move could increase flight times on some of their most important routes from two to three hour, and significantly increase the risk of missing connections. Air China and China Southern have said that the decision will adversely impact a significant number of passengers both in the United States as well as China. China Southern estimated that at least 2,800 passengers who were scheduled to travel between November 1 and December 31 during peak holiday travel season would have to be rebooked, "putting their travel plans in jeopardy." In retaliation to Washington's ban on Russian flights over the U.S. after Russia invaded Ukraine in March 2022, Russia has banned U.S. Airlines and many other foreign airlines from flying over their airspace. Chinese airlines are not banned, and they have used this to gain a larger market share on international routes compared to other carriers. On Friday, a spokesperson for China's Foreign Ministry said that the restrictions did not encourage person-to-person contact. Airlines for America, the major trade association representing American Airlines, Delta Air Lines, and United Airlines, applauded the initiative but called on USDOT "to maintain parity in the numbers of passenger flights available for U.S. airlines and Chinese carriers, by ensuring the level of capacity for passengers remains reasonably tied to the marketplace demand." (Reporting and editing by Chris Sanders; David Shepardson)
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Boeing receives EU antitrust approval for Spirit AeroSystems $4.7 billion deal
Boeing received EU antitrust approval Tuesday for its $4.7 Billion acquisition of Spirit AeroSystems, after agreeing on the sale of some Spirit businesses in order to address concerns about competition. Boeing announced a deal last year to streamline its operations and improve the quality of its products, many years after it had spun off the airline suppliers. Boeing offered remedies when the European Commission, the EU's antitrust enforcer said that the deal would have reduced competition on the global aerostructures market and the large commercial aircraft industry. The Commission confirmed a report last week that it had accepted Boeing's proposal to divest Spirit's aerostructures business to Airbus. Boeing will sell Composites Technology Malaysia Sdn Bhd the Spirit site in Malaysia that supplies aerostructures for Airbus. This allows the Malaysian firm to enter the market. Teresa Ribera, EU antitrust chief, said that "Boeing’s commitments" will preserve competition on this important market. They also allow for the entry of new competitors and guarantee commercial aircraft manufacturers get the parts they require at competitive prices. The U.S. has yet to approve the deal. Boeing's spokesperson stated that they were committed to completing the acquisition and obtaining the necessary regulatory approvals. This will allow Boeing to continue to produce high-quality, safe airplanes, benefiting the flying public and our customers. Spirit Airlines said that it is working hard to meet the closing conditions, as well as complete its further planning with Boeing Airbus and Composites Technology. Spirit AeroSystems' spokesperson Joe Buccino stated, "This is a milestone towards transaction closure expected this quarter."
US retailers rush to import holiday goods, fearing disruptions and strikes
Retailers are preparing for a rush of summer imports into the United States, as they prepare to face a possible strike of port workers. They also want to avoid the ongoing disruptions in shipping caused by attacks on ships in the Red Sea.
Container imports and rates of freight surged in the month of July, signaling a peak season earlier than usual for an industry that deals with about 80% global trade.
Analysts predict that July will be the peak month for U.S. retail, which accounts for half of this trade. August should be nearly as strong, they said.
To attract customers who shop earlier in the season, companies that import toys and home goods have offered holiday promotions. Jonathan Gold, vice president of supply chain and customs policies at the National Retail Federation (NRF), said that retailers don't like to be caught off guard.
Peter Sand, Chief Analyst at pricing platform Xeneta, stated that many shippers have expedited orders for holiday goods. Some even put Christmas items in the water as early May.
Experts said that the influx of goods is not due to consumer spending which has been held back by high interest rates and stubborn inflation. It is more of a precautionary measure against a possible U.S. Port Strike and the late November 28th date for Thanksgiving, which would have shortened the peak season from Christmas Eve to the end of the year.
According to Descartes Systems Group, the supply chain software company, U.S. container exports in July were at their third highest monthly volume ever with 2.6 millions 20-foot-equivalent units (TEUs). This is up 16.8% compared to a year ago, largely due to record-breaking imports from China.
The NRF's executive committee includes Target, Macy's, and Saks CEOs. It also anticipates strong imports in August. Walmart, America's biggest container shipper, will report its second-quarter earnings in August.
After talks between the International Longshoremen's Association (ILA) and the United States Maritime Alliance stalled, retailers are worried about a possible strike on Oct. 1, at seaports from Maine to Texas.
Maersk outlined on Friday the potential consequences of a strike disruption in U.S. port.
Maersk stated in an update on the U.S. Market that even a week-long shutdown could cause significant delays and backlogs to increase with every passing day.
According to Xeneta, the non-contract spot rate for a container traveling from the Far East up to the U.S. West Coast jumped by 144% between April and July, but has since dropped 17%. Similar trends have been seen on container routes going to the U.S. East Coast, northern Europe, and the Mediterranean.
Sand stated that "we should see the spot markets fall even further. However, the decline will not be as rapid. It is still going be a painful year-end for shippers."
TARIFF THREAT
In the first half 2024, container imports to the United States were largely driven by industrial products. This was partly because of looming tariffs for exports from China. The administration of President Joe Biden imposed new tariffs on a number of goods that will go into effect later this summer.
Jason Miller, professor at Michigan State University’s Business School and expert in supply chain management, said that solar cells and EV batteries are the main beneficiaries of tariffs.
Biden has kept the tariffs in place that his predecessor Donald Trump had put into effect. Donald Trump has, as the Republican nominee for 2024, threatened to increase tariffs even further if he wins the White House. Miller stated that despite this threat, companies have not responded in a big way. Maersk, a global shipper, said that there may be a pull-back in demand before the November U.S. elections due to tariff uncertainty.
Maersk CEO Vincent Clerc stated this week that there was a general consensus on the fact that the United States has entered into a more competitive relationship with China, and the outcome of the elections will not affect the relationship.
(source: Reuters)