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US Judge sets August hearing to end Boeing criminal prosecution
The Justice Department and Boeing have requested that a hearing be held on August 28 to discuss an agreement that would allow the planemaker to avoid criminal prosecution for a charge stemming out of two fatal 737 MAX crashes in which 346 people were killed. Boeing can escape independent monitoring for three years under the deal. This is despite objections by relatives of those who died in crashes in 2018 or 2019. Boeing agreed last year to plead guilty to a criminal charge of fraud that it had misled U.S. regulatory authorities about a critical flight control system in the 737 MAX jet, its most popular model. U.S. district judge Reed O'Connor, in Texas, said he would hear from any lawyers or other parties who wish to speak about the proposed dismissal regarding the charge that Boeing misled U.S. regulatory authorities about a critical flight control system of the 737 MAX. Some family members claim that the dismissal of the employee is not in the best interest of the public and the obligations imposed by Boeing are not enforceable. They have cited O'Connor's 2023 statement, "Boeing's crimes may be rightfully considered as the deadliest corporate crime committed in U.S. history." Boeing The executive branch is the only one who has argued The power to decide if a prosecution should be brought or maintained, and to ask O'Connor not to accept objections from the families but to grant the Government's motion for dismissal of the criminal fraud conspiracy charges. Some families believe that O'Connor, if the government refused to proceed with the prosecution, even if the court had rejected the deal in question, should appoint a Special Prosecutor. The non-prosecution Agreement is a legal agreement that prohibits prosecution. Boeing has agreed to pay On top of the $243.6 million new fine, an additional $444.5 millions will be added to a fund for crash victims. The money will be distributed evenly amongst each crash victim. Boeing has agreed to pay a total of $1.1 billion, which includes the fine, compensation for families, and $455 million in order to improve the company's safety, compliance and quality programs. The Justice Department reported that the vast majority of families had settled their civil cases with Boeing, and they have collectively been "paid several hundred million dollars." Reporting by David Shepardson, Editing by Leslie Adler & David Gregorio
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NTSB Chair says media reports about Air India crash were speculative and premature
Jennifer Homendy, Chair of the United States National Transportation Safety Board, said Friday that media reports about the crash of a Boeing Dreamliner operated by Air India that killed 260 passengers were premature and speculative. The preliminary report released by India's Aircraft Accident Investigation Bureau last week found confusion in cockpit just before the crash on June 12, and raised new questions about the location of the critical fuel cutoff switches. The source who was familiar with the early assessment by U.S. officials of the evidence said that a cockpit recording of the dialogue between the pilots supports the belief that the captain stopped the fuel flow to the plane's engine. Requests for comments from GE Aerospace and Boeing, Air India, the Directorate General of Civil Aviation of India, AAIB, and Air India were not immediately responded to. Homendy stated that investigations of this scale take time and the NTSB would continue to support AAIB in its ongoing investigation. Reporting by Abu Sultan in Bengaluru and Gursimran K. Kaur; editing by Richard Chang
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EU sanctions on Russian energy, financial and banking sectors target the BTC offered by Azeri
The differentials between Brent and Urals crudes dated Friday remained unchanged, but premiums for Azeri BTC slid further in the afternoon trading window due to weak demand, traders reported. The European Union agreed on Friday to an 18th set of sanctions against Russia. These include measures that aim to deal further blows with the Russian oil industry and energy sector. EU diplomats have confirmed that the EU will set a price cap for Russian crude oil at 15% less than its average market value. This means that at the moment, the price of a barrel of Russian crude is about $47.60. That's well below the $60 limit the Group of Seven Major Economies has been trying to impose from December 2022. Shipping sources confirmed on Friday that Greek tanker operators are likely to continue shipping Russian oil approved for export despite the new wave of sanctions by the European Union, which will tighten further restrictions. PLATTS WINDOW Traders said that SOCAR had offered to load two loads of Azeri BTC of 650,000 barrels at plus $1.55 each on August 10-14. This was about $1.00 below the recent estimate. There were no bids or offers made on Urals or CPC Blend at the Platts Window on Friday. The details of the 18th package approved by the European Union on Friday against Russia for its war in Ukraine are listed below. This package is aimed at further damaging Russia's energy and oil industry. Reporting by Mark Porter; Editing and Cynthia Osterman
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Sources: Greek fleet will continue to ship approved Russian oil, despite new EU sanctions
Shipping sources confirmed on Friday that Greek tanker operators are likely to continue shipping Russian oil approved for export despite the new wave of sanctions by the European Union, which will tighten further restrictions. A large amount of Russian oil is exported now by a "shadow fleet" (unregulated tankers) but shipping data shows that Greek owned ships, which are part of the largest tanker fleet in the world, also carry some of the Russian crude which does not fall within sanctions or exceeds the price cap. The EU agreed on Friday to a 18th package against Russia for its war in Ukraine. This included measures that would further damage its vital energy sector. The EU's main measure is a cap on the price of Russian crude. This will prevent the EU from buying Russian crude for less than 85% the average market value. The cap is currently around $47.60 per barrel, which is far below the $60 cap proposed by the Group of Seven Western Powers. Sources who declined to identify themselves due to the sensitive nature of the issue said that Greek shipping companies will continue to ship the maximum amount possible. They account for dozens oil shipments to Russia each month, and 20% of all trade. Sources at Greek shipping companies involved in the trade said that while it would be more difficult to complete such transactions, they are still "doable". "As long traders continue to buy oil at this price, things will not change much. We'll respect new cap." The Greek Shipping Ministry officials did not respond immediately to a comment request. As of yet, the U.S. has shown no interest in aligning itself with EU's price cap. The EU's move will be limited by the fact that most oil is purchased in dollars and only U.S.-based banks are able to restrict dollar clearing. It will complicate the sanctions-compliant trade in Russian oil carried out by European companies. Leigh Hansson is a partner in Reed Smith's sanctions department. She said that the EU price cap will be a similar requirement to previous ones. We expect a 90-day wind down period for the transportation of Russian crude oil and services related to it for contracts signed by 18 July." (Reporting and editing by Jonathan Saul, Renee Maltezou)
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Sources say that Autostrade CFO Peluso will return to Telecom Italia to serve as finance chief
Two sources said on Friday that Piergiorgio Peluso will be taking over as Chief financial officer at Telecom Italia. Peluso served as TIM CFO from 2007 to 2019. People said that he will return to the former phone monopoly in the next month. TIM and Autostrade per l'Italia spokespeople declined to comment. Sources previously said that TIM was looking for a replacement to the current CFO Adrian Calaza as he will be leaving the company at the end of this year. Calaza, a Brazilian national of Argentinean descent and former CFO at TIM's Brazilian division, will take on the role of Group Finance Chief in 2022. He was responsible for the landmark deal last year to sell TIM's fixed line network to a U.S. investment group led by KKR. The goal of this deal was to reduce TIM's debts by 16.32 billion dollars. Peluso is expected to announce his return to TIM on 5 August, when TIM's Board meets to review the first-half results. One source said that he will take on the CFO position at a future date. Poste Italiane, a financial conglomerate, replaced France's Vivendi, the company's biggest shareholder, in May. Poste Italiane now holds a stake of 24.8%. $1 = 0.8580 euro (Reporting and editing by Alvise Armallini and Elaine Hardcastle).
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Greek-managed ships divert Russian oil to Africa in order to avoid Red Sea Attacks
Three oil traders and LSEG data indicate that several Greek-managed oil tankers are increasingly avoiding using the Red Sea to transport Russian oil to Asia, choosing instead the longer route through Africa due to the escalating threat of Houthi attacks. Rerouting comes after a deadly drone attack and speedboat attack on a Greek-operated, Liberian flagged bulk carrier, off Yemen earlier this month, in which four seafarers were killed. In July, the Houthi group, which is backed by Iran and has a fleet of speedboats under its control in Yemen, sank a second vessel. This ended a short period of calm. Since the Houthi began their attacks in November 2023, traffic on the Red Sea has plummeted. The group says the attacks are in solidarity with Palestinians during the Gaza conflict. Russian oil shipments have continued to flow through the area despite the fact that most Western shipowners abandoned it last year. This is due to the close relationship between Moscow and Iran, who back the Houthis. Recently, Greek shipping companies became active on the Russian Urals oil market. The price of the grade has dropped below the Western price limit of $60 per barrel. This allows them to provide insurance and transport services while still complying with the sanctions under the Group of Seven's price cap. LSEG data indicates that vessels like the Minerva Elpida (carrying a total of 300,000 metric tonnes of Russian Urals crude) and Minerva Vera (carrying a total of 200,000 metric tons of Russian Urals oil), departed late June and early in July, and are now en-route to India via Cape of Good Hope. The Greek ship managers did not respond to emails asking for their comments. Was not able determine who made the decision to alter the route. The tankers in question are part of a fleet whose sister vessels have been docked in Israeli ports since October 20, 2023. According to Norwegian marine insurer Gard, this could make them targets for Houthi force. P&I insurance is a standard feature of ship protection. It covers claims from third parties, including those involving environmental damage or injury. Ships are covered by separate hull and machine policies against physical damage. War risk insurance is necessary when entering high-risk zones such as the Red Sea. Kyklades Maritime manages the Nissos Ios a midsized Suezmax under Marshall Islands flag that can carry up to 1 million barrels. Gard provides protection and indemnity insurance. Minerva Elpida is a Greek flagged Aframax tanker capable of carrying up to 0.7 million barrels. The Minerva Vera is a Malta-flagged Suezmax. Both are managed by Minerva Marine, and insured by NorthStandard. Gard declined to comment about Red Sea security and said that it had not provided war risk insurance for the Nissos Ios. It is not known which companies insured the war risks of these three vessels. Northstandard stated that neither P&I nor war risk underwriters would provide shipowners with routing recommendations. Instead, "the decision to travel via the Cape would have been made jointly by both owners and charterers". Typically, it takes two times as long to travel via the Cape of southern Africa to Europe than to travel through the Red Sea. Since the Houthi attack, war risk premiums on Red Sea cruises have increased by more than two-thirds. This has resulted in an increase of hundreds of thousands of extra dollars for each seven-day voyage. (Reporting in MOSCOW by Jonathan Saul and Louise Heavens in LONDON)
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Russia convicts many for anti-Israel riots in Dagestan Airport two years ago
The Investigative Committee of Russia announced on Friday that 135 Russians were sentenced to long prison terms in connection with an anti-Israel mass protest held in October 2023 in the predominantly Muslim Dagestan Region. In the North Caucasus, hundreds of anti-Israel demonstrators stormed the airport of Makhachkala where a plane just arrived from Tel Aviv. The unrest was caused by Israel's conflict with the Palestinian militant group Hamas. Investigators have said that they have collected evidence against 142 individuals and finished investigations into the involvement of 139. Investigators have put the three others on Russia's most wanted list. They are believed to be those who organised the riots through posts on Telegram. The prison sentences for the 135 convicts ranged from 6 1/2 to 15 years. They were convicted of mass riots, among other crimes. Investigators have not named the individuals or revealed their plea bargain. The video footage from the time shows the protesters, mainly young men, waving Palestinian banners, destroying glass doors, and running through airport shouting, "Allahu akbar" (God Is Greater). Before the security forces were able to contain the unrest, more than 20 people had been injured. The plane was not damaged. Vladimir Putin has blamed Ukraine and the West for the unrest without providing any evidence. Kyiv denies any involvement and the United States condemns the violence.
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Incorrect speed record card caused 2024 Nepal plane crash, panel says
The report of a government-appointed panel on Friday said that a passenger plane crash in Nepal in 2013 which killed 18 people, was caused by incorrect information in the flight documents about the aircraft's speed at takeoff. In July of last year, a CRJ-200LR owned by Nepalese Saurya Airlines crashed shortly after take-off from Kathmandu, killing all 17 passengers as well as the co-pilot. Only the captain was left. The report to the government stated that the crash was due to a "deep-stall during takeoff due abnormally rapid pitch rates commanded at lower than optimal rotation speed". Expert in aviation Nagendra Prasad Gimire said the aircraft took off prematurely before it reached the required speed. The report stated that errors in a "speed card" - which provides airspeed data for specific aircraft during takeoffs, climbs and landings - went unnoticed. It also said the airline failed to deal with previous cases where the aircraft's pitch rate (the rate at the aircraft's nose rotates upwards or downwards) was high during takeoff. The report said that the operator had shown gross negligence and noncompliance throughout the entire process of handling cargo and luggage. All operators should review their speed cards, and ensure that they comply with all requirements for cargo and bag handling. The panel asked the Civil Aviation Authority of Nepal to review its procedures for approving non-scheduled flight. Babu Ram Paudel, a CAAN spokesperson, declined to comment on the report. He said he hadn't seen it. Bivechan Khanal, Saurya Airlines' operation manager, said that the airline will "do everything necessary" to implement all recommendations. The crash brought to light the low air safety standards of Nepal, a landlocked country that is heavily dependent on air travel. In 2013, the European Union banned all air carriers from Europe that were certified in Nepal, citing safety issues. (Reporting and editing by Timothy Heritage, Gopal Sharma)
Source: Union Pacific and Norfolk Southern are exploring a merger across the continent.
A person familiar with this matter has confirmed that Union Pacific, which is the largest U.S. railroad operator in terms of freight, is looking at acquiring Norfolk Southern, to create a coast-to-coast network worth $200 billion.
The person stated that the talks are still in their early stages. There is no guarantee that they will continue or any deal will pass what would have to be an extensive, detailed regulatory examination. Both companies declined to make any comments.
A deal that unites two of the largest freight rail operators from North America will likely be subject to intense scrutiny by regulators. The steel, grain and chemical industries will likely lobby against further consolidation in an industry which has already consolidated from more than 100 Class I railroads back in the 1950s down to six today.
Union Pacific shares dropped 2.7% on Friday afternoon, while Norfolk Southern shares rose 1.52%.
Combining the two would create a single-line freight rail network that would stretch from coast to coast and change the divide between the western and eastern regional operators.
Norfolk is recovering after a turbulent couple of years, which included the firing its former CEO amid ethics investigation, a battle in the boardroom with activist Ancora and a derailment of a train that cost about $1.4 billion to the company.
CONCENTRATION
The merger of Union Pacific and Norfolk Southern will create the United States' first single-line modern freight railroad from West to East.
Union Pacific CEO Jim Vena stated earlier this year that a transcontinental merge would benefit customers by eliminating the need for carriers to interchange in Chicago, a bottleneck for many years, and reducing delays.
Critics warn, however, that a consolidation of this kind could lead to a reduction in competition. This is causing regulators concern. Shippers could face increased costs and fewer service options if there are fewer major players on the market.
Brandon R. Oglenski, Barclays analyst, said: "We suspect that certain shipper groups may be vocal about the perceived loss of competition that a merger could bring.
Semafor was the first to report that discussions between two operators were taking place. This led to speculations about competitors considering concentration.
Mike Steenhoek is the executive director of Soy Transportation Coalition. He said, "History shows that mergers and purchases within the railroad sector will inspire and encourage additional M&A."
Canadian National, CP's main rival, then made an offer to purchase Kansas City Southern.
Canadian Pacific acquired Kansas City Southern, creating the first railroad linking Canada, Mexico, and the U.S. in 2023.
Union Pacific will lead the industry in 2024 with $24.3 billion, followed by BNSF, CSX (privately owned, owned by Berkshire Hathaway), Canadian National, Norfolk, and Canadian Pacific Kansas City.
Steenhoek stated that the energy and momentum towards the remaining U.S. based Class I Railroads - BNSF & CSX – pursuing a merge would be significant.
Oglenski stated that a regulatory decision can take between 16 and 22 months. Merging carriers are required to notify Surface Transportation Board 3 to 6 months prior to filing an application. This is followed by a year of evidentiary review, and then a 90-day final ruling.
He said that a potential Union Pacific purchase of Norfolk Southern would have material synergies.
Emily Nasseff Mitsch is an equity analyst with CFRA. Reporting by Sabrina Valle in New York and Lisa Bartlein; editing by David Gregorio
(source: Reuters)