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India fines IndiGo $2.45Million for December cancellations
IndiGo was fined a record amount of?222 millions Indian rupees (2.45 million dollars) by India's aviation regulator on Saturday for "poor roster planning" that resulted in mass cancellations of flights in December. The regulator issued warnings for senior staff, including Chief Operating Officer Isidre?Porqueras, and Jason Herter, Senior Vice?President of Operations Control Centre, with instructions to IndiGo to relieve Herter?of "current operational responsibilities". According to a government source, the fine was the highest ever. IndiGo has been ordered to provide a $5.51m bank guarantee in favor of the Directorate General of Civil Aviation. This is "to ensure compliance with the directives, and long-term correction of the system," according to the regulator. IndiGo stated in a press release that the board and management are "committed to taking full cognisance and will take appropriate measures, 'in a thoughtful manner and on time. India's biggest airline, Air India, canceled 4,500 flights in the first weeks of December. This left tens of thousand of passengers stranded across the country. It also caused chaos at airports. Reporting by Abhijith Gaapavaram and Rajveer Pardesi, Editing by Toby Chopra & Barbara Lewis
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Indonesia searches for missing surveillance aircraft with 11 onboard
Officials?said that Indonesian rescuers searched on Saturday for a missing ATR 42500 fisheries monitoring aircraft with 11 people aboard. Andi Sultan, a local rescue official, said that the Indonesia Air Transport plane had lost contact with air traffic control at around 1:30 pm (0530 GMT), in the Maros area of South Sulawesi Province. Sultan stated that the aircraft was heading towards Makassar (the capital of South Sulawesi) after leaving?Yogyakarta Province before contact was lost. He added that there were eight crew members and three passengers aboard. Sultan stated that around 400 personnel including military and law enforcement units were deployed to search for the aircraft and its passengers, but the effort was hampered by bad weather. Sultan declined to make any comments on the 'possible cause' of -the incident. We suspect that the plane crashed near the summit of Mount Bulusaraung. He said that our personnel had been deployed there. Pung Nugroho Sasono, a ministry official who works for the Indonesian Ministry of Marine Affairs and Fisheries (MoMAF), told the state news agency Antara that this plane was chartered. The three passengers, according to Marine Affairs and Fisheries minister Sakti Wahyu Trnggono, were staff of the ministry conducting air surveillance for?fisheries. The ATR 42 500 is a regional turboprop capable of carrying 42 to 50 passengers. Flightradar24 has unconfirmed data that an aircraft matching this description flew eastward at 11,000 feet over the Java Sea before rapidly losing altitude and dropping tracking systems. ATR, a Franco-Italian aircraft manufacturer in France, said that it was notified of an accident occurring in Indonesia. Its specialists are assisting the local authorities with their investigations. Reporting by Ananda Teresia from Jakarta, Tim Hepher from Paris and Rajveer S. Pardesi from Bengaluru. Toby Chopra, Mark Potter and Toby Chopra edited the story.
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US rail regulator finds merger application between Union Pacific and Norfolk Southern incomplete
The U.S. Surface Transportation Board sent Union Pacific's $85 billion merger proposal with Norfolk Southern back to be revised on Friday, saying that it was missing required information. This is part of an ongoing review by the U.S. The STB rejected the application in December, citing a lack of projections on market share and competition impacts. The board denied the application without prejudice and allowed the railroads to re-file once they addressed the deficiencies. Donald Trump publicly supported the merger proposal. The administration tends to 'approve large transactions or impose remedy rather than blocking them outright. A merger of this magnitude was considered unthinkable during the Biden administration's broader crackdown against consolidation. This is the first major proposed?merger of railroads to be reviewed using the more stringent framework that was put in place over?two decades ago. The stricter framework?requires applicants?to prove their transaction will enhance competition, not just preserve it?while delivering demonstrable benefits to the public?interest? The board stated that the railroads had projected growth in traffic and divertions from the proposed coast to coast railroad, but only provided data for 2023, not the projections required showing how the combined carrier’s?share could evolve several years after the merger. The decision follows a filing in January by Canadian National. It argued that there were critical 'competitive disclosures' missing from the application, including a methodology to identify routes where two rails feed into one another and complete lists of 'potentially affected shippers'. Union Pacific and Norfolk Southern submitted their nearly 7,000-page application to the Federal Communications Commission on December 19. They claimed that this combination would increase?service reliability?, divert truck freight onto rails, maintain shipper options, and provide broad public benefits, while protecting union jobs. The STB stated that the ruling it issued should not be interpreted as a guideline for how it would ultimately determine whether a revised application was admissible.
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PJM announces plan to combat AI-driven surge in power demand
Grid operator PJM Interconnection unveiled a plan on Friday to manage'surging power 'demand from data centres that are required for Big Tech’s artificial intelligence expansion. This comes after the White House urged immediate action to avoid potential blackouts. PJM Interconnection announced that it plans to require large power users?to either bring their own generation or?enter a connect-and-manage framework subject to an early curtailment. The White House had earlier in the day urged the largest U.S. power grid to conduct an emergency auction to prevent rolling blackouts, as the energy demand for data centers is growing faster than the nation can build new generation facilities. PJM controls a large part of the 'power flow' in 13 states, mainly in the Mid-Atlantic region, including the 'largest concentration in data centers, in Virginia. Other?states are also becoming hubs for server storage. PJM’s board stated that its plan 'would focus on bringing a new?power generator online quickly, and would be coupled to options for new load customers whose energy demand can be curtailed if necessary. Reporting by Laila Mukherjee and Anushree Mokherjee from New York; Editing by Leroy Leo, Lisa Shumaker
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White House wants to auction off the largest US electric grid in an emergency
The White House urged on Friday the largest 'U.S. The electric grid should conduct an auction for emergency power to prevent rolling blackouts, as the energy demand from?data centres? is growing faster than new generation plants can be built. The Trump Administration initiative calls for PJM Interconnection, a company that serves 67,000,000 customers across 13 states, including Washington, D.C., and conducts an emergency auction to address escalating prices of electricity and increasing reliability risks in the mid-Atlantic area of the United States. PJM announced its own plan on Friday, urging big data centers that they bring in their own generation to avoid having their power supply curtailed at peak demand times. Grid operator PJM also called for a faster interconnection track to be created for state-sponsored projects. At a White House meeting, U.S. Secretary of Energy Chris Wright, and Secretary of Interior Doug Burgum, joined by several state governors, discussed initiatives to accelerate the construction of new?power generators worth more than $15 billion on PJM. PJM has been criticized as being too slow in building a cushion to prevent rotating blackouts when demand increases. The rapid expansion of data centres to power artificial intelligence and other things has stretched PJM's resources, as well as those of other regional U.S. electrical grids. Donald Trump wants to fight consumer price inflation, which could undermine Republican support ahead of the November midterm elections. The White House wants to cap the amount that existing power plants are allowed to charge on the PJM market. The recent PJM auction for the capacity market set new records for power generators, with prices more than 800% above those of last year. This increased electricity prices in homes and businesses. Data centers would be required to pay for new power generation, whether or not they use it. This agreement would require them to do this regardless of whether the data center shows up. BYOG is the concept, which stands for "bring you own generation." PJM said it was reviewing the principles laid out by the White House, and the governors. A PJM spokesperson confirmed that PJM had not been invited to the event. PJM forecasts that grid peak usage during the summer will increase by?about?70 gigawatts up to 220 gigawatts in the next 15years. PJM's record summer peak was 165 Gigawatts. PJM claims that it has?processed more than 170 gigawatts in new generation requests since 2023. Nearly 60 gigawatts have been completed by PJM and either signed generation interconnection agreements or have been offered. RISE IN POWER BILLS HAS?LED TO BACKLASH The rising cost of electricity in PJM region has led to a political backlash and threats from some governors that they will abandon the regional grid. Nine state governors sent an open letter last summer to the PJM Board of Managers criticizing the grid operators for not doing enough 'to address the escalating energy affordability crisis. Pennsylvania Governor Josh Shapiro told the White House on Friday that PJM had been "too damn slow" to allow new generation onto their grid, at a time when energy demand was increasing. Burgum said PJM was lucky to have avoided widespread blackouts so far. Reporting by Jarrett Renshaw, Tim McLaughlin and Timothy Gardner from Philadelphia; editing by Liz Hampton and Matthew Lewis
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Florida road added to Trump's list
The U.S. president Donald Trump renamed a road near his private club in Palm Beach in Florida. This is the latest addition to the 'growing list' of programs, initiatives, and buildings that bear?his? name since he took office in January. The state legislature approved a new honorific name for a part of Southern Boulevard. This road connects Palm Beach International Airport with Mar-a-Lago - Trump's residence and private club. The president's motorcade frequently uses this road to travel between the airport, and Trump's property. Trump described himself as "tremendously honoured" by the recognition. He said: "I will remember this amazing gesture forever." County commissioners have told local media that the name change will not affect official addresses, emergency response system, or government maps. Since re-entering office a year ago, his name has appeared on high-profile Washington structures, a new proposed class of Navy warships and a website for prescription drugs run by the government. Washington is home to many monuments and buildings named after presidents. These honors are often national tributes and authorized by Congress. Trump received the Nobel Peace Prize Medal from Venezuelan opposition leader Maria Corina Machado at a White House Meeting on Thursday. The White House said that Trump intends to keep his medal. However, the Norwegian Nobel Committee stated that the prize could not be transferred, shared or revoked. Some historians see it as an?overficial attempt of the president to cement a legacy that could prove short-lived. Several performers have withdrawn in protest over the renaming Washington's premier performing arts venue to the Donald J. Trump Memorial Center for the Performing Arts and John F. Kennedy Memorial Center for the Performing Arts.
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FAA warns airlines flying to Central and South America about possible military actions
The U.S. Federal Aviation Administration issued a series warnings on Friday to airlines to be cautious when flying over Central America and parts of South America. It cited the risk of possible military activities and GPS interferance. The FAA has issued Notices to Airmen for Mexico, Central America, Ecuador, Colombia, and certain portions of the eastern Pacific Ocean. The agency said that the warnings will begin on Friday and last for 60 days. These warnings are coming amid increased tensions in the region between the United States, and other regional leaders, after the Trump administration?mounted a large-scale buildup of military forces in the southern Caribbean and attacked Venezuela, and captured the country's President, Nicolas Maduro, in a military action. Donald Trump raised the 'possibility of other military action? in the region, including against Colombia. Trump warned last week that drug cartels controlled Mexico, and that the U.S. would strike land targets in order to combat them. This was part of a series threats to use military force to fight against cartels. The FAA curbed flight throughout the Caribbean after the attack on Venezuela. This forced major airlines to cancel hundreds of flights. FAA Administrator Bryan Bedford said earlier this week that there was good coordination between the FAA and the U.S. Military before the Venezuela operation. Last month, JetBlue's (JBLU.O), a passenger jet headed for New York, took evasive action to avoid colliding with a U.S. military plane in mid-air. Air Force tanker plane near Venezuela. JetBlue Flight 1112 was departing Curacao and flying approximately 40 miles (64km) off the coast Venezuela when an Airbus plane, (AIR.PA), reported that it had encountered the Air Force jet. The Air Force jet's transponder wasn't activated.
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European regulator warns airlines against flying in Iranian airspace
After simmering tensions arose over the 'deadly crackdown' on Iranian protests, and U.S. threats of 'intervention', the European Union's aviation regulator recommended that airlines in its bloc'stay out' of Iran's 'airspace'. In a bulletin, the European Union Aviation Safety Agency stated that "the presence and potential use of a variety of weapons and air defence systems combined with unpredictable responses from states... creates high risks for civil flights at all levels and altitudes." The protests began in Iran on December 28 due to economic hardships. They grew into large demonstrations demanding the end of the clerical regime, which culminated in violence last week. Crackdown on the crackdown It is a verb that means to have Residents said that the protests have been largely quelled for the time being, while state media reported more arrests, in light of the repeated U.S. threat to intervene should the killings continue. EASA's warning said that due to the ongoing tensions, and the possibility of U.S. military intervention, Iranian air defence forces are on high alert. This has increased the likelihood of misidentification in Iranian airspace. Reopened After a nearly five-hour-long closure due to fears of military action, airlines were forced to cancel or delay flights. According to flight tracking data, European airlines such as Wizz Air and British Airways, Lufthansa, and British Airways, continued to avoid Iran and Iraq despite the re-opening of airspace on Thursday. A surface-to air missile fired by Iran in January 2020 brought down a plane. Ukrainian passenger plane All 176 victims were killed abroad. The Iranian authorities blamed human error for the incident, which occurred amid tensions between Iran's military and that of the United States. Reporting by Gursimran K. Kaur, Editing by Mark Potter & Cynthia Osterman
Shipping companies pull out of Hong Kong to avoid US-China risks
Some shipping companies move their operations discreetly out of Hong Kong, and remove vessels from its registry. Some shipping companies are making contingency planning to do this.
Six shipping executives have said that these low-profile actions are motivated by a fear that their vessels could be seized by Chinese authorities, or face U.S. sanction in the event of a clash between Beijing and Washington. The people said that the growing U.S. scrutiny over the importance of China’s commercial fleet to a potential military conflict, such as one over Taiwan, and Beijing's emphasis of Hong Kong's role in serving Chinese interests is causing concern in the shipping industry. Last month, the U.S. Trade Representative proposed imposing steep U.S. fees on Chinese shipping firms and other companies that operate Chinese-built ships to counter China's "targeted dominant" in shipbuilding and maritime logistic. Washington warned American companies in September about the growing risks associated with operating in Hong Kong. The U.S. has already imposed sanctions on officials who are involved in a crackdown.
Hong Kong has been the hub of shipowners for over a century, as well as brokers, financiers underwriters, and lawyers who support them. Official data shows that its maritime and port industries accounted for 4,2% of the GDP in 2022.
VesselsValue - a subsidiary company of Veson Nautical, a maritime data group - reports that the city's flag was flown on eight out of ten ships in the world.
Interviews with two dozen people familiar with Hong Kong including shipping executives and lawyers revealed a growing concern about the possibility that commercial maritime operations in Hong Kong could be caught up by forces outside their control if a U.S. - China military conflict occurs.
Many pointed out China's increased focus on national security goals, trade frictions, and Hong Kong's leader's broad powers to take control of shipping if necessary, as he is accountable to Beijing.
One executive who, like many others, was allowed to remain anonymous to discuss this sensitive subject said: "We do not want to be in the position where China is knocking on our door, requesting our ships, while the U.S. targets us from the other side."
Previously, the concerns of shipowners as well as their efforts to limit exposure to Hong Kong were not reported. In recent years the perception of risk has increased, in line with the tightening security environment in the Chinese-ruled area and the tensions between two of the largest economies in the world.
Turning Tide
To comply with safety and environment rules, commercial ships must be registered or flagged with a specific country or jurisdiction.
VesselsValue, an independent research firm, found that despite the influx of Chinese ships on Hong Kong's register, the number oceangoing vessels registered in the city dropped by more than 8% in January, from 2,580 in January 2004. Government data show a similar drop.
In 2023 and 2024 74 ships, mostly dry-bulk carriers, were re-flagged for Singapore and Marshall Islands. These vessels transport commodities like coal, iron ore, and grain. VesselsValue reports that 15 tankers and 7 container ships left Hong Kong's registry to fly these flags.
Hong Kong's ship registry has seen a dramatic decline in the last two years. Official data shows that it grew by 400% over the past 20 years.
Hong Kong's Government responded to questions by saying that it is normal for shipping companies, given the changing geopolitical, trade and economic circumstances, to review their operations. It is also normal for the numbers of ships registered to fluctuate over the short-term.
A spokesperson stated that Hong Kong will "continue to excel" as an international shipping center, highlighting a variety of incentives, such as profits tax breaks and environmental subsidies, for shipowners.
The spokesperson stated that neither the laws governing registry nor the emergency provisions empower Hong Kong's leader in commandeering ships to serve as part of a Chinese merchant navy.
When asked to comment on the concerns of industry players about how emergency powers from colonial times might be used during a conflict between the U.S. and China, the spokesperson declined. The provisions give the leader of the city "any regulation whatsoever", which includes taking control over vessels and property.
China's commerce and defence ministries did not respond to questions regarding the role of the merchant fleet in Beijing’s warfighting plan, the possible involvement of Hong Kong flagged vessels, or the concerns of commercial shipowners.
The U.S. Treasury declined to comment on potential sanctions, concerns of shipping executives, or the role played by Hong Kong-registered ships in a Chinese commercial fleet.
Lawyers and executives agree that ships can be reflagged in a variety of ways, including through the sale, chartering or redeployment on different routes.
Basil Karatzas of Karatzas Marine Advisors & Co in the U.S. said that Singapore was becoming the preferred domicile for businesses with less exposure to Chinese shipping or cargo trade. It offered many efficiencies including its legal system but also a lower risk than Hong Kong.
Singapore's Maritime and Port Authority stated that decisions regarding domiciles and flags were based on business considerations. The Maritime and Port Authority of Singapore said it had not noticed any "significant changes" in the number Hong Kong shipping companies moving operations or reflagging vessels to Singapore.
MERCHANT FLEEET
Executives and lawyers agree that Hong Kong's registry for shipping is highly regarded by the industry because of its high safety and regulatory standards. This allows its ships to easily pass through foreign ports. Many of China's international state-owned vessels now fly Hong Kong's banner.
According to PLA military studies and four security analysts, in a conflict these tankers and bulk carriers would be the backbone of the merchant fleet that supplies China's oil and food needs.
The U.S., on the other hand, has a very small shipbuilding industry. It also has far fewer vessels under its flag. Three analysts say that while China's growing state-owned fleet would be a target of the U.S. during a military conflict, Beijing would need other vessels in order to supply its needs, given its reliance on international shipping lanes and vast needs.
Donald Trump has been keeping a close eye on strategic maritime operations. Trump said in his January inauguration address that he would "take back" control of the Panama Canal from China. Trump did not provide specifics but his remarks focused on two Panama port operated by a Hong Kong conglomerate CK Hutchison Holdings subsidiary. The group did not respond to any questions regarding Trump's remarks, but agreed to sell the majority of the subsidiary's shares to a consortium led by BlackRock this week, giving U.S. interest control over the port. Trump said to Congress that his administration would create a shipbuilding office in the White House, and provide new tax incentives.
In a study conducted by the U.S. Congress in November 2023, it was stated that "cargo vessels typically transport 90% of military equipment required in overseas conflicts". The report noted that Chinese shipyards ordered 1,794 ocean-going large ships in 2022 compared to five in the U.S.
Merchant vessels played a crucial role in Britain's 1982 long-range operation to retake Argentina's Falkland Islands. Declassified CIA files show that UK-flagged ships operated out of Hong Kong, many of which were owned or controlled by Chinese firms, supplied communist Hanoi in the Vietnam War.
In 2013, President Xi Jinping outlined the need for a Chinese merchant fleet that would help to build China's maritime strength in a Politburo session.
In the past decade, Chinese military and government documents and studies have emphasized the dual-use value of China’s merchant ships.
According to state media, regulations enacted in 2014 required Chinese builders to build five types of commercial ships, including tankers and container ships, to be able to serve military requirements.
Since then, COSCO has seen a significant increase in its line.
Documents from COSCO show that China places political commissars, officers who make sure Communist Party goals are served, on nominally civil ships.
The U.S. banned COSCO subsidiaries in January for what they said were links with the Chinese military.
COSCO has not responded to any questions regarding its deployment of commissars, U.S. restrictions, or what role COSCO's ships -- including those with Hong Kong flags -- might play in wartime.
'REALLY DE-RISKED'
Hong Kong is still an important shipowners' base, despite geopolitical issues. Some shipowners are quietly hedging.
Taylor Maritime (London-listed) a company that was founded in Hong Kong, in 2014, has a much smaller presence in Hong Kong now after several strategic moves in the last few years.
It has been flagging its ships in Singapore and the Marshall Islands since 2021. The company has offices in London, Guernsey and Singapore.
A person with knowledge of the matter said that the firm "really reduced the risk of Hong Kong". This was due to investors' fears of a Chinese invasion in Taiwan and the Communist Party taking control of Hong Kong.
Taylor Maritime's spokesperson stated that the company initially moved its Asia-based teams from Hong Kong to Singapore to be closer to their clients.
Taylor Maritime, after acquiring Grindrod, a shipping company with an Asia office in Singapore and expanding its operations there, relocated certain functions from Hong Kong to Singapore, where it became the primary Asia hub.
Two people with knowledge of the situation said that Pacific Basin Shipping, a Hong Kong listed company, has always flagged its 110 bulk carrier fleet in Hong Kong. However, it is now preparing contingency plans for them to be registered elsewhere while it assesses possible risks.
Pacific Basin's spokesperson stated that the company constantly evaluated geopolitical risk but its fleet still flew the Hong Kong flag "which, at least for the moment, outweighs the challenges".
The spokesperson stated that "Being located in Hong Kong places us near China's 40% share of the global dry bulk export/import activity as well as close to Asia's strong industrial and economic growth regions."
Angad Banga said that shipping firms adjust contingency plans based upon risk assessments, but he has not heard of concerns regarding the commandeering vessels.
Banga said that although some organizations may be re-evaluating their operational strategies, they do not see a widespread exodus from Hong Kong or a loss of confidence. The city, he added, remained attractive to maritime commerce.
Some industry figures have described a general unease in Hong Kong, which has affected their planning.
Three lawyers have said that, until recently, contracts for the increasing number of ships constructed in China that are financed by Chinese banks stipulated that the ship must fly the Hong Kong Flag.
Lawyers said that in the past two years some companies have added a disclaimer to their contracts, stating that they are willing to consider other flags as an alternative. Could not independently verify these changes. Beijing officials have stressed that Hong Kong is important in achieving national security goals. They also referred to China's modernisation of its military and refusal to abandon the use of force against Taiwan.
Three executives and lawyers said that the sweeping security laws, which were first implemented in Hong Kong in July 2021 and then strengthened in March 2020, have increased dangers.
Lawyers said that any attempt by Hong Kong’s leader to commandeer ships in an emergency could prove difficult, since locally registered vessels often travel routes far away from Hong Kong. They said that such powers, which have been in place for a long time, now needed to be seen through the lens of national security.
One lawyer stated that some shipowners would not object to a request from the government to hand over their vessels. This could be due to patriotism, or because they might profit by a crisis.
Another veteran lawyer said that it is "better to avoid being in a situation where you could be asked".
It was not an issue a few short years ago. The national security map has been redrawn. (Reporting and editing by David Crawshaw; Additional reporting by Andrea Shalal, Idrees, and Idrees in Washington and Beijing, Shanghai, and Hong Kong;
(source: Reuters)