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US tightens penalties on foreign-built vessels
United States Trade Representative said that it will modify maritime fees for foreign-built vehicles carriers and LNG vessels in advance of the port fees on China linked ships scheduled to take effect next week. USTR announced in a press release that the fees for operators of foreign-built vehicles carriers will be $46 per ton starting October 14. This is lower than the $150 per net tonne fee originally proposed by USTR in April. The industry considered this fee prohibitive. However, it is still higher than the $14 per net tonne fee proposed on June 12th. USTR will also eliminate, retroactively to April 17, the provision that allowed the suspension of LNG export licenses in the event certain restrictions regarding the use of vessels built abroad were not met. It also added an exemption from fees for certain ethane carriers and liquefied petrol gas (LPG), which are part of long-term charter agreements. USTR proposed in February the actions needed to counter China’s growing maritime dominance, and restore American shipbuilding. The original proposals of the USTR were watered-down under pressure from the industry. They called them too punitive, and they said that it would have stopped a revival in U.S. Shipbuilding. Beijing made the move on the same day that it retaliated for U.S. fees on port charges, which took effect on Wednesday and applied to vessels built in China or owned by Chinese companies. China announced that it would charge a fee for ships flagged or built in the United States or owned by companies whose shares or board members are at least 25 percent U.S.-owned. Tariffs for CRANE, CARGO Equipment USTR said that it would also impose 100% tariffs for certain cargo-handling and ship-to shore cranes, as well as intermodal chassis used to haul containers. The agency confirmed that it would not impose any tariffs on cranes shipped to shore before April 17. USTR has announced that it will not impose any duties on intermodal containers because of the possible impact on domestic carriers. USTR proposed to make further modifications to the action it took in April. It imposed additional tariffs up to 150% for certain cargo-handling gear, such as rubber-tired gantry cranes and components. Reporting by Lisa Baertlein and David Lawder, both in Washington. Editing by Tom Hogue.
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Trump threatens to export Boeing parts as a response to China
Donald Trump, the President of the United States, said that Washington could implement export controls on Boeing parts in response to Chinese restrictions on exports of rare earth minerals. "We have a lot of things. One big thing is an airplane." When asked at the White House what products the U.S. could export control, Trump replied that China has a large number of Boeing aircraft and needs parts. Cirium, a company that provides aviation analysis, reports that Chinese airlines have ordered at least 222 Boeing aircraft. Boeing aircraft are in service in the country. Boeing's 737 single aisle jet is the most popular plane on order. Steve Holland reported from Washington, and Dan Catchpole from Seattle. Ismail Shakil wrote the article. Chris Reese edited it.
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Spirit Airlines cancels Airbus Order in Settlement with AerCap
Spirit Airlines, in an effort to optimize its fleet, will not purchase 52 Airbus aircraft and its options on 10 more. AerCap will take over the aircraft orders. The agreement between Spirit and AerCap was approved by the U.S. Bankruptcy Court of the Southern District of New York on Friday as part of a settlement of disputes. Spirit's second bankruptcy was triggered by a dispute with the largest aircraft leasing company in the world. AerCap abruptly cancelled the lease agreements of 36 Airbus A320neo jets scheduled to be delivered to Spirit in 2027-2028. The company also claimed that Spirit had defaulted on leases of 37 aircraft in its operational fleet. Spirit disputed AerCap's validity. The company's access to its fleet, both current and future, was compromised. It had no choice but to file for bankruptcy. Spirit will not renew 27 of its 37 leases as part of a settlement reached between the two parties. AerCap was given permission to use the $9.7 million cash security deposits provided by Spirit for the cancelled aircraft leases. The Irish leasing giant has also been given permission to make a claim against Spirit for up to $572,000,000 in total. The amount of money that Spirit will be able collect is still unknown. Spirit will relinquish all rights to the undeliverable jets. It will also sign lease agreements with AerCap to acquire 30 new Airbus A320 and A321 aircraft for delivery evenly spread across 2027-2028-2029. AerCap will inject $150 million in cash into the bankrupt airline as part of this deal. Spirit also announced that the court had approved a debtor in possession ("DIP") facility up to $475 millions from its existing bondholders. The carrier has immediate access to $200 million of the total financing. Spirit stated that the agreement would allow it to cut operating costs by hundreds and millions of dollars. Spirit intends to shrink its operation to cut costs. It has decided that approximately 1,800 flight crew members, or about one third of its cabin staff, will be furloughed on December 1. The carrier plans to reduce its fleet, which is currently 214 aircraft strong, by 100 aircraft or nearly half.
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US FAA resumes flights at Atlanta Airport after air traffic control was evacuated
The Federal Aviation Administration announced on Friday that flights will resume at Hartsfield Jackson Atlanta International Airport following a fire alarm. Reports of a strong gas smell forced the ground stop, and the temporary evacuation the air traffic tower. Flights were halted and diverted due to the issue. FlightAware is a website that tracks flights. It reported 500 delayed flights and nine cancelled. FlightRadar24 reported that at least half a dozen Delta Air Lines flight were diverted. FlightRadar24 reported that "Flights are moving in Atlanta again, but it will take a while to clear the situation this evening." The FAA announced that the tower would be restaffed once employees had been given permission to return. Atlanta is the busiest airport in the United States by passenger traffic. (Reporting and editing by Diane Craft, Tom Hogue and Diane Craft; Jasper Ward and David Shepardson)
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China retaliates against US port fees
China's Transport Ministry announced on Friday that it will impose port fees for U.S. owned, operated, flagged, or built vessels starting on Tuesday, as a response to U.S. fees on ships with ties to China. The U.S. president Donald Trump announced that he would increase tariffs on Chinese imports to the U.S. by 100%, and implement export controls on key software as a retaliation to China's export restrictions on rare earth minerals. Analysts said that there are only a few U.S. built or U.S. flagged vessels doing international trade. But China will ensnare even more vessels by applying levies on companies where 25% or more shares or board positions are held by U.S. investment funds. Erik Broekhuizen is a manager of marine research and consulting at Poten & Partners, a ship brokerage firm. "The impact could be significant." "The potential impact is significant." SOME VEHICLES TO PAY CHINA AND U.S. FEE Matson, a U.S. shipping company, told its customers that it was subject to new China port fees but had no plans to alter their service schedule. Lars Jensen of Vespucci Maritime's container shipping consultancy, Vespucci Maritime CEO Lars Jensen said that the U.S. subsidiaries of CMA-CGM, American President Lines, and Zim in Israel, are also likely to be affected. Jensen said that the fees will be charged in China and America for 100 vessels chartered by container line and owned by Poseidon Seaspan. Maersk Line Limited APL Zim and Seaspan have not responded to comments on the fees. Analysts said that although most oil tanker operators were based outside of the United States they could be hit by China's fees for port access because they are listed there. Scorpio Tankers, for example, has the largest and youngest fleet in the industry and is listed in America. It did not respond immediately to a comment request. Broekhuizen, in a note to clients, said that the Chinese port fees have "thrown the tanker markets in chaos". He added that many vessels which could be affected were already on their journey to China. Samantha Hartke, the Americas analyst for Vortexa, stated that the port fees in China will affect 43 super-tankers carrying liquefied gas, or 10%, of the global fleet. Analysts said that vessels owned or operated in China will be charged a flat rate of $50 per tonnage net per voyage. The most vulnerable is China's COSCO, which includes its OOCL Fleet, with fees estimated at around $2 billion by 2026. COSCO declined to comment immediately. CHINA CALLS U.S. FEE DISCRIMINATORY U.S. fees for China-linked ships, after an investigation by the U.S. trade representative, are part of U.S. efforts to revitalize domestic shipbuilding, and to blunt China's commercial and naval shipping power. The Chinese Ministry said: "It's clearly discriminatory, severely harms China's legitimate shipping interests, disrupts global supply chains, and undermines international economic and trading order." The USTR office has not responded to a comment request. In the last two decades, China has risen to No. 1 in the world of shipbuilding. Its biggest shipyards are involved with both commercial and military projects. China has risen to the top of the world shipbuilding rankings in just two decades, and its largest shipyards are involved with both commercial as well as military projects. Joe Kramek is the president and CEO of World Shipping Association. He said that the fees announced by China are similar to those imposed by the U.S. They "add complexity and costs to the global network which keeps goods moving and economies linked and may harm their exporters and producers as well as consumers, at a time where global trade has already been under pressure." Rates rise over three years The Chinese Transport Ministry said that the tariff for U.S.-linked ships berthing in Chinese ports from Tuesday will be 400 Yuan ($56.13). This will rise to 640 Yuan ($89.81), and 880 Yuan ($123.52), from April 17th 2027. From April 17, 2028 the fee for vessels visiting Chinese ports will be 1,120 Yuan ($157.16). Since September, tensions between China and America have increased. The two superpowers are struggling to break their 90-day trade tariff truce that began on August 11 and ends around November 9 The U.S. trade war with China has led to a sharp decline in Chinese imports of U.S. agricultural and energy products.
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CANADA-CRUDE-Discount on Western Canada Select widens
On Friday, the discount between West Texas Intermediate and Western Canada Select futures (the North American benchmark) widened. CalRock reported that WCS for Hardisty, Alberta delivery in November settled at $10.65 per barrel below the U.S. benchmark WTI. This is compared to a close on Thursday of $10.60. The WCS discount is tighter this month than usual, as opposed to the seasonal pattern which usually sees it widening after the summer driving season. Canadian crude oil production is on the rise. According to the Alberta Energy Regulator's data, Alberta produced 4.2 million barrels of crude oil per day in August. This was the highest ever recorded for the month. The price of Brent and U.S. Crude futures dropped more than $2 per barrel or more than 3 percent on Friday, as the threat by U.S. president Donald Trump to increase tariffs against China cast a cloud over demand in a market that is perceived as being oversupplied. (Reporting from Georgina McCartney, Houston; Editing and proofreading by Sahal Muhammad)
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Delta and Aeromexico challenge US decisions to dissolve joint venture
Delta Air Lines, Aeromexico and the U.S. Government sued each other to challenge an order that the joint venture be disbanded by January 1, which allowed the carriers to coordinate the scheduling, pricing and capacities decisions for U.S. - Mexico flights. The companies filed a lawsuit on Thursday in the 11th Circuit Court of Appeals against the U.S. Transportation Department's decision of September 15. The petition was published on Friday. Transportation Department has ordered the end of the joint venture, which lasted for nearly nine years. The department cited competition concerns as a reason to terminate it. Delta said that in a Friday statement, the petition was "our only option and the next procedural step in the process" to protect Delta and Aeromexico’s global networks and customers. According to the Atlanta-based airline, following the order of dissolving the venture by the 1st January "would be financially and operationally burdensome." The companies intend to request a stay from the appeals court to stop the enforcement of the January 1 deadline until the court has reviewed the case. The Transportation Department has not yet commented. USDOT announced last month that the joint venture would be terminated due to "ongoing anti-competitive effects on U.S. Mexico City markets which provide unfair advantages to Delta and Aeromexico". About 60% of passengers flying from Mexico City Airport into the U.S. are carried by these carriers. The airport is the 4th largest international gateway into and out of the United States. The U.S. Government said that it did not require Delta to sell its 20% stake in Aeromexico. Delta stated that the joint venture creates more than 310 million dollars of gross domestic product in the United States and nearly 4,000 jobs. It warned that up to $800,000,000 in consumer benefits per year could disappear, and two dozen routes may be cancelled. Smaller aircraft could also replace the existing planes. The Department of Transportation warned that the venture would likely result in higher fares on some markets, reduced capacities and problems for U.S. carriers because of government intervention. (Reporting and editing by Diane Craft, David Gregorio and David Shepardson)
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Peru's new president prepares cabinet to quell the anger as elections approach
After taking office, Peruvian president Jose Jeri has scrambled for a new cabinet. He is looking for names that will help to calm public anger about the rising crime and corruption in advance of next year's election. Two sources in Jeri's office said that Jeri was now putting together his 19-member Cabinet. This is a crucial test for his efforts to create a consensus cabinet and calm a volatile country. He took over after Dina Boluarte was removed from office in a congressional session that lasted all night. Congress voted to remove a deeply unpopular leader due to "moral incapacity". This was after public protests and anger over the rise in crime, which has seen murders and extortion soar. The public's anger reached a boiling point after one of Peru's most popular bands, the cumbia band, was attacked in the middle of a concert on Wednesday. It took place at a venue that belonged to the Peruvian Army. On Thursday, Congress presented multiple motions for Boluarte's impeachment. Jeri is the seventh Peruvian president in two years. He's a conservative politician, who has faced his own controversy, including an investigation into sexual assault that was shelved and accusations of corruption he denied. Some Peruvians have reacted with skepticism to the new president, as most of his predecessors were ousted from office in the last nine years or resigned due to scandals. Edwar Sandoval said, "We don't trust President Jeri either, but there is no other person to lead the ship." Sandoval was a shopper in a popular Lima marketplace. "May God save us." Jeri maintained that he had a clean criminal record, and called for unification during his first speech as president. Jeri stated that it was time to apologize for any mistakes made. "To all Peruvians I apologize and make a promise. The promise is to start building and laying foundations for a country where, through empathy, all Peruvians can be reconciled." Jeri, the former Congresswoman who became president in 2007, will now finish her current term, which ends in July. General elections will be held in April. (Reporting and writing by Marco Aquino, Kylie Madry, Alexander Villegas, Deepa Babington).
Dallas airports are back to normal after FAA details the problem that caused the outage
Flight operations returned to normal at two Dallas area airports on Saturday after the Federal Aviation Administration revealed that a Verizon Communications unit had suffered telecom failures which caused more than 2,000 flights to be disrupted.
American Airlines, Dallas Fort Worth Airport's largest carrier, reported that more than 100,000 passengers had been affected by telecom problems which began around 2 pm CT on Friday and continued until the morning of Saturday.
American Airlines said that it had to cancel 530 flights on Friday and 160 flights on Saturday. It also had to divert 65 other flights bound for Dallas.
Southwest Airlines, Dallas Love Field's largest carrier, has delayed or cancelled more than 1,100 flights on Friday. Southwest Airlines reported 580 extreme delays Friday.
American Airlines, which has also experienced a delay of more than 350 flights in the last week, warned that there may be additional operational impact.
The FAA reported that "multiple failures of telecommunications services provided by Verizon Communications Frontier unit" led to the outage which affected the FAA's Dallas Terminal Radar Approach Control (which handles operations at both Dallas airports).
The FAA stated that the oversight by L3Harris contractor failed to ensure the redundancies of the system worked properly.
A Frontier spokesperson said that a third party contractor in Argyle (Texas) accidentally cut the fiber lines of their company, affecting communication systems at Dallas airports. She said that her team coordinated with the FAA, the airports, and worked over night to stabilize the system. As a result, the airports were back up and running by today.
American Airlines explains the events leading to flight disruptions. Two fiber optic cables were cut on Friday, affecting data that supports FAA radars and radio frequencies, as well as computer systems.
David Seymour (American Airlines' Chief Operating Officer) wrote in an email sent to its employees that the efforts of L3Harris, Frontier and other airlines to restore service were not moving fast enough. He also said that the airline was working on determining the financial impact.
Seymour, along with the airline's chief executive officer, Robert Isom had difficulty "reaching leaders at Frontier and L3Harris". "We are extremely disappointed that neither of the providers seems to be in a hurry to resolve this issue," Seymour wrote in an email.
L3Harris didn't immediately respond to an inquiry for comment.
In recent years, the FAA has been plagued by a series of technical issues that highlight the fragility of the U.S. Air Traffic Control System. Congress awarded $12.5 billion in July to revamp the system. (Reporting by David Shepardson, Lucia Mutikani and Leslie Adler; editing by Leslie Adler).
(source: Reuters)