WASHINGTON
(Reuters) – Purchases of U.S.-made Boeing Co aircraft by China could be
part of a sweeping deal currently being negotiated to end the
months-long trade war between Washington and Beijing, Boeing’s top
executive said on Thursday.
A
tit-for-tat trade war between the world’s two largest economic powers
has slowed the global economy. It has also opened up new risks for
Boeing, which calls itself America’s biggest exporter, in the world’s
fastest growing aviation market. Boeing sells roughly a third of its
top-selling U.S.-made 737 jetliners to customers in China.
Boeing
Chief Executive Dennis Muilenburg told an aviation summit in Washington
that he sensed U.S.-China trade talks were progressing “in a good way.”
“They
are dealing with some of the tough framework issues around intellectual
property and things like that,” Muilenburg said. “I do think they are
making progress. And at the same time, I think there’s an economic
opportunity here for airplanes to be part of the ultimate deal and help
further close the trade deficit gap.”
Governments
typically use jet deals to achieve broader diplomatic objectives. In
talks with Beijing, U.S. officials have demanded more details on China’s
pledge to make big purchases of American goods, as well as to push for
ways to hold China to any commitments on changes to industrial policies.
U.S.
President Donald Trump has demanded that China shrink its widening
trade surplus with the United States. On Wednesday, the U.S. reported
the goods trade deficit with China rose 11.6 percent to an all-time high
of $419.2 billion in 2018.
China
is poised to overtake the United States as the world’s largest aviation
market in the next decade and is gobbling up planes made by both Boeing
and European rival Airbus SE, while also investing in homegrown
aircraft businesses.
Boeing forecasts Chinese demand for 7,700 new airplanes over the next 20 years valued at $1.2 trillion.
(Reporting by Eric M. Johnson and David Shepardson in Washington; Editing by Tom Brown)
NOTE: Planesintheair.com forcast that 12 to 16 Boeing 747-8F freighters will be included in any new US-China trade deal!
CHICAGO
(Reuters) – Southwest Airlines Co’s mechanics, who have been in labor
contract talks for more than six years, deserve a new deal that makes
them among the best paid in the airline industry, but the low-cost U.S.
carrier needs “more supplier flexibility” in return, the company’s chief
executive said.
The
labor dispute, one of the biggest to hit a top-four U.S. airline in
more than a decade, has escalated with Southwest’s daily out-of-service
aircraft doubling, forcing the carrier to cancel hundreds of flights
since Feb. 15.
Southwest
CEO Gary Kelly in an email to the company’s employees acknowledged the
company was “in a period of tension and turmoil” regarding the
out-of-service aircraft. Reuters obtained a copy of the email late
Friday.
Kelly
said the mechanics deserve a new contract and pointed out that the deal
the mechanics voted down last year would have made those workers the
highest paid in the industry. He said current talks offer the
opportunity to offer even higher pay with no impact on job security “in
exchange for more supplier flexibility.”
Southwest
already outsources the majority of heavy maintenance work, such as
scheduled engine repairs, to external suppliers, but wants the option to
send more scheduled maintenance abroad in order to fund compensation
increases. The change would not affect the kind of work currently
handled by its mechanics, a Southwest spokesman said.
Officials
with the Aircraft Mechanics Fraternal Association (AMFA), which
represents about 2,400 Southwest mechanics and has been in contract
talks with management since 2012, could not immediately be reached to
comment on Saturday.
The
union has disputed the notion that the maintenance issues are driven by
the labor dispute, pointing out the company has the lowest
mechanic-to-aircraft ratio of any major carrier.
In
a Friday email to its members, the union rejected the company’s
assertion that the maintenance issues were a job action and said
mechanics should not allow themselves to be pressured to ignore safety
or mechanical issues with a plane.
“If
you feel you are being pressured to disregard aircraft damage or
shortcut the manuals, then let your airline representative know of such
threats,” union national director Bret Oestreich said in the email. “But
do not get baited into acts of defiance that will be characterized as
insubordination.”
Flights
by Southwest accounted for more than a third of 777 U.S. cancellations
between Friday and Saturday, according to FlightAware.com.
(Reporting by Tracy Rucinski in Chicago, Additional reporting by Ben Klayman in Detroit; Editing by Andrea Ricci)
NEW
YORK, Feb 23 (Reuters) – A Boeing 767 cargo jetliner with three people
on board crashed into a bay near Houston’s George Bush Intercontinental
Airport on Saturday, police and officials said.
Atlas
Air Flight 3591 was en route to Houston from Miami when radar and radio
contact with the plane was lost about 30 miles (48 km) southeast of the
airport, the Federal Aviation Administration said in a statement.
The
National Transportation Safety Board (NTSB) will be in charge of the
investigation, the statement said, and FAA investigators were on their
way to the crash site.
The
Chambers County Sheriff’s office said the plane had been located in
Jack’s Pocket, at the north end of Trinity Bay near the small city of
Anahuac, according to a Facebook post by the sheriff’s office.
Ed
Gonzalez, the sheriff of neighboring Harris County, which includes
Houston, said on Twitter his office was sending personnel to help with
the rescue efforts.
Boeing said on Twitter it was aware of reports of an accident involving a 767 in Texas and was gathering more information.
Atlas
Air said there were three people on board the aircraft. “Those people
and their family members are our top priority at this time,” the airline
said in a statement.
The
company, a subsidiary of Atlas Air Worldwide has been operating Boeing
767 freighters on behalf of Amazon following a 2016 deal.
“Our thoughts and prayers are with the flight crew, their families and friends along with the entire team at Atlas Air during this terrible tragedy,” Dave Clark, senior vice president of worldwide operations at Amazon, said in a statement.
(Reporting by Maria Caspani in New York Editing by Paul Simao)
HANOI
(Reuters) – Fast-growing Vietnamese budget airline VietJet Aviation JSC
is expected to sign a major jet deal with Boeing Co on the sidelines of
next week’s Trump-Kim summit, according to sources familiar with the
matter.
U.S.
President Donald Trump and North Korean leader Kim Jong Un will hold
their second summit in the Vietnamese capital of Hanoi on Feb 27-28.
Holding
a signing ceremony during Trump’s visit would help emphasise
strengthening economic and military ties between the United States and
Vietnam.
VietJet,
while not government-owned, increasingly uses state visits to showcase
major plane orders balanced between Boeing and Airbus SE. It signed a
deal to buy 100 Boeing 737 MAX narrowbody jets when former U.S.
President Barack Obama visited Hanoi in 2016.
The
airline is likely to finalise next week a separate provisional deal
agreed last year at the Farnborough Airshow to buy another 100 Boeing
737 MAX jets worth almost $13 billion at list prices, sources said on
condition of anonymity due to an expected announcement by VietJet.
The
U.S. Federal Aviation Administration declared last week that Vietnam
complied with international aviation standards, in a move that would
allow Vietnamese carriers to fly there for the first time and codeshare
with U.S. airlines.
VietJet
said last week it planned to purchase widebody jets capable of U.S.
flights to open routes to cities with large Vietnamese communities in
the United States, such as in California.
It might be too early for VietJet to place a widebody order, said one of the sources.
Another
source briefed on the matter said the deal for 100 737 MAX jets was
already on Boeing’s books, having been firmed up earlier and listed as
an unidentified customer.
Boeing declined to comment. VietJet did not respond immediately to a request for comment.
VietJet
finalised a deal in November with Airbus for 50 A321neo jets during a
visit to Hanoi by French Prime Minister Edouard Philippe that had also
been announced provisionally at the Farnborough Airshow.
VietJet
operates 385 flights daily within Vietnam and to places such as Japan,
Hong Kong, South Korea, Taiwan, Singapore, China, Thailand, Myanmar and
Malaysia.
However,
industry analysts have questioned whether the airline will take
delivery of all the aircraft on order as the aerospace industry reaches
the peak of an extended growth phase.
(Reporting by James Pearson in Hanoi; Additional reporting by Tim Hepher in Paris; Writing by Jamie Freed; Editing by Muralikumar Anantharaman)
BREMEN,
Germany (Reuters) – Ariane 6, Europe’s next-generation space rocket, is
expected to win its first two commercial launch orders in coming weeks,
company officials said, a key milestone as the European launcher vies
for orders against Elon Musk’s U.S. competitor SpaceX.
Operator
Arianespace faces increased competition from SpaceX and Blue Origin,
owned by Amazon CEO Jeff Bezos. Japan and India also pose a growing
challenge.
Ariane
6 has three institutional orders in hand from the European Commission
and France and is close to signing deals with two commercial customers,
said Mathias Spude, spokesman for ArianeGroup, a joint venture of Airbus
and Safran, that is the majority stakeholder in Arianespace.
ArianeGroup
has invested 400 million euros (£347 million) of its own funds in the
3.4-billion-euro development of Ariane 6 – a project key to ensuring
Europe’s independent access to space and a market valued at over $1
trillion by 2040.
Manufacturers
say the rocket will be more versatile than Ariane 5, able to carry out
missions from placing as many as 90 small satellites in low-earth orbit
to taking classic spy satellites to far higher perches in geostationary
orbit.
But
the business case depends on drumming up enough commercial business to
augment the 5-6 institutional launches expected in Europe annually in
coming years, about a quarter of those planned in the United States.
European governments also face industry pressure to use Ariane 6 even if they could get cheaper rides using SpaceX.
“Europe
continues to need its own access to space – the market of the future,”
said Matthias Wachter with the BDI German Federation of Industry. “It
doesn’t make sense to use European tax money to develop our own rocket
but then launch satellites with competitors from the United States or
Asia.”
Ariane
6, due for a first launch in 2020, was designed to save significant
costs compared to Ariane 5, but industry experts say it will still cost
around 70 million euros per launch – well above the rate offered by
SpaceX, which uses reusable rocket technology and can count on larger
U.S. orders.
Ariane
6’s designers insist innovative production techniques will favour the
European launcher when the commercial market recovers from a recent
slump.
“When
it wakes up … we will be on the market with a rocket that is 40
percent cheaper, and will continue to reduce costs after that,” Spude
told Reuters at the Ariane 6 production site.
Still,
experts say SpaceX is widely credited with jolting the overall market
with a keen focus on cutting costs, forcing Europe to shake up its
launch industry.
(Reporting by Andrea Shalal, Editing by Tim Hepher)
Feb
21 (Reuters) – India’s Jet Airways Ltd has approved a rescue deal by
the lenders of the carrier reeling under a net debt of 72.99 billion
rupees ($1.02 billion), but doubts linger over whether the bailout would
help it clear dues on time.
The resolution plan will make Jet’s lenders its largest shareholders and fix a near 85 billion rupee funding gap.
Jet has been steadily losing market share to its rival and low-cost carrier IndiGo, which is owned by InterGlobe Aviation Ltd.
The airline has also seen its share price suffer as it navigated through several negotiations with its lenders and shareholders.
Oct 18 – Report says Indian conglomerate Tata Group is in talks to buy stake in Jet. Jet calls report “speculative”
Oct 30 – U.S.-based Delta Air Lines Inc expresses interest to buy Jet stake from promoter Naresh Goyal and Etihad Airways
Nov 5 – Report says Tata aims to buy the 51 percent stake in the airline owned by Naresh Goyal, and Etihad Airways’ 24 percent stake, and merge Jet with Vistara
Nov 12 – Jet posts third straight quarterly loss
Nov 13 – Tata Sons begins due diligence to buy Jet, reports say
Nov 15 – Shares surge nearly 25 percent following reports that the debt-laden airline was nearing a rescue deal with Tata Sons; another report says the Indian government asked Tata to explore buying Jet
Nov 16 – Tata Sons says discussions on Jet is preliminary and no proposal has been made
Nov 22 – Independent director Ranjan Mathai resigns, citing rising pressure from other commitments
Dec 3 – Jet says it will stop providing free meals to most domestic economy class passengers from January
Dec 5 – Jet and Etihad Airways have been holding rescue talks with Jet’s bankers, sources tell Reuters
Dec 6 – Jet tells its pilot union it will clear all salary dues by April, a source tells Reuters
Dec 14 – Goyal’s penchant for control has come up as a major obstacle as the airline tries to negotiate a rescue deal, several people who have worked closely with him or known him over the years tell Reuters
Jan 2, 2019 – The airline says it has delayed payment to a consortium of Indian banks, led by SBI; ICRA cuts rating again
Jan 10 – Jet proposes to creditors that it will catch up with debt payments in arrears by September, and from April will meet debt payments as they come due, according to a document seen by Reuters
Jan 11 – Some aircraft lessors were prompted to explore taking back aircraft from Jet, people familiar with the matter told Reuters. Etihad is not “in any position to sink new equity into Jet at this juncture”, says a person familiar with Etihad’s position.
Jan 14 – Report states Goyal is likely to step down from the board and give up majority control
Jan 16 – TV channel reports that Etihad offered to buy Jet shares at a 49 percent discount and immediately release $35 million.
Jan 17 – Top creditor SBI says Jet’s lenders are considering a plan to resolve its debt issues, amid further reports that Goyal is willing to invest 7 billion rupees in the airline and pledge all his shares but wants to retain a 25 percent stake.
Jan 24 – India capital markets regulator says it has no “view” on relaxing norms for a Jet bailout
Jan 25 – Etihad appoints Alvarez & Marsal to conduct due diligence on Jet, sources tell Reuters
Jan 30 – Jet denies its aircraft had been grounded by GE Capital Aviation Services
Feb 1 – Jet agrees to most conditions set by Etihad Airways for a lifeline, a report says
Feb 8 – Airline grounds four aircraft after failing to make payments to lessors
Feb 14 – Jet’s board approves a rescue deal which will make its lenders its largest shareholders and fix a near 85 billion rupee funding gap
Feb 15 – Jet is seeking an $840 million bailout from shareholders and a state-backed fund, Business Television India reports
Feb 21 – International lessors have grounded more Jet Airways planes prior to potentially moving them out of India, as scepticism builds whether a state-led bailout of the carrier can clear their dues on time, sources tell Reuters
($1 = 71.2325 Indian rupees)
(Compiled by Arnab Paul and Chris Thomas in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)
BRUSSELS (Reuters) – Belgian pilots have overwhelmingly voted in favour of a deal with Ryanair on pay and rosters, the Belgian cockpit association (BeCA) said on Friday.
The BeCA said that 98.5 percent of those participating in a secret ballot had voted in favour of the deal that the association said guaranteed stability for pilots for the next four years and harmonised working conditions and pay for all pilots based in Belgium.
Belgian cabin crew and pilots had reached a preliminary deal in October.
“However, it is not all over. It is now up to Ryanair to establish an appropriate local management structure that will guarantee the quick implementation of these commitments,” BeCa said in a statement.
Ryanair suffered a number of strikes last year by cabin crew and pilots, forcing it to cancel hundreds of flights, after the airline recognised unions for the first time in 2017.
The Irish low-cost carrier has sought to reach agreements with unions in a series of countries across Europe.
(Reporting by Philip Blenkinsop; Editing by Kirsten Donovan)
(Reuters) – Tesla Inc has agreed to buy energy storage company Maxwell Technologies Inc for $218 million in an all-stock deal that could help the electric car maker produce batteries that hold more energy and last longer at a time when it needs to cut costs and faces growing competition.
Tesla is rapidly increasing production of its Model 3 sedan and needs to lower the price to reach a broader customer base than its pure luxury vehicles.
Maxwell executives told investors in January that it had developed and patented a “dry electrode” technology that could significantly increase the driving range and reduce the cost of electric vehicle batteries. In a presentation, Maxwell said it expected strategic alliances “within six months” centered around this technology.
The company also makes ultracapacitors, which discharge energy faster than batteries and are seen as complementing battery technology.
Ultracapacitors, combined with the energy of batteries, can enable rapid response times, function across a broader temperature range and lengthen battery life by up to two times, according to a blog post on Maxwell’s website.
Volvo-owner Geely Holding Group last May announced a deal with Maxwell and described the company’s ultracapacitor technology as helping to deliver “peak power” for hybrid cars.
“Tesla needs Maxwell’s solvent-free battery electrode manufacturing for a viable path to lower battery costs,” said Craig Irwin of Roth Capital Partners. “Real competitors are coming now, so Tesla needs to move fast.”
Maxwell’s customers also include General Motors and Lamborghini.
The offer values each Maxwell share at $4.75, representing a 55 percent premium to the stock’s closing price on Friday, the companies said. Maxwell shares rose to trade at $4.58.
Currently, Japan’s Panasonic Corp is the exclusive battery cell supplier for Tesla cars.
Tesla chief Elon Musk had highlighted the importance of ultracapacitors back in 2013.
Tesla also sells power storage, often in conjunction with its solar power business, and ultracapacitors could be used in backup systems for homes and for utility power grids.
Maxwell expects the deal, which has already been approved by its board, to close in the second quarter of 2019, or shortly thereafter.
DLA Piper was Maxwell’s outside legal counsel, while Barclays Capital was the independent adviser. Wilson Sonsini Goodrich & Rosati represented Tesla as outside legal counsel.
(Reporting by Supantha Mukherjee, Peter Henderson and Akanksha Rana in Bengaluru and by Joe White and Paul Lienert in Detroit; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty)
SEATTLE (Reuters) – Boeing Co is close to a deal worth $3.5 billion (2.66 billion pounds) at list prices to sell 30 Boeing 737 MAX jetliners to ANA Holdings, two people familiar with the matter said.
The deal is the first sale in Japan for the newest version of Boeing’s best-selling 737 family and marks a reversal for Europe’s Airbus, five years after the same airline became the first Japanese carrier to pick the competing A320neo.
It also coincides with negotiations between Washington and Tokyo over a potential trade pact, with Japan facing pressure from U.S. President Donald Trump’s administration to cut its trade surplus with the United States.
Boeing declined to comment. ANA could not immediately be reached for comment. A deal announcement could come as early as Tuesday, subject to the airline’s final approval, the sources said, speaking on condition of anonymity.
The Boeing 737 MAX and Airbus A320neo have amassed thousands of orders due to significant fuel savings offered by a new generation of engines.
But the world’s largest plane makers continue to wage fierce market battles, while Boeing has been chipping away at Airbus’s recent lead in the market for such medium-haul airplanes.
Trump and other top U.S. administration officials have criticized Japan over trade, asserting that Tokyo treats the United States unfairly by shipping millions of cars to North America while blocking imports of U.S. autos and farm products.
Japan says its markets for manufactured goods are open, although it does protect politically sensitive farm products.
In September, Trump and Japanese Prime Minister Shinzo Abe agreed to start trade talks in an arrangement that appeared, temporarily at least, to protect Japanese automakers from further tariffs on their exports, which make up about two-thirds of Japan’s $69 billion trade surplus with the United States.
Japan has insisted the new Trade Agreement on Goods would not be a wide-ranging free trade agreement, but U.S. Trade Representative Robert Lighthizer said last year he was aiming for a full free-trade deal requiring approval by Congress.
(Reporting by Eric M. Johnson in Seattle and by Reuters bureaus; Editing by GV De Clercq and David Evans)
BRASILIA (Reuters) – A Brazilian federal court on Thursday granted an injunction blocking the proposed tie-up between planemakers Boeing Co (BA.N) and Embraer SA (EMBR3.SA), according to a court document seen by Reuters.
The decision, which can be appealed, forbids Embraer’s board of directors from signing the deal with Boeing. Boeing and Embraer did not immediately reply to requests for comment.
The legal action was brought by four congressmen with Brazil’s leftwing Workers Party, which is opposed to the deal.
The companies announced in July that Brazilian planemaker Embraer would sell 80 percent of its commercial aviation business to Boeing.
But the deal has stalled, partly because the Brazilian government, which has the power to veto important decisions at the planemaker, has been reluctant to give it a greenlight.
President Michel Temer said he would leave the decision to the future administration, which takes office Jan. 1. President-elect Jair Bolsonaro has said he is in favor of the deal.
(Reporting by Ricardo Brito; Editing by Lisa Shumaker and David Gregorio)
