PARIS, Oct 16 (Reuters) – France and Germany have signed a binding deal on arm exports control rules for jointly developed programmes, such as the tank and the warplane of the future, the two countries said on Wednesday in a statement issued after a joint cabinet meeting held in Toulouse.
German curbs on arms exports to non-European Union or non-NATO countries have been a thorn in bilateral co-operation for years. Germany’s SPD party, part of the ruling coalition, is particularly concerned about the trade.
According to the deal signed on Wednesday, Germany will not block French exports to third countries provided equipment was made with less than 20% German components.
French firms, such as Nexter and Arquus, previously known as Renault Trucks Defense, say German restrictions have hindered export deals. Nexter was also worried about the feasibility of the tank of the future project (MGCS) that should be developed with German firm Krauss-Maffei Wegmann.
Airbus Defence & Space and Dassault equally complained that the SCAF fighter jet project with Germany and Spain could be left in limbo.
France and Germany tentatively agreed to speed up the development of the warplane in the next few months, French President Emmanuel Macron said during a news conference with German Chancellor Angela Merkel.
The two countries will sign in January 2020 a deal to develop the SCAF demonstrator programme, French minister of Armed Forces Florence Parly said on Twitter.
Besides defence deals, Paris and Berlin also said they agreed to give preferential treatment to European companies for the launch of space rockets.
(Writing by Benoit Van Overstraeten and Tangi Salaün; Editing by John Irish)
RIO DE JANEIRO (Reuters) – A left-wing political party on Wednesday filed a lawsuit to block the sale of 80% of Brazilian planemaker Embraer SA’s <ERJ> commercial jet division to Boeing Co <BA> for $4.2 billion (3.3 billion pounds), arguing it will harm Brazil’s sovereignty.
The deal, which would position Boeing to compete more directly with Airbus SE <EADSY> in the market for mid-sized passenger planes, has faced significant left-wing opposition largely because Embraer is seen as a strategic company for Brazil’s national security.
So far, a handful of lower court decisions temporarily blocking the deal have been overturned by appeals court judges. The government has authorized the deal and Embraer’s shareholders are all for it.
But the latest lawsuit, filed by Brazil’s Democratic Labor Party (PDT), underscores that there is still a political risk that could potentially unravel the agreements reached so far between Boeing and Embraer. The PDT’s leader, Ciro Gomes, has staunchly opposed the sale of Embraer’s commercial jet division to Boeing.
Embraer declined to comment on the lawsuit.
The proposed deal with Boeing was first announced in July 2018.
Boeing and Embraer are waiting for antitrust approval to finalise the deal, including intense scrutiny from European regulators. They expect that to happen in early 2020.
(Reporting by Rodrigo Viga Gaier in Rio de Janeiro; Editing by Matthew Lewis)
Oct 15 (Reuters) – United Airlines on Tuesday topped Wall Street estimates for quarterly profit, boosted by higher fares and lower fuel costs, and lifted its 2019 profit target despite the continued grounding of the Boeing 737 MAX.
Chicago-based United is one of three U.S. airlines that have each had to cancel more than 2,000 monthly flights through the end of the year as Boeing Co’s 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia.
The flight cancellations have weighed on airline profits and costs, but strong travel demand, despite concerns of a global economic slowdown, continued to offset MAX headwinds and disruption in Hong Kong and China.
As a result, United raised its 2019 adjusted diluted earnings per share guidance to $11.25-$12.25 versus $10.50-$12.00 previously.
United shares, which closed up 1% at $87.88 before the earnings release, were about 1% higher in after-hours trading.
Total operating revenue rose 3.4% to $11.38 billion, underpinned by the airline’s three-year strategy to build up flight connections through its main U.S. hubs.
But closely watched unit costs excluding fuel and profit-sharing expenses, a concern for investors, rose 2.1%.
The airline, which is in talks with Boeing over 737 MAX compensation, did not provide any details on the estimated financial impact of the grounding.
Adjusted net income rose to $1.05 billion, or $4.07 per share, in the third quarter, from $834 million or $3.05 per share a year earlier.
Analysts on average had forecast $3.95 per share, according to IBES data from Refinitiv.
United management will host a conference call to discuss results on Wednesday at 10:30 a.m. EDT (1430 GMT).
Fellow U.S. MAX operators Southwest Airlines and American Airlines, which have both warned of a pretax profit hit from the MAX grounding, are due to report quarterly results next week.
United, Southwest and American are all scheduling without the MAX until early January.
(Reporting by Tracy Rucinski in Chicago and Sanjana Shivdas in Bengaluru Editing by Shinjini Ganguli and Matthew Lewis)
PARIS/ZURICH (Reuters) – U.S. engine maker Pratt & Whitney faces new checks on engines for small jetliners after an engine failure forced a Geneva-bound Swiss jet to divert to Paris and prompted a brief grounding of the rest of the airline’s Airbus A220 fleet.
French air crash investigators classified the problem that disrupted the Swiss flight shortly after departure from London Heathrow on Tuesday as a “serious incident” and said it would be investigated by the U.S. National Transportation Safety Board.
It was the third engine incident involving the same airline and model of jet in as many months and resulted in a small amount of debris being scattered as the aircraft landed at Paris Charles de Gaulle, an airport source told Reuters.
It came just hours after France’s BEA agency launched an unusual appeal for 150 volunteers to scour an uninhabited wood in eastern France for a titanium engine part dating from the first blowout in July, which affected a Geneva-London flight.
A second incident in September caused a Swiss A220 to divert to Geneva, but on that occasion the engine’s housing contained fragments torn loose from the engine, the BEA said.
Swiss, owned by Germany’s Lufthansa <DLAKY>, said after Tuesday’s incident it had initially grounded its fleet of Airbus <EADSY> A220 jets for a “comprehensive inspection” of their engines.
Late on Tuesday, it said the first aircraft had already returned to service but that the inspections had forced it to cancel 100 flights, affecting 10,000 passengers.
Operations are expected to return to normal from Thursday.
ADDITIONAL CHECKS
Tuesday’s incident highlighted scrutiny of the performance of new-generation Geared Turbofan engines developed by Pratt & Whitney, a unit of United Technologies Corp <UTX>.
A spokesman for the engine maker said it was recommending additional checks for versions of the engine that power the Airbus A220 – an engine known as the PW1500G – and a rival Brazilian jet, the Embraer 190/195-E2.
A similar engine for the larger A320neo family, Airbus’ most-sold aircraft, was not affected.
“Pratt & Whitney and our airframe OEMs (manufacturers), working in coordination with the regulatory authorities, have recommended additional inspections of the low-pressure compressor for PW1500G and PW1900G engines to keep the fleet operational,” a spokesman said.
“The engines continue to meet all criteria for continued airworthiness. We are working closely with our customers to minimise disruption to their operations.”
Prompted by the earlier incidents in July and September, the U.S. Federal Aviation Administration ordered inspections on the same engine part in A220s and some Embraer jets in September.
On Tuesday, Delta Air Lines <DAL> said its A220 jets were flying as normal.
Air Baltic, which also flies the A220, said it was closely following Pratt’s latest recommendations but that it used a different version of the PW1500G engine from Swiss.
A total of 90 of the 110-130-seat A220 aircraft have been delivered, initially by Canada’s Bombardier <BDRBF> which designed the carbon-fibre jet, and later by Airbus, which bought the loss-making programme last year.
Airbus said it was working with Pratt & Whitneyand would co-operate with any investigation.
In Brazil, Embraer <ERJ> had no immediate comment.
The company uses Pratt’s PW1900G engine in larger versions of its upgraded 80-120-seat E2 jets.
It has delivered six E190-E2 planes split between Norwegian carrier Wideroe and lessor Aercap <AER>, and one E195-E2, which is not yet in commercial service but has been delivered to Brazilian airline Azul SA <AZUL>.
Azul said its operations were not affected.
(Reporting by Tim Hepher in Paris, Tracy Rucinski in Chicago, John Revill in Zurich, Michael Shields in Vienna, Marcelo Rochabrun in Sao Paulo, Allison Lampert in Montreal, Laurence Frost in Paris; Editing by Jane Merriman and Matthew Lewis)
SAO PAULO (Reuters) – Brazil airline Azul SA said on Monday that it is in discussions to join a planned partnership with United Airlines, Avianca Holdings and Copa Holdings for flights between the United States and Latin America.
The three airlines announced their plan to coordinate routes in November 2018, but have yet to receive regulatory approval to go ahead. United owned 8.2% of Azul’s preferred shares last month, according to the Brazilian airline’s website.
(Reporting by Marcelo Rochabrun)
E2-195 plane with Brazil’s No. 3 airline Azul SA logo is seen during a launch event in Sao Jose dos Campos
MILAN, Oct 14 (Reuters) – Alitalia is set to win a temporary lifeline on Tuesday, when its latest rescue deadline expires, with toll road operator Atlantia expected to give a conditional green light to hundreds of millions of euros of investment, according to two people close to the situation.
The future of the troubled Italian carrier remains in doubt with no binding offer and no clear business plan in sight but it should avoid an immediate liquidation after the expiry of the Oct. 15 deadline set by the industry ministry.
Atlantia, which is controlled by Benetton family, has been in talks since July over taking part in a government-orchestrated rescue of the airline, together with railway group Ferrovie dello Stato, the treasury and Delta Air Lines.
“Atlantia is expected to give its commitment to invest in Alitalia subject to several conditions,” one of the sources said. But issues that still cause concern range from potential antitrust problems, treatment of state aid under European Union rules, the cost of possible redundancies and the future of the carrier’s long-haul routes, the source said.
Oct. 15 is the latest in a series of deadlines set for Ferrovie and potential partners in a rescue for Alitalia, which has been under special administrators since May 2017 and needs new funds to continue flying.
The board of Atlantia, which runs Rome’s airports through its Aeroporti di Roma unit, is expected to approve a preliminary commitment to the Alitalia rescue on Tuesday, the sources said.
The rescue plans include potential investment of a total of around 1 billion euros in the carrier, which has cut costs under the special administrators but still burns cash and had only 310 million euros left at the end of September.
Atlantia is expected to invest some 300 million euros, depending on commitments from other partners.
A second source said more time was needed to iron out a complete business plan for Alitalia. Possible involvement by Delta Air Lines or Germany’s Lufthansa AG is still under discussion.
A third source said Atlantia, Ferrovie and other potential partners were under pressure from Italy’s Industry Ministry to present a binding bid and take control of the carrier which in the past two years has already received 900 million euros from the state to stay afloat.
Atlantia’s participation in the rescue was put in doubt this month when it wrote to the Industry ministry, urging a radical overhaul of the Alitalia plan if talks were to go ahead.
(Reporting by Francesca Landini, Stefano Bernabei, Giuseppe Fonte. Editing by Jane Merriman)
An Alitalia Airbus A320 takes off on September 26, 2017 from Toulouse-Blagnac airport in southwestern France. / AFP PHOTO / PASCAL PAVANI
Greg Foran, president and CEO of Walmart U.S., smiles after speaking about the company’s Black Friday plans at a Walmart store in Secaucus, New Jersey
(Reuters) – Air New Zealand Ltd <ANZLY> named Walmart U.S. boss Greg Foran as its new chief executive on Friday, bringing him back home at a time the airline is trying to control costs in a lower-growth environment.
New Zealand-born Foran is credited with turning around Walmart Inc’s <WMT.N> U.S. business as its president and CEO since 2014, with the unit reporting 20 quarters of comparable sales growth under his leadership.
Air New Zealand Chairman Therese Walsh said the carrier was “thrilled to have attracted a world class Kiwi back home.”
“Greg has an impeccable track record in delivering strong commercial performance, outstanding customer focus and in building teams that can take a business to the next level,” Walsh said in a statement.
Grant Williamson, investment adviser at Hamilton Hindin Greene in Christchurch, said snagging Foran was a coup for the carrier.
“In the short term, it’s not going to have a major impact on earnings, there’s bigger things moving in the background like oil prices and global growth,” Williamson said. Air New Zealand shares were marginally higher at NZ$2.85 on Friday.
“But in terms of someone to have a steady hand on the wheel for Air New Zealand going forward, I don’t think they could do much better,” Williamson added.
Foran, who boosted Walmart’s sales by focusing on improving existing stores to keep costs and prices low, said he looked forward to building on Air New Zealand’s competitive advantage in customer focus and care.
The airline is known overseas for its quirky safety videos and consistently ranks highly in global airline customer surveys.
Foran will join Air New Zealand in the first quarter of next year, replacing Christopher Luxon who departed last month after seven years in the role. Luxon, a former Unilever executive, had also joined the airline after a career in fast-moving consumer goods.
During Luxon’s tenure, the carrier was recognised globally as an industry leader for its focus on innovation, environmental sustainability and diversity in hiring.
However, it has more recently faced challenges from a higher fuel bill and weak travel demand, leading the national carrier to report a 31% fall in annual profit in August.
Air New Zealand Chief Revenue Officer Cam Wallace, who had been an internal contender for the top job, according to sources with knowledge of the matter, welcomed the appointment on Twitter.
Foran will remain at Walmart until Jan. 31, when he will be replaced by the head of its Sam’s Club warehouse chain, John Furner.
“While we’ve been highly impressed with Mr. Furner’s work at Sam’s Club… he does admittedly have big shoes to fill,” said a note from Jefferies Group LLC <JEF.N>. “We can’t help but expect the market to react negatively to today’s news.”
(Reporting by Jamie Freed in Singapore and Devika Syamnath in Bengaluru, additional reporting by Nandita Bose in Washington; Editing by Sandra Maler and Jane Wardell)
PARIS, Oct 7 (Reuters) – France’s Dassault Aviation and Europe’s Airbus have stepped up pressure on France and Germany to agree on the next stage of a planned fighter project, warning Europe’s arms industry and long-term security could suffer from delays.
The two companies are the leading industrial partners in a project to build a futuristic swarm of manned and unmanned warplanes, announced by the leaders of France and Germany two years ago and expanded earlier this year to include Spain.
Dassault and Airbus won a 65-million-euro contract in January to develop the concept for the Future Combat Air System (FCAS) but await a new contract to build demonstrators for interlinked fighters, drones and an “air combat cloud” by 2026.
Dassault Aviation Chief Executive Eric Trappier told a conference of policymakers last month that the demonstrator contract should have been launched in September but this was now slipping towards end-year. He called it “indispensable” to avoid any further delays in order to maintain the 2026 deadline.
No reason has been given for the delays.
On Monday evening, Dassault and Airbus amplified those warnings with a joint statement.
“If Europe does not move forward — and move forward quickly — on this programme, it will be impossible to maintain the development and production capabilities needed for a sovereign defence industry,” the companies said.
The warplane system is expected to be operational from 2040, with a view to replacing Dassault’s Rafale and the four-nation Eurofighter, in which Airbus represents both Germany and Spain.
The new project faces competition from Britain and its plans for a new combat jet dubbed “Tempest”.
The fighter developments have split the current Eurofighter consortium and led to a shake-up of industrial alliances as Italy joins Eurofighter partner Britain on Tempest, turning its back on Germany and Spain, while Sweden has opened the door to abandoning its independent stance by co-operating on Tempest.
The FCAS is also overshadowed by differences between France and Germany over export policy after Germany imposed a ban on arms exports to Saudi Arabia over the death of killing of journalist Jamal Khashoggi a year ago by Saudi operatives.
The ban, recently extended to March, has raised questions over a long-delayed Saudi border systems contract run by Airbus.
Airbus Defence and Space Chief Executive Dirk Hoke called in a magazine interview last week for the export ban to be relaxed. German Chancellor Angela Merkel’s government has said there is no reason for the moratorium to be lifted.
France and Germany are expected to discuss the issue at ministerial meetings this week.
AIRBUS SETBACK IN SPAIN
Airbus meanwhile faces a battle to shore up its position as a top defence contractor in Spain after losing its place as the representative of Spain’s interests on the upcoming fighter project to local defence electronics firm Indra Sistemas.
Spain last month named Indra as contractor for the Spanish share of the Franco-German-led FCAS project, displacing Airbus from the Spanish coordinator role it had held on Eurofighter.
Airbus officials have pledged to try to overturn the move but a Spanish defence source told Reuters there was no change in the decision.
Indra declined to comment.
Publicly, Airbus has said it was surprised by the decision but has pledged to continue to defend Spain’s best interests.
Dassault will meanwhile mark a long-awaited milestone on Tuesday when it delivers the first of 36 Rafales to India, the culmination of a fighter procurement process that lasted almost 20 years and involved the cancellation of a much larger deal.
La Tribune reported on Monday that France and India were discussing a possible repeat order for 36 more Rafales.
(Additional reporting by Emma Pinedo Gonzalez in Madrid, Tassilo Hummel in Berlin, Editing by Deepa Babington)
(Reuters) – A World War Two-era B-17 bomber trying to make an emergency landing at an airport near Hartford, Connecticut, crashed and burned on Wednesday, killing seven people on board and closing the airport for several hours, authorities said.
The Boeing B-17 Flying Fortress took off from Bradley International Airport on Wednesday morning and the crew contacted the air traffic control tower five minutes later to report a problem, National Transportation Safety Board member Jennifer Homendy said at a news conference.
During the crew’s attempt to land back at the airport, the plane struck stanchions near a runway and careened across a grassy area and a taxiway before striking a de-icing facility, said Homendy, whose agency sent a 10-member team to investigate the crash.
Rescue crews from numerous emergency response agencies raced to the scene where a plume of thick, black smoke billowed skyward after the crash.
Seven people died in the crash and six others, including a worker in the de-icing station, were treated for injuries ranging from minor to critical, James Rovella, commissioner of the Department of Emergency Services and Public Protection, told the news conference.
A total of 13 people were on board the plane, including three crew members, Rovella said.
The names of the seven people who died have not been released pending notification of all the victims’ families. All the victims were adults, Rovella said.
ESCAPE HATCH
Some people on the plane opened an escape hatch and helped others get out, he said.
“During the course of the next coming days, you’re going to hear about some heroic efforts from some of the individuals that were in or around that plane,” he said.
The airport, located in the town of Windsor Locks, was closed for about 3-1/2 hours after the crash.
The plane was operated by the Massachusetts-based Collings Foundation, which is dedicated to the preservation and public display of automotive and aviation-related history.
“The Collings Foundation flight team is fully cooperating with officials to determine the cause of the crash of the B-17 Flying Fortress and will comment further when details become known,” the foundation said in a statement.
The vintage plane was one of only 18 B-17 aircraft still operating in the United States.
Reporting by Peter Szekely and Maria Caspani in New York, Alex Dobuzinskis in Los Angeles and David Shepardson in Washington; Editing by Jonathan Oatis and Peter Cooney
Comment: I have made several pilgrimages to see the Collings Foundation aircraft over the years, and some of my personnal photos of this aircraft can be seen below. Thank you
SEOUL, Oct 1 (Reuters) – South Korea showcased newly acquired F-35 stealth fighter jets to mark Armed Forces Day on Tuesday as President Moon Jae-in tried to allay concerns that his policy of engagement with North Korea would weaken the South’s commitment to defence.
At an event marking the founding of the South Korean military, Moon said South Korean fighter jets conducted patrol flights offshore, including over islands at the centre of a bitter territorial dispute with Japan.
North Korea has criticised the South’s weapons procurements and its joint military drills with the U.S. military as undisguised preparations for war that are forcing it to develop new short-range missiles.
Moon has thrown his support behind dialogue to end the North’s nuclear and ballistic missile programmes, urging that working-level negotiations between the North and the United States be held soon. No new dates or locations have been set.
Moon marked Armed Forces Day at a ceremony at an airbase in the city of Daegu that highlighted four of the eight Lockheed Martin F-35A jets delivered this year. Forty of the aircraft are to be delivered by 2021.
During the event, an F-15K jet patrolled over the islands claimed by both South Korea and Japan and called Dokdo in Korea and Takeshima in Japan.
Moon made no direction mention of North Korea or Japan but said today’s security climate was highly unpredictable, requiring strength and innovation.
“As the recent drone attack in the Middle East region demonstrated to the world, the challenges that we will face will be entirely different from those of the past,” he said in an address to the military. “The war of the future will be a fight of science and intelligence against all elements that threaten our people’s safety and property.”
Analysts have said the F-35 stealth jets put North Korea’s anti-aircraft and anti-missile defence systems in a vulnerable position.
Negotiations aimed at dismantling North Korea’s nuclear and missile programmes have stalled since a second summit between U.S. President Donald Trump and North Korean leader Kim Jong Un broke down in February over disagreements on denuclearisation.
North Korea blamed the United States on Monday for a failure to restart talks, with Pyongyang’s U.N. ambassador Kim Song saying it was time for Washington to share proposals for talks that showed Washington had adopted a new “calculation method”.
South Korea and the United States have separately begun talks for a new military burden-sharing agreement to decide how much South Korea will pay for stationing what is now about 28,500 U.S. troops in the country.
Moon told Trump during a summit in New York last week what South Korea would contribute, including an increase in purchases of U.S. weapons and future purchase plans, a senior official at South Korea’s presidential office said.
(Reporting by Joyce Lee Editing by Jack Kim, Paul Tait and Gerry Doyle)
