TOMORROWS TRANSPORTATION NEWS TODAY!
Shares of Wynn resorts (WYNN) dove more than 15 percent Thursday after the casino operator’s chief executive said the company is seeing a “slowdown” at its Macau location.
Though CEO Matthew Maddox said results were strong during China’s seven-day Golden Week holiday, attendance since then has been “choppy” during the week and “sporadic” on the weekends.
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Wynn Resorts shares plunge 15% on Macau news
World’s largest leisure travel company and China State Shipbuilding Corporation set to formally launch cruise joint venture this week under the name CSSC Carnival Cruise Shipping Limited.
New cruise company in China to purchase two existing ships from Costa Group, with the first ship expected by end of 2019 to begin serving guests as part of the JV fleet.
Joint venture also finalizes previously announced agreement for world’s first two new cruise ships to be built in China for the Chinese cruise market, the first of which will be delivered in 2023.
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Carnival Launching China Cruise Joint Venture
(Reuters) – Boeing (BA.N) topped analysts’ forecasts for quarterly profit on Wednesday despite a series of charges on U.S. military programs and raised its forecasts for annual profit as it continued to benefit from a boom in global air travel and airplanes.
Shares of the world’s biggest planemaker were up 4.5 percent in premarket trading, helping brighten the mood on Wall Street after a handful of shaky results on Tuesday from U.S. manufacturers hurt by concerns over global trade.
Soaring demand from commercial airlines has driven another surge in revenues for Boeing over the past year, pushing shares in the company up by roughly a third over the past 12 months.
Those moves have been dented somewhat by a combination of the trade worries, this year’s greater market volatility and a series of recurring charges for its delay-plagued KC-46 tanker program.
Boeing recorded another $176 million in charges in the quarter on the aerial refueling tanker, bringing the total cost of the program to more than $3 billion.
It also took a charge of $691 million related to the MQ25 refueling drone and T-X training jet contracts it won in August and September, offset in part by a $412 million tax benefit.
Despite the charges, Chief Executive Officer Dennis Muilenburg played up the new T-X and MQ25 business and completion of a static test model of its forthcoming 777X widebody, with two test flight jetliners in production.
“This strong underlying performance, along with growth across our businesses we’ve seen throughout the year, give us confidence to raise our 2018 revenue and earnings guidance and reaffirm our operating cash flow guidance.”
Boeing raised its full-year profit forecast to $14.90-$15.10 from a previous $14.30-$14.50 per share, and revenue to a range of $98 billion to $100 billion, up from $97 billion to $99 billion.
The Chicago-based firm’s core earnings, which exclude some pension and other costs, came in 11 cents above analysts’ average forecast at $3.58 per share in the quarter ended Sept. 30.
Boeing has delivered 568 aircraft in the first nine months of 2018 despite production snarls on its best-selling 737 narrowbody, up from 554 at the end of September a year ago, putting it on track to deliver another record year of plane sales.
That keeps the manufacturer, which aims to deliver between 810-815 planes in 2018, in front of its European rival Airbus SE (AIR.PA), which delivered 503 aircraft through September this year. Airbus shares gained 2.7 percent.
(Reporting by Ankit Ajmera in Bengaluru; editing by Patrick Graham and Nick Zieminski)
In other recent Boeing news, the company delivered the first 787-9 Dreamliner for Shanghai-based Juneyao Airlines. The new, super-efficient Dreamliner will also be the first widebody commercial jet operated by a privately-held Chinese airline.
“This delivery is our airline’s biggest milestone and marks a big step toward expanding our network in China and beyond,” said Wang Junjin, Chairman, Juneyao Airlines. “As the market-leading widebody model, the 787-9 Dreamliner will play a key role in our global business growth.”
Juneyao Airlines, previously an all-Airbus operator, mainly offers flights from Shanghai to more than 50 cities across China. In introducing the long-range 787 Dreamliner, the carrier is looking to expand its international network and increase flights to Southeast Asia, Japan and Korea.
The 787-9 is part of a family of three airplanes that offer long ranges and unmatched fuel efficiency in the 200 to 350 seat market. The 787-9 can carry 290 passengers and fly up to 7,635 nautical miles (14,140 km), while reducing fuel use and emissions by 20 to 25 percent compared to older airplanes. Passengers will appreciate a more comfortable flight thanks to the Dreamliner’s large windows, lower cabin altitude, smooth-ride technology, and other amenities.
“We are delighted to welcome Juneyao to the growing 787 Dreamliner family. We are confident that the Dreamliner’s fuel efficiency, range and passenger-pleasing features will power the next stage of Juneyao Airlines’ expansion,” said Ihssane Mounir, senior vice president of Commercial Sales & Marketing at The Boeing Company. “This delivery marks the first of 10 787-9 Dreamliners for Juneyao and their emergence as an international carrier.”
To ensure a smooth introduction of the Dreamliner, Juneyao Airlines will use Boeing Global Services’ pilot training. The airline will also employ electronic flight bag in the flight deck to improve operational efficiency. On other aircraft, Juneyao uses Boeing’s tailored charting services and flight planning solutions.
BEIJING (Reuters) – Tesla Inc has signed an agreement with the Shanghai government for an 860,000 square metre plot of land to build its first overseas Gigafactory, the electric carmaker said in a Chinese social media post on Wednesday.
The land agreement marks a key step towards the firm and its Chief Executive Elon Musk making cars locally in China for the fast-growing market, even as tariffs imposed by Beijing on U.S.-made goods have caused it to hike prices of its imported models.
Tesla signed a long-anticipated deal with Shanghai authorities in July to build its first factory outside the United States, which would double the size of its global manufacturing and help lower the pricetag of Tesla cars sold in the world’s largest auto market.
“Securing this site in Shanghai, Tesla’s first Gigafactory outside of the United States, is an important milestone for what will be our next advanced, sustainably developed manufacturing site,” Robin Ren, Tesla’s vice president of worldwide sales, said in a statement.
Tesla did not give the price tag for the plot, but the Shanghai Bureau of Planning and Land Resources said on Wednesday that a plot of land of 864,885 square metres had been sold at auction at a price of 973 million yuan ($140.51 million).
Tesla signed a deal with Shanghai authorities in July to open a plant in the Chinese city with an annual capacity of 500,000 cars.
The factory will help tap China’s rapidly growing market for so-called new-energy vehicles (NEVs), a category comprising electric battery cars and plug-in electric hybrid vehicles, even as China’s wider car market cools.
NEV sales were up 54.8 percent in September and climbed 81.1 percent in the first nine months of this year to 721,000 vehicles, the country’s top automobile industry association said last week.
Beijing, however, is reining in subsidies for the sector, concerned about overcapacity and “blind development,” with many inside the industry expecting a shake-out to hit the wide array of smaller local electric car start-ups.
Tesla, which started hiring for the new Shanghai factory in August, previously said that it would raise capital from Asian debt markets to fund the construction, which will cost around $2 billion.
By Yilei Sun and Adam Jourdan
($1 = 6.9248 Chinese yuan renminbi)
SHANGHAI (Reuters) – Foreign airlines that fly on 20 popular long-haul routes to China will face fresh competitive pressure as Beijing begins to ease decade-old restrictions on Oct. 1, allowing more Chinese carriers to offer service.
The change affects about 20 percent of Chinese long-haul daily capacity, according to data compiled for Reuters by Chinese aviation data firm Variflight.
It will turn up the heat on U.S. and European carriers like United Airlines (UAL.O) and Air France KLM (AIRF.PA), which have higher costs, lower outbound demand from their countries and less cultural appeal to Chinese travelers.
“The North American and European airlines are no match for the Chinese carriers,” said Corrine Png, chief executive of Singapore-based transport consultancy Crucial Perspective, citing the majority of traffic being driven by Chinese customers.
Some have already abandoned Chinese routes, with American Airlines (AAL.O) recently planning to drop Shanghai-Chicago service after also cancelling Beijing-Chicago and describing the routes as a “colossal loss-maker” that cost it $30 million a year.
The “one route, one airline” policy had been in place since 2009; altering it now is a response to the changing aviation market, China’s Civil Aviation Authority has said.
Two of the routes, Shanghai-Paris and Shanghai-Frankfurt, already have two Chinese airlines flying them but can add one more.
‘LITTLE INFLUENCE’
Variflight’s chief data analyst, Cong Wei, said Chinese airlines controlled about 50 percent of the seats on the 20 routes, which include Beijing-Los Angeles and Shanghai-London, and had the potential for a much higher share.
These routes are divided up between state-controlled carriers China Eastern Airlines Corp Ltd <600115.SS>, China Southern Airlines Co <600029.SS> and Air China Ltd <601111.SS>.
They compete against foreign airlines including Air France KLM, Lufthansa (LHAG.DE), Air Canada (AC.TO), British Airways (ICAG.L), Virgin Atlantic [VA.UL], Air New Zealand (AIR.NZ), United Airlines, Delta Air Lines (DAL.N) and American Airlines.
An Air France KLM spokeswoman said the company was monitoring the regulation change but had “very little influence on how this rule could evolve.”
“Competition between Europe and China is already present and increasing,” the spokeswoman said. “We continue to enhance our existing partnerships to offer the most attractive products and services at competitive fares to all our customers. This is undoubtedly the best response to this eventuality.”
Delta Air Lines said China continued to be an important market for its long-term network and that it was well positioned because of its partnership with China Eastern. Air New Zealand said it was aware of the change and was constantly assessing new route opportunities.
Lufthansa, Air Canada, British Airways, Virgin Atlantic, United Airlines and American Airlines did not respond to requests for comment.
TIE-UPS
The policy would also likely hurt incumbent Chinese airlines like Air China, which under the old rules had been able to dominate the Beijing-Los Angeles route. Many Chinese airlines are already facing falling returns on their international business.
Rivals like Hainan Airlines <600221.SS>, China’s fourth-largest carrier, have been expanding their international business in secondary routes and could take on new ones, analysts said. Out of the 20 routes opening for competition, Hainan only flies between Beijing and Toronto.
China Eastern and China Southern, headquartered respectively in Shanghai and Guangzhou, are also expected to launch new routes from Beijing once the Chinese capital’s new second airport opens in late 2019, giving the two state-owned airlines secondary bases.
The opening of Beijing Daxing International Airport was a catalyst for the government’s decision to change the route policy, the Chinese aviation regulator said in May.
China Southern said it supported the policy change, while China Eastern declined to comment. Air China and Hainan Airlines did not respond to requests for comment.
Li Xiaojin, a professor at the Civil Aviation University of China, said foreign carriers could focus on developing services for the luxury end of the Chinese market or deepen recently forged tie-ups with Chinese carriers to try to retain a competitive edge.
But Li said the ultimate winner would be Chinese travellers.
“By liberalizing international air rights, airlines will put more capacity on popular routes, at hot timings … and provide passengers with safe, more convenient, more comfortable and economical services,” he said.
(Reporting by Brenda Goh; Additional reporting by SHANGHAI Newsroom; Editing by Gerry Doyle)
SHANGHAI (Reuters) – Tesla Inc on Tuesday signed agreements with Shanghai authorities that will allow it to open a plant in the Chinese city with an annual capacity of 500,000 cars, local media reported.
Under the agreements, Tesla will independently open a plant integrating research and development, manufacturing and sales functions, according to news website Knews, which is affiliated to state-owned Shanghai Media Group.
Tesla and Shanghai authorities did not immediately respond to requests for comment. The signing was held at Shanghai’s Fairmont Peace Hotel but media attendance was limited, a Shanghai government official who declined to give his name told Reuters.
Tesla’s Chief Executive Elon Musk attended the signing, according to a Reuters witness. Bloomberg reported on Monday that Musk will visit Beijing on Wednesday and Thursday.
Tesla has been in protracted negotiations to open its own factory in China to help bolster its position in the country’s fast-growing market for electric cars and to avoid high import tariffs.
The plant will be based in the Lingang area, close to Shanghai’s Yangshan port, and will count as the largest foreign manufacturing project in the Chinese financial center’s history, Knews said.
Chinese financial magazine Caijing, citing sources close to the project, said the plant’s exact location had not been decided and construction would start early next year.
Tesla hiked prices in China over the weekend to a level more than 70 percent higher than in the United States amid mounting trade frictions between Washington and Beijing that have seen several U.S. imports, including cars, become subjected to retaliatory tariffs of 25 percent.
Tesla boss Elon Musk had previously criticized China’s tough auto rules for foreign businesses, which would have required it to cede a 50 percent share in the factory. The company was keen to maintain control of its own plant and protect its technology.
But it registered a new electric car firm in Shanghai in May after China announced that it planned to scrap rules on capping foreign ownership of new-energy vehicle (NEV) ventures by 2022.
The agreements signed on Tuesday also include a memorandum of understanding between Tesla and the Shanghai municipal government, under which Shanghai agreed to support Tesla to set up a research and development innovation center.
(Reporting by Brenda Goh; Additional Reporting by Shanghai and Beijing Newsrooms and Sweta Singh in Bengaluru Newsroom; Editing by Alexandra Hudson)
LONDON (Reuters) – Norwegian Air (NWC.OL) plans to serve new destinations in South America from London, prompted by strong demand for flights to Buenos Aires which begin this week as it ramps up its budget operation on long-haul routes.
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Norwegian Air to South America
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