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Air Italy Flights Rekindle U.S. Carrier Anger

ROME (Reuters) – Air Italy will start flying to Chicago next year, a move likely to revive a dispute between its minority shareholder Qatar Airways and U.S rivals trying to squeeze Gulf operators out of their domestic market.

Formerly known as Meridiana, Air Italy is the country’s second-largest airline, behind ailing Alitalia [CAITLA.UL], and state-owned Qatar Airways holds a 49 percent stake in it.

Air Italy will fly to Chicago three times a week from Milan Malpensa airport starting from May 14, 2019, Chief Operating Officer Rossen Dimitrov told Reuters.

Since 2015 the largest U.S carriers — Delta Air Lines (DAL.N), American Airlines Group (AAL.O) and United Airlines (UAL.N) — have argued their Gulf rivals are being unfairly subsidised by their governments, distorting competition.

Gulf airlines have always denied those accusations and in May the companies reached a voluntary agreement, saying they would not add new flights to the United States.

However, Air Italy has been flying to New York and Miami since June and will start serving San Francisco and Los Angeles from April 2019.

That has drawn criticism from an alliance of U.S.-based airlines grouped in the “Partnership for Open & Fair Skies”, that Qatar Airways is using Air Italy to offer additional flights between the U.S. and Europe, despite the agreement.

“Once again, Qatar is using Air Italy as a Trojan horse built from subsidized cash to avoid its commitments to the Trump administration and launch new … routes,” said Scott Reed, campaign manager for the Partnership for Open & Fair Skies.

In an emailed statement, Reed called on U.S. President Donald Trump to intercede on the behalf of U.S. airlines.

Dimitrov tried to dismiss any suggestion that Air Italy was acting improperly, noting that Qatar Airways was a minority shareholder.

“They do not dictate what we do and where we go. They do not manage us,” he said.

He added that he would be happy to work with the U.S airlines under code-share agreements, from which both sides would benefit, “rather than spending time and money fighting each other”.

The opening of the Chicago route next year is part of a wider plan, announced in May, in which the airline aims to grow its fleet and passenger numbers fourfold by 2022.

(Reporting by Giulia Segreti and Alberto Sisto; Editing by Keith Weir and Crispian Balmer)

Image from http://www.airitaly.com

Iran Airlines Need 500 Airplanes

DUBAI (Reuters) – Iran needs some 500 planes and would likely back buying the Sukhoi Superjet 100 if Russia is willing to sell them to its airlines, Iranian news agencies reported the country’s top civil aviation official as saying on Wednesday.

Iran needs to upgrade its ageing passenger fleet and is seeking to avert U.S. sanctions on Tehran.

The U.S. Treasury has revoked licences for Boeing Co (BA.N) and Airbus (AIR.PA) to sell passenger jets to Iran after President Donald Trump pulled the United States out of the 2015 Iran nuclear agreement in May and reimposed sanctions.

Most modern commercial planes have more than 10 percent in U.S. parts, the threshold for needing U.S. Treasury approval.

But Russian officials have been reported as saying Sukhoi is working on reducing the number of U.S. parts in the hopes of winning an Iranian order for up to 100 aircraft.

“If the Iranian airlines want to use this aircraft (Superjet 100 ) and the seller is willing to sell it to Iran, the Civil Aviation Organization is ready to issue its final comment on this aircraft,” the semi-official Fars news agency quoted Ali Abedzadeh, head of the Civil Aviation Organization, as saying.

“But this aircraft has adhered to world standards and is flying currently, therefore there is no reason for us to reject it,” Abedzadeh told Fars.

Flag-carrier IranAir had ordered 200 passenger aircraft – 100 from Airbus, 80 from Boeing and 20 from Franco-Italian turboprop maker ATR (LDOF.MI) before U.S. licences were revoked.

“The airlines have proposals for plane purchases and we are trying to devise regulations that will ease their aircraft imports. Considering Iran’s very large market, we need 500 planes now,” Abedzadeh was quoted as saying by the semi-official Tasnim news agency.

Reporting by Dubai newsroom; Editing by Alexander Smith

Image from http://www.scac.ru/en/

Wall Street Set To Jump On Temporary Trade Detente

(Reuters) – U.S. stock index futures jumped around 2 percent on Monday, setting Wall Street up to add to last week’s strong gains, after the United States and China declared a temporary trade truce.

Strong gains in Apple Inc (AAPL.O) and other technology stocks pushed Nasdaq futures NQc1 up more than 2 percent, while S&P 500 e-minis ESc1 touched a near 1-month high. Gains in Dow futures set the blue-chip index up for a near 450-point gain at the open.

Washington and Beijing agreed to a 90-day trade ceasefire during the G20 summit in Argentina on Saturday and U.S. President Donald Trump said China has agreed to “reduce and remove” tariffs below the 40 percent level that the country is currently charging on U.S.-made vehicles.

However, the White House also said that the existing 10 percent tariffs on $200 billion worth of Chinese goods would be lifted to 25 percent if no deal was reached within 90 days.

The trade optimism spilt over to shares of Apple, which gained 3.3 percent in premarket trading.

Trump had said last week that the next round of tariffs could also be placed on the company’s iPhones, as part of the $267 billion list of goods not yet hit by tariffs.

Trade-sensitive Caterpillar Inc (CAT.N), Boeing Co (BA.N) gained over 4.5 percent each, while U.S. carmakers General Motors Co (GM.N), Ford Motor Co (F.N) and Tesla Inc (TSLA.O) rose between 3 percent and 4 percent.

Shares of energy companies also rose as crude prices surged, helping lift Exxon Mobil Corp (XOM.N) up by 2.1 percent and Chevron Corp (CVX.N) by 2.4 percent. [O/R]

“Most of us were hoping that we would come out of these discussions with no new tariffs and a pause, which is ultimately what we got,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

Image from RT.com

Lockheed Martin Lands $22.7 Billion 255-Jet Fighter Order

Let the shareholders rejoice: Lockheed Martin‘s (NYSE: LMT) F-35 Lightning II fighter jet contracts are getting bigger — and bigger.

In September, Reuters reported on a Pentagon deal to buy what it called at the time “the biggest batch yet” of Lockheed Martin’s joint strike fighter – 141 fighter jets valued at $11.5 billion. To win such a big order, Lockheed lowered its average F-35 cost to $81.6 million. With engine and other incidental costs factored in, flyaway costs were a bit higher. Lockheed’s F-35B variant flyaway cost $115.5 million, its F-35C cost $107.7 million, and the F-35A ended up at $89 million. Still, as Lockheed noted  at the time, this contract offered the “lowest per-aircraft price in program history,” which undoubtedly helped Lockheed seal the deal.

Big as that sale was, however, the contract Lockheed just won easily eclipses it.

Click the link below for the full story!

Lockheed Martin Lands 255-Jet Fighter Order

Image from lockheedmartin.com

Harris & L3 To Merge, Become 6th Largest US Defence Contractor

By Jarrett Renshaw and Harry Brumpton

(Reuters) – Military communication equipment providers Harris Corp (HRS.N) and L3 Technologies Inc (LLL.N) announced on Sunday an all-stock merger that will create the United States’ sixth-largest defence contractor with a market value of $34 billion.

Increased defence spending under U.S. President Donald Trump and the Republican-led Congress is driving contractors to pursue mergers so they have more scale to bid on bigger projects, spanning everything from upgrading computer systems to space exploration.

In August, Trump signed a defence policy bill that authorized $639 billion in military spending such as buying weapons, ships, aircraft and paying troops.

“We are in an environment where the economy is pretty strong, we know defence spending is coming up, the 2019 (federal) budget is up 3 percent over 2018, 2018 was up 9 to 10 percent over the prior year,” Harris Chief Executive William Brown said in an interview.

“I think there is an increasing need for more investment, more end-to-end solutions,” Brown added.

The transaction values L3 at $15.7 billion, slightly above its market capitalisation at the end of trading on Friday of $15.3 billion. Harris has a market capitalisation of $18.2 billion.

L3 shareholders will receive 1.3 shares of Harris common stock for each of their shares. As a result, Harris shareholders will own about 54 percent of the combined company, with the remainder owned by L3 shareholders.

The combined company, L3 Harris Technologies Inc, will have about 48,000 employees and customers in over 100 countries, the companies said. The merger is expected to close in midyear 2019, they added.

The new company’s board of directors will have 12 members, consisting of six directors from each company. Brown will serve as chairman and chief executive officer, and L3 CEO Christopher Kubasik will serve as vice chairman, president and chief operating officer for the first two years following the closing of the deal, the companies said.

In the third year, Brown will transition to executive chairman and Kubasik will become CEO. After that year, Kubasik will be both chairman and CEO.

“The aerospace and defence industry is continuing to see a lot of change over the last year or so, and many people have believed for a long time this combination made sense and we have worked hard to make that happen,” Kubasik said in an interview.

A string of deals have taken place in the sector. In June, U.S. defence contractor Northrop Grumman Corp (NOC.N) acquired Orbital ATK Inc for about $7.8 billion, giving it greater access to lucrative government contracts and expanding its arsenal of missile defence systems and space rockets.

In April, weapons maker General Dynamics Corp (GD.N) bought CSRA Inc for $9.7 billion to expand its government services business, after CACI International Inc (CACI.N) withdrew its offer for CSRA following a bidding war.

Morgan Stanley (MS.N) is acting as financial adviser to Harris and Sullivan & Cromwell LLP is serving as principal legal counsel, with Paul, Weiss, Rifkind, Wharton & Garrison LLP acting as special counsel to the board of directors. Goldman Sachs Group Inc (GS.N) is acting as financial adviser to L3 and Simpson Thacher & Bartlett LLP is serving as legal counsel.

(The story adds expected closing date in paragraph 8, detail about new company’s leadership in paragraph 10)

(Reporting by Jarrett Renshaw and Harry Brumpton in New York; Additional reporting by Chris Sanders in Washington; Editing by Sandra Maler and Peter Cooney)

Airlines Win, Passengers Lose As Congress Drops Reasonable Fee Rule

WASHINGTON, Sept 22 (Reuters) – The U.S. airline industry scored a win on Saturday as bipartisan congressional legislation dropped plans to mandate “reasonable and proportional” baggage and change fees, but included other new passenger protections.

After weeks of negotiations, a 1,200-page bill to reauthorize the Federal Aviation Administration (FAA) was unveiled early Saturday that would require the FAA to set minimum dimensions for passenger seats — including legroom and width — and prohibits airlines from involuntarily removing passengers from flights after they’ve cleared the boarding gate.

In April 2017, video went viral on social media of 69-year-old passenger David Dao being dragged from a United Airlines flight at Chicago’s O’Hare International Airport after he refused to give up his seat to make room for crew members. United apologized and promised not to remove seated passengers to make room for other passengers.

But airlines had heavily lobbied against new rules limiting fees. U.S. airlines revenue from baggage and reservation change fees increased from $5.7 billion in 2010 to $7.5 billion in 2017. Other fees are not reported to regulators.

The compromise bill did not include language adopted by a Senate Committee in 2017 that would have required the reasonable fee rules. It was struck in a compromise unveiled by Senate Commerce Committee Republican chairman John Thune and House Transportation and Infrastructure Committee chairman Bill Shuster, a Republican, along with the top Democrats on the two committees Senator Bill Nelson and Representative Peter DeFazio.

Congress is set to vote on the measure next week ahead of a September 30 deadline.

American Airlines Group Inc became the latest major airline on Thursday to hike checked bag prices by $5 for the first bag to $30, joining Delta Air Lines Inc, United and JetBlue Airways Corp.

Airlines for America, an airline trade group, has said the fee provision would result in “government-mandated price controls” and should be rejected and the Trump administration also strongly opposed the provision.

The bill also requires the U.S. Transportation Department to set new rules authorizing commercial drone deliveries and gives the Justice Department and Homeland Security Department new authority to disable or destroy drones if they pose a threat to government facilities after the Trump administration warned it did not have the legal authority it needed to address threats.

Under the bill, airlines must refund passengers for services they paid for but did not receive and will enshrine in law a prohibition on passengers making mobile phone calls while in flight or using e-cigarettes.

The bill requires airlines to allow passengers to check strollers if they are traveling with a small child and require regulators to determine if it is unfair or deceptive for airlines to tell passengers “that a flight is delayed or canceled due to weather alone when other factors are involved.”

It also makes it unlawful for any person to place a live animal in an overhead storage compartment, prompted by outrage over the death a dog in March in an overhead compartment of a United flight. It also gives the Transportation Department authority to require airlines to allow pregnant passengers to board earlier.

The bill would also authorize a return of “supersonic” transport with reduced sonic booms, and provides for an additional $1.68 billion in immediate funding for disaster relief in the wake of Hurricane Florence.

It also directs the FAA to establish an Office of Spaceports to provide guidance, support licensing for spaceports, and promote infrastructure improvements for future space travel.

The bill also addresses sexual misconduct in aviation by creating a task force to review practices and increases civil penalties for interfering with cabin or flight crew members.

(Reporting by David Shepardson)

U.S. Approves Sale Of 6 Boeing P-8A Poseidon’s To South Korea

WASHINGTON (Reuters) – The U.S. State Department on Thursday said it supported the sale of six Boeing Co P-8A Poseidon patrol aircraft to South Korea for an estimated $2.10 billion and had notified Congress of its decision.

South Korea’s military said in June it had picked Boeing to supply the country with maritime patrol aircraft.

South Korea said in February that it would procure from overseas new maritime patrol aircraft with stronger anti-submarine capabilities to better respond to the threat of North Korea’s submarine-launched ballistic missiles.

(Reporting by Lesley Wroughton; Editing by Lisa Shumaker)

A P-8A Poseidon assigned to Patrol Squadron (VP) 16 is seen in flight over Jacksonville, Fla. (U.S Navy photo by Personnel Specialist 1st Class Anthony Petry)

FedEx investing $3.2 billion in people and facilities after tax cut

FedEx has announced it will invest $3.2 billion in its employees and facilities in response to the US tax reform past in December, 2017.

Click the link below for the full story!

Fedex investing $3.2 billion

A FedEx freighter, a Boeing 727-100 formerly used as a cargo plane, lands at the Purdue Airport on Aug. 1. It was taken out of service by FedEx in late July and officially handed over to Purdue in a ceremony Tuesday, Sept. 19, at the airport. (Purdue News Service photo/David Umberger)

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