FILE PHOTO: A Union Pacific rail car is parked at a Burlington National Santa Fe (BNSF) train yard in Seattle, Washington, U.S., February 10, 2017. REUTERS/Chris Helgren
(Reuters) – Union Pacific Corp on Thursday reported a better-than-expected quarterly profit, as the U.S. railroad raised prices, helping offset the impact of severe winter weather and record flooding that damaged rails in the Midwest.
Shares rose 2.7 percent to $173.80 in premarket trading.
Union Pacific’s operating ratio, a measure of operating expenses as a percentage of revenue and a key metric for Wall Street, increased 1 point to 63.6 percent from a year ago.
A lower ratio means more efficiency and higher profitability.
Total operating revenue fell to $5.4 billion from $5.5 billion.
The Omaha, Nebraska-based company’s net income rose to $1.4 billion, or $1.93 per share, in the first-quarter ended March 31 from $1.31 billion, or $1.68 per share, a year earlier.
Analysts, on average, expected a profit of $1.89 per share and revenue of $5.50 billion, according to IBES data from Refinitiv.
Union Pacific and Berkshire Hathaway-owned BNSF are the largest U.S. freight rail operators with an annual revenue of more than $20 billion each.
(Reporting by Rachit Vats in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Shailesh Kuber)
The G-EUPH British Airways Airbus A319-131 makes its final approach for landing at Toulouse-Blagnac airport, France, March 20, 2019. REUTERS/Regis Duvignau/Files
(Reuters)
– IAG said on Monday British Airways’ finance chief Steve Gunning will
replace company veteran and chief financial officer Enrique Dupuy de
Lôme, who steps down after more than eight years in the role.
Gunning,
who joined British Airways in 1998 and has been its CFO since January
2016, will take over from de Lôme at IAG’s annual general meeting in
June, the company said.
“After
eight years as CFO of IAG and prior to that, 20 years as CFO of Iberia,
I believe now is the right time for me to leave IAG,” de Lôme said.
IAG did not immediately respond to a request for comment on the reason for de Lome’s departure.
Gunning takes the role as the airline industry braces for a potential hit from Britain’s impending exit from the European Union.
Shares of IAG jumped to session highs after the announcement and were last up 1.1 percent at 548.4 pence on London’s main index.
(Reporting by Shashwat Awasthi and Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr)
BRUSSELS
(Reuters) – Lufthansa on Friday lost its court challenge against
millions of euros in state aid being granted to Frankfurt-Hahn airport
to the benefit of rival Ryanair, after failing to prove the payments
dented its revenue or market share.
The
German carrier took its case to the Luxembourg-based General Court
after EU antitrust regulators in 2014 gave the green light to a series
of support measures for the airport, which is 82.5-percent owned by
China’s HNA Group with the rest held by the German state of Hesse.
The
support given to the airport, which is only used by Ryanair and Wizz
Air, included capital increases totalling 49 million euros (42.40
million pounds), direct grants and a charging scheme.
The
German airline argued that many of the benefits of the aid were passed
on to Ryanair, which was not paying high enough airport charges.
But
Europe’s second-highest court said that Lufthansa had failed to show it
took a financial hit or lost market share as result of the measures.
The
airline can appeal at the Court of Justice of the European Union but
only on points of law. The case is T-492/15 Deutsche Lufthansa v
Commission.
(Reporting by Foo Yun Chee; editing by Philip Blenkinsop and Kirsten Donovan)
BUCHAREST, March 14 (Reuters) – Romania’s Blue Air will make a decision on its order for 12 Boeing 737 MAX 8 jets only after an investigation into a fatal crash of one of the planes in Ethiopia at the weekend, CEO Marius Puiu told Reuters.
Puiu said his company was “monitoring the situation very carefully.”
“We
trust the world-wide precautionary suspension of flights, a decision
that puts civil aviation transport safety first,” said Puiu, adding the
first 737 MAX 8 plane was planned to arrive in Romania this summer.
“We
are in permanent contact with the manufacturer, with EASA (the European
Union’s aviation safety regulator) and the Romanian civil aeronautical
authority,” he said.
Currently, Blue Air operates 25 Boeing 737 series aircraft – 737-300, 737-400, 737-500, 737-700 and 737-800, with capacities ranging from 120 to 189 seats.
(Reporting by Radu Marinas; Editing by Mark Potter)
WASHINGTON
(Reuters) – The United States on Wednesday grounded Boeing Co’s 737 MAX
jets, citing new satellite data and evidence from the scene of Sunday’s
crash of an Ethiopian Airlines plane that killed 157 people, the second
disaster involving the 737 in less than five months.
It
was the second time the U.S. Federal Aviation Administration has halted
flights of a Boeing plane in six years. It had grounded the 787
Dreamliner in 2013 because of problems with smoking batteries.
Shares
of the world’s biggest plane maker, which were up earlier in the
session, fell 2 percent to $370.48. The shares have fallen about 13
percent since Sunday’s crash, losing about $32 billion of market value.
Shares of Southwest Airlines Co, which has the largest fleet of 737 MAX aircraft, fell 0.4 percent.
“The
agency made this decision as a result of the data gathering process and
new evidence collected at the site and analyzed today,” the FAA said in
a statement, shortly after U.S. President Donald Trump announced the
planes would be grounded.
“This evidence, together with newly refined satellite data available to FAA this morning, led to this decision.”
The grounding will remain in effect as the FAA investigates.
Boeing, which maintained that its planes were safe to fly, said it supported the move to temporarily ground 737 MAX flights.
The
United States joins Europe, China and other countries in grounding
Boeing’s newest plane since the Ethiopian Airlines flight crashed soon
after taking off from Addis Ababa.
The
still-unexplained crash followed another involving a Boeing 737 MAX in
Indonesia five months ago that killed 189 people. Although there is no
proof of any link, the twin disasters have spooked passengers.
The grounding was welcomed by air workers in the United States.
“He
(Trump) did the right thing by grounding this fleet, both for air
travelers and aviation workers,” John Samuelsen, international president
of the Transport Workers Union of America, which represent aviation
workers and flight attendants, told Reuters shortly after the
announcement.
“Our
members are excited, and are no longer concerned about stepping into a
workplace which could lead to the end of their lives, potentially.”
NEW SATELLITE DATA
Canada
also grounded 737 MAX jets on Wednesday, saying satellite data
suggested similarities to the previous crash involving the same plane
model in October.
U.S.-based
aircraft-tracking firm Aireon provided the satellite data to the FAA,
Transport Canada and several other authorities, company spokeswoman
Jessie Hillenbrand said.
Aireon’s
space-based system can monitor data from aircraft equipped with
Automatic Dependent Surveillance-Broadcast (ADS-B) transponders. The
data is considered less detailed than that in black boxes, which look at
systems running inside the plane.
Earlier
on Wednesday, Germany’s federal agency responsible for investigating
air accidents said it would not analyze the black box from the Ethiopian
Airlines plane, casting uncertainty over the process of finding out
what may have caused the disaster. The U.S. FAA said the black boxes
were headed to France later on Wednesday.
Ethiopian
Airlines spokesman Asrat Begashaw said it was still unclear what
happened on Sunday, but its pilot had reported control issues as opposed
to external factors such as birds.
“The pilot reported flight control problems and requested to turn back. In fact he was allowed to turn back,” he said.
(Reporting by David Shepardson in Washington, Kumerra Gemechu in Gora-Bokka, Ethiopia, David Ljunggren in Ottawa; Additional reporting by Duncan Miriri and Aaron Maasho in Addis Ababa; Doina Chiacu in Washington, Omar Mohammed and Maggie Fick in Nairobi; Tim Hepher in Paris; Jamie Freed in Singapore; Terje Solsvik in Oslo; Aditi Shah in Mumbai; Sanjana Shivdas in Bengaluru; Aleksandar Vasovic in Belgrade; Julie Gordon in Ottawa; Angela Moon in New York; Writing by Andrew Cawthorne, Frances Kerry and Bill; Rigby; Editing by Gareth Jones, Nick Zieminski and Grant McCool)
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)
(Reuters)
– Southwest Airlines Co cut its forecast for first-quarter revenue per
seat mile on Wednesday, citing weak passenger demand and a $60 million
hit to first-quarter sales from the longest partial U.S. government
shutdown.
The
more than month-long hiatus in U.S. government decision-making
prevented the country’s fourth-largest airline from launching its new
route to Hawaii and led to widespread delays at airports.
Southwest
had said previously that it expected a $10 million to $15 million
impact on revenue in the first three weeks of January.
On
Wednesday, it quadrupled that for the full quarter and cut its growth
estimate for unit revenue to a range of 3 percent to 4 percent from an
earlier range of 4 percent to 5 percent.
Shares
of the company, which has also been cancelling flights in recent days
due to a conflict with maintenance staff and weather issues, fell nearly
5 percent in early trading, with a Goldman Sachs “sell” recommendation
for investors adding to the pain.
Though
the company has now received permissions for test flights to Hawaii,
Goldman Sachs analyst Catherine O’Brien argued the shutdown would result
in a shortened selling window for the airline, forcing it to discount
fares heavily.
“Most
of the company’s schedule is published eight months in advance and we
would have expected a three to six month selling window for its Hawaii
flights,” O’Brien wrote in a note, downgrading the stock to “sell” from
“neutral”.
“We
now expect initial flights to have a one to one and a half month
selling window, putting more pressure on management to fill planes in a
shorter time frame,” she added, cutting price target on the stock to $54
from $66.
Southwest shares were last down 4.1 percent at $55.30.
The
company said on Tuesday it would be investigating a doubling of the
number of planes grounded with mechanical problems in recent days as it
continues talks with its mechanics union on a new contract that have
been ongoing since 2012.
Flight
cancellations by Southwest accounted for roughly 24 percent of the
nearly 800 total flights canceled across the United States on Tuesday,
according to flight-tracking service FlightAware.com.
About
half of the cancellations were related to unscheduled maintenance
issues but the airline said it had yet to calculate the impact of the
groundings on its results.
(Reporting by Ankit Ajmera and Rama Venkat in Bengaluru; Editing by Anil D’Silva)
LONDON (Reuters) – British regional airline Flybmi has gone into administration and has cancelled all flights with immediate effect, the company said in a statement on Saturday, blaming Brexit uncertainty as one of the reasons for its collapse.
A spokesperson for British Midland Regional Ltd said the company had taken the decision due to increased fuel and carbon costs and to uncertainty arising from Britain’s plans to leave the European Union on March 29.
The airline, based in the English East Midlands, operates 17 planes flying to 25 European cities. It employs 376 people in Britain, Germany, Sweden and Belgium.
“We sincerely regret that this course of action has become the only option open to us, but the challenges, particularly those created by Brexit, have proven to be insurmountable,” the company said.
Spikes in fuel and carbon costs had undermined efforts to move the airline into profit.
It added: “Current trading and future prospects have also been seriously affected by the uncertainty created by the Brexit process, which has led to our inability to secure valuable flying contracts in Europe and lack of confidence around bmi’s ability to continue flying between destinations in Europe.”
The airline, which said it carried 522,000 passengers on 29,000 flights in 2018, advised customers with bookings to contact their bank or payment card issuer to obtain refunds.
Genesee & Wyoming Inc.’s GWR fourth-quarter
earnings (excluding 6 cents from non-recurring items) of $1 per share
surpassed the Zacks Consensus Estimate of 90 cents. The bottom line also
improved 29.9% on a year-over-year basis. Results were aided by an
impressive performance at the North American segment.
Operating revenues inched up 0.7% year over year to $575.6 million, which outpaced the Zacks Consensus Estimate of $569.9 million. Freight revenues accounting for bulk (69.7%) of the top line rose 2.3% to $401.22 million. Meanwhile, freight-related revenues contributing to 24.8% of the top line slid 2.2% to $142.55 million. The balance came from ‘other revenues’.
(Reuters) – Union Pacific Corp (UNP.N), one of the biggest U.S. railroads, on Thursday reported higher-than-expected quarterly profit and said efficiency gains will bolster profits in 2019.
Shares in the company, which connects 23 states in the western two-thirds of the United States by rail, rose 3.3 percent to $159.37.
Its operating ratio – a measure of operating expenses as a percentage of revenue and a key metric for Wall Street – improved 1.1 points to 61.6 percent in the fourth quarter from the same period last year, the company said.
A lower ratio means more efficiency and higher profitability.
“We expect (2019) operating margins will increase as a result of solid core pricing gains and significant productivity benefits,” Chief Executive Lance Fritz said in a statement.
The Omaha, Nebraska-based company this month hired former Canadian National Railway Co (CNR.TO) executive and turnaround expert Jim Vena as its chief operating officer and said its operating ratio would fall below 60 percent by 2020.
Vena worked with Hunter Harrison, who led the revival of two Canadian railroads and died in 2017 after a short stint as CEO of CSX Corp (CSX.O), which recently set a 2019 target for a sub-60 percent operating ratio.
Union Pacific is cutting jobs, consolidating businesses and selling a corporate retreat to drive costs lower.
On a conference call on Thursday, Vena said “everything is on the table” as Union Pacific looks for further efficiency gains.
“I know the railroad has a vision in place to get to a 55 operating ratio already, and we’ll be working aggressively towards that goal,” Vena said.
Net income fell to $1.55 billion, or $2.12 per share in the fourth quarter, from $7.28 billion, or $9.25 per share, a year earlier when the company received a boost from changes in U.S. tax laws.
Freight revenue in the quarter rose 6 percent, lifting total operating revenue to $5.76 billion from $5.45 billion. Net core pricing was up 2.5 percent from the year-ago quarter.
Analysts, on average, expected a profit of $2.06 per share and revenue of $5.74 billion, according to IBES data from Refinitiv.
Terminal dwell, the amount of time rail cars sit idle in a terminal, was 26.7 hours for the quarter, an 18 percent improvement versus a year ago.
Union Pacific and Berkshire Hathaway-owned (BRKa.N) BNSF are the largest U.S. freight rail operators with annual revenue of more than $20 billion each.
(Reporting by Lisa Baertlein in Los Angeles and Rama Venkat in Bengaluru; Editing by Shailesh Kuber, Steve Orlofsky and Will Dunham)
