TOMORROWS TRANSPORTATION NEWS TODAY!
With very expansive top and bottom line growth expected over the next few years, investors may be wondering why Sun Country Airlines (Nasdaq: SNCY) stock is down -5% year to date.
The answer to this question lies in the trend of earnings estimate revisions which have largely declined landing Sun Country’s stock a Zacks Rank #5 (Strong Sell) and the Bear of the Day.
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American Airlines is providing customers additional flexibility in purchasing travel in light of concerns around the coronavirus (COVID-19).
American has extended its offer to waive change fees for customers who purchase travel through April 30. Customers will have even more flexibility since any ticket purchased by April 30 will not incur change fees prior to travel. The offer is available for any of American’s published non-refundable fares. Additional updates on existing travel alerts can be found on aa.com/travelalerts.
WASHINGTON/CHICAGO (Reuters) – Delta Air Lines Inc <DAL> and American Airlines Group Inc <AAL> decided on Friday to temporarily suspend all remaining U.S.-China flights after the U.S. State Department elevated a travel advisory over concerns about the coronavirus.
U.S. officials were due to hold a call with airlines later on Friday to discuss the Chinese flights. Some airline officials worried that if they did not voluntarily halt flights it would prompt the Trump administration to take formal action, potentially complicating any subsequent flight resumption.
The United States told citizens on Thursday not to travel to China due to the epidemic that has infected nearly 10,000 people and been declared a global emergency.
Pilots and flight attendants have been demanding airlines stop flights to the country, with American Airlines’ pilots filing a lawsuit on Thursday seeking an immediate halt.
“The decision to file a lawsuit was made out of concern for the safety of our pilots,” said Dennis Tajer, a spokesman for the Allied Pilots Association which represents American’s pilots.
As of Thursday United Airlines Holdings Inc <UAL> was still planning to operate some flights from San Francisco, even after its pilots union told its members they would be allowed to drop their trip without pay if they were concerned about flying to the country.
Delta and American had both announced lighter schedules to China earlier this week.
On Friday, American said operations to and from China would be halted starting on Friday through March 27. The carrier will continue to fly to Hong Kong.
Delta said its last China-bound flight departing the United States will leave on Monday, Feb. 3, with the last U.S. return flight departing China on Feb. 5.
The Delta suspension is set to last through April 30.
U.S. airline shares have posted heavy losses this week on concerns of the financial impact of the virus.
Other airlines that have stopped their flights to mainland China include Air France KLM SA <AFLYY>, British Airways <ICAGY>, Germany’s Lufthansa <DLAKY> and Virgin Atlantic.
Major Chinese carriers were still operating flights to and from the United States as of Friday.
(Reporting by David Shepardson and Tracy Rucinski; Editing by Nick Zieminski and Tom Brown)
BERLIN (Reuters) – Around 250 Germans on Saturday protested in the outskirts of Berlin where electric car startup Tesla is planning to build a gigafactory, saying its construction will endanger water supply and wildlife in the area.
The U.S. carmaker announced plans last November to build its first European car factory in Gruenheide, in the eastern state of Brandenburg.
Politicians, unions and industry groups have welcomed the move, saying it will bring jobs to the region, but environmental concerns drove hundreds of locals to the streets on Saturday.
“We are here, we are loud, because Tesla is stealing our water,” protesters called.
Saturday’s protest came after a Brandenburg water association on Thursday warned against “extensive and serious problems with the drinking water supply and wastewater disposal” for the proposed factory.
Anne Bach, a 27-year-old environmental activist, said Tesla’s plans published earlier this month showed it would need more than 300 cubic meters of water per hour which would drain the area’s declining reserves.
“I am not against Tesla … But it’s about the site; in a forest area that is a protected wildlife zone. Is this necessary?” Bach said.
“In such an ecological system like the one here and with the background that climate is changing, I cannot understand why another location was not selected from the beginning,” said Frank Gersdorf, a member of “Citizens’ Initiative Gruenheide against Gigafactory”, a local group that organised Saturday’s protest.
Environmentalist protests in Germany have previously halted and delayed major companies’ plans such RWE’s lignite mining at the Hambach forest, near Cologne, which has become a symbol of the anti-coal protests.
Saturday’s protest, which Gersdorf and Bach said developed spontaneously from a 50-people forest walk demonstration, highlighted the deforestation of around 300 hectares to build the factory and its impact on wildlife, including birds, insects and bats.
People were also protesting against an expected “enormous” increase in traffic on a nearby highway and through the villages.
Next to the protest, on the other side of the street, around 20 people carried banners welcoming Tesla in their village, with children chanting, “We are here, we are loud, because Tesla is building our future.”
Bernd Kutz, a Gruenheide local, said Tesla would bring improvement to the area, create jobs and give chances to young people.
“I am here because I don’t understand those demonstrators who shout and show us the finger,” Kutz said. “Why has it always to be negative?”
(Reporting by Riham Alkousaa; editing by Christina Fincher)
MILAN (Reuters) – Italian tax authorities believe that Fiat Chrysler Automobiles <FCAU> underestimated the value of its U.S. business by 5.1 billion euros following Fiat’s phased acquisition of Chrysler, according to a company filing and a source close to the matter.
The audit, which concerns transactions dating back to 2014, could result in FCA having to pay back taxes for $1.5 billion, the source added, confirming a report by Bloomberg.
FCA said in its third-quarter report that the tax authorities had issued to the company a final audit report in October this year “which, if confirmed in the final audit assessment, could result in a material proposed tax adjustment related to the October 12, 2014 merger of Fiat SpA into FCA NV.”
It said the issuance of a final audit report starts a 60-day negotiation period, which ends with the issuance of a final audit assessment expected to be received by the end of December 2019.
“The company believes that its tax position with respect to the merger is fully supported by both the facts and applicable tax law and will vigorously defend its position,” it said in the third-quarter report.
A spokesman for Italy’s tax agency declined to comment.
“At this time, we cannot predict whether any settlement may be reached or if no settlement is reached, the outcome of any litigation. As such, we are unable to reliably evaluate the likelihood that a loss will be incurred or estimate a range of possible loss,” Fiat said.
News of the tax probe comes at a delicate time for Fiat Chrysler, which is finalizing talks with PSA, the maker of Peugeot and Citroen, over a planned $50 billion merger to create the world’s fourth-largest automaker.
(Reporting by Silvia Aloisi in Milan; Editing by Anil D’Silva)
MONTREAL/WINNIPEG, Nov 19 (Reuters) – Thousands of workers at Canada’s largest railway went on strike for the first time in a decade on Tuesday, disrupting the shipping of commodities and sparking calls for Prime Minister Justin Trudeau’s Liberal government to intervene.
About 3,000 unionized workers of Canadian National Railway, including conductors and yardmen, hit picket lines after both sides failed to resolve contract issues at a time of softening demand for freight service. They continued talks on Tuesday in Montreal amid union concerns over fatigue, safety and ensuring that workers’ breaks are not reduced.
Canada, one of the world’s biggest exporters of farm products, relies on CN and Canadian Pacific Railway to move canola, wheat and other commodities over vast distances from western farms to ports. Crude oil shippers and the mining industry also depend on the railways.
The strike comes at an awkward time for Trudeau’s government, which relies on smaller parties to pass legislation and faces criticism from western provinces about its failures to get new oil pipelines built. Trudeau has said he is not reconvening Parliament until Dec. 5, and the government cannot start the process to force workers back on the job until then.
Andrew Scheer, leader of the Conservatives, the second-largest party in Parliament, and Alberta Energy Minister Sonya Savage each separately urged Trudeau on Twitter to recall Parliament immediately.
The Canadian mining industry, which accounts for more than half of annual rail freight revenues, depends on CN to transport supplies to company sites and products from their operations.
“This strike will result in a severe reduction or elimination of railway capacity and will trigger the closure of mines with concurrent layoffs of thousands of employees beginning in a matter of days,” said Pierre Gratton, president and CEO of the Mining Association of Canada.
“SCREECHING HALT”
Industry groups ranging from the Canadian Manufacturers and Exporters to propane and fertilizer groups said Ottawa needed to step in to limit damage to the economy.
The BC Council of Forest Industries, which represents the sector in British Columbia, expressed concerns about the disruptions caused by the strike for rail transport.
“Ninety percent of the forest products we produce are sent to export markets in North America and around the world,” Susan Yurkovich, the body’s president, said.
“A disruption of this critical transportation network will adversely impact BC forest companies at a time when we are already facing significant challenges and increasing competition from around the globe”, Yurkovich added.
CN and CP also collectively handle nearly all grain movement in Western Canada, the country’s crop belt, split roughly evenly between the railways.
The stoppage “has an impact before it even begins because companies pull back sales in anticipation of a strike,” said Wade Sobkowich, executive director of the Western Grain Elevator Association, whose members include Cargill Ltd, Richardson International and Viterra Inc.
CN’s shipments of hazardous goods such as crude are likely to come to a “screeching halt” even if the railroad’s management steps in to limit freight volumes, said Kent McDougall, chief commercial officer at Torq Energy, which loads crude oil in Western Canada onto trains operated by both CN and CP.
A strike may temporarily constrain CN’s volumes, but will not likely have a meaningful long-term impact on the company’s earnings, Credit Suisse analysts said in a research note on Monday, adding that Ottawa has historically been quick to intervene.
Shares of Montreal-based CN were down 1%, while the benchmark Canadian share index was up slightly.
Canadian Labour Minister Patty Hajdu and Transport Minister Marc Garneau said they are monitoring the CN strike situation closely after meeting with the two sides on Monday.
CN said in a statement that it was “disappointed” at the strike action. CN’s service in the United States will continue operating despite the strike.
The company said on Friday it would cut management and union jobs as it grapples with an economic slowdown.
Rail workers with the Teamsters held their last strike in 2009, when locomotive engineers walked off the job for five days, the union said.
(Reporting by Allison Lampert in Montreal and Rod Nickel in Winnipeg Additional reporting by Kelsey Johnson, David Ljunggren and Steve Scherer in Ottawa and Kanishka Singh in Bengaluru Editing by Chizu Nomiyama, Sandra Maler and Leslie Adler)
WASHINGTON (Reuters) – Southwest Airlines Co <LUV> said Monday it will complete inspections on 38 737 airplanes it acquired from foreign air carriers by Jan. 31 that may not meet all U.S. aviation safety requirements.
The planes are part of 88 pre-owned Boeing <BA> 737 aircraft Southwest bought between 2013 and 2017 from 16 foreign carriers. The speedier checks come after inspections of 39 used planes turned up previously undisclosed repairs and incorrectly completed fixes. Southwest used multiple contractors to conduct the reviews of the planes’ maintenance records when they bought the planes.
“We have a plan in place to inspect the 47 remaining aircraft, nine of which are currently in heavy checks, no later than January 31, 2020 – five months earlier than the original FAA accepted completion date of July 1,” Southwest said in a statement on Monday.
Southwest said its inspections to date “did not stem from any suspected safety concerns with the aircraft.” It added its “continuous assessment of the ongoing inspections has revealed nothing to warrant the expedited timeline” but will meet it nevertheless.
In 2018, Southwest agreed to conduct a complete physical inspection on each of these pre-owned aircraft over a two-year period after a Federal Aviation Administration (FAA) safety inspector in May 2018 discovered discrepancies in records for some of 88 aircraft.
Since then, Southwest said it has completed the nose-to-tail inspection of 41 aircraft without any findings that suggested an “adverse impact on continued safe operation.”
An Oct. 24 memo from H. Clayton Foushee, director of the FAA Audit and Evaluation Office, made public on Monday said the Southwest inspections turned up at least 30 previously unknown repairs and 42 major repairs that were found “not to meet FAA airworthiness requirements.” Some required “immediate corrective action to bring the aircraft back into compliance.”
The memo added “the data collected to date would indicate that a majority of” the planes to be inspected do not meet FAA airworthiness requirements.
The U.S. Senate Commerce Committee noted on Monday that the 2018 discovery prompted a full records review by Southwest Airlines of all 88 aircraft that found 360 major repairs previously unknown to the airline because they were not disclosed in the contractors’ initial review.
Foushee’s memo said Southwest grounded 34 planes in November 2018 for inspections. The committee said as a result some planes were grounded “for immediate maintenance to bring them into regulatory compliance as a result of these newly discovered prior major repairs.”
The FAA then sent an Oct. 29 letter to Southwest seeking additional information about the uninspected planes and questioned whether they suffered specific damage items. It also raised concerns about Southwest’s “slow pace in completing the evaluation of aircraft.”
Senate Commerce Committee Chairman Roger Wicker said in an Oct. 30 letter to the FAA that its concerns about Southwest’s used planes correspond “to concerns that have been brought to my attention by whistleblowers as part of my investigation into aviation safety.”
The committee said the FAA allowed Southwest to continue to operate these aircraft and as a result “Southwest Airlines appears to have operated aircraft in unknown airworthiness conditions for thousands of flights.”
The FAA said Monday that after receiving Southwest’s response it determined the airline has “met the requirements for immediate inspection and risk assessments on these aircraft.”
The FAA added it “is requiring more frequent updates on the progress of completing all the requirements.”
(Reporting by David Shepardson; additional reporting by Tracy Rucinski in Chicago; editing by Jonathan Oatis)
CAIRO, July 20 (Reuters) – British Airways and Lufthansa abruptly suspended flights to Cairo from Saturday over security concerns, but giving no details about what may have prompted the move.
“We constantly review our security arrangements at all our airports around the world, and have suspended flights to Cairo for seven days as a precaution to allow for further assessment,” British Airways said in a statement.
Lufthansa later said it had cancelled its flights to Cairo on Saturday from Munich and Frankfurt and will resume its flights on Sunday
British Airways, a unit of IAG, also said that it would never operate an aircraft unless it was safe to do so. When asked for more details about why flights had been suspended and what security arrangements the airline was reviewing, a spokeswoman responded: “We never discuss matters of security.”
Three Egyptian airport security sources told Reuters that British staff had been checking security at Cairo airport on Wednesday and Thursday. They gave no further details.
The British Foreign Office updated its travel advisory on Saturday to add a reference to the British Airways’ suspension, advising travellers affected to contact the airline.
Egypt’s Ministry of Civil Aviation said in a statement late on Saturday that it had contacted the British Embassy in Cairo which had confirmed that the decision to suspend the flights was not issued by Britain’s transport or foreign ministries.
The Egyptian ministry added that it will add more flights from Cairo to London starting on Sunday “to facilitate transporting passengers during this period.”
The British government has long advised against all but essential travel by air to and from the Egyptian resort of Sharm el-Sheikh, where a Russian passenger jet was bombed in 2015, but has not issued similar warnings against air travel to and from Cairo.
“There’s a heightened risk of terrorism against aviation. Additional security measures are in place for flights departing from Egypt to the UK,” the British advisory says.
Tourism, a key source of foreign revenue for Egypt, has been recovering after tourist numbers dropped in the wake of a 2011 uprising and the 2015 bombing of the Russian jet, which killed all 224 people on board shortly after takeoff.
That attack, which was claimed by Islamic State, prompted Russia to halt all flights to Egypt for several years and a number of countries including Britain to cease flights to Sharm el Sheikh, which have yet to resume.
(Reporting by Lena Masri and Amina Ismail; editing by Peter Graff, Diane Craft and G Crosse)
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