FILE PHOTO: Delta Air Lines passenger planes parked in Birmingham
(Reuters) – The United States and China will each allow four weekly flights between the two countries, the U.S. Transportation Department said on Monday, easing a standoff on travel restrictions in the midst of the novel coronavirus pandemic.
The U.S. government still hopes China will agree to restore full U.S. flight rights under their bilateral aviation agreement, the Transportation Department said Monday in its revised order on China flights.
“As the Chinese government allows more flights by U.S. carriers, we will reciprocate,” it said.
The United States had threatened to bar Chinese passenger flights on June 16 due to Beijing’s curbs on U.S. airlines amid simmering tensions between the world’s two largest economies, and has raised concerns about the number of charter flights Chinese carriers want to fly.
Among U.S. airlines, Delta Air Lines and United Airlines had each sought to restart daily passenger flights to China in June but changed their plans in the absence of government approval.
Following China’s agreement to allow four U.S. flights total, Delta said it would operate two flights to Shanghai from Seattle next week and once weekly flights from Seattle and Detroit beginning in July, all via Seoul.
United said it was aiming to re-launch service to China in the weeks ahead.
Chinese authorities have already agreed to some changes on requirements for U.S. carriers, including allowing temperature checks to be done before flights take off for China, rather than mid-flight as previously discussed, a person briefed on the matter said.
(Reporting by David Shepardson and Tracy Rucinski; Editing by Grant McCool and Stephen Coates)
FILE PHOTO: Emirates Airline Boeing 777 planes at are seen Dubai International Airport in Dubai
DUBAI (Reuters) – An eight-month crisis over the grounding of Boeing’s 737 MAX jets and widespread industrial delays are setting an unpredictable backdrop to next week’s Dubai Airshow, with some airlines reviewing fleet plans even as others look for bargains.
The biennial civil and military expo is a major showcase for wares from jumbo jets to military drones but faces growing questions over demand and the capability of overstretched suppliers, delegates arriving for the Nov. 17-21 event said.
Top of their agenda will be the worldwide grounding of the 737 MAX in the wake of two deadly crashes.
Investors who have pushed up Boeing <BA> shares believe the planemaker is turning a corner after the eight month grounding, with the company predicting commercial flights in January. But it also faces a logjam of undelivered jets that could take 1-2 years to unwind.
State-owned flydubai expects its fleet will now shrink by a third this year, highlighting the cost of the grounding for the biggest MAX customer outside the United States. “Flydubai has very big ambitions … given the scale of those ambitions, there’s little they can do but wait and watch, like everyone else,” said Teal Group analyst Richard Aboulafia.
Boeing lost one potential MAX customer earlier this year as Saudi budget airline flyadeal ditched a provisional order.
Experts say airline frustrations with plane and engine makers could also disrupt plans by the world’s largest jetmakers pushing for order endorsements. The Middle East’s largest aerospace event will give Airbus <EADSY> and Boeing a chance to sit with some of their top customers who have threatened to walk from billions in deals.
The planemakers are struggling to deliver aircraft on time, forcing airlines to delay expansion plans, while engines on some jets are consistently causing issues for carriers.
“This seems to be a systemic issue across the board,” said Novus Aviation Capital Managing Director Mounir Kuzbari.
“As a result, we see stress on the relationship between airlines and the plane and engine makers.” Dubai’s Emirates, by far the region’s biggest airline, has issued a stern warning to plane and engine makers. It will no longer take delivery of aircraft that do not meet performance expectations, raising doubts over $35 billion in pending orders.
Airbus, Boeing and engine makers will be looking to allay concerns as they finalise jet sales with Emirates, which is also looking at reducing an order for the delayed Boeing 777X.
Airbus is seen close to a final order for A330neo and A350 jets while Boeing aims to salvage a provisional order for 787s.
GULF PRESSURE
Air Arabia could, however, steal the show with a planned order of up to 120 Airbus jets, industry sources say.
Kuwait’s Jazeera Airways is in negotiations with Airbus and Boeing for around two dozen airplanes.
Past editions of Dubai’s premier trade event have featured blockbuster deals, often led by Emirates as Gulf carriers redrew the aviation map around their ‘super-connector’ hubs.
But the Gulf hub model is increasingly under pressure as the once-rapid growth of the region’s biggest airlines slows.
“The market continues to be weak for all airlines in the region; we should see a further 2-3% reduction in passenger numbers for the full year,” said Diogenis Papiomytis, Frost & Sullivan’s Global Program Director for Commercial Aviation.
Middle East military leaders touring the displays will try to gauge whether they are on the cusp of another regional splurge on weapons after an escalation in Gulf tensions.
A series of attacks over the summer has highlighted potential security gaps among some of the world’s top defence spenders who now increasingly buy from China and Russia.
(Reporting by Alexander Cornwell, Tim Hepher, Ankit Ajmera, Stanley Carvalho; Editing by Mark Potter)
Nov 15 (Reuters) – Canadian National Railway said on Friday it would cut management and union jobs, as the largest Canadian railroad operator grapples with an economic slowdown.
The announcement comes amid declining freight volumes as trade tensions have weighed on the North American economy.
The number of people to be laid off could rise if demand from rail customers continues to decline, the Canadian newspaper said, citing a person familiar with the matter.
Canadian National Railway spokesman said the action, which includes sending some of its employees on temporary leave, has already begun across its network.
(Reporting by Dominic Roshan K.L. in Bengaluru; Editing by Amy Caren Daniel)
Record U.S. tariff award over Airbus aid could fuel trade tensions Logo of Airbus is pictured at the aircraft builder’s headquarters of Airbus in Colomiers near Toulouse
BRUSSELS/PARIS (Reuters) – Transatlantic trade ties face renewed disruption this week when global arbiters are expected to grant the United States a record award allowing it to hit European imports with billions of dollars of tariffs in a long-running aircraft subsidy dispute.
The World Trade Organization (WTO) has found that both European planemaker Airbus <EADSY> and its U.S. rival Boeing <BA> received billions of dollars of illegal subsidies in a pair of cases that have run for 15 years.
Both sides have threatened tariffs after the Geneva body found neither adhered fully to its findings. However, the United States has a head start, with the European Union having to wait until early in 2020 to hear what level of retaliation it can exact over Boeing.
The WTO is expected this week to reveal the amount of EU goods the United States can target. People familiar with the case say the three-person tribunal is expected to award it around $7.5 billion, a record for the 24-year-old watchdog.
Such retaliation rights are rarely granted by the WTO – most parties reach settlements – and in many cases complainants do not exercise their rights. The United States though has indicated it will target EU goods to the fullest extent.
It has already published a $25 billion list from which it will pick items to target from aircraft and aerospace parts to wine, cheese and luxury goods.
The WTO award in the world’s largest corporate trade dispute could fuel already strained trade tensions, diplomats say.
EU manufacturers are already facing U.S. tariffs on steel and aluminum and a threat from U.S. President Donald Trump to penalize EU cars and car parts. The EU has in turn retaliated.
Trade talks between the two, designed to ease tensions and ward off the threat of a tit-for-tat tariff war, have not gone well. The two sides have made some progress on regulatory cooperation, but a proposed deal to reduce duties is stuck, with Washington saying agriculture should be included and Brussels insisting it cannot.
The Trump administration has concluded that tariffs were effective in bringing China to the negotiating table over trade, and in convincing Japan to open its agricultural market to U.S. products. Washington is unlikely to skip the opportunity to implement tariffs in the case over aircraft subsidies, according to current and former U.S. officials.
Airbus has said this would lead to a ‘lose-lose’ trade war.
Some U.S. airlines have urged the administration not to go ahead with the tariffs, saying they could lead to layoffs.
NO SETTLEMENT IN SIGHT
The parties could still theoretically resolve the issue and stave off sanctions, but both sides accuse the other of failing to respond to invitations to reach a negotiated settlement.
U.S. officials say the decision about next steps will be up to U.S. President Trump.
The EU cannot retaliate immediately to any tariffs as it did following the U.S. imposition of metal tariffs in 2018.
It can either wait until a pronouncement in the parallel Boeing case or possibly revive an existing right to hit $4 billion of U.S. imports in a WTO dispute over U.S. tax breaks for exports, even though the two sides settled in 2006. Such a move would likely be strongly contested by Washington.
EU trade chief Cecilia Malmstrom has urged Washington to hold off sanctions and seek an overall deal on aircraft support, but Washington has shown no sign it wants to talk.
A U.S. government official said Washington has been willing since the very beginning to negotiate a solution, but that the EU gave more support to Airbus rather than fixing the problem.
EU-U.S. trade relations are likely to be a major focus in Brussels during a parliamentary hearing of the next trade commissioner, Irishman Phil Hogan, on Monday, and of national trade ministers meeting on Tuesday.
(Additional reporting by Andrea Shalal in Washington, reporting by Philip Blenkinsop; Editing by Elaine Hardcastle)
Record U.S. tariff award over Airbus aid could fuel trade tensions FILE PHOTO: Boeing Co’s logo is seen above the front doors of its largest jetliner factory in Everett
