SE agreed to revive orders for close to 75 aircraft from Qatar Airways after reaching a settlement with the Middle East airline over a long-running dispute about chipping paint on its A350 wide-body models.
A spokesman for Airbus said it would now go ahead with delivering 50 A321 narrow-bodies and 23 remaining A350 twin-aisles previously ordered by Qatar.
The orders had been scrapped as part of an escalating, multibillion-dollar legal battle over the paint issue, which the airline had claimed could pose a safety concern. Airbus repeatedly denied the claims.
Airbus and Qatar Airways earlier Wednesday said in a joint statement that they had reached an “amicable and mutually agreeable settlement” in relation to the legal dispute. The companies didn’t disclose the details of the settlement other than to say the agreement didn’t amount to an admission of liability from either party. A program to repair the degradation on Qatar’s current fleet is under way, the companies added.
Qatar Airways had previously grounded 29 of its A350 jets and refused new deliveries over the issue, reducing its capacity amid a surge in travel to Doha for the 2022 FIFA World Cup. The airline has said the peeling paint was exposing the meshed copper foil that is designed to protect the aircraft from lightning strikes.
That led Qatar Airways to initiate legal proceedings against Airbus in London, in which the carrier had sought damages partly based on the impact on its operations from not being able to use the aircraft. A possible trial had been scheduled for later this year.
While the paint issue has also affected other A350s in service at other Airbus customers, only Qatar Airways had taken the step to unilaterally ground the aircraft. Airbus and the European Union Aviation Safety Agency, which oversees the Toulouse, France-based plane maker, have insisted that the issue is only cosmetic.
The situation had led to a broad fallout between Airbus and one of its biggest customers. In August, Airbus ended all new business with Qatar Airways, canceling contracts valued at more than $13 billion according to the latest available list prices and before the hefty discounts plane makers typically give to customers.
After Airbus canceled a deal to sell Qatar Airways 50 of its A321 jets, the Gulf carrier ordered up to 50 of rival
Boeing Co.
’s 737 MAX 10 single-aisle jets within two weeks. Qatar Airways had previously canceled most of an existing MAX order in 2020 after receiving five of the planes.
Airbus lawyers alleged that Qatar Airways had exaggerated concerns about the issue in an attempt to claim compensation and refuse delivery of aircraft that it didn’t need as the pandemic hit demand for air travel. The plane maker complained in court that the airline and its regulator, the Qatar Civil Aviation Authority, had failed to provide documentation that showed the technical justifications behind grounding the aircraft.
Qatar Airways has said it provided images of the damage, which it purported showed the scale of the issue and the potential safety risk.
Qatar Airways Chief Executive
Akbar Al Baker
has long had a reputation as a tough customer, publicly lashing out at both Airbus and Boeing when he perceives delivery or quality issues.
The Biden administration is preparing to seek congressional approval for a $20 billion sale of new F-16 jet fighters to Turkey along with a separate sale of next-generation F-35 warplanes to Greece, in what would be among the largest foreign weapons sales in recent years, according to U.S. officials.
Administration officials intend the prospect of the sale to prod Turkey to sign off on Finland and Sweden’s accession to the North Atlantic Treaty Organization, which Ankara has blocked over objections to their ties to Kurdish separatist groups. Congress’s approval of the sale is contingent on Turkey’s acquiescence, administration officials said. The two countries ended decades of neutrality when they decided to join NATO last year in reaction to Russia’s invasion of Ukraine.
The sale to Turkey, which the administration has been considering for more than a year, is larger than expected. It includes 40 new aircraft and kits to overhaul 79 of Turkey’s existing F-16 fleet, according to officials familiar with the proposals.
Congressional notification of the deal will roughly coincide with a visit to Washington next week by Turkey’s Foreign Minister
Mevlut Cavusoglu.
The sale to Turkey also includes more than 900 air-to-air missiles and 800 bombs, one of the officials said.
Turkish President Recep Tayyip Erdogan has faced U.S. pressure to approve NATO expansion.
Photo:
adem altan/Agence France-Presse/Getty Images
The separate sale to Greece, which was requested by the Greek government in June 2022, includes at least 30 new F-35s. The F-35 Joint Strike Fighter is the U.S.’s most advanced jet fighter. While officials described the timing of the notifications for both Turkey and Greece as coincidental, it could quell protests from Athens over the F-16 sale if its request is also granted. Greece and Turkey are historic regional rivals and a sale to Turkey alone would likely draw swift condemnation from Athens.
The potential sale of the aircraft could have far-reaching implications for Washington’s efforts to shore up ties with a pair of NATO allies amid the Western response to Russia’s assault on Ukraine.
A State Department spokesman declined to comment on potential arms transfers as a matter of policy until and unless they are formally notified to Congress. Congress has never successfully blocked a foreign arms sale requested by the White House.
The proposed deal with Turkey comes at a moment of tension in U.S.-Turkish relations, with Washington also attempting to convince President Recep
Tayyip Erdogan
to do more to enforce sanctions on Russia and to approve the entry of Finland and Sweden into NATO.
The proposal also sets up a possible showdown with some congressional leaders who have vowed to oppose weapons sales to Turkey. Sen.
Bob Menendez,
a Democrat from New Jersey who is the chairman of the Senate Foreign Relations Committee, has said he wouldn’t approve any F-16 sale to Turkey, citing human-rights concerns.
In recent months, Mr. Erdogan has also threatened to launch a new military incursion against Kurdish militants in Syria. Last month a Turkish court also convicted the mayor of Istanbul, a popular opponent of Mr. Erdogan, of insulting public officials in what human rights groups said was part of a crackdown on the Turkish opposition. The Turkish government says its courts are independent.
Under U.S. arms-export laws, Congress will have 30 days to review the deal. If Congress wants to block the deal it must pass a joint resolution of disapproval. Congress can also pass legislation to block or modify a sale at any time until the delivery.
The Biden administration is looking to sell at least 30 new F-35 jet fighters to Greece.
Photo:
robert atanasovski/Agence France-Presse/Getty Images
U.S. officials say they are encouraging Mr. Erdogan to drop his opposition to Finland and Sweden joining NATO. One official characterized the F-16s as the “carrot on a stick” to get Turkey to agree.
This, officials said, could ease opposition to the sale among some members of Congress. Officials within the State Department have argued for months that the expansion was imperative to NATO’s collective security. However, officials expect that while the Greece package could sail through Congress, the F-16s may be delayed over some members’ reluctance to embolden Ankara with the additional firepower.
Mr. Erdogan first threatened to veto the two countries’ entrance over their ties to Kurdish militant groups in Iraq and Syria. Turkey has fought a slow-burning war with Kurdish armed groups for decades in a conflict that has left tens of thousands dead.
NATO leaders say that Finland and Sweden have addressed Turkey’s concerns, upholding an agreement signed last year that called for both countries to evaluate Turkish extradition requests and drop restrictions on arms sales to Ankara.
Turkish officials say that Sweden hasn’t done enough to uphold its obligations to Turkey, citing what they say is continuing activity by the militant Kurdistan Workers’ Party in Sweden. The Turkish government this week summoned Sweden’s ambassador over a demonstration in Stockholm in which protesters hung a puppet of Mr. Erdogan by its feet. The Turkish president’s hard line against Sweden has broad support within Turkey, including among opposition parties, who have long opposed what they see as a permissive approach to Kurdish militant groups in Europe.
The timing of a vote on NATO expansion in the Turkish parliament will also depend on Turkey’s national election this year, in which Mr. Erdogan faces a close race amid public discontent over the country’s struggling economy.
The Turkish Ministry of Foreign Affairs didn’t respond to a request for comment.
The Biden administration remains cautiously optimistic that Turkey will eventually come around on Finland and Sweden. U.S. officials said last year that there would be no quid pro quo for Turkey’s approval of the NATO expansion, and said that the timing of the F-16 sale was dependent on the administration’s own internal process to complete the deal.
The proposed sales also come amid heightened tensions between Turkey and Greece, two longtime adversaries who have traded threats over the past year in the eastern Mediterranean.
Turkey was originally a participant in the U.S.’s cutting-edge F-35 program but was expelled after Mr. Erdogan approved the purchase of Russia’s S-400 air defense system. The U.S. government said the Russian weapons system could potentially hack the F-35.
Biden administration officials have argued that selling F-16s to Turkey could help restore ties with the country, which maintains the second-largest army in NATO.
Under Mr. Erdogan, Turkey has played an important role in the Ukraine crisis, facilitating negotiations over prisoner exchanges and helping to broker an agreement that allowed Ukraine to resume its exports of grain through Black Sea ports. Mr. Erdogan’s close relationship with Russia’s President
Vladimir Putin
has also raised concerns in Washington, with scrutiny of inflows of Russian money to Turkey, including oligarch assets.
Finland and Sweden have formally applied to join NATO, but Turkey has threatened to block them from joining. WSJ’s Shelby Holliday explains why Turkish President Recep Tayyip Erdogan sees the expansion as a threat to Turkey’s national security. (Video first published in May 2022). Photo composite: Sebastian Vega
—William Mauldin contributed to this article.
Write to Jared Malsin at jared.malsin@wsj.com and Vivian Salama at vivian.salama@wsj.com
SpaceX is gearing up for a key test of its immense rocket that is designed for commercial launches, as well as the Mars mission
Elon Musk
has long sought.
Near a beach east of Brownsville, Texas, employees at Mr. Musk’s space company are preparing for the inaugural orbital flight of Starship, the towering rocket system the company has been developing for years to one day launch into deep space. The initial test mission would last around 90 minutes, beginning with a fiery blast of the ship’s booster over the Gulf of Mexico, SpaceX has said in a regulatory filing.
It isn’t clear when SpaceX will attempt the first flight, after dates Mr. Musk has discussed came and went. Some officials at the National Aeronautics and Space Administration, a customer for a version of Starship, previously said they thought the mission could occur in early December.
A SpaceX Falcon 9 rocket lifted off this month with a payload of 40 satellites for OneWeb’s broadband-satellite network.
Photo:
John Raoux/Associated Press
Mr. Musk, who acquired Twitter Inc. and recently delivered Tesla Inc.’s first all-electric semitrailer trucks, has described getting Starship into orbit as one of his main goals. At SpaceX, which Mr. Musk founded in 2002 and still leads, he has said the rocket system is consuming significant resources and faces formidable technical hurdles.
The company is using new engines it developed on Starship and wants to be able to quickly and rapidly reuse the vehicle, akin to how airlines operate planes. Starship is also really big: Fully stacked, it stands taller than the rocket NASA recently used on its first Artemis moon mission.
“There’s a lot of risks associated with this first launch, so I would not say that it is likely to be successful, but I think we’ll make a lot of progress,” Mr. Musk said last year, during an appearance before a National Academies of Sciences, Engineering, and Medicine panel.
A spokesman for Space Exploration Technologies Corp., as the company is formally called, didn’t respond to requests for comment.
SpaceX’s Starship program has encountered setbacks on shorter-altitude flights, and it isn’t clear how much it would cost if something similar happened on an orbital mission.
Japanese billionaire Yusaku Maezawa plans a journey around the moon on Starship.
Photo:
philip fong/Agence France-Presse/Getty Images
The company’s strategy of accepting potential failures, and learning from them, has helped it develop spacecraft like Falcon 9, the workhorse rocket the company used on almost 60 launches this year through mid-December, former employees said.
“It’s better to lose them now than to lose them because you left data on the table, because you were too scared to have a failure in public during the development phase,” said Abhi Tripathi, who worked in several director roles at SpaceX and currently serves as mission operations director at the University of California-Berkeley Space Sciences Laboratory.
At SpaceX, “risk taking, as long as it is safe to personnel and to property, is highly encouraged,” Mr. Tripathi said.
Jeff Bezos
‘ space company Blue Origin LLC is also working on its own large rocket, as is United Launch Alliance, the launch company jointly owned by
Boeing Co.
BA 0.53%
and
Lockheed Martin Corp.
SpaceX’s Starbase launch site in Texas.
Photo:
ADREES LATIF/REUTERS
If it works, SpaceX’s vehicle would lower the cost to get to orbit and give the company a sophisticated new rocket system, Mr. Musk said earlier this year. If it doesn’t, the program could threaten to become a money pit for a company that already has two proven rockets—Falcon 9 and Falcon Heavy—that are partially reusable, according to space-industry analysts and executives.
NASA is a major backer for Starship, providing deals valued at more than $4 billion to use a moon-lander version of the vehicle for Artemis exploration missions. Senior agency officials have said the company has been meeting milestones under its contract.
Technology entrepreneur Jared Isaacman and the Japanese billionaire
Yusaku Maezawa
have both said they purchased flights using the vehicle. A Japanese satellite operator said in August that it would use Starship to deploy a company satellite.
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Starship is made up of a 230-foot-tall booster called Super Heavy that would power a 164-foot-tall spacecraft, also called Starship, into orbit, according to SpaceX. The latter ship is designed to carry cargo or crew, with a user’s guide touting room for up to 100 people. The spacecraft is designed to be refueled in orbit, enabling longer-distance flights, according to company and NASA presentations.
SpaceX is spending heavily on the Starship program, according to space industry analysts. The privately held company has raised significant funds lately, selling at least $6.1 billion in stock over the past three years, according to securities filings. SpaceX recently began marketing employee shares for sale at a price that would value the company at around $140 billion.
Mr. Musk has warned that SpaceX could face bankruptcy if a severe global recession made capital and liquidity difficult to obtain while the company was investing in Starship and Starlink, its satellite-internet business.
Technical challenges with new rockets are common. In July, the company had to deal with a fiery blast underneath one of the Super Heavy boosters, though last month SpaceX said it completed a significant engine test. SpaceX also has lost Starship prototypes. Two years ago, a Starship spacecraft flew a short-altitude test flight without a booster, but smashed into the ground when trying to land.
In May 2021, the company landed a Starship spacecraft for the first time after another short flight.
For the first orbital test, SpaceX expects to bring the booster down in the Gulf of Mexico and land the Starship spacecraft in the Pacific Ocean, near a Hawaiian island, according to a company filing with the Federal Communications Commission.
Jeff Thornburg, a former SpaceX propulsion executive, said the company’s biggest challenge is ensuring the Starship spacecraft can safely return to Earth. The vehicle will endure enormous stress and heat as it re-enters the atmosphere from orbit, he said, but is designed to be used quickly and repeatedly.
“Reusability brings a lot of complicated engineering, because it can’t just survive once. It’s got to survive 10, 20, 100 plus times,” he said.
After months of delays, the FAA released its long-awaited environmental assessment of SpaceX’s South Texas Starbase launch site. WSJ’s Micah Maidenberg explains what the decision means for SpaceX and the company’s Starship program going forward. Photo Illustration: Alexander Hotz/WSJ
Write to Micah Maidenberg at micah.maidenberg@wsj.com
Russia launched fresh attacks with Iranian-made drones early Saturday over Ukraine, where the country’s southern command said it shot down 10 of the unmanned aerial systems, an indication that Moscow has replenished its supply of the drones as the two countries move toward what the U.S. has called a full defense partnership.
Ukraine’s southern command said it shot down four Shahed-136 drones in the Kherson region, four more in the Mykolaiv region and two in the Odessa region.
Maksym Marchenko, the governor of Odessa, said the drones had attacked energy infrastructure and civilian housing overnight.
“There is no electricity in nearly any of our region’s districts and communities of our region. Energy workers are already working on restoring the damaged infrastructure,” he said.
Russia purchased hundreds of Iranian Shahed and Mohajer series drones over the summer, which Moscow has used to attack Ukraine’s front-line positions and civilian infrastructure. Ukrainian air defenses, however, adapted quickly, shooting the entire batch down over a series of months.
The reappearance of the UAVs on the battlefield this week shows that Russia has resupplied its stocks as the West sees greater defense cooperation between Moscow and Tehran.
Russia has targeted Ukraine’s power grid in an attempt to break civilians’ will.
Photo:
Andrew Kravchenko/Associated Press
The streets of Kyiv in darkness during one of the city’s periodic blackouts to conserve power.
Photo:
oleg petrasyuk/Shutterstock
The Biden administration warned Friday that military ties between Russia and Iran were expanding into “a full-fledged defense partnership” and said the two nations were considering establishing a joint production line to provide lethal drones in Russia.
The U.S. said it believed Iran was considering selling hundreds of ballistic missiles to Russia, and described the military relationship between the two nations as moving beyond simply Iran supplying drones to Russia for use in the war in Ukraine.
The U.K.’s Defense Ministry warned Saturday that the missiles would be used to buttress Russia’s dwindling supply following months of sustained large-scale attacks on Ukraine’s power infrastructure, meant to freeze Ukrainians ahead as winter temperatures dip. Russia has highly likely expended a large proportion of its stock of its own SS-26 Iskander short-range ballistic missiles, which carry a 500 kilogram warhead up to 300 miles, the ministry said.
“If Russia succeeds in bringing a large number of Iranian ballistic missiles into service, it will likely use them to continue and expand its campaign of strikes against Ukraine’s critical national infrastructure,” the ministry said on Twitter.
The worst of the strikes cut water supply in major cities and knocked out half of Ukraine’s power grid, forcing rolling blackouts across the country.
This week, Russian President
Vladimir Putin
admitted to targeting Ukraine’s power infrastructure, despite previously repeatedly asserting that Russia’s forces don’t hit civilian targets. He vowed to continue the campaign.
A Ukrainian soldier takes a break from the front line near the Donbas city of Lyman.
Photo:
STRINGER/REUTERS
Fighting has increased around Donbas, which Ukrainian forces retook this fall.
Photo:
STRINGER/REUTERS
“There’s a lot of noise about our strikes on the energy infrastructure of a neighboring country,” Mr. Putin said. “Yes, we do that.”
Criticism of the strikes would “not interfere with our combat missions,” he said.
Russia’s deployment of drones in Ukraine’s south came as its forces are working to make incremental gains in the country’s eastern Donbas region, with much of the fighting concentrated around the city of Bakhmut. With much of Russia’s artillery ammunition running low, Russia has been forced to make gains on foot.
Russian troops have also boosted fighting around the Donbas city of Lyman, which Ukrainian forces took earlier this fall, causing large portions of the Russian front line to crumble.
The “Russian enemy suffered the greatest losses of the past day near Bakhmut and Lyman,” Ukraine’s general staff said in a statement.
Late Friday Ukrainian President
Volodymyr Zelensky
held a meeting with officials from the Vatican City, following
Pope Francis
‘ increasingly harsh condemnation of the war. The pope has compared the suffering of Ukrainians to 20th century genocides.
Twitter users have complained a lot about Elon Musk’s early moves after taking control of the social network, but their complaints seem tiny compared with what Tesla Inc. investors have had to suffer.
As the U.S. focused on election returns Tuesday evening, Tesla
TSLA,
-7.17%
Chief Executive Musk tried to slip through disclosure of his long-awaited stock sales, revealing that he had sold nearly $4 billion of Tesla stock in the previous three trading sessions. Musk did not publicly address the stock sales nor his intentions to sell more within 24 hours of the disclosure, even while tweeting roughly 20 times in that period.
[MarketWatch asked him on Twitter to address the sales twice, and did not receive a reply; Tesla disbanded its media-relations department years ago.]
The sales fueled a further downturn in shares of the electric-vehicle maker on Wednesday, when the stock fell 7.2% to $177.59, its lowest closing price since November 2020. Tesla is currently down 49.6% on the year, which would be far and away the worst year yet for the stock — the previous record annual decline was 2016, when it fell 11%.
The problems for Tesla investors go far beyond Musk selling its stock so that he could overpay for a company with limited growth prospects and a host of other problems, but the poor optics certainly start there.
“He sold caviar to buy a $2 slice of pizza,” said Dan Ives, a Wedbush Securities analyst.
Ives was one of several on Wall Street to predict Musk would need to sell more shares to either close a gap in his financing of the $44 billion deal to buy the social-media company, or provide additional operating funds. In a telephone conversation Wednesday, he said the Twitter move is “a nightmare that just won’t end for Tesla investors.”
One reason it isn’t ending is that Musk’s need for cash in relation to Twitter is not done with the recent sales, portending more in the future. Musk said in a tweet late last week that Twitter had a “massive drop in revenue” due to activists pressuring advertisers to pull their ads, and he will have to continue paying the employees he did not lay off while servicing a debt load that analysts have estimated will cost him $1 billion a year, much more than Twitter has cleared in profit in the past two years. Twitter reported a net loss of $221 million in 2021, and a net loss of $1.13 billion for 2020.
Read more about Elon Musk potentially pumping Tesla stock ahead of a sale
“The first two weeks of ownership have been a ‘Friday the 13th‘ horror show,” Ives said, adding that the verification plan and mass layoffs of 50% of employees — and then trying to rehire some of the engineers, developers and cybersecurity experts — was “really stupid.” And, according to CNBC, Musk has also pulled more than 50 Tesla engineers, many from the Autopilot team, to work at Twitter.
“But it’s consistent with how this thing has been handled,” Ives said, adding that Musk is “way over his skis” with the Twitter acquisition.
Amid all the chaos of his first two weeks running Twitter, how much time has Musk had to run his other companies? Musk was already splitting his Tesla time with SpaceX, The Boring Company, Neuralink and many other endeavors, and now he has taken on the gargantuan task of turning a social-media company that has never been highly profitable, nor valuable, into something worth the $44 billion he paid.
The effort, Ives said, has “tarnished his brand,” which in turn has a big risk of hurting Tesla. Many investors have bought into the Tesla story because they believe Musk is a genius and they back his vision of electrifying the automotive industry. Twitter does not meld into that vision, except as a platform to spout his opinions, vitriol and promote more wacky concepts.
Since Musk began his quest to buy the company, he has endured more criticism than ever before, with even some fans starting to throw shade or question his decisions. Investor Gary Black, managing partner of the Future Fund LLC, for example, pointed out that Tesla’s top engineers should not be running Twitter, where the news was getting worse.
Tesla is not a company that can just run itself at this point. Musk has claimed he did not want to be chief executive but that there was no one else to take over the car company, which is why he has served as CEO for years. It’s not clear, though, how much effort he actually has made at trying to recruit someone. Now, as Tesla faces its usual multitude of issues, he is off spending his time trying to turn Twitter into a payments company, or maybe a subscription company, or maybe an “everything app,” or whatever he comes up with tomorrow.
“Musk needs to look in the mirror and end this constant merry-go-round of Twitter overhang on the Tesla story, with his focus back on the golden child Tesla, which needs his time more than ever given the soft macro, production/delivery issues in China, and EV competition increasing from all corners of the globe,” Ives wrote in a note Wednesday, in which he reiterated an outperform rating on Tesla stock.
For Twitter to reach anywhere close to the valuation Musk paid for it, it’s going to need a ton of attention from a focused leader, but how can Musk be that leader and give Tesla the attention it deserves? The answer is he cannot, and is very likely to give the attention that Tesla needs to Twitter instead after committing $44 billion (not all of it his) to that endeavor. Tesla investors will be left staring at the sea of red that this year has wrought, and wondering if its leader is about to sell more shares to fund his other effort.
are among the tech heavyweights featured in a packed week of earnings that investors will probe for indicators about the broader economy.
Other tech companies scheduled to report their latest quarterly reports include Google parent company
Alphabet Inc.
and
Microsoft Corp.
Investors also will hear from airlines such as
Southwest Airlines Co.
and
JetBlue Airways Corp.
, automotive companies
General Motors Co.
and
Ford Motor Co.
, and energy giants
Chevron Corp.
and
Exxon
Mobil Corp.
Nearly a third of the S&P 500, or 161 companies, are slated to report earnings in the coming week, according to FactSet. Twelve bellwethers from the Dow Jones Industrial Average, including
Boeing Co.
and
McDonald’s
Corp., are expected to report as well.
The flurry of results from a broad set of companies will give a sense of how businesses are faring as they deal with inflation denting consumer spending, ongoing supply-chain challenges and a stronger dollar.
People awaited the release of Apple’s latest iPhones in New York last month. The company will report quarterly results on Thursday afternoon.
Photo:
ANDREW KELLY/REUTERS
One area holding up to the challenges has been travel. Several airline companies have reported that consumers still have an appetite to spend on trips and vacations. On Friday,
American Express Co.
raised its outlook for the year in part because of a surge in travel spending.
“We expected the recovery in travel spending to be a tailwind for us, but the strength of the rebound has exceeded our expectations throughout the year,” American Express Chief Executive
Stephen Squeri
said.
In addition to airlines reporting, companies such as car-rental company
Hertz Global Holdings Inc.
and lodging companies
Hilton Worldwide Holdings Inc.
and
Wyndham Hotels & Resorts Inc.
will offer reads into leisure spending.
Overall, earnings for the S&P 500 companies are on track to rise 1.5% this period compared with a year ago, while revenue is projected to grow 8.5%, FactSet said.
Other companies will serve as a gauge for how consumers have responded to higher prices and whether they have altered their spending as a result.
Coca-Cola Co.
and
Kimberly-Clark Corp.
on Tuesday and
Kraft Heinz Co.
on Wednesday will show how consumers are digesting higher prices.
Mattel Inc.,
set to report on Tuesday, will highlight whether demand for toys remains resilient. Rival
Hasbro Inc.
issued a warning ahead of the holiday season.
United Parcel Service Inc.
will release its results on Tuesday and provide an opportunity to show how it is faring ahead of the busy shipping season. The Atlanta-based carrier’s earnings come weeks after rival
FedEx Corp.
warned of a looming global recession and outlined plans to raise shipping rates across most of its services in January to contend with a global slowdown in business.
Results from credit-card companies
Visa Inc.
and
Mastercard Inc.
will offer insights into whether inflation has finally put a dent in consumer spending after both companies reported resilient numbers last quarter.
Wireless carrier
T-Mobile US Inc.’s
numbers on Thursday will give more context to mixed results from competitors
Verizon Communications Inc.
and
AT&T Inc.
AT&T
issued an upbeat outlook on Thursday after its core wireless business exceeded the company’s expectations, whereas Verizon on Friday said earnings tumbled as retail customers balked at recent price increases.
Other notable companies lined up to report include
backtracked on his complaints over the cost of funding Starlink internet terminals in Ukraine and said his company would continue to pay for them, as explosions rocked the Russian-held city of Donetsk in eastern Ukraine on Sunday.
Mr. Musk, the billionaire chief executive of SpaceX and
Tesla,
pledged to continue funding the Starlink service for Ukraine just a day after he said SpaceX couldn’t finance the service indefinitely on its own.
“The hell with it,” Mr. Musk tweeted on Saturday. “Even though Starlink is still losing money & other companies are getting billions of taxpayer $, we’ll just keep funding Ukraine govt for free.”
The 20,000 Starlink terminals estimated to be in operation across Ukraine have played a crucial role in maintaining the country’s communications during the war and are deployed at hundreds of Ukrainian military outposts where they allow commanders to call in artillery strikes or coordinate operations in areas where cell service is jammed by Russia.
Mr. Musk didn’t provide further details in his tweet. The Financial Times reported that he told the newspaper he planned to keep paying for the Starlink service in Ukraine indefinitely. His announcement was praised by senior Ukrainian government officials.
“Thank you for joining the right side. Ukraine appreciates that,”
Mykhailo Podolyak,
an aide to Ukrainian President
Volodymyr Zelensky,
wrote in response.
Meanwhile, an explosion rocked the center of Donetsk in eastern Ukraine, damaging the town hall that Russian proxy officials have occupied since they declared Donetsk as the capital of a breakaway pro-Moscow state in 2014.
Shattered windows at a school destroyed during fighting between Ukrainian and Russian forces in Staryi Saltiv, part of Ukraine’s Kharkiv region in the country’s northeast.
Photo:
Carl Court/Getty Images
Recent shelling in the Ukraine-Russia conflict damaged a town administrative building in Donetsk, part of Russian-controlled Ukraine.
Photo:
ALEXANDER ERMOCHENKO/REUTERS
Russia said this month that it had annexed Donetsk and three other Ukrainian regions that it has at least partly occupied, but Ukraine has vowed to regain control over the regions and has been pushing an advance into Russian-held territory in the east and south.
Russian-appointed officials blamed Ukraine for the explosion in Donetsk, claiming it had attacked using U.S.-provided Himars multiple-launch rocket systems. Kyiv didn’t immediately comment on the allegations.
Video posted to social media by Russian state news outlets showed the gutted multistory building with its windows blown out and the charred remains of vehicles parked beside it. Russian-installed authorities there said two people had been injured.
Hours after the explosion in Donetsk, the governor of Russia’s Belgorod region,
Vyacheslav Gladkov,
said three people had been injured in shelling there. He didn’t implicate Ukraine, and Kyiv didn’t immediately comment on claims of strikes in Donetsk and Belgorod, which have both come under fire multiple times in recent months.
The blasts came as Kyiv continued its campaign to push back Russian forces in the southern Kherson region, and Russia sent in reinforcements in a bid to halt Ukraine’s advance.
A bridge across the Siverskyi Donets River in Kharkiv was destroyed after fighting between Ukrainian and Russian forces.
Photo:
Carl Court/Getty Images
People line up for aid packages in Kharkiv.
Photo:
Carl Court/Getty Images
On Sunday, Ukrainian military intelligence announced a $100,000 reward for the capture of Igor Girkin, a former Russian intelligence officer who led a separatist movement in eastern Ukraine in 2014 and this week announced he was joining Russia’s offensive.
Russia has continued rocket strikes on Ukrainian infrastructure throughout the past week, periodically cutting power to large parts of major cities including Lviv in the west and the capital, Kyiv. Moscow has justified at least some of the attacks as responses to an explosion that damaged a bridge from Russia to Crimea earlier this month, which Russia blamed on Ukraine.
On Sunday, the U.K.’s Defense Ministry said Russia was rapidly using up its supply of long-range missiles and would be unable to maintain the pace of strikes for long.
“These attacks represent a further degradation of Russia’s long-range missile stocks, which is likely to constrain their ability to strike the volume of targets they desire in future,” the ministry said.
In a video address late on Saturday, Mr. Zelensky thanked the U.S. for its latest assistance package to the embattled country. President Biden on Friday authorized $725 million of further military aid for Ukraine, which will include weapons and military vehicles.
U.S. arms have been crucial in helping turn the tide of the war in Ukraine’s favor. The Russian strikes in the past week have also prompted Western countries to pledge new air-defense systems, which are expected to begin arriving in Kyiv in the coming weeks. “These are very needed things,” Mr. Zelensky said.
Mr. Zelensky also praised the municipal workers across Ukraine who have restored infrastructure damaged by Russia’s strikes, which have cut power to parts of the country.
In an appeal to Russian citizens who are sent to the war despite their opposition to it, he said: “Anyone who surrenders to Ukraine will safeguard their life. Anyone who continues to fight for the Russian army or as mercenaries will have no such chance.”
Ukrainian soldiers drive a captured Russian tank after refitting it for use in battle, in Kupyansk, part of the Kharkiv region of Ukraine.
Photo:
CLODAGH KILCOYNE/REUTERS
Write to Matthew Luxmoore at Matthew.Luxmoore@wsj.com
Ukraine shot down more than a dozen Iranian combat drones across the front lines this week as Russia expands the use of a foreign-weapons system that Ukrainian commanders say has inflicted serious damage on their forces.
In his nightly address on Friday, Ukrainian President
Volodymyr Zelensky
said his country’s antiaircraft forces had shot down Iranian drones in the eastern Dnipropetrovsk region and the southern city of Odessa, including the nearby Pivdennyi port, used for exporting grain.
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In Russia, renewed protests against President
Vladimir Putin’s
order to mobilize new forces to bolster his flagging offensive in Ukraine led to hundreds of detentions across the country on Saturday.
The Ukrainian Air Force identified the weapons shot down as Shahed-136 unmanned kamikaze drones, or loitering munitions, and Mohajer-6 drones that can carry missiles and be used for reconnaissance. It published a video showing one of the drones it shot out of the sky in the Dnipropetrovsk region.
The Iranian drones are relatively small and fly at a very low altitude, making it hard for Ukrainian air-defense systems to detect them. At least one of the drones made it past Ukrainian defenses, hitting the navy’s headquarters in Odessa on Friday. Ukraine’s southern military command said one civilian was killed and an administration building in the port area was destroyed.
A drone that Ukrainian authorities consider to be an Iranian-made Shahed-136 flew over the city of Odessa on Friday.
Photo:
STRINGER/REUTERS
Footage broadcast by Ukrainian news channels showed soldiers unsuccessfully trying to shoot it down with small arms before it crashed in a ball of fire. Soldiers can be heard shouting, “Where the hell is air defense?”
Another online video showed one of the downed drones being towed in the water to shore.
The air force said it had destroyed seven more Iranian drones, including four Shahed-136s, in the southern Mykolaiv region on Thursday, and another one on Tuesday.
Shahed-136 delta-wing drones, repainted in Russian colors and rebranded as Geranium 2, started appearing this month over Ukrainian armor and artillery positions in the northeastern Kharkiv region, said Col.
Rodion Kulagin,
commander of artillery of Ukraine’s 92nd Mechanized Brigade.
Ukrainian servicemen in the Mykolaiv region, where Ukraine says it shot down several Russian-operated drones this week.
Photo:
genya savilov/Agence France-Presse/Getty Images
In his brigade’s operational area alone, the Iranian drones—which usually fly in pairs and then slam into their targets—have destroyed two 152-mm self-propelled howitzers and two 122-mm self-propelled howitzers, as well as two BTR armored infantry vehicles, Col. Kulagin said.
Russia’s use of Shahed-136 drones in Ukraine represents the most challenging expansion of Tehran’s arsenal beyond the Middle East, where Iran has used its unmanned aerial vehicles to pressure the U.S. and its allies in the region. It also highlights the deficiencies in Russia’s own drone program, which hasn’t been able to match the firepower of armed UAVs deployed by Ukraine.
The immediate battlefield impact of the introduction of Iranian drones into Ukraine war is difficult to assess, but the deployment gives Tehran an opportunity to test out its products against North Atlantic Treaty Organization defense systems, said
Bernard Hudson,
former counterterrorism director for the Central Intelligence Agency.
“This allows Tehran a risk-free path to improve their drone technology and tactics and to make them more capable and lethal. The lessons of Ukraine will inform how Iran will later use these systems in the Middle East,” said Mr. Hudson, founder and chied executive of Looking Glass Global Services, which works in the drone sector in Eastern Europe and the Middle East.
Late Friday, Mr. Zelensky said Ukraine had revoked the accreditation of the Iranian ambassador and had reduced the number of diplomatic personnel at the Iranian Embassy in Kyiv in response to Iran sending the drones. He said he had tasked the Ukrainian Foreign Ministry with developing a response to Iranian support of Russia: “The world will know about every fact of collaboration with evil.”
Kremlin-orchestrated referendums to annex territory Russia controls in Ukraine started in four regions on Friday. People in Russia said goodbye to their loved ones after President Vladimir Putin’s call-up for troops to fight in Ukraine. Photo: Associated Press
Israel and the West have accused Iran and its proxies of flying armed drones to attack Saudi Arabia’s oil industry, the capital of the United Arab Emirates and American soldiers in Syria, as well as tankers in the Gulf of Oman in recent years. Iran-backed Houthi forces in Yemen have repeatedly used delta-wing drones to carry out attacks on neighboring Saudi Arabia.
In an interview published Saturday by French newspaper Ouest-France, Mr. Zelensky said he regretted that Israel hadn’t provided Ukraine with antiaircraft defenses. “This shocks me because at the same time Israel exports its armaments to other countries,” he said, blaming Russian influence in Israel. Israel has previously said that it opposed Russia’s invasion of Ukraine but that it will provide humanitarian rather than military aid.
Ukraine has asked Western allies, which have already supplied billions of dollars’ worth of military equipment, to supply more advanced antidrone and air-defense technologies.
In a separate incident, Ukraine’s southern military command said Saturday that an unmanned aircraft had dropped a poisonous chemical substance on Ukrainian positions, without specifying the location. It said there were no significant casualties.
In Russia, Col. Gen.
Mikhail Mizintsev,
who was sanctioned by the European Union in June for overseeing the bombardment of the strategic Ukrainian port city of Mariupol, was promoted to deputy defense minister for logistics on Saturday. Since the beginning of the war, Russia’s army has struggled with supplying and maintaining its troops in the field and providing them with adequate equipment, critically hobbling Moscow’s invasion plans.
A heavily damaged Russian tank near Kupyansk, a northeastern city recently recaptured by Ukraine.
Photo:
sergey kozlov/Shutterstock
Russians on Saturday turned out to protest in more than a dozen cities nationwide against Mr. Putin’s order to mobilize hundreds of thousands of people to fight in Ukraine. Also Saturday, Mr. Putin signed into law fresh legislation punishing soldiers who refuse to fight, desert the army or surrender with up to 10 years in prison.
In Moscow, riot police detained protesters en masse and with force, carrying them by their limbs and the scruff of their necks and stuffing them into police wagons. Most protesters weren’t able to pull out placards before they were detained.
The rallies were the second this week after protests broke out in the wake of Mr. Putin’s directive on Wednesday. That evening demonstrators chanted “Let our children live!” and “Send Putin to the trenches!” Officers detained more than 1,400 people across the country and handed draft notices to some protesters right at the police station, according to the independent Russian OVD-Info rights monitor and interviews by The Wall Street Journal.
As of Saturday evening, another nearly 750 people had been detained, according to OVD-Info.
Write to Stephen Kalin at stephen.kalin@wsj.com and Evan Gershkovich at evan.gershkovich@wsj.com
MANAMA, Bahrain—The U.S. Navy is working with Israel, Saudi Arabia and other Middle Eastern nations to build a network of unmanned drones as it seeks to constrain Iran’s military in the region—a program the Pentagon hopes will be a model for operations around the world.
A ship operated by Iran’s Islamic Revolutionary Guard Corps attempted to seize an American maritime drone—equipped with cameras, radar and other sensors—but abandoned that effort on Tuesday when a U.S. warship and helicopter approached, U.S. officials said.
U.S. officers declined to disclose the number of aerial and maritime drones deployed by the U.S. and its allies or to give details about where and how they are used, saying that information is classified. But they said the unmanned vessels and aircraft are giving them better visibility over the region’s waters.
The U.S Navy is working with Middle East nations to build a network of unmanned maritime drones.
Photo:
U.S. NAVY
By next summer, the Navy said, it expects to have 100 small surveillance drones—contributed by various countries—operating from the Suez Canal in Egypt to waters off the Iranian coast and feeding information to a command center in Bahrain, headquarters of the U.S. Fifth Fleet.
“I think we are truly on the cusp of an unmanned technological revolution,” said Capt. Michael Brasseur, who heads the U.S. Navy task force working to build the drone fleet in the Middle East.
The drone initiative, now in its sixth month, is part of a burgeoning cooperative relationship among the U.S., Israel and Gulf nations following the Abraham Accords. It mirrors another U.S.-led effort to unite Israel and its Gulf neighbors to create a regional air-defense network.
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From the Robotic Operation Center here in Manama, U.S. Navy personnel and private contractors monitor the drones’ progress. Video screens display blinking red alerts when the drones identify “dark targets” or suspected threats.
The drones—some of which can float at sea for up to six months—can send back detailed images and other data. Analysts review the images and try to determine what they show.
Vice Adm. Brad Cooper, the commander spearheading the effort, said the fleet has proven its value by detecting activity such as a Chinese naval ship moving through the area, suspicious ship-to-ship transfers and vessels using electronic trackers to disguise their identities.
“We’ve been able to detect activity that we simply did not know was previously happening,” he said.
A handout picture from the Iranian Army in July showing a military drone launched from an Iranian navy submarine.
Photo:
Iranian Army office/Agence France-Presse/Getty Images
The Israeli-linked tanker Mercer Street was struck by a drone off the coast of Iran in August 2021.
Photo:
karim sahib/Agence France-Presse/Getty Images
The drones now being tested are unarmed. But defense analysts expect the Navy to move toward equipping some with weapons in the future—something that would likely prompt intense debate.
U.S. lawmakers have raised concerns about Navy plans to build larger unmanned ships, a program that could cost billions of dollars. And the military still has to determine how to make use of smaller drones, protect them from attack and act on the information they transmit.
The U.S. drone operations come as there is mounting concern about Iran’s expanding influence in one of the world’s most important economic thoroughfares. Tehran has deployed ships and submarines equipped with aerial drones and has warned it is prepared to use them.
“If the enemies make a mistake, these drones will present them with a regrettable response,”
Abdolrahim Mousavi,
an Iranian army commander, told reporters during a recent visit by President Biden to the region.
An M5D-Airfox drone launched during a multinational training event in the Middle East in February.
Photo:
U.S. NAVY
The U.S. accused Iran of using drones to target an Israeli-affiliated merchant tanker off the coast of Iran last year in an attack that killed two crew members. Iran said it didn’t carry out the strike.
In July, Israeli Defense Minister
Benny Gantz
said Iran’s forces were “a direct threat to international trade, energy supply and the global economy.”
According to people familiar with the operations, Israel last year struck an Iranian cargo ship suspected of spying in the Red Sea. The explosion crippled the ship and Iran sent a replacement.
Bahrain’s Crown Prince Salman bin Hamad Al Khalifa, center, at a briefing about unmanned aerial vehicles in Bahrain in January.
Photo:
U.S. NAVY
When an Iranian ship was discovered Tuesday towing one of the U.S. Navy’s 23-foot Saildrones that was conducting surveillance in the central Persian Gulf, U.S. forces warned the vessel that the drone was U.S. property. The Iranians dropped the tow line and eventually left the area, they said.
On Wednesday, the IRGC Navy called the U.S. military’s version of the incident “ridiculous,” according to Iranian state television. The IRGC said it took control of the U.S. vessel to prevent “unsafe sailing” and decided to release it after warning the U.S. Navy to not let such “illegal behavior” happen again.
Earlier this year, the U.S. created a new military task force to focus on the Red Sea. Israel, which established diplomatic relations with Bahrain in 2020 as part of the U.S.-brokered Abraham Accords, has, for the first time, a military adviser working out of the Fifth Fleet headquarters in Manama.
The U.S. Navy is testing a range of unmanned craft, including one that looks like a speedboat and can reach speeds of nearly 90 miles an hour. It is also working with Predator-style aerial drones and the Saildrone, which can stay at sea for six months.
The true test of the drones will be whether they provide intelligence that leads to action—such as the seizure of contraband cargo.
“Just watching alone might limit Iran’s behavior,” said Stacie Pettyjohn, director of the Defense Program at the Center for a New American Security. “But if they realize that they are not going to follow through and do anything, it may not be much of a deterrent.”
The Saildrone can stay at sea for up to six months.
Photo:
U.S. NAVY
Write to Dion Nissenbaum at dion.nissenbaum@wsj.com
The Army has about 400 Chinook helicopters in its fleet, a U.S. official says. Soldiers approach a Chinook during a training exercise in Pirkkala, Finland, earlier in August.
Photo:
Roni Rekomaa/Bloomberg News
The U.S. Army has grounded its entire fleet of CH-47 Chinook helicopters because of a risk of engine fires, U.S. officials said.
Army officials are aware of a small number of engine fires with the helicopters, and the incidents didn’t result in any injuries or deaths, the U.S. officials said. One of the officials said the fires occurred in recent days.
The U.S. Army Materiel Command grounded the fleet of hundreds of helicopters “out of an abundance of caution,” but officials were looking at more than 70 aircraft that contained a part that is suspected to be connected to the problem, officials said.
The grounding of the Chinook helicopters, a battlefield workhorse since the 1960s, could pose logistical challenges for American soldiers, depending on how long the order lasts.
The grounding was targeted at certain
Boeing Co.
-made models with engines manufactured by
Honeywell International Inc.,
people familiar with the matter said. The grounding took effect within about the last 24 hours, these people said. The Army has about 400 helicopters in its fleet, one of the U.S. officials said.
Boeing declined to comment, referring questions to the Army.
A Honeywell spokesman said the engine maker worked with the Army to determine that certain components known as O-rings didn’t meet the company’s design specifications. He said the parts were installed during routine maintenance at an Army facility. While he declined to name the company that made the parts, the Honeywell spokesman said the company is working to supply the Army with replacements.
An Army spokeswoman said the service has identified the root cause of fuel leaks that caused “a small number of engine fires among an isolated number” of the helicopters. She said the Army is taking steps to resolve the issue.
“The safety of our soldiers is the Army’s top priority, and we will ensure our aircraft remain safe and airworthy,” the spokeswoman said.
The Chinook is a heavy-lift utility helicopter that is used by both regular and special Army forces, ferrying more than four dozen troops or cargo. It has been a staple of the Army’s helicopter fleet for six decades.
Write to Andrew Tangel at Andrew.Tangel@wsj.com and Gordon Lubold at Gordon.Lubold@wsj.com
