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Business

Airbus and Qatar Airways settle bitter A350 jet row

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PARIS, Feb 1 (Reuters) – Airbus (AIR.PA) and Qatar Airways have settled a dispute over grounded A350 jets, the companies said on Wednesday, averting a potentially damaging UK court trial after a blistering 18-month feud that tore the lid off the global jet market.

The “amicable and mutually agreeable settlement” ends a $2 billion row over surface damage on the long-haul jets. The spat led to the withdrawal of billions of dollars’ worth of jet deals by Airbus and prompted Qatar to increase purchases from Boeing.

The cancelled orders for 23 undelivered A350s and 50 smaller A321neos have been restored under the new deal, which is also expected to see Airbus pay several hundred million dollars to the Gulf carrier, while winning a reprieve from other claims.

Financial details were not publicly disclosed.

The companies said neither admitted liability. Both pledged to drop claims and “move forward and work together as partners”.

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The deal heads off what amounted to an unprecedented public divorce trial between heavyweights in the normally tight-knit and secretive $150 billion jet industry.

The two sides had piled up combined claims and counter-claims worth about $2 billion ahead of the June trial.

French Finance Minister Bruno Le Maire welcomed the deal, which came in the wake of increasing political involvement amid close ties between France, where Airbus is based, and Qatar.

“It is the culmination of significant joint efforts. It is excellent news for the French aerospace industry,” he said.

Airbus shares closed up 1% before the announcement.

Qatar Airways had taken the unusual step of publicly challenging the world’s largest planemaker over safety after paint cracks exposed gaps in a sub-layer of lightning protection on its new-generation A350 carbon-composite jets.

Airbus had acknowledged quality flaws but, backed by European regulators, had insisted that the jets were safe and accused the airline of exaggerating flaws to win compensation.

DAMAGES

Supported by a growing army of lawyers, both sides repeatedly bickered in preliminary hearings over access to documents, to the growing frustration of a judge forced to order co-operation.

Analysts said the deal would allow both sides to feel vindicated, with Qatar Airways winning damages and recognition that the problem lay outside the manual and therefore required a new repair, and Airbus standing its ground on safety and spared the difficult task of finding a home for cancelled A350s.

Qatar will get the in-demand A321neos needed to plan its growth, albeit three years later than expected, in 2026. Airbus’ decision to revoke that order, separate from the disputed A350 contract, had been criticised by global airlines group IATA.

Airbus said it had done its best to avoid pushing Qatar too far back in the queue, though some experts question whether it could have met the earlier schedule because of supply problems.

The settlement is also expected to stop the clock ticking on a claim for grounding compensation that had been growing by $6 million a day, triggered by a clause agreed upon after the repainting of a jet for the World Cup revealed significant surface damage.

Originally valued at $200,000 per day per plane, Airbus’ theoretical liability was ratcheting upwards by a total of $250,000 an hour for 30 jets – or $2 billion a year – by the time the deal was struck, based on court filings. Neither side commented on settlement details.

Airbus said it would now work with the airline and regulators to provide the necessary “repair solution” and return Qatar’s 30 grounded planes to the air.

Confirmation of a settlement came after Reuters reported a deal could arrive as early as Wednesday. In 2021, a Reuters investigation revealed other airlines had been affected by A350 skin degradation, all of whom said it was “cosmetic”.

The dispute has focused attention on the design of modern carbon-fibre jets, which do not interact as smoothly with paint as traditional metal ones, and shed light on industrial methods.

Additional reporting by Leigh Thomas, Michel Rose
Editing by David Goodman, Diane Craft and Gerry Doyle

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France hit by new wave of strikes against Macron’s pension reform

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  • Reform would raise retirement age to 64
  • Schools, transport networks, refinery deliveries hit
  • Macron: Reform vital to ensure viability of pension system

SAINT-NAZAIRE, France, Jan 31 (Reuters) – Striking workers disrupted French refinery deliveries, public transport and schools on Tuesday in a second day of nationwide protests over President Emmanuel Macron’s plan to make people work longer before retirement.

Crowds marched through cities across France to denounce a reform that raises the retirement age by two years to 64 and which is a test of Macron’s ability to push through change now that he has lost his working majority in parliament.

On the rail networks, only one in every three high-speed TGV trains were operating and even fewer local and regional trains. Services on the Paris metro were thrown into disarray.

Buoyed by their success earlier in the month when more than a million people took to the streets, trade unions which have been battling to maintain their power and influence urged the public to turnout en masse.

“We won’t drive until we’re 64!” bus driver Isabelle Texier said at a protest in Saint-Nazaire on the Atlantic coast, adding that many careers involved tough working conditions.

Others felt resigned ahead of likely bargaining between Macron’s ruling alliance and conservative opponents who are more open to pension reform than the left.

“There’s no point in going on strike. This bill will be adopted in any case,” said 34-year-old Matthieu Jacquot, who works in the luxury sector.

Unions said half of primary school teachers had walked off the job. TotalEnergies (TTEF.PA) said 55% of its workers on morning shifts at its refineries had downed tools, a lower number than on Jan. 19. The hard-left CGT union said the figure was inaccurate.

For unions, the challenge will be maintaining a strike movement at a time when high inflation is eroding salaries.

At a local level, some announced “Robin Hood” operations unauthorised by the government. In the southwestern Lot-et-Garonne area, the local CGT trade union branch cut power to several speed cameras and disabled smart power meters.

“When there is such a massive opposition, it would be dangerous for the government not to listen,” said Mylene Jacquot, secretary general of the CFDT union’s civil servants branch.

[1/16] Protesters attend a demonstration against French government’s pension reform plan in Paris as part of a day of national strike and protests in France, January 31, 2023. REUTERS/Gonzalo Fuentes

Opinion polls show a substantial majority of the French oppose the reform, but Macron intends to stand his ground. The reform was “vital” to ensure the viability of the pension system, he said on Monday.

A street march in Paris takes place later in the day.

‘BRUTAL’

The pension system reform would yield an additional 17.7 billion euros ($19.18 billion) in annual pension contributions, according to Labour Ministry estimates.

Unions say there are other ways to raise revenue, such as taxing the super rich or asking employers or well-off pensioners to contribute more.

“This reform is unfair and brutal,” said Luc Farre, the secretary general of the civil servants’ UNSA union. “Moving (the pension age) to 64 is going backwards, socially.”

French power supply was down by 4.5% or 3 gigawatts (GW), as workers at nuclear reactors and thermal plants joined the strike, data from utility group EDF (EDF.PA) showed.

TotalEnergies said deliveries of petroleum products from its French sites had been halted because of the strike, but that customers’ needs were met.

The government made some concessions while drafting the legislation. Macron had originally wanted the retirement age to be set at 65, while the government is also promising a minimum pension of 1,200 euros a month.

Prime Minister Elisabeth Borne has said the 64 threshold is “non-negotiable”, but the government is exploring ways to offset some of the impact, particularly on women.

Hard-left opposition figure Jean-Luc Melenchon, a vocal critic of the reform, said parliament would on Monday debate a motion calling for a referendum on the matter.

“The French are not stupid,” he said at a march in Marseille. “If this reform is vital, it should be possible to convince the people.”

Reporting by Forrest Crellin, Benjamin Mallet, Sudip Kar-Gupta, Leigh Thomas, Blandine Henault, Michel Rose, Dominique Vidalon, Benoit Van Overstraeten; Writing by Ingrid Melander and Richard Lough; Editing by Janet Lawrence

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World

Peru bus plunges off cliff, killing at least 24

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Jan 28 (Reuters) – At least 24 people died in northern Peru after a bus carrying 60 passengers plunged off a cliff in early on Saturday, police told local media.

Peru’s transportation supervisory agency (SUTRAN) confirmed the crash in a statement, without providing a number of fatalities or injuries.

Bodies of victims are transported on the back of a pick-up truck, after a bus carrying 60 passengers plunged off a cliff, in the district of El Alto, Peru January 28, 2023. Piura Government/Handout via REUTERS

The tragedy, involving a bus for the company Q’Orianka Tours Aguila Dorada, occurred in the district of El Alto in the far north of Peru, SUTRAN said.

SUTRAN said early investigations showed the bus appeared to have an up-to-date safety inspection and accident insurance.

Road accidents are relatively common in Peru, with many drivers operating vehicles on precarious roads and without proper training. In 2021, 29 people died when a bus plunged off a highway in the Andes mountains.

Reporting by Brendan O’Boyle; Editing by Cynthia Osterman

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Business

Exclusive: Geely plans to turn maker of London black cabs into EV powerhouse

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COVENTRY, England, Jan 23 (Reuters) – China’s Geely (0175.HK) is planning a big investment to turn the maker of London’s iconic black taxis into a high-volume, all-electric brand with a range of commercial and passenger vehicles, executives at the unit told Reuters.

London Electric Vehicle Company (LEVC) also aims to expand its suite of services, which include cars arranging their own maintenance and recognising their owner’s interests to help them book activities.

“We need a developed product portfolio. We need to make big investments in terms of the technology and infrastructure,” LEVC Chief Executive Alex Nan said at the taxi maker’s headquarters in Coventry, central England. “Geely will make consistent investments into LEVC because this is a very unique project.”

LEVC builds a hybrid taxi model that starts at around 66,000 pounds ($81,500), which has a battery providing 64 miles (103 km) of range and a petrol range-extender giving it a total range of over 300 miles. The company’s business was hit hard by the pandemic and it laid off 140 staff in October.

Nan said LEVC and Geely would seek to attract other investors to its zero-emission portfolio and would look to partner with other carmakers to develop new technology.

Executives said the size of Geely’s investment would be disclosed later. So far the Chinese group, which took full control of LEVC in 2013, has invested 500 million pounds in it.

“Geely fully supports the new transition strategy laid out by LEVC’s board and executive team,” Geely said in a statement.

In 2021, Geely launched a 2 billion pound investment in another unit, niche British luxury sports carmaker Lotus, to massively expand production of its sports cars and build high-end SUVs and sedans in Britain and China. Geely is following a similar path in its plans to grow LEVC, executives said.

Britain’s EV ambitions were dealt a blow last week when startup Britishvolt, which had planned to build a major battery factory in northeast England, filed for administration.

“We need to make sure the UK environment as a whole is competitive and has its position on the world stage,” said LEVC managing director Chris Allen.

READY TO ACCELERATE

Geely owns multiple brands including Volvo (VOLCARb.ST) and – via a joint venture with Volvo – Polestar . Zeekr, another brand in the group, filed for a U.S. initial public offering last month.

As such, Geely faces a complexity that larger EV makers BYD (002594.SZ) and Tesla (TSLA.O) have avoided.

Allen said LEVC was exploring a range of commercial and passenger car models on a common electric platform. It can lean on other group brands that already have EVs to “move forward in a fast, agile way”.

The company already uses an infotainment system and software developed by Volvo and a steering wheel from the Swedish carmaker, allowing it to cut costs, Allen said.

“There’s nothing we couldn’t deliver in a very short time period if we needed to, but it’s just a question of timing,” he said, adding LEVC could easily have a full range of EVs on the road within five years.

“But in two years time, is the industry going to be ready, is the charging infrastructure going to be there, is consumer confidence going to be there?”

LEVC currently has the capacity to build 3,000 taxis a year running on a single shift at its Coventry factory. Allen said that could easily be increased to 20,000 and the plant had room to expand. It could also lean on production in China as Lotus has, Allen said. A major car plant produces on average around 300,000 vehicles per year.

“There’s a huge amount of value in our product that hasn’t ever really been maximised,” Allen said. “This is about growing LEVC into a much more recognizable brand on a global scale and expanding our product offering into as many spaces as we can.”

($1 = 0.8095 pounds)

Reporting by Nick Carey, Additional reporting by Zoey Zhange in Shanghai and Norihiko Shirouzu in Beijing
Editing by Mark Potter

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World

Davos 2023: Greta Thunberg accuses energy firms of throwing people ‘under the bus’

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DAVOS, Switzerland, Jan 19 (Reuters) – Greta Thunberg called on the global energy industry and its financiers to end all fossil fuel investments on Thursday at a high-profile meeting in Davos with the head of the International Energy Agency (IEA).

During a round-table discussion with Fatih Birol on the sidelines of the World Economic Forum (WEF) annual meeting, activists said they had presented a “cease and desist” letter to CEOs calling for a stop to new oil, gas and coal extraction.

“As long as they can get away with it they will continue to invest in fossil fuels, they will continue to throw people under the bus,” Thunberg warned.

The oil and gas industry, which has been accused by activists of hijacking the climate change debate in the Swiss ski resort, has said that it needs to be part of the energy transition as fossil fuels will continue to play a major role in the energy mix as the world shift to a low-carbon economy.

Thunberg, who was detained by police in Germany earlier this week during a demonstration at a coal mine, joined with fellow activists Helena Gualinga from Ecuador, Vanessa Nakate from Uganda and Luisa Neubauer from Germany to discuss the tackle the big issues with Birol.

Birol, whose agency makes policy recommendations on energy, thanked the activists for meeting him, but insisted that the transition had to include a mix of stakeholders, especially in the face of the global energy security crisis.

The IEA chief, who earlier on Thursday met with some of the biggest names in the oil and gas industry in Davos, said there was no reason to justify investments in new oil fields because of the energy crunch, saying by the time these became operational the climate crisis would be worse.

He also said he was less pessimistic than the climate activists about the shift to clean energy.

“We can have slight legitimate optimism,” he said, adding: “Last year the amount of renewables coming to the market was record high.”

But he admitted that the transition was not happening fast enough and warned that emerging and developing countries risked being left behind if advanced economies did not support the transition.

Youth climate activist Greta Thunberg takes part in a discussion on “Treating the climate crisis like a crisis” with International Energy Agency head Fatih Birol (not pictured) on the sidelines of the World Economic Forum in Davos (WEF) in Davos, Switzerland January 19, 2023. REUTERS/Arnd Wiegmann

‘REAL MONEY’

The United Nation’s climate conference, held in Egypt last year, established a loss and damage fund to compensate countries most impacted by climate change events.

Nakate, who held a solitary protest outside the Ugandan parliament for several months in 2019, said the fund “is still an empty bucket with no money at all.”

“There is a need for real money for loss and damage”.

In 2019, the then 16-year-old Thunberg took part in the main WEF meeting, famously telling leaders that “our house is on fire”. She returned to Davos the following year.

But she refused to participate as an official delegate this year as the event returned to its usual January slot.

Asked why she did not want to advocate for change from the inside, Thunberg said there were already activists doing that.

“I think it should be people on the frontlines and not privileged people like me,” she said. “I don’t think the changes we need are very likely to come from the inside. They are more likely to come from the bottom up.”

The activists later walked together through the snowy streets of Davos, where many of the shops have temporarily been turned into “pavilions” sponsored by companies or countries.

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Writing by Leela de Kretser; Editing by Alexander Smith

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World

Nepal plane crash searchers rappel, fly drones to find last two people

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KATHMANDU, Jan 17 (Reuters) – Searchers used drones and rappelled down a 200 metres (656 feet) deep gorge in Nepal’s second-biggest city on Tuesday to search for two people unaccounted for after the country’s deadliest plane crash in 30 years killed at least 70 people.

Difficult terrain and inclement weather was hampering rescue efforts near the tourist city of Pokhara, where the Yeti Airlines ATR 72 turboprop carrying 72 people crashed in clear weather on Sunday just before landing.

“There is thick fog here now. We are sending search and rescue personnel using ropes into the gorge where parts of the plane fell and was in flames,” Ajay K.C., a police official in Pokhara who is part of the rescue efforts, told Reuters.

Searchers found two more bodies on Monday before the search was called off because of fading light.

“There were small children among the passengers. Some might have been burnt and died, and may not be found out. We will continue to look for them,” K.C. said.

An airport official said 48 bodies were brought to the capital Kathmandu on Tuesday and sent to a hospital for autopsies, while 22 bodies were being handed over to families in Pokhara.

Medical personnel in personal protective equipment and masks helped transport shrouded bodies from stretchers to a vehicle before they were flown to Kathmandu, Reuters pictures showed.

Television channels showed weeping relatives waiting for the bodies of their loved ones outside a hospital in Pokhara.

On Monday, searchers found the cockpit voice recorder and flight data recorder from the flight, both in good condition, a discovery that is likely to help investigators determine what caused the crash.

Reuters Graphics

Under international aviation rules, the crash investigation agencies of the countries where the plane and engines were designed and built are automatically part of the inquiry.

ATR is based in France and the plane’s engines were manufactured in Canada by Pratt & Whitney Canada (RTX.N).

French and Canadian air accident investigators have said they plan to participate in the probe.

Reporting by Gopal Sharma, writing by Shilpa Jamkhandikar; Editing by Jamie Freed

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World

Nepal finds black boxes of aircraft after deadliest crash in 30 years

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  • Searchers find bodies of two of four missing passengers
  • Rescue efforts paused after poor weather hampers operation
  • Cockpit voice, flight data recorders found in good shape
  • Nepal observes day of national mourning, launches probe

KATHMANDU, Jan 16 (Reuters) – Searchers found the cockpit voice recorder and flight data recorder on Monday from a passenger flight that crashed, killing at least 70 people in Nepal’s worst plane accident for 30 years, officials said.

The data on the recorders may help investigators determine what caused the Yeti Airlines ATR 72 aircraft, carrying 72 people, to go down in clear weather on Sunday just before landing in the tourist city of Pokhara.

Reuters Graphics

Both recorders were in good shape and will be sent for analysis based on the recommendation of the manufacturer, Teknath Sitaula, a Kathmandu airport official, told Reuters.

Under international aviation rules, the crash investigation agency of the country where the plane was designed and built is automatically part of the inquiry.

ATR is based in France and the plane’s engines were manufactured in Canada by Pratt & Whitney Canada (RTX.N).

Nepal’s Civil Aviation Authority has inspected all ATR 72 and ATR 42 aircraft operating in the country since the crash and found no technical faults in them, it said in a statement on Monday.

There are currently 16 ATR 72 aircraft and three ATR 42s with multiple airlines in the country, an aviation authority official said.

Rescuers battled cloudy weather and poor visibility on Monday as they scoured a river gorge for passengers who are unaccounted for, more than 24 hours after the crash.

Two more bodies were recovered on Monday, taking the death toll to 70, said Navin Acharya, an official at the rescue coordination centre at Kathmandu airport. The search was called off for the remaining two missing people as darkness descended and will resume on Tuesday, he said.

Pokhara police official Ajay K.C. said all bodies had been sent to a hospital.

In the capital Kathmandu around 100 people lit candles at a gathering in memory of the crash victims and called on the government to ensure proper safety standards, witnesses said.

Condolences poured in from around the world, including the Vatican.

“His Holiness Pope Francis sends his condolences to you and to all affected by this tragedy, together with his prayers for those involved in the recovery efforts,” Cardinal Secretary of State Pietro Parolin said in a message to Nepal’s president.

[1/7] A rescue team recovers the body of a victim from the site of the plane crash of a Yeti Airlines operated aircraft, in Pokhara, Nepal January 16, 2023. REUTERS/Rohit Giri

Reuters footage from the crash site showed rescuers looking at the charred remains of the plane near a mountain gorge.

The plane, on a scheduled flight from Kathmandu to Pokhara, gateway to the scenic Annapurna mountain range, was carrying 57 Nepalis, five Indians, four Russians, two South Koreans, and one person each from Argentina, Ireland, Australia and France.

The aircraft had flown more than 1,700 times in the past one year.

Minutes before the aircraft was to land on Sunday, the pilot asked for a change of runway, a spokesperson for Pokhara airport said on Monday. “The permission was granted. “We don’t ask (why), whenever a pilot asks we give permission to change approach,” spokesperson Anup Joshi said.

Sunday’s crash underlined the need for the government to break up the Civil Aviation Authority of Nepal (CAAN), which both regulates airlines and manages airports, experts said.

“The government must immediately separate the regulatory body and service provider by splitting the Civil Aviation Authority of Nepal (CAAN) which is doing both works now,” K.B. Limbu, an aviation expert and a retired pilot, told Reuters.

“This leads to a conflict of interests.”

Asked for comment, Sitaula, the Kathmandu airport official, denied there was any such conflict in the functioning of CAAN.

“The regulatory and service provider (airport management) officials are separate and there is no cross-movement between the two bodies operating under the same organisation,” he said, referring to the CAAN.

There are nine domestic airlines in Nepal, including Yeti Airlines and its unit Tara Air. Yeti and Tara plane crashes have killed at least 165 people in Nepal since 2000 out of a total of 359 dead from aviation accidents, according to data from CAAN.

Reuters Graphics

An additional 75 people have died in helicopter crashes this century in Nepal, which is home to eight of the world’s 14 highest mountains, including Everest, and where sudden weather changes can make for hazardous conditions.

Experts say air accidents are usually caused by a combination of factors, and investigations can take months or longer.

Anju Khatiwada, the co-pilot of Sunday’s ill-fated aircraft, lost her husband Dipak Pokhrel in a similar crash in 2006. Khatiwada’s remains have not been identified but she is feared dead.

Nepal observed a day of national mourning on Monday and set up a panel to investigate the disaster and suggest measures to avoid such incidents in future.

Reporting by Gopal Sharma, writing by Shilpa Jamkhandikar and Shivam Patel; Editing by Gerry Doyle, Raju Gopalakrishnan and Mark Heinrich

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World

At least 64 killed in Nepal’s worst air crash in 30 years

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KATHMANDU, Jan 15 (Reuters) – At least 64 people were killed on Sunday when a domestic flight crashed in Pokhara in Nepal, the small Himalayan country’s worst air crash in three decades.

Hundreds of rescue workers were scouring the hillside where the Yeti Airlines flight, carrying 72 people from the capital Kathmandu, went down.

Local TV showed rescue workers scrambling around broken sections of the aircraft. Some of the ground near the crash site was scorched, with licks of flames visible.

“We have sent 31 bodies to the hospital and are still taking out 33 bodies from the gorge,” said police official Ajay K.C., adding that rescue workers were having difficulty reaching the site in a gorge between two hills near the tourist town’s airport.

Reuters Graphics

The crash is Nepal’s deadliest since 1992, the Aviation Safety Network database showed, when a Pakistan International Airlines Airbus A300 crashed into a hillside upon approach to Kathmandu, killing all 167 people on board.

The plane made contact with the airport from Seti Gorge at 10:50 a.m. (0505 GMT), the aviation authority said in a statement. “Then it crashed.”

“Half of the plane is on the hillside,” said Arun Tamu, a local resident, who told Reuters he reached the site minutes after the plane went down. “The other half has fallen into the gorge of the Seti river.”

Khum Bahadur Chhetri said he watched from the roof of his house as the flight approached.

“I saw the plane trembling, moving left and right, and then suddenly its nose dived and it went into the gorge,” Chhetri told Reuters, adding that local residents took two passengers to a hospital.

The government has set up a panel to investigate the cause of the crash and it is expected to report within 45 days, the finance minister, Bishnu Paudel, told reporters.

SERIES OF CRASHES

At least 309 people have died since 2000 in plane or helicopter crashes in Nepal – home to eight of the world’s 14 highest mountains, including Everest – where sudden weather changes can make for hazardous conditions.

The European Union has banned Nepali airlines from its airspace since 2013, citing safety concerns.

Those on the twin-engine ATR 72 aircraft included two infants and four crew members, said airline spokesman Sudarshan Bartaula.

The journey to Pokhara, Nepal’s second largest city tucked under the picturesque Annapurna mountain range, from the capital Kathmandu is one of the Himalayan country’s most popular tourist routes, with many preferring a short flight instead of a six-hour-long drive through hilly roads.

The weather on Sunday was clear, said Jagannath Niroula, spokesman for Nepal’s Civil Aviation Authority.

Passengers included five Indians, four Russians and one Irish, two South Korean, one Australian, one French and one Argentine national.

The ATR72 of European planemaker ATR is a widely used twin engine turboprop plane manufactured by a joint venture of Airbus (AIR.PA) and Italy’s Leonardo (LDOF.MI). Yeti Airlines has a fleet of six ATR72-500 planes, according to its website.

“ATR specialists are fully engaged to support both the investigation and the customer,” the company said on Twitter, adding that its first thoughts were for those affected, after having been informed of the accident.

Airbus and Leonardo did not immediately respond to requests for comment.

Flight tracking website FlightRadar24 said on Twitter the Yeti Airlines aircraft was 15 years old and equipped with an old transponder with unreliable data.

“We are downloading high-resolution data and verifying the data quality,” it said.

On its website, Yeti describes itself as a leading domestic carrier. Its fleet consists of six ATR 72-500s, including the one that crashed. It also owns Tara Air, and the two together offer the “widest network” in Nepal, the company says.

Reporting by Gopal Sharma; Additional reporting by Jamie Freed; Writing by Devjyot Ghoshal and Aditya Kalra; Editing by William Mallard and Susan Fenton

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Business

S&P 500 ends at highest in month, indexes gain for week as earnings kick off

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  • JPMorgan, Wells Fargo shares jump
  • U.S. consumers’ inflation expectations ease – survey
  • Tesla falls after price cuts on electric vehicles
  • Indexes: Dow up 0.3%, S&P 500 up 0.4%, Nasdaq up 0.7%

NEW YORK, Jan 13 (Reuters) – The S&P 500 and Nasdaq finished at their highest levels in a month on Friday, with shares of JPMorgan Chase and other banks rising following their quarterly results, which kicked off the earnings season.

All three major indexes also registered strong gains for the week, leaving the S&P 500 up 4.2% so far in 2023, and the Cboe Volatility index (.VIX) – Wall Street’s fear gauge – closed at a one-year low.

On Friday, financials (.SPSY) were among sectors that gave the S&P 500 the most support.

JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) beat quarterly earnings estimates, while Wells Fargo & Co (WFC.N) and Citigroup Inc (C.N) fell short of quarterly profit estimates.

But shares of all four firms rose, along with the S&P 500 banks index (.SPXBK), which ended up 1.6%. JPMorgan shares climbed 2.5%.

Still, Wall Street’s biggest banks stockpiled more rainy-day funds to prepare for a possible recession and reported weak investment banking results while showing caution about forecasting income growth. They said higher rates helped to boost profits.

Strategists said investors will be watching for further guidance from company executives in the coming weeks.

“This has shifted the focus back to earnings,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“Even though the earnings were basically OK, people are just kind of stepping back, and you’re going to see a wait-and-see attitude with stocks” as investors hear more from company executives.

Year-over-year earnings from S&P 500 companies are expected to have declined 2.2% for the quarter, according to Refinitiv data.

Also giving some support to the market Friday, the University of Michigan’s survey showed an improvement in U.S. consumer sentiment, with the one-year inflation outlook falling in January to the lowest level since the spring of 2021.

The Dow Jones Industrial Average (.DJI) rose 112.64 points, or 0.33%, to 34,302.61, the S&P 500 (.SPX) gained 15.92 points, or 0.40%, to 3,999.09 and the Nasdaq Composite (.IXIC) added 78.05 points, or 0.71%, to 11,079.16.

The S&P 500 closed at its highest level since Dec. 13, while the Nasdaq closed at its highest level since Dec. 14.

For the week, the S&P 500 gained 2.7% and the Dow rose 2%. The Nasdaq increased 4.8% in its biggest weekly percentage gain since Nov. 11.

The U.S. stock market will be closed Monday for the Martin Luther King Jr. Day holiday.

Thursday’s Consumer Price Index and other recent data have bolstered hopes that a sustained downward trend in inflation could give the Federal Reserve room to dial back on its interest rate hikes.

Money market participants now see a 91.6% chance the Fed will hike the benchmark rate by 25 basis points in February.

Among the day’s decliners, Tesla (TSLA.O) shares fell 0.9% after it slashed prices on its electric vehicles in the United States and Europe by as much as 20% after missing 2022 deliveries estimates.

In other earnings news, UnitedHealth Group Inc (UNH.N) shares rose after it beat Wall Street expectations for fourth-quarter profit but the stock ended down on the day.

Shares of Delta Air Lines Inc (DAL.N) dropped 3.5% as the company forecast first-quarter profit below expectations.

Volume on U.S. exchanges was 10.77 billion shares, compared with the 10.81 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.79-to-1 ratio; on Nasdaq, a 1.78-to-1 ratio favored advancers.

The S&P 500 posted 12 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 105 new highs and 8 new lows.

Additional reporting by Shubham Batra, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Subhranshu Sahu, Shounak Dasgupta and Grant McCool

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U.S. airports rumble back to life after FAA computer outage

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WASHINGTON, Jan 11 (Reuters) – U.S. flights were slowly beginning to resume departures and a ground stop was lifted after the Federal Aviation Administration (FAA) scrambled to fix a system outage overnight that had forced a halt to all U.S. departing flights.

The cause of the problem, which delayed thousands of flights in the United States, was unclear, but U.S. officials said they had so far found no evidence of a cyberattack.

“Normal air traffic operations are resuming gradually across the U.S. following an overnight outage to the Notice to Air Missions system that provides safety info to flight crews. The ground stop has been lifted. We continue to look into the cause of the initial problem” the FAA said in a Tweet.

More than 4,300 flights had been delayed and 700 canceled as officials said it will take hours to recover from the halt to flights.

The FAA had earlier ordered airlines to pause all domestic departures after its pilot alerting system crashed and the agency had to perform a hard reset around 2 a.m., officials said.

The FAA said shortly before 8:30 a.m. departures were resuming at Newark and Atlanta airports.

The FAA is expected to implement a ground delay program in order to address the backlog of flights halted for hours. Flights already in the air had been allowed to continue to their destinations during the ground stop.

U.S. President Joe Biden ordered the Transportation Department to investigate the outage and said the cause of the failure was unknown at this time. Asked if a cyber attack was behind the outage, Biden told reporters at the White House, “We don’t know.”

Transportation Secretary Pete Buttigieg pledged “an after-action process to determine root causes and recommend next steps.”

The FAA said it was working to restore the Notice to Air Missions system that alerts pilots to hazards and changes to airport facilities and procedures that had stopped processing updated information.

A total of 4,314 U.S. flights were delayed as of 9:04 a.m. ET, flight tracking website FlightAware showed. Another 737 were canceled.

MODERNIZATION NEEDED

United said it has resumed operations. The Chicago-based carrier, however, warned that customers might continue to see some delays and cancellations.

Shares of U.S. carriers fell in Wednesday’s premarket trading. Southwest Airlines (LUV.N) was down 2.4%, while Delta Air Lines Inc (DAL.N), United Airlines (UAL.O) and American Airlines (AAL.O) were down about 1%.

“America’s transportation network desperately needs significant upgrades … We call on federal policymakers to modernize our vital air travel infrastructure.” said Geoff Freeman, President and CEO of the U.S. Travel Association, a group representing U.S. airlines, hotels, car rental companies, and theme parks.

FAA’s system outage comes weeks after an operational meltdown at Southwest at the end of last year left thousands of passengers stranded.

A severe winter storm right before Christmas coupled with the Texas-based carrier’s dated technology led to over 16,000 flight cancellations last month.

The DOT, FAA’s parent agency, heavily criticized Southwest’s failures and pressured the airline to compensate passengers for missed flights and other related costs. There is no legal requirement that the FAA must compensate passengers for flight delays caused by agency computer issues.

ESSENTIAL INFORMATION

A NOTAM is a notice containing information essential to personnel concerned with flight operations, but not known far enough in advance to be publicized by other means.

Information can go up to 200 pages for long-haul international flights and may include items such as runway closures, bird hazard warnings and construction obstacles.

United Airlines (UAL.O) said it had temporarily delayed all domestic flights and would issue an update when it learned more from the FAA.

Germany’s Lufthansa and Air France both said they were continuing to operate flights to and from the United States, while the French airline said it was monitoring the situation.

The operator of Paris international airports – Paris Charles de Gaulle airport and Orly airport – said it expects delays to flights.

Austin-Bergstrom International Airport said on Twitter that ground stops across the country were causing delays. A ground stop is an air traffic control measure that slows or halts aircraft at a given airport.

In an earlier advisory on its website, the FAA said its NOTAM system had “failed”, although NOTAMs issued before the outage were still viewable. Earlier this month, a problem with a different airline computer control system delayed dozens of flights in Florida.

A total of 21,464 flights are scheduled to depart airports in the United States on Wednesday with a carrying capacity of nearly 2.9 million passengers, data from Cirium shows.

American Airlines has the most departures from U.S. airports with 4,819 flights scheduled, followed by Delta and Southwest, Cirium data showed.

Reporting by Doina Chiacu and David Shepardson in Washington, Abhijith Ganapavaram in Bengaluru, Jamie Freed in Sydney and Rajesh Kumar Singh in Chicago; Additional reporting by Nathan Gomes and Steve Holland in Washington
Writing by Shailesh Kuber and Alexander Smith Editing by Edmund Blair and Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

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