FILE PHOTO: Matteo Salvini, Italy’s Deputy Prime Minister and leader of the far-right League Party, speaks as he launches campaigning for the European elections, in Milan, Italy April 8, 2019. REUTERS/Alessandro Garofalo/File Photo
April 24, 2019
By Giuseppe Fonte and Gavin Jones
ROME (Reuters) – Italy’s government approved an economic growth plan in the early hours of Wednesday after a bad-tempered cabinet meeting that exposed divisions in the ruling coalition and fuelled speculation about a government collapse.
The infighting overshadowed media coverage of the “growth decree” which called for tax breaks and investment incentives and for simplified procedures for public tenders.
The ruling parties, the right-wing League and anti-establishment 5-Star Movement, are feuding as they compete for votes ahead of European Parliament elections on May 26, stoking investor fears that the government could fall.
The government had presented the decree as a landmark in its efforts to kickstart Italian growth, which has lagged euro zone peers for two decades, but it instead served to underline an intensifying feud between the coalition partners’ leaders.
5-Star chief Luigi Di Maio showed up for the meeting more than an hour late, after using a TV appearance to call for a junior League minister to resign over a corruption scandal. League leader Matteo Salvini has refused to sack the minister.
“It’s official – there are two governments,” read the front-page headline in national daily newspaper La Repubblica.
Di Maio and Salvini repeatedly say they want the alliance to continue even as they attack each other on a range of issues, and they have shown no willingness to compromise over the future of the League official at the centre of the scandal.
Armando Siri, a transport ministry undersecretary and economic adviser to Salvini, has been put under investigation for allegedly accepting bribes to promote the interests of renewable energy firms. Siri denies any wrongdoing.
“I plan to govern for a full mandate and I have no intention of sending Italians to (early) elections,” Salvini told reporters on Wednesday.
He added that he would not push for a cabinet reshuffle to have more weight in government after the EU elections, where the League is likely to be the largest party, opinion polls suggest.
He said Prime Minister Giuseppe Conte – an academic who is from neither ruling party but is close to 5-Star – had not asked for Siri’s resignation. Shortly afterwards Conte said he would speak to Siri, without giving further details.
DEBT RELIEF CHANGE
The growth decree contained few surprises, though the dispute was reflected in a change to one of the decree’s major measures – debt relief for the municipality of Rome, which is run by 5-Star.
The decree was less generous than an original draft of the plan after criticism from the League.
Cabinet also broadened the scope of its plan to compensate savers hit by the country’s recent banking crisis, making the money available to those with an annual income of up to 35,000 euros ($39,000) or with assets of up 200,000 euros.
The asset test was raised from 100,000 euros in the original draft, but it later emerged the amended scheme with the higher threshold would be conditional on EU approval.
The decree also gave the green light for the government to potentially take an equity stake in any vehicle set up to rescue loss-making airline Alitalia. The government is desperate to save the carrier and avoid mass layoffs.
Italy last year unveiled a big-spending budget for 2019, rattling the euro and other financial markets, but it has so far had little impact on growth. The economy slipped into technical recession at the end of 2018 and is now barely expanding.
Italy, the euro zone’s second-most indebted nation after Greece, had public debts equalling 132.2 percent of GDP in 2018, up from 131.4 percent in 2017.
($1 = 0.8923 euros)
(Editing by Giselda Vagnoni, Mark Bendeich and Alison Williams)
FILE PHOTO: A Scandinavian SAS airline passenger plane flies near the air traffic control tower after taking off from Charles de Gaulle International Airport in Roissy, near Paris, August 21, 2013. REUTERS/Charles Platiau/File Photo
April 24, 2019
STOCKHOLM (Reuters) – Scandinavian airline SAS is offering travelers concerned about a possible strike by pilots the chance to reschedule flights for the April 26-29 period to another date free of charge.
The Swedish, Danish and Norwegian pilot unions’ joint SAS branch said this month they would go on strike on April 26 if there was no agreement on wages and terms by then, after an earlier talks round of talks broke down.
SAS said on its website the offer concerned flights operated by SAS but not those operated by its partners as they would not affected by the potential strike.
SAS employs around 1,500 pilots across its home markets of Sweden, Denmark and Norway.
National mediators in the three countries have since last week tried to broker a deal between delegations of the two parties but without success so far.
(Reporting by Anna Ringstrom; Editing by Edmund Blair)
FILE PHOTO: An aerial photo shows Boeing 737 MAX airplanes parked on the tarmac at the Boeing Factory in Renton, Washington, U.S. March 21, 2019. REUTERS/Lindsey Wasson
April 23, 2019
By Tracy Rucinski and Eric M. Johnson
CHICAGO/SEATTLE (Reuters) – Boeing Co has told some 737 MAX owners it is targeting U.S. Federal Aviation Administration approval of its software fix as early as the third week of May and the ungrounding of the aircraft around mid-July, two sources told Reuters.
The dates are part of a provisional timeline that Boeing has shared in meetings with airline customers as it explains an upgrade to software that played a role in two fatal crashes and led to the worldwide grounding of its MAX 737 jetliner in March.
However, Boeing has not yet submitted its completed software package to the FAA for approval, two other sources said.
None of the sources, who were not authorized to speak publicly, said they knew for sure how long the re-certification process will take.
A Boeing spokeswoman said the company is focused on the safe return to service of the MAX and its engagement with global regulators and customers.
Boeing Chief Executive Dennis Muilenburg said last week the company had made the final test flight with the new MAX software before a final certification flight, indicating that the company believed it was making progress toward regulatory approval.
On April 1, the FAA said that once it received Boeing’s completed software package it would run a rigorous safety review before approving the software for installation.
The agency also plans to work with other international regulators on MAX certification in their countries and regions before lifting the flying suspension in the United States, with Boeing prepared to address any concerns, one source said.
Aside from the software certification, international regulators must also decide on new pilot training.
This process is separate from an FAA-led international review panel, which the agency has said may not be completed before the MAX flying suspension is lifted.
The two largest U.S. MAX owners, Southwest Airlines Co and American Airlines Group Inc, removed the aircraft from their flying schedules into August but have said they could use their MAX jets as spares if they are ungrounded sooner.
United Airlines, with 14 MAX jets, said last week that it expected the aircraft to return to service this summer, with deliveries resuming before the end of the year.
Boeing halted MAX deliveries to customers after the grounding in mid-March and said earlier this month that it would cut 737 production to 42 airplanes per month from 52.
One industry source said that as of last week, Boeing planned to keep the lower production rate in place for two months, meaning it aims to resume a rate of 52 aircraft in July but the timeline could shift.
Global airlines have had to cancel thousands of flights and use spare aircraft to cover routes that were previously flown with the fuel-efficient MAX.
(Reporting by Tracy Rucinski in Chicago and Eric M. Johnson in Seattle; Additional reporting by David Shepardson in Washington; Editing by Tom Brown)
FILE PHOTO: Jet Airways aircraft are seen parked at the Chhatrapati Shivaji Maharaj International Airport in Mumbai, India, April 18, 2019. REUTERS/Francis Mascarenhas/File Photo
April 23, 2019
MUMBAI (Reuters) – India’s Jet Airways is constantly engaging with the government and lenders for a resolution of the current debt crisis and will not leave any stone unturned to revive the airline, its chief executive officer Vinay Dube told television channel ET Now in an interview.
Once India’s largest private airline, Jet halted all flight operations indefinitely last Wednesday evening after lenders led by State Bank of India declined to extend more funds to keep the carrier going.
“We are in constant touch with the lenders on how to get it (debt resolution) done in a manner that makes sense for them and makes sense for us,” Dube told ET Now.
“But I would like to think that a flying Jet Airways makes definite sense for them (banks) because it preserves their value as well. So we are not talking about anything that does not make good economic sense for the lenders, this is not charity for the sake of it”.
The company has requested banks for 10 billion rupees ($143.29 million), Dube said.
Earlier in the day, newspaper Business Standard reported that all shortlisted bidders for the company had backed out of the bidding process that is due to complete on May 10.
Dube, however, said he was hopeful of finding a keen, healthy investor who can inject the requisite amount of equity into the company.
The government plans to form a committee to temporarily allocate takeoff and landing slots left vacant by the grounding of Jet Airways flights, a senior official said last week.
Dube, however, said the government had assured the airlines this was a temporary move and the slots will be protected for the airline once they start flying again.
“While we have a combination of aircraft that are being deregistered or early terminated, the majority of them have not left the premise,” Dube said referring to the aircraft and said they will be available to the airline when it starts flying again.
“We understand the banks’ position. This is a financial proposition for them as well and we are in constant touch with them and we will be. For us there is no stone that we will leave unturned. We believe in Jet Airways, we will do whatever we can to make other people also believe in us.”
(Reporting by Swati Bhat; Editing by Rashmi Aich)
People, including passengers of a flight from the Turkmen capital Ashgabat, gather in the baggage claim area upon their arrival at Almaty International Airport, Kazakhstan April 5, 2019. REUTERS/Mariya Gordeyeva
April 23, 2019
By Mariya Gordeyeva
ALMATY (Reuters) – Beset by economic hardship, enterprising Turkmens have found a way to supplement their incomes – smuggling towels and bed linen into neighboring Kazakhstan.
Moving hundreds of items every trip in trademark Chinese plaid bags which at times have clogged airport luggage belts, informal traders – mostly women in their late forties and fifties – hand them over to relatives or local partners to be resold for up to five times the purchase price.
Dressed in traditional Central Asian garb such as headscarves and long skirts, these women arrive on almost every flight from Ashgabat to Almaty, Kazakhstan’s biggest city.
Textiles are among the few items manufactured domestically from local feedstock and prices for items produced by state-owned companies have remained stable for years even as the Turkmen manat lost four-fifths of its value on the black market due to Turkmenistan’s falling gas export revenue.
A deal to resume gas exports to Russia this month brought hope, but turned out to be small and short-term.
Turkmenistan, where president Kurbanguly Berdimukhamedov rules with an elaborate personality cult, is one of the world’s most closed countries.
There are no opposition parties or media critical of the government and Berdymukhamedov, often referred to as Arkadag (Protector), wields sweeping powers.
Turkmenistan rarely allows visits by foreign journalists and the textile trade offers a glimpse into the depth of its economic problems.
The trade attracted the attention of Almaty airport officials this year when luggage from Turkmenistan started clogging its belts. The planes, it turned out, were stuffed with textiles.
“My daughter trades at a bazaar (in Kazakhstan) and I bring her goods little by little… which I buy from our (Turkmen) stores,” said a Turkmen woman picking up bags from the luggage belt in Almaty, Kazakhstan’s commercial hub.
Like all other people involved in this informal textiles trading, the woman spoke on the condition of anonymity because traders like her dodge customs duties by claiming their goods are personal belongings not meant for resale.
These de facto smuggling operations reached industrial scale in early 2019, prompting the Almaty airport to lodge an official complaint with the Turkmen flag carrier.
“There were parcels weighing over 50-60 kilograms (110-130 pounds) each,” said Marina Zabara, a complaints inspector at the airport.
Oversized parcels have since disappeared but the flow of textiles continues. A Reuters reporter saw Turkmen travelers pick up parcels of textiles upon arrival in Almaty this month.
“A woman from Turkmenistan moved to our village last year and offered us to sell their textiles,” said a Kazakh trader working at a market on the outskirts of Almaty. “Her mother brings the goods as luggage, as many items as she can.”
At Almaty’s biggest market, traders display Turkmen bedding – often with traditional patterns based on deer and sheep horns or abstract human figures – from fully-packed cargo containers.
“The demand is good, with the most expensive bedding set priced at 10,000 tenge ($26),” said one trader.
Some hotels have also become wholesale buyers, Turkmens say.
The official exchange rate of the manat is 3.5 per dollar, but on the black market a dollar fetches 18.6 manat.
A Kazakh citizen who used to live in Turkmenistan told Reuters that by buying out luggage allowances from other travelers and bribing airline officials, a “shuttle trader” can move up to 200 kilograms (441 pounds) in one trip.
(Additional reporting by Olzhas Auyezov in Almaty and Marat Gurt in Ashgabat,; Writing by Olzhas Auyezov, editing by Ed Osmond)
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 16, 2019. REUTERS/Staff
April 23, 2019
By Agamoni Ghosh and Medha Singh
(Reuters) – European shares fell on Tuesday as battery maker Umicore kicked off a busy week of earnings with a grim outlook and investors grew concerned about China cutting additional support to its economy, but a rally in oil and gas stocks helped temper losses.
The pan-European STOXX 600 index fell 0.3 percent by 0930 GMT after seven straight sessions of gains, with all major indices in the red except oil major-heavy London’s FTSE 100 which rose 0.4 percent.
Earnings started to roll in on a not-so-positive note with Umicore tumbling 16 percent, after the Belgian group warned revenue and earnings growth in 2020 will be lower than previous indications due to delays in the electric vehicle and energy storage markets.
Umicore’s slide weighed heavily on Belgium’s blue chip Bel 20 Index, pulling it 1.5 percent lower.
Car part suppliers Plastic Omnium and Faurecia also reported first quarter results. Plastic Omnium slid after warning of a decline in worldwide auto production, but Faurecia rose 1.5 percent after the company met its full-year target.
Belgium’s Melexis, which supplies semiconductor solutions for cars, slipped 6 percent after first quarter net income tumbled.
“We’re pausing for breadth ahead of a fairly busy week of earnings after a decent winning streak,” said Jasper Lawler, head of research at London Capital Group in London.
The banking index eased from six-month highs with major European banks as UBS, Credit Suisse and Barclays slated to report earnings late this week after last week’s mixed bag of results from big Wall Street banks.
“We’ve seen the likes of record profits from J.P. Morgan but nothing close in Europe. The numbers aren’t going to be great,” said Lawler.
Earnings numbers from some of the biggest S&P 500 companies, including Boeing Co, Amazon.com Inc and Facebook Inc, are also due this week.
Payments company Wirecard was among the biggest decliners after Germany’s markets regulator Bafin’s two-month ban on short-selling ended on Friday.
Ahold Delhaize slid after the Dutch supermarket warned that a strike at its Stop & Shop chain in U.S. would hurt its underlying 2019 profit margin, as it missed out on around $200 million on Easter week sales.
Renault fell 1.4 percent after Nissan Motor Co Ltd said it would reject a management integration proposal from its French partner and called for an equal capital relationship, according to a Nikkei report.
Also weighing on sentiment was Beijing’s indication to tone down its stimulus measures following unexpected signs of recovery from first-quarter economic data last week.
The oil and gas sector was among the lone bright spots with Royal Dutch Shell, British Petroleum and Total, up between 1.7 percent and 2 percent.
Oil prices were at 2019 highs on Tuesday after Washington announced all Iran sanction waivers would end by May, pressuring importers, mostly Asian, to stop buying from Tehran.
Surging oil prices, however, took a toll on airline stocks. Air France, EasyJet plc, Lufthansa and Ryanair , all shed between 2 percent and 4 percent.
Getinge was the top performer on the STOXX 600 after the Swedish medical technology company beat first quarter sales estimates and said restructuring measures will boost profit in the second half of the year.
Thomas Cook jumped 14 percent after a Sky News report that the world’s oldest tour operator was tentatively approached by several parties regarding a takeover of its tour operating division or the entire company.
(Reporting by Agamoni Ghosh and Medha Singh, Editing by William Maclean and Ed Osmond)
FILE PHOTO: Apr 14, 2019; Columbus, OH, USA; A view of the Stanley Cup Playoffs logo on a hat in the team store prior to game three of the first round of the 2019 Stanley Cup Playoffs between the the Tampa Bay Lightning and the Columbus Blue Jackets at Nationwide Arena. Mandatory Credit: Aaron Doster-USA TODAY Sports/File Photo
April 22, 2019
By Rory Carroll
(Reuters) – The National Hockey League said on Monday it would purchase carbon credits to offset airline emissions of heat-trapping greenhouse gases during the Stanley Cup playoffs.
For the first round of the playoffs, which has the highest number of teams traveling and is currently underway, the NHL will offset more than 465 metric tons of carbon emissions, equivalent to taking 99 cars off the road for one year.
The league will purchase the offsets from Portland, Oregon-based Bonneville Environmental Foundation, which operates offset projects that capture or cut greenhouse gases emitted from animal waste, landfills and fossil fuel use.
The announcement, which coincides with Earth Day, is part of the NHL’s efforts to address climate change.
Last season the NHL published its second Sustainability Report, which examined its commitment to ensure all levels of hockey — from the frozen ponds it was invented on to professional arenas — thrive for future generations.
The report estimated that in the coming decades the average length of the skating season may shrink by one third in eastern Canada and by 20 percent in western Canada.
In response the league has ramped up efforts at its arenas to cut carbon emissions, reduce waste and conserve water, among other initiatives.
(Reporting by Rory Carroll, editing by Pritha Sarkar)
FILE PHOTO – Customers walk past Avianca airline check-in machines at Congonhas airport in Sao Paulo, Brazil, April 12, 2019. REUTERS/Nacho Doce
April 20, 2019
BRASILIA (Reuters) – Avianca Brasil has canceled more than 1,300 flights, Brazilian media reported on Saturday, as the bankrupt airline was forced to reduce its fleet by more than two-thirds.
The cancellations, for April 19-28, are nationwide, with airports in Brasilia, Guarulhos in Sao Paulo, and Galeao in Rio de Janeiro, the hardest hit, O Estado de Sao Paulo reported.
Avianca, which filed for bankruptcy protection in December, has to return 18 leased planes after Easter, Brazil’s National Civil Aviation Agency said on Thursday, reducing its fleet to just eight aircraft.
Earlier this month, the airline had 35 planes.
(Reporting by Jamie McGeever; Editing by Richard Chang)
The Thomas Cook logo is seen in this illustration photo January 22, 2018. REUTERS/Thomas White/Illustration
April 20, 2019
(Reuters) – Thomas Cook has been tentatively approached about a takeover of its tour operating unit, or the entire company, by several parties as its lenders prepare for crunch talks over the state of its finances, Sky News reported on Saturday.
The company, which has put its airline business up for sale, last month announced a review of its money division to help focus on its core holiday business after a rough 2018.
Citing unnamed sources, Sky News reported https://news.sky.com/story/bidders-try-to-land-thomas-cook-as-lenders-chart-new-course-11698817U.S. private equity firm KKR & Co and Swedish buyout group EQT Partners were potential bidders for the group, while China’s Fosun International was understood to be among those to have lodged a preliminary interest in the tour business.
Thomas Cook, the world’s oldest tour operator, has brought in advisers from AlixPartners to work on its balance sheet and cost-reduction plans, while its syndicate of more than a dozen lenders has hired FTI Consulting to advise on their financial exposure to the company, the report added.
Thomas Cook and KKR said they won’t be commenting on the report. EQT declined to comment, while Fosun could not be immediately reached for comment.
(Reporting by Sathvik N in Bengaluru; Editing by David Holmes)
FILE PHOTO: An Alitalia Airbus A320-200 airplane comes in to land at Fiumicino airport in Rome, Italy October 24, 2018. REUTERS/Max Rossi/File Photo
April 19, 2019
By Giselda Vagnoni, Francesca Landini and Stefano Bernabei
MILAN/ROME (Reuters) – Italian transport group Atlantia could join a rescue of loss-making flag carrier Alitalia to try to win favor with the government and secure the future of its own domestic business following a deadly bridge collapse last year, sources said.
Atlantia, controlled by the Benetton family, faces the loss of its entire national motorway concession in a bitter dispute with the government, which erupted after last year’s disaster on its toll network killed 43 people.
The government blamed Atlantia for the tragedy, saying it had failed to adequately maintain the aging bridge, and vowed to revoke the concession, worth 58 percent of group revenue.
However, sources familiar with the matter said Atlantia could mend relations with the government by joining a rescue of Alitalia, which Rome is desperate to save, and possibly be rewarded with a reprieve on its motorway concession.
Atlantia has publicly scoffed at the idea, but sources say it stands ready if Rome signals a quid pro quo is possible. The government has not given such a signal but a political source says it may do if it sees Atlantia as key to saving Alitalia.
Atlantia, which also runs Alitalia’s main airport hub in Rome, has denied it is in talks to join a rescue consortium, saying its hands are already full with complex business challenges, including the fate of its motorway concession.
However, a source familiar with the flag-carrier’s thinking said Alitalia expected Atlantia to sign up to a rescue as early as this month. The source did not elaborate.
Atlantia declined to comment for this article.
Another potential investor in the rescue bid, state-owned rail group Ferrovie dello Stato, which has had initial talks with Atlantia, also believes the Benetton-controlled group could yet be tempted to join, said a source familiar with those talks.
“Atlantia’s door is not closed … it is now up to the government to take the lead in the talks,” said a second source familiar with Alitalia’s thinking.
Alitalia, put into special administration in 2017 after workers rejected a previous rescue plan, needs to find investors ready to inject fresh funds by the end of April, in advance of an end-June repayment deadline for a state bridging loan of 900 million euros. That loan, however, may be rolled over, daily Il Sole 24 Ore said.
The government, formed by the right-wing League party and the anti-establishment 5-Star Movement, is keen to save the airline because it wants to avoid mass layoffs at Alitalia, which has around 11,600 employees.
However, political sources said it was still unclear whether the ruling coalition, especially the 5-Star party, would be ready to make such a peace with Atlantia. The party was the most critical of Atlantia after the bridge collapse.
“For 5-Star even the hypothesis of freezing the procedure for revoking the concession is not politically sustainable,” said a senior 5-Star source.
The prime minister’s office did not reply to a request for comment.
Ferrovie and Delta Air Lines are looking to invest in Alitalia but they still need to find other investors to stump up another 400 million euros for a rescue worth a total of around 1 billion euros, sources close to the talks said.
Ferrovie and its adviser, investment bank Mediobanca, have discreetly sounded out Atlantia after being turned down by a string of other companies.
Reuters was unable to immediately reach a Delta spokeswoman.
Atlantia has been burned by Alitalia once before, having lost 190 million euros when it participated in a rescue in 2008.
“We have many open fronts, we can’t afford to open a further, particularly complex one,” Atlantia CEO Giovanni Castellucci said on Thursday, speaking to shareholders.
In addition to the bridge disaster, Castellucci said he was also dealing with the government over its lengthy approvals process which was blocking 4.9 billion euros in group projects.
Some financial analysts say a quid pro quo would make sense.
“We reckon a possible agreement over Alitalia would be positive for Atlantia, because it would lead to a rapprochement with the government,” broker Equita said in a note this week.
For now, Ferrovie is ready to take a 30 percent stake in Alitalia, Delta Air Lines would invest 100 million euros for a stake of 10-15 percent and another 15 percent would probably go to the Italian treasury, sources familiar with the matter say.
But there is still a question mark over who would take the remaining 40-45 percent of the carrier.
British budget airline easyJet walked away from talks with Ferrovie last month, state-controlled defense group Leonardo and postal operator Poste Italiane said they were not interested in the deal.
If Ferrovie and Delta cannot find co-investors, Rome would face its least favored option: a takeover by German carrier Lufthansa which has said it would only rescue Alitalia if the government were first to carry out major job cuts.
(Additional reporting by Giuseppe Fonte; editing by Mark Bendeich and David Evans)