FILE PHOTO: A United Airlines plane with the Continental Airlines logo on its tail, taxis to the runway at O’Hare International airport in Chicago October 1, 2010. UAL Corp and Continental Airlines Inc. closed their merger on Friday to form the world’s largest carrier, called United Airlines. REUTERS/Frank Polich
May 24, 2019
(Reuters) – United Airlines said on Friday it was willing to loan up to $150 million to Colombian airline Avianca Holdings SA.
In November, United Continental Holdings Inc finalized a three-way joint venture with carriers Avianca and Copa Airlines of Panama, giving the U.S. airline a deeper foothold in Latin America.
Under the deal, United had loaned $456 million to cash-strapped Avianca’s parent company, Synergy Group Corp.
Avianca’s majority shareholder, BRW Aviation LLC – one of the companies that United entered into a loan with – has defaulted, according to a regulatory filing on Friday.
Kingsland Holdings Ltd, Avianca’s largest minority shareholder, has been granted independent voting rights to manage BRW.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Anil D’Silva)
FILE PHOTO: An aerial photo shows several Boeing 737 MAX airplanes grounded at Boeing Field in Seattle, Washington, U.S. March 21, 2019. REUTERS/Lindsey Wasson/File Photo
May 23, 2019
By Allison Lampert
MONTREAL (Reuters) – U.S. Federal Aviation Administration (FAA) representatives told members of the United Nations’ aviation agency they expect approval of Boeing Co’s 737 MAX jets to fly in the United States as early as late June, three people with knowledge of the matter said, although there is no firm timetable for the move. FAA and Boeing representatives briefed members of the International Civil Aviation Organization’s (ICAO) governing council in Montreal on Thursday on efforts to return the plane to service. The three people spoke on condition of anonymity to discuss the private briefing.
The MAX was grounded worldwide in March following two crashes involving the model that killed a combined 346 people.
FAA officials who briefed the council said they expected the ungrounding would take place in the United States as early as late June, but it was not clear when other countries would clear the flights, said two of the sources.
Canada and Europe said on Wednesday they would bring back the grounded aircraft on their own terms.
The FAA declined to comment on Thursday, referring to acting administrator Dan Elwell’s statement on Wednesday that he does not have a timetable for making a decision.
“It’s taking as long as it takes to be right,” he said. “I’m not tied to a timetable.”
Boeing did not immediately respond to a request for comment. Its shares pared earlier losses to close down 0.6% at $350.55.
The ICAO gathering comes as the FAA is meeting with international air regulators in Texas to discuss what steps are needed to return the 737 MAX to service, while the International Air Transport Association (IATA) is hosting MAX airline operators from across the world in Montreal.
Montreal-based ICAO cannot impose binding rules on governments, but wields clout through its safety and security standards which are approved by its 193 member states.
(Reporting by Allison Lampert in Montreal; Additional reporting by Tracy Rucinski in Chicago, David Shepardson in Fort Worth, Texas and Eric Johnson in Seattle; Editing by Matthew Lewis and Bill Rigby)
FILE PHOTO: Shipping containers are seen at a port in Lianyungang, Jiangsu province, China September 8, 2018. REUTERS/Stringer
May 23, 2019
By Doina Chiacu and Stella Qiu
WASHINGTON/BEIJING (Reuters) – The United States and China had a heated exchange on Thursday, with U.S. Secretary of State Mike Pompeo accusing Chinese telecom giant Huawei Technologies of lying about its ties to the government and Beijing saying Washington must end its “wrong actions” if it wanted trade talks to continue.
U.S. tech stocks were the hardest hit in an overall sharp global market drop on Thursday in signs the conflict between the world’s two biggest economies was being seen as a battle not just over trade but also about who controls global technology.
Citing national security concerns, Washington last week effectively banned U.S. firms from doing business with Huawei, the world’s largest telecoms network gear maker, taking the stakes to a different level days after negotiators appeared to be making headway on trade.
Tech companies around the world fell in line. Japanese conglomerate Panasonic Corp said it had stopped shipments of some Huawei components, a day after British chip designer ARM did the same, potentially crippling the Chinese company’s ability to make new chips for smartphones.
Asked if he believed more firms would stop working with Huawei, Pompeo told CNBC in an interview on Thursday: “We do. We’ve been working at the State Department to make sure that everyone understands the risks.”
Pompeo said the chief executive of China’s Huawei Technologies was lying about his company’s lack of ties to the Beijing government, which he said represented a security risk.
“The company is deeply tied not only to China but to the Chinese Communist Party. And that connectivity, the existence of those connections puts American information that crosses those networks at risk,” he said.
“If you put your information in the hands of the Chinese Communist Party, it’s de facto a real risk to you. They may not use it today, they may not use it tomorrow.”
Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services.
U.S. HELP FOR TECH FIRMS, FARMERS
U.S. lawmakers moved on Wednesday to provide about $700 million in grants to help U.S. telecoms providers with the cost of removing Huawei equipment from their networks, and to block the use of equipment or services from Huawei and Chinese telecoms firm ZTE in next-generation 5G networks.
On Thursday, China’s Commerce Ministry hit back.
“If the United States wants to continue trade talks, they should show sincerity and correct their wrong actions. Negotiations can only continue on the basis of equality and mutual respect,” spokesman Gao Feng told a weekly briefing.
“We will closely monitor relevant developments and prepare necessary responses,” he said, without elaborating.
No trade talks have been scheduled since the last round ended on May 10, when President Donald Trump hiked tariffs on $200 billion worth of Chinese goods and took steps to impose more, prompting China to respond with levies of its own.
Trump has threatened to slap tariffs of up to 25% on an additional list of Chinese imports worth about $300 billion, but his Treasury Secretary Steven Mnuchin on Wednesday said he was hopeful the two sides could resume negotiations.
Sources have said the talks stalled after China tried to delete commitments from a draft agreement that its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.
With no resolution in sight, Agriculture Secretary Sonny Perdue on Thursday announced a $16 billion aid program to help U.S. farmers hurt by the conflict, with some funds to be used to open markets outside China to U.S. products. Farmers have been among those hardest hit by the trade war.
Retailers, including Best Buy Co Inc and Walmart Inc, are also warning that the tariffs will raise prices for consumers. The newest round will cost the typical American household $831 annually, according to research on Thursday from the Federal Reserve Bank of New York.
Pompeo also confirmed a New York Times report on Wednesday that China was using high-tech surveillance to set up an intrusive policing effort that could be used to subdue its minorities, including ethnic Muslim Uighurs.
The United States is considering Huawei-like sanctions on Chinese video surveillance firm Hikvision Digital Technology Co Ltd over the issue, a person briefed on the matter said.
Also feeding into tensions, the U.S. military said it sent two Navy ships through the Taiwan Strait on Wednesday, prompting Chinese Foreign Ministry spokesman Lu Kang to lodge “stern representations.”
Taiwan is one of a growing number of flashpoints in the U.S.-China relationship, which also include China’s increasingly muscular military posture in the South China Sea, where the United States also conducts freedom-of-navigation patrols.
Trump, who has embraced protectionism as part of an “America First” agenda aimed at rebalancing global trade, is due to discuss the farmers’ aid program in remarks scheduled for 3:15 p.m. EDT (1915 GMT) at the White House.
He is expected to meet Chinese President Xi Jinping at a G20 summit in Japan June 28-29, around the time when the next levies could be ready, according to Mnuchin’s calculations.
(Reporting by Doina Chiacu and Susan Heavey in Washington, and Stella Qiu and Kevin Yao in Beijing; Writing by Andrea Shalal and Sonya Hepinstall; Editing by Susan Thomas)
FILE PHOTO: CEO Vas Narasimhan of Swiss drugmaker Novartis addresses the company’s annual news conference in Basel, Switzerland January 30, 2019. REUTERS/Arnd Wiegmann
May 23, 2019
ZURICH (Reuters) – Novartis could reach its main drugs business’s margin target “a little sooner” than 2022, as it now forecasts, as it cuts costs and as new drugs including gene therapy accelerate, Chief Executive Vas Narasimhan told investors.
“Our goal right now is to get to the 35%, and make sure that’s a sustainable 35%,” Narasimhan said at a U.S. event. “That could happen a little sooner, we’ll see based on how the launches go. If they did (launch well), I think we would get there sooner, and our goal would be then to continue to push beyond that.”
Hitting the target would mark an increase from the first quarter of 2019, when the Swiss drugmaker’s core operating income of $2.92 billion rose to 33.3% of sales, from 31.3% in the year-earlier period.
(Reporting by John Miller; Editing by Michael Shields)
FILE PHOTO: FILE PHOTO: A 737 Max aircraft is pictured at the Boeing factory in Renton, Washington, U.S., March 27, 2019. REUTERS/Lindsey Wasson/File Photo
May 23, 2019
By David Shepardson
FORT WORTH, Texas (Reuters) – The Federal Aviation Administration is meeting with international air regulators Thursday from around the world to assess the status of the grounded Boeing Co 737 MAX and what steps are needed to return it to service.
Senior FAA officials will give detailed descriptions of the findings to date from the two crashes in Ethiopia and Indonesia which occurred within five months of each other and killed a combined 346 people. The agency will summarize the status of three major ongoing reviews of the 737 MAX and give an update of the recertification process and shed light on Boeing’s proposed revisions to its software and pilot training.
Nearly 60 air regulators from 33 governmental agencies, including from China, Brazil, Australia, the European Union, France, Ethiopia, Indonesia and South Korea are attending the meeting at an FAA office in Texas.
The agency came under criticism in March for failing to ground the Boeing 737 MAX as quickly as China, Europe and other countries.
One of Thursday’s sessions is titled “Data mapping to accidents: safety actions and changes to the 737 MAX training requirements.”
Acting FAA Administrator Dan Elwell told reporters on Wednesday the FAA would share the agency’s “safety analysis that will form the basis for our return to service decision process.”
Some air regulators have said they will conduct independent reviews of the Boeing 737 MAX. Elwell was asked by a reporter on Wednesday if he would delay ungrounding the plane in order to have “peace” with other regulators.
“We have peace with other regulators,” Elwell said. “We’re talking to them constantly. You want to make this like, ‘We at war with the other countries over this.’ We’re not.”
The FAA is still asking Boeing questions about a proposed software upgrade and training revisions and has not decided whether to require simulator training. Elwell repeatedly declined to provide a time frame for how soon the agency might approve the airplane’s return to service or say if it was realistic that airlines could resume flights by August as some have suggested.
“If it takes a year to find everything we need to give us the confidence to lift the (grounding) order, so be it,” Elwell said.
The FAA will not unground the plane until it obtains the findings from a multi-agency Technical Advisory Board reviewing the software fix. It consists of experts not involved in any aspect of the Boeing 737 MAX certification.
Boeing said last week it had completed development of the software update on the 737 MAX to prevent erroneous data from triggering an anti-stall system known as MCAS that is under scrutiny following the two disastrous nose-down crashes. It must still formally submit the upgrade for approval and conduct a certification flight before the FAA can act.
(Reporting by David Shepardson in Fort Worth, Texas; Editing by Matthew Lewis)
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 16, 2019. REUTERS/Brendan McDermid
May 23, 2019
By Shreyashi Sanyal
(Reuters) – U.S. stock index futures slid on Thursday, as investors worried that the U.S.-China trade war could spiral into a technology cold war between the two countries, with no signs of resolution in sight.
Beijing said Washington needs to correct its “wrong actions” for trade talks to continue after the United States blacklisted Huawei Technology Co Ltd last week.
Although the Trump administration temporarily eased curbs on the Chinese telecoms gear maker, tensions again mounted following reports on Wednesday that the United States was considering sanctions on Chinese video surveillance firm Hikvision.
Investors now fret that tit-for-tat tariffs and other retaliatory actions by the world’s two largest economies will be a drag on global growth, especially hitting the high-growth technology sector.
Apple Inc shares fell 1.7% in premarket trading, while those of chipmakers, which have a higher revenue exposure to China, also declined. Intel Corp, Micron Technology Inc and Qualcomm Inc slipped between 1.7% and 3.6%
Tepid data from the eurozone added to the downbeat tone. A private survey showed business growth accelerating at a slower-than-expected pace this month, weighed down by a deepening contraction in the bloc’s manufacturing industry.
At 7:06 a.m. ET, Dow e-minis were down 223 points, or 0.87%. S&P 500 e-minis were down 25 points, or 0.87% and Nasdaq 100 e-minis were down 88 points, or 1.18%.
The prolonged U.S.-China trade war has rattled financial markets, knocking the benchmark S&P 500 index 3.4% off its record high hit on May 1. The index is now on track to post its worst monthly decline of the year.
Investors on Wednesday largely shrugged off the release of minutes from the Federal Reserve’s latest policy meeting, in which officials agreed that their patient approach to setting monetary policy could remain in place “for some time.”
Tesla Inc fell 3.3%, set to add to a six-day slump, which has pushed its closing price to below $200 for the first time since 2016.
Hormel Foods Corp fell 2.3% after the packaged meat producer cut its full-year earnings forecast.
In a bright spot, L Brands Inc jumped 12.4% after the retailer reported better-than-expected earnings, helped by sales at its Bath & Body Works business.
A Commerce Department report, due at 8:30 a.m. ET, is expected to show new home sales declined to a seasonally adjusted annual rate of 675,000 in April, after having risen to 692,000 units in March.
A separate report due later is expected to show Markit’s purchasing managers survey of manufacturing activity edged down to 52.5 in May from 52.6 in the previous month.
(Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)
A T-Mobile store is pictured in the Manhattan borough of New York, New York, U.S., May 20, 2019. REUTERS/Carlo Allegri
May 23, 2019
(Reuters) – The U.S. Department of Justice’s antitrust chief, Makan Delrahim, is still open to T-Mobile US Inc’s $26 billion acquisition of smaller rival Sprint Corp, CNBC reported on Thursday.
Reuters reported on Wednesday that the antitrust division staff had recommended the agency block the deal, citing two sources familiar with the matter.
Shares of Sprint were up 6% in premarket trading, while T-Mobile rose 1.2%.
The DoJ did not immediately respond to a request for comment.
(Reporting by Vibhuti Sharma in Bengaluru; Editing by Bernard Orr)
FILE PHOTO: Fog shrouds the Tyson slaughterhouse in Burbank, Washington December 26, 2013. Picture taken December 26, 2013. REUTERS/Ross Courtney
May 23, 2019
(Reuters) – Tyson Foods Inc said on Thursday it has not formalized plans for a beef processing plant in Kazakhstan, responding to a media report that the largest U.S. meat processor was in talks over a multibillion-dollar investment in the country.
The investment would allow Tyson to dodge high tariffs on American agricultural goods and give a backdoor access into China, the Financial Times had reported, citing three people familiar with the matter.
“We’ve visited Kazakhstan and have interest in the nation’s future food production efforts, however, we have not formalized plans for a project there,” Tyson said.
Tyson had discussed an initial investment of about $200 million in the Kazakh plant that would form part of a potential total investment of several billion dollars, according to the FT report.
(Reporting by Rishika Chatterjee and Bhargav Acharya in Bengaluru; editing by Gopakumar Warrier and Sriraj Kalluvila)
FILE PHOTO: A Nokian tyre is on display at a tyre assembling centre and shop in Moscow, August 8, 2014.REUTERS/Maxim Shemetov/File Photo
May 23, 2019
By Anne Kauranen
HELSINKI (Reuters) – Finnish tire maker Nokian Tyres expects its new U.S. factory in Tennessee to help it double its sales in North America, especially by expanding its all-season tire sales in the region, the company said on Thursday.
The company, which has previously concentrated mostly on winter tire sales in Russia and Europe, said the new facility would allow it to seek growth in the significantly larger all-season tire market in North America.
Two years ago Nokian, which currently has a large plant in Russia and a smaller one in Finland, announced an investment of $360 million in the new production facility in Dayton, Tennessee, set for startup in the latter half of this year.
“Our goal is to double our sales in North America within five years,” the company’s chief executive Hille Korhonen told reporters in Helsinki.
Last year, Nokian’s North American sales amounted to 194.5 million euros ($217 million), a little over 12 percent of its total sales.
The new factory is expected to cut delivery times in North America to weeks and eliminate the need to hold large inventories, Mark Earl, Vice President in charge of Americas, said.
“Our current 120 to 180 day lead time from our Russian factory to North America is difficult to manage,” Earl said.
Previously the company sold only winter tyres in North America, mainly in Canada and some northern U.S. states, but has gradually ramped up its all-season tire sales.
Earl said the total retail tire market amounted to 240 million units a year in the United States alone, with Nokian holding just a 1% share at the moment.
“There is a lot of room in the market for a company like us,” Earl said, adding the plan was to concentrate on larger tire sizes and models for premium cars.
(Reporting by Anne Kauranen; Editing by Mark Potter)
A company logo is seen on a Best Buy store in Westminster, Colorado January 16, 2014. Best Buy Co shares tumbled about 30 percent on Thursday after the world’s largest consumer electronics chain reported disappointing holiday sales and warned of a bigger-than-expected decline in quarterly operating margins. REUTERS/Rick Wilking (UNITED STATES – Tags: BUSINESS LOGO)
May 23, 2019
(Reuters) – Best Buy Co Inc beat Wall Street estimates for quarterly same-store sales on Thursday, as the consumer electronics retailer sold more wearables and tablets and signed up more people to its subscription-based tech support services.
Best Buy’s overall same-store sales rose 1.1% in the first quarter ended May 4. Analysts on average had expected a 0.9% increase, according to IBES data from Refinitiv.
Total revenue rose to $9.14 billion from $9.11 billion, in line with analysts’ estimates.
(Reporting by Uday Sampath in Bengaluru; Editing by Tomasz Janowski and Arun Koyyur)