Connect with us

Business

American Airlines’ new CEO Robert Isom vows reliability as peak travel season kicks off

Published

on


An American Airlines Boeing 777-300ER plane takes off from Sydney Airport in Sydney, Australia, October 28, 2020.

Loren Elliott | Reuters

American Airlines‘ new CEO Robert Isom is aiming for one thing this summer: reliability.

The airline grew faster than its large competitors last year and occasionally passengers faced widespread disruptions, the result of routine challenges like weather as well as understaffing. Other carriers such as Southwest Airlines and Spirit Airlines faced similar issues that forced them to trim schedules.

Now Isom, who took the helm of the biggest U.S. carrier on March 31, said his priority is making sure passengers can count on American this summer and beyond.

“People really need to feel like they have control of their itineraries and we give them control by making sure they get to where they want to go on time. I just can’t be any more blunt about it than that,” Isom told pilots during a company town hall last week, which was reviewed by CNBC. “Other airlines are really struggling.”

American’s partner in the Northeast U.S., JetBlue Airways, for example, earlier this month told staff it would cut as much as 10% of summer flying to avoid repeats of mass cancellations and delays, CNBC reported. American’s West Coast code-sharing partner, Alaska Airlines, announced a 2% capacity cut this spring because of a shortage of pilots.

Leisure leads recovery

Air travel has surged and passengers have shown they are willing to pay up for tickets after two years of pandemic, a trend that’s helping carriers cover a jump in fuel costs. The Transportation Security Administration on Friday screened more than 2.3 million people, about 10% fewer than in 2019 but up 57% from a year ago.

Isom said domestic leisure travelers are making up for relatively weaker demand for business and international travel.

March appeared to be American’s best month in its history, he said. That echoed Delta Air Lines‘ CEO Ed Bastian’s comments when the airline reported results last week. American is set to report first-quarter results and provide its second-quarter outlook before the market opens on Thursday.

American’s first-quarter capacity was down close to 11% from the same period of 2019, it said in a filing last week. Delta, for its part, plans to fly 84% of its 2019 capacity in the current quarter, up from 83% in the first quarter.

“The priority is to operate reliably,” Delta’s president Glen Hauenstein said on an earnings call. “If these demand trends continue, we have the opportunity to take another tick up or we could pivot in a different direction if warranted.”

U.S. carriers have scrambled to staff up to handle the travel rebound. The $54 billion in federal payroll support airlines won from Congress prohibited layoffs but carriers urged thousands to take buyouts and extended leaves of absence.

Airlines are facing a shortfall of pilots, particularly for smaller regional carriers that feed into their hubs, which has forced them to cancel flights or limit growth. Pilots from Delta, American and Southwest have picketed or complained about fatigue from grueling schedules in recent months.

Isom said American has adequate staffing of pilots, flight attendants mechanics and customer service agents to handle summer travel.

“We’ve brought the schedule to a level that fits the resources that we have,” Isom told crews.

Other challenges to growth include getting aircraft from manufacturers, including Boeing, which has had its 787 Dreamliner deliveries halted for much of the past year and a half because of production flaws. American has said Boeing’s woes have forced it to reduce some long-haul international flying.

Minimizing disruptions

The airline has also been working on ways to avoid cascading delays that have been so costly for the airline and passengers.

American has invested heavily in training and its Integrated Operations Center, a command center at its Fort Worth, Texas, headquarters to help avoid delays.

One solution when bad weather occurs, which is common at its main hub as well as major airports that serve Miami and Charlotte, N.C., is to work with air traffic control to establish ground delay programs that help avoid cancellations later, Steve Olson, head of the IOC said during the town hall.

Olson said accountability is key, and not just measuring how fast the airline bounces back from disruptions but determining what the impact is on the airlines’ crews, who have complained about long hold times with scheduling and hotel services. Flight attendants or pilots that are out of position for assignments during bad weather have added to cancellations and delays.



Source link

Business

IMF hikes global growth forecast as inflation cools

Published

on


The IMF has revised its global economic outlook upwards.

Norberto Duarte | Afp | Getty Images

The International Monetary Fund on Monday revised upward its global growth projections for the year, but warned that higher interest rates and Russia’s invasion of Ukraine would likely still weigh on activity.

In its latest economic update, the institution said the global economy will grow 2.9% this year — which represents a 0.2 percentage point improvement from its previous forecast in October. However, it said that number would still mean a fall from an expansion of 3.4% in 2022.

It also revised its projection for 2024 down to 3.1%.

“Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity,” Pierre-Olivier Gourinchas, director of the research department at the IMF, said in a blog post.

The Fund turned more positive on the global economy due to better-than-expected domestic factors in several countries, such as the United States.

“Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Gourinchas said, also noting that inflationary pressures have come down.

Global outlook is better but don't get too optimistic, IMF chief warns at Davos

In addition, China announced the reopening of its economy after strict Covid-19 lockdowns, which is expected to contribute to higher global growth. A weaker U.S. dollar has also brightened the prospects for emerging countries that hold debt in foreign currency.

However, the picture isn’t totally positive. IMF Managing Director Kristalina Georgieva warned earlier this month that the economy was not as bad as some feared, “but less bad doesn’t quite yet mean good.”

“We have to be cautious,” she said during a CNBC-moderated panel at the World Economic Forum in Davos, Switzerland.

The IMF on Monday warned of several factors that could deteriorate the outlook in the coming months. These included the fact that China’s Covid reopening could stall; inflation could remain high; Russia’s invasion of Ukraine could shake energy and food costs even further; and markets could turn sour on worse-than-expected inflation prints.

IMF calculations say that about 84% of nations will face lower headline inflation this year compared to 2022, but they still forecast an annual average rate of 6.6% in 2023 and of 4.3% in 2024.

As such, the Washington, D.C.-based institution said one of the main policy priorities is that central banks keep addressing the surge in consumer prices.

“Clear central bank communication and appropriate reactions to shifts in the data will help keep inflation expectations anchored and lessen wage and price pressures,” the IMF said in its latest report.

“Central banks’ balance sheets will need to be unwound carefully, amid market liquidity risks,” it added.



Source link

Continue Reading

Business

Credit Suisse see Apple beating the Street this week for a few reasons

Published

on




Source link

Continue Reading

Business

Most Adani shares continue losses; founder loses $28 billion in month

Published

on


Gautam Adani, chairperson of Indian conglomerate Adani Group, at the World Congress of Accountants in Mumbai on Nov. 19, 2022. Founder Gautam Adani, the richest man in Asia and once second only to Elon Musk, fell out of the world’s top five richest to rank seventh on the Bloomberg’s Billionaire Index.

Indranil Mukherjee | Afp | Getty Images

Shares of most of Adani Group companies continued to see sharp losses for a third consecutive trading session as the company attempted to rebut short seller firm Hindenburg’s report, which accused the conglomerate of stock manipulation and an “accounting fraud scheme.”

Adani Enterprises erased earlier gains of up to 10% and last traded flat in Mumbai’s afternoon trade after the group published a lengthy response of over 400 pages to Hindenburg’s report over the weekend, saying that it will exercise its rights to “pursue remedies” to protect its investors “before all appropriate authorities.”

Adani Enterprises’ stock price remains more than 25% lower in the month to date, Refinitiv data showed. It proceeded with a secondary share sale worth $2.5 billion, which were overshadowed by a rout that wiped out a total of $48 billion as of last week’s close.

Founder Gautam Adani, the richest man in Asia and once second only to Elon Musk, fell out of the world’s top five richest to seventh place on the Bloomberg’s Billionaire Index.

His net worth fell $27.9 billion year to date, the index showed. It peaked at $150 billion on Sept. 20, 2022, before falling to to $92.7 billion as of last week’s close, according to the index.

Despite small gains seen in Adani Enterprises, other affiliates of the Adani Group continued to plunge.

‘Attack on India’

Adani Group said Hindenburg’s allegations were a “calculated attack on India, independence, integrity and quality of Indian institutions, and growth story and ambition of India,” in the response it released over the weekend.

The group’s chief financial officer Jugeshinder Singh said in an interview with CNBC-TV18, an affiliate of CNBC, that the value of Adani Enterprises has not changed “simply because” of share price volatility, adding it instead lies in its “ability to incubate new businesses.”

He added that he is confident Adani Enterprises‘ follow-on public offering will be fully subscribed, calling Hindenburg’s report “simply a lie” and the timing of the report “malicious.”

Hindenburg on Monday morning described the group’s response “bloated” and claimed it “ignores every key allegation” against the conglomerate that it raised.

“Fraud cannot be obfuscated by nationalism of a bloated response that ignores every key allegation we raised,” the short seller titled its response to Adani Group.



Source link

Continue Reading

Trending