June 23, 2017

Boeing outsells Airbus at Paris show

© Matt Mills McKnightIran signs final contract to buy 30 Boeing 737 planes

According to the head of sales John Leahy, the planes ordered are valued at just under $40 billion.

Airbus signed deals with AirAsia, and privately-owned Iranian carriers Zagros Airlines and Iran Airtour.

“Is this a slower show than previous years? Yes, it is. Are we conceding that Boeing sold a few more airplanes than we did? Yes,” Leahy told a news conference.

Boeing’s head of commercial aircraft sales Ihssane Mounir said the company won orders and commitments for 571 planes worth as much as $74.8 billion.

“It’s been very exciting for us,” Mounir said as cited by Bloomberg. “I’ve been to many of these, and this is probably one of our busiest” shows.

Pledges to buy the new single-aisle 737 Max 10, which Boeing began marketing in Paris to rival Airbus’s A321neo, amounted to 361 airliners, he said.

“We had expected they would have had a bigger launch on the 737 Max 10, not quite as many conversions, more incremental orders,” Airbus’ Leahy said, adding Boeing’s plane launch could result in price pressure. “They’re clearly going to come after us on price.”

The biggest disclosed buyer at the Paris Expo, GE Capital Aviation Services, ordered 100 Airbus planes valued at $10.8 billion and converted 20 Boeing production slots from previous purchases to the Max 10.

Boeing announced it had signed a sales agreement with an “unidentified major airline” for 125 737 Max 8s valued at $14 billion.

The world’s third-largest lessor Avolon ordered $8.4 billion worth of Boeing models. Its CEO Domhnal Slattery told Bloomberg the unit of Beijing-based Bohai Capital Holding decided to lock in deliveries of as many as 125 of the upgraded narrow-body jets starting in 2021 because the slots are “very valuable real estate.”

He said the Max series is oversold through 2020, and capacity is finite for the model favored by budget carriers. Slattery forecast the aerospace market is shifting to Asia due to the middle-class expanding by more than 1 billion people over the next decade.

Article source: https://www.rt.com/business/393578-airbus-boeing-orders-defeat/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Most refugees to stay jobless for years – German minister

© Kim Hong-JiStarbucks to hire thousands of refugees to serve Europeans coffee

She told the Financial Times that Germany faces challenges in integrating its enormous migrant population.

According to Ozoguz, only a quarter to a third of the newcomers would enter the labor market over the next five years, and “for many others, we will need up to ten.”

Initially the influx of many working-age, highly-motivated immigrants spurred optimism that they would mitigate Germany’s acute skills shortage. The CEO of carmaker Daimler Dieter Zetsche even said the refugees could lay the foundation for the “next German economic miracle.”

However, according to Ozoguz, time showed the migrants’ lack of qualifications and language skills.

“There has been a shift in perceptions,” she said.

Many of the first Syrian refugees to arrive in Germany were doctors and engineers, but they were followed by “many, many more who lacked skills.”

According to a report by the Institute for Employment Research (IAB), only 45 percent of Syrian refugees in Germany have a school-leaving certificate and 23 percent a college degree.

FILE PHOTO Sakis Mitrolidis’Merkel’s fault’: Poland’s ruling party leader blames Germany for EU refugee crisis

Statistics from the Federal Labor Agency showed the employment rate among refugees stands at just 17 percent. The agency said 484,000 of the refugees are searching for work compared with 322,000 last July.

Ozoguz said the authorities’ top priority was not to find employment for the refugees as soon as possible but to ensure they learned German and had access to training to acquire the skills needed for an advanced industrial economy.

“In the past, we put people very quickly into jobs where they didn’t need to speak, and 40 years later people asked them — how come you still can’t speak German?” she said.

“We don’t want to repeat that mistake.”

German Chancellor Angela Merkel who is seeking a fourth term in Bundestag elections this September has been widely criticized for her ‘open-door’ policy to those fleeing war and persecution.

Around 1.3 million migrants have arrived in Germany since the start of 2015.

Article source: https://www.rt.com/business/393398-refugees-stay-jobless-germany/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Uber CEO Travis Kalanick quits under pressure from investors

Uber CEO Travis Kalanick © Shu ZhangEmbattled Uber chief takes leave of absence to ‘work on himself’

According to The New York Times, five of Uber’s major investors demanded on Tuesday the chief executive resigns immediately. Kalanick will, however, remain on the board of directors.

“I love Uber more than anything in the world, and at this difficult moment in my personal life I have accepted the investors request to step aside so that Uber can go back to building rather than be distracted with another fight,” Kalanick said in a statement.

Last week Kalanick said he was taking an indefinite leave of absence following the death of his mother in a boating accident.

Uber’s board said in a statement that “Travis has always put Uber first. This is a bold decision and a sign of his devotion and love for Uber.”

“By stepping away, he’s taking the time to heal from his personal tragedy while giving the company room to fully embrace this new chapter in Uber’s history. We look forward to continuing to serve with him on the board.”

Kalanick co-founded Uber in 2009, turning it into a dominant global ride-hailing service.

Over the past year, the company has been rocked by scandals and negative publicity. They included revelations of questionable spy programs, claims of sexual harassment and discrimination, as well as criticism of the way Kalanick was running the company.

Uber has also been dealing with an intellectual property lawsuit from Google’s parent company, Alphabet, over alleged theft of trade secrets related to driverless cars.

Kalanick’s departure is just the latest in a number of senior executives to leave the company.

In recent months, Uber has fired more than 20 employees after an investigation into the company’s culture. The firm has reviewed more than 200 HR complaints including harassment and bullying.

Despite all the troubles, Uber’s business is growing with revenue reaching $3.4 billion in the first quarter of this year. The company is currently valued at $69 billion.

Article source: https://www.rt.com/business/393330-uber-kalanick-quits-pressure/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia to deliver test batch of nuclear fuel to US reactor in 2019

© Christian HartmannThe future of nuclear power: Russia makes fuel device for ultra-safe reactor

TVEL, the fuel supply wing of the Russian State Atomic Energy Corporation, Rosatom, has begun production of TVS-KVADRAT (FA-SQUARE), the new fuel type designed for PWR (pressurized water reactor) plants of Western design.

“A contract on test-industrial operations with one of the US [nuclear power plants] operators is already signed, and we’ll deliver test batch of TVS-KVADRAT fuel assemblies in 2019,” TVEL’s Senior VP for Commerce and International Business, Oleg Grigoriev, told reporters at a news conference during the Atomexpo-2017 forum on Tuesday.

TVEL has already received all the necessary documents from the US plant operator enabling the company to adopt Russian fuel for the US reactor.

“We’re determined to sign another contract on test-industrial operations this year with another major US nuclear power plant operator. In all, there’re five companies in the consortium which supports the TVS-KVADRAT program in the US,” Grigoriev added.

Apart from the contract with a US nuclear power plant operator, TVEL signed an agreement last year on commercial delivery of TVS-KVADRAT fuel to Swedish Vattenfall Nuclear Fuel AB which operates the Ringhals nuclear power plant. The commercial deliveries for Sweden are scheduled to start in 2021, according to Grigoriev.

The TVS-KVADRATs are currently produced in volumes needed to meet the demand of the two companies, but TVEL might expand its production if needed.

READ MORE: Rosatom plans to sell 49% stake in $22bn Turkish nuclear power plant

“There’re possibilities for scaling the production up. It will depend on the market demand,” Grigoriev told reporters on Monday.

The TVS-KVADRAT fuel type is being produced at JSC Novosibirsk Chemical Concentrates Plant. The fuel assemblies derive its name from it being square in section, to be compatible with western pressurized water reactors.

Article source: https://www.rt.com/business/393269-russia-us-nuclear-fuel/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Supersonic air travel may be back within decade

© NASA Langley Research CenterNASA seeks to revive supersonic air travel with quiet passenger jet initiative

Scholl said five airlines had ordered the planes, including Virgin. The names of the other four customers will be announced at special events.

“Airlines are excited for something new and different to offer their passengers, and we’re thrilled that major world airlines share our vision for a future of faster, more accessible supersonic travel. We look forward to sharing more about these partnerships in the future,” said Scholl at a Paris Air Show news conference.

He added the new aircraft orders are backed by “tens of millions” of dollars in non-refundable payments.

The plane will have a list price to customers of $200 million.

According to Boom, the average length of the flight from Paris to New York will fall from seven to three and a half hours when the airliner flies at its top speed of Mach 2.2. A flight from San Francisco to Tokyo will take a little over five hours, compared to the current eleven.

A business class ticket from London to New York is estimated at $5,000.

The new plane comes with two configurations of either 55 business class seats or 15 business with 30 first class seats on longer flights.

The company plans to have the aircraft in the skies by 2023 but is first developing a smaller supersonic jet to test the technology.

The XB-1 Supersonic Demonstrator will fly in Denver late next year after passing a significant performance and safety test, said Scholl.

He added that the new development technology makes Boom’s jet faster and less costly for passengers than the British-French supersonic jet Concorde which flew passengers across the Atlantic for 27 years before retiring in 2003.

“Concorde was designed half a century ago with slide rules and wind tunnels. Today we’ve got better aerodynamics, new materials, better engines, and all that adds up to a 75 percent reduction in operating cost,” he said.

The company expects around 1,300 supersonic airliners will be built over ten years.

Article source: https://www.rt.com/business/393223-supersonic-return-airline-orders/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Bank of England nemesis George Soros warns Brexit is ‘lose-lose’ scenario

Georges Soros, Chairman of Soros Fund Management. © Charles PlatiauSoros’s bad bet against Trump cost his clients $1bn

“We are fast approaching the tipping point that characterizes all unsustainable economic developments,” Soros wrote in an op-ed published Monday on the website of the Project Syndicate news organization.

“The fact is that Brexit is a lose-lose proposition, harmful both to Britain and the European Union. It cannot be undone, but people can change their minds. Apparently, this is happening,” the businessman wrote.

Soros predicts mounting debt and falling living standards for Britons.

“Economic reality is beginning to catch up with the false hopes of the general population. They believed the promises of the popular press that Brexit would not reduce their living standards, so they managed to maintain those standards by running up their household debts,” explained the billionaire.

“Once the experience of June is repeated in subsequent months, households will realize that their living standards are falling and they will have to adjust their spending habits,” warned Soros.

“To make matters worse, they will also realize that they have become over-indebted and they will have to pay back their debts. This will reduce the household consumption that has sustained the economy even further,” he added.

On 16 September 1992, Soros’ $10 billion short position on the British pound forced the Bank of England to withdraw Sterling from the European Exchange Rate Mechanism (ERM) after it was unable to keep the currency above its agreed lower limit in the ERM.

Soros pocketed $1 billion on the deal and gained a reputation as the premier currency speculator in the world.

Article source: https://www.rt.com/business/393221-soros-brexit-eu-uk/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Barclays charged with fraud over Qatar-backed rescue

© Toru HanaiEx-Barclays banker charged for leaking insider info to plumber

The announcement by the Serious Fraud Office (SFO) marks the culmination of a five-year investigation into the emergency action Barclays took in 2008 to avoid a state bailout when Britain’s banking system was on the verge of collapse.

The case revolves around the £322 million ($410 million) in fees the British bank paid to Qatari investors for a loan as part of a wider £12 billion fundraising during the 2008 financial crisis. The Barclays deal with Qatar also included a $3 billion loan.

The SFO said Barclays former Chief Executive Officer John Varley, former chairman of investment banking for the Middle East Roger Jenkins, ex-deputy head of investment banking Richard Boath and ex-wealth chief Thomas Kalaris face charges along with the bank.

Varley and Jenkins both face three counts of conspiracy to commit fraud and unlawful financial assistance.

A lawyer for the 61-year-old Jenkins said his client would “vigorously defend against these charges.”

“As one might expect in the challenging circumstances of 2008, Mr. Jenkins sought and received both internal and external legal advice on each and every subject mentioned in the accusations leveled by the SFO today,” said Jenkins’ US-based lawyer Brad Kaufman.

The four defendants are to appear in a London court on July 3.

The bank said in a statement it was “considering its position.”

Since the financial crisis, Barclays has faced different investigations, including into the manipulation of the main benchmark rates and the way executives dealt with whistleblowers.

Last year four former Barclays’ traders were found guilty of Libor rigging between 2005 and 2007. The verdicts came four years after Barclays received a hefty fine over rate-fixing. The case provoked political and public reaction forcing the bank’s CEO Bob Diamond to resign.

Article source: https://www.rt.com/business/393177-barclays-qatar-fraud-fine/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Are Russia and the Saudis planning a natural gas cartel?

Russian President Vladimir Putin (L), Saudi Deputy Crown Prince Mohammed bin Salman (R) © Pavel GolovkinPutin meets Saudi Prince after oil production cuts deal extension

At the same time, Russia and Saudi continue to give indications of a possible OPEC 2.0 scenario, in which a possible Russian membership is on the table. This would confront the market with a renewed and stronger oil cartel, although the overall strategies need to be adjusted.

At the same time, Saudi Arabia, via its oil giant Aramco has openly stated to be interested in global gas investment opportunities, starting in Russia’s Siberian region. While the media still looks at the current discussions as a pure crude oil cooperation strategy, some see another development on the horizon.

The real power of OPEC, non-OPEC cooperation would increase if they would not only include a crude oil production cut, but also integrate the other (hidden) cartel, the Gas Exporting Countries Forum (GECF). An OPEC 2.1, including gas exporters, would really block any negative developments in the market, even shale oil and gas.

At present, international analysts and media sources are hyping the story about Saudi Arabia’s multi-billion dollar investments in Russia’s oil and gas sectors. Statements made by Saudi minister of petroleum Khalid Al Falih are only making headlines at present if he indicates that oil giant Aramco will be targeting natural gas projects and even LNG in future.

LNG tanker © Haryadi Be / Global Look PressSaudi beef with Qatar may be about gas, not terrorism

Certain analysts think that Aramco is taking the same road as Shell, BP and other oil majors, have taken, diversifying away from oil and into gas. The ‘Golden Age of Gas’, as reported by the IEA has not yet become reality. Riyadh now seems interested in becoming a convert of the gas era, but reality is not as simple. There is more between the lines than currently is being discussed in the media.

First of all, Saudi Aramco has always been heavily involved in the gas sector, as it is already a very large gas producer. Recent figures show that Saudi Arabia’s total proved natural gas reserves are set to be around 8500 bcm, which means it holds the sixth most proved natural gas reserves globally and the third most in the Middle East.

In 2014, Aramco produced around 102.4 bcm of natural gas, which made them the eighth largest natural gas producer in the world. Additionally, it marked the fifth consecutive year of increasing natural gas production in Saudi Arabia, illustrating that Saudi Arabia has emphasized growing their domestic production in order to continue to meet their energy demand.

The Kingdom also is not only a huge producer of natural gas, its local consumption is also impressive. The kingdom consumed 108.2 bcm in 2014, making it the 5th largest consumer worldwide. In 2014, natural gas made up ~40.7 percent of Saudi Arabia’s primary energy consumption.

Read more on Oilprice.com: Iraq Dethrones Saudi Arabia As India’s No.1 Oil Supplier

The country’s natural gas consumption has continued to grow as has natural gas’s role in Saudi Arabia’s current energy mix. In 2014, natural gas made up ~40.7 percent of Saudi Arabia’s primary energy consumption. For the next years this will increase substantially.

© Reuters Qatar may be Russia’s trump card to boost gas supplies to Europe

Currently, Saudi Arabia does not import or export natural gas and therefore they have not established themselves as a global natural gas supplier even though they produce significant amounts of it. Additionally, Saudi Arabia has been able to achieve important security of supply due to the fact that they only rely on themselves for their natural gas needs.

However, this also means that Saudi Arabia will have to continue to produce at high levels going forward to meet their domestic demand. To counter growing demand for natural gas, Aramco is even pursuing shale gas in the future, with first production expected around 2020-2021.

A rapid development of reserves is necessary, as not only will the Kingdom need more gas to compensate for its current crude oil usage, which is a direct financial pressure on the budget, but current diversification plans also imply increased natural gas consumption in the petchem industry. Next to this, increased gas production is crucial for power generation and water desalination in the near future.

Technically, gas production is also of importance to support crude oil production, partly via gas reinjection projects on ageing oil fields. The above painted situation was part of the EP strategy of Aramco, when it took in several IOCs (Shell) and independents to search for new gas reserves, especially in the Rub Al Khali (Empty Quarter). The latter until now has been rather disappointing, and most international parties have left.

The present and future gas cooperation between Russia and Saudi Arabia should be assessed in this light. Aramco’s internationalization strategy includes investments and operations in Russia or FSU republics the coming years. These actions are part of a diversification drive in Aramco, but should not be looked at with only attention for the Russian opportunities.

Taking into account the current Saudi situation, Aramco has been looking for access to technology, RD and cooperation since decades with the usual suspects. Gazprom, Lukoil and Rosneft were not included at that time in the inner circle, as the geopolitical situation and the clash between communism and Wahhabism prevented an opening. This has changed, and both sides are now showing an increased willingness to cooperate in both their territories, Russia but also Saudi Arabia.

The Saudi offer to invest in Russia will have very strong strings attached. Investing in Russian oil and gas operations, including LNG, will be linked to receiving an in depth insight and access to Russian gas technology and RD. Aramco will without any doubt have direct research links and investments with Gazprom VNIIGAZ (Scientific-Research Institute of Natural Gases and Gas Technologies) — with its research operations in Saratov, next to the Volga River could substantially support “In Kingdom” gas operations and production projects in the future.

The bottom line at present for Saudi Arabia’s geopolitical and economic power drive is an increased economic diversification effort at home. All instruments, including the multibillion investments by the Saudi sovereign wealth fund PIF, which will include Saudi Aramco IPO revenues in 2018, in the RIDF (Russian Direct Investment Fund) should be seen in that light. The meetings between Saudi deputy crown prince Mohammed Bin Salman or Saudi minister of petroleum Khalid Al Falih with Russian president Putin and his cohorts are linked to the internal drive of the Kingdom.

Read more on Oilprice.com: Solar And Wind Revolution Happening Much Faster Than Expected

CEO of Russia's state gas giant Gazprom Alexei Miller © Sergei KarpukhinGazprom CEO sees Russian dominance of European gas market

This cooperation could also be driven by another issue. In addition to the historic cooperation between the two oil producers, as shown in the OPEC non-OPEC production cut agreements the last years, both have been discussing since years also a global gas cooperation. Even that the oil price plunge has pushed both former adversaries to cooperate, an expansion to gas could even be strategically very interesting.

For Russia, a combined market approach of OPEC and the Gas Exporting Countries Forum (GECF), labelled sometimes as the gas cartel, would increase its global power. The same is the case for Saudi Arabia, as the OPEC leader, holding vast reserves of natural and associated gas, understands that a combined OPEC-GECF strategy could have several main strategic advantages.

Not only would this create a power bloc that could have a much higher impact on the U.S. shale revolution, blocking part of the global market if necessary, but also it would increase pressure on Saudi’s main rival at present Qatar, the world’s leading LNG exporter.

By cooperating with Russia, Saudi Arabia could kill two birds with one stone. Riyadh’s strategy with OPEC – Russia could be solidified, while at the same time it holds power over the world’s gas sector.

Moscow’s support for Riyadh’s plans will not only benefit the Kingdom’s natural gas development, but also corner Qatar fully. A combined Russian-Saudi power play in global gas could change it dramatically. Putin and MBS could be looking for a kill.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/393062-russia-natural-gas-saudi-arabia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Lockheed Martin about to close $37bn+ deal for F-35 jets

The contract will be the biggest yet for the F-35 jets and will consist of three tranches over fiscal years 2018-2020.

According to people familiar with the talks, the pricing of the jets is not final, although the average price of the 440 jets was expected to be $85 million each.

Touted as the fifth-generation fighter jet with a modular design, the F-35 comes in three variants.

U.S. President-elect Donald Trump © Shannon StapletonLockheed CEO promises cheaper F-35 1,800 jobs after meeting with Trump

The average price for the F-35 “A” variant could be $85 million in 2019 and could drop below $80 million in 2020, the sources said.

A Lockheed representative said the company does not discuss negotiations on contracts and any deal involving a “block buy” would be announced by the US government.

One of the sources told Reuters the US Defense Department expects to spend $379 billion, down from $391 billion, to develop and buy 2,443 of the supersonic warplanes through 2039.

“This is part of an ongoing process. If it gets done, it would be a plus for Lockheed, allowing for better long-term production management,” said Robert Stallard, an analyst at Vertical Research.

The F-35 program has been widely criticized for being too expensive, including by US President Donald Trump who tweeted in December the cost was “out of control.” A month later Lockheed Martin CEO Marillyn Hewson met with Trump projecting “thousands and thousands of jobs” at the Lockheed plant in Texas, where the F-35 is built, and cheaper costs.

In February, the Pentagon agreed to a deal for a tenth batch of fighter aircraft and to pay below $95 million per jet for the first time, compared with $102 million in the previous purchase.

The Pentagon said the price of a jet could fall 16 percent to around $80 million in future purchases.

Article source: https://www.rt.com/business/393015-lockheed-deal-jets-sale/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Hawaii may become first US state to adopt basic income

© Dean TremlKiwis consider paying people for doing nothing

The bill, titled House Concurrent Resolution 89, was brought by Hawaii State Representative Chris Lee and was passed by both houses of the state legislature in a unanimous vote.

The resolution declares that all the islanders “deserve basic financial security.”

It also orders government offices to weigh the state’s economy and find ways to ensure all families have basic financial security, including an evaluation of different forms of a full or partial universal basic income.

“As innovation and automation and inequality disrupt our economy, we want to make sure that everybody benefits and nobody is left behind. It’s past time that we had a serious talk about not just tweaking our economic policies, but having a new discussion from the ground up about what our values and priorities are,” said Lee as quoted by US online magazine Mother Jones.

According to Lee, the measure is necessary due to Hawaii’s excessive cost of living, which is reportedly the highest in the country, as well as the state’s heavy reliance on low-paid service industry jobs.

The bill reportedly keeps focus on Hawaii’s service-focused economy, vulnerable to any disruptions that might be brought by job-killing tech change, including e-trading and automation of basic service processes.

The idea of a UBI, first proposed in the US by former President Richard Nixon in 1969, is widely debated with critics saying that free money may lead to more lax attitude about work. Moreover, such a program is almost impossible to finance.

READ MORE: Swiss voters overwhelmingly reject $2,500 basic income proposal in national referendum

At the same time, some experts advocate the system due to potential to improve social welfare programs and diminish unemployment created by automation.

“Planning for the future isn’t politically sexy and won’t win anyone an election. But if we do it properly, we will all be much better off for it in the long run,” Lee wrote in a Reddit post.

Article source: https://www.rt.com/business/392573-hawaii-pass-bill-basic-income/?utm_source=rss&utm_medium=rss&utm_campaign=RSS