Archive for the ‘Business’ Category
January 19, 2011
Boeing has delayed the Dreamliner again — for the seventh time!
The Telegraph reports:
Boeing told investors on Tuesday that the 787 will now be delivered to launch customer All Nippon Airways in the third quarter of the year, rather than the first, after a fire on one of the test planes in November. All test flights were suspended for six weeks after the fire.
The 787, which seats 210 to 250 passengers and has a list price of $202m, promises to be the company’s greenest and most efficient airliner yet and uses advanced composite materials to achieve these savings. However, technical problems have pushed the aircraft behind schedule and it is now into its third year of delays. Boeing is under pressure to deliver the 787, which has become the company’s fastest-selling airliner.
Shinichiro Ito, the president of All Nippon, said last week the airline is having a “hard time” dealing with the delay. Boeing has secured 847 orders for the 787, which took its maiden flight in December 2009. Boeing insisted the latest setback will not have a “material impact” on its results, something investors appeared to agree with.
Meanwhile Qantas experiences further problems with its Rolls Royce engines . AFP reports on two Boeing 747 Qantas flights with engine problems:
A Qantas passenger jet bound for New York made an unscheduled stop in Fiji after it developed a problem with one of its engines, the Australian airline said Wednesday.
Qantas said flight QF107, a Boeing 747, carrying 375 passengers from Sydney to New York via Los Angeles, touched down in Nadi on Tuesday for repairs to a fuel valve supplying one of its engines…..
…… The hitch comes just days after another Qantas Boeing 747, QF11 to Los Angeles, experienced a contained engine failure on the runway of Sydney airport due to a turbine blade defect.
Media reports on that incident said that passengers heard “a loud bang” and saw black smoke pour from the affected engine, with the captain reportedly telling those on board that the engine had “cooked itself” over the plane’s intercom.
The “contained” engine failure is the more serious issue. The Boeing 747 long-reach aircraft flown by Qantas uses Rolls-Royce RB211-524G-T engines. The “T” at the end signifies that it includes some of the Trent modifications. The Trent 900 engines are used on the Airbus A380s while the Trent 1000 is planned for the Boeing Dreamliner.
A Trent 1000 experienced an uncontained failure on the test-bed last year while the Trent 900 has had an uncontained failure and a number of other difficulties on the A380.
Related:
https://ktwop.wordpress.com/2010/09/28/rolls-royce-trent-1000-fix-is-defined/
https://ktwop.wordpress.com/2010/10/25/in-flight-failure-of-rb-211-524-engine/
https://ktwop.wordpress.com/2010/11/04/qantas-a-380-suffers-in-flight-rr-trent-900-engine-failure/
https://ktwop.wordpress.com/2010/11/05/trent-900-vs-gp7200-competitive-pressures-getting-too-hot/
https://ktwop.wordpress.com/2010/11/07/further-boeing-dreamliner-delays-and-rolls-royce-shares-feeling-the-heat/
Tags:Airbus A380, Boeing 747, Boeing 787, Dreamliner delays, Qantas, Rolls Royce engine failures, Rolls Royce Rb-211-524, Rolls-Royce Trent
Posted in Aviation, Business, Engineering, Technology | Comments Off on Dreamliner delayed again and Qantas dramatics continue – now with B747 engines
January 13, 2011
Image via Wikipedia
The countries are considered among those dragging down the Eurozone but strong demand for Portugese bonds on Wednesday was followed by solid demand for those issued by Spain and Italy today. Earlier this week both Japan and China had pledged to buy the bonds in Europe. Both countries have large cash reserves and are probably attracted by the higher yields but are also making a political statement in supporting the Eurozone. China is on a charm offensive and wishes to be seen to be reaching out to Greece and Portugal.
BBC:
Spain has raised 3bn euros ($3.9bn; £2.5bn) in an auction of five-year government bonds. The average yield on the bonds was 4.542%, which was nearly one percentage point higher than the rate reached in the last auction in November. However, analysts had feared the yield would be even higher.
The debt sale, which follows a similar auction by Portugal on Wednesday, is soothing fears over the eurozone’s ability to service its debts. Michael Lister, strategist at West LB in Dusseldorf, said: “The figures look really good, it’s the perfect sequel to the Portugal auction yesterday.”
Wall Street Journal:
The Hong Kong dollar rose against the U.S. dollar Thursday as a successful bond auction in Portugal helped ease concerns about the euro zone’s debt problems, encouraging investors to shift funds from the U.S. currency to riskier assets.
Traders said gains in the local stock market will continue to boost demand for the Hong Kong dollar. They said they expect the U.S. dollar to trade between HK$7.7720 and HK$7.7780 Friday.
“Portugal’s bond auction temporarily eased concerns over European debt. Also, the U.S. dollar isn’t likely rise sharply ahead of (Chinese) President Hu Jintao’s visit to the U.S. next week,” said a senior trader at a Chinese bank. Hu plans to meet U.S. President Barack Obama in Washington on Jan. 19.
The Portuguese government sold EUR1.25 billion worth of bonds in an auction overnight, offering good news to investors worried an unsuccessful bond sale could signal tougher austerity measures in parts of the euro zone.
Financial Times:
Spain and Italy on Thursday followed Portugal by holding successful bond auctions, providing a glimmer of optimism in the eurozone debt crisis. Italy sold €6bn of five-year and 15-year debt while Spain issued €3bn in five-year bonds, but both countries were forced to pay higher interest rates than in previous auctions.
The three successful auctions this week from peripheral eurozone countries provide a small amount of breathing room in the crisis. But the elevated yields paid by all of them and their high funding needs mean that investors are still waiting for decisive action from European policymakers.
Italy sold €3bn of 15-year bonds at a yield of 5.06 per cent, up from 4.81 per cent at a previous auction in November. Likewise, the yield on €3bn of five-year debt rose from 3.24 per cent two months ago to 3.67 per cent. Both auctions were fully covered. Spain paid almost a percentage point more than it did in November with a five-year yield of 4.54 per cent.
Tags:Bond issues, Euro, Eurozone, Italy, Portugal, Spain
Posted in Business, Economy, European Union | Comments Off on Solid demand for bond issues by Spain, Portugal and Italy boost Euro
January 13, 2011
Hotel Steigenberger, Davos: Image via Wikipedia
The World Economic Forum is requiring its strategic partners to bring along at least one woman in every group of five.
I am not sure whether this is a blow for or against gender equality. Coming as it does from the World Economic Forum for the meeting in Davos to be held in 2 weeks, I suspect that it is primarily about having a good time rather than about gender equality!!
From The Guardian:
Each year, prime ministers, bankers, business tycoons and other movers and shakers of the global elite gather at the World Economic Forum (WEF) in the Swiss Alpine town of Davos. And each year, one key thing has been missing: women.
Now, in an attempt to improve the traditionally dismal gender balance at this month’s event, which starts a week next Tuesday, the WEF has for the first time imposed a minimum quota of women.
The forum’s “strategic partners” – a group of about 100 companies including Barclays, Goldman Sachs and Deutsche Bank – have been told they must bring along at least one woman in every group of five senior executives sent to the high-profile event. Strategic partners account for 500 of the 2,500 participants expected this year at a gathering where David Cameron will rub shoulders with the Russian president, Dmitry Medvedev, historian Niall Ferguson, UN secretary general Ban Ki-moon, at least one member of the Saudi royal family and countless business supremos and members of the academic elite.
“The World Economic Forum annual meeting engages the highest levels of leadership from a variety of sectors and participation figures are a reflection of the scarcity of women in this external pool,” said Saadia Zahidi, who heads the gender parity programme at the WEF and came up with the quota plan.
At Davos, the world’s most powerful men (and a few women) broker multimillion-pound deals behind the scenes of the conferences. The forum’s black-tie dinners, cocktail parties and other less formal encounters are the ultimate networking events and those present follow the old “contacts lead to contracts” motto.
But so far, relatively few women have benefited from this high-level schmoozing. Women made up only 9-15% of those present between 2001 and 2005.
Tags:Davos, Gender equality, quota of women, World Economic Forum
Posted in Behaviour, Business, Economics, Ethics | 1 Comment »
January 12, 2011
Bloomberg reports:
IndiGo, the Indian low-cost carrier that agreed to a record plane order, may begin overseas flights in August as economic growth stokes travel in the world’s second-most populous nation. The carrier eventually plans to fly to the Middle East, Southeast Asia and other South Asianations, President Aditya Ghosh said in a phone interview today. The New Delhi-based carrier is unable to start international flights before August because of government regulations.
VT-INA - IndiGo - Airbus A320-232: image PlanespottersNet_026313.jpg
IndiGo may consider sale-and-leaseback deals and debt issuances to help pay for the 180 Airbus SAS A320 planes it has signed a preliminary agreement for, Ghosh said. The aircraft, worth about $15 billion at list prices, will boost the carrier’s fleet as it competes with Air India and Jet Airways India Ltd. in Asia’s second fastest-growing major economy.
The new order, which was announced yesterday, builds on the 100 A320s that IndiGo signed up for in 2005, the year before it began services. The carrier was operating 32 planes at the end of November, according to data on Airbus’ website. The other planes in the initial order for 100 are due to be delivered by 2015, Ghosh said. The airline is a unit of closely held InterGlobe Enterprises Ltd., which also runs hotels and offers technology services…..
Deliveries of the next 180 single-aisle planes will run from 2016 to 2025, Ghosh said. These planes will include 150 of Airbus’s revamped A320, which will be fitted with new engines. The carrier is the first customer for this new version.
Indian carriers are buying aircraft and adding overseas routes as rising wages and trade stoke leisure and business travel. Domestic passenger numbers will likely surge fourfold to 180 million a year by 2020, according to a government forecast…..
Airlines in India have to fly domestically for at least five years before they can start overseas services, under government rules.
Tags:Airbus, Airbus A320, IndiGo, IndiGo overseas, Low-cost carrier
Posted in Aviation, Business, India | Comments Off on Indian low-cost carrier signs record Airbus deal, plans to fly overseas routes
January 11, 2011
From the Daily Mail:
Dozens of Easyjet passengers were ordered off a plane and threatened with arrest if they refused – because the overloaded jet was too heavy to take off.
The flight from Birmingham to Geneva was over-filled with 10 tonnes too much fuel so the captain asked the last 37 customers to get off the plane. When some passengers refused to budge they were informed that three police officers were waiting in the airport terminal and would arrest them if necessary.
I have experienced this once on an SAS flight from Copenhagen to Norrköping. We had just seated ourselves when my son cried out “Dad, they’re taking our bags away”. Sure enough they had overfilled the plane with fuel and off-loaded baggage to compensate. But the Captain came out and apologised personally to each affected passenger, explaining that the ground crew had over-filled with fuel according to his instructions which had been based on a passenger manifest which was about 2 hours out-of-date. He acknowledged it was his fault publicly on the loudspeakers and that he had no excuses. He promised that all baggage would come out on the next flight and would be delivered to our addresses (which did happen). By the time we had landed, the stewardesses had taken down the addresses of the affected passengers and when we landed the kids were plied with toys, puzzles and 2 weeks worth of chocolates and we were given carrier bags full of bottles of wine and champagne left over from the meal service.
What I was particularly struck by was that all the irritation and anger of the passengers was completely neutralised as soon as the captain made his public acknowledgement, admitted the mistake and took responsibility. The mood on the plane palpably changed and by the time we had landed my boys actually thought it was all part of an adventure organised especially for them. Needless to say they still have a deep seated loyalty to the SAS brand even though SAS has fallen on relatively hard times and we usually have to fly Lufthansa to reach the destinations we need to get to. That Captain had a touch of class.
EasyJet has a lot to learn about what taking responsibility actually means.
If at all possible EasyJet and RyanAir are airlines I avoid like the plague.
Tags:airline incompetence, brand loyalty, classy behaviour, corporate responsibility, Easyjet, mood change, SAS
Posted in Aviation, Behaviour, Business | 1 Comment »
January 10, 2011
Mount Merapi has continued erupting in the past two or three weeks but at much lower intensities than the fatal eruptions which occurred on October 26 and November 5.
Island Crisis reports that:
YOGYAKARTA, INDONESIA (BNO NEWS) — With heavy rainfall accompanied by sporadic but strong wind currents, Indonesia’s Yogyakarta was hit by the largest outflow of cold lava and mud, locally known as lahar dingin, since October’s Merapi eruptions, local media reported.
The cold lava damaged several bridges and created chaos as traffic flow was cut off for around 18 hours on one of the city’s main highways, which was flooded under meter-deep lahar in several areas. “In addition to destroying the Gempol main bridge on the Putih River, lahar also destroyed bridges in other villages, leading to the isolation of hundreds of residents in seven hamlets,” Heri Prawoto, head of the Magelang district’s Disaster Management Office, told the Jakarta Globe.
But the resilience of humans is amazing.
The Merapi Golf Course in Yogyakarta, covered in ash. image credit: DigitalGlobe.
In Merapi’s Shadow, a Tourism Boom
The golf courses may be covered in volcanic ash, but tourists are flocking to Indonesia to see devastated villages near the recently eruptive Mount Merapi volcano.
Tourists with a curiosity about the aftermath of earthquakes, tsunamis and volcanic eruptions are being courted to the central Javanese city of Yogyakarta, Reuters reports.
The eruptions, which began on Oct. 26, killed more than 350 people and created nearly 400,000 refuges. That destruction, it seems, is a selling point for local travel agencies desperate for tourists’ dollars. “In the new volcano tour package, we’ll take customers to explore the closest village to the peak and see how bad the devastation is,” Edwin Ismedi Hinma, of the local tour agencies association, told Reuters. “Then we’ll take them to a river to watch cold lahars flood past.”
Tags:cold lava floods, Indonesia, lahar dingin, Mount Merapi, Yogyakarta
Posted in Business, Environment, Indonesia, Natural Disasters, Volcanos | 2 Comments »
January 9, 2011
In Transparency International’s Corruption Perceptions Index, Turkey ranks together with countries such as the Czech Republic, Hungary, Saudi Arabia, South Africa and Slovenia but somewhat better than Italy.
A bribery ring composed of customs officials in Turkey and including the Director of the Istanbul Region has been revealed. It appears that the 34 arrested shared a bribes pool which in the period of the 6 month investigation is estimated to have contained about $125 million.
From the magnitude of the bribes pool it would seem that Turkey is well qualified for membership of the European Union and the monetary value of this case compares “well” with the Formula 1 bribery case in Germany – though that involved just one individual(?).
It was announced today that:
Thirty-four individuals serving at the İstanbul Customs Regional Directorate have been detained in a major investigation into bribery and corruption allegations at the customs department. The suspects include the chief director of the İstanbul Customs Regional Directorate.
The operation was carried out on Friday.
The allegations against the suspects include the collection of money paid in bribes in a pool and then the distribution of this money to İstanbul customs officials every Friday on the basis of rank and seniority. The investigators claim Chief Director Lütfi Ekinci was aware of this practice among his staff. Ekinci was detained in Mersin, where he was vacationing in his summerhouse.
The suspects allegedly relied on three methods to take bribes from companies importing goods to Turkey. One was to force companies that had all their documents in order to give money, calling this a “donation.” The other method was showing the value of an imported good to be nine-tenths less than the actual value on paper. In other words, an item that would normally cost TL 10 would be recorded as costing TL 1. A third method the officials used was falsifying documents and showing those products that are subject to higher taxes — such as cigarettes — as if they belong in another taxation category. The difference would be taken by the customs officials and added to the bribery pool. Investigators estimate the amount channeled into the bribe fund was TL 200 million ($125 million)…….. The center of the raids was the İstanbul Atatürk Airport Customs and the Ambarlı Customs Zone, but the raids were staged simultaneously at 20 different addresses. Hayrettin Eker, the İstanbul Atatürk Airport Customs Directorate Cargo Terminal chief, and Smuggling Intelligence and Narcotic Department Chief Coşkun Cihanoğlu were also detained in the operation. Documents and computers in the offices of the two men were seized by the police.
The police found TL 20,000 inside an envelope in Eker’s office. A total of TL 150,000 was found on other customs officials detained in the operation, which the investigators claim was taken in bribes. Investigators say the operations will extend to the companies that were involved in the customs bribery scheme.
Tags:Bribery, Chief Director Lütfi Ekinci, Corruption Perceptions Index, Customs corruption Istanbul, Transparency International, Turkey
Posted in Behaviour, Business, Corruption, Ethics, Turkey | 3 Comments »
January 7, 2011
Suzlon wind energy project: Image via Wikipedia
http://www.moneycontrol.com/news/business/consolidation-likelyrenewable-energy-sector-ey_510295.html
Beleaguered wind power major Suzlon, may be on the block. Sources indicate that Spain’s Gamesa is looking to pick up a majority stake in the company. Suzlon added in its statement to the stock exchanges that the news was both speculative in nature and inaccurate. Market rumours also have it that Suzlon’s founders the Tanti family may sell its entire 55% stake to Gamesa’s UK unit.
http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/suzlon-investors-wonder-over-the-companys-accurate-picture-/articleshow/7219558.cms
Suzlon is the most leveraged wind company with net debt to earnings before interest, taxes, depreciation and amortisation ratio of 4.2, say JPMorgan analysts. That compares with less than 1 for global peers.
There are two ways out when saddled with Himalayan debt – either sell assets to pay off the debts, or declare bankruptcy. Suzlon is selling off stakes in assets such as gearbox-maker Hansen. But the question is what could be going on in the mind of promoter Tulsi Tanti, who was the nation’s eighth-richest man in 2006. After all, Mr Tanti had picked ‘Suz’ in Suzlon from the word, soojh-boojh, which means intelligence, and ‘lon’ from the word, loan. One part of it, ‘lon’, seems to have run longer than desired. So, will the other inspiration, intelligence, come into play?
If investors bet that intelligence would play a more dominant role than passion, then they may not be wrong in speculating that a possible stake sale could happen. Of course, at what valuation is anyone’s guess.
Mr Tanti, who once delivered fortunes for private funds such as Chryscapital and Citigroup, now heads a company whose shares are down more than 85% from their peak. The company may have created a record in going for seven share sales in five years, but there may be no one to buy in the next issue.
http://www.guardian.co.uk/business/2011/jan/06/wind-turbine-maker-skykon-in-administration
Britain’s nascent wind manufacturing industry has suffered a blow after the owner of Scotland’s only large turbine plant went into administration. The plant near Campbeltown, owned by Danish firm Skykon, has been closed and more than 120 staff sent home without pay after Ernst & Young was appointed as administrators this week.
A spokesman for the administrators said several expressions of interest had been received for the business and that staff would be updated next week. The future of the plant has been uncertain for several years. The Scottish government last year agreed to provide a £9m rescue loan to persuade Skykon to buy it from Danish rival Vestas. But Skykon has been in insolvency proceedings for months in Denmark after a slowdown in wind turbine orders across Europe. Only about £2m of the loan has already been paid. Ernst & Young declined to comment on whether the Scottish government would get that money back.
The prospects of production resuming at the plant are bleak. The number of new wind farms being planned in Europe is falling because governments are withdrawing subsidies to cut budget deficits while energy companies’ balance sheets are becoming increasingly strained.
Tags:Skycon, Suzlon Energy, wind power, wind turbine manufacturers
Posted in Business, Energy, Environment, Renewable Energy, Wind power | Comments Off on Wind turbine manufacturers in trouble
January 4, 2011
Munich Re – like all insurance companies – is in the business of alarmism. The insurance business relies on the total risk perceived by all the buyers of insurance products being significantly higher than the actual risk that materialises. The bigger this difference the greater the insurance company’s profits.
In a new press release Munich Re presents its overall picture of natural catastrophes in 2010.
Several major catastrophes in 2010 resulted in substantial losses and an exceptionally high number of fatalities. The overall picture last year was dominated by an accumulation of severe earthquakes to an extent seldom experienced in recent decades.
The facts are not in doubt but Munich Re’s opinionated conclusion and the introduction of global warming into the same breath as earthquakes and extreme weather is intellectually bankrupt and blatantly self-serving:
The high number of weather-related natural catastrophes and record temperatures both globally and in different regions of the world provide further indications of advancing climate change.
Munich Re’s business is best served if the perception of risk is very high, the actual risk is much lower than than that perceived and more and more people take to insuring these exaggerated risks. Munich Re – as other insurance companies – have become expert at taking real data, blending it with unjustified opinions and then applying a totally bogus “pondus” to exaggerating the perceived risk.
(more…)
Tags:Alarmism, climate change, earthquakes, global warming, hurricanes, Insurance, maximisation of risk perception, Munich Re
Posted in Alarmism, Business, Climate, Natural Disasters | 4 Comments »
January 4, 2011
The Times of India reports on the bizarre story of a confidential file found on the street:
Even as the race for the “mother of all defence deals” enters the last lap, two IAS (Indian Administrative Service) officers of the defence ministry are now under the scanner for the mysterious way in which a “secret” file connected to the $10.4 billion project to acquire 126 new fighters went missing and was then found by a roadside.
There is an intense battle currently in progress to win the $10 billion deal for 126 combat aircraft (MMRCA – medium multi-role combat aircraft) where the final decision is expected to be taken by March. As I have posted earlier, the technical and flight evaluations on the 6 contenders were conducted by the Indian Air Force and their highly confidential and secret report was submitted to the Ministry of Defence by early November 2010. Many rumours circulated at the time and the word on the street was that the Eurofighter Typhoon had won the technical evaluation. However this evaluation is merely one (but important) stage in the decision making process. The strategic and financial evaluations are under way and political lobbying is building up. Some of this lobbying is at the highest levels of government and no doubt the recent visits to India by Obama and Medvedev and Sarkozy were utilised fully.
For all the contenders the technical evaluation is what determines what is left to be done to win the contract. The details in the technical evaluation report are most important for a contender to know how to compensate for any perceived failings. I am quite sure that every contender has managed by now to obtain a copy of the technical evaluation report. (To obtain copies of confidential reports from Indian bureaucrats is not in the realm of the impossible. In my experience obtaining reports and confidential documents from clerks in government service is much more effective than any Freedom of Information application and are not subject to any redactions.) I am equally sure that all the six aircraft manufacturers would have by now developed their sales strategies and lobbying plans based on the their weaknesses as recorded in the report. But what may have been missed by some is that unofficial dissemination of the “confidential” report is an expected event. It may even have been a deliberate leakage of the report as part of the Government of India’s buying strategy.
The six are:
- Dassault, Rafale, France
- Eurofighter, Typhoon, UK, Italy, Germany and Spain
- Lockheed Martin, F-16IN Super Viper, US
- Boeing, F/A-18E/F Super Hornet, US
- Saab, JAS 39 Gripen, Sweden
- Mikoyan, MiG-35, Russia
Even though there are only 6 contenders, the number of lobbyists, sub-contractors and foreign embassy officials involved would have led to at least 100 copies of the report having been “sold” by various bureaucrats with access to the file. So I do not find it very surprising that one of the many “unsold” copies was abandoned somewhere. The value of such reports goes down sharply with time. It must have been at its most expensive immediately after it was submitted to government and before the many visits by various heads of state to Delhi. Again from my past experience of such things I would expect that the report probably had an initial “price” of around Rs 10 lakhs (about $20,000) but now some 2 months later, can probably be purchased for less than 1 lakh ($2,000).
Nobody is probably very bothered by this episode since the leakage of the report to the contenders is part of the game and already taken into consideration by the Government. In fact leakage of “perceived weaknesses” to a supplier is one of the best buying strategies to extract improvements in the supplier’s offer. The most senior bureaucrats in the Ministry of Defence are probably congratulating themselves for having managed to disseminate so many copies of the report before this particular slip-up.
But for now all the right noises will be made for public consumption. As the ToI reports:
Ordering an inquiry into the episode, defence minister A K Antony on Monday said he was “very clear that every officer has to be very careful at every stage” while dealing with the huge MMRCA (medium multi-role combat aircraft) project. “We have viewed the incident seriously…the inquiry is in progress,” he said. It was last week that the “secret” file, which was earlier submitted to the MoD by IAF, went missing and was then found later in the day near Khelgaon Marg in South Delhi.
MoD was tight-lipped about the incident but sources said the file was apparently lost by the bureaucrats, one an additional secretary-rank officer and the other a director, while being taken to the Bharat Electronics Limited guest-house on Khelgaon Marg. The file was found by a security guard who then got in touch with the authorities concerned.
Tags:deliberate leaking of confidential information, India, Indian Air Force, Indian MRCA competition, technical evaluation
Posted in Aviation, Business, Defense, India, International Trade | 1 Comment »
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