Dallas, Apr 13 (AP/UNB) — Southwest Airlines customers relaxing on Thursday evening got an email that may mean their summer vacation could be more stressful and expensive than they planned.
Southwest, the biggest operator of Boeing jets, is removing the grounded 737 Max from its schedule until at least Aug. 5, well past the peak of the summer high season.
Company President Tom Nealon wrote in his email that the airline is taking the Max out of its schedule two months longer than previously planned to reduce the need for last-minute changes during the summer travel season. The decision, he wrote, would make the schedule more reliable.
Other airlines are likely to follow Southwest's example, putting pressure on Boeing to finish fixing software on an anti-stall system implicated in two deadly crashes.
Last month, Boeing and federal officials said privately that the company would finish its work before the end of March. Instead, it was delayed by an unexpected problem that Boeing hasn't fully described, and the company is now aiming to complete its work by late April.
Boeing CEO Dennis Muilenburg said the company's pilots have flown 96 test flights totaling 160 hours with the new software and will operate more in the coming weeks to prove that the fix works.
The changes must be submitted to the Federal Aviation Administration for approval. Foreign regulators including those in Europe and China will then do their own reviews — significant because foreign airlines account for about 85% of Max orders, according to analysts for financial services firm Cowen.
It remains uncertain how willing passengers will be to board the Max after crashes in Indonesia and Ethiopia killed all 346 people on board.
"The general flying public seems to be asking more questions about the airplane than they have with prior fleet groundings," said Goldman Sachs analyst Noah Poponak, referring to the 2013 grounding of Boeing 787s because of overheating lithium-ion battery packs. The 787 survived and became a hit with airlines and passengers.
FAA officials including acting chief Daniel Elwell met in Washington with representatives from Southwest, American and United and their pilot unions. An FAA spokesman said they went over the early findings from the two crash investigations, upcoming changes in the Max software, and pilot training for those changes. Elwell promised that the agency would be transparent about decisions to clear the plane to fly.
American Airlines 737 pilot Dennis Tajer, who was in the meeting, said unions pushed for a stronger pilot-training program including troubleshooting items only indirectly related to the anti-stall software. He said FAA seemed receptive.
"This will not be a minimum-training event to just get by," he said.
The longer the Max planes sit on the ground, the more money airlines lose. Southwest already figures that just the first three weeks the Max had been grounded, along with other setbacks, cut the airline's first-quarter revenue by $150 million.
Southwest has been canceling about 90 flights a day because its 34 Max jets have been grounded since mid-March. Spokesman Chris Mainz said the new schedule eliminates about 160 daily flights to assure customers that it will operate the flights they booked.
That is 4% of Southwest's 4,000 daily flights during summer. Still, unless the airline finds replacement planes quickly — and that can be a complicated process — Southwest will scrap about 10,000 flights that could have carried nearly 1.8 million people between now and early August.
American Airlines doesn't expect its 24 Max jets to be flying before June 5, and it too is canceling about 90 flights a day.
United Airlines, with 14 Max planes, says it is shuffling its fleet and mostly covering flights that were scheduled with the Max in mind.
Without those planes, travelers will have fewer flights to choose from, and fewer planes to carry passengers whose flights are canceled for other reasons such as bad weather. There could also be fewer fare sales.
"Travelers who have not already booked their summer reservations may end up paying a slightly higher airfare," said Henry Harteveldt, a travel-industry analyst with Atmosphere Research Group, "but it's not going to be the summer from hell."
Harteveldt said he expects airlines that don't have Max jets — a list that includes Delta, JetBlue, Alaska and Spirit — will court travelers with price-cutting.
The cost of the Max crisis to Boeing also rises the longer the plane is grounded and jets coming off the assembly line pile up around Seattle.
With aircraft orders booming, Boeing shares have soared for more than two years, although they dropped about 14% from March 1 through Friday's close. Most of Wall Street has expressed confidence that Boeing can fix the Max quickly and regain momentum.
Poponak, the Goldman Sachs analyst, said however there is a risk that Boeing orders could suffer for the next few years. He said some airlines seemed to view the Airbus competitor, the A320neo series, as superior, and some aircraft-leasing companies faced a challenge to place the Max with airline customers.
Since its launch in 2017, the Max had emerged as Boeing's best-selling jet. Fewer than 400 have been delivered, but about 4,600 are on order.
However, the company took no new orders for the Max in March — not even before the March 10 crash in Ethiopia — and only 10 in the first three months of the year, down from 112 in the same period last year. It could be that airlines interested in the plane had already placed orders.
Boeing stopped deliveries and announced last week that it was cutting production of 737s from 52 to 42 a month.
Airlines in China and Norway have said they want compensation for their grounded planes. While other airlines have kept silent, analysts expect Boeing will make concessions that could total hundreds of millions of dollars.
The Chicago-based company also faces a growing number of lawsuits by families of the crash victims.
Boeing hasn't provided numbers on the financial impact from the Max crisis.
San Francisco, Apr 12 (AP/UNB) — Uber is providing a look under the hood of its business in the lead-up to its hotly anticipated debut on the stock market, revealing strong growth but an ongoing struggle to overcome huge losses and repair its reputation.
Documents released Thursday offered the most detailed view of the world's largest ride-hailing service since its inception a decade ago.
The massive filing shows Uber has been generating the robust revenue growth that entices investors, but also racked up nearly $8 billion in losses over its 10 years in existence, which mirrors the same trend challenging Lyft, Uber's main rival in the U.S.
Uber's revenue totaled $11.3 billion in 2018, a 42% increase from $7.9 billion in 2017, and a giant leap from $495 million in 2014.
The company posted a profit of $997 million last year, but that doesn't mean its ride-hailing service suddenly started to make money — far from it. The positive result stemmed from a windfall that Uber generated from the sale of its operations in Russia and Southeast Asia. The company said it sustained an operating loss of $3 billion.
The San Francisco company also disclosed a legal cloud hanging over its head as government authorities and regulators investigate whether the company broke any laws.
Among other things, Uber revealed the U.S. Justice Department is conducting a criminal investigation into a yearlong cover-up of a massive computer break-in during 2016 that heisted personal information belonging to millions of passengers and drivers.
The probes are among the many risks that investors must weigh as they mull whether to jump into one of the biggest IPOs in years.
Uber CEO Dara Khosrowshahi acknowledged the self-inflicted wounds that damaged the ride-hailing service's reputation while trying to make the case that the company has rehabilitated itself since he took over 18 months ago.
He struck his note of contrition and optimism in a letter included in the federal documents.
"Some of the attributes that made Uber a wildly successful startup — a fierce sense of entrepreneurialism, our willingness to take risks that others might not, and that famous Uber hustle — led to missteps along the way," Khosrowshahi wrote, closing his letter by assuring he will run Uber with integrity.
Reaching profitability has proven to be a challenge for both Uber and Lyft. Paying drivers is a huge expense, and Uber's fierce competition with Lyft for customers has led both companies to offer rides below cost. Drivers for both companies complain about declining earnings, and they can easily switch between platforms, making it difficult for either company to further reduce driver costs and keep fares cheap for passengers.
Uber said it plans to give bonuses to qualified drivers and is setting aside an undisclosed portion of its stock for drivers to buy.
Its unprofitable history may force Uber to eventually raise its ride-hailing prices unless it can reduce its costs by shifting to driverless cars or expand into other markets and lines of business.
But Uber's operating losses declined from $4 billion in 2017 to $3 billion in 2018, indicating it could be heading in the right direction.
"They're showing that they're capable of controlling their costs, which has been a concern of ride sharing companies in general," said SharesPost analyst Alejandro Ortiz. "That's a sign that will be looked on favorably in the next few weeks."
Lyft beat Uber to the stock market last month with an IPO that raised $2.3 billion, but its shares have been backsliding after an early run-up. Lyft's stock currently is hovering around $61, down from its IPO price of $72.
The rocky start may have prompted Uber to tamp down its IPO ambitions. The company is expected to try to raise roughly $10 billion and seeks a market value of $90 billion to $100 billion, according to the Wall Street Journal. That's below earlier estimates of $120 billion.
The investment bankers handling Uber's IPO are expected to reveal a pricing range for Uber's shares later this month. That will come before executives head out on a so-called road show designed to drum up interest in the IPO among institutional investors who will be given the first opportunity to buy the stock before it begins trading on the New York Stock Exchange next month.
In the end, Uber is widely expected to be the biggest technology IPO since Chinese e-commerce giant Alibaba Group went public in 2014. And it's likely to be the largest among U.S. tech companies since Facebook took its bow on Wall Street seven years ago at a time when most people hadn't ever considered using an app on their smartphone to summon a ride from strangers driving their own cars.
Uber launched in 2009 as UberCab, a black car service where customers could hail professional drivers with a few taps on a smartphone. It shortened its name to Uber in 2010, distancing itself from the taxicab industry, which has criticized the company for operating under less regulation than the traditional taxi industry.
The company operates in 65 countries and has completed 10 billion trips worldwide.
Uber is also expanding in other markets such as freight while offering other ways to get around with shared scooters and bikes. Its fast-growing food delivery business, which spans 500 cities globally, doubled its revenue to $757 million in 2018 from $367 million in 2017.
But Uber faces challenges that Lyft doesn't because of a series of damaging revelations that sullied its reputation among consumers. The setbacks have included rampant internal sexual harassment and allegations it stole self-driving car technology.
The blowback from the problems helped Lyft pick up ground in the U.S. — something Uber acknowledged in its filing — and led to the ouster of Uber co-founder Travis Kalanick as CEO in 2017. Now it will be up to Kalanick's successor, Khosrowshahi, to persuade investors that Uber has cleaned up its act and merits a market value higher than Ford Motor and General Motors combined.
Kalanick is one of Uber's largest shareholders, owning nearly 9% of the company's stock.
Uber has been investing substantially in self-driving vehicles, which could be critical to reducing driver costs and achieving profitability. It launched its first self-driving test vehicle in 2016 and its self-driving car division has more than 1,000 employees, and it has built more than 250 self-driving cars so far.
But it suspended testing when one of its self-driving vehicles struck and killed a pedestrian in Arizona last year. The company resumed testing self-driving vehicles in Pittsburgh in December.
In its federal filing, Uber warned of the fierce competition it faces on that front from rivals such as Tesla and Google's Waymo, who it said could introduce autonomous vehicles earlier than Uber. The company also warned that potential future regulations or increases in insurance costs could impact the autonomous vehicle business.
Alphabet, the parent company of Google, owns 5% of Uber, even as it competes with Uber on self-driving technology. Alphabet also owns roughly 5% of Lyft's stock.
Dhaka, Apr 11 (UNB)- A section of industrialists on Thursday urged the government not to hike gas and electricity prices.
The call came from a seminar titled ‘Energy Pricing: Impact on Industries,’ organized by the Dhaka Chamber of Commerce and Industries (DCCI) at its auditorium in the capital’s commercial district.
Businessmen participating in the seminar pointed to various problems with the gas connection they get in their factories. They held the view that the faults should be corrected to provide a reliable gas supply, before the government goes for rate hikes.
Muhammad Fouzul Kabir Khan, former secretary to the Power Division, presented the keynote. He explained that the proposed hike in the price of gas would not have the same blanket effect across all industries. Rather it would vary from one industry to the other, depending on the predominance or otherwise of gas as an input in the production process.
So for a gas-fired power plant, the cost of power production may increase 93.7 percent; for steel mills, production costs may shoot up sharply, by 7.4 percent; and cost of cement production may increase by nearly 2 percent.
“Non-food inflation may also increase to 1.5percent due to gas price hike. Electricity tariffs in Bangladesh are quite comparable with other regional countries.” He put forth some recommendations to conclude, including hunting down and disconnecting illegal gas and electricity connections, encouraging the use of LPG, and introducing the concept of peak pricing for electricity tariffs.
Fouzul Khan’s assertion on electricity tariffs in Bangladesh being ‘comparable’ to other countries in the region was directly contradicted by State Minister for Power, Energy and Mineral Resources Nasrul Hamid.
“There is very low price in our country compared to other countries of the world. We have to come out from subsidy. For this, we need further five to six years,” the state minister said, before going on to dismiss the notion that the government hikes utility prices at all. He rather sees them as ‘adjustments’, either up or down according to subsidy announced in the budget. The government still subsidizes around Tk 6000 crore in the energy sector on an annual basis.
Hamid also said that many industries with factories are being built in Bangladesh without considering how to supply them with energy. “So I ask all businesses to use electricity more and more in your factories, and instead of cars with internal combustion engines to buy electricity cars from abroad.
“Pay your gas and electricity bills regularly and stop illegal connections in your factories,” he also upon the factory owners.
He called upon the industrialists to invest in planned Economic Zones to get uninterrupted supply of gas and electricity. Moreover, a Gas Management Master Plan has been put together by the government. A plan to ensure tolerable electricity price for the consumers is in place.
Before finishing his address, Sanders informed the audience that by the year 2041, the total demand for electricity in Bangladesh will reach 72,000 megawatt; but generation capacity will reach to 79,500 megawatt. Gas demand in industries will reach about 10,000 mmcfd by year 2041.
Abdus Salam, a former senior vice-president of DCCI, said the government should explore new gas fields to meet the country’s demand.
Mohammad Ali Khokon, President of Bangladesh Textile Mills Association (BTMA) said: “Gas is a very important matter in our factories. We urge the government not to raise the gas price.”
DCCI President Osama Taseer said that in March 2019, Petrobangla and gas distribution companies proposed average 102 percent gas tariff hike, of which 132 pc gas price hike for industrial users, 96pc gas price hike for captive power and 208pc gas price hike for power.
He said that for smoother industrial production we have to ensure uninterrupted gas supply as well as good PSI (Pound per Square Inch). Due to proposed gas tariff hike, input costs of industry may increase and may have impact on energy intensive industries like Fertilizer, Textile, Denim, RMG, Cement, Steel and allied sectors.
Dr Ijaz Hossan, professor of chemical engineering department of BUET and Dr Badrul Imam, Supernumerary professor of Geology of Dhaka University and others were present there.
Dhaka, Apr 11 (UNB) - Mohammadi Group Managing Director Rubana Huq, also wife of late Dhaka North City Corporation Mayor Annisul Huq, has been elected first female president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) for the next two years.
Of the 35 directors elected in the April 6 BGMEA election, only Rubana Huq submitted the form for the president post on Thursday, the last date for filing forms.
According to the BGMEA article 10 (3), she has been declared as a valid candidate for the post, said a press release.
Besides, seven vice-presidents have also been chosen. They are Managing Director (MD) of Chattogram Asian Apparels Mohammad Abdus Salam (first vice-president), Surma Garments MD Foysal Samad (senior vice-president), and Seha Design’s MD SM Mannan (Kochi), DBL Group’s Vice Chairman MA Rahim (Firoz), Tusuka Fashions Chairman Arshad Jamal (Dipu), Frame Sweaters MD Mohammad Moshiul Azom (Sajol) and Al Amin garment’s MD SM Chowdhury (Salim).
This will be announced officially on Friday.
All the 35 directors were elected from the Sammilita Forum for 2019-2021 period.
Two panels -- Rubana Huq-led Sammilita Forum and Design and Source Limited Managing Director Jahangir Alam-led Swadhinata Parishad contested the election.
Dhaka, Apr 11 (UNB) – Industries Minister Nurul Majid Mahmud Humayun visited Walton Hi-Tech Industries (WHIL) at Chandra in Gazipur on Thursday.
During his visit State Minister for Industries Kamal Ahmed Mojumder was also present there.
After visiting the industry, minister said that Bangladesh will easily become a middle income country by 2021 and a higher income country by 2041 if industrial entrepreneurs like Walton come forward.
State Minister Kamal Ahmed Mojumder assured of providing all kind of assistances in protecting protecting and boosting the local industries.
WHIL’s Vice-Chairman SM Shamsul Alam, Directors SM Mahbubul Alam and Tahmina Afrose Tanna welcomed the minister in the morning while Walton’s Executive Director SM Zahid Hasan, Humayun Kabir, Uday Hakim, Alamgir Hossain Sarker and Yusuf Ali, Deputy Executive Director Sharif Harunur Rashid, Shahjada Selim, Senior Additional Director Mohsin Ali Mollah, Additional Director Milton Ahmed and Media Adviser Enayet Ferdous were present.