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☆ Morning Bid: Turbulence
▼ + stars: | 2023-01-19 | by ( ) www.reuters.com time to read: +2 min

Traders took Wednesday's weak U.S. production, retail sales and producer price data badly, selling risk assets and buying safer ones. Bond markets shrugged off hawkish rhetoric from non-voting Fed officials Bullard and Mester to rally. Fed voters Lael Brainard and John Williams might get more of markets' attention at events later in the day. Elsewhere, the dust is settling quickly on the Bank of Japan's decision not to bend to speculators' attack on its yield curve control policy. The yen has bounced back to where it was before the meeting and the Nikkei (.N225) slipped, though calm in Japan's bond market might suggest short sellers are having a breather before re-loading for meetings in March and April.

☆ U.S. airlines sound bullish on travel demand despite recession risk
▼ + stars: | 2023-01-18 | by ( Rajesh Kumar Singh | ) www.reuters.com time to read: +3 min

CHICAGO, Jan 18 (Reuters) - U.S. airlines on the back of strong financial results remain upbeat about travel demand, even as economists and analysts say the risk of an economic recession has gone up. United Airlines (UAL.O) and Delta Air Lines (DAL.N) reported higher-than-expected quarterly earnings on resilient consumer demand, while American Airlines (AAL.O) lifted its profit outlook. Carriers are enjoying the strongest travel demand since the start of the COVID-19 pandemic, boosted by reopening of closed borders, a strong U.S. dollar and rising corporate travel. While recession fears have sparked concerns about consumer spending, airline executives say travel demand is not likely to wane any time soon. United estimates domestic passenger revenue previously accounted for about 0.5% of the country's gross domestic product.

☆ Southwest Airlines pilot union calls for strike authorization vote
▼ + stars: | 2023-01-18 | by ( ) www.reuters.com time to read: +2 min

Jan 18 (Reuters) - Southwest Airlines Co's (LUV.N) pilot union has called for a strike authorization vote, weeks after a tech meltdown at the carrier left tens of thousands of passengers stranded across the United States. Casey Murray, president of Southwest Airlines Pilot Association (SWAPA), said in a statement. The strike authorization vote will take place beginning May 1 and will be counted at the end of that month, said SWAPA, which represents more than 10,000 pilots. Southwest pilots have been locked in talks over a new contract with the airline for nearly three years. Reporting by Kannaki Deka in Bengaluru; Editing by Shailesh Kuber and Shinjini GanguliOur Standards: The Thomson Reuters Trust Principles.

A reading from the Commerce Department showed retail sales fell 1.1% in December, compared with expectations of a 0.8% drop. Another report showed U.S. producer prices rose less than expected year-on-year in December, adding to evidence of a moderation in inflation. Earnings from big U.S. banks were a mixed bag, with many stockpiling rainy-day funds preparing for a looming recession. Shares of other major carriers including American Airlines Group Inc (AAL.O), Delta Air Lines Inc (DAL.N) and Southwest Airlines Co (LUV.N) rose between 1.6% and 2.2%. IBM Corp (IBM.N) slipped 1.5% after Morgan Stanley downgraded the company's shares to "equal weight" from "overweight", citing slowing revenue growth.

REUTERS/Kamil Krzaczynski/File PhotoJan 18 (Reuters) - New York excavation contractor Brian Dietz does not view higher air fares as a deal-breaker for flying and airlines are seeing more small and medium size companies like his feeding a 2023 rebound in business travel. Although business travelers often book economy seats, corporate travel is critical for airlines because it means more frequent flyers and appetite for higher-margin premium fares. SME executives were some of the first business travelers back on planes after the pandemic-induced slump. They have since emerged as the fastest-growing segment within corporate travel according to Amex GBT. Spending on business travel globally is expected to recover to 80% of 2019 levels in 2023, up from 65% in 2022, according to the Global Business Travel Association (GBTA).

☆ Shareholders sue Southwest Airlines over flight meltdown
▼ + stars: | 2023-01-13 | by ( Jonathan Stempel | ) www.reuters.com time to read: +2 min

REUTERS/Shelby Tauber//File PhotoJan 12 (Reuters) - Shareholders filed a lawsuit against Southwest Airlines Co (LUV.N) on Thursday, accusing the carrier of fraudulently concealing problems that led last month to an operational meltdown and more than 15,000 flight cancellations. Flight operations at Dallas-based Southwest buckled shortly before Christmas as a fierce winter storm swept across the United States. The carrier largely restored normal operations by Dec. 30, several days after other airlines had recovered. In an interview on Thursday, Jordan said Southwest was looking at all operations to avoid a repeat of the meltdown. The case is Teroganesian v Southwest Airlines Co, U.S. District Court, Southern District of Texas, No.

☆ Exclusive: Southwest eyes operational changes after airline's meltdown -CEO
▼ + stars: | 2023-01-13 | by ( Rajesh Kumar Singh | ) www.reuters.com time to read: +2 min

CHICAGO, Jan 12 (Reuters) - Southwest Airlines Co (LUV.N) Chief Executive Bob Jordan said on Thursday the company is looking at all options to ensure the operational meltdown it suffered last month is not repeated. The Dallas-based carrier has been dealing with customer outrage and regulatory scrutiny after a systems meltdown last month left thousands of passengers stranded. Southwest has hired consultancy Oliver Wyman to investigate the disruption, Jordan told Reuters in an interview. Southwest's board has set up a new Operations Review Committee to oversee management following last month's systems collapse, Jordan said. With the exception of 1% of bags, the airline has delivered all the luggage which went missing back to customers.

☆ U.S. senators press Southwest to answer questions on holiday meltdown
▼ + stars: | 2023-01-13 | by ( ) www.reuters.com time to read: 1 min

WASHINGTON, Jan 13 (Reuters) - A group of 15 U.S. senators on Friday demanded Southwest Airlines (LUV.N) Chief Executive Bob Jordan answer questions about the low-cost carrier's holiday meltdown that led to nearly 16,000 flight cancellations. "The airline must examine the causes of this disaster and ensure it never happens again," said the letter led by Democratic Senators Ed Markey and Richard Blumenthal asking for answers about the software it uses for crew scheduling and why did the company "fail to invest funds to modernize these systems to ensure that it could effectively coordinate crew and flight schedules after major storms and during major travel periods?" Reporting by David Shepardson; Editing by Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.

☆ Airbus withdraws from U.S. FAA Boeing safety culture panel
▼ + stars: | 2023-01-13 | by ( David Shepardson | ) www.reuters.com time to read: +2 min

WASHINGTON, Jan 13 (Reuters) - European planemaker Airbus (AIR.PA) said it had withdrawn from a U.S. government-named panel reviewing Boeing’s (BA.N) safety processes and how they influence Boeing safety culture after two fatal 737 MAX crashes in recent years killed 346 people. Congress directed the agency to appoint a panel by early 2021, but the FAA missed that deadline. Boeing last week declined to comment on the panel, but previously emphasized it has significantly reformed its safety culture after the MAX crashes cost it more than $20 billion. read moreIn May, the FAA opted to renew Boeing's Organization Designation Authorization (ODA) program for three years rather than the five years Boeing sought. The FAA continues to subject Boeing to enhanced oversight, inspecting all new Boeing 737 MAXs and 787s before they can be delivered.

Major carriers such as United Airlines Holdings Inc (UAL.O), American Airlines Group Inc (AAL.O), Delta Air Lines Inc (DAL.N) and Southwest Airlines Co (LUV.N) have rushed to add staff after a faster-than-expected rebound in the U.S. travel market. "Margins are set to take a hit in 2023 as airlines ratify new contracts with labor groups," Cowen analyst Helane Becker said last month. "Delta's recent tentative pilot agreement, assuming it is ratified, could drive incremental unit costs higher by ~2%, and 2%-3% higher for American, Southwest and United," Barclays analyst Brandon Oglenski said on Wednesday. American Airlines on Thursday forecast a higher fourth-quarter profit as the Texas-based carrier benefited from strong demand for travel during the key holiday season. Shares of American Airlines, Delta Air Lines, United Airlines and Southwest Airlines fell between 14% and 30% in 2022 on mass cancellations and economic worries.

WASHINGTON/CHICAGO, Jan 12 (Reuters) - U.S. airline operations returned to normal on Thursday even as the Federal Aviation Administration (FAA) continues to investigate pinpoint the cause of a computer outage that grounded flights nationally and to prevent it from happening again. "FAA operations are back to normal, and we are seeing no unusual delays or cancellations this morning," the FAA said in a tweet. More than 11,300 flights were delayed or canceled on Wednesday in the first national grounding of domestic traffic in about two decades. As of noon Thursday, 1,400 U.S. flights were delayed and 117 were canceled, according to FlightAware, a typical aviation day given current weather issues. Major carriers Delta Air Lines (DAL.N), United Airlines (UAL.O), American Airlines Group Inc (AAL.O) and Southwest Airlines (LUV.N) all were reporting normal operations on Thursday.

[1/2] Passengers wait for the resumption of flights at O’Hare International Airport after the Federal Aviation Administration (FAA) had ordered airlines to pause all domestic departures due to a system outage, in Chicago, Illinois, U.S., January 11, 2023. REUTERS/Jim VondruskaWASHINGTON/CHICAGO, Jan 12 (Reuters) - U.S. airlines said they expect operations to return to normal on Thursday as the Federal Aviation Administration (FAA) scrambles to pinpoint the cause of a computer outage that grounded flights nationally and to prevent it from happening again. More than 11,300 U.S. flights were delayed or cancelled on Wednesday, according to FlightAware, in the first national grounding of domestic traffic in about two decades. Major carriers such as Delta Air Lines (DAL.N), United Airlines (UAL.O) and Southwest Airlines (LUV.N) said they expected normal operations on Thursday. "The health of that agency and its ability to deliver on its mission really is important," he said in an interview.

☆ U.S. Congress to investigate FAA computer outage that snarled flights
▼ + stars: | 2023-01-11 | by ( David Shepardson | ) www.reuters.com time to read: +2 min

The public needs a resilient air transportation system." House Transportation Committee Chair Sam Graves, a Republican, said the ground stop "highlights a huge vulnerability in our air transportation system." The administration needs to explain to Congress what happened, and Congress should enact reforms in this year’s FAA reauthorization legislation." Senate Majority Leader Chuck Schumer said "the FAA needs to get to root causes so this doesn’t happen again." The FAA authorization is due to expire on Sept. 30 and the outage may put pressure on Congress to complete action.

☆ Here are Wednesday's biggest analyst calls: Apple, Tesla, Netflix, Amazon, Salesforce, Levi's & more
▼ + stars: | 2023-01-11 | by ( Michael Bloom | ) www.cnbc.com time to read: +8 min

Bank of America downgrades Coinbase to underperform from neutral Bank of America said it sees too many headwinds for the crypto exchange. Goldman Sachs downgrades Jefferies to neutral from buy Goldman said it sees a "backlog decline" for the investment bank company. Bank of America upgrades Toll Brothers and Pulte Group to buy from neutral Bank of America upgraded several homebuilders, citing compelling valuations. "We upgrade PulteGroup to Buy (from Neutral), Toll Brothers to Buy (from Neutral), and Lennar to Neutral (from Underperform). Bank of America upgrades Dow to neutral from underperform Bank of America said it's taking a more "offensive" approach to the stock.

☆ Southwest and Twitter are on a similar flight path
▼ + stars: | 2023-01-11 | by ( Robert Cyran | ) www.reuters.com time to read: +3 min

NEW YORK, Jan 11 (Reuters Breakingviews) - Twitter has slashed about three-quarters of employees since Elon Musk completed his buyout. But it’s also possible Twitter is building up what software developers call “technical debt” – where today’s underinvestment becomes tomorrow’s liability. The holiday meltdown at Southwest Airlines (LUV.N) is an example of how technical debt can build up even in non-technology companies. Twitter doesn’t have airplanes to keep aloft, but it too could be building up a kind of technical debt. The company had about $6 billion of operating costs in the four quarters before it went private, compared with $5 billion of revenue, which suggest there was fat to cut.

FAA officials said a preliminary review traced the outage to a damaged database file, but added there was no evidence of a cyberattack and the investigation was continuing. FAA officials said they were working to "further pinpoint the causes" so the problem can be avoided in the future. One issue airlines are facing is trying to get planes in and out of crowded gates, which is causing further delays. He described confusion as airline employees and many passengers were initially unaware of the FAA's moves and flight delays. The U.S. Travel Association, which represents the travel industry including airlines, called the FAA system failure "catastrophic."

☆ FAA system outage disrupts thousands of flights across U.S.
▼ + stars: | 2023-01-11 | by ( Leslie Josephs | ) www.cnbc.com time to read: +6 min

The FAA's outage was the second major air travel disruption in less than a month and drew bipartisan criticism. Later Wednesday, Canada's air navigation agency said its similar notification system experienced a brief outage, but said no flights were delayed as a result. Zoom In Icon Arrows pointing outwards FAA system failure created mass cancellations across the U.S. on Jan. 11th, 2023. FlightawareWednesday's FAA issue added to concern from Washington from both Republicans and Democrats, particularly about technology that the complex U.S. air system, the world's busiest, relies on. More than a third of Delta's and United's mainline flights were delayed, while about 50% of American's were running late.

☆ U.S. regulators forwarding Southwest complaints as part of probe
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +3 min

WASHINGTON, Jan 10 (Reuters) - The U.S. Transportation Department said on Tuesday it is forwarding thousands of consumer complaints stemming from Southwest Airlines' (LUV.N) massive December flight cancellations as part of its ongoing investigation. The Transportation Department said it is directing Southwest to provide substantive responses to all consumer complaints within 60 days, as required by federal regulations. Southwest said on Tuesday it is "making every effort" to refund and reimburse customers, and is now processing flight refund requests within an average of about three days. Southwest on Tuesday also launched a seasonal sale for fares as low as $49 for some one-way routes. REROUTED RIBEYESome Southwest customers remain upset.

☆ U.S. forwarding Southwest complaints to airline as part of probe
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: 1 min

WASHINGTON, Jan 10 (Reuters) - The U.S. Transportation Department (USDOT) said Tuesday it is forwarding thousands of consumer complaints stemming from Southwest Airlines (LUV.N) massive December flight disruptions to the airline as part of its ongoing investigation. Southwest canceled over 16,000 flights between Dec. 22 and Dec. 31. USDOT said it is directing Southwest to provide substantive responses to all consumer complaints within 60 days, as required by federal regulations. The agency has repeatedly vowed to hold Southwest accountable if it fails to adhere to the promises made to reimburse passengers. Reporting by David ShepardsonOur Standards: The Thomson Reuters Trust Principles.

☆ Southwest launches one-way fares starting $49 for some routes
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +1 min

Jan 10 (Reuters) - Southwest Airlines Co (LUV.N) on Tuesday launched a limited fare sale for select one-way routes, days after the carrier's massive flight disruptions in December. The airline said it will offer the fares starting at $49 for certain one-way routes, with travelers required to make the purchase 21 days in advance. Southwest faced operational chaos during the peak holiday season due to a tech meltdown, forcing the carrier to cancel more than 16,000 flights that stranded passengers and invited scrutiny from the U.S. government. BofA Global Research on Tuesday cut the price target on the company's shares by $3 to $42 after the wave of cancellations. Reporting by Aishwarya Nair in BengaluruOur Standards: The Thomson Reuters Trust Principles.

☆ S&P downgrades Southwest Airlines outlook, expects weaker FFO
▼ + stars: | 2023-01-09 | by ( ) www.reuters.com time to read: +2 min

Jan 9 (Reuters) - Global ratings agency S&P Global lowered Southwest Airlines Co's (LUV.N) outlook to stable from positive, saying it expects the airline to generate weaker funds from operations (FFO) through 2023 amid the recent operational meltdown. Lingering effects from the operational issues and a possible decline in travel demand due to inflation could limit Southwest's ability to raise its fares to cover higher costs, S&P said. Moody's believes the impact on Southwest's passenger volumes and finances will barely be noticeable by this spring and beyond. Last week, Southwest forecast a pre-tax hit of $725 million to $825 million to quarterly earnings due to the cancellations. Reporting by Shivansh Tiwary and Aishwarya Nair in Bengaluru; Editing by Krishna Chandra Eluri and Maju SamuelOur Standards: The Thomson Reuters Trust Principles.

☆ New York state comptroller asks Southwest Air about plans to avoid future meltdowns
▼ + stars: | 2023-01-09 | by ( Rajesh Kumar Singh | ) www.reuters.com time to read: +2 min

CHICAGO, Jan 9 (Reuters) - New York State's comptroller has written to Southwest Airlines Co (LUV.N), asking the carrier to explain how it plans to prevent an operational collapse like the one at the end of last year which stranded thousands of passengers. The comptroller's office oversees the state's pension system, which held 1.35 million shares of the Dallas-based company at the end of March 2022. DiNapoli asked the company to share its plan to "correct these failures - not just in the immediate term, but for the coming years." A Southwest spokesperson told Reuters earlier that the airline is focusing on improving its technology for scheduling crews. Reporting by Rajesh Kumar Singh in Chicago Editing by Matthew LewisOur Standards: The Thomson Reuters Trust Principles.

☆ Southwest Airlines reshuffles senior management roles
▼ + stars: | 2023-01-09 | by ( ) www.reuters.com time to read: +1 min

[1/2] Southwest customers visit the help desk after U.S. airlines, led by Southwest, canceled thousands of flights due to a massive winter storm which swept over much of the country before and during the Christmas holiday weekend, at Dallas Love Field Airport in Dallas, Texas, U.S., December 28, 2022. The Texas-based carrier promoted vice president of network planning, Adam Decaire, to senior vice president of network planning and network operations control (NOC), effective immediately. "This change creates a tighter feedback loop between schedule design and schedule execution while adding resiliency and reliability to the network," the carrier said. The carrier on Monday announced key leadership changes in departments including marketing & customer experience, culture & communications, legal-corporate & transactions and sales. Reporting by Aishwarya Nair in Bengaluru; Editing by Maju SamuelOur Standards: The Thomson Reuters Trust Principles.

☆ Southwest meltdown may cost the airline up to $825 million
▼ + stars: | 2023-01-06 | by ( Chris Isidore | ) edition.cnn.com time to read: +2 min

New York CNN —The cost of the service meltdown at Southwest Airlines over the year-end holidays cost the airline nearly $1 billion and will cause the company to report a loss rather than a profit in the fourth quarter, the airline said in a filing on Friday. The airline, the nation’s largest domestic carrier, said the cost of canceling more than 16,700 flights between December 21 and 29 will be somewhere between $725 million and $825 miilion. A bit more than half the cost - between $400 million and $425 million - will come from lost ticket revenue that will be refunded to customers. While bad weather started the service problems, Southwest suffered far worse service problems, according to its employee unions, because the antiquated scheduling system left it without the crew members it needed to staff flights. This is not the first time the airline has suffered a costly service meltdown.

☆ Southwest Airlines expects to post loss after mass cancellations
▼ + stars: | 2023-01-06 | by ( ) www.reuters.com time to read: +1 min

Jan 6 (Reuters) - Southwest Airlines Co (LUV.N) on Friday revised its fourth quarter forecast to net loss from "strong profit" after a technological meltdown forced it to cancel thousands of flights around Christmas and New Year's Eve. Southwest Airlines led flight cancellations across carriers during the last two weeks of December, as a massive winter storm swept across the eastern part of the United States. The net loss will largely be due to an estimated pre-tax negative impact of $725 million to $825 million, the company said in a regulatory filing. Shares of the company fell about 1% in premarket trade. Reporting by Kannaki Deka and Abhijith Ganapavaram in Bengaluru; Editing by Vinay DwivediOur Standards: The Thomson Reuters Trust Principles.

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