Delta Air Lines is the latest airline to suffer a summer slump, with its passenger traffic down by an estimated 3.1% in July compared to last year. The company’s stock price has also dipped as investors question whether Delta can maintain its momentum during the traditionally busy fall season.
The airline news is a topic that has been trending for the past few months. Airlines end a strong summer, but the Delta variant stifles momentum.
In August, a Delta Air Lines employee assisted passengers at Los Angeles International Airport. Credit… courtesy of Getty Images/Mario Tama
Airlines had a strong finish to the typical summer travel season, but expectations for the autumn have dwindled as businesses postpone office reopenings and the Delta strain of the coronavirus has reduced sales and increased cancellations in recent weeks.
United Airlines said in a securities filing on Thursday that it no longer expects to make a profit before taxes for the three months ending in September, and that revenue would most likely be down by a third from the same time last year. Despite this, the airline said that it still expects to save money as projected before.
Delta Air Lines seemed to have the upper hand. In a filing, the airline said that it still anticipated a pretax profit for the quarter, but that revenue would likely fall short of the estimate it issued earlier this summer. As Delta staffed up to keep operations operating smoothly throughout the recovery, costs were greater than expected.
“The narrative for the quarter has really been about the tremendous increase in demand that we’ve witnessed,” Delta CEO Ed Bastian said at a Cowen investment bank conference on Thursday.
United and Delta also predicted that once virus cases peaked, the recovery would continue, with Mr. Bastian noting that the airline was already witnessing a comeback in the South, where illnesses had spiked earlier in the summer. In filings, United and Southwest Airlines claimed the current wave of illnesses had had less of an impact on their businesses than prior spikes in coronavirus cases.
In July, American Airlines and Delta both reported better-than-expected results, but the rebound slowed in August. The recovery in business travel also stalled, according to Delta, as businesses postponed or cut down plans to reopen operations. Despite this, the airline said that ticket sales had steadied in the previous ten days.
In a securities filing on Thursday, American stated that although its third-quarter financial results will likely be lower than anticipated, the firm still expected the quarter to be its best by some metrics since the epidemic started.
A slower-than-expected September will hurt Southwest’s revenue, but the airline said it still expects to finish the quarter within its forecasted range. When compared to the same months in 2019, corporate travel was down almost two-thirds in July and August, and is projected to stay down a similar percentage in September. Delta, according to Mr. Bastian, is experiencing similar patterns in business travel.
For most of the summer, which is the biggest season for the business, airlines flew roughly 80% more passengers than in 2019. According to Transportation Security Administration passenger screening statistics, that number began to decline in the second part of August, but rebounded during the Labor Day vacation.
Despite the fact that it is still early, American and Southwest both reported strong ticket sales for holiday travel towards the end of the year.
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The European Central Bank said on Thursday that it will reduce the pace of its pandemic-era bond-buying program, which has been one of the primary instruments it has used to assist the eurozone economy through lockdowns, citing “favorable financing conditions” and the inflation forecast.
The program, which has recently been buying around 80 billion euros ($95 billion) of mainly government bonds each month, aims to keep borrowing rates low while also promoting economic development.
Other policy measures were unaffected. Interest rates remained unchanged, including the deposit rate, which stayed at -0.5 percent. The amount of the bank’s second bond-buying program, which was resumed in 2019 to avert a regional recession, was also maintained by policymakers.
Inflation is increasing faster than anticipated in the eurozone, supply chain disruptions and product shortages are driving up manufacturing prices, and there are early indications that the economic recovery is faltering.
It’s a combination that has sparked debate among officials at the central bank over whether to reduce and eventually terminate its massive bond-buying program. It started in March 2020, as the epidemic swept throughout Europe, and is expected to last until at least next March, buying a total of 1.85 trillion euros in bonds. The pause would assist guarantee that the acquisitions are completed on time, but the central bank hasn’t ruled out extending them.
“The Governing Council assesses that favorable financing circumstances can be maintained with a somewhat reduced pace of net asset purchases, based on a combined assessment of financing conditions and the inflation outlook,” the central bank said in a statement on Thursday.
The central bank’s revised forward guidance will be put to the test with Thursday’s choices. Policymakers stated in July that they were prepared to ignore short-term spikes in inflation and would only increase interest rates if it was evident that annual inflation would hit 2% “well ahead” of the end of the central bank’s projection horizon and remain there over the medium run.
When the central bank’s head, Christine Lagarde, holds a news conference later on Thursday, new inflation and economic growth forecasts will be released. In June, prior estimates projected that inflation would reach 2.6 percent in the fourth quarter, then fall to 1.5 percent in 2022 and 1.4 percent in 2023.
However, the region’s statistics office said last week that inflation had already climbed to 3% in August, the highest level in almost ten years. Policymakers, like other central banks across the globe, have been wagering that the increase in inflation would be transitory.
In the years leading up to the epidemic, inflation had been below the bank’s goal of 2%.
Last Monday, Klaas Knot, the governor of the Dutch central bank and a member of the European Central Bank’s governing council, stated, “The stars are considerably more aligned than they have been for a long time for the return of inflation back to 2%.”
Policymakers should not overlook the danger of “excessively high inflation,” according to Jens Weidmann, the president of the German central bank, and should not “commit to our extremely loose monetary policy position for too long.”
However, the European Central Bank as a whole has been more careful in preparing markets for a return to normal policy than the Federal Reserve and the Bank of England. While the economy is improving, with growth of 2.2 percent in the second quarter compared to the first three months of the year, Ms. Lagarde has underlined the risk presented by the Delta variation spread.
The central bank’s top economist, Philip Lane, recently said that the economy will face headwinds in the second half of the year, including supply-chain bottlenecks that may last longer than anticipated.
While the pandemic-era bond program may be coming to an end, the central bank is likely to continue with its older bond-purchasing program, in which it buys 20 billion euros in assets every month. Many experts believe authorities will raise the amount of purchases to keep the economy stimulated long after the pandemic’s acute effect has gone.
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The blood testing start-discredited up’s founder Theranos appeared in federal court and was charged with two charges of wire fraud conspiracy and ten counts of wire fraud. CreditCredit… The New York Times’ Mike Kai Chen
On Wednesday, attorneys for the government and the defense gave their opening remarks in the trial of Elizabeth Holmes, the founder of the blood-testing startup Theranos, and a former corporate controller started to testify before the proceedings stopped for the day.
The trial will take a day off and resume on Friday. [Learn more about the opening remarks in the trial.]
The government’s argument
Robert Leach, an assistant US attorney, meticulously detailed the periods when Theranos was on the verge of bankruptcy. “Because she was short on time and money, Elizabeth Holmes chose to lie,” he continued, repeating himself.
Mr. Leach explained how Theranos made misleading statements about its technology being utilized on battlefields. He showed investors from pharmaceutical firms allegedly fabricated reports that Ms. Holmes provided them praising Theranos’ technology. He said she had sold grossly inflated income forecasts and perpetrated her deception via the press media.
Mr. Leach said, “The plan earned her recognition, respect, and love.”
The legal team for the defense
Ms. Holmes was a diligent, if naive, businesswoman who failed but did not commit any crimes, according to the defense.
Ms. Holmes is represented by Lance Wade of Williams & Connolly. “The villain the government just portrayed is really a live, breathing human being who tried her very best each and every day,” he said. “It’s not a crime to give it your all and yet fall short.”
Mr. Wade claimed that the truth behind Theranos’ collapse was more complex than the government’s portrayal, and that the firm had developed some useful blood-testing technologies.
The trial of Elizabeth Holmes has piqued the public’s attention. Credit… Getty Images/Nick Otto/Agence France-Presse
The circus is a great place to visit.
The trial drew such a large crowd that a queue formed outside the federal courtroom before 5 a.m. Ms. Holmes was surrounded by television teams as she entered the winding lane in front of the courtroom about 8 a.m. Billy Evans, her boyfriend, and family members led her past the crowd.
A group of three blond-haired ladies in black suits who resembled the defendant, as well as curious members of the public, arrived. Mr. Evans and the ladies in black handed out a cushioned seat to replace the hard seats in the courtroom at one point.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The New York Times’ Carlos Chavarria
Elizabeth Holmes, the discredited founder of the blood-testing company Theranos, is charged with two charges of wire fraud conspiracy and ten counts of wire fraud.
Here are some of the case’s main players:
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
Reuters/Stephen Lam
As a 19-year-old Stanford dropout, Holmes started Theranos in 2003. She became the world’s youngest millionaire after raising $700 million from investors, but she has been accused of lying about how effectively Theranos’ technology performed. She has entered a not guilty plea.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
Getty Images/Justin Sullivan
Sunny, Ramesh Balwani, was the president and chief operational officer of Theranos from 2009 to 2016, and he had a love connection with Holmes. He’s also been charged with fraud and may go on trial next year. He has entered a not guilty plea.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The New York Times’ Jefferson Siegel
David Boies, a well-known attorney, was Theranos’ lawyer and sat on its board of directors.
He attempted to silence critics of the company’s business methods, including whistleblowers and media.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
Getty Images
Journalist John Carreyrou exposed Theranos’ deceptive activities in his articles.
His reporting for The Wall Street Journal contributed to Theranos’ demise.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
Getty Images/Jeff Kravitz/FilmMagic
Former Theranos workers Tyler Shultz and Erika Cheung were whistle-blowers. In 2013 and 2014, they worked at the start-up.
Shultz is the grandson of former Secretary of State George Shultz, who served on the Theranos board of directors.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The New York Times’ Eric Thayer
James Mattis, a former four-star general, was on Theranos’ board of directors.
He then became Secretary of Defense under President Donald J. Trump.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The lawsuit will be overseen by Edward Davila, a federal judge in the Northern District of California.
Holmes’ main lawyer is Kevin Downey, a partner at the Washington law firm Williams & Connolly.
The government’s prosecution will be led by Robert Leach, an assistant US attorney for the Northern District of California, and other prosecutors from the US attorney’s office.
More about Elizabeth Holmes may be found here:
30th of August, 2021
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Spanish families are paying nearly twice as much for energy as they were a year ago, sparking utility company complaints. Credit… Associated Press/Manu Fernandez
The New York Times’ Stanley Reed and Raphael Minder write that wholesale natural gas prices are almost five times higher than they were at this time last year, threatening to be a drag on Europe’s and other economies.
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As a result of the wholesale price more than doubling, Spanish families are paying approximately 40% more for energy than they did a year ago, sparking enraged demonstrations against utility providers.
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Because of rising natural gas costs, the UK’s energy regulator, Ofgem, has approved a 12 percent rise in the energy bill limit for millions of families paying normal rates, to 1,277 pounds ($1,763) per year.
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Gas prices have increased in the United States as well, but they are still still about a fifth of what they are in Europe. Because of its huge domestic supply of relatively inexpensive gas from shale drilling and other operations, the United States has a significant pricing advantage over Europe, while Europe must import the majority of its gas.
Around 60% of Europe’s gas is imported, with supplies coming mostly from Russia and, to a lesser degree, Algeria and Libya. READ THE ENTIRE ARTICLE
By 2050, the Biden administration wants the country to produce almost half of its energy from the sun.
According to Ivan Penn, one of our energy correspondents, such was the aim of a new study published on Wednesday by the Energy Department. To get there, the nation would have to double the quantity of solar energy installed per year for the following four years, then double it again by 2030, starting from a present level of 4%.
It’s unclear how aggressively the government will pursue solar energy advancements via legislation and regulations. Many specifics will be determined by Congress in the end.
Nonetheless, according to the Energy Department’s estimates, solar panels will be able to provide 40% of the country’s energy by 2035 — enough to power all American households — and 45 percent by 2050.
In many areas of the nation, solar panels are currently the cheapest source of electricity. In recent years, the usage of solar and wind energy has expanded considerably faster than most government and independent experts anticipated.
To get there, however, individuals, companies, and the government will have to spend billions of dollars. With the addition of batteries, transmission lines, and other technology that can soak up energy when the sun shines and transmit it from one part of the nation to another, the electric grid would have to be nearly entirely rebuilt.
Building and installing enough solar panels to provide up to 45 percent of the country’s energy requirements would put a burden on manufacturers and the energy sector, driving increased demand for aluminum, silicon, steel, and glass. In addition, the sector will need to rapidly recruit and train tens of thousands of employees. According to some labor organizations, developers typically employ lower-paid nonunion workers rather than the union members Mr. Biden often promotes in the drive to construct solar farms fast.
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