Diageo East Africa First-Half Profit Rises First Time in 3 Years
The Kenya-based unit of Diageo Plc reported net income in the six months through December of 8.1 billion shillings ($62.7 million), 19% more than a year earlier. Net revenue climbed 2%.
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Yahoo
an hour ago
- Yahoo
Analysis-Air Canada labor deal may reshape pay for North American airline crews
By Allison Lampert and Rajesh Kumar Singh MONTREAL/CHICAGO (Reuters) -A crippling strike by Air Canada flight attendants that grounded thousands of flights over wages and unpaid labor is the latest blow to the airline industry's compensation system that does not fully pay cabin crews for their hours at work. The union, representing more than 10,000 Air Canada flight attendants, said on Tuesday they reached a tentative deal that ends unpaid work, without sharing further details. Analysts say any gains could influence upcoming contract negotiations in North America. The deal could also drive up structural costs in a cyclical industry. Labor is airlines' biggest operating expense after fuel. The four-day strike that stranded more than 500,000 passengers mirrors unrest at U.S. carriers, where flight attendants cannot walk off the job until the National Mediation Board grants permission. But cabin crews at American, Southwest, and Alaska Airlines last year rejected several contract deals, saying they did not address concerns about unpaid work. Flight attendants at United Airlines last month voted down a $6-billion tentative labor agreement, which did not provide compensation for time on the ground before and after flights. The Chicago-based airline's union is surveying its members before returning to bargaining in December. United and the union did not immediately respond to requests for comments. While cabin crews get paid for a minimum number of hours, they are mostly compensated when planes are in motion, neglecting the crucial tasks performed during boarding, deplaning, and other ground operations. Unions say this amounts to significant unpaid labor. In previous contract negotiations, airlines secured concessions from workers as the industry was struggling due to economic downturns or the pandemic. But a runup in inflation, stagnant wages, and increased workload have fueled resentment among flight attendants, bolstering demands for a change in pay practices. "The Air Canada strike helps negotiations everywhere. It defined the problem of ridiculous expectations for flight attendants to work without pay," said Sara Nelson, international president of the Association of Flight Attendants-CWA, which represents 55,000 flight attendants at 20 airlines, including United. "The striking flight attendants are an inspiration to working people everywhere." Nelson spoke with Wesley Lesosky, head of Air Canada's flight attendants union, on Monday to coordinate positions, representatives of both unions told Reuters. Shanyn Elliott, an Air Canada Rouge flight attendant, said when she started work in 2017, she would pick up long-haul flights to earn extra pay as her C$23 ($16.60) hourly wage did not cover the cost of living. Adding to her frustration, frequent flight delays after the pandemic meant longer hours, said Elliott, who heads the strike committee for Air Canada flight attendants at the Canadian Union of Public Employees. Air Canada CEO Michael Rousseau said the industry needed to review its compensation models. In an interview, he said the Canadian carrier has accepted the concept of ground pay, adding other airlines will likely look at their own models. "I do think the industry has to take a closer look at this over time," Rousseau told Reuters. "We all should be open to change." American and Alaska have already begun compensating attendants for boarding time in their new labor agreements. American's flight attendants are now also compensated for some hours between flights. Those gains came after Delta Air Lines, whose flight attendants are not in a union, instituted boarding pay for cabin crew at half of their hourly wages in 2022 when they were trying to organize. HIGHER COSTS But paying for boarding and time on the ground would inflate airlines' operating costs. American Airlines' new flight attendant contract is estimated to cost it an extra $4.2 billion over five years. The company last month blamed increased labor costs in part for its margin underperformance. Canaccord Genuity analyst Matthew Lee estimates the proposed wage hikes at Air Canada would mean up to C$140 million in incremental costs. Air Canada's wage bill has increased about 26% since before the pandemic. The airline is already grappling with weak passenger traffic to the U.S. amid strained trade relations between Canada and the U.S., leading to a nearly 40% year-on-year decline in quarterly profit. But analysts warn holding the line on costs risks industrial peace. "The movement is on," said John Gradek, a faculty lecturer in supply networks and aviation management at McGill University. ($1 = 1.3855 Canadian dollars) Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
2 hours ago
- Yahoo
SoftBank and Trump may not be enough to save Intel
Intel (INTC) rose roughly 7% on Tuesday, a day after SoftBank Group announced it would take a $2 billion stake in the struggling chipmaker. News of SoftBank's investment follows a Bloomberg report last week that said the Trump administration is considering taking up to a 10% position in the company. Treasury Secretary Scott Bessent confirmed in a CNBC interview Tuesday that the investment would involve the US government converting Intel's grants from the Biden-era CHIPS and Science Act — worth $10.9 billion — into an equity stake aimed at stabilizing the company's US manufacturing business. Bessent did not confirm the size of the stake the government would take. Intel has fallen behind in an industry it once dominated. Its manufacturing division is bleeding cash, just as its legacy computer chip segment forfeits market share to rivals Advanced Micro Devices (AMD) and Qualcomm (QCOM) in the PC space. Intel is also woefully behind AMD and Nvidia (NVDA) in the AI race. The company's market capitalization of $111 billion is less than half of its value in 2021. And CEO Lip-Bu Tan has been forced to lay off 15% of the company's workforce and shelve plans to build plants in Europe. But the troubled chipmaker is the only large-scale US-based leading-edge chip manufacturer, giving it geopolitical significance as the nation looks to reshore semiconductor production. Intel's problems, however, may be too big for either SoftBank or the Trump administration to solve on their own. Intel in need of direction Deutsche Bank analyst Ross Seymore said news of the US potentially taking a stake in Intel, combined with the SoftBank investment, shows that "[Tan] is taking bold actions to solidify Intel's financial and strategic positioning during its ongoing difficult transformation process." Tan became CEO in March after Intel's board ousted former CEO Pat Gelsinger late last year. But others on Wall Street expressed skepticism that those investments would be enough to save Intel from its decline, which resulted from years of missteps. Loop Capital analyst Gary Mobley wrote in a recent note to clients that the support from SoftBank and, potentially, the US government may be "akin to a lifeline with no secure anchor at the other end," because while Intel may be "finding new buyers of its primary equity capital," that may not guarantee it can find customers for its manufacturing business. Gelsinger established Intel's third-party chip manufacturing business, otherwise known as its Foundry, in 2021 as a means of competing with rival TSMC, which produces chips for companies including Nvidia, Apple (AAPL), AMD, and others. But so far, its Foundry business has been a disappointment, struggling to secure customers. While Intel has said it reached agreements to build chips for Amazon (AMZN) and Microsoft (MSFT), the company is still its own largest manufacturing client. Intel's plan includes building chips based on newer technologies, including its 18A and upcoming 14A node design processes, part of Gelsinger's plan for five process nodes in four years. But 18A, which was initially supposed to roll out in the first half of 2025, is now slated to debut in 2026. Bernstein analyst Stacy Rasgon was similarly critical of Intel's cash infusion in his own investor note, writing, "We do not believe that Intel's capability gap has anything to do with money." Rasgon also questioned whether the US taking a stake in Intel would be enough to complete the company's domestic manufacturing expansions. "Intel was originally supposed to get these CHIPS Act funds for free; giving up 10% of the company for them seems worse," he wrote in a note to clients. "And if the goal is to help Intel build substantial US capacity, $10.9B really isn't enough." Moor Insights and Strategy founder and chief analyst Patrick Moorhead told Yahoo Finance that while SoftBank's $2 billion investment and the prospect of a potential US stake are good things, the company would require as much as $40 billion to build out its next-generation 14A technology. Still, getting the US government involved, at least in the short term, could prove to be a boon for the company. "My short-term answer is that the US government is a kingmaker, and they just made Intel the king, and they are going to wrap policy around that to make Intel foundry successful," Moorhead said. If the government sticks with Intel for the long haul, though, Moorhead said it could further complicate the company's development problems, leading to a lack of innovation, inefficiencies, and growing costs. "My hope is that Intel gets back on its feet, it turns itself into a reputable, leading-edge foundry, and the government sells the stake," he said. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at Email Daniel Howley at dhowley@ Follow him on X/Twitter at @DanielHowley. Sign in to access your portfolio
Business Insider
2 hours ago
- Business Insider
The White House just joined TikTok a month before it's set to be banned (again)
A lot can change in a year — just ask TikTok. Last year, the US government took the extraordinary step of voting to ban the popular app used by millions of Americans, citing national security concerns. On Tuesday, the White House became its latest user. The White House TikTok account launched with a video montage of President Donald Trump narrated by the man himself. "Every day I wake up determined to deliver a better life for the people all across this nation," Trump says over images of him with UFC head Dana White, law enforcement officers, and American workers. "I am your voice!" The account's second post featured various shots of the White House during different seasons. The White House joined the app less than a month before it's set to be banned in the US on September 17 unless it's sold to a US buyer, though that deadline has already been extended several times. "The Trump administration is committed to communicating the historic successes President Trump has delivered to the American people with as many audiences and platforms as possible," Karoline Leavitt, White House press secretary, said in a statement to Business Insider. "President Trump's message dominated TikTok during his presidential campaign, and we're excited to build upon those successes and communicate in a way no other administration has before." The White House did not respond to questions about whether the divest-or-ban deadline would be extended again or if a deal was expected by the deadline. Lawmakers in April 2024 voted to ban TikTok unless its China-based parent company, ByteDance, sold its American assets. Some officials cited concerns that sensitive data belonging to American users could end up in the hands of the Chinese government, and members of Congress have said it could be used for Chinese Communist Party propaganda. TikTok has said it does not share data with the Chinese government. The TikTok divest-or-ban law, signed by President Joe Biden last year, gave TikTok until January 19 to sell or risk shutting down. The app briefly went dark that day for US-based users before coming back online, with TikTok crediting Trump for its return. The White House has said the president does not want TikTok to go dark and prefers it be sold. Trump has delayed the divest-or-ban deadline three times since taking office in January. Commerce Secretary Howard Lutnick told CNBC last month that TikTok will go dark again unless China agrees to a deal that will give Americans control over the app. "We've made the decision. You can't have Chinese control and have something on 100 million American phones," Lutnick said, adding that China's decision would be coming "very soon."
