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USA Today
2 days ago
- Business
- USA Today
Major airlines warn credit card fee bill could end frequent flyer rewards
Major airlines warn credit card fee bill could end frequent flyer rewards Show Caption Hide Caption New United Airlines policy means you may need to arrive earlier A new United Airlines policy will require passengers without checked bags to arrive at least 45 minutes before their flight. Major airlines said Monday they oppose a new effort to advance legislation that would reduce fees charged by Visa V.N and Mastercard MA.N on transactions, saying the bill could force them to stop offering rewards credit cards that give consumers frequent flyer miles for making transactions. American Airlines AAL.O, United Airlines UAL.O, Southwest Airlines LUV.N and others including Boeing BA.N, Airbus RTX RTX.N and GE Aerospace GE.N, said in a letter to senators the legislation sponsored by Senators Dick Durbin and Roger Marshall could sharply reduce air travel and harm overall tourism. Also signing the letter were aviation unions. Airlines generate billions of dollars annually in fees for branded credit cards. Durbin has called the airlines "basically credit card companies that own some planes." Airlines successfully defeated efforts in 2023 to pass the measure but it could be attached to a cryptocurrency bill under consideration. Durbin, a Democrat, said previously the measure co-sponsored with Republican Marshall could save merchants and consumers $15 billion annually in fees charge for credit card transactions, while businesses pay more than $100 billion in so-called swipe fees annually. Credit card news: General Motors revamps credit card, changes GM Rewards program to add discounts Durbin and Marshall did not immediately respond to requests for comment. The letter said over 31 million Americans hold airline travel reward cards and 57% of all frequent flier miles and points issued in 2023 were generated by airline credit card use and nearly 16 million domestic air visitor trips were awarded from points earned through use of an airline-branded credit card in 2023. Last year, the Biden administration's Transportation Department opened an inquiry ordering American, Delta Air Lines, Southwest and United to provide records and submit reports to ensure consumers do not face unfair, deceptive, or anticompetitive practices. U.S. carriers relied on these programs, which have tens of millions of members, for revenue and to raise funds during the COVID-19 pandemic when travel demand plunged. Loyalty programs of Delta, United and American were each valued at more than $20 billion in 2023, according to consulting firm On Point Loyalty. Reporting by David Shepardson; Editing by Nick Zieminski
India Today
3 days ago
- Business
- India Today
Air India in talks for another mega aircraft deal with Airbus, Boeing: Sources
Tata Group's Air India is in talks with Airbus and Boeing for a major new aircraft order including some 200 extra single-aisle planes, topping up a mammoth deal in 2023 as the former state carrier pursues a multi-billion-dollar revamp, industry sources order discussions, which two of the sources said could involve hundreds of airplanes in total spread across various sizes, expand on previously reported discussions for a further batch of large wide-body aircraft, they told those talks, Boeing BA.N is edging forward as the front-runner to sell more of its 777X jets, two of the sources said. Air India, Boeing BA.N and Airbus all declined to of a potential new blockbuster order from India's flag carrier emerged as global airline bosses gathered in the world's fastest-growing aviation market for a Delhi industry summit to be addressed by Indian Prime Minister Narendra Modi on India placed a then-record order for 470 planes from both suppliers in 2023 and another 100 Airbus jets last back-to-back plane orders come at a time when aircraft manufacturers are scrambling with supply chain issues leading to severe delays in aircraft delivery and a looming jet new planes is crucial for Air India, which has suffered from years of under-investment under government ownership and is now undertaking an ambitious modernisation plan to recapture market share lost to global of the sources said the potential new narrow-body jet order provisionally involved 200 aircraft, while two others estimated the volume in the timing of any deal was not immediately clear and one source said pricing could be a stumbling block as Air India seeks to emulate deals by India's largest carrier IndiGo, which announced new partnerships and a top-up Airbus order on aircraft orders typically take months of closely held talks to negotiate, with any Boeing and Airbus components usually being announced aviation market is expanding at some 7% a year, according to Airbus forecasts. But analysts say its growth remains hampered by weak infrastructure, especially as it looks to connect hinterlands to bigger the eve of the airline meeting in the Indian capital, the International Air Transport Association of 300 global carriers said the country's airlines were poised to demonstrate continued rapid growth, clouded by expensive fuel costs and high Reel
CNBC
01-05-2025
- Business
- CNBC
Ryanair threatens to cancel huge Boeing order if tariffs raise prices: Reuters
Ryanair on Thursday threatened to cancel orders for hundreds of Boeing aircraft if a U.S.-led tariff war leads to materially higher prices, and said it could look at alternative suppliers, including Chinese planemaker COMAC. The threat by Europe's largest low-cost carrier and one of Boeing's biggest customers was the latest sign of a potential reordering of the global aerospace industry if U.S. President Donald Trump does not exempt the sector from his tariff plans. But with COMAC not yet certified in Europe and Boeing's main rival Airbus saying it is sold out through the rest of the decade, Ryanair may find it hard to follow through on its threat, one industry source said. In a letter to a senior U.S. lawmaker, Ryanair's chief executive Michael O'Leary said Trump's tariffs could threaten 330 Boeing 737 MAX aircraft that his airline has on order, which have a list price of more than $30 billion. "If the U.S. government proceeds with its ill-judged plan to impose tariffs, and if these tariffs materially affect the price of Boeing aircraft exports to Europe, then we would certainly reassess both our current Boeing orders, and the possibility of placing those orders elsewhere," O'Leary said. The letter, seen by Reuters, was a response to a warning by U.S. Representative Raja Krishnamoorthi, a Democrat from Illinois, about the security implications of Ryanair following through on an earlier suggestion it might consider a COMAC order. Boeing was not immediately available for comment. The threat to cancel orders marked a hardening of tone from O'Leary, who in April had threatened to delay deliveries. In March he said that Boeing executives had privately expressed confidence that aircraft would be exempted from Trump's tariffs. Aircraft industry sources say Boeing and Airbus contracts do not include any provision for tariffs, since the industry has for decades operated without them. Tariffs only become due once ownership of the aircraft has passed to the purchasing airline and the contract has been completed. Most aircraft purchase contracts include a clause requiring all sides to pay their own taxes without explicitly mentioning tariffs, the sources said. But many aerospace companies are said to be reviewing the wording of contracts for future deals on the assumption that trade turbulence will remain for some time. O'Leary's comments in the letter may in part be a tactical intervention ahead of a period of potentially tough negotiations with Boeing behind the scenes, the industry sources said. O'Leary said in the letter the Irish airline has not had any discussions with COMAC about aircraft purchases since about 2011 but that it would "of course" consider it if they were 10%-20% cheaper than Boeing's main rival Airbus Airbus, which is Boeing's only competitor for large single-aisle aircraft that are currently certified in Europe, has repeatedly said it is sold out through the rest of the decade. No Western airline has bought a COMAC plane. The Chinese company has applied for certification for its C919 jet in Europe but not in the United States. The C919 jet is around 150 seats or up to around 190 in dense layouts, smaller than the Boeing planes Ryanair currently flies and the MAX 10, which make up most of the planes it has on order, which can seat up to 230. Ryanair's threat comes as Boeing is looking to resell potentially dozens of planes locked out of China by tariffs after repatriating a third jet to the United States in a delivery standoff that prompted more criticism of Beijing from Trump. It is rare for airlines to cancel airplane contracts rather than delay delivery because of the small number of suppliers and the risk of returning to the back of the queue for capacity, dampening growth, analysts say. And attempts by airlines to cancel contracts are typically resisted by planemakers, who can cite a list of excusable factors like supply chain delays, according to industry sources and previous court filings.
The Independent
11-04-2025
- Business
- The Independent
Major airline slashes economy fares on transatlantic travel
Air France is cutting economy ticket prices on transatlantic flights amid weakening demand, according to the airline's chief executive. Ben Smith acknowledged a "slight softness" in economy-class fares, contrasting with the "relative stability" seen in premium cabins, in an interview with Bloomberg TV. While the airline hasn't yet adjusted its flight capacity, Smith expressed concern about the potential impact of a broader economic downturn. He noted that the travel industry is often among the first to feel the effects of economic downturns, describing the current situation as "uncharted territory". The price cuts appear to be a strategic move to maintain full planes despite the softening demand. Air France confirmed that Smith had made the comments. Shares of European airline groups have plunged after US President Donald Trump revealed on April 2 his "reciprocal" tariff plan that included an imposition of 20 per cent tariffs on European Union products such as Airbus planes. The EU is set to launch its first counter-measures against Trump's tariffs next week. Air France last month launched a new first-class suite as it expands efforts to lure wealthy travellers. Mr Smith said the new investment aimed to place the company at the top of the European league in airline luxury, signalling a battle with British Airways and Lufthansa. "A large percentage of the customers are flying for business reasons ... Many of them have the choice of a private jet or flying in first class," Smith said in an interview. "What is new for us over the last few years is a marked increase in the number of luxury customers that are flying for leisure purposes." The air travel industry is locked in a battle for high fare-paying customers as it recovers from the pandemic but is split over the value of investing in first class, with many carriers focusing on steady improvements in business-class seating.
Zawya
14-03-2025
- Business
- Zawya
Europe's top money managers start to bring defence stocks in from the cold
LONDON - European asset managers are reconsidering their policies on investing in defence, under pressure from clients and some politicians to loosen restrictions and help fund the continent's race to re-arm. Under European Union rules, a number of funds badged as sustainable need to ensure their investments 'Do No Significant Harm'. Many have avoided the sector entirely, with even engine maker Rolls Royce RR.L and Airbus which has a big commercial aviation division, judged off limits. But as the EU now seeks around 800 billion euros ($870 billion) of investment to bolster defence after U.S. President Donald Trump said Europe must take more responsibility for its own security, the sector is too important to ignore. Britain's largest investor Legal & General LGEN.L is among those planning to increase exposure to defence, saying the sector's appeal has "risen dramatically" amid deeper geopolitical tensions, Reuters reported on Thursday. Some of Europe's largest fund groups have separately begun to review their policies at board level, people familiar with the companies told Reuters, although the complexity and controversial nature of rewriting sustainability policies to include arms makers make the process tricky, the people said. Switzerland's UBS Asset Management UBSG.S told Reuters it was reviewing defence sector exclusions across funds while Mercer, a leading consultant to pension funds, said investors were asking asset managers to include defence in portfolios, including those with sustainability aims. The EU's spending boost has sent European aerospace and defence stocks including Germany's and Italy's Leonardo to record highs along with the sector index .SXPARO - and left investors without exposure ruing missed opportunities. "Some (asset managers' clients) are saying, we actually think it's important that... Europe be able to defend itself. And so we'd actually like you to make investments in this sector," said Rich Nuzum, global chief investment strategist at Mercer, which advises investors managing $17.5 trillion of assets. Exclusions on investing in controversial weapons – such as cluster munitions and biological weapons – are widely held and informed by international treaties. EU and UK rules do not ban investment in most other defence companies, but an investor focus on environmental, social and governance (ESG) helped dissuade big asset managers from doing so, like with tobacco. "We're coming to a point where the atmosphere is that if you rule out defence, you're the one who has to explain, not the other way around," said Carl Haglund, CEO of Finnish pension and insurance group Veritas and ex-defence minister of Finland. Reuters contacted 10 of Europe's largest asset managers to ask if they were reviewing their policies. As well as UBS, Allianz Global Investors said it was reviewing its exclusions, but that the timing was coincidental. France's BNP Paribas reiterated its commitment to defence. Amundi and Schroders SDR.L said their policies were unchanged, while DWS HSBC Asset Management HSBA.L and Insight Investment declined to say if their exclusions were under review. The global head of listed assets at Mirova, a smaller Natixis-owned manager, said rearmament efforts and Europe's rising security threats compelled the firm to reconsider its "cautious stance" to defence as it seeks to balance ethical considerations with a need for robust defence capabilities. But Herve Guez noted the complexity of backing arms makers, highlighting problems around the risks that certain weapons end up in "controversial" countries. POLITICAL PRESSURE British politicians last week urged investors to support the military sector and France has floated removing ESG-related curbs on defence loans. Norway's central bank chief has said ethical investing standards may need to change. Clients have begun asking about defence because companies like Rolls-Royce are "completely excluded from our investments", said Siobhan Archer, global stewardship lead at LGT Wealth Management, part of the private banking group of the Princely Family of Liechtenstein. LGT is looking "really closely" at what to do, Archer added. Some fund managers are sceptical. Carmignac's head of sustainable investing, Lloyd McAllister, said it was wrong to blame ESG funds for thwarting investment into defence, with most traditional funds - which hold far more in assets - including its own, able to invest. Sustainable funds, he said, were for where "the positive benefit is much more visceral than a load of weapons sat in a warehouse". Other investors are capitalising on an opportunity. WisdomTree this week launched what it called the first European defence exchange traded fund. Tom Vile Jensen, deputy director of trade body Insurance & Pensions Denmark, told Reuters he expected the country's retirement and pension groups to drop most remaining bans on defence investment. There are signs sustainability-minded funds are rowing back. European asset managers held 1.1% of their portfolios in aerospace and defence at the end of 2024, up from 0.7% two years earlier, Morningstar data showed. ESG fund holdings rose to 0.5% from 0.4% a year earlier, the data showed. Barclays analysts this week said the ESG underweight in defence had fallen "markedly" since last year. "We will go along with a more positive stance (on defence), it's inevitable if you consider the geopolitical situation," Legal & General's CIO Sonja Laud said. ($1 = 0.9228 euros)
