2024-07-25 13:07

July 25 (Reuters) - American Airlines (AAL.O) , opens new tab on Thursday cut its annual profit forecast, citing its previous sales and distribution strategy that drove away corporate travelers and hit its revenue. The Texas-based airline also highlighted an excess capacity in the domestic market that has undermined the industry's pricing power. Its shares were down 5.4% at $9.63 in pre-market trade. Under the previous strategy, American sought to rework its contracts with corporate travel agencies and customers, cutting perks and discounts. It also slashed its sales team. The airline also aggressively pushed a plan that sought to compel customers to make bookings directly, instead of through third-party sites and travel agencies. After the strategy backfired, American fired chief commercial officer Vasu Raja who was spearheading it. CEO Robert Isom promised a reset. Yet, American said the fallout will continue to impact its revenue and earnings through the remainder of the year. While it expects to break even in the current quarter, full-year adjusted profit is now estimated to come in the range of 70 cents per share and $1.30 per share, compared with its previous forecast of $2.25 to $3.25 per share. On Thursday, the airline said it is renegotiating contracts with corporate customers and travel agencies. It is also adding account managers for corporate customers and increasing sales support for agencies. The company said companies and travelers will earn frequent flier miles regardless of where they make their travel bookings. It has reinstated competitive fares in the distribution channel traditionally used by travel agencies and corporate managed travel programs. Isom said the strategy shift will take time to show results, but the company is getting positive feedback from travel agencies and corporate customers. American also scaled down its planned seat capacity growth in the second half of the year to address supply-demand imbalances in the domestic market that are hurting its pricing power. The airline reported an adjusted profit of $1.09 per share, compared with analysts' average estimates of $1.05 per share, according to LSEG data. Its second-quarter total operating revenue rose 2%, to $14.33 billion, but came slightly below Wall Street expectations of $14.36 billion. Sign up here. https://www.reuters.com/business/aerospace-defense/american-airlines-cuts-2024-profit-forecast-pricing-pressure-2024-07-25/

2024-07-25 12:40

JOHANNESBURG, July 25 (Reuters) - Inflation in key sub-Saharan African economies is unlikely to slow to targets even after recent aggressive interest rate hikes as central banks look to reverse those increases, a Reuters poll found. Economies in the region have struggled to mirror the disinflation trend in some parts of the world this year due to weak currencies and high food prices, despite 450 basis points (bps) in rate hikes from Zambia to 1,275 bps in Nigeria over the past two years. The median forecast in the July 17-24 poll in key African economies including Angola, Ghana and Nigeria showed inflation was unlikely to return to central banks' target bands anytime soon. Inflation in Nigeria - Africa's biggest economy - is expected to slow next year to an average of 19.9% from 30.3% this year, still far from its central bank's 6%-9% target range. Nigeria's central bank raised its benchmark lending rate by 50 basis points to 26.75% earlier this week. June's inflation rate was 34.19% in Nigeria and in neighbouring Ghana it was 22.8%. Ghana's rate is expected to slow and average 13.1% next year from 21.1% this year. The Bank of Ghana targets inflation at 8%, with a margin of error of 2 percentage points either side. Authorities in Ghana are expected to finish the year with interest rates 200 basis points lower, with the first 50 basis point cut in its main rate to 28.50% expected on Monday. J.P. Morgan said in a note that in economies such as Nigeria, Zambia and Angola - "calling the inflation peak has become more challenging whilst we still expect a peak within the next 1-2 months". It said the disinflation path that follows will also be quite sticky with risks of more upside than downside. Inflation in Angola is expected to slow to 16.7% next year from 27.5% this year, while in Zambia it is forecast to ease to 11.0% from 14.2%, the poll showed. Cost push pressures, loose fiscal policies and foreign exchange weakness are key factors behind the inflation persistence witnessed in the region, added J.P. Morgan. It was only Kenya where medians in the poll showed inflation quickening slightly next year, to 5.6% from 5.5% this year. However, it is still considered a success story on the continent, with inflation running in single digits similar to South Africa, the continent's most industrialised economy. (Other stories from the Reuters global economic poll) Sign up here. https://www.reuters.com/world/africa/inflation-key-african-economies-unlikely-slow-targets-anytime-soon-2024-07-25/

2024-07-25 12:38

July 25 (Reuters) - Canada's Heliene and India's Premier Energies (PEME.NS) , opens new tab are planning a 1-gigawatt solar cell factory in the United States to satisfy demand for domestically made solar energy equipment. WHY IT MATTERS The U.S. solar manufacturing industry needs a domestic supply of cells, the building blocks of solar panels, in order to make products that can qualify for a generous new subsidy for American-made clean energy equipment. Currently there are no U.S. suppliers of silicon solar cells, and President Joe Biden's administration has been seeking to build up the domestic industry to compete with China. Heliene and Premier Energies expect to begin production at their facility in the second quarter of 2026. The factory will be located in the Minneapolis, Minnesota, area. The facility will supply Heliene's existing U.S. module factories, which are located in Minnesota. KEY QUOTE "Premier Energies has been a valued partner of Heliene's for many years now and we share a commitment to providing the highest-quality, most-reliable products to solar customers. With demand for U.S.-made modules and components growing, now is the perfect time to embark on the next phase of our partnership with this joint venture," Heliene CEO Martin Pochtaruk said in a statement. CONTEXT Solar manufacturers are counting on a new 10% tax credit to project developers when their facilities use American-made panels to drive demand for their products. To qualify for the domestic content subsidy, Biden's Inflation Reduction Act specifies that 40% of the cost of a project's manufactured products, such as solar panels, must be made in the United States. Sign up here. https://www.reuters.com/business/energy/canadian-indian-solar-firms-join-forces-us-cell-factory-2024-07-25/

2024-07-25 12:25

ADDIS ABABA, July 25 (Reuters) - The death toll from landslides in Ethiopia earlier this week has risen to 257 and is expected to almost double, the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) said on Thursday. Heavy rains triggered a landslide burying people in the Gofa Zone of southern Ethiopia on Sunday night and a second one on Monday engulfed those engaged in rescue efforts. "The death toll is expected to rise to up to 500 people as per information received from local authorities," UNOCHA said in a report. On Tuesday, Ethiopia's National Disaster Risk Management Commission had put the death toll at 229. Dagmawi Ayele, an administrator for the Gofa Zone said rescuers had so far recovered 226 bodies, which had been buried after a funeral ceremony, and were searching for 20 more. "It is too dangerous to approach to the site," he said, adding that the rains were continuing on Thursday. Sign up here. https://www.reuters.com/world/africa/death-toll-ethiopia-landslides-rises-257-un-says-2024-07-25/

2024-07-25 12:22

BEIJING, July 25 (Reuters) - The United Nation's Food and Agriculture Organization (FAO) on Thursday called for urgent regional efforts to combat a rise in avian influenza cases across the Asia-Pacific region. "Since late 2023, we have observed a rise in human cases and the virus spreading to new animal species," Kachen Wongsathapornchai, regional manager of the FAO's Emergency Centre for Transboundary Animal Diseases (ECTAD), said in a statement. "The emergence of novel A/H5N1 strains, which are more easily transmissible, increases the pandemic threat. Immediate, coordinated preventive measures are essential." Bird flu spreads to farmed animals from wild birds. The H5N1 strain of avian flu has swept the globe in recent years, killing billions of farmed and wild birds and spreading to tens of mammal species. Australia reported a human H5N1 case in May. Earlier this year, a Chinese woman died from a rare H3N8 subtype of avian influenza, the world's first death from the strain. Australia, where at least 10 poultry farms have been infected, is dealing with three parallel outbreaks of bird flu. Sign up here. https://www.reuters.com/world/asia-pacific/un-fao-urges-urgent-efforts-combat-rise-bird-flu-cases-asia-pacific-2024-07-25/

2024-07-25 12:16

BERLIN, July 25 (Reuters) - German rail operator Deutsche Bahn (DBN.UL) slightly lowered its full-year operating profit and revenue forecasts on Thursday after huge investments in its run-down rail network, strikes and bad weather led to a billion-euro net loss in the first half. The state-owned company said it now expects adjusted earnings before interest and taxes (EBIT) of about 1 billion euros ($1.08 billion) for 2024, after forecasting over 1 billion in March. Revenue is now seen at about last year's level of 45 billion, 2 billion less than previously forecast. Deutsche Bahn reported a net loss of 1.2 billion euros during the first half of this year, confirming an earlier exclusive report by Reuters. It did not provide full-year guidance for its net result. After more than a decade of under-investment, Deutsche Bahn has started massive repair works on its tracks, crossings and overhead lines that will take years and which lead to hefty train delays and cancellations. The German government's introduction of a so-called Germany ticket last year that allows travel on all regional and local trains for 49 euros a month led to a huge spike in passengers and added to the problems. Unprecedented bad weather worsened the already-stretched situation for passenger and freight transport in the January-June period. Workers strikes that snarled rail traffic for several days at a time cost the firm around 300 million euros, it said. Deutsche Bahn said it invested 4 billion euros in its rail networks and services in the first half, a 35% increase over last year. The rail operator sits on 33 billion euros of debt, but the company expects billions in repayments from the federal government under a new state support programme for advance payments on the route renovation. "This funding will have an impact on cash and profits in the second half of 2024," Chief Executive Richard Lutz said without indicating how much money he expected. While Germany's passengers association Pro Bahn denounced "many years of neglect of the railroads by politicians", conservative federal lawmaker Ulrich Lange said Deutsche Bahn's results were a "record of failure" and called for its management to be fired. ($1 = 0.9221 euros) Sign up here. https://www.reuters.com/business/autos-transportation/deutsche-bahn-lowers-2024-forecasts-after-billion-euro-net-loss-h1-2024-07-25/