American Airlines to cancel 115 flights daily over 737 MAX

In a March 13, 2019 file photo, an American Airlines Boeing 737 MAX 8 sits at a boarding gate at LaGuardia Airport in New York. (AP)
Updated 15 April 2019
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American Airlines to cancel 115 flights daily over 737 MAX

  • The global fleet of 737 MAX planes has been barred from flying since mid-March
  • Earlier this week, competitor Southwest Airlines said it would operate its 34 aircraft of the same model starting August 5

WASHINGTON: American Airlines announced Sunday it would scrap some 115 flights per day in the coming months because its fleet of Boeing 737 MAX planes is being grounded until August 19.
America’s leading airline had previously only planned to keep the planes out of commission until June 5, with Boeing facing intense scrutiny after 157 people died in an Ethiopian Airlines 737 MAX crash on March 10 — the second deadly crash involving the aircraft in five months.
The global fleet of 737 MAX planes has been barred from flying since mid-March.
“These 115 flights represent approximately 1.5 percent of American’s total flying each day this summer,” American Airlines chairman and CEO Doug Parker said in a statement.
But he stressed his confidence in the aircraft overall.
“Based upon our ongoing work with the Federal Aviation Administration (FAA) and Boeing, we are highly confident that the MAX will be recertified prior to this time (August 19),” he said.
“By extending our cancelations through the summer, we can plan more reliably for the peak travel season and provide confidence to our customers and team members when it comes to their travel plans.
“Once the MAX is recertified, we anticipate bringing our MAX aircraft back on line as spares to supplement our operation as needed during the summer.”
American Airlines had lowered one of its first quarter indicators in light of the Boeing 737 MAX 8 planes being grounded, along with the partial US government shutdown and technical challenges.
Earlier this week, competitor Southwest Airlines said it would operate its 34 aircraft of the same model starting August 5.


Pakistani central bank lifts interest rate as inflation bites

Updated 20 May 2019
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Pakistani central bank lifts interest rate as inflation bites

ISLAMABAD: Pakistan’s central bank raised its key interest rate to 12.25% on Monday, warning that already soaring inflation risked further rises on the back of higher oil prices and reforms required for a bailout from the International Monetary Fund.
The 150 basis points increase follows a preliminary agreement last week with the IMF for a $6 billion loan that is expected to come with tough conditions, including raising more tax revenues and putting up gas and power prices. It was the eighth time the central bank has increased its main policy rate since the start of last year.
With economic growth set to slow to 2.9% this year from 5.2% last year, according to IMF forecasts, the rate rise adds to pressure on Prime Minister Imran Khan, who came to power last year facing a balance of payments crisis that has now forced his government to turn to the IMF.
Higher prices for basic essentials including food and energy has already stirred public anger but the central bank suggested there was little prospect of any immediate improvement.
Noting average headline inflation rose to 7% in the July-April period from 3.8 percent a year earlier, the central bank said recent rises in domestic oil prices and the cost of food suggested that “inflationary pressures are likely to continue for some time.”

 

It said it expected headline inflation to average between 6.5% and 7.5% for the financial year to the end of June and was expected to be “considerably higher” in the coming year. Expected tax measures in next month’s budget as well as higher gas and power prices and volatility in international oil prices could push inflation up further, it said.
It said the fiscal deficit, which the IMF expects to reach 7.2% of gross domestic product (GDP) this year, was likely to have been “considerably higher” during the July-March period than in the same period a year earlier due to shortfalls in revenue collection, higher interest payments and security costs.
Despite some improvements, financing the current account deficit remained “challenging” and foreign exchange reserves of $8.8 billion were below standard adequacy levels at less than the equivalent of three months of imports.
The central bank said it was watching foreign exchange markets closely and was prepared to take action to curb “unwarranted” volatility, after the sharp fall in the rupee over recent days that saw the currency touch a record low of 150 against the US dollar.
Details of what Pakistan will be required to do under the IMF agreement, which must still be approved by the Fund’s board, have not been announced but already opposition parties are planning protests.
As well as higher energy prices that will hit households hard, there are also expectations of new taxes and spending cuts in next month’s budget to reach a primary budget deficit — excluding interest payments — of 0.6% of GDP.
With the IMF forecasting a primary deficit of 2.2% for the coming financial year, that implies squeezing roughly $5 billion in extra revenues from Pakistan’s $315 billion economy, which has long suffered from problems raising tax revenue.

FACTOID

Pakistan’s economic growth is set to slow to 2.9% this year.