Accounts – Fun With Justin http://funwithjustin.com/ Fri, 28 May 2021 11:13:38 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://funwithjustin.com/wp-content/uploads/2021/05/fun-with-justin-icon-150x150.png Accounts – Fun With Justin http://funwithjustin.com/ 32 32 RBA keeps cash rate stable at record 0.10% https://funwithjustin.com/rba-keeps-cash-rate-stable-at-record-0-10/ Wed, 07 Apr 2021 23:16:23 +0000 https://funwithjustin.com/rba-keeps-cash-rate-stable-at-record-0-10/

Despite the the fastest rise in house prices in 32 years, the Reserve Bank of Australia must keep the historically low interest rate of 0.10%, it announced after its monthly meeting on April 6.

Good news for first-time homebuyers trying to break into the market and continually encouraging investors to return, RBA Governor Philip Lowe has indicated he is determined to resist calls to raise the rate in order to to cool overheated real estate prices.

“It’s all about ‘stability as you go,” said Matthew Hassan, senior economist at Westpac. “He’ll want to get us through the end of JobKeeper and JobSeeker… and make sure everything else goes well.”

“At this point, he wants to keep the economy as a whole in a delicate area and doesn’t want to shake part of it from a distance. The economy is doing well, the vaccine rollout looks good and the virus is not raging here. He can play a more nuanced role later in the year when we get through that time.

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Australian Prudential Regulation Authority (APRA) Chairman Wayne Byres has previously said that trying to curb rising house prices is not his role, and at the moment he does not see the national leap in 2.8% in March on Core Logic figures – with Sydney prices skyrocketing 3.7 percent and prices in Melbourne 2.4 percent – like any threat to financial stability.

With this kind of narrow tenure and the RBA’s broader wishlist of factors such as a stronger job market and wage growth, the decision not to raise interest rates was not a decision. surprise.

AMP Capital’s chief economist Dr Shane Oliver said he believed Mr Lowe would also like to see an inflation rate of between two and three percent, rather than his current rate of around one percent .

“But it just might be the lull before the storm,” said Dr Oliver. “You never know if there might be a more choppy sea with another rise in bond yields, like before, and some clouds looming on the horizon, like an acceleration in headline inflation or the boom. real estate which is accelerating and putting increased pressure on the RBA and APRA.

“We are already seeing headline inflation climbing to maybe 3.5 or 4% with the consumer price index coming back due to the fact that child care costs are no longer covered, the excise tax goes up and gasoline prices go up. And they will keep an eye on the housing market because they don’t want to see any deterioration in lending standards. “

Decisions would also need to be made on when quantitative easing might end before any interest rate changes can even be considered, said Tim Reardon, chief economist for the Housing Industry Association.

But for now, the low interest rate is helping to stimulate the market, as are improving economic conditions, rising confidence levels, government incentives and the lack of supply.

“This price hike will eventually act as a shock absorber for first-time home buyers who currently represent 43 percent of the market,” Reardon said. “But as capital growth improves and rents rise, we’ll see investors come back.

“We are also witnessing a demographic change in the country, with a distance from apartments and capitals with the restriction of migration abroad and the decline in employment in the hospitality sector and in the number of students. , and an increase in the popularity of single-family homes in residential areas, as people want more space. “

First-time home buyers are, therefore, moved away from the inner suburbs of cities, to the outer suburbs or regions, as unaffordability gradually eliminates the benefits of low interest rates and subsidies.

As investors grapple with uncertainty, Australian Real Estate Institute chairman Adrian Kelly said first-time homebuyers were making hay while the sun was shining.

“On the bright side for them, there’s also a bit of talk about ‘easing’ loan restrictions, and we’ve had a few conversations with the federal government about it,” he said.

If the market gets too hot, many onlookers are convinced that banks will self-regulate because they don’t want to be overexposed on their loans. And after the Royal Commission, Mr Kelly said, they are behaving much more responsibly, such as with their decision to suspend mortgage payments on COVID-19.

“Most importantly, the difficulty we are facing right now is a supply issue,” he said. “In a normal market, you have a happy seller and a happy buyer. Now you have a happy seller and a happy buyer … and 19 frustrated and unhappy unhappy buyers. We just need to build more houses. “


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What do we know about student loans? Less than you think https://funwithjustin.com/what-do-we-know-about-student-loans-less-than-you-think/ Wed, 07 Apr 2021 23:16:08 +0000 https://funwithjustin.com/what-do-we-know-about-student-loans-less-than-you-think/

Despite the fact that almost 1 of 5 American adults grapple with student loan debt – a total of $ 1.5 trillion – little is known about the various often treacherous paths borrowers take as they move toward repayment. The landscape remains such a mystery as public data on student loans is limited.

This lack of transparency may seem impossible to apprehend, in particular because securities about Student ready became omnipresent during the last years. But much of the information available to researchers, policy makers and the public comes from data surveys, colleges, Nonprofit, and credit bureaus, which provide snapshots of borrowers’ experiences rather than the full story. As a result, the public is largely unaware of what student loan repayment looks like for millions of Americans.

Little is known about how borrowers move through higher education and into and out of repayments. Are students more likely to default when they attend multiple schools? How soon after repayment begins do borrowers change their repayment plans? Do borrowers who are in default fail through delinquency after delinquency, or do they make a direct attempt to default?

These questions cannot be answered with public data. The absence of these data not only hinders the collective understanding of student debt, but also allows inaccurate accounts such as the assumption that highly indebted borrowers are those most in difficulty. This could lead students to do misinformed borrowing decisions and the political decision-makers to propose ineffective reforms.

The Department of Education could fix this – and quite simply. The Federal Office for Student Aid (FSA) holds over 56 billion records on federal student loans in the National Student Loans Data System (NSLDS). Although researchers sometimes use Limited NSLDS data to provide an overview of the federal student loan portfolio, the data is never used to trace the path of students through repayment, even though all the necessary information is stored in the system. FSA May Release NSLDS Data without much effort but seems to lack the will to do so. Ultimately, he can take action from Congress to force the regular release of student-level data that can help everyone understand the state of federal loan repayment and what’s at stake if things don’t change. not.

Why is the data on student loans so poor?

The systems that house student aid data were built in a different era, before the expansion of federal education loans. As federal programs were created, new data systems emerged, forming a network of administrative data systems that house billions of aid data records on millions of students, some of which date back over 30 years.

In the meantime, other datasets have been brought together to answer policy-relevant questions. But this data suffers from three shortcomings: 1) It almost always reports highly aggregated results rather than data on individual borrowers. Therefore, it is impossible to understand how, for example, the repayment experiences of low-income students differ from those of high-income students; 2) Most of the more detailed data are published infrequently, which means that the most recent information available is almost always out of date; and 3) student loan data is almost always static and accessed at some point. They cannot be used to understand, for example, the paths taken by student borrowers between leaving school and paying off their loans in full.

Borrowers Struggle When Decision Makers Are Left Blind

With such poor public data on student loans, policymakers are more likely to base their proposals on anecdotal observations or conventional wisdom rather than research. The repayment of student loans poses significant problems that the data currently available does not address. Below are three of the many areas of student loan borrowing and loan repayment where making NSLDS data available would be invaluable to policy makers looking for ways to improve borrower repayment processes.

Information on who uses income-based repayment plans, their monthly payments, and income

  • What we know: FSA Data Center publishes information on the number of borrowers using Income-Based Repayment Plans (IDRs), which allow borrowers to pay a certain portion of their income each month towards their student loan balances.
  • What we don’t know: The published data does not say anything about the lifespan of borrowers in these plans, the balances of borrowers in these plans, the default rates of borrowers who use these plans, the amount that borrowers in these plans pay monthly, and those who use the plans. There is also no demographic data on borrowers who participate in IDR plans.
  • Why is this important: There is significant interest in reduce the number of IDR plansbecause there are several options available to borrowers and it is not known which plans work best for borrowers in distress. But the lack of data on who uses them and for how long makes it difficult to determine which reforms would benefit and do the most harm.

Data on borrowers who default, such as the number of payments they make and the deferrals they use

  • What we know: Recently published data shows that 27% of borrowers who started college in 2004 defaulted within 12 years of starting repayment. The majority of these borrowers did not graduate or obtain a certificate. The majority were also enrolled in a community or for-profit college. The data also shows that African American borrowers, in particular, have high default rates, even when they get a bachelor’s degree.
  • What we don’t know: Little is known about the paths borrowers take to default. The available data does not provide information on the number of payments borrowers make or the number of deferrals or abstentions they use before defaulting. It is also unclear how many borrowers go through periods of delinquency and never default, and the available data gives no insight into current loan manager default rates.
  • Why is this important: Policymakers cannot expect to improve student loan repayment processes if they use the best assumptions or worse, baseless assumptions about why borrowers do not repay their debt. A better understanding of how borrowers process repayments, including in the event of default and in the event of default, could indicate how best to smooth out sticking points for vulnerable students.

An overview of repayment pathways, including the time it takes borrowers to repay their loans

  • What we know: The standard repayment plan, which offers borrowers a fixed monthly payment over a 10-year period, is the most common path to repayment. Full refund, however, probably takes longer than that, since 70% of borrowers use a stay or forbearance at some point during the refund process.
  • What we don’t know: The available data does not show how long it takes borrowers to fully repay their loans. Re-enrollment, defaults, deferrals, defaults, and underwriting other repayment plans can all cause borrowers to pay for a longer period, but it is not known how long these events prolong the loan period. repayment, how often borrowers each experience it and how much more they pay in the long run.
  • Why is this important: With more and better information on repayment trajectories, policymakers could better understand how various repayment tools are serving borrowers’ circumstances and whether there are appropriate options for all types of borrowers. Additionally, it would allow policymakers to better understand whether current and proposed accountability measures – such as cohort default rates and repayment rates – are valid benchmarks.

FSA already has better data, but congressional push needed to make it available

The FSA periodically publishes summary tables using NSLDS data, proving that the dataset is capable of answering important questions. But these tables cannot be combined with each other, which leaves little room for drawing more precise conclusions.

The FSA has developed tools to allow more flexible internal analyzes of NSLDS data. In 2004, he built the Enterprise Data Warehouse and Analytics, a system which pulls a representative sample of NSLDS records to allow new perspectives on borrowing and repayments. However, the FSA does not make this data available to the research community or the public, even though federal law does not prevent it from doing so.

If the FSA regularly published a representative sample of NSLDS, it would provide researchers, policy makers and the public with reliable and up-to-date data on borrowers’ journeys through repayment. And if this data were compared with data from other federal agencies, such as the Treasury Department, the Department of Health and Human Services, and the Department of Defense, there would be more comprehensive information on borrower income. students, relying on federal resources. public benefits tested, or how the military fare on reimbursement.

Pressure from US Secretary of Education Betsy DeVos or Congress could push the FSA to release this data. The former secretaries were hesitant to push FSA, however, so it seems unlikely that Secretary DeVos will change course. And although Congress has historically been reluctant to call for more data – and even actively banned a national student-level data system in 2008 – there was recent bipartisan efforts remove this ban and improve the collection and publication of federal data.

Congress does not need stand-alone legislation to make a sample of NSLDS available to the public. He could add the provision to a budget bill, ensuring continued availability of data in the future. This would provide real value to Congress and alleviate some of the Department of Education’s analytical burden, which would be a valuable proposition for anyone invested in improving borrower outcomes.

Colleen Campbell is Associate Director of Post-Secondary Education at the Center for American Progress.


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Recovery loans of up to £ 10million available for businesses in need of support https://funwithjustin.com/recovery-loans-of-up-to-10million-available-for-businesses-in-need-of-support/ Wed, 07 Apr 2021 23:15:53 +0000 https://funwithjustin.com/recovery-loans-of-up-to-10million-available-for-businesses-in-need-of-support/

State-guaranteed loans of up to £ 10million are to be made to businesses that need support until the end of the year.

As announced in the budget last month, Chancellor Rishi Sunak opened the Treasury Stimulus Loan program to revive businesses as old Covid-19 loan programs are set to run out.

From Tuesday April 6, the new fundraising initiative will replace the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and its big brother CLBILS.

The Treasury has pledged to cover 80% of what banks lend if companies don’t repay their loans.

Mr Sunak said: “We have stopped at nothing to protect jobs and livelihoods throughout the pandemic and, as the situation evolved, we have ensured that our support continues to respond to business needs.

“As we safely reopen parts of our economy, our new stimulus loan program will ensure businesses continue to have access to the financing they need as we emerge from this crisis.”

Businesses will be able to access loans ranging from £ 25,001 to a maximum of £ 10 million.

Bill and asset funding will be available from £ 1,000, according to the Treasury.

The new plan, which runs until December 31, benefits from the same government guarantee as CBILS and CLBILS, but is less generous than the 100% guarantee for BBLS.

It will be administered by the British Business Bank, with loans available through a “diverse network of accredited commercial lenders,” officials said.

Companies will be able to lend up to £ 10million thanks to the new turnaround program (Victoria Jones / PA)

Interest rates have been capped at 14.99% and ministers are urging lenders to ensure that rates are kept low in an effort to ensure business owners pay less than the cap.

The recovery loan program can be used as an additional loan in addition to the support received from emergency programs put in place last year.

Bounce loans were first unveiled at the end of April last year and became available to businesses days later in early May.

With higher collateral and less stringent lender controls, Bounce Loans have proven to be by far the most popular of the three programs, both in terms of number of loans issued and total amount loaned.

As of February 21, more than 1.5 million businesses had received a loan totaling £ 45.6 billion, and another half a million had applied.

The BBLS was intended to quickly channel cash from banks to small businesses, up to £ 50,000 each. The government has given a 100% guarantee on the loans to ensure that the banks are not reluctant to lend.

BBLS, CBILS, CLBILS and the Bank of England’s Covid Business Finance Facility have between them provided tens of billions of pounds in loans to UK businesses.

Business Secretary Kwasi Kwarteng said, “We are doing all we can to support businesses as we carefully reopen our economy and reclaim our way of life.

“The launch of our new Stimulus Loan program will provide businesses with a solid foundation on which to plan, protect jobs and prepare for a safe reopening as we rebuild better after the pandemic.”


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Biden’s $ 2T plan sees massive infrastructure investment as Hill’s battle begins https://funwithjustin.com/bidens-2t-plan-sees-massive-infrastructure-investment-as-hills-battle-begins/ Wed, 07 Apr 2021 23:14:12 +0000 https://funwithjustin.com/bidens-2t-plan-sees-massive-infrastructure-investment-as-hills-battle-begins/

President Joe Biden’s $ 2 trillion infrastructure plan would invest $ 621 billion in transportation infrastructure and be funded by an increase in the corporate tax rate, among other measures.

Biden released the U.S. Jobs Plan on Wednesday morning as lawmakers begin efforts to legislate on an infrastructure package in the coming months. To pay for parts of the plan, Biden proposed a Made in America tax plan to set the corporate tax rate at 28% from 21%.

This is the first of two bills, the second focusing on free access to community colleges, universal preschool and others. Municipal bond provisions were not mentioned in Biden’s plan, but stakeholders expect those details to be considered in Congress and most expect there to be a protracted battle. between the two parties on how to pay all arrangements.

President Joe Biden released his $ 2 trillion infrastructure plan on Wednesday.

Bloomberg News

“We didn’t expect many financing details to be released in this project and this was confirmed today,” said Brett Bolton, vice president of federal legislative and regulatory policy at Bond Dealers of America. “What we’re looking for are our friends on Capitol Hill to take on this role and really start looking for financing options that include a strong effort to include municipal bond market priorities.

How the bill or bills reach Congress is also uncertain. Republicans are against raising taxes and Democrats want a massive new infrastructure package that demands it.

The possibility of a reconciliation bill still looms.

Reconciliation is a tool that allows lawmakers to bring levels of taxation and spending into line with levels set in a budget resolution. It can only be used twice this year and has already been used to pass COVID relief this month.

Raising the corporate tax rate to 28% from 21% – the rate set by the 2017 Tax Cuts and Jobs Act – like any tax increase, will face repression from the Republicans .

And this week, Three House Democrats have said they will not support any of Biden’s tax hikes unless the plan includes a repeal of the $ 10,000 cap on state and local tax deductions.

In a divided Congress, this could block legislation.

However, key players in the House and administration have expressed support for the municipal bond provisions.

House Ways and Means Committee Chairman Richard Neal, D-Mass., Told BDA he plans to push through an infrastructure package for his committee by late spring or early summer.

Neal also reiterated his support for specific provisions on municipal bonds such as tax-exempt prepayments, the expansion of PABs, the reinstatement of direct-payment bonds that would be exempt from sequestration and the increase in the cap for tax-free prepayments. small borrowers for the amount of tax exemption. bonds that they can issue in a year and remain eligible for sale to banks with favorable banking status.

U.S. Transportation Secretary Pete Buttigieg said many provisions on municipal bonds hold promise, such as increasing the federal cap on private activity bonds, returning a pay-out bond, and reinstating the tax-exempt early repayment.

“Having a leadership like that in administration, working with the leaders on the Hill, really helped point them in the right direction and really reassured that Bonds will get a good chance in the deliberations over the next few months. ”Bolton said.

Home Transportation and Infrastructure Committee Chairman Peter DeFazio, D-Ore., Backed Biden’s plan.

“In announcing this plan, President Biden took the conversations I had with him, Vice President Harris and Secretary Buttigieg, and he put those words into action,” DeFazio said. “The U.S. Jobs Plan will not only make bold and transformational investments in our nation’s transportation and infrastructure, it will do so with a focus on creating well-paying jobs, supporting U.S. manufacturing. , investing in rural and urban communities, and addressing the greatest challenge of our time, the climate crisis.

“I’m intrigued to see how the Hill reacts and I guess they’ll be looking to the fundraising part of that soon,” Bolton added.

The National Association of State Treasurers wants to discuss funding tools to support Biden’s infrastructure plans with the administration and Congress.

“We remain particularly focused on efforts to reinstate tax-exempt prepayment obligations as part of any infrastructure package going forward,” said Shaun Snyder, Executive Director of NAST.

Among the details of the plan, it would modernize 20,000 miles of highways, roads and streets, repairing thousands of small bridges along the way. Biden also wants to replace thousands of buses and rail cars, renew airports, and expand transit and rail to new communities. Biden proposed an increase of $ 115 billion to modernize highways, streets and bridges.

Biden’s plan also calls on Congress to invest $ 85 billion to modernize existing transit to meet passenger demand.

“This investment will double federal public transit funding, reduce the repair backlog and bring bus, bus rapid transit and rail services to communities and neighborhoods across the country,” they said. written.

Congress is also expected to invest $ 25 billion in airports, including funding for the Airport Improvement Program, or AIP, the Biden administration said, as well as $ 17 billion in inland waterways, coastal ports. , land ports of entry and ferries.

The American Association of Port Authorities supported Biden’s plan.

“Investments in port infrastructure support growing opportunities across the national economy and ensure continued global competitiveness,” AAPA said. “US ports look forward to working with President Biden and bipartisan leaders in Congress to advance significant investments in our nation’s infrastructure.

Airports Council International noted that the airports were underfunded, adding that this had created a backlog of $ 115 billion in projects.

“As we roll into the brighter days ahead, US airports are ready to take off,” said Kevin Burke, President and CEO of ACI-NA. “These much-needed funds will help America’s airports rebuild and create jobs that will support a vibrant 21st century economy.”

Clean water was another focal point of Biden’s sketch with a plan to phase out all lead pipes and service lines that can be paid for by investing $ 45 billion in the State Revolving Fund for the drinking water from the Environmental Protection Agency and in improving water infrastructure for the Nation Act.

State revolving funds act as infrastructure banks by providing low-interest loans for water infrastructure projects. As the money is returned to the state revolving credit fund, the state makes new loans for other projects. These recycled payments of loan principal and interest income allow the government fund to “spin” over time.

Biden wants to invest $ 100 billion to modernize and build new public schools, through direct grants and $ 50 billion in bonds.

The Government Finance Officers Association was encouraged by the fact that Biden’s proposal seeks to invest in public transit, water and broadband.

“We recognize that the process of turning this proposal into legislation has yet to happen. We therefore hope that as this effort begins, our federal partners recognize the importance of protecting tax-exempt municipal bonds given that this is a tool with a long history in infrastructure investments. . Said Michael Belarmino, senior policy adviser to GFOA.

Biden will speak more about his plan later Wednesday at an event in Pittsburgh. “The President looks forward to working with Congress and will come up with additional ideas in the coming weeks to reform our tax code so that it rewards work, not wealth, and ensures that the highest income earners pay their fair share, ”his administration wrote.


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Discount Airlines Taps Stock Market As Investors Bet On Resumption Of Travel https://funwithjustin.com/discount-airlines-taps-stock-market-as-investors-bet-on-resumption-of-travel/ Wed, 07 Apr 2021 23:14:12 +0000 https://funwithjustin.com/discount-airlines-taps-stock-market-as-investors-bet-on-resumption-of-travel/

As air travel increasingly shows signs of rebounding from its pandemic low, airlines that focus on offering cheap fares to leisure travelers are capitalizing on the stock market.

Frontier Group Holdings Inc.’s initial public offering raised $ 570 million after shares of the Denver-based budget carrier were valued at $ 19 each. Sun Country Airlines Holdings Inc., which largely flies the Midwest to sunny vacation spots, raised more than $ 250 million when it went public in March.

US airlines lost some $ 35 billion last year, and most are still losing money. But stock offers are a sign that investors are betting that some of the industries hardest hit by the pandemic are ready to bounce. Airports are busier than they’ve ever been in the past year with busy spring break traffic, and airlines say summer bookings have resumed.

In the latest sign of an expected upturn in travel,

United Airlines Holdings Inc.

plans to restart the pilot hiring process it interrupted last year, the company told Pilots in a memo.

Airports in Paris and Singapore, along with airlines such as United and JetBlue, are experimenting with apps that verify travelers are not Covid before boarding. WSJ visits an airport in Rome to see how a digital health passport works. Photo credit: AOKpass

United plans to start with 300 pilots who received conditional job offers last year or whose new hire training was canceled during the pandemic. The hiring was first reported by CNBC. Some other airlines have also said they plan to hire this year.

Frontier and Sun Country all say they will benefit as vaccinations accelerate and spark an increased appetite for travel.

“The vaccine is unleashing the demand that we are seeing across the country,” said Barry Biffle, Managing Director of Frontier, in an interview.

Yet another wave of infections, rising fuel prices and fierce competition for the same pool of travelers all present challenges. Frontier stocks slipped in their market debut on Thursday, falling 15 cents to $ 18.85. The stock trades on the Nasdaq under the symbol ULCC, an industry acronym for the Ultra Low Cost carrier.

Airlines have had little trouble raising funds during the pandemic, despite industry struggles. With U.S. government grants and loans boosting investor confidence in the ability of carriers to weather the lean months, airlines were able to sell stocks and mortgage everything from planes to frequent flyer programs to bring in billions of dollars in. cash.

Today, Frontier and Sun Country hope to return to the rapid growth trajectory they followed before the pandemic struck.

“We’re ready to add capacity to a recovery,” said Jude Bricker, Managing Director of Sun Country, in an interview. “This money is intended for growth, for the purchase of planes and for the hiring of personnel,” he said of the cash raised as part of the public offering.

Neither company escaped the pandemic unscathed. Frontier lost $ 225 million in 2020 after posting a profit of $ 251 million in 2019. Sun Country lost $ 3.9 million in 2020, just one year after a financial turnaround propelled the small airline at a profit of $ 46 million in 2019.

Things change. Frontier said its operation generated cash in March. Sun Country said it repaid a government loan taken out in October.

John F. Kennedy International Airport Terminal 5 last Friday. Airports are busier than they have ever been in the past year.


Photo:

Angus Mordant / Bloomberg News

In times of economic crisis, slim budget airlines are often able to seize opportunities while traditional carriers with complex international networks, expensive hubs and high overheads need to cut back.

So far, this upturn in travel is playing on the strengths of discounters. Travelers who travel to see family and friends in the United States or to nearby vacation spots like the Caribbean are much faster to return than business and international travelers who have traditionally been the mainstays of major global airlines. .

Many of these major airlines have also borrowed heavily to survive the pandemic. They will likely have to charge higher rates to cover the additional interest payments, said Helane Becker, an analyst at Cowen & Co. That could be an advantage for more agile low-cost airlines it didn’t go so deeply into debt last year.

Yet the competition is likely to be fierce. Competitive discounters like

Spirit Airlines Inc.

and

Allegiant Travel Co.

start adding more routes. Spirit announced service to Puerto Vallarta, Mexico on Wednesday, the ninth new destination the airline has added to its network since the start of the pandemic.

Big airlines are also looking to the increasingly crowded domestic market. United announced plans to fly last week more than two dozen of new national roads. Many of these routes are the type of flights that ultra-low cost carriers typically dominate, including from Midwestern cities that bypass major hubs and go directly to vacation destinations.

United chief executive Scott Kirby said this week the airline’s indoor leisure activities were almost back to normal.

American Airlines Group Inc.

said this week that its domestic flights were 80% full and that the previous week’s bookings were almost back to pre-pandemic levels. He plans to get nearly all of his jets back to work this summer.

In the meantime,

Delta Airlines Inc.

said on Wednesday that he will start to occupy the middle seats in May after blocking them for over a year for social distancing purposes, a move that will immediately increase Delta’s carrying capacity.

Frontier CEO Mr Biffle said he was confident the demand was more than enough. “Everyone has been locked up for a year now,” he said.

Indigo Partners LLC, a private equity firm run by longtime airline investor William Franke, bought Frontier in 2013 after Mr. Franke failed to persuade Spirit Airlines, where he was chairman, of the buy.

Mr. Franke and Mr. Biffle, a former Spirit executive, cut costs and rebuilt Frontier on the model of billing extremely low fares, while also collecting fees for additions like carry-on baggage and the allocation of seats in advance. The airline has grown rapidly. It flies to 110 airports, up from 61 in 2017. Frontier made plans for an IPO that year, but didn’t pull the trigger and finally cut the offer last summer in the middle of the air rout.

Sun Country was also in the midst of a turnaround before the pandemic, after being bought out by the private equity firm

Global management of Apollo Inc.

in 2018. The airline has a unique business model. In addition to its scheduled passenger flights which take customers from its base in Minneapolis and other Midwestern cities to sunny and warm-weather destinations, it operates a freight service under contract with

Amazon.com Inc.

and charters flights for clients such as NCAA, Major League Soccer and the US Defense Department.

Mr Bricker said Sun Country began planning for its market debut following positive vaccine news and seeing shares of other airlines start to rise. The airline’s shares have fallen since they started trading, but at $ 33.50 it remains above the IPO price of $ 24.

Write to Alison Sider at alison.sider@wsj.com

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8


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Air France-KLM plans board meeting on refinancing, sources say https://funwithjustin.com/air-france-klm-plans-board-meeting-on-refinancing-sources-say/ Wed, 07 Apr 2021 23:14:12 +0000 https://funwithjustin.com/air-france-klm-plans-board-meeting-on-refinancing-sources-say/

PARIS (Reuters) – Air France-KLM’s board of directors is expected to meet on Monday to discuss a state-backed refinancing plan to strengthen its balance sheet after a year of coronavirus shutdowns, two said on Friday. sources close to the case.

An Air France Airbus A350 plane lands at Roissy Charles-de-Gaulle airport near Paris, France April 2, 2021. REUTERS / Christian Hartmann

The airline group, which received 10.4 billion euros ($ 12.2 billion) in government-guaranteed loans last year, discussed a multi-step recapitalization plan to alleviate debt that as a result, sources said.

But the plan, likely to include converting a € 3 billion French government loan into hybrid instruments, has been delayed by disputes over European Union demands that Air France abandon take-off slots. and Paris-Orly landing as a condition.

French Finance Minister Bruno Le Maire signaled a breakthrough in those talks earlier this week, predicting a deal in “a few days”.

Air France-KLM declined to comment on the scheduled meeting of the airline group’s board of directors, first reported by Bloomberg.

EU officials initially requested a similar number of slots to the 24 ceded by German Lufthansa to Frankfurt and Munich in exchange for its government-backed capital hike, sources familiar with the talks said.

This position sparked protests from Air France, its unions and the government.

France and the Netherlands each own nearly 14% of Air France-KLM, and the Dutch state has held separate talks with the EU on converting its € 1 billion loan to KLM into hybrid debt in exchange for slot concessions at Amsterdam-Schiphol.

The conversion of public debt will not be enough to straighten Air France-KLM’s balance sheet, analysts believe, who predict that a new dilutive capital increase will follow.

The group told investors it plans to raise “quasi-equity and equity,” after its balance sheet recorded € 5.42 billion in negative equity as of December 31.

Reporting by Laurence Frost; Additional reporting by Gwenaelle Barzic; Editing by Edmund Blair and Barbara Lewis


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Can companies deny you entry if you don’t have a vaccination passport? https://funwithjustin.com/can-companies-deny-you-entry-if-you-dont-have-a-vaccination-passport/ Wed, 07 Apr 2021 23:14:12 +0000 https://funwithjustin.com/can-companies-deny-you-entry-if-you-dont-have-a-vaccination-passport/

As more Americans get vaccinated against COVID-19 and the economy begins to reopen, some businesses are requiring proof of vaccination to enter their premises.

After your first vaccine, you receive a card issued by the Centers for Disease Control and Prevention. Miami Heat basketball team, for example, asks some of their fans to show the card to get some seats at the games.

On Thursday, the Heat arena set up two vaccinated sections for participants who had their cards on, allowing fans to sit closer to each other, the Wall Street Journal reported. Madison Square Garden in New York required proof of vaccination or a negative PCR or antigen test performed within a specific time frame.

Sophisticated and high-tech options are being deployed. The Commons project, for example, developed the CommonPass – an app that shows you have been vaccinated or your negative test result. Some airlines have launched the platform trials. New York State launched the Excelsior Pass, which provides the same information. “Think of it like a mobile boarding pass for airlines,” the state website said.

The concept of the vaccine passport has raised ethical questions on data privacy and potential discrimination against unvaccinated people. However, legal experts say companies have the right to deny entry to those who cannot present evidence.

“At this time, nothing would prevent that, unless there is a specific law in a state, which does not yet exist,” said Robert I. Field, professor of law and public health at Drexel University. “Proof of vaccination would indicate that you pose a low risk to other customers or company employees – and that would be a reasonable measure.”

Dane S. Ciolino, a professor at Loyola University’s New Orleans College of Law, noted that an owner can decide which people to let in as long as they don’t exclude them based on categories such as race. or religion. “Unvaccinated people are not a protected class,” Ciolino said.

However, Republican governors in states like Texas and Florida have signed executive orders to prevent companies from demanding proof.

Texas order says no government agency or private entity receiving government funds may require a person to provide proof of COVID-19 vaccination, although this exempts nursing homes and assisted living facilities. Meanwhile, the Florida order says more broadly that state enterprises cannot impose these requirements.

Field said the decrees had limited application to private companies.

“There is no real punishment, there are no fines and there is certainly no imprisonment,” he said. “The only enforcement mechanism is that they can limit state funding for these organizations if they receive grants, loans, or other types of state financial assistance.”

Even people medically exempt from vaccination would not have a complaint against a company preventing them from entering, according to University of Washington law professor Patricia Kuszler.

“I don’t think going to a basketball game is a fundamental right,” Kuszler said.

At the federal level, there will be no vaccination mandate, nor a requirement to get a vaccine passport, White House press secretary Jen Psaki said on Tuesday. However, the Biden administration is working with U.S. airlines to provide advice on vaccine passports, which could boost travel.

COVID-19 crisis devastated the airline industry, along with businesses leave or lay off tens of thousands of employees in the past year. In April 2020, Delta and United posted their first quarterly losses in more than five years.

However, the number of jobs in the country is starting to pick up, probably in part because of the increase in vaccinations.

At the start of last month, the Penn Wharton Budget Model at the University of Pennsylvania predicted that vaccinations would double to 3 million per day add 2 million jobs to the economy and increase real gross domestic product by about 1% over the summer.

The United States has now achieves this vaccination goal. CDC data shows that last week the country started taking an average of 3 million strokes per day. Some days saw even higher totals, with 4 million doses administered on Saturday.

These figures follow a strong employment report. In March, 916,000 jobs were added to the economy, while the unemployment rate fell to 6% – the lowest level since the start of the pandemic. Last spring, the unemployment rate hit 14.8%.

So, could a vaccine passport system accelerate the ongoing rebound?

For schools, healthcare facilities and international travel, proof of immunization is already required in some cases, said Alexander Arnon, associate director of policy analysis at the PWBM. “It is sort of an essential part of the economic recovery,” he added.

But Arnon doesn’t think passports would make a particularly big difference for restaurants or cinemas.

“People who are vaccinated, especially in places where most other people are vaccinated, are going to feel quite confident going out, even if there is no passport system in place,” said Arnon.

Field, of Drexel University, expects the vaccine passport controversy to subside as more Americans receive their vaccines. As this happens, fewer people will be concerned about contracting the virus, and fewer will be left out for not presenting evidence.

Some parts of the country, such as California, have announced that they full reopening due to sufficient vaccine supply and low hospitalization figures for COVID-19.

What do vaccines mean for economic recovery?

COVID-19 isn’t going anywhere anytime soon, say expert witnesses who testified in a recent hearing organized by the Joint Economic Committee. Simply put, we can’t eradicate the virus because it infects other species, and there will also be people who choose not to get vaccinated or mount an immune response, according to Dr Céline Gounder. from NYU School of Medicine & Bellevue Hospital. “This means we can’t just rely on vaccination,” Gounder said. She said the four phases of pandemic recovery end the emergency, relax mitigation measures, achieve herd immunity and have long-term control.

Can companies deny you entry if you don’t have a vaccination passport?

As more Americans get vaccinated against COVID-19 and the economy begins to reopen, some businesses are requiring proof of vaccination to enter their premises. The concept of the vaccine passport has raised ethical questions on data privacy and potential discrimination against unvaccinated people. However, legal experts say that companies to have the right to deny entry to those who cannot show proof.

What should I know about tax season this year?

Glad you asked! We have an all separate FAQ section on that. Some quick results: the deadline has been extended from April 15 to May 17 for individuals. Additionally, millions of people received unemployment benefits in 2020 – of which up to $ 10,200 will now be tax-free for those with adjusted gross income below $ 150,000. And, for those who filed before the US bailout was passed, in layman’s terms, you don’t need to file an amended return just yet. Find answers to the rest of your questions here.


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Western Global Airlines pilots join union https://funwithjustin.com/western-global-airlines-pilots-join-union/ Wed, 07 Apr 2021 23:14:12 +0000 https://funwithjustin.com/western-global-airlines-pilots-join-union/

The National Mediation Council on Tuesday certified the Airline Pilots Association as the negotiating representative of the 180 pilots of the all-cargo carrier Western Global Airlines. The pilots were previously not represented.

Sixty-nine percent of the attendees voted to join the world’s largest pilots union.

Western Global Airlines, based in Estero, Florida, is a 6-year-old company that flies planes under contract to airlines and logistics companies. Its fleet consists of MD-11s and Boeing 747-400 freighters. Customers include UPS, DHL Express, Postal Service, Amazon, and the Department of Defense.

The company received $ 34 million in federal COVID relief payments in last year’s CARES law, along with millions of other payroll protection program loans, which House Democrats complained about was money the company didn’t deserve because that the pandemic had not made him lose business.

In 2019, logistics company Flexport abandoned Western Global as charter operator due to service issues.

On a related note, Aloha Air Cargo runway workers last week ratified a new contract that includes beneficial wage and working rule changes, said Clazy Griswold, the Air Division coordinator. for Teamsters Local 986. Negotiations were negotiated by the National Mediation Council.

“In difficult times, we did well,” he says.

Teamsters Local 986 represents approximately 200 Aloha Air ground officers and pilots on separate contracts. Aloha Air Cargo, a subsidiary of Northern Aviation Services, operates a Boeing 767 and a 737 between the Hawaiian Islands, as well as two routes connecting Honolulu to Los Angeles and Seattle.

Click here for more FreightWaves / American Shipper stories by Eric Kulisch.


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Airlines Offer Crown Jewel Loyalty Programs To Bond Market https://funwithjustin.com/airlines-offer-crown-jewel-loyalty-programs-to-bond-market/ Wed, 07 Apr 2021 23:14:12 +0000 https://funwithjustin.com/airlines-offer-crown-jewel-loyalty-programs-to-bond-market/

When the coronavirus pandemic brought travel to a halt, airlines turned to whatever sources of funding they could find – even their previously untouched loyalty programs. Whether this is a positive development for the industry depends on who you ask.

United Airlines Holdings Inc., Delta Air Lines Inc. and American Airlines Group Inc. have raised more than $ 25 billion through debt transactions supported by their traveler loyalty programs. Americans $ 10 billion supply, a combination of bonds and loans, was the largest ever for an airline and reportedly attracted $ 45 billion in orders from yield-hungry investors. The carrier used the proceeds to repay a pandemic US Treasury loan that had more onerous terms. Spirit Airlines Inc. and Hawaiian Holdings Inc. have raised an additional $ 2.05 billion supported in part by their loyalty programs.

It is all the more incredible that no airline has attempted to monetize your loyalty program that way until the pandemic. At first glance, this looks like an incredible feat of ingenuity from Wall Street. United was the pioneer of the fundraising vehicle with help from Goldman Sachs Group Inc. after a previous separate debt deal backed by aging planes had to be scrapped due to investor concerns about the value of this collateral amid a potential glut of retired jets. Loyalty programs, on the other hand, generate a lot of money and in theory tend to be less volatile than traditional airline ticket revenues or the underlying fleet value.

All it takes is a quick glance at the yields on these bonds to see that investors place a lot of importance on loyalty programs. United’s MileagePlus debt valued a 7% return in June, compared to the 11% return that had been announced in informal pricing talks a month earlier, just as Warren Buffett said Berkshire Hathaway Inc. had abandoned its stakes in a handful of airlines. In September, Delta issued an eight-year debt that returned just 4.75%. Eight-year US bonds were valued this month at 5.75%, mainly due to the recent rise in US benchmark yields. The spread between T-bills was only 20 basis points wider than Delta’s, even though Moody’s Investors Service rated US securities four rungs lower.

Mileage credit redemptions fell by two-thirds at American in 2020, in line with declining overall passenger revenue, according to the company’s annual report. But the revenue associated with the marketing component of the loyalty program – defined as the use of intellectual property, including the American brand, advertising, and access to the loyal member list – has only declined by one. about fifth. According to a report by Savanthi Syth, analyst at Raymond James Financial Inc., the average member of AAdvantage has been participating in the loyalty program for 10 years, and 40% of users have income over $ 100,000. This type of stability helps explain why credit rating companies are willing to rate these debt transactions higher than the companies themselves.

Loyalty programs offer “a lot of what’s good for airlines without what’s bad for airlines,” Syth said in a telephone interview. But if airlines offer their crown jewel to creditors, what is left for equity investors? Retail traders have piled on these stocks as pandemic shows signs of easing: US exchange-traded fund Global Jets (ticker: JETS) topped $ 4 billion in assets this month, an increase of over 2,600% from the previous year.

Some airlines, including Air Canada and Gol Linhas Aereas Inteligentes SA, have created their loyalty programs with the aim of monetizing these lucrative programs and creating shareholder value. But the independent oversight of loyalty programs has created an inherent conflict of interest and deprived airlines of some of the benefits of having these systems in the first place. The main idea of ​​the airline is to retain customers, but independent programs may seek to maximize profits by selling mileage credits to third parties such as credit card partners. So Air Canada reabsorbed its loyalty program in 2019 and Gol try at do the same with its Smile loyalty system. Rather, monetizing loyalty programs through leverage offers financial benefits without the operational headaches, but there is still a conflict of interest inherent in this transaction as shareholders have fewer rights to these lucrative assets.

“For a stock holder, even airline asset backed securities are a problem,” Syth said. “If you can’t pay the bondholder, the plane will be blown away and you will have less value. The same evaluation should be done with these programs. “


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Relief bill will save tens of thousands of airline and airport jobs https://funwithjustin.com/relief-bill-will-save-tens-of-thousands-of-airline-and-airport-jobs/ Wed, 07 Apr 2021 23:14:12 +0000 https://funwithjustin.com/relief-bill-will-save-tens-of-thousands-of-airline-and-airport-jobs/

The pandemic relief bill that President Biden signed Thursday afternoon will protect tens of thousands of aviation jobs, providing a lifeline for an industry that is likely to struggle for some time even as vaccinations accelerate.

After Congress this week approved the legislation, which includes $ 14 billion for airlines and an additional $ 9 billion for airports and other businesses, American Airlines and United Airlines told 27,000 employees they could ignore the notice of leave they had received in recent weeks. Airlines had issued the warnings, which are legally required ahead of the sweeping cuts, as they prepared to take the leave at the end of this month, when a first round of federal aid expired. The new bill extends this assistance until September.

“If you have one of those WARN Act notices that we sent out in February, tear it up,” Doug Parker, CEO of American, said in an Instagram video. “There will be no time off at American Airlines in April and, with the rise in vaccinations, I hope never again.”

The relief package, which Mr Biden says is necessary to protect the economy and workers and which many Republican lawmakers have criticized as excessive, is the third to provide funding to keep airline workers employed since. the start of the pandemic. Last March, Congress granted passenger airlines $ 25 billion in loans and an additional $ 25 billion in wage subsidies. He renewed payroll funding in December with an additional $ 15 billion and again this week.

Biden’s relief bill also sets aside $ 1 billion for aviation contractors and $ 8 billion for airports to help them operate normally, limit the spread of the virus, pay workers and to repay their debts. In return for the aid, airports, contractors and airlines are barred from major layoffs until September and have been forced to make further concessions.

The aviation and travel industry has been among the hardest hit by the pandemic. A year ago, passenger numbers began to drop as the virus spread widely and government officials restricted or discouraged travel. By early April, the number of people who fly each day had fallen 96% from the previous year.

Since then, travel has recovered somewhat. On average, around one million people per day were screened at airport security checkpoints over the past week, down about 46% from the same period in 2019, according to Transportation data. Security Administration.

Yet airlines collectively lose $ 150 million a day on average, according to Airlines for America, an association that represents American, United and the other major carriers. Widespread vaccine distribution has given the industry hope for a rebound, but airlines are expected to continue to lose money through the summer, and most industry analysts and executives are not sure. don’t expect travel to return to 2019 levels until 2023 or 2024.

In a report released Thursday, Fitch Ratings said it now expected a slower first-half air travel recovery in the United States and Canada than it had previously forecast. But the second half of the year could see a “pretty robust rebound,” Fitch analysts said, citing recent surveys that show many people are eager to travel once they feel safe.

“Fitch thinks it may not be necessary to achieve full herd immunity to at least start bouncing travel,” the analysts wrote. “On the contrary, a drop in death rates caused by vaccine coverage among vulnerable populations may be enough to ease restrictions on the pandemic and increase the comfort of travelers.”

In the meantime, airlines are doing what they can to get people to book tickets, set up direct flights to popular beach destinations, cut fares and promise strict enforcement of security procedures.

But obstacles remain. This week, the Centers for Disease Control and Prevention said people who had been fully vaccinated could safely engage in a wider range of activities than those who had not, including congregating in small groups at home without masks or social distancing. To the frustration of airlines and other industry leaders, the agency continued to recommend that everyone avoid travel.

Airlines have argued that there is a low risk of in-flight virus transmission due to high-end cabin ventilation systems, strict disinfection practices and stringent mask requirements. But travel has nonetheless facilitated the spread of the virus around the world.

“We know that after mass travel, after vacation, after vacation, we tend to see an increase in cases,” CDC director Dr. Rochelle Walensky said on MSNBC Monday night. “And so, we really want to make sure – again with only 10% of people vaccinated – that we limit travel.”

Widespread distribution of vaccines will not solve all of the industry’s problems either. It could be at least a year, if not much longer, before business and international travel, which tends to be much more profitable for airlines than leisure bookings, starts to bounce. Some people have speculated that business travel could be permanently reduced because salespeople and other professionals have become accustomed to video conferencing and have come to realize that many trips they made were a waste.




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