Air Travel Rises Ahead of Thanksgiving, Despite Warnings: Live Updates


Here’s what you need to know:

Credit…David Santiago/Miami Herald, via Associated Press

More travelers were screened at airport security checkpoints on Sunday than on any day since the pandemic took hold in March, a worrying sign that people flying to visit their families for Thanksgiving could increase the spread of the coronavirus.

A little more than one million people were screened by the Transportation Security Administration on Sunday, according to federal data published on Monday. That number is about half of what it was in 2019, but it represents a big increase from the spring, when less than a half a million people flew on any given day.

The Centers for Disease Control and Prevention and Dr. Anthony Fauci, the country’s top infectious disease expert, have been strongly discouraging holiday travel for fear that it would increase the number of new infections, which have surged in recent weeks as the weather turns colder and more people spend time indoors.

Airlines have said that flying is safe because of the precautions the industry has put in place, like high-end air filtration. They also point to the relatively few published cases of the coronavirus being spread during a flight. But the science on in-flight safety is far from settled, and travelers would still be at risk of contracting or spreading the virus at airports and once they are at their destination.

The increase in travel during the holidays has been encouraging for airlines. But it won’t be enough to offset the deep losses they have suffered during the pandemic. The nation’s largest airlines have collectively reported tens of billions of dollars in losses so far this year, and analysts expect demand to remain weak for a couple of years or more. The industry is hoping that the incoming Biden administration and Congress will give airlines more aid early next year.

Credit…Joe Raedle/Getty Images

General Motors said on Monday that it would recall 5.9 million cars and light trucks equipped with airbag inflaters that posed a safety risk, giving in to pressure from federal regulators to do so.

The recall affects several popular G.M. models, including the Chevrolet Silverado and Suburban produced from 2007 to 2014 and equipped with inflaters made by the Japanese supplier Takata. Under certain conditions, the inflaters may explode, showering vehicle occupants with metal shards. The devices have been cited as the cause of more than two dozen deaths and set off recalls of tens of millions of cars and trucks globally.

G.M. had earlier pushed back against a recall request, made by the National Highway Traffic Safety Administration, but said Monday that it would comply.

“Although we believe a recall of these vehicles is not warranted based on the factual and scientific record, NHTSA has directed that we replace the airbag inflaters in the vehicles in question,” the company said in a statement.

The safety agency said in a statement that the inflaters in G.M. cars “are at risk of the same type of explosion after long-term exposure to high heat and humidity as other recalled Takata inflaters.”

In regulatory filings, G.M. has said recall of affected vehicles would cost $1.2 billion. The company has 30 days to submit a plan for carrying out the recall.

Credit…Amr Alfiky/The New York Times

Black Friday has long been the biggest shopping day of the year, with doorbuster deals inspiring some die-hard shoppers to camp out all night in front of big-box stores.

But as coronavirus cases climb across the country and public health officials beg people to avoid crowds, will stores still try to lure customers inside? And if they do, will customers take the bait and show up?

“This year is going to be a Black Friday unlike any other,” said Kelly O’Keefe, managing partner at the Brand Federation, a consulting firm. “We’re not going to have crowds knocking down Walmart’s door this year. There will be fewer people in stores and there will be much better management of those people.”

Here’s what some of the biggest retailers are doing to keep customers safe on Black Friday this year:

Best Buy said it was selling this year’s new gaming consoles online only, to avoid lines outside stores.

The electronics chain said it would limit the number of customers inside stores to comply with social-distancing guidelines as recommended by the Centers for Disease Control and Prevention. Best Buy also said it would consider limiting store hours, reducing occupancy and shifting to curbside-only pickup service “on a case-by-case basis to help local communities contain outbreaks.”

All pickup orders will now happen curbside, and pickup will be available before and after in-store hours.

The stores will require customers and employees to wear face coverings and will supply face coverings to customers who do not have one. Best Buy will provide sanitizer wipes near high-touch displays to give the customers the option of wiping down surfaces before engaging with them.

Walmart put on three separate sales in November, both online and in store.

It is offering customers the option to pick up their online Black Friday orders through Walmart’s contactless curbside pickup service.

On Black Friday itself, Walmart stores will open at 5 a.m., and customers will be asked to form a single, straight line to enter the stores. Employees will hand out sanitized shopping carts and will remind customers to wear a mask when entering the store. Walmart will limit the number of customers in the store to 20 percent capacity and will direct customers to shop down the right-hand side of aisles.

Target has spread its sale offerings throughout all of November, offering promotions of different product categories each week.

To minimize lines, Target has added mobile checkout devices to allow store employees to help shoppers check out anywhere in the store. The company also allows guests to check out by themselves using Target’s mobile app.

Additionally, the company has added thousands of items eligible for same-day pickup.

Target says it will monitor the number of shoppers to ensure people have enough space to shop safely and will allow customers to reserve a spot in line outside their local store.

The home improvement retailer has made Black Friday prices available throughout the holiday season, from Nov. 6 through December, both in store and online, in an effort to reduce crowds. Home Depot said it had reduced the number of items displayed in certain areas in stores to create more space for social distancing.

Credit…Pool photo by Siphiwe Sibeko
  • Stocks edged higher on Monday, bolstered by news that a third drugmaker — AstraZeneca — said its coronavirus vaccine was also showing promise in clinical trials, and a government official in the United States described how vaccines might be distributed to Americans as early as next month.

  • The S&P 500 rose more than half a percent in early trading, while key benchmarks in Europe were slightly higher. The Nikkei 225 in Japan fell 0.4 percent, the Hang Seng Index in Hong Kong rose 0.1 percent, and the Shanghai Composite index climbed 1.1 percent.

  • AstraZeneca said that early analysis of some of its late-stage clinical trials showed the vaccine, developed with the University of Oxford, was on average 70 percent effective. The trials used two different dosing regimens, one of which was 90 percent effective in preventing Covid-19 and the other of which was 62 percent effective.

  • Shares in AstraZeneca were 1.7 percent lower. The trial results suggest the vaccine hasn’t matched the effectiveness of those developed by Pfizer and Moderna. But AstraZeneca’s vaccine has advantages of being much cheaper and easier to store and transport.

  • Though there have been positive developments about vaccines, it will be many months before large swathes of the population receive them. In the meantime, virus cases are still rising rapidly and the economic impact is being felt.

  • Advisers to President-elect Joseph R. Biden Jr. are pushing for Democrats in Congress to reach a quick stimulus deal with Senate Republicans amid fear of a double-dip recession. The S&P 500 fell last week as investors considered the Treasury Department’s plan to end emergency lending programs at the end of the year, while other federal assistance programs created under the CARES Act are set to expire at year’s end.

  • Commodities prices rose, with Brent crude up 1.3 percent to $45.66 a barrel. West Texas Intermediate futures, the United States benchmark, rose about 1. percent to nearly $43 a barrel, the highest since late August.

  • Shares in Cineworld, owner of Regal cinemas, jumped as much as 27 percent as the company reassured investors it would have enough cash to reopen, even if that doesn’t happen until May. The company’s chief executive said in a statement that the firm had secured $750 million in extra liquidity, $450 million in the form of a new three-year debt facility.

Credit…Axel Schmidt/Reuters

Adidas tapped JPMorgan Chase to help it weigh a sale of Reebok that could take place as soon as early next year, sources told the DealBook newsletter.

Rumors have been swirling that the company may sell the brand, which has struggled to keep pace with rivals like Nike. The Financial Times has reported that Permira and Triton are among Reebok’s interested suitors. Adidas did not respond to a request for comment. JPMorgan declined to comment.

Reebok could fetch around $1 billion in a deal, said the sources, who spoke on condition of anonymity because the information was confidential. Though that valuation is subject to change, it would be a far cry from the roughly $4 billion that Adidas paid for it in 2005. Reebok’s sales were down 7 percent in the most recent quarter, excluding currency effects, compared with a 3 percent drop for Adidas as a whole.

Buyers may be wary of the pitfalls involved in the 2015 sale of Adidas’s Rockport unit. Three years after Adidas sold the shoe brand to Berkshire Partners, it filed for bankruptcy, blaming its former parent for a sale process that “took meaningfully longer and was significantly more expensive than planned.”

Broadly speaking, the athletic apparel industry is doing well. Consumers are embracing both comfort and fitness during the pandemic, bolstering sales at companies like Nike and Lululemon. But Reebok’s quirky brand has had a hard time recapturing its 1980s heyday, even with the muscle of Adidas behind it. And Reebok’s gear is focused largely on indoor sports, like CrossFit, which will take longer to recover in the pandemic.

Credit…Lucy Nicholson/Reuters

In the stock market, dividend payouts had appeared to be among the prime casualties of the recession caused by the pandemic. There were predictions by Goldman Sachs, among others, that dividends would fall by more than 20 percent, cutting payouts to investors by hundreds of millions of dollars.

It hasn’t turned out that way, writes The New York Times’s Jeff Sommer.

Dividends are down, yes, but with little more than a month to go in 2020, the total decline for dividends in the S&P 500 is likely to be less than 1 percent, according to the estimate of Howard Silverblatt, senior index analyst for S&P Dow Jones Indices.

A drop of that size would be inconsequential, given the severity of the stock market downturn earlier in the year and the rate that the economy shrank, 31.4 percent, in the second quarter of the year.

“Considering where we were, this hasn’t been a bad year for dividends,” Mr. Silverblatt. “It has been a great year.”

A total of 42 companies in the S&P 500, heavily concentrated among hotels, airlines and retailers, suspended dividend payments from March through July, according to Mr. Silverblatt’s data. But the business outlook for many companies has since turned around, and their dividend actions reflect it:

  • Darden Restaurants, Estée Lauder and Marathon Oil suspended their dividend payments earlier this year, only to reinstate them recently.

  • Microsoft increased its dividend by 9.8 percent in September, which amounts to a boost of $1.5 billion. Apple in April increased its dividend by $875 million.

  • AbbVie, the drug company, raised its dividends by $847 million in October. And Chevron, the oil company, did so by $756 million in January. It has maintained quarterly dividends since then, despite declining oil prices.

As things stand, Mr. Silverblatt says, it’s reasonable to project that corporate America will prosper and that dividend payments will continue to recover, perhaps even hitting a record next year, exceeding their 2019 peak.

Credit…Ruth Fremson/The New York Times

While President Trump is still contesting the election results, corporate America — along with much of the rest of the world — is moving on. In recent days, companies including Boeing, CVS Health and McDonald’s have said they recognized President-elect Joseph R. Biden Jr. and believe the election was free and fair.

On Friday and Saturday, the chorus of chief executives calling for an orderly transition continued to grow, David Gelles reported.

“The election is over and we expect a smooth transition,” said Ajay Banga, the chief executive of Mastercard. “That’s the hallmark of American democracy.”

Many companies were already offering to work with the Biden administration on efforts to combat the coronavirus pandemic and kick-start the economy.

“The country needs political stability,” said Michael Dell, the chief executive of Dell Technologies. “We are eager to progress forward and work with the new administration and Congress on pandemic response and recovery and other critical priorities including education, infrastructure and the environment.”

Julie Sweet, the chief executive of Accenture, congratulated Mr. Biden and Vice President-elect Kamala Harris on Nov. 8, the day after most major news media organizations called the election. On Friday, Ms. Sweet called for the Trump administration to cooperate with the transition.

“We have work to do as a country — defeating the pandemic, ending the digital divide, rebuilding the economy and so much more,” she said. “A peaceful, lawful transition must be permitted to move forward.”

Among the companies effectively calling on the Trump administration to concede defeat were many major government contractors, including Cisco.

“We had a free and fair election, and it was encouraging to see the record number of Americans who exercised their right to vote,” said Chuck Robbins, the chief executive of Cisco. “Now we must move forward with the transition process so we can take the steps needed to recover from the pandemic.”

Carlos Gutierrez, the former Commerce secretary, who is now the chairman of EmPath, a private company, and was previously the chief executive of Kellogg, said that beyond disrupting the handoff to the Biden administration, Mr. Trump’s refusal to concede was eroding America’s standing in the world.

“The absence of a normal transition, and a president determined to make some kind of a mark in his last 60 days, has created uncertainty and a worldwide sense of confusion,” Mr. Gutierrez said.

Credit…Clay Enos/Warner Bros. Entertainment, via Associated Press

“Wonder Woman 1984” is coming this Christmas Day. If that isn’t enough big news, this big-budget film will be released in theaters and on the streaming service HBO Max.

Thank, or blame, the coronavirus pandemic.

With many theaters shut because of the virus, and those that are open struggling, many studios have either pushed the release dates of major films into next year or created a hybrid model in which operating theaters can show new releases while they are also made available through streaming or on-demand services.

“We’re not in Kansas anymore,” said Jason Kilar, chief executive of WarnerMedia, in a statement invoking the Hollywood classic film “The Wizard of Oz.”

The new normal, at least temporarily but maybe longer, means a very different movie business, Nicole Sperling reports. In April, Universal Pictures had a successful video-on-demand release for “Trolls World Tour.”

AMC, the largest theater operator in the world, objected and announced it would no longer book any Universal films. But by July, the two companies signed a multiyear deal in which Universal movies would play in AMC theaters for a minimum of 17 days before becoming available in homes through premium video-on-demand. That shortened window could mean that studios will spend less on marketing.

Credit…Tom Jamieson for The New York Times

The pandemic has been devastating for the airline industry, but the economic hurt goes far beyond the carriers and their workers. Most major airlines hire hundreds of companies for a variety of tasks, from cooking the in-flight food to staffing check-in desks to delivering lost luggage. These companies and employees have been knocked down as well.

Information about these companies rarely comes to light. But this summer, when Virgin feared it would run out of cash in the fall, it worked out an intricate $1.6 billion private rescue deal. As part of the plan, Eshe Nelson reported for The New York Times, 162 companies around the world to whom Virgin owed about $69 million agreed to get paid 20 percent less, with the balance paid in installments until September 2022.

Many of these companies have been forced by the collapse in air travel to cut staff or close facilities. Among the many affected:

  • Swissport, a company that provides ground handling services for many airlines. “Around 95 percent of our revenue disappeared in two weeks,” said Luzius Wirth, the executive vice president for Europe, the Middle East and Africa. The company had to stop spending quickly and furloughed as many staff members as possible, he said.

  • Eagle Couriers, a company in Scotland that returns lost luggage to passengers. Eagle is essentially paid for every bag it handles, and eventually laid off half of its baggage handling team. “There’s no way we are getting back to previous volumes,” said Richard Beaton, the company’s commercial director. “If ever.”

  • Safran Seats GB, a company based in Wales that designs and makes business and first-class seats for Virgin and other carriers. Airlines struggling for cash are putting off plans for new seats, said the chief executive, Victoria Foy. By the end of the year, she expects the company to have about 900 employees, 700 fewer than at the start of 2020.

These companies didn’t attribute their financial problems to Virgin Atlantic but rather the cumulative pain of the dramatic drop in air travel.

For Tracey Moore, a former Swissport employee, it meant giving up a job she had longed for, working at Virgin’s check-in desk at Manchester Airport. After being furloughed for months, and fearing a pay cut or losing her job, she took a buyout. “I don’t think I had a real choice,” she said, adding, “I loved being in the uniform.”


Sahred From Source link Business