US Business

The Italian government on Tuesday approved injecting another 400 million euros ($400 million) into state-owned ITA Airways as efforts to sell off the airline stall.

The funds will be available to the airline by the end of the month after the economy ministry approved the injection.

The airline was created last year out of the ashes of Alitalia, which accumulated more than 11 billion euros in losses in the two decades before being shut down.

The European Union approved Italy continuing to support an airline, but insisted upon a new, smaller company and limited public funding.

The previous government under prime minister Mario Draghi launched an effort to sell off a majority of the airline, and in August accepted an offer by US investment fund Certares, Delta Air Lines and Air France-KLM over a proposal by Germany’s Lufthansa and shipping group MSC. 

But with little progress in negotiations with the Certares consortium, new Economy Minister Giancarlo Giorgetti at the end of October did not renew the exclusivity of talks with ITA, putting Lufthansa and shipping group MSC back in the running.

The choice of Certares also did not please the airline’s chairman, Alfredo Altavilla, who had clashed with the company’s board over the selection and resigned on Monday.

The Certares consortium had proposed buying 50 percent of ITA plus one share for 350 million euros, leaving the remaining shares to the Italian state.

Lufthansa and Swiss-Italian shipping group MSC had meanwhile offered 850 million euros for 80 percent of ITA.

Lufthansa said at the beginning of November that it was “still interested” in taking over ITA, as long as it was a “real privatisation of the airline”.

The injection of 400 million euros into the airline was already planned for 2022, and follows an initial 700 million euros invested in the company last year.

The European Commission has authorised Italy to pump up to 1.35 billion euros into the airline.

Labour unions have called a major one-day strike which threatens to paralyse Paris public transport Thursday, the latest industrial action to demand relief from the French government over soaring prices.

The RATP transport operator for the capital has warned of particularly severe disruptions for metro and suburban rail lines, with bus and tram services also impacted by the protest for higher wages.

Seven metro lines will be fully closed and another seven will only operate at peak hours, RATP announced. 

Only lines 1 and 14 — which are fully automated with no drivers — would operate normally but risk becoming overcrowded, the RATP said.

There would also only be a partial service on suburban lines RER A and RER B which connect central Paris with Disneyland Paris and Charles de Gaulle airport respectively.

Unions have staged strikes across several sectors in recent weeks seeking pay hikes or increased hiring as spiralling energy costs feed into widespread inflation.

Union leaders are also hoping to step up pressure on President Emmanuel Macron as he prepares to revive a controversial pensions overhaul that would push back the official retirement age from 62 to 64 or 65.

A similar attempt sparked massive protests two years ago, before the government abandoned the overhaul amid the Covid-19 outbreak.

But the Paris transport strike did not spill over into other sectors, with only the hard-line CGT union calling for nationwide work stoppages.

CGT official Celine Verzeletti said she expected 150 to 200 demonstrations, similar to the turnout on October 18, in the midst of long-running strikes at oil refineries that led to petrol shortages.

Thursday’s strike comes as commuters have grown increasingly frustrated with Paris public transport, with services still reduced since the Covid pandemic even though traffic levels have broadly returned to pre-crisis levels.

Former prime minister Jean Castex, who is set to take over as RATP chief in the coming weeks, on Tuesday told a Senate committee that one of his priorities would be human resources, including more hiring.

He is still to appear before another committee in the National Assembly on Wednesday. Both committees will then decide whether to approve his appointment.

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Kenya Airways pilots will end their days-long strike and return to work on Wednesday morning, their union said, after a court ordered staff to resume operations in a breakthrough for the beleaguered airline.

The protesting pilots, who make up 10 percent of the workforce, are pressing for the reinstatement of contributions to a provident fund and payment of all salaries stopped during the Covid-19 pandemic.

The walkout has forced hundreds of flight cancellations and left thousands of passengers stranded since Saturday morning, exacerbating the woes facing the troubled national carrier and prompting the government to threaten the pilots with disciplinary action.

Hours after a Nairobi court on Tuesday ordered the pilots to return to work, the Kenya Airline Pilots Association (KALPA) said its members would “resume duty” by 06:00 am (0300 GMT) on Wednesday — the deadline stipulated in the court order.

“KALPA members will do their best to restore normalcy to operations,” the union’s general secretary Murithi Nyagah said in a statement released late Tuesday, calling the travel disruptions “regrettable”.

KALPA launched the walkout at Nairobi’s Jomo Kenyatta International Airport in defiance of a court order issued last week against the strike, prompting judges to summon union representatives to appear in court on Tuesday.

Justice Anna Mwaure ordered KALPA members “to resume their duties as pilots by 6:00 am on 9th November 2022 unconditionally”.

Kenya Airways, which is part-owned by the government as well as Air France-KLM, is one of the biggest in Africa, connecting multiple countries to Europe and Asia. 

But it has been running losses for years, despite the government pumping in millions of dollars to keep it afloat.

The court order was welcomed by the government and the airline’s management who vowed to intensify efforts to “recover the time, money and reputation lost”.

Mwaure also ordered the airline’s management to allow the pilots “to perform their duties without harassing them or intimidating them and especially by not taking any disciplinary action against any of them”.

Transport Minister Kipchumba Murkomen urged the pilots and the airline’s management “to obey the court order”.

“We regret that the issues at hand were allowed to persist and escalate into a strike,” he said.

“In the past three days, this strike has disrupted travel plans for over 12,000 customers… forced the cancellation of over 300 flights, and affected 3,500 other employees who were not part of it,” he added.

In a statement released Tuesday evening, the airline’s CEO Allan Kilavuka said: “We commit to complying with the Court’s directions.”

The carrier had earlier said the strike had forced it to cancel most of its flights but Kilavuka vowed that the airline would “do everything possible to return to normalcy in the shortest time”.

– ‘Economic sabotage’ –

The dispute has added to the challenges facing Kenya’s recently elected government, with Murkomen on Sunday threatening the pilots with disciplinary action unless they returned to work.

The airline and the government have accused the union of engaging in “economic sabotage”, with Kenya Airways warning that the strike would lead to losses estimated at $2.5 million per day.

“Due to this unlawful action by KALPA, the customers of KQ both locally and globally have suffered and continue to suffer immeasurable inconvenience and losses,” Kenya Airways said in a statement Monday using the shorthand airline code.

The carrier had also announced that it was ending its recognition of the union and withdrawing from their collective bargaining deal, accusing KALPA of “exposing the airline to irreparable damage”.

The pilots in turn accused the airline’s management of making “no concessions” to end the stalemate.

The airline was founded in 1977 following the demise of East African Airways, and flies more than four million passengers to 42 destinations annually.

It has been operating in large part thanks to state bailouts following years of losses.

A Nairobi court has ordered striking Kenya Airways pilots to return to work by Wednesday morning, a breakthrough for the beleaguered carrier after the days-long walkout forced flight cancellations and left thousands of passengers stranded.

The Kenya Airline Pilots Association (KALPA) launched the strike at Nairobi’s Jomo Kenyatta International Airport on Saturday morning, defying a court order issued last week against the industrial action.

Justice Anna Mwaure on Tuesday ordered “the Kenya Airways pilots to resume their duties as pilots by 6:00 am on 9th November 2022 unconditionally”.

The walkout has exacerbated the woes facing the troubled national carrier, which has been running losses for years, despite the government pumping in millions of dollars to keep it afloat.

There was no immediate response from KALPA to the court order, which was welcomed by the government and the airline’s management who vowed to intensify efforts to “recover the time, money and reputation lost”.

The carrier on Monday announced that it was ending its recognition of the union and withdrawing from their collective bargaining deal, accusing KALPA of “exposing the airline to irreparable damage”.

Mwaure said the court would now consider the issue and ordered the airline’s management to allow the pilots “to perform their duties without harassing them or intimidating them and especially by not taking any disciplinary action against any of them”.

Transport Minister Kipchumba Murkomen urged the pilots and the airline’s management “to obey the court order”.

“We regret that the issues at hand were allowed to persist and escalate into a strike,” he said.

“In the past three days, this strike has disrupted travel plans for over 12,000 customers… forced the cancellation of over 300 flights, and affected 3,500 other employees who were not part of it,” he added.

In a statement released Tuesday evening, the airline’s CEO Allan Kilavuka said: “We commit to complying with the Court’s directions.”

The carrier had earlier said that the strike had forced it to cancel most of its flights but Kilavuka vowed that the airline would “do everything possible to return to normalcy in the shortest time”.

– ‘Economic sabotage’ –

Kenya Airways, which is part owned by the government as well as Air France-KLM, is one of the biggest in Africa, connecting multiple countries to Europe and Asia. 

The dispute has added to the challenges facing Kenya’s recently elected government, with Murkomen on Sunday threatening the pilots with disciplinary action unless they returned to work.

Mwaure had summoned KALPA officials to appear in court on Tuesday for disobeying last week’s injunction against the strike.

The airline and the government have accused the union of engaging in “economic sabotage”, with Kenya Airways warning that the strike would lead to losses estimated at $2.5 million per day.

“Due to this unlawful action by KALPA, the customers of KQ both locally and globally have suffered and continue to suffer immeasurable inconvenience and losses,” Kenya Airways said in a statement Monday using the shorthand airline code.

The pilots in turn have accused the airline’s management of making “no concessions” to end the stalemate.

The protesting pilots, who make up 10 percent of the workforce, are pressing for the reinstatement of contributions to a provident fund and payment of all salaries stopped during the Covid-19 pandemic.

It was founded in 1977 following the demise of East African Airways, and flies more than four million passengers to 42 destinations annually.

It has been operating in large part thanks to state bailouts following years of losses.

A federal judge rejected a motion by Theranos founder Elizabeth Holmes for a new trial following her conviction for fraud, according to a decision seen Tuesday by AFP.

Holmes, who was convicted in January of defrauding investors in her blood-testing startup, had argued that a new trial was warranted after a prosecution witness, Adam Rosendorff, came to Holmes’s residence to express regret.

Attorneys for Holmes argued that Rosendorff’s remarks showed the Justice Department had “cherry-picked” from testimony “to make things seem worse than they were,” according to a legal brief arguing for a new trial.

But US District Judge Edward Davila, who oversaw Holmes’s 15-week trial following the demise of Theranos, cited the “vagueness” of Rosendorff’s statements in rejecting the request.

At an October hearing on the request for a new trial, Rosendorff “testified that he did not believe the government was making things sound worse than they were at trial,” Davila wrote in his decision.

“The court finds Dr. Rosendorff’s statements under oath to be credible, which would declaw most, if not all, of the negative implications the Defendant would attribute to them.”

Davila also rejected other arguments made by Holmes’s legal team, which centered on statements made at the fraud trial by Ramesh “Sunny” Balwani, Holmes’s former aide and ex-boyfriend, and on assertions the government had suppressed evidence.

Holmes had vowed to revolutionize health diagnostics with self-service machines that could run an array of tests on just a few drops of blood, a vision that drew high-profile backers and made her a billionaire on paper by the age of 30.

But the company collapsed following Wall Street Journal reporting that revealed the machines did not work as promised.

A California jury found Holmes guilty of four counts of tricking investors, raising the possibility she could service decades behind bars.

Homes is scheduled to be sentenced November 18.

Global stock markets mostly moved higher on Tuesday as Americans headed to the polls in critical midterm elections.

The dollar dipped the euro, while Chinese demand concerns helped push oil prices down around one percent.

Europe’s main markets ended in the green after starting mixed, with Frankfurt adding 1.3 percent while London and Paris scored more modest gains. 

On Wall Street, the Dow had added around 1.5 percent two hours into trading, while the broader S&P 500 and tech-heavy Nasdaq were also up by a similar margin.

“Those US midterm elections today might keep investors on the sidelines a bit before they make any major decisions,” noted Markets.com analyst Neil Wilson.

“Investors are hoping for a political gridlock. That would make it difficult to pass radical policy changes,” said Fawad Razaqzada market analyst with City Index and FOREX.com.

Polls opened Tuesday in crucial US elections that could decide the political future of both President Joe Biden and his predecessor Donald Trump — who has all but announced he will seek the White House again in 2024.

Biden’s Democrats are facing a gargantuan struggle to hang on to Congress, after a race the president has cast as a “defining” moment for US democracy — while Trump’s Republicans have campaigned hard on kitchen-table issues like inflation and crime.

Polls show Republicans are likely to win at least one house of Congress — and some see the prospect of further Washington gridlock as a scenario that lessens the risk of policy uncertainty.

“Consensus is that investors prefer political deadlock as it prevents any significant shifts in policy,” added Scope Markets analyst James Hughes.

“With that looking like a real possibility, the real market turbulence may appear later in the week.”

Politics aside, investors are also waiting on US inflation data due on Thursday for a pointer on the interest path ahead.

In Asia, the Hong Kong and Shanghai stock markets sank as speculation about a rollback of China’s strict zero-Covid policies fuelled market volatility, but Tokyo ended 1.3 percent ahead.

– Crypto crunch –

Elsewhere, in the world of crypto finance, Binance, the world’s biggest cryptocurrency platform, tweeted it has agreed to buy its financially-troubled rival FTX.com.

Binance chief executive Changpeng Zhao said the group had signed a non-binding letter of intent “to fully acquire FTX.com,” which is enduring “a significant liquidity crunch”.

FTX’s native FTT token had earlier slumped 25.4 percent to 16.63 dollars, its lowest since early 2021 after Zhao said Binance was liquidating its holdings amid concerns about FTX’s finances.

Bitcoin, which had earlier sunk 5.3 percent to $19,583, ending a relatively bullish October run, shot back above $20,000 as its daily loss to 1.1 percent.

– Key figures around 1530 GMT –

New York – Dow: UP 1.5 percent at 33,344.07 points

EURO STOXX 50: UP 0.8 percent at 3,738.30

London – FTSE 100: UP 0.1 percent at 7,306.14 (close)

Paris – CAC 40: UP 0.4 percent at 6,441.50 (close)

Frankfurt – DAX: UP 1.2 percent at 13,688.75 (close)

Tokyo – Nikkei 225: UP 1.3 percent at 27,872.11 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 16,557.31 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,064.49 (close)

Pound/dollar: UP at $1.1562 from $1.1514 on Monday

Euro/dollar: UP at $1.0076 from $1.0020

Dollar/yen: DOWN at 145.49 from 146.93 yen

Euro/pound: UP at 87.14 pence from 87.03 pence

West Texas Intermediate: DOWN 1.0 percent at $90.90 per barrel

Brent North Sea crude: DOWN 0.7 percent at $97.22 per barrel

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