Tag: Business

United to halt JFK service as airline battles FAA to add more flights

United Airlines said on Friday it will suspend service in late October to New York’s John F. Kennedy Airport.

Earlier this month, United had threatened to take the action if the Federal Aviation Administration did not grant the air carrier additional flights.

United has been flying just twice daily to San Francisco and Los Angeles from JFK, the busiest New York-area airport, after resuming service in 2021.

“Given our current, too-small-to-be-competitive schedule out of JFK — coupled with the start of the winter season where more airlines will operate their slots as they resume JFK flying — United has made the difficult decision to temporarily suspend service at JFK,” United said, in a memo seen by Reuters.

The airline did not specify when it might resume service.

United said its “discussions with FAA have been constructive” but added “it’s also clear that process to add additional capacity at JFK will take some time. “

United said the decision would impact 100 employees who work at JFK but emphasized that “no one is losing their job” and employees will transition to other nearby airports.

United has been working to pursue additional slots – which are takeoff and landing authorizations – through the FAA and by seeking commercial agreements to acquire slots from other airlines.

United said without permanent slots it cannot serve JFK “effectively compared to the larger schedules and more attractive flight times flown by our competitors” like JetBlue Airways and American Airlines.

United in 2015 struck a long-term deal to lease 24 year-round slots at JFK to Delta Air Lines as it ended JFK service to concentrate at its nearby Newark hub in northern New Jersey. It also flies out of LaGuardia.

United argues there is room to grow at JFK, the 13th-busiest U.S. airport, because the FAA and the Port Authority since 2008 have made significant infrastructure investments including “the widening of runways, construction of multi-entrance taxiways, and the creation of aligned high-speed turnoffs.”

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Consumer prices — a key inflation gauge — hotter than expected in August

A key inflation indicator showed higher-than-expected increases in core prices in August, adding more pressure on the Federal Reserve to act despite the risk of a deeper recession.

Consumer prices increased by 6.2% in August compared to the same month one year ago, according to the Commerce Department’s Personal Consumption Expenditures index — the Fed’s preferred measure of inflation. The annual rate was down from 6.4% in July.

Prices rose by 0.3% compared to the previous month.

The core PCE, which excludes volatile food and energy prices, increased by a hotter-than-expected 4.9% year-over-year in August, or by 0.6% compared to July.

Ahead of the release, economists expected core PCE inflation to increase by 4.7% year-over-year and by 0.5% compared to July.

The PCE inflation gauge is one of many data points the Federal Reserve uses to inform its policy path. Earlier this month, the Fed hiked its benchmark interest rate by three-quarters of a percentage point for the third consecutive time as it doubled down on the fight against inflation.

The Fed’s hawkish stance has spooked investors who fear the central bank’s rate hikes will tip the US economy into a deep recession. Meanwhile, the Fed has pledged to adjust its path based on the data it receives.

“The [Federal Open Markets Committee] is strongly resolved to bring inflation down to 2% and we will keep at it until the job is done,” Fed Chair Jerome Powell said at a press conference earlier this month.

Ex-Treasury Secretary Larry Summers warned this week that the level of global market risk is similar to conditions seen prior to the Great Recession – and pointed to inflation-related discomfort as a key obstacle for policymakers.

The Fed is expected to enact more rate hikes this year.
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Chicago Fed President Charles Evans, a non-voting member of the rate-setting FOMC, said he was “a little nervous” the Fed was hiking rates too rapidly to fully assess the impact on markets.

Another closely watched gauge, the Consumer Price Index, showed earlier this month that inflation ran at a hotter-than-expected 8.3% in August. Core CPI inflation, which excludes volatile food and gas prices, rose 6.3% year-over-year — up sharply from the rate of 5.9% seen in June and July.

Market analysts are increasingly fearful of a global recession.
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As The Post reported, inflation has increased 13% since President Biden took office. Critics of the Biden administration argue the president’s government spending programs and restrictive energy policies have helped to fuel inflation.

Meanwhile, Biden and his allies have argued inflation is showing signs of improvement – and largely placed the blame for higher prices on aftershocks related to the COVID-19 pandemic as well as Russian President Vladimir Putin’s invasion of Ukraine.

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New York has fourth-highest household debt in US — and it’s rising

New York state residents have the fourth highest personal household debt in the country — and the burden is only growing heavier, according to a recent government report.

The office of Comptroller Thomas DiNapoli released a report this week indicating that New Yorkers were carrying an average household debt of $53,830 as of the fourth quarter of last year.

The report noted that while New York was still below the national average of $55,810, the state was still well above the national average when factoring in just student loans and credit card debt per capita.

By the end of last year, Americans amassed a total of $15.6 trillion in household debt. New York accounted for 5.6% of the total, or $869.4 billion.

California led the nation in national average household debt. Texas, Florida, New York, and Illinois round out the top five.

New Yorkers’ average household debt rose to $53,830 at the end of 2021.
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According to DiNapoli’s office, average household debt has rose by 4% nationally and 2% in the Empire State during the first two quarters of this year — outpacing the previous highs that were set in 2008.

The vast majority of household debt both nationwide and statewide was made up by mortgage debt, according to the Thursday report.

In New York, 69.2% of residents’ average household debt — or $601.2 billion — was owed to lenders for mortgage payments. Nationwide, that figure was 70.2% — or $10.9 trillion.

“Households across the nation have record levels of debt, after a temporary decline at the onset of the pandemic in 2020,” DiNapoli said.

California, Texas, and Florida are the only states with more household debt than New York.
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“We’re seeing debt rise for New Yorkers with student loans, mortgages and credit cards.”

DiNapoli added: “Borrowing can help individuals achieve their personal and financial goals, but high levels of debt can cause damaging long-term consequences.”

“I urge policymakers to improve access for individuals and families to financial education resources, so they are better prepared to build a stronger financial future.”

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Justice Department antitrust chief wants to ‘unplug’ tech monopolists

The Justice Department’s top antitrust cop said he wants to “unplug” monopolistic Big Tech firms and drove home his support for a stalled congressional bill intended to rein in Google, Amazon, Meta and Apple during a fiery speech on Friday. 

Jonathan Kanter, the Biden-appointed assistant attorney general who leads the Justice Department’s antitrust division, said U.S. regulators had previously taken a “whack-a-mole” approach to monopolistic behavior by Big Tech companies. 

“No one ever really wins that game — the moles just keep coming,” Kanter said. “To stop them from popping up, you really need to unplug the machine. In the same way, enforcers need to unplug the monopolization machine in digital platform industries.” 

During his speech at the Fordham University Conference on International Law and Policy in Manhattan, Kanter called for US antitrust regulators to take a far more aggressive approach to enforcing current laws. 

“The digital economy has enabled monopoly power of a nature and degree not seen before in our country,” Kanter said in front of an audience at the Fordham law school that included many lawyers who defend tech firms against regulators like him.

FTC Chair Lina Khan, who also spoke at the conference Friday, called antitrust legislation in Congress “an extremely healthy development” despite it remaining stalled.
Bloomberg via Getty Images

The bill, co-sponsored by Sens. Amy Klobuchar (D-Minn.) and Sen. Chuck Grassley (R-Iowa) and passed by the Senate Judiciary in January, would ban Big Tech companies from favoring their products over competitors in search results. For example, Amazon would not be allowed to favor its Amazon Basics products over competitors. 

Kanter, who did not call out companies by name but spoke about Big Tech more generally, also reiterated the Justice Department’s support of the American Innovation and Choice Online Act, which remains stalled in Congress. 

Majority Leader Chuck Schumer (D-NY) has said he supports the bill but has not brought it up for a vote, even though Klobuchar and Grassley have insisted for months they have the votes to pass it. Big Tech foes have accused Schumer of holding up the bill, while Schumer insists he’s waiting until it has enough votes. 

Prior to joining the Justice Department in July 2021, Kanter represented Google rivals and critics including Microsoft, Yelp and New York Post parent company News Corp. 

Ahead of Kanter’s speech, he greeted the European Union’s Competition Commissioner Margethe Vestager with a kiss on the cheek. 

Vestager spoke at the conference days after notching a major win against Google when a European court largely slapped down the search giant’s appeal of a record-breaking $4 billion fine for throttling competition and reducing consumer choice through the dominance of its mobile Android operating system. 

Two other top Biden administration antitrust officials also spoke on Friday.

Federal Trade Commission Chair Lina Khan called antitrust legislation in Congress “an extremely healthy development,” while White House economic advisor Tim Wu called for lawmakers to better fund the FTC and Justice Department. 

“The agencies are engaged in extremely complicated, resource-intensive, expert-intensive litigation that is draining their pockets,” Wu said.

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CNN taps Don Lemon, Kaitlan Collins and Poppy Harlow to anchor morning show

Ratings-challenged CNN will reshuffle the deck chairs on the slowly-sinking network, pushing out left-leaning primetime host Don Lemon from his plum solo slot to a newly-created morning team, boss Chris Licht announced Thursday.

Lemon will join Kaitlan Collins and Poppy Harlow to replace current “New Day” hosts John Berman and Brianna Keilar.

Lemon’s long-anticipated demotion comes after Licht was tasked by new corporate overlord Warner Bros. Discovery to shift CNN away from opinion-based shows to more centrist reporting of the news.

Last month, the network canned Brian Stelter, the outspoken host of the now canceled “Reliable Sources.”

Lemon — who often espoused his liberal opinions on his 10 pm show “Don Lemon Tonight” — helmed the lowest-ranked program in primetime in August, averaging 660,000 viewers to finish a distant third to Fox and MSNBC.

Kaitlin Collins and Don Lemon will be join Poppy Harlow as co-hosts of CNN’s new morning show.
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A rep for CNN said the network will be making an announcement on who will replace Lemon in the next few weeks.

Insiders have earmarked Kasie Hunt as a possible replacement for Lemon, or for the 9 p.m. slot, which was left open when Chris Cuomo was fired last year over his role in advising his older brother, then-New York Gov. Andrew Cuomo, in his sex harassment scandal.

Poppy Harlow, who has filled in at “New Day,” will co-host the new morning show.
Getty Images for TIME

Sources recently told The Post that Licht “has his work cut out for him” as he tries to pump up the network’s ratings.

In August, Fox News dominated with nine shows making the top 10 highest-rated cable news shows. Only MSNBC’s Rachel Maddow pulled out a fifth-place ranking with 2.7 million viewers, lagging behind Fox’s “The Five” (3.4 million), “Tucker Carlson Tonight” (3.3 million), “Hannity” (2.9 million) and “Jesse Watters Primetime” (2.9 million).

The only CNN show to crack the top 25 was “Anderson Cooper 360” — in 25th place with 950,000 viewers.

Meanwhile, “New Day,” came in 42nd place out of 82 cable news shows, bringing in 396,000 total viewers.

CNN did not provide a start date for the changes but said it will rename “New Day” and update its set later this year. Berman and Keilar will remain at the network, Licht said.

Don Lemon is moved to the morning show as ratings at his primetime show continued to sink.
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The exec is known for his previous success launching MSNBC’s “Morning Joe” and revamping CBS’ morning show, which was then called “CBS This Morning.” Both shows brought about a lively conversation about current topics and news of the day with a broad selection of guests.

“There is no stronger combination of talent than Don, Poppy and Kaitlan to deliver on our promise of a game-changing morning news program,” Licht said Thursday. “They are each uniquely intelligent, reliable and compelling; together they have a rare and palpable chemistry. Combined with CNN’s resources and global newsgathering capabilities, we will offer a smart, bold and refreshing way to start the day.”

Harlow has most recently served as an anchor of “CNN Newsroom,” as well as a relief presenter at “New Day,” while Collins served as a White House correspondent for the network.

The rejuggling also comes after Warner Bros. Discovery CEO David Zaslav said he is looking  to shore up at least $3 billion in cost savings in 2023 across the company. Earlier this year, the parent company shuttered CNN+, the network’s month-old streaming service, laying off roughly 300 staffers.

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Walmart-backed fintech One to test banking services

One, a fintech company backed by Walmart, will introduce checking accounts to thousands of Walmart employees and a small percentage of its online customers for beta testing in the coming weeks, two people familiar with the matter said.

The fintech aims to make the accounts available to Walmart’s 1.6 million employees within a year before rolling out services more broadly, the people said. It also hopes to expand its offerings to loans and investments.

Bloomberg News earlier reported on the plans. Walmart declined to comment.

Omer Ismail, One’s chief executive officer, joined the company last year after almost two decades at Goldman Sachs and leading the Wall Street giant’s consumer-banking business, Marcus.

One’s banking services are underpinned by Coastal Community Bank, which holds its banking charter. One is majority-owned by Walmart, but operates independently of the retail giant.

The fintech startup was formed after an investment from Ribbit Capital in January last year. Now One employs over 200 employees and is capitalized with more than $250 million on its balance sheet to fund future growth, which includes creating an app that will be integrated into Walmart’s in-store and digital channels, according to its website.

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Airlines commit to free meals, lodging for delays ahead of Labor Day

Several major US air carriers caved to public pressure by confirming they will pay for meals and lodging to passengers who endure delays or cancellations ahead of the potentially chaotic Labor Day travel weekend.

The move by the carriers comes after Transportation Secretary Pete Buttigieg demanded airline CEOs provide free meals and hotel rooms for lengthy delays “at a minimum” due a period of widespread flight disruptions and cancellations.

Most US airlines already offered meal vouchers or complimentary lodging to passengers in the event of delays, but the benefits were not explicitly detailed in plans on their website or other public-facing areas.

As a result, some customers had to be aware in advance about the existence of the vouchers in order to take advantage of the benefit.

Airlines are alerting customers they are eligible for free meals and lodging in the event of some flight delays or cancellations.
Bloomberg via Getty Images

“For cancellations or delays within our control, like mechanical issues, that result in your waiting for more than three hours, we’ll give you a digital or printed meal voucher,” United said in a customer commitment plan that took effect on Tuesday.

“This voucher can be used for the reasonable cost of a meal at airport food vendors. If you don’t automatically get one, just ask us.”

JetBlue noted that passengers stuck waiting 3 hours or more due to “controllable cancellations” will receive meal vouchers of $12 and hotel accommodations for overnight cancellations.

Airlines are scrambling to meet surging travel demand this year.
Anadolu Agency via Getty Images

Southwest’s customer service plan includes similar language, though it notes in bold that the free meal vouchers and lodging apply to flight delays or cancellations “within our control.”

The Post has reached out to the airlines for comment on the updated customer service policies.

“US airlines are committed to offering a high level of customer service and providing a positive and safe flight experience for all passengers,” Airlines for America, a trade group representing major carriers, said in a statement.

Flight disruptions have skyrocketed this year.
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“Carriers continue to post their customer service plans on their websites and welcome opportunities to simplify, clarify and increase transparency for travelers,” the statement added.

In letters to major US airline CEOs earlier this month, Buttigieg referred to ongoing travel chaos and flight disruptions as “unacceptable” ahead of the Labor Day holiday. The letters also demanded that airlines update their customer service plans to reflect assistance available to impacted travelers.

Buttigieg said the Department of Transportation was “contemplating” more regulations that would “further expand the rights of airline passengers.”

Transportation Secretary Pete Buttigieg had urged airlines to offer the benefits “at a minimum.”
AFP via Getty Images

“As you know, these aren’t just numbers, these are missed birthday parties, graduations, time with loved ones and important meetings,” Buttigieg said.

Airlines have been struggling to meet surging travel demand this year while contending with labor shortages and supply chain issues. Mishandled baggage complaints and flight delays have spiked during the tumultuous period.

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‘Pharma Bro’ Martin Shkreli booted from his company by activist revolt

Convicted “Pharma Bro” Martin Shkreli has finally been ousted as boss of the pharmaceutical company he founded, The Post has learned.

Activist shareholders booted the group of directors still loyal to Shkreli during the annual general meeting of Turing’s parent company, Vyera, on Thursday.

Shkreli rose to notoriety after he hiked the price of life-saving AIDS treatment Daraprim to $750 a pill from $17.50 after obtaining the exclusive rights to it in 2015.

The “Pharma Bro” is notorious for hiking the price of life-saving drug Daraprim.
Bloomberg via Getty Images

“The plan is to remove Martin from the company, right the price of Daraprim to pre-Shkreli levels, and do what’s right first with patients, physicians then shareholders,” Jason Aryeh, a longtime activist who previously sought to wrest control of the company, told The Post.

Shkreli was sentenced to seven years in prison in 2017 after being convicted of securities fraud while running two hedge funds.

The victory for the activists comes after a fraught and lengthy proxy battle. In June 2021, Aryeh and other activist investors failed — with the 39-year-old fraudster voting his shares from prison. 

This time, however, Shkreli was banned by Vyera from voting his shares. Still, it wasn’t a slam dunk the activists would win. They feared the current directors — who owned an estimated 44% — could pull tricks like issuing themselves new shares.

The new group takes over a company in disarray, insiders told The Post.

As of June, Turing had “just $23 million in cash, down from $50 million the previous quarter” Aryeh said. “No idea what they’re doing — they burned through $27 million… where did it go?”

“The plan is to liquidate any remaining assets and return money to shareholders,” Aryeh added. “There’s going to be more skeletons they’re going to uncover — my guess is it’ll go defunct eventually.”

Derek Abbott, a bankruptcy lawyer who has been appointed as the legal “receiver” led the charge in this proxy battle. Abbott declined to comment.

In December, the Federal Trade Commission accused Shkreli in court of using anticompetitive tactics to drive up the price of Daraprim. The feds won, resulting in Shkreli being banned from the pharmaceutical industry in the US.

However, because Vyera is based in Switzerland — and subject to Swiss laws — the FTC ban was not enforceable.

Shkreli was sprung from prison in May and moved to a halfway house, from where he is expected to be released Sept. 14. 

He also was banned from Twitter in 2017 for “targeted harassment” of a journalist.

After his early release from prison, Shkreli quipped on Facebook: “Getting out of real prison is easier than getting out of Twitter prison.”

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McDonald’s reshapes board as director Sheila Penrose retires

McDonald’s is reshaping its board, including the exit of a board member recently targeted by activist investor Carl Icahn over how pigs used in the chain’s food are treated.

Sheila Penrose was in charge of the sustainability and corporate responsibility committee.
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Sheila Penrose, who is retiring, has been a McDonald’s board member for 15 years. She was in charge of the sustainability and corporate responsibility committee.

Billionaire Carl Icahn nominated two alternative board candidates earlier this year in an attempt to force changes at the world’s biggest burger chain over how it sources the pork used in its bacon cheeseburgers and sausage patties. Icahn sought to unseat Penrose and Richard Lenny, the former CEO of Hershey.

Shareholders resoundingly rejected Icahn’s campaign, which garnered the support of only 1% of the company’s outstanding shares. Penrose maintained overwhelming support from shareholders as well, as did Lenny.

McDonald’s, based in Chicago, did not say why Penrose is retiring now but it lauded her contributions to the company.

“She’s helped to spearhead our sustainability efforts and advocated on behalf of the larger role that McDonald’s plays in communities around the world,” said CEO Chris Kempczinski. “I will miss her.”

In addition to the departure of Penrose, McDonald’s is adding three new board members.

McDonald’s is adding three new board members. Above, CEO Chris Kempczinski.

Tony Capuano, CEO of Marriott International; Jennifer Taubert, executive vice president and worldwide chairman, pharmaceuticals at Johnson & Johnson; and Amy Weaver, president and chief financial officer at Salesforce, will join the board on Oct. 1, a day after Penrose retires.

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Fed’s future rate hikes hinge on inflation data: minutes

Federal Reserve officials said last month that the pace of future interest rate increases would hinge on incoming data, with some saying rates would need to stay at a “sufficiently restrictive level” for “some time” in order to control inflation, according to the minutes of the July 26-27 session.

Participants at the session said it may take longer than anticipated for inflation to dissipate, and that a slowdown in aggregate demand engineered by the central bank “would play an important role in reducing inflation pressures,” said the minutes, which were released on Wednesday.

The Fed hiked interest rates by another 0.75% last month.
Bloomberg via Getty Images

The minutes did not indicate clear bias among Fed officials for either a smaller rate increase of half a percentage point or a third consecutive 75-basis-point hike at the upcoming Sept. 20-21 meeting, but a restatement that the behavior of inflation and the economy in general would drive the decision.

The Fed has lifted its benchmark overnight interest rate by 225 points this year to a target range of 2.25% to 2.50% as part of an effort to control inflation, which is running at a four-decade high and hovering, by the Fed’s preferred measure, at more than three times the 2% target.

The central bank is widely expected to hike rates next month by either 50 or 75 basis points.

For the Fed to scale back its rate hikes, inflation reports due to be released before the next meeting would likely need to confirm that the pace of price increases was declining.

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