Good morning.
I'm Brian Curtiz and I'm Doug Krisner. Here are the stories we're following today.
The United Airlines says it has found loose bolts in multiple Boeing seven thirty seven Max nine jets during inspections. This comes in the wake of a door plug getting blown out of an Alaska Airlines plane over the weekend. As a result, US aviation safety regulators grounded and ordered inspections on some one hundred and seventy one Max nine jets. Today, Boeing issued guidelines to airlines on how to conduct these inspections.
It's an initial step that is required before the US Federal Aviation Administration could approve a return to flight for the planes. Boeing shares, by the way, closed down eight percent in New York. They are a little changed in after hours, which is interesting because it came after we heard as comments from United Airlines. But that eight percent dropping the stock is the biggest decline we've seen in Boeing since October of twenty twenty two.
Will the CEO of Jet Blue Airways, Robin Hayes, He's going to be stepping down next month. We are told his decision came at the urging of his doctor, although no specific health issue is involved. Here's more from Bloomberg's Charlie Pellett. The company says Hayes will be replaced on February twelfth by Joanna Garrity, a nearly twenty year Jet
Blue veteran who is currently serving as president. The fifty seven year old Hayes has been CEO since February of twenty fifteen, and Jet Blue shares have declined by about two thirds since then. The transition comes at a critical time for Jet Blue, as it awaits a federal judge's ruling on whether it's pending three point eight billion dollar takeover of Spirit Airlines violates antitrust laws and should be blocked in New York Charlie Pellett.
Bloomberg Radio shares closed at a record an up six point four percent in the latest session after the company unveiled three new desktop graphics chips. These extra components will let gamers, designers, and others computer makers and users get better use of AI in their personal machines. We heard earlier from Bloomberg Z and King.
AI has been an enormous benefit for this company already. It's proved materially that this is real, that this is about actual sales and actual deployment. Again in video comes out here and says, hey, don't forget about us. This AIPC, that Intel, that AMD has been talking about. We can do this too, and actually we think we're better than IAS. So again that's likely to press the right kind of button with investors and with saying that reaction.
Bloomberg Z and King separately in video said the capabilities of its new products will not trigger rules put in place by the US government to limit the export of AI related chips to China. And again and video shares a very good session of six point four percent.
We go to China next, where the central Bank is hinting at further monetary easing with a possible cut in banks reserve ratios. The story from Bloomberg zivon men in Hong Kong.
The PBOC may use a sortied monetary policy tools to provide more support. The central Bank's head of monetary Policy, Joe Lahn, said these tools include money market operations, medium term lending facilities, and reserve requirements. The comments come after the Central Bank already provided a massive amount of liquidity in recent weeks. Back in July, Zoe made similar comments in public before the Central Bank made a triple r cut in September. Much of this may already be priced
into markets. Last month, economists pulled by Bloomberg forecast a twenty five basis point cut in the first quarter of this year. In Hong Kong I'm Yvon Mann Bloomberg Radio.
Meantime, Chinese President Shijin Ping is pledging to deepen the country's crackdown on corruption. Bloomberg's Juan Wong has that story.
From Hong Kong.
President, she said he would increase punishment for people who offer bribes. CCTV says she urged tighter monitoring to prevent the spread of graft to news sectors. He highlighted finance, energy, infrat structure, pharmaceutical and state owned firms as the main areas of focus. She has repeatedly foiled a zero tolerance on corruption since he took office in twenty twelve. Just last year, China investigated a number of high profile bankers.
These include former Bank of China chairman Liul Janga and former China Development Bank Vice president Jo ching Yu. In Hong Kong, joined Wan Bloomberg Radio.
Sony is planning to call off the ten billion dollar merger agreement of its Indian unit with Z Entertainment. We are told it's due to a standoff over leadership. Seems as though there were questions surrounding whether Z CEO punit Goenca, who is also incidentally the founder's son, would lead this new merged entity. Back in twenty twenty one, in agreement was signed for go Inca to lead the new company. However, Sony no longer wants him to be in the role.
Sony seems to be a little wary about a regulatory probe against him, and now Sony is working on sending a termination Noticed by January twentieth for World.
News, Donald Trump is looking to have one of his court cases thrown out. We get more on this from Bloomberg's Dan Schwartzman, Dan, that's correct, Brian.
In a filing today in Atlanta, Georgia, Trump has asked a judge to throughout the state's criminal case against him. The former president has been accused of leading a conspiracy to overturn the twenty twenty election. Now, Trump argues he should be immune from prosecution due to having been acquitted by the Senate after being impeached for the same conduct. Trump will also use the same argument on Tuesday during an appeals court hearing in Washington after a district judge
struck down his immunity defense. President Biden speaking in Charleston, South Carolina, today as he tries to make his case to black voters as to why they should support him like they did in twenty twenty. The president's favorability amongst black voters felt to sixty one percent in December. That's down seven percent from October. Donald Trump holding steady a twenty five percent. Biden was interrupted by pro Palestinian protesters
during his speech. He says he's working to get Israel out of Gaza.
I understand their passion, and I've been quietly working. I've been quietly working with the Israeli government to get them to reduce and significantly get out from Gaza. I'm using all I can to do.
As President Biden speaking in South Carolina. Secretary of State Anthony Blincoln continuing his fourth tour the Middle East since Hamas's October seventh attack on Israel with a meeting with Saudi Arabia's Crown Prince Mohammed bin Salman. Blincoln is attempting to calm the region while also urging Israel to do
more to protect civilians in Gaza. The Secretary also took the time to warn the Iranian Baktruthy militants that there will be consequences for attacking commercial ships in the Red Sea. Hes BLA says that a senior commander we sum Taweel was killed in an Israeli airstrike on a car in southern Lebanon. The terror organization and Israel have been trading
fire daily since Hamasa's attack on Israel. Senior Israeli officials have warned that they are prepared to militarily moves law from the northern border if a diplomatic solution is not achieved, with time for a resolution running out. The first US moon landing in fifty years seemingly is doomed, as the Pittsburgh based Astrobotic Technology says the spacecraft developed a quote
critical fuel leak hours after takeoff. The company says they had managed to point the lander toward the sun to allow for the solar panel to collect enough sunlight to charge its battery. While determining the next steps Astrobotic is aiming to be the first private company to land on the Moon, with NASA having giving them and a Houston based company millions of dollars to build and fly lunar landers. The second company is scheduled to make an attempt on
the Moon next month. Global News twenty four hours a day and whenever you want it with Bloomberg News Now. I'm Dan Schwarzman, and this is Bloomberg.
I'm Brand Curtis in Hong Kong. This is Bloomberg Daybreak, Gajia. Paul Allen joins us now from Sydney, and our guest is George Ferguson, Bloomberg Intelligence senior Aerospace and Airlines analyst, to look closer at this Boeing story in all the latest, so George, this latest disclosure by United Airlines would seem to be quite troubling as it involves multiple jets being affected by this, although the testing apparently was confined to
the Max Dash nine jets. And we'll get into maybe later whether or not this could spread, but in the short term, could this set back hopes now that the FAA might clear these planes anytime soon?
You know, first, thanks for having me on. I just think that I think given the problems with the Alaska airflight, I think the FAA would have wanted inspection of all the airplanes of the fleet anyways, And so my senses it doesn't necessarily slow things down or change the inspection program. I do think that, you know, this plug is typically used on the longer version of the seven three seven, so I think that the risk that it spreads to
the rest of the MAX fleet is lower. And this is not even a plug in the smaller of the airplane as near as we can tell, and so I think that it probably does stay limited to the DASH nine.
Yeah, another small development that we heard of that is kind of curious. The cockpit flight recorder got overridden. First off, since when was that a thing? And secondly, what are the implications?
Yeah, i'd heard this as well, and so you know, it's like one of those hard drives that probably overwrites itself every so many hours. And my guess is though, that there's wasn't a lot to learn necessarily from the cockpit, right the pilots got the airplane back intact, thankfully, you know, to the airport. I'm sure there's a bunch of stress
in the cockpit. But I really think that the majority of what we're going to learn about this flight is going to be back at the door plug and the piece they found on the ground.
It seems like what we've learned so far is that this is more of a manufacturing issue rather than a design issue. Is that correct? And is that somewhat less troubling then? To clean up the manufacturing side rather than design, I think.
It is less troubling. I think it would be a silver lining for Boeing. You hate to have this happen under any circumstances. But when you look at the the you know, the way that the plug, You look at these sort of the shots later on, and you see where the plug was in the airplane and how clean the plug seemed to have left the airplane, it does seem to indicate that either fasteners failed or someone didn't
apply the fasteners correctly. And I think the United News kind of confirms that maybe somebody on the manufacturing line didn't understand the right procedure for, you know, for applying this plug.
Are we potentially seeing a bit of a blame game starting to emerge here as well as to whether it's Boeing's process is at fault, perhaps Spirit that makes the fuselage, or even this other company when hearing about AI which should installed Wi Fi during a maintenance period.
Yeah, so the ar is a sort of a late breaking story. And I guess I'd have to hear that they had done the dome on both Alaska and United and a bunch of airplanes. I think we'd have to find sort of more evidence that would tie them together. I would think that there, you know, there's always a potential for blame game here. But at the end of the day, Boeing manufactures the airplane and warrants to be warrants it to be air worthy as it leaves their factory.
And so I think, as much as they might have a supplier problem with Spirit not doing the work right, it's their job to make sure the airplane leaves the factory ready to go. And so I think that you can't get away with too much of that, And I would just, you know, I sort of follow that up a bit with Boeing can't make the seven thirty seven, any version of it without Spirit Aerosystems. And so as much as they may want to say, hey, look, our
supplier did this, is not our fault. They you know, they need spirit to survive and they need spirit to thrive, and so again they can only get away with so much of that. They really need to get down there if the problems is spirit, and help Spirit fix the problem, because that's the way forward for both Spirit and for Boeing.
Just asking this from a pure layman standpoint, you know, getting back to the question of these plugs. You know, these these areas of the plane which might have a door, but in this case was had a plug block in
there and that's what blew off and caused this. Since this, if it ultimately is a manufacturing issue, wouldn't this kind of raise questions about many other planes no matter what, because you know a lot of these manufacturing processes, you know, these people are working on multiple types of planes.
Yeah.
So Spirit though, has you know, a heavy amount of work on the seven thirty seven. So I think that you're you know, if it's a problem it's spirit, Does it mean that it's a problem on a lot of different narrow bodies? Not necessarily. Plugs are used on a lot of different airplanes that have been used effectively for many, many many years, right, And you know, I think as well, you.
If there's a problem with a plug, significant enough problem that it's not going to be able to maintain pressure, you're going to know it, I think pretty soon when you get into service. And this particular airplane have been in service less than three months, so I don't think I don't think it's something that we all have need to be overly concerned about. But again I think on the on the dash nine you do, and we need to make an inspection on everything in the fleet to feel safe.
Can you give us a bit of a saints of the task. I hate NAFA Boeing in terms of restoring trust, restoring its reputation. Is there anything comparable in your experience?
No, the I mean, I think these last four or five years of Boeing have been I would I would say perhaps unprecedented, and starting from the mcast debacle, with the with the crashes and getting to hear I think we can see how this occurred. Right the airplane was grounded prior to the pandemic. I think you know that led the stress on the workforce. People may decide to leave. There were reductions in workforce. Then you hit a pandemic
where travel goes to almost zero. And you can understand why other people might say that would be their time to leave the business. So I think the way forward is really about training the workforce extremely well, and they may have to overdo that here.
Yeah, all right, George, thank you very good information. George Ferguson, Bloomberg Intelligence Senior Aerospace and Airlines Analyst. This is Bloomberg Daybreak Asia Morning brief on the stories making news from Hong Kong to Singapore and Wall Street.
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