Skip to main content

%1

More Than 90 New Airlines Are Launching in 2021. They Say It’s the Perfect Time.

Submitted by jhartgen@abi.org on

For most of last year, running an airline meant parking jets, laying off workers and haggling with governments for bailout funds in a desperate effort to stay out of bankruptcy as appetite for travel shriveled to nearly nothing. A new class of entrepreneurs believes the moment has arrived to do something that has proved difficult in the best of circumstances: start an airline, the Wall Street Journal reported. Upstart airlines are cropping up in North America, Europe, South America, Africa and Asia, as the pandemic continues to depress global travel. More than 90 new carriers, most with funding already secured, have plans in place to take off before the end of the year, according to Avolon Holdings Ltd., an aircraft leasing firm. Some of the upstarts are emerging from the ashes of airlines that failed during the pandemic. Others have been waiting for air travel to show signs of recovery so they can activate plans that were already in place. Most are hoping that they can seize the chance to pick up heavily discounted aircraft, snap up coveted space at once-congested airports and in some cases, hire laid-off pilots and flight attendants. In the U.S., two new airlines are looking to fly routes that larger carriers have ignored or left behind after years of consolidation. One of them, Avelo Airlines had its first scheduled flight Wednesday morning, from Hollywood Burbank Airport to Santa Rosa, in California’s Sonoma County. The airline, which has its corporate headquarters in Houston, is being started by Andrew Levy, the former CFO of United Airlines Holdings Inc., who began planning in 2018 to launch a low-cost carrier that would fly from less crowded secondary airports. Mr. Levy decided last November to go ahead with his plans.

Cirque du Soleil Poised to Make Its Big Comeback

Submitted by jhartgen@abi.org on

On March 14, 2020, entertainment behemoth Cirque du Soleil shuttered its seven Vegas production shows due to COVID-19. More than 15 months later, the company will finally turn the lights back on, Nevada Public Radio reported. With state plans allowing entertainment venues to operate at 100 percent capacity starting June 1, Cirque will revive its pioneering shows "Mystere" and "O," along with its affiliate show "Blue Man Group." All three will be open by the big July 4 holiday weekend. Many have said the return of Cirque on the Strip would signal the return of the Strip entertainment. But it’s also a huge comeback for Cirque itself, the company having come out of last year’s bankruptcy. The company went from putting on 44 shows across the globe to zero revenue almost overnight and was pushed into bankruptcy. “The company was very, very healthy, but you cannot sustain close to 5,000 employees without any revenue. That is why we had to protect ourselves from our creditors,” said Daniel Lamarre, CEO and president of Cirque du Soleil. But from that came new investors who helped the company survive. “That shows a lot about the strength of the brand of Cirque du Soleil because, despite zero revenue for more than a year, people were willing to spend money to keep us alive,” he said.

Biden, Republicans Set Talks Over Competing Infrastructure Plans

Submitted by jhartgen@abi.org on

Lawmakers and administration officials signaled on Sunday that they expected negotiations over an infrastructure package to ramp up this week, as Republicans and President Biden work to see if a bipartisan agreement is within reach, the Wall Street Journal reported. White House chief of staff Ron Klain said that Mr. Biden had invited Sen. Shelley Moore Capito of West Virginia, one of the lead GOP negotiators on the infrastructure package, and others to meet this week. “We’re going to work with Republicans. We’re going to find common ground,” Mr. Klain said on CBS. Republicans said they wanted to see that Mr. Biden was willing to make some concessions to prove his willingness to work across the aisle. Sen. Susan Collins of Maine, a centrist Republican involved in the discussions, said it was up to Mr. Biden to make the next offer in negotiations with GOP lawmakers. Republicans last month proposed spending $568 billion on infrastructure, offering a far narrower and less expensive alternative to the plan Mr. Biden unveiled in March, which would spend $2.3 trillion over eight years on programs and services that go beyond transportation, among them home care for seniors and technology and manufacturing research. In addition, Mr. Biden announced a $1.8 trillion child-care and education plan in his joint address to Congress last week. GOP lawmakers have said they think it might be possible to reach a bipartisan agreement on a more limited package focused on roads, bridges and other elements of physical infrastructure.

COVID-19 Stimulus Checks Likely Drove Record Rise in Household Income

Submitted by ckanon@abi.org on
Household income likely rose at a record pace in March as federal-stimulus checks helped fuel an economic revival that is poised to endure with an easing pandemic, the Wall Street Journal reported. Economists expect household income rose 20% in March from the previous month. That would mark the largest monthly increase for government records tracing back to 1959. The expected surge reflects $1,400 stimulus checks and other government aid included in a $1.9 trillion fiscal relief package signed into law in March. Economists also project that income growth pushed up consumer spending by 4% last month, which would be the steepest month-over-month increase since last summer. Widespread vaccinations and the broader reopening of the economy will help the recovery endure after the effects of fiscal stimulus fade, economists say. “If we have COVID-19 cases under control, that would ideally make way for us to reopen the services sector of the economy,” said Pooja Sriram, U.S. economist at Barclays. “That, in fact, is a crucial aspect of ensuring that this recovery continues.” Stimulus payments included in the latest package propelled spending the most of all three rounds of pandemic stimulus checks, according to data-analytics company Earnest Research.
Article Tags

Commentary: They Want You Back at the Office

Submitted by ckanon@abi.org on
With New York City set to reopen fully in July, and many companies expecting to summon workers back this summer and fall, those in commercial real estate are hoping that the rebirth they’ve tried to hasten may finally happen, the New York Times reported. The industry, coming off a boom of continuous growth, has seen commissions fall off as vacancy rates have climbed to their highest levels in decades. Real estate executives, characteristically bullish on their prospects, are facing existential questions. Offices have long been something of a tautology: Companies have needed offices because to be a company, you had to have an office. But more than a year of forced work-from-home for corporate America has upended that truism, leaving some CFOs running the numbers on potential savings in rent and some employees loath to return to life as it was. Commercial real estate is a business populated mostly by chest-thumping optimists. It is not geared toward the circumspect, the timid or the tepid. But with 1.3 billion square feet of office space available across America’s top markets, strains in rosy projections are showing. For now, the brokers are doing all they can: taking showings to Zoom; sweetening deals and offering leases with more wiggle room; embracing the idea of a more flexible workplace while betting that won’t backfire; and marketing the office as a place to which people want to return — if not for a full business week.

America Is Running Low on Chicken. Blame COVID-19, a Sandwich Craze and Huge Appetite for Wings

Submitted by ckanon@abi.org on
It’s not like we weren’t warned. The doomsayers predicted this months ago: “A MASSIVE CHICKEN WING SHORTAGE IS BREWING,” blared the headline of one trade publication in early February. But it turned out to be so much worse, The Washington Post reported. In other words, not just wings, but chicken in general. It seems the poultry paucity has arrived, heralded by a series of fast-food executives describing in earnings calls their stores’ struggles to stock enough chicken — nuggets, tenders, wings, patties, all shapes and sizes — to keep pace with legions of peckish Americans. “Demand for the new sandwich has been so strong that, coupled with general tightening in domestic chicken supply, our main challenge has been keeping up with that demand,” said David Gibbs, CEO of Yum Brands, whose KFC restaurants recently rolled out a new fried-chicken sandwich. Charles R. Morrison, chairman and CEO of Wingstop, said that “Suppliers are struggling, just as many in our industry are, to hire people to process chicken, thus placing unexpected pressure on the amount of birds that can be processed and negatively affecting supply of all parts of the chicken in the U.S., not just wings.” Chicken has for years been the most popular meat in the U.S. and experts and analysts have cited several reasons for the current deficit. Some are related to the coronavirus — pandemic-spurred disruptions in the market and supply chain and an increased demand for a comfort food that is takeout- or delivery-friendly. Others, industry watchers say, include increased competition, volatile feed prices and even the deadly winter storms that swept over the South in February, halting the work of chicken processors.
Article Tags

Cruise Lines Could Start U.S. Sailings by Mid-July, CDC Says

Submitted by ckanon@abi.org on
Cruise operators could restart sailings out of the U.S. by mid-July, the Centers for Disease Control and Prevention said, paving the way to resume operations that have been suspended for longer than a year due to the COVID-19 pandemic, the Wall Street Journal reported. The CDC, in a letter to cruise-industry leaders, also said that cruise ships can proceed to passenger sailings without test cruises if they attest that 98% of crew members and 95% of passengers are fully vaccinated. The move was a result of twice-weekly meetings with cruise representatives over the past month. Under the conditional-sail order put in place in October, cruise operators were required to conduct test cruises and apply for a certificate at least 60 days before offering passenger cruises. The CDC said it would now review and respond to applications for simulated voyages within five days. “This puts cruise ships closer to open-water sailing sooner,” the CDC said. The CDC also loosened testing and quarantine requirements for passengers and crew. For the first passenger voyages out of the U.S., fully vaccinated people can now take a rapid test upon embarkation instead of a polymerase chain-reaction test. Passengers will be able to quarantine at home if they are within driving distance.

COVID Restaurant ‘Carnage’ Shows Itself in Latest Old Country Buffet Bankruptcy

Submitted by ckanon@abi.org on
The painful impact of the pandemic on the restaurant industry was made all too clear last week when all-you-can-eat chain Old Country Buffet filed for bankruptcy for the fourth time since 2008, Bloomberg reported. Like many eateries, Old Country and its affiliates struggled as COVID-19 lockdowns kept restaurant-goers at home. Another all-you-can-eat chain, CiCi’s Holdings Inc., sought chapter 11 protection in January. The pandemic was hard on restaurants that counted on the sale of alcohol and soft drinks, a low cost but lucrative item for casual dining spots. Ruby Tuesday Inc., California Pizza Kitchen Inc. and Friendly’s Restaurants LLC are among the chains that filed for bankruptcy last year as COVID-19 spread. Old Country Buffet’s most recent chapter 11 filing makes it a rare instance of a so-called chapter 44 filer, industry parlance for a company that seeks bankruptcy four times. It had managed to stay out of bankruptcy since 2016 after previously filing in 2012 and 2008. The amount of traded distressed bonds and loans rose to about $90 billion as of April 23, up 1.6% week-on-week, data compiled by Bloomberg show. Troubled bonds grew 1.9% while distressed loans rose 0.6%. It’s the first time the weekly tally of distressed debt outstanding has risen this month. 

Restaurants Serve Up Signing Bonuses, Higher Pay to Win Back Workers

Submitted by ckanon@abi.org on
Restaurants spent much of the past year trying to win back customers. Now, they are struggling to win back employees, The Wall Street Journal reported. Nationwide chains and independent eateries alike said they can’t hire enough workers to staff kitchens and dining rooms, just as COVID-19 restrictions relax and more consumers want to eat out again. Fast-food operators, including owners of Jimmy John’s Gourmet Sandwiches restaurants, are offering signing bonuses for recruits. Chipotle Mexican Grill Inc. is offering free college tuition to employees who work at least 15 hours a week after four months on the job. Taco Bell is giving paid family leave to company-store managers. McDonald’s Corp. owners are assessing what pay and benefits its U.S. employees most want, to better pitch the Golden Arches as an employer. Atlanta-based restaurant operator Daniel Halpern, who runs 50 TGI Fridays and other restaurants, recently increased hourly wages and is offering employees immediate pay. He said he is still short about 900 workers. U.S. restaurants increasingly are seating and serving customers again, after a year when quarantining and seating restrictions forced many to launch online-only food brands or rely on takeout business. Sales at bars and restaurants rose 13.4% in March compared with February, the biggest month-over-month increase since June, Commerce Department figures show. But servers, hosts and line cooks aren’t similarly rushing back, restaurant owners say — whether because they are fearful of COVID-19, have moved on to other industries or remain on unemployment benefits. Other sectors of the U.S. economy also are scrambling to staff up, with manufacturers, live-events coordinators and other companies wrestling with labor shortages.

Giant U.S. Landlords Pursue Evictions Despite CDC Ban

Submitted by jhartgen@abi.org on

According to the Princeton University Eviction Lab, 318,091 households have faced eviction proceedings during the pandemic in the 27 cities the research project tracks, including Phoenix, Milwaukee and Dallas, Reuters reported. Many more remain vulnerable to eviction and possible homelessness: By May, an estimated 7 million renters across the country will owe $40 billion in back rent, utilities and fees, Moody’s Analytics estimates. Before the pandemic, about 900,000 households were evicted each year. Most renters live in apartments or houses owned by small-scale “mom-and-pop” landlords, who often rely heavily on their rental income. But based on a review of hundreds of court filings across the country, as well as interviews with tenants, their lawyers and housing advocates, it’s the big, deep-pocketed corporate landlords with property portfolios spanning multiple states that have been the most aggressive in filing eviction cases, even as they have thrived in the pandemic. Since the pandemic began, large corporate landlords have filed nearly 70,000 eviction cases in just 27 counties in seven states analyzed by the Private Equity Stakeholder Project, a Chicago-based nonprofit that studies the impact of private equity investments on the public. Many of the big landlords, especially those focused on single-family homes, have benefited as higher-income families have fled to the suburbs for perceived safety and more space during the pandemic. Invitation Homes had its best year ever in 2020, with profits climbing to a record $200 million as occupancy rates neared 100%. Its share price has nearly doubled since March 2020. Invitation Homes ranked fifth among companies seeking evictions in the seven states examined by the Private Equity Stakeholder Project, with 710 cases since the CDC moratorium took effect Sept. 4. Ahead of it were S2 Capital, a Dallas, Texas, investment firm, with 1,160 eviction suits; Ventron Management, with 1,134 cases against tenants in Georgia and Florida and which received $2.6 million under the federal Paycheck Protection Program; private equity firm Pretium Partners, which operates Progress Residential and Front Yard Residential, with 1,074 eviction suits; and Western Wealth Capital, with 1,018.