%1

A congressional panel yesterday will examine payouts under a federal coronavirus pandemic aid program intended to help small businesses weather the COVID-19 outbreak amid revelations that as much as 20% of the money may have been awarded to fraudsters, the Associated Press reported. The problems in the COVID-19 Economic Injury Disaster Loan program, overseen by the U.S. Small Business Administration, included a finding by congressional investigators that some 1.6 million applications for the loans may have been approved without being evaluated. Separately, the SBA’s Office of the Inspector General estimated that at least $80 billion distributed from the $400 billion program could have been potentially fraudulent, much of it in scams using stolen identities. The program is expected to be at the center of a congressional subcommittee hearing that also will tackle broader fraud concerns with the flood of pandemic aid from multiple federal government programs for states, local governments, businesses and the unemployed.

LATAM Airlines Group SA, the largest air transport group in Latin America, yesterday asked a bankruptcy judge to approve $2.75 billion in new loans to fund the company's exit from chapter 11, Reuters reported. U.S. Bankruptcy Judge James Garrity in Manhattan will review the request during a court hearing on June 23. LATAM, which has operating units in Chile, Brazil, Colombia and Peru, says it has commitments for $2.75 billion in loans from JPMorgan Chase Bank NA, Goldman Sachs Lending Partners LLC, Barclays Bank Plc, BNP Paribas, BNP Paribas Securities Corp and Natixis, with an additional $1.17 billion agreement to refinance and extend its existing bankruptcy loan. "This commitment secures us the full amount of financing required to complete our restructuring plan and, very importantly, with a degree of flexibility that allows us to optimize existing market conditions," LATAM Airlines Chief Executive Roberto Alvo said in a press release on Saturday. In addition to the judge approving the exit loans, LATAM is awaiting Judge Garrity's decision on whether to approve its overall restructuring plan. LATAM needs to secure its exit loans before emerging from bankruptcy and continuing to raise funds through a post-bankruptcy $800 million equity offering, according to court documents.

Port congestion should ease next year as new container vessels are delivered and demand from shippers softens from pandemic highs, but not enough to restore global supply-chain flows to where they were before Covid, according to the head of DHL’s freight-forwarding unit, Bloomberg News reported. “It’s going to ease in 2023, but it’s not going to go back to 2019,” DHL Global Forwarding, Freight Chief Executive Officer Tim Scharwath said in an interview Wednesday. “I don’t think we’re going to go back to this overcapacity situation where rates were very low. Infrastructure, especially in the U.S., isn’t going to get better overnight, because infrastructure developments take a long time.” Coronavirus outbreaks and related restrictions led to a shortage of workers and truckers at several major ports around the world last year, slowing the movement of goods in and out of freight hubs and pushing container shipping rates to record highs. Spot prices to Los Angeles from China jumped more than eightfold to as high as $12,424 in September from the end of 2019. While the situation has eased in most places as workers return, further stress on the supply chain could materialize as the key port of Shanghai tentatively emerges from a two-month lockdown and cargo backlogs there are cleared. “The Shanghai situation was like a clog in a pipe,” Scharwath said. The city is “smart to open up slowly to make sure that this clog goes out piece by piece and bit by bit to get the flow running.”

The U.S. Commerce Department yesterday unveiled a new strategy aimed at boosting international tourism hit hard by COVID-19 and government travel restrictions by streamlining the entry process and promoting more diverse destinations, Reuters reported. The "National Travel and Tourism Strategy" sets a goal of 90 million international visitors by 2027 who will spend an estimated $279 billion annually, topping pre-pandemic levels, the department told Reuters. "There are a lot of industries that are well past COVID — travel and tourism is not," U.S. Commerce Secretary Gina Raimondo said. The federal government must do more to support the resurgence of travel and tourism to ensure the industry rebuilds to be "more resilient, sustainable and equitable," according to the draft strategy document seen by Reuters. In 2019, the United States had 79.4 million international visitors, a figure that plummeted to 19.2 million in 2020 as the pandemic hit and rose to just 22.1 million in 2021. International visitors spent $239.4 billion in 2019, but just $81 billion in 2019, the Commerce Department said. Before COVID, tourism supported 9.5 million U.S. jobs and generated $1.9 trillion in economic output.

Americans continued to add more cash to their wallets in April, but found that it wouldn’t go as far as it did this time last year, according to data released on Friday, the New York Times reported. Personal income after taxes rose 0.3 percent last month, but fell 0.3 percent from the same month last year, reflecting the government’s 2021 distribution of stimulus checks. Adjusted for inflation, that measure of income was flat on the month but down 6.2 percent from last year. Spending climbed 0.9 percent over the month, but rose less in real terms as inflation continued to rise at its fastest pace in decades. The new numbers, from the Commerce Department, suggest that after two years of Covid restrictions, consumer appetites are robust despite goods shortages, overbooked airplanes and skyrocketing oil prices driving up the cost of everyday life. Economists increasingly project that momentum will slow as the Federal Reserve tries to cool the U.S. economy with interest-rate hikes and pandemic stimulus wanes.