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A U.S. bankruptcy court will start considering Grupo Aeromexico SAB de CV's proposed reorganization plan on Thursday, as the Mexican carrier battles junior creditors who say they are being unfairly treated in a hearing likely to stretch over several days, Reuters reported. Aeromexico, which filed for chapter 11 protection in New York in June 2020, will make its case to U.S. Bankruptcy Judge Shelley Chapman for its proposal, which would infuse new capital into the company and make Apollo Global Management, a frequent investor in distressed companies, the largest shareholder. Though the airline has lined up the support it says it needs from its multiple creditor groups, some still say the plan should not be approved unless junior creditors, some of whom may see just pennies on the dollar, receive better recoveries. Judge Chapman has set aside several days for the hearing, so will likely not rule on the plan on Thursday. If she ultimately approves the deal, Aeromexico — one of three major Latin American airlines that filed for bankruptcy during the pandemic — will be able to exit bankruptcy. The plan, according to the airline, would reduce its debt by $1 billion and save around 13,000 jobs. But junior creditors argue it is overly beneficial to existing shareholders, including Delta Air Lines In. and four board members, at their expense.

Latam Airlines Group SA “flatly rejected” Azul SA’s offer to buy the bankrupt carrier even though the sale would be a better deal for creditors, Azul contends in new court filings, Bloomberg News reported. Azul for months has been expressing interest in a tie-up with Chile’s Latam, but the bankrupt airline has refused to seriously engage in talks, lawyers for Brazil-based Azul said in court papers. Azul said its deal outlined in a Nov. 11 term sheet values Latam at $13 billion and would provide more for creditors than Latam’s current proposal, which is on the verge of seeking court approval. Latam has said Azul’s offer lacked critical details — like how the deal would be executed, how long it would take and whether it could be approved by regulators — as well as the requisite support from creditors. Latam’s restructuring plan is backed by a key group of creditors — including SVPGlobal, Sculptor Capital Management and Sixth Street Partners — and its largest equity holders. Latam is approaching a critical juncture in its effort to exit the bankruptcy case, which began with a chapter 11 filing in May 2020 as COVID-19 lockdowns stymied international travel. On Thursday, the company will seek a bankruptcy judge’s permission to begin collecting creditor votes on its restructuring plan. Its official committee of unsecured creditors is opposing that step, alleging the plan violates U.S. bankruptcy law.

U.S. auto retail sales are expected to dip in January as reduced manufacturing due to the Omicron variant, supply chain constraints and global inflation caused prices to soar amid high demand, consultants J.D. Power and LMC Automotive said, Reuters reported. Retail sales of new vehicles could fall 8.3% to 828,900 units from a year earlier, a report released by the consultants on Wednesday said. "The volume of new vehicles being delivered to dealerships in January has been insufficient to meet strong consumer demand, resulting in a significantly diminished sales pace," said Thomas King, president of the data and analytics division at J.D. Powers. The COVID-19 pandemic has caused bottlenecks in supply chains, driving up costs for everything from labor to raw materials. With consumer demand exceeding supply, new vehicle prices continue to go up. The average new-vehicle retail transaction price in January is expected to reach $44,905, the previous high for any month was in December 2021 at $45,283. Total new-vehicle sales for January 2022, including retail and non-retail transactions, are projected to reach 932,099 units, a 15.6% decrease from last year.
https://finance.yahoo.com/news/u-auto-sales-slip-january-140001706.html

Investors set a record for U.S. commercial-property sales last year, betting that the pandemic is reordering how Americans live, work and play, the Wall Street Journal reported. Real-estate buyers loaded up on warehouses, which serve as fulfillment centers for the e-commerce boom. They bought apartment buildings to capitalize on record high rents. They paid up for resorts and vacation-oriented hotels that benefited from the resurgence in travel to leisure destinations. Overall, commercial-property sales totaled a record $809 billion in 2021, according to data firm Real Capital Analytics. That was nearly double 2020’s total, and it exceeded the previous record of about $600 billion in 2019. The surge in activity reflects investors’ views that work and lifestyle changes brought on by COVID-19 aren’t fleeting. They are wagering hundreds of billions of dollars on that belief. Real-estate investors say they don’t see 2022 sales slowing down much, if at all, from last year’s record pace. Demand for fulfillment centers, other logistics properties and apartment buildings remains strong. That is in part because of supply-chain shortages that are limiting development of such properties, keeping prices of existing inventory high.

The U.S. supply of computer chips has fallen to alarmingly low levels, raising the prospect of factory shutdowns, the Commerce Department reported yesterday, according to the Associated Press. Companies that use semiconductors are down to less than five days of inventory — a sharp drop from 40 days in 2019, according to a department survey of 150 companies. The chips used in the production of automobiles and medical devices are especially scarce. Demand for chips, the department said, was up 17% last year from 2019. Citing the results, the Biden administration called on Congress to pass stalled legislation that would provide $52 billion for domestic semiconductor production. “The semiconductor supply chain remains fragile, and it is essential that Congress pass chips funding as soon as possible,” Commerce Secretary Gina Raimondo said in a statement. “With sky-rocketing demand and full utilization of existing manufacturing facilities, it’s clear the only solution to solve this crisis in the long-term is to rebuild our domestic manufacturing capabilities.”

The Omicron wave of the coronavirus appears to be cresting in much of the country. But its economic disruptions have made a postpandemic normal ever more elusive, the New York Times reported. Forecasters have slashed their estimates for economic growth in the first three months of 2022. Some expect January to show the first monthly decline in employment in more than a year. And retail sales and manufacturing production fell in December, suggesting that the impact began well before cases hit their peak. “Those are Omicron’s fingerprints,” said Constance L. Hunter, chief economist for the accounting firm KPMG. “It will slow growth in the beginning of the first quarter.” Global markets yesterday were in a frenzy, with the S&P 500 plunging nearly 4 percent before recovering its losses. Market analysts said that the early declines reflected fears that the Federal Reserve might need to respond more aggressively than expected to rapidly rising prices, a prospect that some economists say has been made more likely by Omicron. Recovery prospects in the longer run are uncertain. Some economists say even temporary job losses could force consumers to pull back their spending, especially now that federal programs that helped families early in the pandemic have largely ended. Others worry that Omicron could compound supply-chain backlogs both in the United States and overseas, prolonging the recent bout of high inflation and putting pressure on the Fed to act.

U.S. business activity grew at its slowest pace in 18 months in January as a winter surge in COVID-19 infections worsened worker shortages at factories, though demand remained strong, Reuters reported. Data firm IHS Markit said on Monday its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a reading of 50.8 this month from 57.0 in December. That was the lowest level since July 2020. A reading above 50 indicates growth in the private sector. The flash composite orders index slipped to a still-high reading of 55.0 from 56.6 in December. The IHS Markit survey's flash services sector PMI dropped to a reading of 50.9, also the lowest since July 2020, from 57.6 in December. Economists polled by Reuters had forecast a reading of 55.0 this month for the services sector, which accounts for more than two-thirds of U.S. economic activity. Services industry businesses reported that labor shortages, employee absences and Omicron held back growth. Still, demand for services remained strong and companies managed to hire more workers, reducing the backlog of unfinished work.

The U.S. Transportation Department (USDOT) announced yesterday that it is issuing a new rule to make it easier for regulators to move faster to protect airline customers from unfair and deceptive practices, Reuters reported. The new regulation will simplify and speed hearing procedures the department uses when issuing protection rules to prohibit unfair or deceptive practices by airlines and ticket agents. The USDOT plans future rules on airline ticket refunds and transparency of airline baggage and other fees. It will also soon issue guidance on the definitions of "unfair" and "deceptive" for purposes of airline customer protection, the department said in a statement. Under the new rules, the department will require airlines or others seeking hearings on proposed government regulations on unfair aviation practices to move faster, make clear hearings will be granted only if in the public interest, and eliminate a requirement that hearing officers issue detailed reports.