Speaker 1: Good morning.
Speaker 2: I'm Brian Curtiz and I'm Doug Krisner. Here are the
Speaker 2: stories we're following today.
Speaker 1: The United Airlines says it has found loose bolts in
Speaker 1: multiple Boeing seven thirty seven Max nine jets during inspections.
Speaker 1: This comes in the wake of a door plug getting
Speaker 1: blown out of an Alaska Airlines plane over the weekend.
Speaker 1: As a result, US aviation safety regulators grounded and ordered
Speaker 1: inspections on some one hundred and seventy one Max nine jets. Today,
Speaker 1: Boeing issued guidelines to airlines on how to conduct these inspections.
Speaker 1: It's an initial step that is required before the US
Speaker 1: Federal Aviation Administration could approve a return to flight for
Speaker 1: the planes. Boeing shares, by the way, closed down eight
Speaker 1: percent in New York. They are a little changed in
Speaker 1: after hours, which is interesting because it came after we
Speaker 1: heard as comments from United Airlines. But that eight percent
Speaker 1: dropping the stock is the biggest decline we've seen in
Speaker 1: Boeing since October of twenty twenty two.
Speaker 2: Will the CEO of Jet Blue Airways, Robin Hayes, He's
Speaker 2: going to be stepping down next month. We are told
Speaker 2: his decision came at the urging of his doctor, although
Speaker 2: no specific health issue is involved. Here's more from Bloomberg's
Speaker 2: Charlie Pellett. The company says Hayes will be replaced on
Speaker 2: February twelfth by Joanna Garrity, a nearly twenty year Jet
Speaker 2: Blue veteran who is currently serving as president. The fifty
Speaker 2: seven year old Hayes has been CEO since February of
Speaker 2: twenty fifteen, and Jet Blue shares have declined by about
Speaker 2: two thirds since then. The transition comes at a critical
Speaker 2: time for Jet Blue, as it awaits a federal judge's
Speaker 2: ruling on whether it's pending three point eight billion dollar
Speaker 2: takeover of Spirit Airlines violates antitrust laws and should be
Speaker 2: blocked in New York Charlie Pellett.
Speaker 1: Bloomberg Radio shares closed at a record an up six
Speaker 1: point four percent in the latest session after the company
Speaker 1: unveiled three new desktop graphics chips. These extra components will
Speaker 1: let gamers, designers, and others computer makers and users get
Speaker 1: better use of AI in their personal machines. We heard
Speaker 1: earlier from Bloomberg Z and King.
Speaker 3: AI has been an enormous benefit for this company already.
Speaker 3: It's proved materially that this is real, that this is
Speaker 3: about actual sales and actual deployment. Again in video comes
Speaker 3: out here and says, hey, don't forget about us. This AIPC,
Speaker 3: that Intel, that AMD has been talking about. We can
Speaker 3: do this too, and actually we think we're better than IAS.
Speaker 3: So again that's likely to press the right kind of
Speaker 3: button with investors and with saying that reaction.
Speaker 1: Bloomberg Z and King separately in video said the capabilities
Speaker 1: of its new products will not trigger rules put in
Speaker 1: place by the US government to limit the export of
Speaker 1: AI related chips to China. And again and video shares
Speaker 1: a very good session of six point four percent.
Speaker 2: We go to China next, where the central Bank is
Speaker 2: hinting at further monetary easing with a possible cut in
Speaker 2: banks reserve ratios. The story from Bloomberg zivon men in
Speaker 2: Hong Kong.
Speaker 4: The PBOC may use a sortied monetary policy tools to
Speaker 4: provide more support. The central Bank's head of monetary Policy,
Speaker 4: Joe Lahn, said these tools include money market operations, medium
Speaker 4: term lending facilities, and reserve requirements. The comments come after
Speaker 4: the Central Bank already provided a massive amount of liquidity
Speaker 4: in recent weeks. Back in July, Zoe made similar comments
Speaker 4: in public before the Central Bank made a triple r
Speaker 4: cut in September. Much of this may already be priced
Speaker 4: into markets. Last month, economists pulled by Bloomberg forecast a
Speaker 4: twenty five basis point cut in the first quarter of
Speaker 4: this year. In Hong Kong I'm Yvon Mann Bloomberg Radio.
Speaker 1: Meantime, Chinese President Shijin Ping is pledging to deepen the
Speaker 1: country's crackdown on corruption. Bloomberg's Juan Wong has that story.
Speaker 2: From Hong Kong.
Speaker 5: President, she said he would increase punishment for people who
Speaker 5: offer bribes. CCTV says she urged tighter monitoring to prevent
Speaker 5: the spread of graft to news sectors. He highlighted finance, energy,
Speaker 5: infrat structure, pharmaceutical and state owned firms as the main
Speaker 5: areas of focus. She has repeatedly foiled a zero tolerance
Speaker 5: on corruption since he took office in twenty twelve. Just
Speaker 5: last year, China investigated a number of high profile bankers.
Speaker 5: These include former Bank of China chairman Liul Janga and
Speaker 5: former China Development Bank Vice president Jo ching Yu. In
Speaker 5: Hong Kong, joined Wan Bloomberg Radio.
Speaker 2: Sony is planning to call off the ten billion dollar
Speaker 2: merger agreement of its Indian unit with Z Entertainment. We
Speaker 2: are told it's due to a standoff over leadership. Seems
Speaker 2: as though there were questions surrounding whether Z CEO punit Goenca,
Speaker 2: who is also incidentally the founder's son, would lead this
Speaker 2: new merged entity. Back in twenty twenty one, in agreement
Speaker 2: was signed for go Inca to lead the new company. However,
Speaker 2: Sony no longer wants him to be in the role.
Speaker 2: Sony seems to be a little wary about a regulatory
Speaker 2: probe against him, and now Sony is working on sending
Speaker 2: a termination Noticed by January twentieth for World.
Speaker 1: News, Donald Trump is looking to have one of his
Speaker 1: court cases thrown out. We get more on this from
Speaker 1: Bloomberg's Dan Schwartzman, Dan, that's correct, Brian.
Speaker 6: In a filing today in Atlanta, Georgia, Trump has asked
Speaker 6: a judge to throughout the state's criminal case against him.
Speaker 6: The former president has been accused of leading a conspiracy
Speaker 6: to overturn the twenty twenty election. Now, Trump argues he
Speaker 6: should be immune from prosecution due to having been acquitted
Speaker 6: by the Senate after being impeached for the same conduct.
Speaker 6: Trump will also use the same argument on Tuesday during
Speaker 6: an appeals court hearing in Washington after a district judge
Speaker 6: struck down his immunity defense. President Biden speaking in Charleston,
Speaker 6: South Carolina, today as he tries to make his case
Speaker 6: to black voters as to why they should support him
Speaker 6: like they did in twenty twenty. The president's favorability amongst
Speaker 6: black voters felt to sixty one percent in December. That's
Speaker 6: down seven percent from October. Donald Trump holding steady a
Speaker 6: twenty five percent. Biden was interrupted by pro Palestinian protesters
Speaker 6: during his speech. He says he's working to get Israel
Speaker 6: out of Gaza.
Speaker 7: I understand their passion, and I've been quietly working. I've
Speaker 7: been quietly working with the Israeli government to get them
Speaker 7: to reduce and significantly get out from Gaza. I'm using
Speaker 7: all I can to do.
Speaker 6: As President Biden speaking in South Carolina. Secretary of State
Speaker 6: Anthony Blincoln continuing his fourth tour the Middle East since
Speaker 6: Hamas's October seventh attack on Israel with a meeting with
Speaker 6: Saudi Arabia's Crown Prince Mohammed bin Salman. Blincoln is attempting
Speaker 6: to calm the region while also urging Israel to do
Speaker 6: more to protect civilians in Gaza. The Secretary also took
Speaker 6: the time to warn the Iranian Baktruthy militants that there
Speaker 6: will be consequences for attacking commercial ships in the Red Sea.
Speaker 6: Hes BLA says that a senior commander we sum Taweel
Speaker 6: was killed in an Israeli airstrike on a car in
Speaker 6: southern Lebanon. The terror organization and Israel have been trading
Speaker 6: fire daily since Hamasa's attack on Israel. Senior Israeli officials
Speaker 6: have warned that they are prepared to militarily moves law
Speaker 6: from the northern border if a diplomatic solution is not achieved,
Speaker 6: with time for a resolution running out. The first US
Speaker 6: moon landing in fifty years seemingly is doomed, as the
Speaker 6: Pittsburgh based Astrobotic Technology says the spacecraft developed a quote
Speaker 6: critical fuel leak hours after takeoff. The company says they
Speaker 6: had managed to point the lander toward the sun to
Speaker 6: allow for the solar panel to collect enough sunlight to
Speaker 6: charge its battery. While determining the next steps Astrobotic is
Speaker 6: aiming to be the first private company to land on
Speaker 6: the Moon, with NASA having giving them and a Houston
Speaker 6: based company millions of dollars to build and fly lunar landers.
Speaker 6: The second company is scheduled to make an attempt on
Speaker 6: the Moon next month. Global News twenty four hours a
Speaker 6: day and whenever you want it with Bloomberg News Now.
Speaker 6: I'm Dan Schwarzman, and this is Bloomberg.
Speaker 1: I'm Brand Curtis in Hong Kong. This is Bloomberg Daybreak, Gajia.
Speaker 1: Paul Allen joins us now from Sydney, and our guest
Speaker 1: is George Ferguson, Bloomberg Intelligence senior Aerospace and Airlines analyst,
Speaker 1: to look closer at this Boeing story in all the latest,
Speaker 1: so George, this latest disclosure by United Airlines would seem
Speaker 1: to be quite troubling as it involves multiple jets being
Speaker 1: affected by this, although the testing apparently was confined to
Speaker 1: the Max Dash nine jets. And we'll get into maybe
Speaker 1: later whether or not this could spread, but in the
Speaker 1: short term, could this set back hopes now that the
Speaker 1: FAA might clear these planes anytime soon?
Speaker 8: You know, first, thanks for having me on. I just
Speaker 8: think that I think given the problems with the Alaska airflight,
Speaker 8: I think the FAA would have wanted inspection of all
Speaker 8: the airplanes of the fleet anyways, And so my senses
Speaker 8: it doesn't necessarily slow things down or change the inspection program.
Speaker 8: I do think that, you know, this plug is typically
Speaker 8: used on the longer version of the seven three seven,
Speaker 8: so I think that the risk that it spreads to
Speaker 8: the rest of the MAX fleet is lower. And this
Speaker 8: is not even a plug in the smaller of the
Speaker 8: airplane as near as we can tell, and so I
Speaker 8: think that it probably does stay limited to the DASH nine.
Speaker 9: Yeah, another small development that we heard of that is
Speaker 9: kind of curious. The cockpit flight recorder got overridden. First off,
Speaker 9: since when was that a thing? And secondly, what are
Speaker 9: the implications?
Speaker 8: Yeah, i'd heard this as well, and so you know,
Speaker 8: it's like one of those hard drives that probably overwrites
Speaker 8: itself every so many hours. And my guess is though,
Speaker 8: that there's wasn't a lot to learn necessarily from the cockpit,
Speaker 8: right the pilots got the airplane back intact, thankfully, you know,
Speaker 8: to the airport. I'm sure there's a bunch of stress
Speaker 8: in the cockpit. But I really think that the majority
Speaker 8: of what we're going to learn about this flight is
Speaker 8: going to be back at the door plug and the
Speaker 8: piece they found on the ground.
Speaker 1: It seems like what we've learned so far is that
Speaker 1: this is more of a manufacturing issue rather than a
Speaker 1: design issue. Is that correct? And is that somewhat less
Speaker 1: troubling then? To clean up the manufacturing side rather than design,
Speaker 1: I think.
Speaker 8: It is less troubling. I think it would be a
Speaker 8: silver lining for Boeing. You hate to have this happen
Speaker 8: under any circumstances. But when you look at the the
Speaker 8: you know, the way that the plug, You look at
Speaker 8: these sort of the shots later on, and you see
Speaker 8: where the plug was in the airplane and how clean
Speaker 8: the plug seemed to have left the airplane, it does
Speaker 8: seem to indicate that either fasteners failed or someone didn't
Speaker 8: apply the fasteners correctly. And I think the United News
Speaker 8: kind of confirms that maybe somebody on the manufacturing line
Speaker 8: didn't understand the right procedure for, you know, for applying
Speaker 8: this plug.
Speaker 9: Are we potentially seeing a bit of a blame game
Speaker 9: starting to emerge here as well as to whether it's
Speaker 9: Boeing's process is at fault, perhaps Spirit that makes the fuselage,
Speaker 9: or even this other company when hearing about AI which
Speaker 9: should installed Wi Fi during a maintenance period.
Speaker 8: Yeah, so the ar is a sort of a late
Speaker 8: breaking story. And I guess I'd have to hear that
Speaker 8: they had done the dome on both Alaska and United
Speaker 8: and a bunch of airplanes. I think we'd have to
Speaker 8: find sort of more evidence that would tie them together.
Speaker 8: I would think that there, you know, there's always a
Speaker 8: potential for blame game here. But at the end of
Speaker 8: the day, Boeing manufactures the airplane and warrants to be
Speaker 8: warrants it to be air worthy as it leaves their factory.
Speaker 8: And so I think, as much as they might have
Speaker 8: a supplier problem with Spirit not doing the work right,
Speaker 8: it's their job to make sure the airplane leaves the
Speaker 8: factory ready to go. And so I think that you
Speaker 8: can't get away with too much of that, And I
Speaker 8: would just, you know, I sort of follow that up
Speaker 8: a bit with Boeing can't make the seven thirty seven,
Speaker 8: any version of it without Spirit Aerosystems. And so as
Speaker 8: much as they may want to say, hey, look, our
Speaker 8: supplier did this, is not our fault. They you know,
Speaker 8: they need spirit to survive and they need spirit to thrive,
Speaker 8: and so again they can only get away with so
Speaker 8: much of that. They really need to get down there
Speaker 8: if the problems is spirit, and help Spirit fix the problem,
Speaker 8: because that's the way forward for both Spirit and for Boeing.
Speaker 1: Just asking this from a pure layman standpoint, you know,
Speaker 1: getting back to the question of these plugs. You know,
Speaker 1: these these areas of the plane which might have a door,
Speaker 1: but in this case was had a plug block in
Speaker 1: there and that's what blew off and caused this. Since this,
Speaker 1: if it ultimately is a manufacturing issue, wouldn't this kind
Speaker 1: of raise questions about many other planes no matter what,
Speaker 1: because you know a lot of these manufacturing processes, you know,
Speaker 1: these people are working on multiple types of planes.
Speaker 7: Yeah.
Speaker 8: So Spirit though, has you know, a heavy amount of
Speaker 8: work on the seven thirty seven. So I think that
Speaker 8: you're you know, if it's a problem it's spirit, Does
Speaker 8: it mean that it's a problem on a lot of
Speaker 8: different narrow bodies? Not necessarily. Plugs are used on a
Speaker 8: lot of different airplanes that have been used effectively for many,
Speaker 8: many many years, right, And you know, I think as well, you.
Speaker 8: If there's a problem with a plug, significant enough problem
Speaker 8: that it's not going to be able to maintain pressure,
Speaker 8: you're going to know it, I think pretty soon when
Speaker 8: you get into service. And this particular airplane have been
Speaker 8: in service less than three months, so I don't think
Speaker 8: I don't think it's something that we all have need
Speaker 8: to be overly concerned about. But again I think on
Speaker 8: the on the dash nine you do, and we need
Speaker 8: to make an inspection on everything in the fleet to
Speaker 8: feel safe.
Speaker 9: Can you give us a bit of a saints of
Speaker 9: the task. I hate NAFA Boeing in terms of restoring trust,
Speaker 9: restoring its reputation. Is there anything comparable in your experience?
Speaker 8: No, the I mean, I think these last four or
Speaker 8: five years of Boeing have been I would I would
Speaker 8: say perhaps unprecedented, and starting from the mcast debacle, with
Speaker 8: the with the crashes and getting to hear I think
Speaker 8: we can see how this occurred. Right the airplane was
Speaker 8: grounded prior to the pandemic. I think you know that
Speaker 8: led the stress on the workforce. People may decide to leave.
Speaker 8: There were reductions in workforce. Then you hit a pandemic
Speaker 8: where travel goes to almost zero. And you can understand
Speaker 8: why other people might say that would be their time
Speaker 8: to leave the business. So I think the way forward
Speaker 8: is really about training the workforce extremely well, and they
Speaker 8: may have to overdo that here.
Speaker 1: Yeah, all right, George, thank you very good information. George Ferguson,
Speaker 1: Bloomberg Intelligence Senior Aerospace and Airlines Analyst. This is Bloomberg
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