Business

NEW YORK — United Airlines announced plans on Thursday to buy 15 aircraft from airline startup Boom Supersonic in a move that could revive the high-speed form of air travel after the Concorde was wound down in 2003.

Under the deal, United would purchase Boom's "Overture" aircraft once the planes meet "United's demanding safety, operating and sustainability requirements" with an aim to start passenger travel in 2029, the companies said in a joint press statement.

The announcement represents a potential comeback to a once heavily-touted method of travel, although some analysts expressed skepticism, particularly over the relatively speedy timeframe.

The agreement covers 15 planes and includes an option for United to obtain another 35 aircraft. The companies did not disclose financial terms.

"It's an interesting idea, but there are a lot of questions," said Michel Merluzeau, an expert at consultancy AIR, who estimates that developing a new commercial jet that passes muster with regulators could cost $10 to $15 billion.

"We need to be realistic about this," added Merluzeau, who sees 2035 or 2040 as a more likely target date for commercial service.

Merluzeau said it also was not clear whether United had agreed to any payments or if the announcement represented an intention to purchase. 

Boom's plane is capable of flying at twice the speed of leading aircraft now on the market, with the potential to fly from Newark to London in three and a half hours and San Francisco to Tokyo in six hours, the companies said.

The jets will also be "net-zero" in carbon use because they will use renewable fuel.

Comeback? 

Commercial supersonic jet travel was introduced in the 1970s with the Concorde, but the jets were retired in 2003 due in part to the high cost of meeting environmental restrictions on sonic booms.

The Concorde's demise also followed a 2000 Air France accident that killed 113 people.

The aircraft could fly at over twice the speed of sound, creating its famous "sonic boom" when it burst through the sound barrier. 

Only the wealthiest passengers were able to afford the exorbitant ticket prices for the 100-144 seats on the aircraft, which was only ever used by Air France and British Airways.

Still, the technology is getting another look today as companies in the United States and abroad develop planes with lighter and more efficient composite materials and new engine designs, according to a fact sheet from the Federal Aviation Administration.

"Our mission has always been about connecting people and now working with Boom, we'll be able to do that on an even greater scale," said United Chief Executive Scott Kirby.

Peter McNally, an analyst at Third Bridge, said faster flights could be appealing to business customers, adding "the key for United, American and Delta is business and long-distance travel."

Founded in 2014, Denver-based Boom Supersonic said it is also working with the United States air force on a military version of the Overture. 

The company has thus far raised $270 million from investors, a spokeswoman for Boom said. Boom Supersonic's supporters include venture capital investors such as Bessemer Venture Partners and American Express Ventures, a unit of the credit card company.

Boom's chief executive and co-founder, Blake Scholl, a former Amazon staffer, has touted the venture as a way to meet consumer interest in an increasingly interconnected world.

"The story of Concorde is the story of a journey started but not completed — and we want to pick up on it," Scholl said in July 2018 at an event held in parallel to the Farnborough Airshow.

Jon Ostrower, editor of the aviation publication the Air Current, said on Twitter that United's order marked a shift in a long-term industry trend.

"The last time United ordered supersonic aircraft, humans had yet to walk on the Moon," Ostrower said. "More than a half century later, United is again focusing on speed, bucking the most consistent airline trend over the past 50 years: A desire to fly cheaper, not faster."

A competing startup for supersonic travel, Aerion, shut down in May after Boeing pulled the plug on its investment.

"We couldn't get there with respect to the market and with respect to the needed investment," Boeing Chief Executive Dave Calhoun said at a conference Thursday, adding that the company reached a point "where we didn't believe in it quite as much as we thought we could".

Major new investments must have meaningful upside to work at Boeing, and "we don't have to be big on every form of air travel", Calhoun added.

SAINT PETERSBURG — A flagship economic forum has returned to Saint Petersburg, with Russia aiming to signal it has moved beyond the coronavirus pandemic and is open for business.

The Saint Petersburg International Economic Forum (SPIEF), often dubbed the Russian Davos, officially started on Thursday and is the country's main showcase for investors, attracting political and business leaders from around the world.

It has been hosted every year since 1997 -- cancelled only in 2020 due to the pandemic -- in the hometown of President Vladimir Putin, who is expected to speak at the forum in person on Friday.

"The forum is very important for the image of the city, the restoration of the economy's growth and the revival of tourism," Saint Petersburg governor Alexander Beglov told the RIA Novosti news agency.

The scale of the forum is smaller than previous years, with the number of participants capped at 5,000. In comparison, the 2019 SPIEF was attended by over 19,000 people from 145 countries, according to organisers.

Leaders of China, France and India have previously attended the forum.

This time Putin will be joined via videolink by Austrian Chancellor Sebastian Kurz and Sheikh Tamim bin Hamad Al-Thani, the emir of Qatar, which has sent one of the biggest delegations this year.

The reduced attendance also comes after a turbulent year for Russian diplomacy, as relations with the West -- which have been deteriorating since the annexation of Crimea in 2014 -- reached a new low following the poisoning and imprisonment of Kremlin critic Alexei Navalny.

It is also a challenging time for independent media and opposition groups in Russia that have faced increasing pressure in recent years. 

Independent business new outlet VTimes announced on Thursday it would shut down after being branded a "foreign agent", a designation that requires it to disclose its funding and label its publications with a tag.

Handshakes, no masks 

Russian officials say that "bad politics should not be allowed to interfere with good business", said Chris Weafer, analyst and founder of Macro-Advisory consultancy firm.

According to Weafer, one of the messages at this year's SPIEF is that "Russia has turned a corner and has learned from the last seven years" characterised by low oil prices and sanctions.

But in 2020, the inflow of foreign direct investment to Russia slumped to the level of the mid 1990s, the Central Bank said in January, after years of steadily decreasing against the backdrop of sanctions.

The forum comes almost a year after Russia lifted its strict lockdown that was imposed last spring when the coronavirus swept across the country.

Since late summer most virus restrictions have been lifted with authorities opting to protect the economy and pin hopes on Russia's Sputnik V jab that was registered in August.

The country still continues to record an average of 9,000 new infections every day.

To ensure virus safety at the forum, all participants this year are required to test negative for the coronavirus before they enter the site. Inside, masks are required at all times.

Julius Bakazarov, a 19-year-old forum volunteer, said participants "never ignore requests" to wear masks or observe other measures.

But the reality is different, with few people wearing face coverings, handshakes among participants and large crowds gathering at the forum venues, an AFP journalist reported.

'Observe the rules' 

Saint Petersburg, Russia's second largest city, has struggled to contain the spread of the virus, especially after a boom in domestic tourism made the former capital a popular travel destination. 

Just days after the forum, the city will also host several matches of the postponed Euro 2020 football tournament that will bring together thousands of fans, both from Russia and abroad.

SPIEF volunteer Yekaterina Bolkhovskaya, who lives in Saint Petersburg, said holding an event such as the economic forum can only have a "positive effect".

"This will remind people that if they want to participate in big events then they need to... observe the rules of personal hygiene and safety," the 19-year-old said.

WASHINGTON — US private hiring surged in May, adding 978,000 positions, according to payroll services firm ADP, far more than expected.

Most of the new jobs were in the services sector, which increased by 850,000 positions, more than half of which were in leisure and hospitality, the sector hardest hit by the Covid-19 shutdowns.

Goods-producing firms added 128,000 jobs, the report said.

While the overall gain, the biggest since June of last year, bodes well for the government jobs report due out Friday, economists warn that ADP figures often are widely different than official data.

Despite the Labour Department reporting a tepid increase of 218,000 private nonfarm jobs in April, ADP's revised data shows a gain of 654,000.

Still, ADP chief economist Nela Richardson said the results underscore the "marked improvement" in private payrolls.

"Companies of all sizes experienced an uptick in job growth, reflecting the improving nature" of the pandemic and economy, she said in a statement.

Ian Shepherdson of Pantheon Macroeconomics notes the ADP model includes other economic data that have strengthened as the economy has reopened.

"But firms appear not to be able to find all the workers implied by the strong macro data," he said in an analysis, "so we think ADP likely will overstate the official numbers for the second straight month."

Firms nationwide have reported struggles to fill open positions, and a Federal Reserve report released Wednesday noted that the issues have hindered production in some cases and prompted companies to boost wages and incentives.

The consensus forecast among economists is for a private jobs gain of 650,000 in the Labour Department report.

WASHINGTON — Malfunctioning equipment accounts for about half of the biggest sources of potent greenhouse gas methane emissions at the United States' largest oilfield, a study led by NASA showed on Wednesday.

Researchers found that repairing just 123 sources found to leak most persistently in the area they surveyed using sensor-equipped planes would reduce methane emissions by 55 tons (50 metric tons) an hour.

That amount is equivalent to 5.5 per cent of the official estimate of all methane emissions from oil and gas production in the entire United States.

The Permian Basin is a shale basin about 250 miles wide and 300 miles long (about 400 by 500 kilometers), spanning parts of west Texas and southeastern New Mexico. 

It produced about 4.5 million barrels of crude a day last month, according to official figures, making it the largest producing oil field in the world.

Fracking is the most common drilling method in the basin, and is linked to leaks of methane, which has about 80 times the warming potential of carbon dioxide over the first 20 years it reaches the atmosphere.

The research team, which included the University of Arizona and Arizona State University, focused their efforts on "super-emitter" sources, which release more than 22 pounds (10 kilogrammes) of methane per hour.

They calculated emission rates by combining observed methane concentrations -- detectable by air using imaging spectrometers that identify the gas by its effects on reflected sunlight -- with reported wind speeds.

The team located a total 1,756 super-emitters in a 22,000-square-mile (57,000-square-kilometre) section of the oilfield they surveyed.

Not every emission is a sign of a leak -- some are planned venting of pressure release valves.

"Multiple revisits of these sites are the best way to discriminate between unplanned and planned emissions," said Daniel Cusworth, a scientist with NASA's Jet Propulsion Laboratory and lead author of the study published in the journal Environmental Science and Technology.

Cusworth and his colleagues focused on 1,100 sources seen emitting plumes on at least three flights, and classified 123 sites as the most persistent.

The study could have practical implications: once sources are located and verified on the ground, there's a good chance the leaks can be repaired, said co-author Riley Duren of the University of Arizona.

The imaging sensors used in the study are able to pinpoint methane sources to within 15 to 30 feet (five to 10 meters) while flying at the altitude of a commercial airliner. 

High-resolution cameras were then used to relate plumes to pieces of equipment on the ground such as oil and gas wells, compressors, pipelines, all of which can potentially leak.

NEW YORK — Electric vehicle maker Tesla has initiated a recall of nearly 6,000 vehicles to inspect brake calipers for loose bolts.

The recall, made public on Tuesday, involves as many as 5,974 cars from the 2019-2021 Model 3 and 2020-2021 Model Y lines.

"The brake caliper bolts may be loose, allowing the brake caliper to separate and contact the wheel rim," according to a document sent by the National Highway Traffic Safety Administration (NHTSA) to Tesla after it notified the regulatory agency of the issue.

"Contact with the rim may cause a loss of tire pressure, increasing the risk of a crash."

Tesla is not aware of the issue causing any injuries or deaths, according to the NHTSA documents, and the company will inspect and tighten or replace customers' caliper bolts as needed.

The automaker became aware in December that a fastener was missing from a brake caliper on a 2021 Model Y and began an investigation to see how widespread the issue was, according to the documents, which add that Tesla has taken steps to fix the problem on the assembly line.

OTTAWA — Canada's economy grew at a rate of 5.6 per cent in the first three months of 2021, the government statistical agency said on Tuesday.

Its strength was in part due to low mortgage rates fueling strong demand for housing, continued government COVID aid to households and businesses, and an improved jobs market, Statistics Canada said in a statement.

The figure, however, was about a percentage point lower than analysts had forecast, following a revised 9.3 per cent uptick in gross domestic product (GDP) in the previous quarter.

"Canada's economy managed to shrug off a case of COVID in the winter, only to succumb to a harsher wave of the same disease in the spring," CIBC Economics analyst Avery Shenfeld said in a research note.

Still, growth was "healthy" in the quarter, he said, pointing to strong price gains, and Canadians staying in the country with reduced winter travel abroad helping to give a boost to "mediocre consumer spending".

According to Statistics Canada, the economy got a boost from a sharp increase in prices for construction materials and energy used in Canada and exported, as well as increased wages — notably in construction and information and cultural industries.

Housing investments continued to rise for a third consecutive quarter, leading the recovery, but adding tens of billions of dollars in Canadians' residential mortgage debts.

Outlays for new vehicles, computers, games, toys and hobbies, as well as sports and camping equipment rose, but declined for clothing and footwear.

As consumers spent more time at home during the pandemic, spending on food and alcoholic beverages also increased.

Shenfeld noted that Canadians amassed significant savings during the pandemic, up 13 per cent in the first quarter, but "that money won't be spent just yet," he said, as public health restrictions were still in place in much of the country heading into the second quarter.

"Investors will already be looking past Q2, with hopes that vaccinations will pave the way for much stronger growth again in the second half of the year," Shenfeld said, after lockdowns were a drag on April growth.

By Sarah Stewart
Agence France-Presse

DUBAI — Dubai's property market is powering out of a six-year malaise as "lockdown dodgers" and wealthy international investors drive a buying frenzy that is breaking records and fuelling an economic recovery.

Luxury villas are the hottest segment in the market, with European buyers, in particular, seeking homes on Dubai's signature Palm Jumeirah man-made island, as well as golf course estates.

Dubai's rollercoaster property market, which had been in steady decline since 2014, went into flatline after COVID-19 hit last year and the emirate slammed shut its borders, said Zhann Zochinke, chief operating officer of consultancy Property Monitor.

"Then straight after that lockdown period we started to see transaction volumes increase, and they really haven't stopped since," he said.

"We're now seeing record month-on-month gains and transaction volumes."

The Gulf emirate became one of the first destinations to reopen to visitors last July, pairing the open-door policy with strict rules on masking and social distancing, and an energetic vaccination programme which has produced some of the highest inoculation rates globally.

Despite a surge in coronavirus cases in the new year after holidaymakers descended en masse, life has continued largely as normal with restaurants and hotels open, and few of the restrictions that have blighted life elsewhere.

"The lockdown dodgers from other countries? I think we're seeing a lot of that there," Zochinke said, adding that other draws were more relaxed residency rules and a decision to allow full foreign ownership of firms.

'Not just a 

construction site' 

The flood of arrivals has regenerated the tourism industry, long an economic mainstay of Dubai which has little of the oil wealth that powers its neighbours, and helped business activity recover to pre-COVID levels in April, according to IHS Markit.

"Travel and tourism firms recorded the most notable bounce in performance, amid increasing hopes of a rise in tourism activity later in the year, boosted by the rapid vaccine roll-out," said the research firm's Economist David Owen.

After years of torpor when homeowners watched their equity drain away, the surge in luxury properties above 10 million dirhams ($2.7 million) has been striking, with 90 transactions in April compared to around 350-400 on a regular yearly basis, according to Property Monitor.

A mansion on the Palm has sold for 111.25 million dirhams, the highest price reached in years in the precinct which features 16 "fronds" lined with show-stopping houses and supercars parked in the driveways.

The highest-priced property now available on the block is a vast Italian-inspired modern villa positioned at the end of one of the fronds, complete with 180 degree beach frontage, which is being offered for 100 million dirhams.

After it languished on the market during the gloomy days at the height of the pandemic, the developers are hoping that one of the new breed of cashed-up Europeans will be tempted by the infinity pool, private cinema, and acres of marble and glass.

"I think people have started to realise that Dubai is not just a construction site anymore, which it was maybe 10 years ago when we had the most amount of cranes in the world," said Matthew Bate, CEO of BlackBrick, one of the agencies representing the property.

'COVID opened 

the doors' 

"People are now looking at Dubai and saying — I'm going to make this my primary home. I can work from Dubai and still manage business in Europe or North America or Asia," he said.

"So I think what COVID ultimately did, it opened the doors for us to the rest of the world."

In a market where many fortunes have been made and lost, there is nervousness about whether the recent giddy rises can be sustained.

Sales of properties above 10 million dirhams rose 6.7 per cent in April compared to the previous month, and 81 villas were sold on the Palm in April alone compared to 54 in all of 2020, according to Property Monitor.

Even with the remarkable gains, the market is still off its highs of 2014, and the apartment market is trailing far behind.

The financial services firm Morgan Stanley, however, said in a recent report that the rally isn't likely to stop soon.

"Robust demand, peaking supply growth and long lead times for new projects could lead to a tighter-than-expected market over the next several years," it said.

It credited "a wave of government reforms over the past 12 months, attractive mortgage rates, and a shift in demand patterns due to COVID-19".

WASHINGTON — President Joe Biden on Friday proposed a $6 trillion budget to "reimagine" the US economy and stave off Chinese competition, though driving the United States into record debt — and with Congress first needing to give approval.

Announcing the proposed spending, Biden said a post-pandemic United States "cannot afford to simply return to the way things were before."

"We must seize the moment to reimagine and rebuild a new American economy," he said.

The president's annual budget is more a wish list or a message on his priorities than anything else. Congress ultimately decides what money goes where, and the current Congress has only the narrowest Democratic majority.

Opposition Republicans are leery of any big new role for the central government.

Congressman Kevin McCarthy, leader of the Republican minority in the House of Representatives, called it "the most reckless and irresponsible budget proposal in my lifetime."

Even some of Biden's supporters warn that an economy already set to roar back from the COVID-19 shutdown risks getting swept up into an inflationary spiral.

But the massive plan signals the White House's determination to put hard numbers on Biden's campaign to rethink the relationship between government and business in what he says is an existential contest with China.

Under the Biden blueprint, the federal spigot would unleash $6.011 trillion in 2022, with increases gradually rising to $8.2 trillion in 2031. Debt as a percentage of annual GDP would be expected to quickly surpass the level seen at the end of World War II.

The Democrat made clear where the lion's share of that expected $6 trillion price tag should go.

One huge chunk would be an infrastructure bill originally proposed at $2.3 trillion but since whittled down to $1.7 trillion in negotiations with Congress. 

Another $1.8 trillion would go on increased state-funded education and social services — all, Biden argues, part of building a better 21st century workforce.

The overall aim, Biden said, is to grow the US middle class, while positioning "the United States to out-compete our rivals".

Can it pass? 

The budget proposal is being unveiled just ahead of the long Memorial Day weekend and with Congress heading out on a week's recess.

The timing may dampen the immediate furor on Capitol Hill, where many Democrats want Biden to use his control of Congress to push transformational legislation but Republicans are playing hardball in trying to block most of what the president proposes.

Spending priorities are just one area of division.

For example, Republicans are pretty much unanimous in opposing Biden's broad definition of infrastructure to include green energy and social programmes.

But there's even less agreement on how to pay for it.

Biden wants to raise money by ending a corporate tax cut Republicans passed under his predecessor Donald Trump. He also wants to go aggressively after tax loopholes used by the ultra-wealthy and large corporations.

Republicans refuse to accept this and say their own, more modest, infrastructure spending plans could be paid for by reallocating unspent money already budgeted.

"President Biden's proposal would drown American families in debt, deficits and inflation," the senior Republican senator, Mitch McConnell, said.

Despite the stand-off — and the sheer scale of Biden's mega budget — the White House still has a potential ace up its sleeve in that slim Democratic majority.

Ordinarily, Biden needs at least 10 Republicans to cross over in the evenly split Senate, a tall order at the best of times. 

However, if Democrats remain unanimous — which is also not guaranteed — they may be able to pass the budget through a fast-track procedure known as reconciliation.