United Airlines is planning a record expansion of its aircraft fleet.
The carrier is ordering 270 single-aisle planes from Boeing and Airbus, signaling confidence in the resurgence of air travel.
Daily Business Briefing
June 29, 2021Updated June 29, 2021, 6:47 a.m. ETJune 29, 2021, 6:47 a.m. ET
The carrier is ordering 270 single-aisle planes from Boeing and Airbus, signaling confidence in the resurgence of air travel.
Here are the antitrust arguments against Facebook and why a judge rejected them.A new mortgage rule aims to speed modifications and slow foreclosures.Economists grapple with how much racism is to blame for a wide pay gap.Catch up: Digital currency may be a fad, like parachute pants, a Fed official says.
United Airlines planes at Newark Liberty International Airport. United expects to add more than 500 aircraft to its fleet in the coming years.Credit…Chris Helgren/Reuters
United Airlines announced Tuesday that it was ordering 270 single-aisle planes from Boeing and Airbus, the biggest aircraft purchase in United’s history and the largest in the United States in a decade. The deal will drive an expansion of United’s fleet, in both the number and the size of its planes.
“It’s about building an airline that can compete with anyone,” Andrew Nocella, the airline’s chief commercial officer, said in a call with reporters.
Boeing will supply 200 of the planes, all versions of the 737 Max, its leading commercial aircraft. Of those, 150 will be 737 Max 10s, and 50 will be smaller Max 8s. Airbus will provide the remaining 70 planes, all from the A321neo line.
United took its first delivery of a Max 8 on Monday and expects to receive the first of the other two planes in 2023. The airline currently has just over 800 planes in its fleet.
United declined to say how much it was paying for the planes, but such large orders are typically deeply discounted. The order is good news for Boeing, which is trying to recover from the nearly two-year global ban on the Max after two fatal crashes. Since global regulators began lifting their bans on the plane late last year, Boeing has rushed to deliver the planes and book new orders.
Combined with existing orders, United expects to add more than 500 planes to its fleet in the coming years, including 40 in 2022 and 138 in 2023. The airline also plans a huge retrofit project in which it will upgrade its existing single-aisle planes to match the interiors of the new planes. About 300 of the new planes will replace smaller jets, while 200 will be used to expand United’s fleet.
Airlines in the United States are experiencing a strong summer rebound in travel. On Sunday, the Transportation Security Administration screened nearly 2.2 million people at airport security checkpoints, the most since the pandemic began 16 months ago. United on Monday also said it expected to earn a pretax profit in July, its first since January 2020.
The airline played up the purchase as a transformational investment, which it calls “United Next.” By 2026, the expansion will increase the number of seats per United flight in North America by nearly 30 percent and increase the number of premium seats available per flight by 75 percent, the airline said. It will also allow United to replace older, more-polluting planes, improving overall fuel efficiency by 11 percent, the airline said.
To support the new planes and the service they will provide, United expects to add 25,000 jobs nationwide, including up to 5,000 in Newark and 4,000 in San Francisco.
“If you stepped into Facebook’s turf or resisted pressure to sell, Zuckerberg would go into ‘destroy mode,'” the states said of Facebook’s chief executive, Mark Zuckerberg.Credit…Tom Brenner/The New York Times
A federal judge on Monday eviscerated arguments in two antitrust suits against Facebook — one filed by the Federal Trade Commission, and the other by attorneys general from 46 states and the District of Columbia and Guam.
The judge, James E. Boasberg of U.S. District Court for the District of Columbia, said the federal government had not made its case that Facebook holds a monopoly over social networking. And he said the states had waited too long to bring their case.
Here are the arguments the prosecutors made and the judge’s response:
The Federal Trade Commission said that “Facebook has maintained its monopoly position by buying up companies that present competitive threats and by imposing restrictive policies that unjustifiably hinder actual or potential rivals that Facebook does not or cannot acquire.” Facebook achieved monopoly power after “toppling early rival Myspace,” the agency said, and has become “the largest and most profitable social network in the world.”
Judge Boasberg said that the commission had not sufficiently proved that Facebook was a monopoly and that the agency’s definition for social media was too vague.
“The F.T.C.’s complaint says almost nothing concrete on the key question of how much power Facebook actually had, and still has,” Judge Boasberg wrote. “It is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist. After all, no one who hears the title of the 2010 film ‘The Social Network’ wonders which company it is about.
“Yet, whatever it may mean to the public, ‘monopoly power’ is a term of art under federal law with a precise economic meaning: the power to profitably raise prices or exclude competition in a properly defined market. To merely allege that a defendant firm has somewhere over 60 percent share of an unusual, nonintuitive product market — the confines of which are only somewhat fleshed out and the players within which remain almost entirely unspecified — is not enough.”
The commission also claimed that Facebook maintained its dominance by threatening to cut off software developers from plugging into the social network if they made competing products. It also argued that, although Facebook had reversed a policy that allowed it to cut off stand-alone apps that replicated its features, “Facebook is likely to reinstitute such policies if such scrutiny passes.”
“A monopolist has no duty to deal with its competitors, and a refusal to do so is generally lawful,” Judge Boasberg wrote. “To be actionable, such a scheme must involve specific instances in which that policy was enforced (i) against a rival with which the monopolist had a previous course of dealing; (ii) while the monopolist kept dealing with others in the market; (iii) at a short-term profit loss, with no conceivable rationale other than driving a competitor out of business in the long run.”
“There are no facts alleged, moreover, suggesting that the antitrust ‘scrutiny’ the company is facing is ‘about to’ pass or indeed will pass at any time in the foreseeable future. Indeed, a quick glance at any newspaper yields the contrary conclusion.”
“Facebook has coupled its acquisition strategy with exclusionary tactics that snuffed out competitive threats,” the states said in their suit, “and sent the message to technology firms that, in the words of one participant, if you stepped into Facebook’s turf or resisted pressure to sell, Zuckerberg would go into ‘destroy mode,’ subjecting your business to the ‘wrath of Mark.'” In addition to Facebook’s chief executive, Mark Zuckerberg, the states specifically referred to the company’s purchases of Instagram in 2012 and WhatsApp in 2014.
Judge Boasberg noted that the states’ “suit — which seeks, in the main, to have Facebook divest one or both companies — was not filed until December 2020.” He added, “The court is aware of no case, and plaintiffs provide none, where such a long delay in seeking such a consequential remedy has been countenanced in a case brought by a plaintiff other than the federal government.”
Federal moratoriums on evictions and foreclosures have kept most delinquent homeowners in place since last March, but those protections will end on July 31.Credit…Michael Dwyer/Associated Press
Federal officials on Monday finalized a rule intended to slow down what they fear will be a looming wave of pandemic-related foreclosures by making it easier for lenders to modify borrowers’ loan terms and by adding additional hurdles before lenders can seize homes.
The Consumer Financial Protection Bureau said that around 3 percent of residential mortgage borrowers are now at least four months in arrears — the point at which most foreclosure processes are allowed to begin.
“We have never before seen this many borrowers so far behind on their mortgages,” Dave Uejio, the bureau’s acting director, said.
Federal moratoriums on evictions and foreclosures have kept most delinquent homeowners in place since last March, but those protections will end on July 31. Under the consumer bureau’s new rule, which takes effect on Aug. 31 and extends until the end of the year, mortgage servicers will generally be barred from initiating a foreclosure unless they have complied with heightened rules.
In most cases, lenders will only be allowed to foreclose on a home if it is abandoned, if the borrower has not responded to messages for at least 90 days, or if the borrower has been formally evaluated for all available “loss mitigation” options (such as a loan modification) and none are viable.
Servicers will also be allowed to proceed with foreclosures for borrowers who were already 120 or more days delinquent before March 1, 2020.
The new rule also allows mortgage servicers to more easily offer some loan modifications so long as the changes do not increase a borrower’s monthly payments or extend the loan’s term more than 40 years beyond the modification date.
The rule is significantly softer than a proposal the consumer bureau floated in April, which would have banned most foreclosure filings for the rest of the year. Mr. Uejio described the agency’s revised approach as one that would encourage “a measured return” to foreclosures.
Pete Mills, the senior vice president of residential policy for the Mortgage Bankers Association, said the agency’s rule was generally reasonable and incorporated changes the industry had sought, such as the exception allowing foreclosures on abandoned properties to proceed.
“In many cases, servicers are already going well beyond the minimum requirements in the rules to reach borrowers,” Mr. Mills said.
There will be a one-month gap between the end of the federal moratorium and the date when the consumer bureau’s new rule takes effect, but lenders will still be required to make a good-faith effort to contract borrowers and explore alternatives before proceeding with a foreclosure, bureau officials said on a call with reporters.
Diane Thompson, a senior adviser at the bureau, said the agency’s goal was to head off “preventable” foreclosures and to give people time to consider their choices, including resuming payments, modifying their loan or selling their home.
For those who haven’t been making payments since the pandemic took hold, it’s “important to understand that you’re going to need to figure out a plan for how to address that in the not-too-distant future,” Ms. Thompson said. “People need to be assessing their options.”
After a year in which demands for racial justice acquired new resonance, some experts are pushing back against a strongly held tenet of economics: that differences in wages largely reflect differences in skill. Economists should stop looking for a reason other than racism, they say, to account for why African Americans are falling further behind in the economy.
In 2020, the typical full-time Black worker earned about 20 percent less than a typical full-time white worker. And Black men and women are far less likely than whites to have jobs. So the median earnings for Black men in 2019 amounted to only 56 cents for every dollar earned by white men. The gap was wider than it was in 1970, writes Eduardo Porter for The New York Times.
Black workers also earn lower wages relative to their credentials. An analysis by the Economic Policy Institute, a liberal think tank, found that whether they have a high school diploma or an advanced degree, Black workers make about 80 percent of the earnings of a white worker with similar education.
“I’m not in denial that education matters, but I am pushing back on the extent that it matters,” said Darrick Hamilton, a professor of economics at the New School in New York. “The fact is there are a limited number of jobs and we sort them based on power. Race is a deciding factor.”
But for all the evidence of racial disparities, many economists say employers’ racial biases cannot fully explain what’s going on in the workplace. The idea that discrimination alone has determined Black workers’ lot at work — their employment and their wages — does not mesh with how American society changed over the past half-century.
Most of the gains made by African Americans in the workplace were made from the 1940s to the 1970s, when racial biases were much more prevalent across society. Then they got stuck.
“There was convergence between Blacks and whites, but then it stopped,” said Erik Hurst, a professor of economics at the University of Chicago’s Booth School of Business. “The question is why.”
Randal K. Quarles, the Federal Reserve’s vice chair for supervision.Credit…Brendan McDermid/Reuters
Randal K. Quarles, the Federal Reserve’s vice chair for supervision, suggested on Monday that the global rush to research and develop central bank digital currencies is driven by fear of missing out, or, as it is better known, FOMO. Mr. Quarles warned that the nation has a habit of falling victim to a “mass suspension of our critical thinking and to occasionally impetuous, deluded crazes or fads.” He invoked the parachute pants of the 1980s as a parallel to the current currency craze, noting that sometimes fads are just silly.
Several Wall Street banks announced plans on Monday to increase dividends and buy back their stock as the economy rebounds from the coronavirus pandemic. Morgan Stanley and Wells Fargo were the most aggressive. Morgan Stanley said it would double its dividend to 70 cents per share and expand a previously announced share buyback plan to $12 billion from $10 billion. Wells Fargo also said it would double its dividend, to 20 cents per share, and buy back $18 billion of its own shares. JPMorgan Chase, the nation’s largest bank by assets, said it would increase its dividend to $1 a share starting in the third quarter, from the current 90 cents.