Frontier Becomes First US Airline To Order A321XLR - One Mile at a Time

Read more: In the first couple of days we’ve seen A321XLR orders from Qantas, Jetstar, Aer Lingus, Iberia, Frontier, JetSMART, and Wizz Air, and American. Should passengers dread the A321XLR, though?

At the beginning of the week the A321XLR was launched, and the orders for the plane just keep coming in. This plane will launch in 2023, and will be the longest range single aisle plane in the world, with a range of 5,400 miles.

Indigo Partners orders 50 A321XLRs

Phoenix-based Indigo Partners is a private equity fund that invests in airlines around the world. If the name sounds familiar, it’s because they were looking at saving WOW Air a few months back, but that didn’t end up happening.

Indigo Partners has invested in airlines like Frontier Airlines, JetSMART, Volaris, and Wizz Air.

Today Indigo Partners has signed a memorandum of understanding to acquire 50 A321XLRs. This includes new orders for 32 A321XLRs, as well as the conversion of 18 existing A320neo orders.

Indigo Partners has already revealed how these planes will be distributed between airlines:

• 20 A321XLRs will be allocated to Wizz Air (Hungary)
• 18 A321XLRs will be allocated to Frontier (US)
• 12 A321XLRs will be allocated to JetSMART (Chile)

Wizz Air is getting 20 A321XLRs

What I find interesting here is that this makes Frontier the first US airline to order the A321XLR. There were rumors that American would be interested and that an order might be imminent, but Frontier beat them to the punch here.

Frankly I’m a bit surprised, because Frontier isn’t among the first US airlines I would have expected to order this plane.

What could Frontier do with A321XLRs?

Frontier is an ultra low cost carrier based in Denver. Their fleet consists exclusively of Airbus A320-family aircraft. They currently have just under 90 planes in their fleet, with nearly 200 more on order, split between the A320neo, A321neo, and now A321XLR.

The reason I find this move so fascinating is because Frontier operates very few international routes. A vast majority of their routes are domestic, and then they have a very limited number of routes to Canada, Mexico, and the Caribbean.

Today Frontier’s CEO hinted at a few possibilities for the planes:

• Frontier currently struggles to fly coast-to-coast in winter with a full payload, and the A321XLR would make this easy
• Frontier wants to use the A321XLR to add service to Hawaii and Alaska
• In the future Frontier would consider adding flights to Europe or South America, or at least that’s not out of the question

Frontier is getting 18 A321XLRs

With Denver being Frontier’s primary hub, here’s the A321XLR’s approximate range from Denver (though they could use the plane out of other hubs as well):

I find Frontier’s order to be interesting. In the case of Aer Lingus or Iberia or Qantas I can totally say “oh, the use for these planes is obvious.”

It’s not quite as straightforward with Frontier. It seems Frontier will mostly use the planes for coast-to-coast and Hawaii flights, both of which are well within range of the A321XLR, and don’t take advantage of the full potential of the plane.

Frontier is good at sticking to their core competency, so personally I don’t think they’ll use the plane for huge expansion to South America or Europe, for example.

After all, if there’s one thing we’ve learned in the airline industry in the past few years it’s how challenging the ultra low cost transatlantic business model is.

Bottom line

A321XLRs are selling as fast as red hats and mini-constitutions in Orlando last night. This is a plane with a real market. At this point there’s almost competition between airlines to order the A321XLR — if airlines want any chance of getting delivery slots for this plane in the next decade, they’re going to have to order soon.

So there’s not only real demand for the plane, but also competition for securing slots. I think the orders will keep rolling in, even well after the Paris Air Show.

What do you make of Indigo Partners’ A321XLR order?

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2019-06-19 13:43:42Z
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Bringing Shoe Manufacturing Back To The United States Poses Challenges - NPR

Enlarge this image

Workers makes shoes at a factory in Jinjiang, in southeast China's Fujian province. Nearly all shoes sold in the U.S. are foreign-made. China's share has declined, but it's still a major source. Stringer/AFP/Getty Images hide caption

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Stringer/AFP/Getty Images

For Douglas Clark, the darkest part of working for Nike in the 1980s was watching American shoe manufacturing "evaporate" in the Northeast in a mass exodus to Asia in pursuit of cheaper labor.

"As a true Yankee — and my father was a Colonial historian — you know, it was heartbreaking," he said.

Clark would go on to a long career in footwear, at Converse, Reebok, Timberland, then his own line of shoes at New England Footwear. And there, he would devote eight years to one mission: creating a model to make shoemaking in America profitable again.

This was a tall order. At a time when President Trump speaks of rebuilding American manufacturing, footwear is a telling example of how hard it is to turn back time.

These days, 99% of shoes sold in the U.S. are imported, many of them from China, Vietnam and Indonesia. China's share has declined in recent years, but it remains a key source of America's shoes and shoe parts. That's why some U.S. footwear companies have been loud opponents of Trump's threat of more tariffs for almost everything imported from China.

"We'd love to make shoes in the United States," Steve Madden CEO Ed Rosenfeld told NPR. "It's very hard to envision a scenario where we'd make the types of products that we make, at the prices that we make them, in the United States."

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For a shoe-factory job paying $12 an hour, the actual cost of shoemaking — when adding benefits — grows to $16 an hour, compared with about $3 an hour in China, said Mike Jeppesen, head of global operations at Wolverine Worldwide, which owns brands like Merrell, Sperry and Keds. And that cost of making shoes in America quadruples after wholesale and retail markups, he said, ballooning into a $50 price difference between a pair made in the U.S. versus in China.

"There's really very little commercial reason for why you would make footwear in the U.S. today," Jeppesen said. He acknowledges one exception to that: factories that work to meet constant demand for American-made shoes by the U.S. military.

Indeed, many of the remaining 200-some U.S. footwear factories serve the military, said Tom Capps, whose Capps Shoe Co. in Virginia mainly makes uniform shoes for the government.

Capps said he employs 125 to 175 workers, depending on the factory's workload. That's on the high end for an industry where most firms employ fewer than 10 people, according to the Footwear Distributors and Retailers of America.

Owners of U.S. factories that make nonmilitary shoes in America said they found their own reasons to stay. Many cited their love of the craft and tradition. Capps said he also found a niche by offering a large selection of sizes. Olivier Marchal, of Sense of Motion Footwear in Colorado, worried about the environmental impact of shipping shoes and materials from across the world in Asia.

But U.S. factory owners also listed two major challenges of domestic footwear manufacturing: finding skilled workers and affordable parts and materials.

As shoemaking jobs disappeared, so did the support network for the industry. Suppliers of things like the little metal eyelets and colorful leather followed the industry overseas. Many shoe factories turned into warehouses and offices.

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San Antonio Shoemakers has been making shoes in Texas since the 1970s. SAS recently got a big contract to make sneakers for the U.S. military. Carson Frame/The American Homefront Project hide caption

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Carson Frame/The American Homefront Project

Dan Heselton runs Maine Mountain Moccasin out of one such factory that vacated during the exodus.

"We'll post jobs," he said, "and it's very seldom that someone under the age of 40 is coming in the door to apply." Among the workers who remain, arthritis is a common struggle.

"A lot of the people have said multiple times that they definitely don't want their son or daughter doing this," Heselton said. "That's tough to hear."

With the higher costs of U.S. labor and materials, the remaining manufacturers tend to rely on their shoppers choosing to pay more for the "Made in America" brand.

"We know that we can't make a $19 shoe to be sold at Target or Walmart. That's just not going to be possible for us," said Nancy Richardson, CEO of SAS, a midsize company that has been making shoes in San Antonio since the 1970s. "So we focus on having people feel like they get an $800 pair of shoes for $150 or $200."

The mass-market companies, meanwhile, have been turning their U.S. operations more toward design and marketing, leaving all the cutting, gluing and stitching to manufacturers overseas.

Clark wanted to change that. On his mission to return mainstream manufacturing to America, he zeroed in on the cost and complexity of the labor involved in shoemaking.

U.S. factory owners often say they wish people realized just how many parts and processes it takes to make a shoe. There are multiple layers to create the sole alone, including lots of heavy-duty sewing. Securing the bottom of the shoe takes multiple steps. By the time the shoe is ready to wear, dozens of people might have worked on it.

Clark knew about this, and about the U.S. manufacturers' struggles with materials, parts and workers. But he also knew that history was already starting to repeat itself in China. Wages have been going up there. Footwear companies have been moving — yet again — to other countries, chasing lower costs.

This could be the opening for America's comeback, Clark thought. But for it to work, the process had to be simplified — maybe a dozen parts instead of 50 — and more automated. Maybe then, he said, the manufacturing could be "where the markets are, instead of where the labor is."

A few years back, he got a contract with a big brand and a grant to get started. He began with making top parts, or uppers, "that didn't involve a lot of labor," he said.

Footwear manufacturing has long included machines — cutting or gluing soles. But higher-level innovation? Ironically, factory owners said that's happening where the industry is — overseas.

Major brands, like Nike and Adidas, have been developing new technologies, including in U.S. But they still rely heavily on factory workers abroad. Because unlike humans, robots aren't nimble — they can't notice imperfections or quickly switch to a new fashion style.

"Robots are not forgiving," Clark said.

For Clark, the story had a frustrating end. Developing automation got very expensive and progressed more slowly than expected. He was draining his funds and agreed to sell his factory to a technology company, which knew a lot about robots. The factory is now closed.

Clark had signed a noncompete agreement, so now "I'm essentially retired unwillingly," he said. He had hoped his legacy would be reviving American shoe manufacturing. Instead, he is now in real estate.

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2019-06-19 11:07:00Z
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What's the future for cash? Target register outages prove physical loot still has its place - USA TODAY

Edward C. Baig USA TODAY

Published 6:45 AM EDT Jun 19, 2019

Does the use of cash have an expiration date?

The evidence that physical loot is on borrowed time is slowly but surely mounting. But don’t read the last rites for cash just yet.

If anything, the checkout register outages at Target stores over the weekend were a reminder that point-of-sale machines aren’t foolproof, and nothing beats cash when technology fails.

With that in mind, you may want to keep a modest stash handy.

Still, you’ve gotten quite comfortable leaving most bills and coins behind. More of you, in fact, are placing your smartphone or smart watch near the checkout registers to pay for this or that thing, using services such as Apple Pay or Google Pay. Your wallet, and any money stashed inside, remains in your pocket.

You’re equally cool, and so are your buddies, settling debts and swapping funds digitally, via the likes of Venmo, PayPal or Zelle. 

Americans generally are becoming less reliant on physical currency, with 29% of U.S. adults indicating in a recent Pew study that they make no purchases using cash during a typical week, up from 24% in 2015.

Facebook's cryptocurrency

You can’t help but look to the future assaults on cash either. At the very least you’re curious, if a long way from being sold yet, on the idea behind the Libra global “cryptocurrency” that Facebook announced Tuesday. The social network is pushing this alternate digital payment system with more than two-dozen financial and tech partners, including eBay, Uber, Lyft, PayPal, Spotify, Coinbase, Mastercard and Visa, and basing the pricing on other financial instruments.

Facebook currency: Would you trust Facebook with your money? What Libra cryptocurrency means for users

Yolo app: New Yolo anonymous Q&A app attracts millions of teenage users, has parents wary

Never mind that you’re still baffled by concepts such as Bitcoin and blockchain, and aren’t exactly thrilled with Facebook’s lousy reputation concerning privacy. That has to be a cause of concern for Facebook as it also launches a new subsidiary with plans for a crypto-digital wallet called Calibra, expected to launch on Messenger, WhatsApp and as a standalone app in 2020. 

You may even be wondering where you might carry cash someday, given the inevitable long-term demise of the Costanza-sized physical wallet. 

Sixty-eight percent of smartphone owners surveyed by SurveyMonkey Audience on USA TODAY’s behalf recently say it is likely that smartphones will eventually replace the need for wallets entirely. Nearly half (45%) think wallets will be obsolete in five years or less. 

How much cash should you keep for an emergency?

The Target episode proved that you shouldn’t count out cash. Some Target shoppers on Sunday reported that the stores could accept cash (or checks) but not process their credit cards, though this snag was much smaller than far bigger outages that took out Target registers a day earlier, which prevented payments via plastic, and yes, cash too. 

“I think (the Target episode) is a blip that everybody will quickly forget about,” says Greg McBride, chief financial analyst at Bankrate.com. “However, it is a reminder to all of us that we have to have a certain amount of cash just in case of isolated occurrences,” such as in the aftermath of a hurricane when the power goes out.

How much cash you should keep around for emergencies varies of course, depending on your circumstances. McBride, who frequently travels for business, says he keeps enough to hop in a cab to the airport.

Other people USA TODAY canvassed said they typically carry between $20 and $50, though the amount is sometimes less.

“The big picture still is you don’t want to have an overabundance of cash either in your pocket or stuffed under the mattress due to the risk of loss and theft. Plastic offers protections against those scenarios, cash does not,” McBride says.

As you would expect, Mastercard senior vice president for communications Seth Eisen makes a similar pitch.

“Electronic payments – the credit, debit and prepaid cards we’re all familiar with no matter what form they take – are an opportunity to provide people and businesses with greater security, greater transparency and greater certainty when they make a payment or are paid themselves,” he says. 

Cash is still king when it comes to the smallest purchases. Forty-five percent of consumers who own rewards credit cards polled last year by CreditCards.com were using cash for purchases under $10. That compared to 30% of consumers who use debit cards for such purchases, and 23% who use credit cards.

The survey also found that $25 was the median purchase total at which rewards cardholders indicated it made sense to use credit.

“I’m tempted to quote Mark Twain. The death of cash has been greatly exaggerated,” says McBride. “It’s definitely in decline and will continue to decline. When it goes away completely, it’s hard to put a time frame on it.”

Readers: Do you foresee giving up cash altogether? Email: ebaig@usatoday.com; Follow @edbaig on Twitter

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2019-06-19 09:30:00Z
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Dow futures pause as investors await Fed meeting - CNBC

U.S. stock index futures were marginally higher on Wednesday morning, as investors wait to hear from Federal Reserve Chairman Jerome Powell.

Around 6 a.m. ET, Dow futures indicated a positive open of nearly 20 points. Futures on the S&P and Nasdaq were both slightly higher, too.

There's a special focus on the outcome of the Federal Reserve meeting Wednesday. Not only are traders are keen to understand the chances of rate cuts this year, but they are also interested to know if President Donald Trump has any influence on the central bank.

The U.S. president, when asked Tuesday whether he wants to remove Jay Powell from his position, said "Let's see what he does." This comes after a Bloomberg News report argued that the White House looked into demoting the chairman of the Fed back in February. Larry Kudlow, director of the National Economic Council, told reporters Tuesday that Trump is not planning to demote Powell, however.

Earlier in the day, President Trump had accused ECB President Mario Draghi of currency manipulation, after the latter's speech at a conference in which he suggested that the European Central Bank could provide more stimulus if inflation does not pick up in the euro zone. Draghi responded later saying the central bank's remit is clear. "Our mandate is price stability defined as a rate of inflation which is close to but below 2% over the medium term," Draghi said.

Meanwhile, President Trump also said he will be having an "extended meeting" next week with the Chinese leader at the G-20 meeting in Japan.

There are no data items to note Wednesday.

In terms of corporate earnings, Oracle and Winnebago will be updating investors.

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2019-06-19 06:26:09Z
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Dow futures pause as investors await Fed meeting - CNBC

U.S. stock index futures were marginally higher on Wednesday morning, as investors wait to hear from Federal Reserve Chairman Jerome Powell.

Around 6 a.m. ET, Dow futures indicated a positive open of nearly 20 points. Futures on the S&P and Nasdaq were both slightly higher, too.

There's a special focus on the outcome of the Federal Reserve meeting Wednesday. Not only are traders are keen to understand the chances of rate cuts this year, but they are also interested to know if President Donald Trump has any influence on the central bank.

The U.S. president, when asked Tuesday whether he wants to remove Jay Powell from his position, said "Let's see what he does." This comes after a Bloomberg News report argued that the White House looked into demoting the chairman of the Fed back in February. Larry Kudlow, director of the National Economic Council, told reporters Tuesday that Trump is not planning to demote Powell, however.

Earlier in the day, President Trump had accused ECB President Mario Draghi of currency manipulation, after the latter's speech at a conference in which he suggested that the European Central Bank could provide more stimulus if inflation does not pick up in the euro zone. Draghi responded later saying the central bank's remit is clear. "Our mandate is price stability defined as a rate of inflation which is close to but below 2% over the medium term," Draghi said.

Meanwhile, President Trump also said he will be having an "extended meeting" next week with the Chinese leader at the G-20 meeting in Japan.

There are no data items to note Wednesday.

In terms of corporate earnings, Oracle and Winnebago will be updating investors.

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https://www.cnbc.com/2019/06/19/dow-futures-modestly-higher-as-investors-await-fed-meeting.html

2019-06-19 06:08:31Z
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Dow futures modestly higher as investors await Fed meeting - CNBC

U.S. stock index futures were marginally higher on Wednesday morning, as investors wait to hear from Federal Reserve Chairman Jerome Powell.

At around 01:30 a.m. ET, Dow futures rose 10 points, indicating a positive open of more than 33 points. Futures on the S&P and Nasdaq were both slightly higher too.

There's a special focus on the outcome of the Federal Reserve meeting Wednesday. Not only are traders are keen to understand the chances of rate cuts this year, but they are also interested to know if President Donald Trump has any influence on the central bank.

The U.S. President, when asked Tuesday whether he wants to remove Jay Powell from his position, said "Let's see what he does." This comes after a Bloomberg News report argued that the White House looked into demoting the chairman of the Fed back in February. Larry Kudlow, director of the National Economic Council, told reporters Tuesday that Trump is not planning to demote Powell, however.

Earlier in the day, President Trump had accused ECB President Mario Draghi of currency manipulation, after the latter's speech at a conference in which he suggested that the European Central Bank could provide more stimulus if inflation does not pick up in the euro zone. Draghi responded later saying the central bank's remit is clear. "Our mandate is price stability defined as a rate of inflation which is close to but below 2% over the medium term," Draghi said.

Meanwhile, President Trump also said he will be having an "extended meeting" next week with the Chinese leader at the G-20 meeting in Japan.

There are no data items to note Wednesday.

In terms of corporate earnings, Oracle and Winnebago will be updating investors.

Let's block ads! (Why?)

https://www.cnbc.com/2019/06/19/dow-futures-modestly-higher-as-investors-await-fed-meeting.html

2019-06-19 06:07:25Z
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Why Trump might end up regretting the rate cut he wants so badly - CNN

Trump has repeatedly bashed chairman Jerome Powell — his pick to lead the US central bank — accusing the world's most powerful central banker of damage because the Fed raised interest rates last year just as Republicans were goosing the economy with tax cuts. And on Tuesday, Trump even declined to rule out demoting Powell, instead saying that he would watch the chairman closely.

"I want to be given a level playing field. So far I haven't been," Trump said to reporters at the White House as he left for his re-election kickoff rally.

Powell has preached patience for the last several months when it comes to rate-setting policy. But as central bankers meet in Washington this week for their two-day policy meeting, they are faced with a host of challenges — including the possibility of a protracted trade war with Beijing, as well as recent signs of a slowing US economy.

Those concerns have saddled the Fed with a dilemma: When should it cut rates? And how quickly should it do so?

At their last meeting in May, Fed officials relayed a sense of relief that fears over a global economic slowdown had subsided in the wake of positive economic news from China, along with signs that tensions between Washington and Beijing seemed to be easing as negotiators worked steadily toward a deal.

But all of that has since been upended. Talks between the world's two largest economies came to a halt days after the Fed meeting, when the Trump administration claimed that China reneged on its trade commitments. US markets plunged as Trump threatened even more tariffs on China, and as businesses and investors grappled with uncertainty about how the trade war would end. Other threats from Trump of tariffs on Mexico, while short lived, added to the already tense climate.

That kind of anxiety, along with a mixed economic picture, has put the Fed in a precarious position as it tries to extend one of the longest economic expansions since the 2008 financial crisis.

"The goalposts have certainly shifted from the start of 2019, when there were two forecasted rate hikes," said Steve Rick, chief economist at CUNA Mutual Group. "Then, in March, we hit pause, and now we're talking about a potential cut."

Most economists don't think the Fed will change rates at all at this week's meeting, leaving the benchmark rate hovering between 2.25% and 2.5%. The central bank is probably waiting to make a move when it has a clearer picture of what direction the US economy is taking, along with what happens when Trump and China's President Xi Jinping talk trade later this month.

"We expect the main message from the June FOMC meeting to be that the committee will 'act as appropriate' to sustain the expansion," Michael Gapen, chief economist at Barclays Investment Bank wrote in a note to clients. "We look for the committee to signal a preference for 'flexibility' over 'patience' when assessing incoming information."

It's unclear how the US-China trade discussions will unfold. In the latest twist, Trump on Tuesday tweeted he had a "very good" telephone conversation with Xi, and that the two leaders would have an "extended meeting" later this month at the Group of 20 leaders summit in Osaka, Japan.

While the Fed likely will leave things as they are this week, the probability of a rate cut shoots up next month and throughout the remainder of the year, according to the CME FedWatch tool. Powell also sent US markets higher earlier this month after he said that policy makers would "act as appropriate" to sustain the economic expansion — remarks that Wall Street interpreted as a sign the Fed would cut rates if needed.

In any case, if policy makers cut rates in the coming months, experts warn it won't signal a healthy prognosis for the US economy.

"The Fed taking such an action would imply considerable economic weakness than they had been expecting just a few months earlier," said Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics and a former visiting associate director for the division of monetary affairs at the Fed. "I can't see how it would be viewed as good news."

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https://www.cnn.com/2019/06/19/economy/federal-reserve-fomc-june-meeting/index.html

2019-06-19 04:01:00Z
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