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American Airlines reports profits despite jet fuel cost drag

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American Airlines reported record revenues on strong flying demand with ebbing of the Covid-19 pandemic
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American Airlines reported a profitable second quarter Thursday as the ebbing of the Covid-19 pandemic resulted in record revenues despite the hit from higher fuel costs.  

The big US carrier said its first profitable quarter since the start of the pandemic was due to operations rather than government support programs.

Profits were $476 million compared with just $19 million in the year-ago period.

Revenues jumped about 80 percent to $13.4 billion, the most in the company’s history. Jet fuel costs were more than double the level from the 2021 period.

Pricey tickets have fueled the surge. From April through June, revenues topped those of the pre-pandemic 2019 quarter by 12 percent, even though capacity was 8.5 percent lower.

American signaled that the trend was holding in the third quarter, when it expects revenues of 10-12 percent above the 2019 level, with capacity down 8-10 percent.

Leisure travel remains above pre-pandemic levels, while American also saw improvements in both business travel and international bookings, Chief Executive Officer Robert Isom said in a letter to employees.

“Making sure American could take advantage of the continued recovery has been our collective focus, and the second quarter is evidence that our actions are producing positive results,” Isom said. 

“There is no better validation of this than reporting our first quarterly profit since the start of the pandemic.”

Shares fell 3.2 percent to $14.73 in pre-market trading.

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Chinese ride-hailing giant Didi hit with $1.2 billion fine

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Didi has been caught up in a crackdown on the technology sector that has ensnared some of China's biggest firms
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China has fined ride-hailing giant Didi 8 billion yuan ($1.2 billion), regulators announced Thursday, concluding a year-long investigation into alleged data security violations.

The probe found “conclusive evidence” that Didi had committed violations of an “egregious nature”, the Cyberspace Administration of China (CAC) said in a statement.

It accused Didi of illegally storing the ID information of more than 57 million drivers in plain text instead of a more secure format.

The regulator said the firm also analysed passenger details without their knowledge — including photos on their mobile phones and facial recognition data.

“Even when regulatory authorities ordered corrections, comprehensive and in-depth corrections were not carried out,” the CAC said, adding Didi’s violations took place over seven years starting June 2015.

Didi has been one of the highest-profile targets of a widespread clampdown on China’s tech sector, which saw years of runaway growth and the emergence of supersized monopolies before regulators stepped in. 

The fine amounts to more than four percent of its $27.3 billion total revenue last year.

“We sincerely accept this decision (and will) resolutely obey it,” Didi said in a statement on social media.

“We sincerely thank the competent authorities for their inspection and guidance… We will take this as a warning… (and) further strengthen the construction of network security and data security.”

Didi’s fine is the largest imposed by Chinese authorities since e-commerce behemoth Alibaba was ordered to pay around $2.75 billion in April 2021 for anti-competitive practices.

The ride-hailing firm got into hot water in June last year after it pressed ahead with an initial public offering in the United States, reportedly against Beijing’s wishes.  

Days after it raised $4.4 billion in New York, Chinese authorities launched a cybersecurity probe into the company, sending its shares plunging.  

Since then, Didi’s app has been removed from Chinese stores and it has been unable to register new users.

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China to fine ride-hailing giant Didi more than $1 bn: reports

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Chinese regulators are reportedly preparing to fine ride-hailing giant Didi more than $1 billion
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China is preparing to hit ride-hailing giant Didi with a fine of more than $1 billion to wrap up a long-running probe, media reports said, boosting investor hopes that the country’s tech crackdown is winding down.

Didi, once known as China’s answer to Uber, has been one of the highest-profile targets of the widespread clampdown on the sector, which saw years of runaway growth and supersized monopolies before regulators stepped in.

The fine — imposed over Didi’s cybersecurity practices — would amount to more than four percent of its $27.3 billion total revenue last year and pave the way for its new share listing in Hong Kong, The Wall Street Journal reported Tuesday.

Citing unnamed sources familiar with the matter, the Journal said that once the fine is announced, the government will ease its restrictions on Didi’s operations.

The firm was prevented from adding new users and its apps were removed from online stores in China by regulators.

The WSJ report triggered a rally in Chinese tech shares in Hong Kong on Wednesday, with investors hopeful that the two-year regulatory storm that swept the sector was nearing its end.

E-commerce giant Alibaba soared four percent, while gaming titan Tencent gained 2.5 percent in early trade.

Didi got into hot water in June last year after it pressed ahead with an IPO in the United States, reportedly against Beijing’s wishes.

Days after it raised $4.4 billion in New York, Chinese authorities launched a cybersecurity probe into the company, sending its shares plunging.

If confirmed, Didi’s fine would be the biggest imposed on a Chinese tech company since Alibaba was told to pay $2.75 billion in April 2021 as punishment for anti-competitive practices.

Didi did not respond immediately to an emailed request for comment.

Its shareholders voted to delist the firm from New York in May.

That move is expected to pave the way for a Hong Kong listing that was reportedly put on hold after China’s top internet watchdog told executives their proposals to prevent security and data leaks were insufficient.

China’s regulatory crackdown has eased this year as it grapples with the economic fallout from its zero-Covid strategy, with the country struggling to reach its 5.5 percent growth target.

However, there is still a strict regulatory environment for tech firms: President Xi Jinping last month called for stronger oversight and better security in the financial tech arena.

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China speeding up approvals for new coal plants: Greenpeace

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China relies heavily on coal for generating electricity, but authorities have pledged to peak carbon emissions by 2030
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China has ramped up approvals for new coal power plants this year, Greenpeace said Wednesday, with authorities trying to lower the risk of economically painful electricity shortages.

China is the world’s biggest emitter of the greenhouse gases driving global warming, and President Xi Jinping last year vowed to phase down coal use from 2026 as part of an ambitious set of national climate commitments.

But campaigners fear those targets are under threat with the government focused on economic challenges, even as the deadly impact of climate change is felt around the world.

In the first quarter of 2022, Chinese regulators gave the green light to coal plants with a total capacity of 8.63 gigawatts, according to research conducted by Greenpeace.

That is nearly half of the entire coal-fired capacity approved last year, the environmental campaigners said.

“Building more coal-fired power capacity will not provide energy security for China,” said Wu Jinghan, climate and energy campaigner with Greenpeace in Beijing.

“China has an overcapacity of coal-fired power plants. Power inadequacies originate from poor integration of generation, grid, load and storage.”

The figure for new coal plant approvals dipped in mid-2021 but rebounded later in the year as China experienced widespread power outages due to a supply crunch.

Electricity consumption has surged this summer as China suffers through an intense heatwave, with air conditioning cranked up at homes and businesses to try and keep people cool.

China relies on coal for around 60 percent of its electricity, and has asked domestic miners to increase capacity by 300 million tons this year.

The State Council, China’s cabinet, in May announced 10 billion yuan ($1.5 billion) of investment in coal power generation, as coal producers were pressured to ramp up output before the 2025 threshold. 

“An overcapacity of this one energy source is a major hurdle for energy security, as well as China’s energy transition,” Wu warned.

Skyrocketing global commodity prices in the wake of Russia’s invasion of Ukraine have renewed China’s focus on energy security.

As the Chinese economy stalls under strict Covid policies and prolonged supply chain disruptions, authorities are looking to boost growth through a massive infrastructure construction push — which relies overwhelmingly on coal power.

China is the world’s biggest coal consumer and producer, and analysts worry that economic targets will derail its pledge to peak carbon emissions by 2030.

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