Airlines Struggle with Luxury Seat Delays

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at Schwab d. com slash Washington Wise A federal judge rules that the Trump administration unlawfully froze Hudson River tunnel funding Plus, how Ukrainian drones are making Russians feel the hardships of war And as inflation shows signs of pulling back across Europe, we'll look at why the continent needs all the help it can get The fact that Europeans are so anxious about spending, the fact that they're saving more, that is really holding back the European economy. It's Tuesday, june thirtieth. I'm Luke Varas for the Wall Street Journal, and here is the AM edition of What's News, The top headlines and B stories moving your world today In a break for East Coast commuters, a federal judge has permanently blocked the Trump administration from withholding funds for a new rail tunnel connecting New York and New Jersey under the Hudson River Both states had sued after the administration said it wouldn't distribute funding for the project as it reviewed whether it included DEI policies. uling however, Judge Jeanette Vargas cited public comments from Trump, suggesting that the funding freeze was his personal decision and was politically motivated The White House referred request for comment to the Transportation Department, where a spokesman said it remained committed to making sure taxpayer dollars were spent responsibly Amtrak's current pair of tunnels connecting Manhattan to New Jersey are over a century old and sustained major damage during twenty twelve's superstorm Sandy, spurring calls for their replacement US stocks are set to close out a blockbuster quarter with fresh momentum. Futures are rising this morning, putting major indexes on pace for their best quarterly gains in years The S andP five hundred is up fourteen percent through yesterday and the NASDAq up twenty percent biggest quarterly rallies for both since twenty twenty despite remarkable volatility, that saw tech stocks sell off as recently as last week invvestors have returned, however, with tech shares doing much of the heavy lifting again premet. Japanese yen has hit a forty year low driven down by a strong U. S dollar and high interest rates from the Federal Reserve Tokyo Bureau Chief Jason Douglas explains There are a bunch of factors driving it and then some of it is still kind of slightly unexplainable. There's a big gap between rates in Japan and rates in the U.S, for instance, and that's the kind of thing that tends to weaken a currency. I think there's some anxiety around the fiscal plans of the Gvernment of Prime Minister Takaichi here in Japan. She is planning on doing some big spending. She announced new plans for a two trillion dollars thereabouts investment package Only yesterday. And then there are a few other slightly more idiosyncratic things, but there's this AI boom going on and that is weakening the currencies of big Asian exporters, somewhat paradoxically because they're benefiting on the export side, selling all this equipment to the US to build data centers and that kind of thing. But then retail investors in these countries are in fact piling into US stocks So we see these big outflows from places like Korea and to some extent in Japan as well. and that is adding to diamer pressure on the currency. In Japan's case, the stock market here is up something like forty percent, but a lot of that is institutional money from overseas and because they're more sophisticated, they tend to hedge their exposure to the currency which you tends to push it down not up. And then all of this, of course, more recently we've had the Iran warar and the crisis in the Strait of Hormuz Fan is a big energy importer and so In price energy and dollars, the currencies of countries that have to import a lot do tend to weaken the end, trading just below Japan's preferred one hundred and sixty level at one hundred and sixty two to the dollar Traders are on high alert for whether authorities may intervene to defend the yen. to avert a currency induced rise in consumer prices Well, inflation is also a concern in Europe, as new data this morning from Spain, France, Italy and Germany show that consumer prices are coming off recent highs, but broadly remain more elevated than policymakers would like As a result, economics reporter Chelsea Delaney says that Europeans have doubled down on saving Move that's hurting growth So the US has grown twice as fast as the eurozone in the UK in the past couple of years Consumers are what drive economies with their willingness to spend on food and clothes and vacations and going out to restaurants and the fact that in Europe, consumers are so frugal and so anxious. It is one of the main reasons why the economy has been growing so slowly, especially in comparison to the United States. Historically, Europeans are more debad averse than Americans And seemingly more wary of the future too. Young people tell me they're really worried about the future of these pension systems, which have been so wonderful for a lot of Europeans for generations. With aging populations, they're worried that's not going to be there. They need to save more. Some people are just still really shocked by the prices they see when they go to the grocery store, and even if they can' afford it, they say, I'm not going to buy that And some people are genuinely worried about the economy. You know we're seeing wars, inflation is going up again. So Europeans just seem to have larger psychological scars from this recent period of inflation. Unlike Americans, Europeans keep about a third of their financial assets tucked away Economists argue that ten trillion dollars sitting in household bank accounts would help the economy if it were put into productive investments instead. Coming up, Russians are starting to feel the pain of war as Ukraine pummels Crimea in what should be its peak summer tourism season. We've got that story and more after the break Isn't home where we all wanna be? Reba here for realtor dot coma the pro's number one most trusted app. Finding a home is like dating. You're searching for the one. With over five hundred thousand new listings every month, you could find the one today! Download the realtor dot com app ca you're nearly home. Make it real With realaltor d. com Pro's number one, most trusted app based onugust twenty five for proprietary survey. Over five hundred thousand new listings every month based on average new fororsale and rentalistings, july twenty fourth to june twenty five Ukraine is taking the war to Russian civilians Almost four and a half years after the Russian invasion, Kyiv is unleashing waves of punishing attacks against occupied Crimea. and hundreds of miles away, overwhelming Russian air defenses as its drones enact a heavy toll on energy infrastructure and other targets in and around Moscow T put those developments in context, I'm joined now by journal correspondent Thomas Grove Thomas, let's talk about these two moves by Ukraine in turn, starting with the attacks that we've seen on Crimea, which really should be in tourist high season now, plans that Kyiv has managed to thwart. Tell us what's been going on. What we're seeing is what seems to be a very well timed campaign by the Ukrainians against Crimea, which As we know, Russia annexed in twenty fourteen What we're seeing is just hundreds of drones flying to Crimea, hitting oil installations, fuel installations, energy infrastructure, power infrastructure And what we've seen is that this kind of incredibly prized asset has turned into a liability for Moscow and tourists have been leaving in droves, numbers in the thousands Dving back across the only route available to them to get back into Russia is the Kirch Bridge and regional authorities put a state of emergency in place late last week So things are looking pretty serious at the moment. And Thomas it is' not just Crea that Ukraine iss hitting, but also targets that are deep inside Russian territory, including sites near Moscow, how is it that Kieyiva is now able to hit targets so far away? What we're seeing is Ukraine's capabilities changing significantly and both in the number of drones that it can produce and how far they can fly. While they've struck Russia's Black Sea fleet in the past, Now they're really going after civilian infrastructure, things that are kind of keeping the lifeblood of the peninsula, so to speak in terms of energy resources. So that's really creating a huge problem and a big headache for Putin domestically Eespecially ahead of parliamentary elections later this year Thomas, what's the goal here for Kyiv? Are these just attacks for the sake of attacking something or is there a hope this can lead to something else? So I think Kim's accomplishing a few things here at the same time. On one hand, they made it very clear they want to really attack the infrastructure that feeds the front line. you know, so whether we're looking at fuel supplies, whether we're looking at you know, the industrial base that Russia uses to get its arms to the frontline and the fuel that the soldiers run on On another level, I think there is an important psychological component here. I think they are trying to really show the Russians what they're capable of and parlay this potentially into some sort of negotiations in the future. will be, you know, terms of which could be more favorable to the Ukrainians, at least they hope But there are no tox as such right now. And I think that's one of the problems that Kyiv is facing is that right now there's no platform in which they could really launch this into a negotiating win We also saw the recent G seven Volodymyr Zelensky advertising Ukraine's recent flashy strikes on Russia as a reason to convince Western supporters to get off the sidelines and give them more weapons. What's the likelihood that's actually the outcome here? Does Russia not still have massive factors on its side if it's able to weather this current situation Interestingly enough, we more than four years into the war now, we're seeing a lot of variables coming into play that maybe weren't there before. I think we're seeing a slowdown in the Russian economy. we're seeing faltering poll numbers for Putin Russia has always managed in the past to regain the edge and then lose it. It's a cycle that goes back and forth between the two opponents and it has for years There's a sense that Russia could very well get off its back foot militarily and start intercepting a lot of these drones. The problem that Russia has here is the one that most European countries have, which is simply their air defenses aren't geared to handle drones. They're geared to handle tactical missiles, ballistic missiles perhaps in some places not drones. and I think, you know, what Russia is facing now is exactly what Ukraine and Europe is facing If I'm hear you correctly, Thomas, unlike earlier phases of the war where Ukraine was really reliant on Anti tank missiles, longer range missiles from the US. arere they now self sufficient militarily at least as it pertains to drones? So I mean, militarily obviously depends on a huge amount of money coming into the country as well. That's a very important aspect of this. you know, Ukraine is still dependent on the West for that But whenever we're looking at their own ability to produce and launch by themselves We've seen a huge increase in their capabilities. And what's most important about this is that you know, we're no longer dealing with big expensive missiles that they went from the West, they are creating hundreds of thousands of very small and cheap to make drones. And that's what's really important here I've been speaking to Wall Street Journal correspondent, Thomas Grove. Thomas, appreciate the update. Thank you so much. Thank you Finally, picture this. You walk into your aircraft cabin right You take a left turn, not right, left turn. And you walk toward these gorgeous li lat seats that have an enclosure so you have that privacy from everyone around you It aviation reporter Ben Kats You've got a little locker where you can put all your safety items, you've got an ottoman to put your feet, you've got a separate li flap bed, should you want it. There are speakers built into What Ben describing are a new generation of luxury business class seats or sweites rolling out on a number of airlines KLM, Luftansa, Singapore Airlines United and American But sit in them Eager to outdo one another in attracting deep pocketed travelers, those airlines debuted new premium seating before receiving safety approvals from regulators As a result, Ben said they're being forced to rope off portions of their cabins as those bespoke new seats are run through a gauntlet of crash and fire tests leading lucrative customers to settle for less glitzy seats. take their business elsewhere The fact that this is happening and we're seeing this repeatedly at multiple different airlines, these business car seats that are lying literally empty This is a massive failure on the industry, and over conffidence, maybe by the airlines, maybe by the seat manufacturers who overpromised in terms of customization and what the regulators would be able to do. maybe a bit of conservatism from the regulators. But you take it all together And what you're really seeing is a real nightmare for the airlines who as this drags on, these delays, they're missing out on potentially this boon in premium leisure travel And that's it for What's News For this Tuesday morning. Today's show was produced by Daniel Bach and Hadtie Mooyer, our supervising producer is Sandra Kilhoff, and I'm Luke Vargus for the Wall Street Journal We will be back tonight with a new show. until then Thank for listening Still running global payroll like a relay race, Dal replaces fragmented payroll vendors with one global system, No third parties. Hire manage and pay teams in one hundred and fifty plus countries with in house local experts in white glove delivery, and DL plugs into what you already use, Workday, SAP, Netsuite Operate like a local, everyverywhere. Visit dEel d. com slash wsj. That's dE l dot com slash wsj