Chairman of India’s Ailing Jet Airways Resigns

The chairman of India’s private Jet Airways has quit amid mounting financial woes which have forced it to suspend 14 international routes and ground more than 80 planes.

A statement by the airline says its board on Monday accepted the resignations of Chairman Naresh Goyal, his wife and a nominee of Gulf carrier Etihad Airways from the board. It said Goyal will also cease to be chairman.

Goyal has been trying to obtain new funding from Etihad Airways, which holds a 24 percent stake in the airline, which was founded 27 years ago.

The statement said the airline will receive 15 billion rupees ($217 million) in immediate funding under a recovery plan formulated by its creditors.

 

 

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Nike fined $14 Million for Blocking Cross-border Sales of Soccer Merchandise

U.S. sportswear maker Nike was hit with a 12.5 million euro ($14.14 million) fine on Monday for blocking cross-border sales of soccer merchandise of some of Europe’s best-known clubs, the latest EU sanction against such restrictions.

The European Commission said Nike’s illegal practices occurred between 2004 to 2017 and related to licensed merchandise for FC Barcelona, Manchester United, Juventus, Inter Milan, AS Roma and the French Football Federation.

The European Union case focused on Nike’s role as a licensor for making and distributing licensed merchandise featuring a soccer club’s brands and not its own trademarks.

The sanction came after a two-year investigation triggered by a sector inquiry into e-commerce in the 28-country bloc. The EU wants to boost online trade and economic growth.

European Competition Commissioner Margrethe Vestager said Nike’s actions deprived soccer fans in other countries of the opportunity to buy their clubs’ merchandise such as mugs, bags, bed sheets, stationery and toys.

“Nike prevented many of its licensees from selling these branded products in a different country leading to less choice and higher prices for consumers,” she said in a statement.

Nike’s practices included clauses in contracts prohibiting out-of-territory sales by licensees and threats to end agreements if licensees ignored the clauses. Its fine was cut by 40 percent after it cooperated with the EU enforcer.

($1 = 0.8839 euros)

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Long-Awaited Video Service Expected From Apple on Monday

Apple is expected to announce Monday that it’s launching a video service that could compete with Netflix, Amazon and cable TV itself.

It’s a long-awaited attempt from the iPhone maker, several years after Netflix turned “binge watching” into a worldwide phenomenon.

The new video service is expected to have original TV shows and movies that reportedly cost Apple more than $1 billion — far less than Netflix and HBO spend every year.

Also expected is a subscription service consisting of news, entertainment and sports bundled from newspapers and magazines.

Apple is making the announcements at its Cupertino, California, headquarters during an event likely to be studded with Hollywood celebrities.

The iPhone has long been Apple’s marquee product and main money maker, but sales are starting to decline. The company is pushing digital subscriptions as it searches for new growth.

Making must-have TV shows and movies that are watchable on any device has propelled Netflix into a force in both Silicon Valley and Hollywood.

But Apple remained focused on making on gadgets: iPhones, iPads, computers and its Apple TV streaming box for TVs. Apple co-founder Steve Jobs began toying with the idea of building a powerful TV business, but he couldn’t pull it off before his death in 2011. It has taken his successor, CEO Tim Cook, nearly eight years to draw up the script that the company will now try to execute.

“Apple is very late to this game,” eMarketer analyst Paul Verna said. “Netflix has become the gold standard in how to create and distribute content, using all the data they have about their viewers.”

Netflix’s prowess has attracted 139 million subscribers worldwide. But Apple will have several other deep-pocketed competitors fighting for consumers’ dollars. Amazon has also become a formidable force in video streaming. Walt Disney Co. is launching its own service this year, armed with an imposing library that became more formidable with its purchase of 21st Century Fox’s films and TV series. AT&T is debuting another streaming service built around HBO.

Apple has plenty of money to spend, though, with about $245 billion in cash and marketable securities. It must prove itself attractive to Hollywood even without a track record for supporting high-quality programming and then ensuring it gets widely seen.

As part of its efforts to make quick connections, Apple hired two longtime Sony television executives, Jamie Erlicht and Zack Van Amburg, in 2017. They have reportedly signed up stars such as Oprah Winfrey, Steven Spielberg and Jennifer Aniston.

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How Will Foreign Investment Change Vietnam’s Economy?

Vietnam’s cheap workers might not be the country’s stars for much longer: low wages helped to propel the communist nation to some of the fastest growth rates in the world, but analysts say it needs a new economic model now.

After a slow recovery from the Vietnam War, the Southeast Asian country saw gross domestic product rise year after year from the 1990s on. That was built on the back of low-cost labor and factory-driven exports, as well as companies’ increasing tie-ins to foreign investment.

Vietnam is currently at a turning point, looking back at simple exports like rice and Reeboks that helped it develop, and looking forward to a more advanced economy along the lines of Taiwan or South Korea. Locals do not want “Made in Vietnam” to signal low quality. They also want to integrate into global trade, without the backlash against globalization seen among populist voters from Europe to the United States.

“What has been working in the past 30 years may not necessarily work in the future,” said Ousmane Dione, the World Bank director in Vietnam. “The impacts of initial institutional and structural reforms seem to have reached their limit.”

He was referring to the Doi Moi reforms that began three decades ago, when Vietnam started to introduce more and more traits of a market economy into its system, like private ownership of firms and houses. Hanoi is conducting a review of how well Doi Moi turned out, and how to chart an economic path for the next three decades.

Advisers have put forward ideas of how the new economy could look in Vietnam, among which are three common themes: the internet and other high-tech sectors will dominate; businesses will move into services and other value-added industries rather than physical goods; and employees will constantly update their skills through life-long learning.

For example, Vietnamese factory hands are accustomed to assembling phones and cars, but could they one day move up the value chain, such as by providing tech support to people who buy these products?

On the technology side, Vietnam could do more to collaborate with the rest of Southeast Asia, according to Pham Hong Hai, CEO of HSBC Vietnam. That may range from ensuring electronic payments go off without a hitch across borders, to cooperating on a response to cyber threats, he said.

“Businesses are crying out for tangible developments that will smoothen intra-regional trade,” Hai said. Vietnam “should continue the momentum to further integrate into the region and gain most benefits from globalization.”

Left Behind?

The other vital theme has to do with the workforce, making sure its productivity and skill levels improve. Millions of Vietnamese now rely on entry-level jobs to make a living, whether it’s gluing together wallets at a factory, or picking coffee cherries on a farm.

That was the work that used to attract foreign investors to the country in droves, but not all of those jobs will last. So groups from government agencies to charities are enacting education and training programs to equip locals with skills for the future.

This is meant not just to increase job security, but also to prevent Vietnamese from feeling left behind or bitter if jobs get off-shored to cheaper countries. Vietnam hopes to avoid the populist resentment of other parts of the world, as well as the trade protectionism that has created.

To that end Vietnam is turning to partners like Australia, which has supported projects that allow the fruits of economic success to be spread more widely.

Vietnam set out on a new “chapter that embraces innovation, promotes bold reform, and helps Vietnam achieve its ambitious development goals,” said Craig Chittick, the Australian ambassador in the country of 100 million people.

His government has backed programs in Vietnam like the KOTO center, which teaches hospitality skills to street children, as well as a contest to invent technologies useful to rural women and a forum to promote impact investing. The idea is that not all groups have benefited from past economic growth, but there is still a chance to change that in the new Vietnam.

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Ethiopian Airlines Chief: ‘Many Questions’ Remain About Boeing Aircraft

The head of Ethiopian Airlines said “many questions on the B-737 MAX airplane remain without answers” and he pledged “full and transparent cooperation to discover what went wrong.”

“Until we have answers, putting one more life at risk is too much,” CEO Tewolde Gebremariam said Monday in a statement.

“Immediately after the crash and owing to the similarity with the Lion Air Accident, we grounded our fleet of Max 8s. Within days, the plane had been grounded around the world. I fully support this,” Gebremariam said.

A March 10 Ethiopian Airlines crash and Indonesia’s Lion Air crash in October were both Boeing 737 MAX 8 planes. Everyone on board the two flights was killed.

The Ethiopian Airlines flight data recorders revealed that there were “clear similarities” between the two doomed flights.

Gebremariam asserted that his crews were “well trained” on this aircraft.

“We are the the only airline in Africa, among the very few in the world, with the B-737 full flight Simulator,” he said. “Contrary to some media reports, our pilots who fly the new model were trained on all appropriate simulators.”

“In a nation that sometimes is saddled with negative stereotypes, accidents like this affect our sense of pride,” Gebremariam said. “Yet this tragedy won’t define us. We pledge to work with Boeing and our colleagues in all the airlines to make air travel even safer.”

 

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How US States Are Richer Than Some Foreign Nations

The United States is an economic powerhouse.

As the largest economy in the world, the U.S. produced $20.5 trillion worth of goods and services — known as its Gross Domestic Product (GDP) — in 2018. That’s impressive when you consider that the total GDP for the entire world was about $80 trillion in 2017.

In fact, every U.S. state has a GDP that makes it as powerful, economically, as a foreign nation.

California is the state with the highest GDP in the country. Its $2.97 trillion economy is on par with Britain, which has a GDP of $2.81 trillion. The UK needed 14.5 million workers — 75 percent more than California used — to produce the same economic output. On its own, California is the fifth-largest economy in the world.

The GDP of Texas ($1.78 trillion) is equivalent to the economy of Canada ($1.73 trillion), while New York’s GDP ($1.70 trillion) matches up to South Korea ($1.66 trillion).

Even the smaller U.S. states can hold their own. Wyoming, the smallest U.S. state population-wise, with fewer than 600,000 residents, has a GDP of $41 billion, which is about the same as Jordan’s, a country of 9 million people.

Mark J. Perry, an economics and finance professor at the University of Michigan, and a scholar at the American Enterprise Institute, used data from the U.S. Department of Commerce and the International Monetary Fund for his analysis comparing the GDP’s of U.S. states to entire countries.

He says those numbers are a testament to the “world-class productivity of the American workforce,” and a reminder of “how much wealth, output and prosperity is being created every day in the largest economic engine there has ever been in human history.”

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US Government Posts $234 Billion Deficit in February

The U.S. federal government posted a $234 billion budget deficit in February, according to data released Friday by the Treasury Department.

Analysts polled by Reuters had expected a $227 billion deficit for the month.

The Treasury said federal spending in February was $401 billion, up 8 percent from the same month in 2018, while receipts were $167 billion, up 7 percent compared to February 2018.

The deficit for the fiscal year to date was $544 billion, compared with $391 billion in the comparable period the year earlier.

When adjusted for calendar effects, the deficit was $547 billion for the fiscal year to date versus $439 billion in the comparable prior period.

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