Cameron Inaugurates Farnborough Airshow And Announces £3 Billion Purchase Deal With Boeing

David Cameron, the UK Prime Minister has announced on July 11 signing a decade long deal worth £3 billion with the US aircraft manufacturing company, Boeing. Under the deal, UK will purchase nine P-8A Poseidon aircraft for maritime patrol and fifty Apache AH-64E attack helicopters for the British Army.

The deal has been signed between the UK Ministry of Defense and the aircraft manufacturer after last week’s NATO summit and covers training, maintenance and support. Mr. Cameron has announced the deal while inaugurating the Farnborough Airshow. 

     

To implement the deal, Boeing will develop a new facility at RAF Lossiemouth in Moray at a cost of £100 million. The aircraft manufacturer expects to add 2,000 new jobs during the coming years as part of its plan to expand maintenance and support operations for both military and commercial buyers in Europe, reports BBC.

While addressing in the inaugural ceremony, the Prime Minister has represented the deal as a sign of confidence over the British economy diminishing uncertainties posed due to Brexit. A spokesperson has described the purchase deal as part of government’s effort against pledge for spending at least 2% of GDP in maintaining defense, according to a report published in The Guardian.

The nine P-8A Poseidon aircraft will fulfill the gap originated from grounding an age old jet fleet in 2010. The purchase has also been delayed for an ad interim effort to fill the blank with British made aircraft. First phase delivery of the aircraft will take place between 2019 and 2020, predicts the Defense Ministry. The British government has been forced to seek help from its allies to patrol its coast and hunting submarines following suspicious navigation by the foreign vessels during recent months.

Due to decline in demand for Boeing’s combat jets, the US aircraft manufacturer has been depending immensely on modified jetliners for military use. After India and Australia, UK appears as the third overseas client for Boeing’s P-8A which is a modified version of its best selling 737 passenger jet, reports The Wall StreetJournal.

The Chicago based aircraft manufacturer has set a goal for selling 100 P-8A over the next decade. Inclusion of a host of sensors and ability to get equipped with torpedo like weapons has made the aircraft more lucrative to the consumers.

The deal has taken place under the US foreign military-sales program and has remained unconsidered for long due to not offering enough work to British industry. However, the new Apaches will be maintained in the UK by Leonardo-Finmeccanica SpA in the longer term, informs Michael Fallon, the UK Defense Secretary. Leonardo-Finmeccanica SpA is an Italian aerospace company with a larger helicopter operation in the UK. 

New Jobs Created In The US Market Amid Slower Business Investments

The US job market has been able to add 287,000 new jobs out righting fears for possible economic slowdown following a weaker start to the calendar year. The new job figure appears to be quite astonishing compared to only 11,000 jobs recorded during May.

The new job data, announced by the US Labor Department on July 8, are also stronger than the forecast. Dollar has appreciated some value and yields from US government bonds have increased a little, which indicate for a possible US rate hike. Meanwhile, the US unemployment rate has been increased to 4.9% from 4.7%, recorded in May, reports BBC quoting a different set of statistics.  

   

Economists have predicted for the job growth amid fears for repetition of the dismal figures of May indicating further deepening into economic slowdown. However, the recently disclosed employment data has surpassed forecasts while recording job gains from a vast range of industries. Moreover, the Us Labor Department’s announcement diminishes anxiety over emerging threats originated from Brexit, according to a report published in The Washington Post.

Voting in favor of Brexit by the Britons has already caused appreciation of US Dollar against Pound Sterling. This indicates a possible slowdown in US exports to the UK. Quoting Tara Sinclair, chief economist for job site Indeed and a professor at George Washington University, The Bulletin represents the job numbers as exciting.

However, some economists have warned over possible volatility in a single month’s reading and suggest interpreting the data as part of a longer period to define the trend. Comparison of the new employment figure with other growth figures indicates steady expansion of the US economy instead of surging due to ongoing recovery from the global recession.

The US job market has been adding 172,000 new jobs on an average per month since the first month of 2016. However, the figure seems to be lower compared to that recorded in 2015 which is again lower than a year earlier. Thomas Perez, the US Labor Secretary has described the figures as predicted from a fully healed job market, while addressing an interview.      

Hospitality, retail and healthcare services have created jobs in June while flat growth has been recorded for the construction and manufacturing sectors mainly due to stronger dollar and weaker export growth. At the same time, the mining and transportation sectors have reported job cuts.

However, economists still warn over long term challenges for the US economy. According to their analysis, lower investment in businesses also indicates for an economic booming in the near future. Since Brexit may spark deeper crisis elsewhere in the world, so investors will keep their investments at hold during the next few months, analyzes Joseph Lake, director of global forecasting at the Economic Intelligence Unit.

Malaysia Slaps Banning on Rayani Air Due To Violation of Regulatory Conditions

Rayani Air Sdn. Bhd., the first Islamic Sharia compliant airline in Malaysia has been grounded permanently. Department of Civil Aviation (DCA) in Malaysia has revoked the carrier’s Air Operator Certificate (AOC) due to concern over safety audit and administration.

The full service airline in Malaysia has initiated commercial operation in December last year. It has also been acknowledged as the fourth Sharia compliant airline in the world after Royal Brunei Airlines (RBA), Saudi Arabian Airlines and Iran Air.

Following Islamic dietary regulations, no alcoholic beverage or pork has been served on board. Furthermore, prayers have been recited prior to initiation of every flight.  

Two Boeing 737-400 planes with capacity of carrying 180 passengers have been used in the Rayani fleet. Eight pilots and 50 crews have been engaged to conduct the flight operations, reports BBC.

The DCA and Ministry of Transport in Malaysia have been working in collaboration with Malaysian Aviation Commission (MAVCOM) over the Rayani issue. DCA has informed through a statement that safety and security of the aviation industry is of paramount importance to them.  

Prior to imposing suspension, the DCA has cautioned the airline twice over its non-compliance and poor service levels. Despite serving multiple notifications, Rayani Air has failed to implement the AOC conditions, informs Azharuddin Abdul Rahman, director-general of the DCA.   

Rayani Air has violated conditions of Air Service License (ASL), alleges MAVCOM through a separate statement. The airline is also accused of lacking financial and management capacity to continue operations as a commercial airline, according to a report published in The Telegraph.

MAVCOM has issued a show cause notice to the airline on May 25. Rayani Air’s unsatisfactory response coupled with negative evaluation report on its commercial standing and capabilities, all have contributed in imposing the ban.

Earlier, DCA has decided revoking the AOC on May 12 following an inquiry. The authority has conducted an investigation into the administration and safety audit of the airline's state of operations.

However, the airline has decided appealing to both MAVCOM and the DCA to provide a second chance to revive its operations. The revocation appears amid airline’s negotiating efforts to acquire equity from investors, Rayani Air owner Ravi Alegandrran reveals his point of argument for the appeal, reports Financial Times.

A qualified and capable management team on behalf of the new investors will take the helm of Rayani Air after revival of the airline’s operations following the planned appeal, adds Mr. Ravi to his statement. He however, stresses the requirement of revival to resolve issues like employees’ salaries, ticket refunds and meeting other liabilities.

Passengers, who have purchased tickets from Rayani Air prior to announcing the ban, will be able to lodge complaint with the carrier seeking refund. They may even file civil lawsuit or lodge complaint with MAVCOM too.

The commission reserves the right to hear and try against complaints with a view to protect legitimate consumers. However, it has also been considering seeking High Court directive to register the banning as a judgment.