United CEO provides reassurances on safety
Extra training planned after series of airplane incidents
The CEO of United Airlines says that a slew of recent incidents ranging from a piece of aluminum skin falling off a plane to another jet losing a wheel on takeoff will cause the airline to review its safety training for employees.
CEO Scott Kirby said the airline was already planning an extra day of training for pilots starting in May and changes in training curriculum for newly hired mechanics.
In a memo to customers on Monday, Kirby tried to reassure travelers that safety is the airline’s top priority.
“Unfortunately, in the past few weeks, our airline has experienced a number of incidents that are reminders of the importance of safety,” he said. “While they are all unrelated, I want you to know that these incidents have our attention and have sharpened our focus.”
Kirby said the airline is reviewing each recent incident and will use what it learns to “inform” safety training and procedures. He did not give any details beyond measures that he said were already being planned, such as the extra day of training for pilots.
Some of the recent incidents – such as cracks in multilayered windshields – don’t normally attract much attention but have gained news coverage and clicks on social media because of the sheer number of events affecting one airline in a short period of time.
To a degree, United may be a victim of heightened concern about air safety since January, when a panel blew off an Alaska Airlines Boeing 737 Max at 16,000 feet above Oregon; investigators say bolts securing the panel were missing. “I don’t see a major safety issue at United,” said John Cox, a former airline pilot and now a safety consultant. “The media is enhancing the events with extra scrutiny. Anything right now that happens to a United airplane makes the news.”
hikes: Slowly and methodically, while trying to divine the economy’s direction from often-conflicting data.
“The Fed is driving events, not events driving the Fed,” Reinhart said. “That’s why this task is different than others.”
Reports don’t help cause
The central bank’s policymakers had said after their last meeting in January that they needed “greater confidence” that inflation was cooling decisively toward their 2% target. Since then, the government has issued two inflation reports that showed the pace of price increases remaining sticky-high.
In most respects, the U.S. economy remains remarkably healthy. Employers keep hiring, unemployment remains low, the stock market is hovering near record highs and inflation has plummeted from its highs. Yet average prices remain much higher than they were before the pandemic – a source of unhappiness for many Americans for which Republicans have sought to pin blame on Biden.
Excluding volatile food and energy costs, so-called “core” prices rose at a monthly pace of 0.4% in both January and February, a pace far higher than is consistent with the Fed’s inflation target. Compared with a year earlier, core prices rose 3.8% in February. Core prices are considered a good signal of where inflation is likely headed.
But in February, a measure of housing costs slowed, a notable trend because housing is among the “stickiest” price categories that the government tracks. At the same time, more volatile categories, like clothing, used cars and airline tickets, drove up prices in February, and they may well reverse course in coming months.
“Nothing about those two data points made you feel substantially better about” inflation reaching the Fed’s target soon, said Seth Carpenter, chief global economist at Morgan Stanley and also a former Fed economist. “But it’s not at all enough to make you change your view on the fundamental direction of travel” for inflation.
Pace of decreases to slow
Indeed, several Fed officials have said in recent speeches that they expect inflation to keep declining this year, though likely more slowly than in 2023.
The Fed has also built in some expectation that price increases would ease only gradually this year. In December, it projected that core inflation would reach 2.4% by the end of 2024. That’s not far from its current 2.8%, according to the Fed’s preferred measure.
On Wednesday, the Fed’s policymakers will update their quarterly economic projections, which are expected to repeat their December forecast for three rate cuts by the end of 2024.
Still, it would take only two of the 19 Fed officials to change their forecast to one fewer rate cut for the central bank’s overall projection to downshift to just two rate cuts for 2024. Some economists expect that to happen, given that inflation has remained persistent at the start of this year.
The Fed’s benchmark rate stands at about 5.4%, the highest level in 23 years, after a series of 11 rate hikes that were intended to curb the worst inflation in four decades. They have made borrowing much more expensive for consumers and businesses.
Foreign regulators also cautious
Like the Fed, other major central banks are keeping rates high to ensure that they have a firm handle on consumer price spikes.
In Europe, pressure is building to lower borrowing costs as inflation drops and economic growth has stalled, unlike in the United States. The European Central Bank’s leader hinted this month that a possible rate cut wouldn’t come until June, while the Bank of England isn’t expected to open the door to any imminent cut at its meeting Thursday.
Most economists expect the Fed to implement its first rate cut at its June meeting, which would mean that in May, the Fed would signal such a coming move.
By June, the policymakers will have in hand three more inflation readings and three more jobs reports.
Sarah House, senior economist at Wells Fargo, said that timetable leaves plenty of time for inflation to resume its downward path. A rate reduction would likely lead, over time, to lower rates for mortgages, auto loans, credit cards and many business loans.
“They certainly need to see something better than the past couple of months, but they can get it,” she said.