TheChek News Flow

European aerospace group has been a winner from the post-pandemic rebound in travel demand

Airbus will pay a special dividend to shareholders after setting a new record for orders last year, as the aeroplane maker capitalised on resurgent travel demand.

The Toulouse-based company said it would make the payout of €1.00 a share in April, on top of an annual dividend payment of €1.80 per share, as net cash exceeded €10bn.

The announcement came as Airbus said it expected to deliver about 800 commercial aircraft to customers this year, 65 more than in 2023. The group reported that operating profit rose 4 per cent to €5.8bn last year, while revenues climbed 11 per cent to €65.4bn.

“Our dividend proposals are a reflection of the strong 2023 financials, our growth prospects in 2024 and balance sheet strength,” said chief executive Guillaume Faury.

While its commercial aircraft business enjoyed a strong year, Airbus disclosed that its defence and space business was hit by charges totalling €600mn.

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Putin says he prefers Joe Biden over Donald Trump in US election

Comments come after US president urges Congress to back aid for Ukraine’s war effort against Russia

Vladimir Putin has said Joe Biden would be a better US president for Russia than Donald Trump and dismissed concerns over his counterpart’s age and acuity for the role.

Putin’s comments late on Wednesday marked his first foray into this year’s presidential election as tensions between Democrats and Republicans rise over the White House’s efforts to send more military aid to Ukraine.

Asked in a state television interview to choose between Biden and Trump, Putin said the US leader was “more experienced, predictable, an old-school politician”, adding that Russia would “work with any US leader who wins the trust of the American people”.

The Russian president’s comments came a day after Biden accused Trump of having “bowed down to a Russian dictator” as he urged Republicans in Congress to defy Trump and back more funding for Ukraine.

Trump’s presidency from 2017 to 2021 was dogged with accusations that he was too sympathetic to Putin. US intelligence assessed that Russia had interfered in the 2016 White House race to help Trump defeat Hillary Clinton.

Putin suggested on Wednesday that concerns over Biden’s age and mental acuity were part of the US election campaign “getting more and more vicious” and said he had seen no evidence his counterpart was not fit for office.

At their last meeting in Geneva in 2021, Putin recalled, “they were already saying Biden wasn’t competent [ . . . ] but I saw nothing of the sort. Yes, he looked at his notes, and to be honest, I looked at mine. No big deal. So he banged his head on the helicopter when he was getting out of it — who of us hasn’t banged their head on something?”

Despite his guarded backing of Biden, Putin said American policy on Russia was “harmful and mistaken” and suggested Trump was right to cast aspersions on the future of Nato.

The US has provided crucial military and financial aid to Ukraine since Putin ordered the full-scale invasion of the country two years ago, but is struggling to secure congressional support for a new $60bn round of funding amid a wave of Republican hostility led by Trump.

The former US president, who is all but certain to challenge Biden as the Republican nominee in November, said last week he would encourage Russia to do “whatever the hell they want” to Nato countries that did not meet defence spending targets.

“There is probably some logic in his point of view” to conditioning US support for Nato allies on meeting the alliance’s target, currently at 2 per cent of gross domestic product, Putin said. “There is no logic from the Europeans’ point of view — they want the US to keep carrying out some functions for free, as they have done since Nato was founded.”

“If the US think they don’t need [Nato] anymore, then that’s their decision,” Putin added, saying that Trump “had his own views on how US relations with their allies should develop”.

Russia seeks new nuclear capabilities in space, US intelligence shows

White House faces calls to declassify information about ‘serious national security threat’

The US has shared intelligence with Congress and European allies about a new Russian nuclear capability that could be used in space, according to people familiar with the matter.

Earlier on Wednesday, the Republican chair of the House Intelligence Committee called on the White House to declassify information about a “serious national security threat”, and emailed members of Congress about a “destabilising foreign military capability”, which he did not detail. That sent Washington into a frenzy in an effort to figure out more information.

The intelligence is about Russian efforts to develop a space-based anti-satellite nuclear weapon, according to people familiar with the matter. The details of the threat were first reported by The New York Times.

The weapon would not be used to attack humans and was not yet active, the people said. The matter is serious but not an immediate threat, they said.

President Joe Biden’s national security adviser, Jake Sullivan, refused to shed light on the undisclosed threat on Wednesday, which US media reports had earlier linked to Russia and space.

“Today the House Permanent Select Committee on Intelligence has made available to all members of Congress information concerning a serious national security threat,” congressman Mike Turner of Ohio said in the statement.

“I am requesting that President Biden declassify all information relating to this threat so that Congress, the administration and our allies can openly discuss the actions necessary to respond to this threat.”

Turner also instructed fellow members of Congress to access details about the threat in a classified setting. ABC News reported that the threat related to a Russian attempt to put a nuclear weapon in space.

Speaking after Turner’s statement, Sullivan said he was planning to meet with a group of senior members of Congress known as the “Gang of Eight” on Thursday to brief them about the matter, but gave no details.

“I am a bit surprised that congressman Turner came out publicly today in advance of a meeting on the books for me to go sit with him alongside our intelligence and defence professionals tomorrow,” Sullivan said.

The comments from Turner come amid a mounting focus in Washington on foreign conflicts, with the White House trying to secure new funding for Ukraine in its war against Russia, over the opposition of House Republicans.

Asked whether Americans should be alarmed about Turner’s warning, Sullivan said the administration was taking steps to protect them from a range of national security threats.

“I am confident that President Biden in the decisions that he is taking is going to ensure the security of the American people,” he said. “We believe that we can and will and are protecting the national security of the United States and the American people.”

Jim Himes, the top Democrat on the House Intelligence Committee, said “people should not panic”, but added that while Turner was “right to highlight this issue” it was too sensitive to publicly discuss.

“I don’t want people thinking that Martians are landing or that your Wednesday is going to be ruined. But it is something that the Congress and the administration does need to address in the medium to long run,” he said.

Negative GDP growth piles pressure on Bank of Japan as it plans exit from negative rates

Japan’s economy has contracted for a second straight quarter in the face of wilting domestic demand, adding to pressure on the Bank of Japan as it considers raising interest rates for the first time since 2007. 

Weak private consumption pushed Japan’s gross domestic product to shrink by 0.4 per cent on an annualised basis in the fourth quarter, and by 0.1 per cent on a quarterly basis, according to preliminary data released by Japan’s Cabinet Office on Thursday.

The fall was at odds with economists’ estimates of a slight rise of between 0.2 and 0.3 per cent, and pushed some investors to revise bets on when the BoJ will begin to unwind its ultra-loose monetary policy, including the world’s last remaining negative interest rates.

Economist had been expecting the BoJ to raise rates at its April monetary policy meeting, if not in March.

“The latest GDP data, although it might be revised, complicates the monetary policy outlook. Two consecutive declines in GDP add to a string of disappointing data releases,” said Stefan Angrick, chief economist at Moody’s Analytics in Tokyo. “This makes it harder to justify a rate hike, not to mention a series of hikes.”

Angrick noted that a small increase in exports had helped offset a larger contraction, but said “the decline in GDP was broad-based”, with falls in private consumption, capital spending and government consumption.

The disappointing fourth quarter data also came as Japan’s third-quarter GDP was revised down to a 3.3 per cent contraction on an annualised basis.

“To add insult to injury, GDP for the third stanza was revised to a 0.8 per cent drop from a 0.7 per cent drop” on a quarterly basis, added Angrick. “With two consecutive declines in GDP, Japan is in a technical recession.”

The yen was little changed after the data release on Thursday at ¥150.2 to the US dollar, while the Nikkei 225 index rose close to 1 per cent, staying just above 38,000 points and within touching distance of its December 1989 bubble-era high of 38,915.

The BoJ kept overnight interest rates at minus 0.1 per cent at its most recent policy meeting in January.

But officials at the Japanese central bank have been growing increasingly confident that the economy is robust enough to attempt an exit from its negative interest rates policy, thanks to momentum for wage growth and greater assurance of hitting its inflation target of 2 per cent.

However, economists said that the fourth-quarter GDP data would complicate that picture, particularly as indices for services and consumption activity remained subdued ahead of the “shunto” spring wage negotiations by the country’s largest companies. 

Private consumption fell 0.2 per cent in the fourth quarter, following a 0.3 decline in the previous quarter.

“The Bank of Japan will likely now become even more cautious about any policy change,” said Min Joo Kang, senior economist for South Korea and Japan at ING, predicting that an interest rate increase could be pushed back to June, or even the third quarter of 2024.

According to Rabobank analysts, futures trading on Thursday suggested the probability of an April rate increase falling to 63 per cent, from more than 70 per cent the day before.

Japan’s Cabinet Office data releases are closely watched by economists and investors but are volatile and prone to revision. A technical recession is defined as two consecutive quarters of contracting GDP.