Delta Lost More Than $12 Billion Last Year – The New York Times

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Empty Delta ticket counters at Salt Lake City International Airport in April. The airline reported a loss of nearly $12.4 billion for 2020.
Credit…Rick Bowmer/Associated Press

Delta Air Lines lost $755 million in the fourth quarter, bringing its losses to nearly $12.4 billion in 2020, a year in which the airline industry was battered by a pandemic that crippled air travel.

“Our December quarter results capped the toughest year in Delta’s history,” Ed Bastian, Delta’s chief executive, said in a statement Tuesday morning. “While our challenges continue in 2021, I am optimistic this will be a year of recovery and a turning point that results in an even stronger Delta.”

The airline brought in nearly $4 billion in operating revenue in the last three months of the year, a 65 percent decline from the same quarter a year earlier. But Delta also nearly halved its “daily cash burn,” an approximate measure of spending on core operations and investments, which analysts use to gauge how close a business is to taking in more cash than it is spending.

The distribution of coronavirus vaccines has given Delta and other airlines hope, but a meaningful recovery is not expected until the vaccines are widely administered, which is not expected until at least the second half of the year. During the first three months of 2021, Delta expects scheduled flight capacity to be down about a third and revenue to be 60 to 65 percent lower compared with the same quarter in 2019.

In the earnings announcement, Glen Hauenstein, Delta’s president, said the airline expected the year to unfold in three phases: choppy at first, followed by “an inflection point” and then a sustained recovery “as customer confidence gains momentum, vaccinations become widespread and offices reopen.”

Holiday travel provided some relief to the industry, but air travel is still down more than 60 percent compared with last year, according to the latest Transportation Security Administration airport security screening data.

Fannie Mae and Freddie Mac effectively guarantee roughly half of all mortgages in the United States against default.
Credit…Steven Senne/Associated Press

The Treasury Department said it would allow Fannie Mae and Freddie Mac, the two government-controlled mortgage finance firms, to retain more of their profits to guard against future risks in the housing market.

The plan is part of an effort to enable Fannie and Freddie to leave government control — although neither the Treasury nor the Federal Housing Finance Agency, which regulates both firms, expect that to happen anytime soon.

Both firms have been in a government conservatorship since September 2008, when Treasury officials in the Bush administration had to step in with a $187 billion bailout in the early days of the financial crisis. Today, they effectively guarantee roughly half of all mortgages in the United States against default, which helps keep a lid on the interest rate for a traditional 30-year mortgage.

The Treasury and the F.H.F.A. said in a joint statement that the conservatorship was not meant to be indefinite and that federal officials had developed a “blueprint” for privatizing the firms. That blueprint foresees Fannie and Freddie both being able to sell stock to raise capital at some later date.

But the conservatorship, which has already spanned parts of three presidencies, will now be overseen by the Biden administration. That means a new Treasury secretary, and it may soon mean a new F.H.F.A. director.

Mark Calabria, who took over the agency in 2019, has long favored a plan to end the conservatorship. But a case pending before the Supreme Court could allow the president to replace him without waiting for Mr. Calabria’s five-year term to expire.

A Disneyland parking lot was used as a vaccination site on Wednesday. The resort has been closed for 10 months because of the pandemic.
Credit…Mario Tama/Getty Images

Disneyland, which has been closed for 10 months because of California’s strict approach to coronavirus safety, alerted annual passholders that it was ending the popular program, which it started offering to hard-core customers in the 1980s.

The Walt Disney Company said it would begin issuing prorated refunds in the coming days. Annual passes to Disneyland were most recently $419 to $1,449, depending on access and perks.

Disney declined to say how many people were enrolled. The Orange County Register estimated in 2018 that Disneyland sold “hundreds of thousands” annual passes a year.

In part, the program is ending because Disney expects pent-up demand — from passholders and day guests alike — to far outstrip capacity when the attractions eventually reopen. Walt Disney World in Florida returned in July and has been running at 35 percent capacity since the fall.

In a letter to passholders, Ken Potrock, president of the Disneyland Resort, cited uncertainty about the duration of the pandemic and “expected restrictions around the reopening of our theme parks.”

“We plan to use this time while we remain closed to develop new membership offerings,” he said. He gave no update on when Disneyland might reopen.

Disneyland typically attracts more than 18 million visitors per year; an adjacent Disney theme park in Anaheim, Calif., draws 10 million. Total revenue in 2019 stood at roughly $3.8 billion, according to analysts.

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Biden Outlines $1.9 Trillion Economic Rescue Package

President-elect Joseph R. Biden Jr. on Thursday proposed a spending package to combat the economic downturn caused by the coronavirus. The plan includes $1,400 direct payments to individuals and more generous unemployment benefits.

During this pandemic, millions of Americans, through no fault of their own, have lost the dignity and respect that comes with a job and a paycheck. Millions of Americans never thought they’d be out of work — many of them never even envisioned the idea — are facing eviction, waiting for hours in their cars to feed their families as they drive up to a food bank. A growing chorus of top economists agree that the moment of crisis — in this moment of crisis, with interest rates at historic lows, we cannot afford inaction. Our rescue plan also includes immediate relief to Americans hardest hit and most in need. We will finish the job of getting a total of $2,000 in cash relief to people who need it the most. The $600 already appropriated is simply not enough. One in seven households in America, more than one in five Black and Latino households in America, report they don’t have enough food to eat. So we’re going to extend emergency nutritional assistance for 30 — for 43 million children and their families enrolled in the SNAP program through the rest of this year. To the millions of you just looking for a fighting chance in this economy, I promise you, we will not forget you. We understand what you’re going through. We will never, ever give up.

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President-elect Joseph R. Biden Jr. on Thursday proposed a spending package to combat the economic downturn caused by the coronavirus. The plan includes $1,400 direct payments to individuals and more generous unemployment benefits.CreditCredit…Amr Alfiky/The New York Times

President-elect Joseph R. Biden Jr. on Thursday proposed a $1.9 trillion rescue package to combat the economic downturn and the Covid-19 crisis, outlining the type of sweeping aid that Democrats have demanded for months and signaling the shift in the federal government’s pandemic response as Mr. Biden prepares to take office next week.

The package includes more than $400 billion to combat the pandemic directly, including money to accelerate vaccine deployment and to safely reopen most schools within 100 days. An additional $350 billion would help state and local governments bridge budget shortfalls, while the plan would also include $1,400 direct payments to individuals, more generous unemployment benefits, federally mandated paid leave for workers and large subsidies for child care costs.

“During this pandemic, millions of Americans, through no fault of their own, have lost the dignity and respect that comes with a job and a paycheck,” Mr. Biden said in a speech to the nation on Tuesday evening. “There is real pain overwhelming the real economy.”

He acknowledged the high price tag but said the nation could not afford to do anything less. “The very health of our nation is at stake,” Mr. Biden said, speaking from Delaware. “We have to act and we have to act now.”

Here are some of the highlights of Mr. Biden’s so-called American Rescue Plan:

  • The “rescue” proposal would be financed entirely through increased federal borrowing, and flows from the idea that the virus and the recovery are intertwined.

  • The $20 billion “national vaccine program” he announced envisions nationwide community vaccination centers.

  • He also called for a “public health jobs program” that would address his goals of bolstering the economy and the coronavirus response while also rebuilding the nation’s public health infrastructure. The proposal would fund 100,000 public health workers to engage in vaccine outreach and contact tracing.

  • To address the racial disparities in health exposed by the coronavirus pandemic, which has disproportionately claimed the lives of people of color, he pledged to increase funding for community health centers, and also intends to fund efforts to mitigate the pandemic in prisons and jails, where African-Americans and Latinos are overrepresented.

  • Mr. Biden proposed a wide range of efforts to help those who have suffered the most under the economic shutdowns, including emergency paid leave to 106 million Americans, regardless of the size of their employer, and extending tax credits to many families to offset up to $8,000 in annual child care costs.

  • The plan gives billions of dollars in aid to renters struggling to keep up with mounting unpaid liabilities to landlords, and it would give grants to millions of the hardest-hit small businesses.

  • The proposal would temporarily increase the size of two tax credits in a manner that would effectively provide more cash from the government to low-income workers and families.

  • Mr. Biden called on Congress to raise the federal minimum wage to $15 an hour, and he proposed extending expanded unemployment benefits through the end of September, with an extra $400 weekly supplement.

Volunteers processing donations at a food pantry in Wichita, Kan. More than one million people filed new claims for unemployment benefits last week.
Credit…Stephen Speranza for The New York Times

The surge last week in unemployment claims is the latest indication that the coronavirus pandemic is still sending shock waves through the economy. And some economists say it could be spring before the labor market starts to meaningfully improve.

“People are still scared of the virus, as they should be, and that is going to have an economic impact,” said AnnElizabeth Konkel, an economist at the career site Indeed. “The virus is the root of all that is going on right now.”

How quickly the economy recovers will depend on several factors, including how soon more widespread administration of the vaccine can begin. Warmer weather could allow more people to gather outside, slowing the spread of the virus as it did last year. President-elect Joseph R. Biden Jr. has also vowed to push another big relief package through Congress, which could provide a lifeline to struggling individuals and businesses the coronavirus is under control.

Still, as the coronavirus continues to pummel the leisure and hospitality industries, employers are likely to continue cutting jobs in the weeks ahead. Some struggling businesses may not survive.

In addition, a major element of the relief package signed by President Trump last month — a $300 weekly federal supplement to other unemployment benefits — is set to expire in mid-March, which could again leave people in the lurch.

Economists say that economic improvement will not happen overnight even once the coronavirus does become contained.

“As we get into the second quarter, the economy should begin to heal,” said Mark Hamrick, senior economic analyst at Bankrate. “But clearly, all of this has taken much longer than anyone expected, and probably the healing will take some time as well.”

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Fed Will Not Raise Interest Rates Anytime Soon, Powell Says

Jerome H. Powell, the chair of the Federal Reserve, said the U.S. economy is a long way from recovery and the central bank would not raise interest rates anytime soon.

The economy is far from our goals, and as I mentioned a couple of times, we’re strongly committed to a framework of using our monetary policy tools until the job is well and truly done. When the time comes to raise interest rates, we’ll certainly do that in that time. By the way, is no time soon. Remember, we’re a long way from maximum employment. There’s plenty of slack in the labor market. Unlikely that wage pressures are going to be reaching a level that would create — support higher inflation. Also second, the other factor, I’d point to is look around the world, shortage of demand in lots of large advanced economy countries around the world with — who began this crisis at deeply negative interest rates and have had little policy space with interest rates. Now, there are other things they can do, and they are doing, but that all is going to hang around for a while. And the U.S. economy is strongly integrated with the rest of the world. And that’s going to matter. Surveys now show that market participants expect us not to raise rates until inflation has reached 2 percent, and until the labor market is very strong indeed. And that is also consistent with our rate guidance. I’m optimistic about the economy over the next couple of years. I really, and we’ve got to get through this very difficult period this winter with the spread of Covid. But as the vaccines go out, and we get Covid under control, there’s a lot of reason to be optimistic about the U.S. economy.

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Jerome H. Powell, the chair of the Federal Reserve, said the U.S. economy is a long way from recovery and the central bank would not raise interest rates anytime soon.CreditCredit…Pool photo by Greg Nash

Jerome H. Powell, the chair of the Federal Reserve, made it clear on Thursday that the central bank would be cautious in easing off its support for the economy — and that action was anything but imminent. Speaking during a webcast question-and-answer session, Mr. Powell said it would take time for the economy to recover from the pain of the pandemic era.

“We’re a long way from maximum employment, there’s plenty of slack in the labor market,” he said, noting also that weakness in global economies would weigh on progress in the United States. And if inflation picks up substantially, he added, the Fed has policy tools to counteract that. “Too low inflation is the much more difficult problem to solve.”

Some investors have worried that the Fed might speed up its plans to reduce its enormous bond purchases, or even to lift interest rates from their near-zero setting. The central bank has been buying about $120 billion in Treasury and mortgage-backed debt each month to keep markets operating smoothly and to help support the economy.

Top officials have been clear that economic conditions remain well short of their twin targets — maximum employment and slow but steady price increases. Mr. Powell reiterated that there was a long way to go to get the economy back to full health.

“When the time comes to raise interest rates, we will certainly do that,” he said. “And that time, by the way, is no time soon.”

Fitbit has 29 million customers, a small share of the global market for fitness tracking devices.
Credit…Michele Tantussi/Reuters

Google on Thursday announced it had finalized its $2.1 billion acquisition of Fitbit, after a deadline passed for the Justice Department to object to the deal.

Fitbit gives the search company a giant leap into the wearable health tech market, putting it more in direct competition with Apple.

In a blog post announcing the completion of the deal, Google said it was committed to protecting the privacy of users, the main sticking point for global regulators who reviewed the merger. The search company promised regulators it would not collect data to be used for targeted advertising.

“This deal has always been about devices, not data,” Rick Osterloh, Google’s senior vice president of devices and services, said. “We worked with global regulators on an approach which safeguards consumers’ privacy expectations.”

James Park, the chief executive of 13-year-old Fitbit, said under Google, with its vast resources, FitBit’s prospects were “truly limitless.” Fitbit has 29 million customers, a small share of the global market for fitness tracking devices. The giant in the field is Apple, which nearly 40 percent of the wearable tech market, according to IDC research.

Google’s privacy commitments were enough to persuade European regulators to approve the deal in December after a 13-month investigation. The regulators approved the deal on privacy commitments and with Google’s promise to continue providing its free Android software to competing makers of fitness and health devices.

The business deal was completed after the Justice Department did not object to the deal by Jan. 13, its deadline for making such a move. The Justice Department, which is suing Google for antitrust violations in its search business, said it was still investigating the deal. Regulators can scrutinize finalized mergers and acquisitions.

“The Antitrust Division’s investigation of Google’s acquisition of Fitbit remains ongoing,” said Alex Okuliar, a senior antitrust official for the agency. The Justice Department, Mr. Okuliar said, “continues to investigate whether Google’s acquisition of Fitbit may harm competition and consumers in the United States.”

Google said in a statement that it continues to be in touch with the agency. “We are confident this deal will increase competition in the highly crowded wearables market, and we’ve made commitments that we plan to implement globally,” the company said.

A coal-fired plant in Stratton, Ohio. Banks have stopped lending to some of the fossil fuel industry’s most harmful practices.
Credit…Brian Snyder/Reuters

Over the past several years, big banks around the world have cut off lending to some of the fossil fuel industry’s most harmful practices, like coal mining and the use of coal-fired power plants.

Decisions like those would be prohibited by a new Trump administration rule finalized on Thursday — although the change may be swiftly undone by the incoming Biden administration, to the relief of the banks who opposed it.

On his last day as acting comptroller of the currency, Brian Brooks finalized a rule that the Office of the Comptroller of the Currency, which regulates the country’s biggest banks, is calling the Fair Access rule. It says that banks must offer the same products and services to everyone, unless they can prove to the regulator that a specific borrower is too much of a risk.

Banks that cut off companies conducting legal businesses “need to show their work and the legitimate business reasons for doing so,” Mr. Brooks said in a statement.

The rule is set to take effect on April 1, but might not make it that far. The rule is one of a long list of changes that Democrats expect to undo after President-elect Joseph R. Biden Jr. takes office.

The rule was among a series of last-minute, industry-friendly changes that the Trump administration is making in its final days. Lobbying groups were given just 25 business days to comment on the proposal — over a period that stretched from Thanksgiving to Christmas to just after New Year’s Day — yet they made their dismay perfectly clear.

Greg Baer, the chief executive of the Bank Policy Institute, a trade group representing the biggest banks, wrote to the regulator in December to ask that the rule be withdrawn. In a statement posted on group’s website on Thursday, Mr. Baer said banks were disappointed in the decision to fast-track a rule that was “hastily conceived and poorly constructed.”

“The rule lacks both logic and legal basis, it ignores basic facts about how banking works, and it will undermine the safety and soundness of the banks to which it applies,” he said.

The Trump administration on Thursday added the Chinese National Overseas Oil Corporation, one of China’s largest oil and gas producers, to an “entity list” that will restrict its ability to purchase American exports, citing the company’s “reckless and belligerent actions” in the South China Sea.

The Department of Commerce, which made the announcement, also said it would add a Chinese company named Skyrizon to a separate list of companies that have ties to the Chinese military, which will result in new restrictions on investing in and selling products to the company.

The Trump administration has steadily ramped up restrictions on the sale of American technology to Chinese entities, saying that such sales pose a national security risk. The Chinese government fuels its military development in part through policies that allow it to access and replicate sensitive technologies for its militarization efforts, the Commerce Department said.

In a separate announcement Thursday morning, the department said that it was expanding its restrictions on exports of technology to prohibit companies from selling goods to foreign intelligence services in Cuba, China, Iran, North Korea, Russia, Syria and Venezuela. The department said it would also expand the categories of goods that fall under those restrictions.

  • Stocks on Wall Street fell on Thursday, retreating for the second time this week after notching record highs last week, even as investors anticipated President-elect Joseph R. Biden Jr.’s announcement of a multitrillion-dollar spending plan to counter the pandemic’s impact on the U.S. economy.

  • The S&P 500 fell 0.4 percent, ending lower than it stood a week ago. In Europe, the Stoxx Europe 600 index rose 0.7 percent and London’s FTSE 100 was up 0.8 percent.

  • Mr. Biden’s full plan will reportedly cost $1.9 trillion, and is expected to initially focus on expanding the country’s vaccination program and virus testing capacity.

  • Mr. Biden is expected to provide details in a speech Thursday evening in Delaware, hours after the latest tally of weekly unemployment claims showed a sharp rise in newly jobless Americans. Hiring remains dreadful, with employers recording a net loss of 140,000 jobs in December. Last spring, as the pandemic arrived in the United States, 22 million jobs disappeared. Nearly 10 million remain lost.

  • The latest data from China shows a humming economy. Exports rose 18 percent in December from a year earlier, reflecting global demand for work-from-home devices. Imports also increased, up 6.5 percent from a year ago, a sign of a strengthening domestic consumer economy.

Erna Solberg, the prime minister of Norway, on a tour of New York Harbor in 2019 to discuss Equinor’s wind farm project for New York State. This week Equinor and BP were chosen for two more wind projects.
Credit…Gabriela Bhaskar for The New York Times

Gov. Andrew M. Cuomo of New York has picked two European giants, Norway’s Equinor and BP, to supply the state with clean electricity from wind turbines planted on two large tracts in the Atlantic.

Offshore wind developers are attracted to the East Coast of the United States because of the availability of shallow water sites suitable for wind farms and the proximity of major electric power consuming centers like New York and Boston.

Until recently, offshore wind was largely a European industry but it has gained interest elsewhere as larger turbines and other innovations have brought down costs.

The deal will bring investment of nearly $9 billion, according to a news release from the state government. One of the sites is 20 miles off the south shore of Long Island, and the other is about the same distance south of Nantucket. The projects are expected to produce power late in this decade.

Equinor had already reached a $3 billion offshore power deal with New York in 2019. That wind farm plus the two just announced will have generating capacity sufficient to power 1.8 million homes.

For European oil companies like Equinor, the former Statoil, offshore wind projects provide opportunities to invest billions of dollars to advance their agenda of shifting away from oil and gas toward cleaner energy. Equinor moved early to acquire rights to ocean acreage off the United States and last year agreed to sell a 50 percent stake in its U.S. business to BP for $1.1 billion.

Equinor, other companies and the state will invest $644 million in a port in South Brooklyn and other facilities for constructing and servicing the wind farms, according to the news release.

Credit…J. Scott Applewhite/Associated Press

A lawmaker in Washington is asking big banks and other financial services companies to stop processing financial transactions for people and organizations that participated in last week’s attack on the United States Capitol.

Representative Emanuel Cleaver, a Missouri Democrat who serves on the House Financial Services Committee and is chairman of its subcommittee on national security, announced on Thursday that he had written to a trade group, the Electronic Transaction Association, to request the freeze. He also asked the group, which represents companies like Visa, JPMorgan Chase and Square, to immediately stop doing business with anyone who based fund-raising campaigns off the Jan. 6 attack.

“Far-right, white-nationalist and associated domestic terror organizations pose an imminent threat to the national security of the United States and our financial system,” Mr. Cleaver wrote in a letter on Tuesday to the group’s leaders.

“Every effort should be made to identify all terror suspects involved in the attack, prevent the facilitation of further criminal activity, and to disrupt their illicit networks.”

Mr. Cleaver said that several groups, including the Proud Boys, the Boogaloo Bois and the Sons of Liberty, which had been documented as participants in the attack, had already been cut off from many mainstream fund-raising platforms, but were still using “intermediary organizations with questionable terms of service” that might in turn be doing banking and payments business with mainstream companies. He asked that the association’s members assess their “formal and informal relationships” with the groups and work to cut them off He also asked that the group respond to his request by Friday.

“We received the chairman’s letter and are preparing our response on how the payments industry is addressing illegal activity that occurred last week,” Scott Talbott, a lobbyist for the group, said in an email on Thursday.

PepsiCo joined companies that have suspended all political donations after the attack on the Capitol.
Credit…Joshua Bright for The New York Times

PepsiCo announced on Thursday that it was suspending all donations from its corporate political action committee, adding to the list of dozens of companies that have come out with some sort of halt on political giving since last week’s violence at the Capitol.

“The peaceful transfer of power is a keystone of the American democratic process, and we categorically denounce the violence last week that attempted to disrupt this process,” a representative said. “In light of these events, we are suspending all political contributions while conducting a full review to ensure they align with our company’s values and our shared vision going forward.”

Pepsi’s PAC spent $140,000 this election cycle, according to the Center for Responsive Politics.

In pausing all donations, Pepsi is not going as far as companies like Walmart and Marriott, which halted donations specifically to the 147 Republicans in Congress who objected to certifying the presidential election result. It joins companies like rival Coca-Cola, along with the energy giant BP and the consulting firm EY, formerly Ernst & Young, in halting donations across the board.

The brokerage firm Charles Schwab said this week that it was shutting down its PAC, citing the divisive political environment.

“I’ve never seen the corporate PAC world react to something this uniformly and strongly,” said Kenneth Gross, a partner at the law firm Skadden who focuses on campaign finance law.

“I think there’s a sense of, ‘Let’s not overreact — but we need to do something,’” he said.

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