Cash root of Delta's Venezuela flight cuts
Delta Air Lines Inc. joined American Airlines in cutting the number of flights between the U.S. and Venezuela because of a dispute over cash trapped in the country.
Delta will go from once daily flights between Atlanta and Caracas to one weekly round trip starting Aug. 1, said Sarah Lora, a spokesman for the carrier. Atlanta-based Delta has provided uninterrupted service to Venezuela for 15 years, she said.
The change will further isolate Venezuela, where at least a dozen carriers have cut capacity, sales or service in protest over strict currency controls that prevent them from repatriating earnings from tickets sold there without government authorization.
"Delta will remain in the market to serve valued customers; however, the debt created over the past several years due to currency issues made us take a business decision to minimize our risk," Lora said, declining to disclose how much money the airline has stuck in Venezuela.
American Airlines Group Inc., the U.S. carrier with the most flights to Venezuela, reduced its weekly trips to 10 from 48 as of July 1. The Fort Worth-based airline had $750 million locked in Venezuela as of March 31.
-- Bloomberg News
EU banks face scrutiny over cash outlook
Banks in the European Union may have to reconsider their business plans if they can't convince watchdogs that they're able to generate cash over a 3-year period as part of a push to eliminate differences in the way risks are measured across the 28-nation bloc.
Lenders' "ability to generate acceptable returns" will be assessed by supervisors, who will give them a score between 1 and 4, with 4 considered "high risk," under proposals published Monday by the European Banking Authority. Banks will also be regularly assessed on their internal governance and how vulnerable they are to capital and liquidity shocks, facing the same criteria for the appraisals.
The proposals come four months before the European Central Bank takes over as chief supervisor of 120 of the euro region's biggest lenders and in the middle of an unprecedented health check on their loans. The guidelines intend to iron out differences in regulators' opinions on how much capital the lenders should hold.
"This is essential both for achieving more consistent prudential outcomes across the union and for the purposes of reaching joint decisions on the capital and liquidity adequacy of cross-border EU banking groups," the London-based EBA said in a statement on its website.
Firms have until Oct. 7 to respond to the proposals, and the deadline for implementation is Jan. 1, 2016.
-- Bloomberg News
China claims victory in WTO U.S. dispute
GENEVA -- An appeals body of the World Trade Organization has decided it lacked enough information to uphold China's objections to a U.S. law meant to help American companies that face unfair foreign competition.
The WTO appellate body said in an opinion Monday it was "unable to complete the analysis" and could not uphold China's appeal of a previous WTO ruling on the law signed by President Barack Obama in 2012.
But China claimed victory because the WTO panel did not overturn another part of the ruling that said the U.S. violated trade rules when it double-counted certain punishments on Chinese goods.
China's WTO mission in Geneva said in a statement that the panel's conclusions represent "another significant victory of China's challenge against the United States' abuse of trade remedy measures."
-- The Associated Press
Hyundai owners sue, claim mileage scam
SEOUL -- Hyundai, South Korea's largest automaker, was sued by consumers in its home market after the nation's transport ministry said the company overstated the fuel efficiency of one of its models.
About 1,500 owners of diesel-powered Santa Fe sport-utility vehicles built between May 2012 and June 2014 filed a complaint Monday with the Seoul Central District Court, the third of its kind, over the mileage exaggeration, said Kim Woong, managing partner at Yeyul, the law firm representing the consumers. A court official confirmed the filing. The official asked not to be named, citing court policy.
The lawsuit against Hyundai, which is already struggling against a strong won that's eroding profit from exports, may stain the company's reputation at home amid intensifying competition from imported brands including Bayerische Motoren Werke AG and Volkswagen AG. South Korea accounted for 44 percent of the Seoul-based carmaker's revenue in 2013, according to data compiled by Bloomberg.
"It's definitely bad news for the company," Lee Sang Hyun, an analyst at NH Investment & Securities Co., said by phone. "Although the compensation cost is expected to be relatively small, as it only involves the Santa Fe, we can't completely rule out the possibility that the government may decide to test and find more vehicles that fail to meet the government's standards."
-- The Associated Press
Game on: NYC taxi-like service cuts fares
Uber Technologies Inc., the car-sharing service that lets people order transportation via a smartphone, is temporarily cutting fares on its taxi-like option to step up competition with New York City cab services.
The San Francisco-based startup reduced fares by 20 percent in New York for its UberX service, making it cheaper than a city taxi, the company said Monday on its website. The lower prices will be in place for an unspecified limited time.
Uber is using the slower summer months to experiment with lower fares to compete with traditional cabs, Josh Mohrer, Uber's general manager for New York, said. While there have been price cuts on UberX services in other cities, this is the first in New York. The company will assess its success at the end of the summer. If more people are using the service, then pricing will stay at the new lower level, said Mohrer.
"New York is Uber's biggest market, and we're growing fast, but we always hear, 'I like Uber, it's convenient but a taxi is still the best deal,'" Mohrer said. "It's always been a goal of ours to be cheaper than taxis."
-- Bloomberg News
Business on 07/08/2014