Israel airline strike ends after government, El Al forge deal

By Steven Scheer

JERUSALEM | Mon Apr 22, 2013 2:02pm EDT

JERUSALEM (Reuters) – Israel reached an agreement with airline El Al (ELAL.TA) on Monday to help cover its security costs, which ended a two-day strike and will help the flag carrier be competitive in an open-skies deal with Europe.

Flights at El Al and two smaller airlines were grounded for a second day as workers protested against the open-skies deal with Europe, which was approved by the cabinet on Sunday and which they feared could cost them their jobs.

Nearly 50 El Al flights from Tel Aviv were canceled on Monday, affecting some 15,000 passengers, although the airline’s union did allow three special flights to take off.

An El Al spokeswoman said flights would resume at 23:30 local time (2030 GMT).

Since the start of talks on the open-skies deal three years ago, Israeli carriers and their workers’ unions have been concerned about the steep security costs Israeli airlines must pay, which their competitors overseas do not.

The government currently pays 70 percent of Israeli airlines’ security costs and had agreed to raise it to 80 percent, but the airline did not deem that enough. El Al itself paid $ 33 million for security in 2012.

The Finance Ministry said it had reached an agreement on security issues with El Al but did not provide details. The Histadrut, Israel’s main labour federation, said the state would finance 97.5 percent of Israeli airlines’ security costs.

“Too bad it took two days of strike and damage to hundreds of thousands of citizens to reach an agreement that could have been done last Friday,” the Histadrut said.

The airline’s shares rebounded 2.5 percent on Monday after sliding 8.5 percent on Sunday.

Workers at El Al and smaller rivals Arkia and Israir had started an open-ended strike at 5 a.m. (0200 GMT) on Sunday in protest over the cabinet’s decision to ratify the open skies deal, which will relax restrictions and quotas on flights between Israel and the European Union.

Supporters of the agreement, which goes into effect next April, say it will increase competition and help Israel’s tourism and economy.

Israel’s Manufacturers’ Association, concerned over the impact the strike would have on foreign trade, had urged the labour court to step in and order airline employees back to work.

Without a deal with El Al, the Histadrut was set to shut Ben-Gurion International Airport, Israel’s main airport, to all incoming and outgoing flights on Tuesday at 5 a.m. (0200 GMT) for four hours.

“Open skies is a done deal,” Finance Minister Yair Lapid said. “It’s a good agreement for Israel’s citizens, the economy and tourism.”

To help airlines prepare for the increase in competition, the agreement will be gradually phased in over the next five years.

Earlier in the day, El Al Chief Executive Elyezer Shkedy said he had repeatedly appealed to the Israeli government “to act immediately to put in order the various issues that will enable fair and equal competition and above all the government’s full participation in security costs for Israeli airlines”.

(Editing by Mike Collett-White and Jane Baird)

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Reuters: Business News

Israel airline strike ends after government, El Al forge deal

Lufthansa cancels 1700 flights due to Monday"s union strike

Aircraft of German air carrier Lufthansa are seen at the airline’s main hub, the Fraport airport in Frankfurt, March 11 2013.

Credit: Reuters/Kai Pfaffenbach

Reuters: Business News

Lufthansa cancels 1700 flights due to Monday"s union strike

Guest Post: The 1984 Playbook Has Arrived: U.S. Air Force Deletes Drone Strike Data

Submitted by Mike Krieger of Liberty Blitzkrieg

The 1984 Playbook Has Arrived: U.S. Air Force Deletes Drone Strike Data

If you recall, Winston Smith’s job in George Orwell’s classic novel 1984 was to go into historical records and literally change history.  He would alter photographs and text in the archives so that history would always portray “The Party” in a positive light and as omniscient.  Well folks, this behavior has arrived in America and we better nip it in the bud fast before one of these drones is flying right over our heads.  From the Air Force Times:

As scrutiny and debate over the use of remotely piloted aircraft (RPA) by the American military increased last month, the Air Force reversed a policy of sharing the number of airstrikes launched from RPAs in Afghanistan and quietly scrubbed those statistics from previous releases kept on their website.

 

Last October, Air Force Central Command started tallying weapons releases from RPAs, broken down into monthly updates. At the time, AFCENT spokeswoman Capt. Kim Bender said the numbers would be put out every month as part of a service effort to “provide more detailed information on RPA ops in Afghanistan.”

 

The Air Force maintained that policy for the statistics reports for November, December and January. But the February numbers, released March 7, contained empty space where the box of RPA statistics had previously been.

 

Additionally, monthly reports hosted on the Air Force website have had the RPA data removed — and recently.

 

On Sunday, U.S. Central Command said in a statement that the decision was made to remove the statistics because the data disproportionately places emphasis on the airstrikes. The majority of the RPA missions are for intelligence, surveillance and reconnaissance, with a small percent involving airstrikes.

 

The data removal coincided with increased scrutiny on RPA policy caused by President Obama’s nomination of John Brennan to head the CIA. Brennan faced opposition in the Senate over the use of RPAs and his defense of their legality in his role as Obama’s deputy national security adviser.

Nothing to see here folks, move along.  Literally.

Full article here.

Zero Hedge

Guest Post: The 1984 Playbook Has Arrived: U.S. Air Force Deletes Drone Strike Data

North Korea threatens US nuclear strike ahead of UN sanctions vote

North Korea’s government has said it reserves the right to carry out a pre-emptive nuclear attack against the United States ahead of a UN vote on tighter sanctions against the communist regime.

The Security Council meets later today to approve fresh economic sanctions against Pyongyang after the country carried out an unauthorized nuclear test on February 12.

The BBC’s Lucy Williamson in Seoul says the sanctions will target “the funding that the U.S. believes is going into North Korea’s military program.” The new set of restrictions will focus on the country’s international banking operations.

Earlier this week, North Korea also threatened to scrap the 60-year truce which ended the Korean War.

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North Korea threatens US nuclear strike ahead of UN sanctions vote

Rebalancing in Spain Stage Two: 20,000 Iberia Airline Workers to Strike, 1,222 flights Cancelled in First five Days

The “rebalancing” in Spain continues along the lines I have suggested, not as suggested by economists and those who think there is guaranteed future of the eurozone.

Via Google translate from El Economista, please consider Strike by Iberia Starts Monday

The nearly 20,000 workers are called from Iberia to strike on Monday in the first week of the 15 days of strikes called by unions CCOO, Asetma, USE, SITCPLA and CTA-Flight, which has forced airlines group to cancel a total of 1,222 flights in its first five days.

The 24-hour strikes, affecting ground staff and cabin crew (TCP), but which are called all employees of the airline, will be held from Monday 18 to Friday 22 February, from Monday 4 to Friday 8 March and Monday 18 (a public holiday in some ACs) to 22 next month. The pilots’ union will join the strike in March.

Furthermore, the six unions representing 93% of the staff have organized concentrations for 18 and 22 February in all Spanish airports, coinciding with the start of the 15-day strike.

The Minister of Development, Ana Pastor, reiterated on Friday to unions and the management of Iberia make an “effort” to avoid the strike.

At a meeting in Development with representatives of both sides, Pastor said the government has “no authority” to intervene in the management of a private company, but said he does have the “legal obligation” and “direct responsibility” for ensuring connectivity in Spain, so it would intervene in the event that gave a “serious disruption of transportation”, as it has done on other occasions.

Iberia has insisted that the 15-day strike “worsen” the situation of the company, so it has appealed to the groups to call off the strikes, considering that they only hurt customers, reputation and all his employed.

The airline has launched a contingency plan to cater to all passengers during the strike days and has flexible rates to facilitate the exchange or refund.

It has also reached agreements to protect customers with other airlines in order to have more choices, and has taken shape that has agreements with Oneworld alliance members, along with about a dozen companies.

Travelers concerned may Serviberia phone call 902 400 500 or 900 100 480 in Spain to change your flight or request a refund if the change is not interested.

Rebalancing the German Way Cannot Work

I am not taking the side of the union. Rather, I am pointing out that rebalancing the German way, by forcing still higher unemployment in Spain cannot and will not work.

At some point, and quite frankly I would have expected it by now, there is going to be mass resistance to efforts to balance the budget and productivity differences on the backs of workers.

Spanish Debt Grows by €146 Billion

I like working with Dough Short at Advisor Perspectives. He took my post Spanish Debt Grows by €146 Billion, Largest Ever Recorded; Debt-to-GDP Highest Since 1910 and added a couple of charts to it, stating in an email “I couldn’t resist adding a postscript”.

Here are the charts and commentary from Doug Short’s reposting of Spanish Debt Grows by €146 Billion

Postscript from dshort: Here is an updated chart that I last posted about ten months ago highlighting the disconnect between the S&P 500 and Spain’s IBEX 35. Fed policy has certainly been more successful in boosting US equities than the various strategies in Spain despite EU support. The divergence starts at approximately the date of Chairman Bernanke’s speech at the Fed’s 2010 annual symposium in Jackson Hole, Wyoming (August 27, 2010). Bernanke strongly hinted at the forthcoming Federal Reserve intervention that was subsequently initiated in November of 2010, namely, the second round of quantitative easing, aka QE2.

click on chart for sharper image

Here is a closer look at the correlation between the S&P 500 and Fed policy.

click on chart for sharper image

Rebalancing the Hard Way

Unemployment in Spain is over 26%. Youth unemployment is over 50%. Spain’s budget deficit is still large and growing even though taxes have increased.

Rebalancing the German Way (the hard way), will require still  higher levels of unemployment and still lower wages, perhaps for a decade.

I suggest the patience of the Spanish population cannot possibly last that long.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

Rebalancing in Spain Stage Two: 20,000 Iberia Airline Workers to Strike, 1,222 flights Cancelled in First five Days