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American Airlines just completed the Boeing 737 Max’s first passenger flight in the US since March 2019

An American Airlines' Boeing 737 Max 8. Shannon Stapleton/Reuters American Airlines flew the first scheduled passenger flight in 21 months…

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American Airlines Boeing 737 Max 8An American Airlines’ Boeing 737 Max 8.

Shannon Stapleton/Reuters

  • American Airlines flew the first scheduled passenger flight in 21 months of the Boeing 737 Max in the US on Tuesday from Miami to New York.
  • The uneventful flight marked the beginning of a new chapter for the aircraft that aims to restore confidence from the traveling public.
  • Airlines like American are eager to get the plane flying to take advantage of its economics and get the grounding behind them.
  • The aircraft was grounded for 20 months following two fatal crashes that took the lives of 346 passengers.
  • Visit Business Insider’s homepage for more stories.

The Boeing 737 Max saga is finally over for American Airlines as the aircraft’s first flight with paying passengers just landed safely at New York’s LaGuardia Airport after a 3-hour flight from Miami.

American flight 718, a likely homage to one of New York’s area codes, departed Miami onboard just on a routine flight up the East Coast with just 83 passengers, including American Airlines President Robert Isom, on Tuesday. The aircraft quickly climbed to 39,000 feet while hugging the coast, Flightradar 24 data shows, and settled in for the familiar yet monumental journey that would represent a second chance to the ill-fated aircraft.

It was one of the 11 daily flights American would operate between the two cities but arguably the most-watched flight of the day as the first one carrying paying passengers on the jet in the US since March 2019. The two-year-old aircraft operating the flight was delivered to American in May 2018, according to Planespotters.net, but has sat idle on the ground longer than it’s been flying, enduring a 20-month grounding alongside 24 compatriots.

The weeks leading up to this first flight saw American eagerly work to return its Max aircraft to flying service, starting with implementing the required fixes mandated by the Federal Aviation Administration. Once its first few aircraft were in compliance, American began demonstration flights with employees and media, including Business Insider senior reporter David Slotnick.

It’s the day that American has been waiting for since March 2019, but the Max’s story began long before that with a phone call from then-American Airlines CEO Gerard Arpey to Boeing back in 2011. Arpey had pressured Boeing to produce a new fuel-efficient aircraft to rival the next-generation A320neo aircraft being produced by Airbus, which American was considering purchasing at the time.

American was placing a massive order for hundreds of new planes and Boeing was at risk to miss out if it didn’t act quickly. The manufacturer was considering a clean-slate aircraft but American had forced its hand in pulling the trigger on a re-engined version of the popular 737 Next Generation, and the result was the Boeing 737 Max we know today.

“American is pleased to be the first airline to commit to Boeing’s new 737 family offering, which is expected to provide a new level of economic efficiency and operational performance, pending final confirmation of the program by Boeing,” the airline said in a statement, committing to the Max before it was known as the Max.

As Boeing soon found, however, developing the new jet wasn’t as simple as giving it new, fuel-efficient engines as the aircraft’s design needed to be adjusted. The new placement of the engines caused the plane to pitch up and fly differently than the current-generation 737s, prompting Boeing to install a quasi-autopilot system known as Maneuvering Characteristics Augmentation System to angle the plane down, unbeknownst to the pilots.

It was important that the Max flew just like its predecessor so pilots could fly both interchangeably with very little additional training. This was a key selling feature of the aircraft as it could keep training costs down for airlines.

An airline like American could train its pilots on the Boeing 737 using its existing training scheme and only require pilots to undergo minimal computer-based training to fly the Max at limited additional cost to the airline. It’s not uncommon as Airbus has a similar setup for its Airbus A320 and A320neo family aircraft since the cockpits are nearly identical.

But the system ended up working against Boeing as sensor failures inadvertently activated and crashed two airliners carrying a total of 346 people. Boeing spent over a year working on fixes before the Federal Aviation Administration was satisfied enough to begin test flights in late September.

FAA Administrator Steve Dickson, a former airline pilot, was at the helm for one of them to personally vouch for the aircraft’s safety. His agency had come under scrutiny for not properly regulating Boeing, mishandling the certification process for the 737 Max, and more recently, mishandling the recertification process, as a US Senate report found.

Read more: The 16 most outrageous things Boeing employees said about the company, 737 Max program, and each other in released internal emails

Building back the Max in the US

American is the first US airline to resume service with what is arguably the most infamous aircraft of the modern era, rushing to launch the aircraft in 2020 ahead of its competitors. Brazil’s Gol Linhas Aéreas was the first airline to resume flying the Max, operating the first flight on December 9, followed by Aeromexico on December 29.

United Airlines won’t be flying the aircraft for another month, planning to fly the Max from Houston and Denver starting February 11, 2021. Southwest Airlines, while maintaining the largest Boeing 737 Max fleet before the pandemic, hasn’t yet announced a start date or loaded the aircraft into its schedule, the most recent Cirium data shows.

Alaska Airlines has a tentative start date of March 1, 2021, for the aircraft where it will fly routes across the West Coast. The first model is set to arrive at Alaska in January, after which the airline has promised extensive proving runs of over 50 hours across 19,000 miles.

Richard Aboulafia, vice president of analysis at Teal Group, told Business Insider that there are two likely reasons for American’s haste in restoring the Max to service: fuel prices and seasonality. The aircraft has economic benefits that airlines can’t afford to pass up and the Max can hedge against rising fuel prices thanks to its fuel efficiency.

“There is a concern that fuel prices are nudging upwards again, and might go higher again with the recovery,” Aboulafia said.

American is also basing the aircraft in Miami, which has experienced a surge of travelers looking to escape the hardest-hit cities of the pandemic. Having the Max can help increase margins on routes to South Florida, and other popular locales like St. Thomas and St. Croix in the US Virgin Islands where American plans to fly the jet come January.

All four US airlines flying the Boeing 737 Max, however, have vowed flexibility for passengers who prefer not to fly on the aircraft. Passengers finding themselves on the aircraft can make free changes to other aircraft.

The successful first flight begins the long road to restoring consumer confidence in the jet. While some view the aircraft as the “single most scrutinized jet in history,” as Aboulafia said, others are actively avoiding it as the Max has had staying power in the minds of the traveling public unlike any other grounded aircraft in recent years.

American will fly the plane exclusively between New York and Miami until January 5, 2021, when more routes will see the plane. And the Max name isn’t keeping many away as the return flight from New York to Miami is reportedly “booked solid.”

Source: https://markets.businessinsider.com/news/stocks/the-boeing-737-max-returns-to-us-skies-paying-passengers-2020-12-1029923901

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Two new Florida cruises have cabins for solo travelers – see inside the ships

The Solo Suite available in 2022. Atlas Ocean Voyages Over the last month, Oceania Cruises and Atlas Ocean Voyages have unveiled ships with si…

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The cruise industry is gradually resuming operations, and at the same time, some cruise lines are tapping into a specific segment of customers: solo travelers.

volunteer employees boarding a cruise ship carrying luggageVolunteer Royal Caribbean employees for the Freedom of the Seas sailing at PortMiami on June 20.

Marta Lavandier/AP Photo

Over the past month, two Florida-based cruise lines – including a newcomer to the industry – have unveiled new ships with cabins designed for lone travelers.

top view of the World NavigatorThe World Navigator.

Atlas Ocean Voyages

But solo cruising isn’t a new trend: Cruise lines like Royal Caribbean, Virgin Voyages, and Norwegian have already successfully rolled out single-person accommodations.

a bed next to a desk, tv, and mirrorThe Solo Insider.

Virgin Voyages

Source: Royal Caribbean, Virgin Voyages, Norwegian Cruise Line

And so far, it’s been a success. For brands like Virgin, these solo rooms “perform really well,” John Diorio, the cruise line’s associate vice president of sales, told Johanna Jainchill for Travel Weekly.

a bathroom with a shower, sink, mirrorThe Solo Insider.

Virgin Voyages

Source: Travel Weekly

Staying in solo suites allows independent travelers to bypass paying single supplements, the fees that come with staying in a room designed for more than one occupant.

a bed besides a balcony with views of the oceanThe Anthem of the Seas’ Studio Ocean View Stateroom with a balcony.

Royal Caribbean International

Some solo travelers see this single supplement as a “major obstacle” and a “penalization” for solitary vacations, Alberto Aliberti, president of Atlas Ocean Voyages, told Insider in an email statement.

a bed besides a balcony with views of the oceanThe Quantum of the Sea’ Superior Studio Ocean View with a balcony.

Royal Caribbean International

Fort Lauderdale, Florida-based Atlas Ocean Voyages just debuted this month, and it’s the first luxury cruise line to join the market in over 20 years, according to the company.

the exterior of the World NavigatorThe World Navigator.

Atlas Ocean Voyages

Source: Insider

To cater to this solo traveler segment, Atlas Ocean Voyages decided to include single-person suites aboard its first and and only vessel.

a rendering of a bed facing a TV with a window in the backThe Solo Suite available in 2022.

Atlas Ocean Voyages

The brand’s World Navigator cruise ship has 98 guest rooms that can accommodate just under 200 travelers.

a bed besides a armchair, lights, and a nightstandThe Veranda Stateroom.

Atlas Ocean Voyages

Beginning March 2022, the World Navigator will also have six 183-square-foot suites designated for solo travelers.

a rendering of a bed facing a TV with a window in the backThe Solo Suite available in 2022.

Atlas Ocean Voyages

These single rooms – which Aliberti says have prompted “very positive responses” – will come with the same perks as the ship’s other suites. This includes binoculars and in-room Nespresso coffee, a stocked mini-refrigerator, and bar and butler services.

a rendering of a bed facing a TV with a window in the backThe Solo Suite available in 2022.

Atlas Ocean Voyages

Similarly, in July, Norwegian Cruise Line Holdings’ Oceania Cruises brand announced plans for its Vista cruise ship, which will officially debut in 2023.

a living room with a couch, coffee table, and deskThe Concierge Level Solo Veranda stateroom.

Oceania Cruises

Source: Oceania Cruises

The Miami-based cruise line’s upcoming ship will have “concierge level solo veranda staterooms” created for lone travelers, a first for the cruise line.

a bed tucked away in the corner of the suite with the living room in the backgroundThe Concierge Level Solo Veranda stateroom.

Oceania Cruises

Like Atlas Ocean Voyages, solo guests sailing with Oceania will have the same luxury amenities as other concierge level passengers, such as free laundry and access to the Concierge Lounge.

a living room with a couch, coffee table, desk, and bed in the backgroundThe Concierge Level Solo Veranda stateroom.

Oceania Cruises

And according to Aliberti, that’s the point. Many of these “underserved” solo travelers want the suite amenities, just not the single supplement payments.

a table with seats and a mirrorThe Solo Insider.

Virgin Voyages

Source: https://markets.businessinsider.com/news/stocks/photos-florida-cruise-ships-cabins-for-solo-travelers-2021-8

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Blackstone’s betting $6 billion on the rental market – here’s why private-equity loves real estate right now

Jonathan Gray, Blackstone president and chief operating officer Heidi Gutman/NBCUniversal via Getty Images Blackstone is all-in on rent resets…

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Jonathan GrayJonathan Gray, Blackstone president and chief operating officer

Heidi Gutman/NBCUniversal via Getty Images

  • Blackstone is all-in on rent resets and long-term property assets to combat potential inflation.
  • Private equity firms have trillions of dollars in cash to put to work on acquisitions.
  • Blackstone’s share price ticked over $100 for the first time this month.
  • See more stories on Insider’s business page.

It’s been quite the month for Blackstone.

The private-equity behemoth is part of a consortium of investors that bought Medline for about $34 billion, its share price ticked over $100 for the first time, and it’s doubling down on residential real estate with a $6 billion Home Partners of America buy.

It’s a bet on scorching demand for housing continuing, and also a defensive move as inflation worries start to seep into investors’ minds. The average price of a home topped $350,000 for the first time inn May, according to the National Association of Realtors, logging the largest-ever increase in prices since the NAR began tracking data.

“Whether it’s apartments, storage facilities for warehouse distribution, or single-family homes, private-equity is getting into this as an inflation hedge,” Nicholas Tsafos, a partner with accounting firm EisnerAmper, told Insider.

Home Partners, which owns more than 17,000 homes in the US, rents out these properties, but tenants have an opportunity to someday buy the home.

In the single-family rental arena, private-equity firms can hike rents, while also holding onto profitable, tangible assets.

“Because interest rates are low, and with the potential for a pick-up in inflation, private-equity also feels the need to be long on hard assets,” Tsafos said. “In real estate, you buy it today and then flip it for a higher price.”

Jon Gray, Blackstone’s president and COO, alluded to it during the firm’s earnings call in April when he said multi-family apartments that come with the ability to reset rents were key for Blackstone.

The firm bought many houses at remarkable discounts after the housing market crashed in 2007. It accumulated a number of single-family homes through a former portfolio company Invitation Homes. Blackstone sold its final block of shares in the company in 2019.

The private-equity shop also favors logistics spaces, such as warehousing, life sciences offices, and media and studio businesses with offices, according to a June 22 research note from UBS.

In October, Blackstone made a handsome investment when it sold life sciences real-estate company BioMed Realty for $14.6 billion, after acquiring it for about $8 billion in January 2016.

And it’s not just Blackstone. Fellow private-equity investor KKR is investing in My Community Homes, a platform that buys and manages single-family rental properties, according to Bloomberg.

KKR will invest in My Community Homes through its real-estate and private-credit vehicles.

A spokesperson for KKR was not immediately available to comment.

The Carlyle Group said in May that it provided up to $300 million to Four Springs Capital Trust, a private REIT that acquires and manages single-tenant properties with long-term net leases.

Four Springs will use the money to build its portfolio, which encompasses 122 properties across 29 states, Carlyle said in a press release.

The move on real estate comes while private investment firms sit on more than $1 trillion in cash. Borrowing costs, too, remain subdued as the Fed keeps interest rates at all-time lows.

Given the sheer amount of dry powder available, coupled with accommodative credit markets, private-equity is keen to conduct a surfeit of acquisitions, and isn’t shy about injecting large sums of equity into prospective investments.

Medline, for example, is expected to raise roughly $17 billion from the debt markets, while the private investors are providing a similar amount in equity.

“Big leveraged buyouts are back in vogue,” said Christopher Zook, chairman and CIO of alternative investment manager CAZ Investments. “Whether it’s KKR or Blackstone, they have large capital to put to work. So they’ve got to do a ton of deals.”

Disclaimer: KKR holds a majority stake in Insider’s parent company, Axel Springer.

It’s been quite the month for Blackstone.

Source: https://markets.businessinsider.com/news/stocks/blackstone-home-partners-america-single-family-rental-real-estate-inflation-2021-6-1030556791

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Trading the Fed, plus insights from a 99th-percentile fund manager

Hello and welcome to Insider Investing. I'm Joe Ciolli, and I'm here to guide you through the current market and investing landscape. Here…

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Hello and welcome to Insider Investing. I’m Joe Ciolli, and I’m here to guide you through the current market and investing landscape. Here’s what’s on the docket:

If you aren’t yet a subscriber to Insider Investing, you can sign up here.

Have thoughts on the newsletter? Just want to talk markets? Feel free to drop me a line at [email protected] or on Twitter @JoeCiolli.

Fed-driven portfolio adjustments GettyImages 1228670990

Pool/Getty Images

The Federal Reserve left interest rates steady this past week while setting the stage for two hikes by year-end 2023. Traders, who took a wait-and-see approach before the Fed meeting, quickly sprung into action. Insider spoke with Wall Street and crypto investors to gauge how to position for the hawkish shift.

Read the full story here:

The Fed has left rates steady while signaling 2 potential hikes by the end of 2023. Here is what to do with your stocks, bonds, and digital assets, according to top Wall Street and crypto investors.99th-percentile insights and stock picks Dave Ellison

Hennessy Funds

Financial-sector stocks have outperformed the rest of the market over the last several months. Hennessy Funds’ Dave Ellison – who’s in the 99th percentile compared to peers over the past year – told Insider he expects their strong performance to continue. He shared 5 financial stocks to buy now in order to take advantage of the remaining upside.

Read the full stories here:

Dave Ellison has beaten 99% of his peers over the last year managing the Hennessy Small-Cap Financial Fund. He breaks down why he thinks financial stocks still have room to run – and shares 5 names to bet onSPAC shorts SPACs and hedge funds 2x1

Brian Snyder/Reuters; Michael Loccisano/Getty Images; Samantha Lee/Insider

Short interest in SPACs stood at $3.2 billion in mid-June, up from $2.7 billion. The uptick in SPAC shorts comes as the market works to recover from a weeks-long slowdown, and one ETF manager expects recently “de-SPACed” companies to see short activity surge soon. Exclusive data shows the 20 most-shorted blank-check companies right now.

Read the full stories here:

Bets against SPACs are revving back up as the market attempts a comeback. Here are the 20 most-shorted blank-check companies now.YOU’RE INVITED: A Millennial Guide to Home Ownership

Join us and learn how to navigate the complicated process of buying a home in today’s hot market on Tuesday, June 22 at 12 p.m. ET – during a free, hour-long virtual event presented by Fidelity.

Register here.

Stock pick central

Seeking experts who are willing to name names? Look no further:

Have thoughts on the newsletter? Just want to talk markets? Feel free to drop me a line at [email protected] or on Twitter @JoeCiolli.

Source: https://markets.businessinsider.com/news/stocks/trading-fed-99th-percentile-picks-spac-short-selling-insider-investing-2021-6-1030537490

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