As Covid-19 again forces the World Economic Forum to forgo its annual Davos gathering, this special report looks at the continuing fallout from the pandemic, and at other global challenges, from rising inflation to climate change and US-China rivalry More
A health worker administers a Covid vaccine in Zimbabwe. Developing countries have lower vaccination rates than western nations © Getty Images
As the world enters its third year of reluctant coexistence with coronavirus, global health systems are straining under the impact of the hyper-infectious Omicron variant. But, even as countries continue to battle the pandemic, their leaders are thinking about ways to shape a society that will be better prepared for the next health emergency.They are considering not only how to deliver a more agile response to future emerging pathogens but also how to tackle the health inequalities so brutally exposed in the past two years — in the rich world, as well as the global south.Vaccination remains a yawning divide between the west and the developing world. While just under 60 per cent of the global population has received at least one vaccine dose, the figure for people in low-income countries is only 9.5 per cent, according to research organisation Our World in Data.The statistics point both to issues of supply and to the need for better infrastructure to administer the shots that have proved so effective at reducing Covid-19 hospitalisations and deaths. David Heymann, a distinguished fellow in the global health programme at Chatham House, a London-based think-tank, notes that many lower- and middle-income countries, unaccustomed to the mass flu immunisation campaigns carried out in western nations, lack established systems for delivering vaccinations at scale. “So it’s not just a matter of saying the Covax facility [a procurement scheme set up to give people in poor countries equitable access to vaccines] will give you vaccines, it’s a matter of making sure that countries are ready for those vaccines and are willing to use them,” he says.African countries, for example, may have a different perspective on the urgency of Covid vaccination than western countries because they have a different overall burden of disease. Heymann says that, during a recent meeting in Ghana, some of Africa’s public health leaders told him that “Covid vaccines are not our priority — we want malaria vaccines, we want vaccines which are for diseases that are causing high mortality in our countries.”Such concerns are underscored by data that show the collateral damage inflicted on wider public health goals by the pandemic — particularly in poorer nations. The World Health Organization said last month that, of the 11 countries with the highest malaria burden, only India registered progress against the disease in 2020, as testing and the distribution of treatments were hampered by the Covid crisis. The 10 other countries, all in Africa, reported increases in malaria cases and deaths, the WHO said.The advent of other potentially life-saving Covid treatments, such as antivirals, could open up further inequalities, experts fear. In the global health community, the overriding concern is that a moment in history that could prompt nations to act jointly to forestall future public health emergencies must not be lost.A report last year from the Global Preparedness Monitoring Board, a body co-convened by the World Health Organization and World Bank, blamed “geopolitical divisions” and a tendency for power brokers to negotiate behind closed doors without the people most affected for “multiple tragedies”. These ranged from “vaccine hoarding” to oxygen shortages in poor countries and “the shattering of fragile economies and health systems”.
A Covid vaccination site in South Africa. The country’s scientists provided valuable early data on the Omicron variant © AFP via Getty Images
Ingrid Katz, associate faculty director at research organisation the Harvard Global Health Institute, says that pandemics magnify inequalities in the global health system. She worries that, as attention on Covid starts to wane for many people over the next two years, “there will be less of an appetite to think about our global neighbours and how critical they are.” As an example of the kind of international co-operation that can change the course of a disease outbreak, she cites the release of information by South African scientists on the sequencing of Omicron, This, she says, was “critical information and helped us at least have a knowledge of what was coming our way”.Katz has been heartened by efforts in December by the World Health Assembly, the WHO’s decision-making body, to craft an international pandemic agreement. This, she says, will “define how we can address some of these gaps in global governance and the inequities that we saw play out in this pandemic”. However, the coronavirus crisis has also exposed the shortcomings of individual countries’ health systems. Around the world, there is a growing awareness that, if healthcare systems are to prevent rather than simply cure disease, they must move beyond the silos that divide hospital care from primary and community care. They must now recognise the role played by institutions such as food banks in sustaining the poorest members of society.This emphasis on prevention will involve greater focus on the social determinants of health — factors such as housing, food and the environment. Kieron Boyle, who heads Impact on Urban Health, a London-based philanthropic foundation, identifies obesity and air pollution as the two biggest global concerns and says business will be under growing pressure to help address them. Boyle anticipates that the pandemic’s “social backlog” will be felt strongly in 2022. He points out that people from deprived backgrounds have suffered disproportionately from illness and disrupted employment and education, and they now face the effects of rising inflation. “That’s going to bring another wave of health crises,” he warns. More
For markets, 2022 will be the year of playing chicken.Inflation has raced higher in the past year, well beyond most central banks’ tolerance levels. So the time has come for policymakers to start withdrawing the stimulus that pushed asset prices up after the pandemic first hit, nearly two years ago.Some central banks have already started removing the support they pumped into the financial system. Among them is the Bank of England which, in December, surprised investors with its first interest rate rise in three years.And the most influential of them all — the US Federal Reserve — has started trimming asset purchases, as well as signalling that it will deliver three rate rises over the course of the year. Investors increasingly think the first could come as soon as March, and that three could be too conservative. The question is whether the Fed can do that without destabilising financial markets.Hence, the high-stakes test of nerves. Corporate earnings and economic growth of course matter to fund managers, but the direction of interest rates is the dominant issue across all asset classes. Policymakers shrugged off surging inflation for close to a year. Whether they will now get tough and stick with their intended rate rises should markets take fright is far from clear. Many investors doubt that policymakers will be brave enough to crank up the cost of borrowing in the face of any blow-ups in asset prices.
“Central banks can’t afford to be aggressive inflation fighters,” argues Salman Ahmed, global head of macro at Fidelity. “It’s not consistent with economic stability because of debt burdens.” The European Central Bank has some particularly sharp restrictions here, given that its monetary support of the bond market is so crucial to holding the euro currency area together. The Fed has more leeway due to the dollar’s central role as a global reserve currency but, even then, “there is a risk of endangering financial stability”, Ahmed adds.Public debt in the US stood at about 60 per cent of national output in 2007, Ahmed notes. Now, due in part to the massive fiscal largesse linked to the coronavirus pandemic, it is well over 100 per cent — which in turn means that a huge slice of predicted GDP growth could be erased by higher benchmark interest rates that raise debt servicing costs. “That’s the elephant in the room,” Ahmed says. “When inflation is below 2 per cent, you can justify being dovish.” In the US, it is now running at 7 per cent, taking that option away.Already, cryptocurrencies and some of the more speculative areas of stock markets have stumbled since the Fed showed more urgency in its shift to tighter policy, but the impact has not fanned out across markets more broadly. Some fund managers remain confident that fiscal and monetary authorities can work their way out of this quandary without further disrupting economic growth or markets. Nonetheless, the past decade shows how tricky this process can be. In 2013, then Fed chair Ben Bernanke sparked what became known as a “taper tantrum”, when he declared an intention to trim regular asset purchases introduced after the global financial crisis of 2008. Emerging markets currencies and bonds, in particular, suffered a heavy blow. On a smaller scale, in late 2018, current chair Jay Powell suggested that the Fed was on “automatic pilot” towards regular rate rises, triggering tremors across global stocks. Within six weeks, he had changed his tune, urging greater patience. Investors took this as, at least in part, a capitulation to market pressures.The same tension is present now. Raising rates too late or too timidly could prove to be an act of self-sabotage that leaves future generations struggling to rein in inflation and stores up other problems for the long term. “For inflation not to become a problem, we need a steep tightening cycle,” says Luigi Speranza, chief global economist at French bank BNP Paribas. He thinks the Fed may have to raise rates faster than investors anticipate. But acting too soon or aggressively threatens to strangle a global economic recovery that is already vulnerable to the vagaries of the pandemic, and to spark a short-term market shock.“The bear argument is that, if we were to get a distinct rise in [benchmark bond yields], then everything from house prices to growth stocks goes down,” says Andrew Pease, global head of investment strategy at Russell Investments. Already, double-digit percentage declines in the value of some high-growth but low-profit US technology stocks highlight how hard these fears can bite. If policymakers repeatedly tighten liquidity and then hit pause, that would line up a year of “buying the dip” in markets, Pease says — already a familiar pattern, particularly since the pandemic struck.Sliding interest rates and resilient demand for government bonds have meant that yields have declined for the past four decades, boosting the attractiveness of riskier assets. Without a continued downdraft in bond yields, to which many fund managers have grown accustomed over their entire careers, those riskier assets may struggle. Pease thinks a further decline in yields is hard to imagine, “unless you can see a world where the Fed takes rates to ECB levels, below zero”.“Look, it’s possible,” he adds. “But, without that, it’s difficult to see what are the fundamental factors that drive down yields further. I can’t see rates really spiking but I think we have had the bottom of that cycle. It looks like it’s over.” For investors and asset managers, that could make 2022 harder to navigate than the previous year-and-a-half. More
The big economic surprise of 2021 was the strength of the economic recovery. Another was the surge in inflation that accompanied this recovery, particularly in the US. After the shock from Covid-19 in 2020 and the unexpectedly strong recovery and inflationary surprise of 2021, what might 2022 have in store for us? The most recent OECD forecast is of global growth of 4.5 per cent in 2022, only modestly below the recovery-boosted growth of 5.6 per cent in the previous year. The OECD also forecasts 4.3 per cent growth for the eurozone in 2022, against 3.7 per cent for the US, but inflation of 4.4 per cent in the US in 2022 against 2.7 per cent in the eurozone.One can imagine upside risks, even relative to this reasonably attractive scenario. Inflation might disappear more quickly than forecast, for example, if the supply shortages that accompanied the recovery are remedied. This would then allow central banks to persist with monetary accommodation. In addition, further coronavirus variants, beyond Omicron, might prove progressively less harmful. Or a worldwide vaccination programme might give enduring respite from the pandemic. If so, a faster reopening of the world economy could support a still stronger and more widely shared recovery, especially in the economies of badly damaged emerging and developing countries.Yet there are also downside risks, both economic and non-economic. Among the former is the possibility that the surge in inflation continues to surprise on the upside, possibly generating a wage-price spiral as workers respond to the damaging effect of high inflation on real wages. That might uproot the anchor for inflationary expectations. Central banks would be forced to tighten far more fiercely than currently expected. This would almost certainly also generate negative reactions in today’s frothy asset markets, possibly causing a wave of bankruptcies.Among the non-economic downside risks is the emergence of coronavirus variants against which current vaccines are ineffective. There are also geopolitical risks, most obviously the tensions between the US, China and Russia. Such tensions have frequently been realised as wars.Other risks fall at the interface between economic and non-economic. One is substantial damage to global economic relations as the friction between China and the West continues to worsen, as now seems likely. Then there is the longer-term danger of destabilising climate change. While awareness of the threat is growing, action is still well behind what is needed to avoid potentially catastrophic shifts in the climate. The recent COP26 climate conference in Glasgow was not a total failure. But it was also far from a success. If Donald Trump or someone like him becomes the next US president, the chances of dealing successfully with this threat would become vanishingly small.The big lesson we have learned over the past one and a half decades is just how uncertain the world economy is. We can recognise a few predictable forces: the inbuilt tendency of market-driven economies to grow, the continuation of scientific and technological advances, and the demographic forces of fertility and ageing. But there are also unpredictable drivers of disorder: financial crises, political upheavals, geopolitical stresses, pandemics and, in the background, climate change. Covid-19 has reminded us forcefully of such uncertainties. It has also brought with it some powerful lessons. Among these, two stand out.The first is that, in the context of such pervasive uncertainty, it is vital for our systems to be robust, or resilient, or a bit of both.
Robust systems can function throughout shocks, while resilient ones return swiftly to normal functioning after such shocks. Which one we need depends on how vital continued operation is. In general, systems that supply vital goods and services, such as basic foodstuffs, medical supplies, energy or day-to-day financial services, need to be robust. But users of many other goods and services can cope with some disruption. In that case, it is resilience that matters.Both businesses and policymakers need to decide where they need robustness and where they need resilience — and how much they are prepared to pay for either and in what way. But they should also avoid the obviously mistaken view that “local” is a synonym for “robust” or “resilient”. Putting all one’s eggs in the basket named “local” guarantees neither robustness nor resilience.The second and far more important lesson is that the contradiction between the species we are and the world we have created is becoming ever more dangerous. Although an intensely tribal species, we have created a global world.Covid has been a global shock par excellence. Yet it has proved impossible to mount a coherent global response, above all in the supply and delivery of vaccines. Such tribalism has ended up increasing the vulnerability of everybody. Similarly, geopolitics is pulling the world apart, even though it is more integrated than ever before on multiple dimensions, not least economic ones. This contradiction between who we are and what we have built is the dominant one of our era. These stresses may not shake the foundations of our world in any given year. But they create background risks that should not be ignored. More
Supply chains were once studied only by worthy nerds with an interest in esoteric subjects, such as the computerisation of bills of lading. Or they were opined on by commentators in expansive takes on the march of globalisation at places like the World Economic Forum in Davos. Last year, though, the subject went mainstream, as dozens of ships were backed up outside the ports of Los Angeles and Long Beach, and the car industry ran short of semiconductors.The fact that these supply chain snarl-ups came during the coronavirus pandemic — and after years of trade tensions, particularly between the US and China — encouraged a belief in the vulnerability of globalisation to external shocks. It looked like the rupture in our global trading system that so many people had predicted, for so long. Politicians who had always been suspicious of globalisation sensed an opportunity, and leapt in with various plans to encourage reshoring, nearshoring and “friendshoring” (building supply chains only with political allies).But, look at it more closely, and the causes of 2021’s (still continuing) supply chain problems — and the policy lessons to be drawn from them — appear different. Far from being the result of pandemic-related supply shocks what we have seen so far looks a lot more like a massive resurgence of demand as the global economy recovers from the Covid shock of 2020. Specifically, there has been a big shift towards buying consumer durables as the pent-up demand for these goods after a year or more of lockdown came to the fore — and sent trade surging. What’s the evidence either way? Well, if the snarl-ups were all about supply-side shocks. then we might have expected to see a big drop-off in trade itself. We would also have expected some plausible cause-and-effect, such as cargo shipping or ports themselves seizing up, because of a Covid-driven lack of workers. In fact, we haven’t really seen much of that at all. The much-maligned west coast ports in the US have been handling record amounts of cargo. Shipping lines and manufacturers have complained of some problems — and there have undoubtedly been issues with factories shutting down in Asia because of outbreaks of Covid among the workforce. But, in general, the ports and the international trading system haven’t collapsed from a shortage of staff. Towards the end of 2021, there was some evidence starting to emerge that freight rates were peaking — although the Omicron variant of Covid kept uncertainty levels, and those rates, high.Shining sea: ports on the US west coast — such as Los Angeles, seen here — have been dealing with record amounts of cargo © Getty ImagesAs the shipping expert, economist and author Marc Levinson points out, the maritime industry before the Covid crisis was running at well below capacity — so much so that some companies involved were forced into consolidating mergers. It is somewhat implausible, therefore, that a sudden shortage of staff crunched all that handling capacity. And it is quite possible that a massive shipbuilding and infrastructure programme now will merely result in a glut in a year or 18 months’ time. The same may be true of one of the most obvious products caught in the supply chain crunch: semiconductors, which have caused shutdowns in car production across the world. The US has since earmarked $52bn to increase semiconductor production, and the EU is scrambling to come up with its own subsidy programme.For the moment, the jury remains out on whether the demand-side or supply-side thesis is the more accurate with regard to the cause of the supply-chain crunch. But if it is the former, it seems likely that a lot of the measures being taken, or at least proposed, are going to end up doing more harm than good. Creating a subsidy-laden semiconductor industry that ends up permanently dependent on the state is not a recipe for an efficient global economy. Neither is a series of half-thought-through government interventions to encourage reshoring, such as those currently being contemplated — and indeed implemented — by Joe Biden’s US administration.Right now, there doesn’t seem to be much evidence that companies are reshoring of their own volition. Surveys show that businesses are continuing to trade globally and to invest in China (not least to access the huge Chinese market) and are planning to continue to do so.So, if anything, the biggest threat to the globalised economy is political, not economic. China has been pursuing a “dual circulation” strategy, with a rapidly growing domestic economy increasingly insulated from a traded sector: it doesn’t mean an end to globalisation, but it is certainly a brake on it. The US has selected certain sectors including semiconductors and electric vehicles in which it wants to encourage domestic production. So far, such efforts have been overcome by the commercial logic of trade. But, even if the supply chain problems resolve themselves, the threat of political interference will remain present.Alan Beattie writes the FT’s Trade Secrets newsletter More
SYDNEY (Reuters) – The dollar was firm on Wednesday after a rip higher in U.S. yields vaulted it up sharply on the euro overnight, putting it back above support levels that have held for the past few months in anticipation of rising U.S. interest rates.The euro fell about 0.7% on Tuesday, its sharpest daily drop in a month, and is back on its 50-day moving average at $1.1323. Two-year Treasury yields have leapt 15 basis points over two sessions to cross 1% and benchmark 10-year yields stand at a two-year high of 1.8842%. [US/]The dollar has also regained support levels against the Australian and New Zealand dollars and held sterling below its 200-day moving average.The U.S. Federal Reserve meets to set policy next week and traders are growing anxious about another hawkish surprise.”A lot of (Fed) officials left us with hawkish impressions right before going quiet (ahead of the meeting),” NatWest markets’ strategist Jan Nevrusi said”After (Tuesday’s) price action, there is slightly more than one hike priced in for the March meeting, and going into next week, I would imagine it oscillates within the lower end of the 25-50 basis point range.”Fed funds futures are pricing three more hikes in 2022. Analysts say dollar strength could extend if traders start expecting rates to rise not just faster but further as well.”We expect the U.S. rate rethink – and this latest shift higher in yields reflects a push higher in the implied terminal rate, rather than just a faster pace of increases initially – to support the dollar in the first half of the year,” Societe Generale (OTC:SCGLY) strategist Kit Juckes said.Moves in the U.S. bond market unsettled equity investors, underpinning the safe-haven yen, which has held at 114.67 to the dollar. The U.S. dollar index rose 0.5% on Tuesday and held that gain at 95.768 on Wednesday.Traders also have a wary eye on a delicate situation in Ukraine. U.S. Secretary of State Antony Blinken will seek to defuse a crisis with Moscow when he meets Russia’s foreign minister in Geneva this week. The Australian dollar held below its 50-day moving average at $0.7187. It has struggled to break resistance just below 73 cents. The kiwi was pinned at $0.6771.Sterling has taken a knock in recent sessions but will be in focus later on Wednesday when British inflation figures are due.Annual headline inflation is seen hitting an almost decade-high 5.2% and a surprise could trigger further bets on Bank of England rate hikes and renew the pound’s rally.It last sat at $1.3591.========================================================Currency bid prices at 0053 GMTDescription RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $1.1326 $1.1327 -0.01% -0.38% +1.1330 +1.1320 Dollar/Yen 114.6900 114.5800 +0.02% -0.37% +114.6950 +114.6000 Euro/Yen 129.88 129.79 +0.07% -0.34% +129.8900 +129.7500 Dollar/Swiss 0.9171 0.9175 -0.03% +0.55% +0.9176 +0.9171 Sterling/Dollar 1.3590 1.3598 -0.03% +0.51% +1.3600 +1.3593 Dollar/Canadian 1.2506 1.2513 -0.04% -1.08% +1.2512 +1.2497 Aussie/Dollar 0.7179 0.7186 -0.13% -1.27% +0.7189 +0.7177 NZ Dollar/Dollar 0.6765 0.6765 -0.01% -1.17% +0.6775 +0.6765 All spotsTokyo spotsEurope spots Volatilities Tokyo Forex market info from BOJ More
BENGALURU (Reuters) – Euro zone inflation is set to burn hotter throughout 2022 than expected a month ago, according to economists polled by Reuters, which could pressure the European Central Bank to tighten policy once the Omicron wave of the pandemic passes. For the near-term, the virus remains a wild card, with a wide range of forecasts on economic growth in the Jan 11-18 poll and the median forecast for the current quarter chopped to 0.5% from 0.7%.More than two-thirds of economists polled said the Omicron variant will have a milder economic impact than Delta, mainly because there are fewer restrictions in place now.Forecasts for inflation this year have risen for the seventh consecutive survey — up by 0.6 percentage points each for the first and second quarters to 4.1% and 3.7% respectively, well above the ECB’s 2.0% target. “In the short term, we see some downside on growth stemming from virus containment measures,” said Bas van Geffen, senior macro strategist at Rabobank, referring to the current quarter.”In the longer term, we mainly expect slower growth as supply-driven inflation erodes households’ real spending power, which weighs on consumption and euro zone GDP. Omicron or other strains could further aggravate this negative impact of cost-push inflation,” he said. Like in much of the rest of the world, inflation is soaring in the euro zone but it most likely peaked in the last quarter. Annual consumer price rises hit a record high of 5% last month. But the ECB has resisted calls for tighter policy, sticking to the view that price pressures will ease this year.So far, the poll results back that view, with inflation set to dip to 1.9%, just below its target, in the fourth quarter and averaging below 2.0% from then on.So nearly every economist expected policy interest rates to hold steady well into next year.”Monetary policy cannot do much about supply-side inflationary shocks like the supply chain shocks, energy shortages, and global food prices: after all, the ECB’s policy cannot create semiconductors, natural gas or food,” said Rabobank’s van Geffen. Of the 39 economists who had a rate forecast for 2023, those who see a rate hike were evenly split on whether it will happen in the first or second half of the year.A like-for-like analysis showed slightly more analysts now expect higher rates by the first half of next year compared to the December poll. Only one expects rates to rise this year. That stands in sharp contrast to the U.S. Federal Reserve. Facing the highest inflation in 40 years, it is set to raise its federal funds rate from near-zero as soon as March.A few economists say the ECB also should move soon.”Zero and negative interest rates respectively are pure emergency measures. With inflation above target and inflation risks tilted to the upside as well as a tight labour market and a closed output gap there is no reason to keep rates that low,” said Jörg Angelé, senior economist, Bantleon Bank.”It would be better for the ECB to start early reversing its ultraloose monetary policy in small steps. If it waits too long, it risks being forced to pull the brakes and end up with a recession.”Asked when the ECB will end its Asset Purchase Programe, about 85% of respondents, 28 of 33, said by the end of the first half of 2023. The Fed is already hinting it will soon start offloading its holdings of bonds. The euro zone economy is expected to grow 4.0% this year and 2.4% next, from 4.2% and 2.3% predicted a month ago. Growth in Germany, the largest economy, was downgraded to 4.0% from 4.4% in the last quarterly poll in October, according to the median forecast. Expected growth in France eased slightly to 3.7% from 3.9%, while Italy’s forecast held steady at 4.2%. The three biggest economies of the bloc saw a significant upgrade in annual inflation forecasts for this year.Euro zone jobless rate forecast for this year edged down slightly to 7.2% from 7.3% in the last poll, while prediction for next year remained steady at 7.0%. (For other stories from the Reuters global economic poll:) More
(Reuters) -Major international airlines rushed on Tuesday to rejig or cancel flights to the United States on the eve of a 5G wireless rollout that triggered safety concerns, despite two wireless carriers saying they will delay parts of the deployment.The Federal Aviation Administration (FAA) has warned that potential 5G interference could affect height readings that play a key role in bad-weather landings on some jets and airlines say the Boeing (NYSE:BA) 777 is among models initially in the spotlight.Despite an announcement by AT&T (NYSE:T) and Verizon (NYSE:VZ) that they would delay turning on some 5G towers near airports, several airlines still canceled flights. Others said more cancellations were likely unless the FAA issued new formal guidance in the wake of the wireless announcements. “While this is a positive development toward preventing widespread disruptions to flight operations, some flight restrictions may remain,” Delta Air Lines (NYSE:DAL) said.The world’s largest operator of the Boeing 777, Dubai’s Emirates, said it would suspend flights to nine U.S. destinations from Jan. 19, the planned date for the deployment of 5G wireless services.Emirates flights to New York’s JFK, Los Angeles and Washington DC will continue to operate.Japan’s two major airlines, All Nippon Airways and Japan Airlines, said they would curtail Boeing 777 flights.ANA said it was cancelling or changing the aircraft used on some U.S. flights. JAL said it would not use the 777 on U.S. mainland routes “until safety is confirmed,” according to a notice to passengers reported by airline publication Skift.Korean Air Lines said it had switched away from 777s and 747-8s on six U.S. passenger and cargo flights and expected to also change planes used on another six flights on Wednesday.The airlines said they were acting in response to a notice from Boeing that 5G signals may interfere with the radio altimeter on the 777, leading to restrictions.A spokesman for Boeing had no immediate comment.The 777 last year was the second-most used widebody plane on flights to and from U.S. airports with around 210,000 flights, behind only the 767, according to data from FlightRadar24.Industry sources said Boeing had issued technical advisories noting potential interference, but that flight restrictions were in the hands of the FAA, which has for now limited operations at key airports unless airlines qualify for special approvals.Radio altimeters give precise readings of the height above the ground on approach and help with automated landings, as well as verifying the jet has landed before allowing reverse thrust.Air India, which serves four U.S. destinations with Boeing 777s, said those flights would be curtailed or face changes in aircraft type starting from Wednesday.WORKHORSE JETThe announcement of cancellations came despite the wireless carriers delaying turning on some 5G towers near key airports.Airline industry sources said the decision had arrived too late to affect complex aircraft and crewing decisions for some Wednesday flights.British Airways opted to switch aircraft on its daily flight to Los Angeles to an Airbus A380 from the usual Boeing 777 service, two people familiar with the matter told Reuters.That entails pre-positioning a flight crew in Los Angeles to fly the Airbus superjumbo back to London on the return leg.Web tracker Flightradar24 said the A350 may also be used. The radio altimeters on the two Airbus jets have been cleared while the planemaker is still assessing its other models.The 777 mini-jumbo is a workhorse of the long-haul travel market that remains depressed following COVID-19, while its freighter equivalent has reshaped the aviation route map during the pandemic, according to a spokesperson for Flightradar 24.Not all 777s are affected. Emirates, which is also a major user of the larger A380, will switch to the larger aircraft for Los Angeles and New York but keep flying the 777 to Washington, which is not affected.Qatar Airways, which operates both Boeing 777s and A350s to the United States, said it was evaluating the situation.President Joe Biden hailed the agreement with the wireless carriers, saying it would allow more than 90% of wireless tower deployment to occur as scheduled. He said they would work to “reach a permanent, workable solution around these key airports.” More
