Raphael Stevens

COOLIDGE, Arizona – From engines to landing gear, the hunt is on for aircraft parts as airlines prepare their jets for swarms of summer travelers, with new planes from Boeing and Airbus still in short supply.
The search for parts leads some aircraft owners here, where older, retired planes are stripped for parts that will be prepared to fly on other planes or repurposed altogether. Some parts can be turned into high-end furniture, like $42,000 desks. What’s left can be crushed into scrap and melted down.

Until they’re picked apart, the planes are stored in arid climates, like the Arizona desert, to avoid damaging weather and humidity.

Arrows pointing outwards

An Airbus plane with parts removed in Coolidge, Arizona.
Leslie Josephs | CNBC

The used-parts business was worth about $3 billion to $5 billion before the pandemic, according to Mike Stengel, a principal at AeroDynamic Advisory. It’s now riding a boom in global aircraft maintenance, repair and overhaul, an industry that is set to expand 22% this year to $94 billion, consulting firm Oliver Wyman estimated in a report in February.
The current demand for aircraft parts is the result of the industry’s deep demand swings resulting from the Covid pandemic. In an effort to cut costs when demand collapsed amid travel restrictions, airlines raced to retire planes, only to need aircraft later when demand returned. Carriers also deferred maintenance and prioritized using engines with more time left on them.
Meanwhile, Boeing and Airbus are still trying to stabilize their supply chains and train workers after thousands left the industry during the pandemic’s slump.

Arrows pointing outwards

One challenge is locating feedstock of aircraft. Travel demand is recovering — the International Air Transport Association last week said global air traffic is nearly 85% recovered to 2019 levels. In the U.S. it’s already past that point.

With deliveries of new jets behind schedule, airlines are holding onto planes longer, repairing or overhauling them, adding to demand for parts and labor.

Technicians remove an engine covering from a retired plane in Marana, Arizona
Leslie Josephs/CNBC

Last year, 273 commercial jets were retired, the fewest in almost two decades and half the number in 2019, said Aerodynamic’s Stengel, citing data from the Centre for Aviation.
“There are supply chain issues across the aviation industry at the moment where these highly valuable parts made out of often-rare and precious materials can’t be produced quick enough,” said Lee McConnellogue, chief executive of ecube, a U.K.-based company that provides “end-of-life” services for aircraft. “So airlines and maintenance companies alike have to find an alternate source other than brand new.”

A used airplane is dismantled in Marana, Arizona.
Leslie Josephs/CNBC

Ecube recently expanded, opening a facility here adding to its portfolio that includes Spain and Wales. The new site features a crush pad where old planes are shredded before being carted off.
“Engine shops are really full,” said Rob Morris, global head of consultancy at aviation data firm Cirium. “Used material’s in demand.”

Technicians remove an engine covering from a retired plane in Marana, Arizona
Leslie Josephs/CNBC

Morris said that’s also driving up the prices to rent engines. For example, a CFM56 engine that powers some older models of the Boeing 737 is renting for $65,000 a month, up from $55,000 a month last year.

Airbus A320 landing gear in a repair shop in Marana, Arizona.
Leslie Josephs | CNBC

Boeing and Airbus executives are planning to pick up the pace in production and aircraft deliveries this year, however, which could boost plane retirements and in turn add to supplies of used parts and drive down the price.
“There are a couple of stars that have to align for the retirement floodgates to accelerate, and one big one is Airbus and Boeing being able to consistently deliver aircraft according to schedule — and for airlines to believe them,” Stengel said. More

Dominion Voting System’s defamation lawsuit against Fox Corp. and its cable TV networks will go to trial on Monday.
Industry analysts and experts watching the case say the biggest consequence to the company will likely be financial, as viewership and advertising remain steady.
But the outcome of the case is far from clear, and neither side appears interested in settling.

Members of Rise and Resist participate in their weekly “Truth Tuesday” protest at News Corp headquarters on February 21, 2023 in New York City. 
Michael M. Santiago | Getty Images News | Getty Images

Dominion Voting System’s defamation lawsuit against Fox Corp. and its cable TV networks will go to trial in the coming days, but it remains to be seen what, exactly, the lawsuit means for Fox and its business.
Dominion brought its lawsuit against Fox and its TV networks, Fox News and Fox Business, in March 2021, arguing their hosts pushed false claims that Dominion’s voting machines were rigged in the 2020 presidential election that saw Joe Biden triumph over Donald Trump. The trial begins on Monday.

IAC Chairman Barry Diller, who was chairman and CEO of parent-company Fox from 1984 to 1992, said at a media conference hosted by startup Semafor earlier this week that although he thought Fox should lose the case, handing Dominion “a very big reward,” that the company will just pay the damages and move on.
“What’s it going to do? Worsen [Fox Corp. Chair] Rupert Murdoch’s reputation?” Diller joked.

On its face, the biggest potential consequence for Fox would be a financial hit: The company will have to pay to defend itself against the claims and, if it loses, possible damages to Dominion, upwards of $1.6 billion. No matter the outcome, an appeal is likely.
Fox, which has denied the claims made by Dominion and said it is protected by the First Amendment, has opposed the amount of the damages that the voting machine maker is seeking. The Delaware judge overseeing the case — who ruled a trial was necessary — recently said it would be up to a jury to decide the matter. 

Business risk

Neither side has shown signs of a wanting to settle the case, and the two parties have met once at a court-ordered meeting. But even if they did come to a settlement, Fox would still be on the hook for a steep payment, experts say.  

“There could be a lot of implications depending on how it plays out,” said Imraan Farukhi, an assistant professor at Syracuse University’s S.I. Newhouse School of Public Communications. Besides the financial impact, Farukhi added, “The other question is what will they do with their talent if they lose? The majority of the stars at Fox are implicated. Any other news organization would have probably seen their hosts losing their jobs for improper reporting.”
Lou Dobbs, who is slated to be a witness, saw his weekday program on the Fox Business network canceled the day after he was named a defendant in the defamation lawsuit of a second voting machine company, Smartmatic. At the time, Fox said his show’s cancellation was in the works prior to the lawsuit.
Shows helmed by Tucker Carlson, Maria Bartiromo, Sean Hannity, Laura Ingraham and Jeanine Pirro have been listed as evidence by Dominion. Those hosts also are slated to testify in Dominion’s case.
On Wednesday, the Delaware judge overseeing the case sanctioned Fox for withholding evidence and reportedly said if depositions or anything else needed to be redone, it would come at a cost to the company.
But the most likely immediate effect on Fox and its bottom line could come in the form of libel training classes for talent and others in the newsroom, as well as an increase in production insurance policies that cover defamatory statements, Farukhi said. Those policies could also help cover the costs related to the lawsuit for Fox.
Still, a near-term financial impact is unlikely to spell disaster for the network.
As thousands of documents have been unveiled in recent months, revealing skepticism from Fox’s top TV hosts and executives about the election-fraud claims that were made on air, Fox News’ ratings have remained stable, according to Nielsen. Similarly, so has the parent company’s stock price. 

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Fox Corp.’s stock has remained stable in recent months as evidence implicating its TV hosts and executives have come to light in Dominion’s defamation lawsuit.

Fox News’ steady audience has also ensured that advertisers stick around, too. Oftentimes, companies will pull their ads when TV networks are embroiled in controversy. For Fox, that hasn’t been an issue in its lawsuit battle with Dominion. 
“I am hesitant to say how this could implicate their business when it comes to viewership and sponsors,” Farukhi said. “Their audience and sponsors seem to not really care what the network is being accused of in this case. They only stop viewing Fox when it provides information that is not congruent with their predetermined conclusions.”
Fox Corp. CEO Lachlan Murdoch sounded confident about the network’s future when asked during a March investor conference if he could share anything about the case.
“I think fundamentally what I’ll just say about it is that a news organization has an obligation and it is an obligation to report news fulsomely, and without fear or favor,” Murdoch said at the time. “That’s what Fox News has always done and that’s what Fox News will always do.” 
He added that “the noise that you hear about this case is actually not about the law and it’s not about journalism and it’s really about politics.”  
No other questions were asked during the conference. 

Amendment protections

Fox has continuously denied the claims made against its network and hosts, arguing the case is about First Amendment protections “of the media’s absolute right to cover the news.” Attorneys have argued that covering the allegations being made by Trump and his attorneys was newsworthy and protected by the First Amendment. 
For that reason, the case has been closely watched by First Amendment experts. While it’s difficult to prove a defamation case in the U.S., many believe there’s enough evidence this time that it could happen. 
“The fact that the lawsuit hasn’t settled yet, and Dominion likely doesn’t want to settle, shows they have a good likelihood of prevailing,” said Gautam Hans, an associate law professor and First Amendment expert at Cornell University. “There’s been a lot of embarrassing, contradictory statements that have come out from the discovery process that even if Dominion loses there will have been pain inflicted on Fox along the way.” 
The evidence gathered for the case — which includes text messages, emails and other internal communications between Fox’s executives, TV hosts, producers and others tied to the newsroom — shows those at the network and parent company were skeptical of what was being reported.
The elder Murdoch, the Fox Corp. chair, suggested the TV hosts “went too far,” and said during his deposition that some of the network’s commentators “endorsed” the claims. 
Paul Ryan, the former Republican speaker of the House and a Fox board member, told Rupert and Lachlan Murdoch “that Fox News should not be spreading conspiracy theories,” according to court papers. 
Fox News host Carlson said in a text message to his producer that pro-Trump attorney Sidney Powell was lying, according to court papers. In other texts, Carlson said, “It’s unbelievably offensive to me. Our viewers are good people and they believe it.”  More

Delta posted a quarterly loss driven in part by a new pilot contract.
The airline forecast revenue growth and profit for the second quarter that were ahead of analysts’ estimates.
CEO Ed Bastian on Thursday brushed off the potential of a consumer pullback in spending.

Delta Air Lines airplanes at the Hartsfield-Jackson Atlanta International Airport (ATL) in Atlanta, Georgia, on Tuesday, Dec. 21, 2021.
Elijah Nouvelage | Bloomberg | Getty Images

Delta Air Lines posted a wider loss than it previously estimated for the first three months of the year, but forecast revenue growth and profit for the second quarter that were ahead of analysts’ estimates, signaling strong travel demand despite weakness in other sectors.
CEO Ed Bastian on Thursday brushed off the potential of a consumer pullback in spending.

Air travel “is something the consumer’s prioritizing,” Bastian said in an interview. “They may be pulling back in other areas … but I don’t see it in our credit card data, I don’t see it in our bookings.”
The Atlanta-based carrier said it expects sales in the current quarter to increase by 15% to 17% over last year, with adjusted operating margins of as much as 16% and adjusted earnings per share of between $2 to $2.25. Analysts polled by Refinitiv had anticipated second-quarter revenue growth of 14.7% and earnings per share of $1.66.
The airline projected “record advance bookings for the summer.”
Bastian said the carrier is dialing back its capacity growth plans for the summer, however, in an effort to improve reliability. Airlines have faced aircraft delivery delays, staffing and training backlogs, and constrained airspace.
Delta said it plans to grow capacity 17% in the second quarter from a year earlier, though that won’t get the carrier back to 2019 levels as it previously planned.

“We’re intentionally pulling back some of the capacity,” Bastian told CNBC. “We want to make sure we don’t outrun our capabilities.”
He said the airline should be able to get to 2019 capacity levels by the end of the year.
U.S. carriers generally make the bulk of their revenue during the busy spring and summer travel season and Delta’s outlook points to more strength in travel demand, and its strong pricing power. Delta is the first U.S. carrier to report earnings. United Airlines will report on Tuesday, and other carriers will report later in the month.
Here’s how Delta performed in the first quarter, ended March 31, compared with Wall Street expectations based on Refinitiv consensus estimates:

Adjusted earnings per share: 25 cents vs. 30 cents expected.
Adjusted revenue: $11.84 billion vs. $11.99 billion expected.

Delta posted a net loss of $363 million, or 57 cents per share, citing, in part, a new, four-year pilot contract that includes 34% raises. That’s still an improvement from the year-ago period, when travel demand was still recovering and the company reported a net loss of $940 million, or $1.48 per share.
Adjusting for one-time items, the company reported net income of $163 million, or 25 cents per share, up from a loss of $748 million, or $1.23 per share, during the first quarter of 2022.
Unit costs, excluding fuel were up 4.7% on the year, partly driven by winter storms that grounded flights.
Delta said its corporate bookings have been recovering, with domestic sales in March 85% back to 2019 levels. It also got a boost in its loyalty program, with its co-branded credit card partnership with American Express contributing $1.7 billion in the last quarter, up 38% from last year, Delta said.
The airline said sales from premium cabins like first class were outpacing revenue from standard coach.
Delta shares were up 2% in premarket trading. More

General Motors will continue to test the price ceiling of its highly profitable full-size pickup trucks as it spends billions to transition to all-electric vehicles.
The latest model revealed Thursday is the Chevrolet Silverado HD 2500 ZR2, a new off-road model for one of GM’s most expensive pickup trucks.
Automakers such as GM, Ford Motor and others have been growing off-road vehicle offerings as a way to boost profits.

2024 Chevrolet Silverado HD ZR2

DETROIT — General Motors will continue to test the price ceiling of its highly profitable full-size pickup trucks as it spends billions to transition to all-electric vehicles.
The latest model revealed Thursday is the Chevrolet Silverado HD 2500 ZR2, a new off-road model for one of GM’s most expensive pickup trucks. The company also unveiled a special-edition “ZR2 Bison” version in partnership with well-known off-road parts supplier American Expedition Vehicles.

Automakers such as GM, Ford Motor and others have been growing off-road vehicle offerings as a way to boost profits on their trucks and SUVs with far less investment than a new vehicle.

2024 Chevrolet Silverado HD ZR2 Bison

“ZR2 has been a huge success for us,” said Michael MacPhee, director of Chevy truck marketing. “The performance/off-road space is the fastest-growing in pickup right now. So, it’s a natural extension for us to build that to the HD space.”
MacPhee declined to disclose expected profit margins for the upcoming vehicles, which will begin production at a Michigan plant this summer.
The new ZR2 trucks are in addition to similar models of smaller pickups such as the Chevrolet Colorado and Chevrolet Silverado 1500, a smaller sibling of the 2500 model. MacPhee said current ZR2 models are the fastest-turning vehicles of the brand’s premium trims and bring in the highest number of new customers.

2024 Chevrolet Silverado HD ZR2

The company declined to disclose exact pricing for the new ZR2 pickups, saying they will be “aspirational but attainable.” The current Chevrolet Silverado 1500 ZR2 starts at about $74,000 for a comparable model. GM also currently offers a Z71 off-road package of the large HD truck that can easily top $80,000.

The ZR2 vehicles feature a host of off-road components, systems and capabilities. Even if owners don’t use the trucks for their intended use cases, off-road vehicles have grown in popularity for their more aggressive looks and taller ride height.
The HD ZR2 trucks will be offered exclusively in the 2500 four-door crew cab configuration. The standard 6.6-liter V8 gasoline engine will produce 401 horsepower and 464 foot-pounds of torque. A 6.6-liter Duramax turbo-diesel with 445 horsepower and 910 foot-pounds will also be available. GM said diesel is expected to make up a majority of the sales, like it does for current HD models.
GM’s burly fossil fuel-powered pickup trucks are assisting the automaker in investing $35 billion in electric and autonomous vehicles between 2020 and 2025.

2024 Chevrolet Silverado HD ZR2 More