Raphael Stevens

McDonald’s will extend its $5 value meal in most U.S. markets, saying the deal is helping to boost traffic.
McDonald’s is extending the promotion as rivals such as Burger King and Starbucks offer deals to entice diners and boost traffic.
The company is set to report earnings July 29.

In an aerial view, a customer walks by a sign as they leave a McDonald’s restaurant in San Pablo, California, on April 3, 2023.
Justin Sullivan | Getty Images

McDonald’s will extend its $5 value meal beyond its initial four-week window in most of its U.S. markets as the fast-food giant says the offer is driving traffic back to restaurants.
In a memo to the U.S. system obtained by CNBC on Monday, executives wrote that nearly every business unit, encompassing 93% of its restaurants, voted to extend the promotion past its original end date late this month. The memo said the majority of locations will extend through August, or plan to vote on whether to do so. 

The $5 value meal rolled out on menu boards beginning June 25 and was initially set to last roughly a month. It includes a McChicken or McDouble, four-piece chicken nuggets, fries and a drink. The combo costs substantially less than purchasing those items individually.
“Our message is resonating with our millions of customers,” Myra Doria, national field president, and Tariq Hassan, U.S. chief marketing and customer experience officer, wrote in the memo. “When our customers are ordering the $5 Meal Deal, they aren’t visiting the competition, and early performance shows this deal is meeting the objective of driving guests back to our restaurants.” 
Bloomberg earlier reported the decision to extend the deal.
The move comes as restaurants offer deals to boost sagging traffic, as consumers — particularly lower-income diners — balk at higher prices after years of inflation-fueled hikes. The meal has faced competition from other chains including Burger King, Wendy’s, Taco Bell and even Starbucks, which have offered deals ranging between $3 and $5, as companies look to bring in value-conscious consumers in a highly competitive environment.
The memo went on: “We must remember that driving guest counts ultimately propels our business and is the key to sustained growth.”

Coca-Cola kicked in marketing funds to make the initial value offer more appealing for franchisees, CNBC reported in May. Some franchisee advocates had pushed for future contributions from the company to make the discounted offering sustainable for operators in the long run.
The company is set to report earnings July 29.
McDonald’s declined to comment.

Don’t miss these insights from CNBC PRO More

Korean Air ordered a mix of Boeing 787 Dreamliners and the yet-to-be certified 777X.
The order is a vote of confidence for Boeing, which has struggled with delays across its jetliner portfolio.

A Boeing 777X airplane takes off during its first test flight from the company’s plant in Everett, Washington, January 25, 2020.
Terray Sylvester | Reuters

FARNBOROUGH, England — Boeing won orders for at least 40 wide-body jetliners from Korean Air, including the yet-to-be-certified 777X jetliner, in a vote of confidence for the struggling manufacturer.
The order, announced at the Farnborough Airshow outside of London, includes 20 777X planes, the largest in Boeing’s commercial jet lineup, and 20 787-10 Dreamliner planes, both long-range jets. The airline can also upsize its order for 10 more of the Dreamliners, the biggest option for that model.

Korean Air CEO Walter Cho said he expected to start receiving the planes later this decade.
The twin-engine 777X is years behind schedule but earlier this month began certification flight tests with the U.S. Federal Aviation Administration, a major milestone.
Boeing customers have been grappling with delayed aircraft, in part due to post-Covid supply chain snarls that have hit the aerospace industry, but also related to a safety crisis and manufacturing flaws, particularly after a door plug blow out earlier this year on one of its smaller and bestselling 737 Max planes.
“If I wasn’t assured, I would not have ordered it,” Cho said at a news conference of Korean Air’s order. “I know Boeing will pull through whatever it is they’re going through right now, and I have full confidence in Boeing.”
The airline, a partner of Delta Air Lines, earlier this year also ordered competing Airbus A350-1000 aircraft, the largest of that type.
“Whichever comes first will become our flagship, whoever’s on time,” Cho said.

Read more CNBC airline news More

Wall Street expects General Motors to be the standout among the traditional Detroit automakers when they report second-quarter results this week.
Some analysts expect both GM and Ford to guide toward the upper end of their 2024 financial forecasts, if not raise them.
Chrysler parent Stellantis is in a different position compared to its rivals, as it deals with issues in North America.

General Motors CEO Mary Barra, center, at the New York Stock Exchange, Nov. 17, 2022.
Source: NYSE

DETROIT — Wall Street expects General Motors to be the standout among the traditional Detroit automakers when they report second-quarter results this week, with sales and vehicle prices stable during the first half of the year for America’s largest carmaker.
GM is forecast to report a solid adjusted profit of $2.75 per share, up 44.2% from a year earlier, and $45.46 billion in revenue, up 1.6% over the prior-year period, according to average analyst estimates compiled by financial markets data and analytics company LSEG.

That compares to LSEG estimates for Ford Motor that call for adjusted earnings per share of 68 cents for the second quarter, down 5.2% from the second quarter of 2023. Ford’s automotive revenue is expected to increase 3.8% compared to a year earlier to $44.02 billion, according to LSEG.
GM reports earnings before markets open Tuesday. Ford is scheduled to report Wednesday afternoon after markets close, followed by Chrysler parent Stellantis, which reports earnings biannually, releasing its first-half results Thursday morning.
Several Wall Street analysts expect GM to guide toward the higher end of the automaker’s already raised guidance for 2024, if not raise it again as part of its second-quarter results. There’s less of a consensus regarding outlooks for Stellantis and Ford.

Stock chart icon

GM, Ford and Stellantis stocks in 2024.

“We expect both Ford and GM to post solid 2Q beats, driven by favorable pricing; volume/mix will be a benefit for Ford, while GM should benefit from easy comps on cost,” Barclays analyst Dan Levy said in a July 15 investor note. “Both are expected to raise 2024 guidance.”
Evercore analyst Chris McNally remains “positive [on] GM (particularly over Ford),” citing the automaker’s lower pricing. Evercore still expects a “solid” second quarter for Ford, though, trending toward the upper half of its previously announced 2024 guidance.

Ford’s guidance for the year includes adjusted earnings before interest and taxes, or EBIT, of between $10 billion and $12 billion and free cash flow of $6.5 billion to $7.5 billion.
GM’s 2024 guidance comes in at adjusted earnings of $12.5 billion to $14.5 billion, or $9 to $10 a share, and adjusted automotive free cash flow in a range of $8.5 billion to $10.5 billion.
“Expect both companies to report solid quarters with either confident confirmations of prior guides (i.e. upper-end of ranges) or modest upward revisions,” Citi analyst Itay Michaeli said in a July 11 investor note.

Ford CEO Jim Farley at a battery lab for the automaker in suburban Detroit, announcing a new $3.5 billion electric vehicle battery plant in the state to produce lithium iron phosphate batteries, Feb. 13, 2023.
Michael Wayland/CNBC

Stellantis, with major operations in North America and Europe, is in a different position compared to its rivals.
The transatlantic automaker is expected to report an adjusted operating profit for the first half of the year, but investors are concerned about its North American operations.
The company is in the midst of correcting what CEO Carlos Tavares described as “arrogant” mistakes in the region that have led to sales declines, bloated inventories and investor concerns. Those comments came during an investor event last month.
Despite the problems, Stellantis finance chief Natalie Knight said during the June event that the company’s adjusted operating income margin would be between 10% and 11% for the first half of the year.
She also reconfirmed Stellantis’ 2024 guidance that included a double-digit adjusted operating income margin, positive industrial free cash flow and at least 7.7 billion euros ($8.4 billion) in capital return to investors in the forms of dividends and buybacks.
Shares of Stellantis are down by more than 12% in 2024 — in contrast to shares of GM, up 36%, and Ford, up about 18%.

Stellantis CEO Carlos Tavares speaks to media on June 13, 2024 following the company’s investor day at its North American headquarters in Auburn Hills, Mich.
Michael Wayland / CNBC

Tavares noted the convergence of three issues at Stellantis: selling down vehicle inventory too slowly; manufacturing issues, specifically with two unnamed plants; and a lack of “sophistication in the way to go to market.”
Stellantis, which owns brands such as Jeep and Ram in the U.S., is expected to report an 11.3% year-over-year decline in revenue to 45.37 billion euros ($49.39 billion), according to LSEG.
Analysts still expect Stellantis to be profitable in 2024, with projected adjusted earnings per share of $4.82. However, that would be down 18.9% from last year.
For GM, Ford and Stellantis alike, investors will be watching for updates on their electric vehicle plans, capital spending and rising new vehicle inventory levels in the U.S.
“We believe the U.S. auto cycle dynamics can remain supportive of strong [automaker] earnings streams, with healthy pricing dynamics maintained even despite some normalization,” Barclays’ Levy said. “Yet inventory levels have risen. … We believe rising inventory levels require monitoring, as incrementally negative datapoints may pressure [automaker] stocks.”
— CNBC’s Michael Bloom contributed to this report.

Don’t miss these insights from CNBC PRO More

Delta Air Lines canceled more than 4,600 flights from Friday through Sunday, more than any other carrier.
The Atlanta-based airline also canceled another 550 flights, or 15% of its mainline operation, as of early Monday.
The disruptions have persisted at Delta while most other carriers have recovered.

Travelers wait in line at a Delta Airlines counter at Ronald Reagan National Airport in Arlington, Virginia, on July 19, 2024. Airlines around the world experienced disruption on an unprecedented scale after a widespread global computer outage grounded planes and created chaos at airports.
Ting Shen/Bloomberg via Getty Images

Delta Air Lines CEO Ed Bastian apologized and offered frequent flyer miles to travelers for hundreds of flight cancellations as the carrier struggled to recover from Friday’s globe-spanning IT outage, disruptions that sparked criticism from Transportation Secretary Pete Buttigieg.
The Atlanta-based airline canceled more than 4,600 flights from Friday through Sunday, more than any other airline, according to aviation data firm OAG.

As of early Monday, Delta had already canceled another 550 flights, or 15% of its mainline operation.
The delays and cancellations have put Delta in a rare spotlight for the carrier whose leaders pride themselves on reliability and punctuality.
“We continue to receive reports of unacceptable disruptions and customer service conditions at Delta Air Lines, including hundreds of complaints filed with our Department,” Buttigieg said in an emailed statement late Sunday. “I have made clear to Delta that we expect the airline to provide prompt refunds” to customers who chose to call off their trips because of the disruptions as well as “timely reimbursements for food and overnight hotel stays to consumers affected by the delays and cancellations, as well as adequate customer service assistance to all of their passengers.”
The disruptions have persisted at Delta while most other carriers have recovered. American Airlines said it was almost back to normal by Saturday.
“I want to apologize to every one of you who have been impacted by these events,” Bastian said in a message to customers. “Delta is in the business of connecting the world, and we understand how difficult it can be when your travels are disrupted.”

The airline was offering flight attendants extra pay to pick up shifts, a staff memo on Sunday said. The carrier called some of them on their personal phones to come in, according to a person familiar with the matter. High demand during some one of the busiest periods of summer challenged the airline to find alternative flights for affected travelers, Bastian said in his note.
United Airlines also had elevated flight disruptions on Sunday with 9% of its schedule canceled, or 260 flights, according to FlightAware, but still below Delta’s.
Delta Air Lines has a number of Microsoft tools that were impacted in the outage, “in particular one of our crew tracking-related tools was affected and unable to effectively process the unprecedented number of changes triggered by the system shutdown,” Bastian said in his note.
That would make the event similar to an issue Southwest Airlines suffered, on a much greater scale, at the end of 2022 when it failed to recover from severe winter weather for days.
A botched software update from cybersecurity firm Crowdstrike that paralyzed some Windows-based programs also hit the banking and health-care industries. More

Boeing Commercial Airplanes CEO Stephanie Pope said the company is making progress on improving its output of planes.
She said the company’s transformation plan could take years to fully implement.
Boeing has scrambled to institute a safety and manufacturing improvement plan after a door plug blew out of a 737 Max five days into the year.

Boeing’s Stephanie Pope gives a press conference at the Paris Le Bourget Airport, on June 20, 2023.
Geoffroy Van Der Hasselt | AFP | Getty Images

LONDON — Boeing’s output of 737 Max planes is showing signs of improvement, the new head of its commercial unit said ahead of a major air show on Sunday, while admitting that the manufacturer has “disappointed” customers with delayed planes.
Boeing is trying to get past several safety and manufacturing crises, including the midair door plug blow out in January, which have slowed deliveries of planes to airlines and prompted the Federal Aviation Administration to increase its oversight of the storied manufacturer.

Stephanie Pope, in her first press conference since taking over the key role at the troubled aircraft manufacturer in March, reiterated that Boeing has committed to increasing production of the Max to 38 a month. Production slipped into the mid-20s per month in the first half of the year, analysts have said.
Pope said Boeing is on the right path to improving its manufacturing quality, safety and predictability of deliveries, a “transformational change” that she said will take years.
“It still doesn’t take away the reality that we’ve disappointed” our customers, she said at a press conference before the Farnborough Airshow, outside of London. “We’ve impacted their business and we haven’t met the commitments and lived up to being the partner that they expect and they need us to be.”
Boeing has unveiled a host of goals aimed at getting it back on the right path, like improving worker training and manufacturing processes, among others. In the spring it delivered an improvement plan to the FAA that the agency ordered after the blowout in January.
“This plan is not a three month plan,” said Pope. “I call it transformational because some of these actions will take years.”

As part of the leadership shakeup that promoted Pope to head the commercial unit, Boeing’s CEO Dave Calhoun said he would step down by year’s end.
When asked whether she was interested in the role, Pope said she is focused on the commercial unit’s recovery.
“That is my priority,” she said.
Boeing’s problems aren’t limited to its commercial program, however. Its defense unit has also been grappling with delays, including of the money-losing and delayed modification of two Boeing 747s that will serve as the next two Air Force One aircraft.

Boeing 737 MAX aircraft are assembled at the company’s plant in Renton, Washington, U.S. June 25, 2024. 
Jennifer Buchanan | Via Reuters

The CEO of that unit, Ted Colbert, said Boeing continues “to fight through some of the challenges that really stemmed from challenges in the supply chain.”
Boeing reports quarterly results on July 31 and is set to report charges from that unit, Colbert said at the same press conference.

Read more CNBC airline news More

Air travel disruptions persisted on Saturday as carriers worked to recover from Friday’s IT outage.
More than 2,800 flights were canceled worldwide on Saturday, more than 2,100 of them in the U.S., according to flight aware.
The sudden outage sparked chaos in airports around the global with thousands of travelers stranded.

The United Airlines terminal on July 19, 2024 as a global technology outage affected LAX airport in Los Angeles. 
Myung J. Chun | Los Angeles Times | Getty Images

Flight cancellations and delays continued on Saturday as airlines worked to recover from a global IT outage sparked chaos at airports and for other industries a day earlier.
More than 2,800 flights were canceled on Saturday, with over 2,100 of them in the United States, according to flight-tracking site FlightAware. More than 8,600 U.S. flights were delayed.

On Friday, more than 5,000 flights were canceled worldwide, with about 3,400 in the U.S. Nearly 13,000 U.S. flights were delayed.
The disruptions on Fwere similar to severe weather like a winter or tropical storm but airlines had no time to prepare for the outage, leaving them scrambling to accommodate customers ahead of a summer weekend.
A software update from CrowdStrike that went awry led to a major outage of Microsoft systems for businesses around the world.
Delta Air Lines canceled about 36% of its Saturday flights up from 32% a day earlier. Airlines waived fare differences and fees for affected customers.
American Airlines cancelled just 44 flights on Saturday, or 1% of its mainline operation, down from 11% a day earlier, the fastest recovery of the major U.S. carriers.

“Our customer is at the center of everything we do, and we thank them for their patience as our team worked together around the clock to return to normal operations just one day after the global outage,” American said in a statement.
About 15% of United’s mainline flights were canceled on Saturday, down from 22% on Friday, according to FlightAware data.
“Most of our technology systems have been restored and our reliability is improving, although we will continue to see cancellations and delays this weekend,” United said.
How much customers with impacted flights will be reimbursed for additional expenses like meals or hotels depends on the airline’s specific policy.
But customers are entitled to a refund for a canceled flight if they do not choose to travel on an alternate flight or accept a voucher.
“I am hearing reports of some airlines only offering flight credits to passengers for cancelled flights,” Transportation Secretary Pete Buttigieg said in a social media post on Saturday. “Let me be clear — you are entitled to get your money back promptly if your flight is cancelled and you don’t take a rebooking.”
— CNBC’s Rebecca Picciotto contributed to this report.

Read more CNBC airline news More