Business

In a flash, euphoria over artificial intelligence (AI) has turned to panic. Since early trading began on January 27th the market value of Nvidia, an AI chipmaking champion, has slumped by 17% at the time of writing. The share prices of Alphabet, Amazon and Microsoft—America’s cloud-computing triumvirate—have fallen by 3%, 1% and 3%, respectively. All told, American tech companies have shed around $1trn in value. More

Pharmaceutical companies appear to be cautiously optimistic that brighter days are ahead under a Trump administration, following years of Joe Biden’s hardline stance on the industry. 
Drugmakers hope to see efforts that focus more on cracking down on pharmacy benefit managers while promoting drug innovation and patient access to treatments.
Those companies are particularly eager to see changes to a provision of Biden’s Inflation Reduction Act that allows Medicare to negotiate drug prices with manufacturers.

U.S. President Donald Trump speaks about prescription drug prices during an appearance in the Brady Press Briefing Room at the White House in Washington, U.S., November 20, 2020.
Carlos Barria | Reuters

Pharmaceutical companies appear to be hopeful about their growth under a Trump administration, after former President Joe Biden took a hardline stance on the industry for the last four years. 
Like his predecessor, President Donald Trump will make lowering health-care costs for Americans a priority. It’s a popular bipartisan issue in a nation where patients pay two-to-three times more for prescription drugs than people in other developed countries. Trump has not yet outlined specific health policy plans, but his new administration will likely take a different, more pro-business approach than Biden’s did. 

Drugmakers hope Trump will focus more on cracking down on middlemen called pharmacy benefit managers, while taking heat off the prices the pharma companies themselves charge, promoting drug innovation and improving patient access to treatments. Those companies are particularly eager to see changes to Biden’s Inflation Reduction Act, which includes landmark provisions that aim to make medicines more affordable — but that the industry views as a threat to innovation and its profits. 
That was the sentiment during the JPMorgan Health Care Conference in San Francisco this month, the largest gathering in the U.S. of pharma and biotech executives and investors. The annual conference gives a pulse on the industry’s outlook for the year ahead. To no surprise, health policy questions dominated many of the conversations as Trump was heading into office.
Trump isn’t exactly a friendly face to the U.S. pharmaceutical industry, as he targeted companies and high drug costs during his first term through proposals like linking government payments for medicines to lower prices paid abroad. Still, executives stressed they are ready to work with Trump, who some described as being willing to hear out their grievances. 
“There are several people that think for our industry, the risks outweigh the opportunities. There are other people, among them myself, which they think that the opportunities outweigh the risks. I guess we’ll see,” Pfizer CEO Albert Bourla said during a presentation at the conference. 
“What we do as an industry, and as Pfizer, is engage with the new administration,” he later added. “We have very productive engagements and we try to explain the positions, I think that are well-understood.” 

Still, some executives acknowledged uncertainties around the new administration, such as the anti-vaccine views of Robert F. Kennedy Jr., Trump’s pick to lead the Department of Health and Human Services. Health experts have said that Kennedy, if confirmed by the Senate, may not do much to stop vaccine approvals, but could deter more Americans from taking recommended shots.  
“I think he represents the caution when it comes to the Trump administration,” BMO biotech analyst Evan Seigerman said. “You got to figure out how to work with him, right?”

Pharmacy benefit manager reform 

PBM reform is top of mind for drugmakers. They argue that the middlemen overcharge insurance plans for which they negotiate medication rebates, underpay pharmacies for dispensing prescriptions and fail to pass on savings from those discounts to patients. 
Congress stripped out bipartisan PBM reforms in the final federal government spending package late last year, even after lawmakers for years introduced bills and held hearings to scrutinize them. 
But the pharmaceutical industry is “optimistic” that it will see PBM reform this year, as Trump, lawmakers and lawmakers from both parties are concerned about their practices, said Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America, the industry’s biggest lobbying group in the U.S. 
“I think there continues to be significant momentum behind PBM reforms, and there will be … legislative vehicles available this year to move them forward,” Ubl said in an interview with CNBC. 
He also pointed to a previous Trump proposal that the president could revisit: To eliminate the so-called safe harbor for rebates – a rule that sought to stop PBMs from keeping rebates and instead ensure that any discounts from drugmakers would directly reach patients.
Trump has signaled that he will target PBMs, saying at a news conference in December, “We’re going to knock out the middleman. We’re going to get drug costs down at levels that nobody has ever seen before.” 
But Trump still has to figure out if he will change the Biden administration’s approach to PBM reform, said Seigerman. Biden’s FTC Chair Lina Khan carried out an extensive investigation into the middlemen and then sued them for allegedly inflating insulin prices.
“The fact that it was a Lina Khan priority makes it harder for Trump because he’ll either outright reject something from the Biden administration or say, ‘We did it better,’ and take full credit,” Seigerman said.
Ubl pointed to three key reforms the industry wants to see, the first of which is “breaking the link” between a drug’s list price and how PBMs are compensated. 
Currently, the higher price of a covered drug leads to bigger potential rebates that PBMs can keep as profit. That incentivizes the middlemen to steer patients toward higher-priced medicines and keep cheaper generic and biosimilar drugs off of insurance formularies, or lists of covered drugs, according to Ubl. 
The second reform is to ensure the rebates reach patients at the pharmacy counter, which could be achieved by reviving Trump’s previous proposal or through other policies, Ubl said. The last reform would be increasing transparency around the PBM business model, such as the rebates they collect and their markup practices, since it is “largely opaque” to insurers and other stakeholders, according to Ubl. 
“We know the supply chain, PBMs are not transparent enough and we should be able to pass through more of that savings directly to consumers,” Eli Lilly CEO David Ricks said during a presentation at the conference.
PBMs deny that they contribute to higher drug prices, and often shift the blame to drugmakers who set the initial list prices for drugs before negotiations. Cigna’s Express Scripts, one of the three major PBMs in the U.S., has claimed that it passes more than 95% of all rebate dollars to its health plan clients.
Top PBM executives have also said they are open to increased transparency around their businesses, but companies have yet to make significant changes on that front.

Changes to Medicare drug price negotiations

The pharmaceutical industry is also hopeful that Trump could work with Congress to revise a piece of the IRA that allows Medicare to negotiate drug prices with manufacturers — a popular policy that could bring significant savings for senior patients. The Biden administration kicked off the second cycle of that process last week, unveiling the next 15 drugs selected for the price talks. 
But dismantling or scaling back the IRA would be difficult, Seigerman said. He pointed to Trump’s unsuccessful attempt to repeal and replace the Affordable Care Act during his first administration, even when he had control of the House and Senate. That law expanded insurance coverage for uninsured patients. 
Health policy experts previously told CNBC that it also seems unlikely that a Trump administration would want to scrap efforts to lower drug prices, a bipartisan issue that is top of mind for Americans.
Still, the industry will continue to fight the law in a flurry of legal challenges, which have so far been unsuccessful. Drugmakers argue that the provision will slash their profits, hinder investments in research and development for certain medications and result in unintended consequences for patients, such as fewer treatments and higher premiums. 
The industry also argues the process is government-mandated “price-setting” rather than negotiations since companies that don’t agree to the talks must either pay an excise tax or withdraw all their medications from the Medicare and Medicaid markets. Though in one failed court challenge last year, a federal judge argued that participating in those markets is voluntary. 
PhRMA’s Ubl said the biggest issue with the law is what the industry calls the “pill penalty.” The law essentially spares biologics like vaccines from new negotiated prices for 13 years after they receive U.S. Food and Drug Administration approval, compared to just nine years for small-molecule drugs that come in a pill or tablet form. 
The industry argues that the discrepancy discourages companies from investing in the development of small-molecule drugs, which are more convenient for patients.
Fewer small molecule drugs will likely mean fewer cheaper generic versions of them on the market in the U.S., Eli Lilly’s Ricks said during the conference. 
“I think that’s a terrible outcome because that’s the most efficient, cheapest thing going in health care,” he said.
A revision of the law would require legislative action, but Ubl said some changes could take place without Congress. For example, PhRMA does not believe all drugs with the same active ingredient should be up for price talks when they are approved under different names for different uses.
That was the case last week when Eli Lilly’s weight loss drug Wegovy, diabetes treatment Ozempic and another diabetes drug Rybelsus were selected as one product for the price talks since they share the same active ingredient.

The RFK Jr. question

The one big unknown for the pharmaceutical industry is how RFK Jr. could shape the government’s health priorities if confirmed to lead HHS. 
Kennedy has long made misleading and false statements about the safety of vaccines, which have saved the lives of more than 1.1 million children in the U.S. and saved Americans $540 billion in direct health-care costs over the last three decades, according to CDC research in August. Despite his history, Kennedy told NBC News in early November that he isn’t planning to take anyone’s vaccines away in the U.S. 
But Kennedy could affect vaccine uptake without making federal policy changes. For example, some health policy experts have raised concerns about Kennedy using his new potential platform to spread anti-vaccine rhetoric and deter Americans from receiving recommended shots at a time when vaccination rates are already falling, especially among children.
“He’s very anti-vax, which isn’t great,” Seigerman said. “That’s not good for a company like Pfizer or Merck or GSK – all the folks that make the vaccines that we use.” 
During his presentation at the conference, Pfizer’s Bourla said Kennedy’s anti-vaccine rhetoric is in “complete contradiction” with what the company, regulators and the medical and scientific community believe. Pfizer delivered the world’s first Covid vaccine and markets shots for other diseases, such as respiratory syncytial virus and pneumococcal disease. 
If Kennedy contributes to even lower U.S. vaccination rates for certain diseases, “we will start having epidemics and that will be detrimental for him and for the administration,” Bourla said, adding that he has “made that very clear” to them.  
But Bourla said the company can work with the administration in other areas, noting that Trump is “very much focused” on cancer. Bourla said he sees the potential to build programs that will accelerate development of cancer treatments. 
Drugmakers are more aligned with Kennedy’s goal of tackling chronic diseases in the U.S. as part of his “Make America Health Again” platform, which appears to have a particular emphasis on changing U.S. food policy. 
Gilead CEO Daniel O’Day told CNBC that the company’s work aligns with the administration’s focus on chronic diseases. Gilead is a leader in HIV treatment and prevention having developed 12 medications for the disease. 
“For Gilead Sciences, it means medicines that we spoke about that can be the best tool to end the epidemic or some other medicines,” O’Day said.
During his presentation, Eli Lilly’s Ricks said making America healthy again is “what we do every day.” While diet and exercise help to prevent obesity, he contended those lifestyle changes are “rather ineffective” at treating the disease compared to the company’s drug Zepbound. 
Ricks said, “If there’s common ground there,” Eli Lilly would like to work with the Trump administration to expand access to obesity medications and “find a way to pay for them.”  
The Biden administration has proposed allowing Medicare to cover obesity drugs, which have roughly $1,000 list prices before insurance, but it is unclear if Trump will finalize that plan. 
Still, Ricks said the Trump administration has been receptive to Eli Lilly’s ideas, which is “a bit of a change from the last four years.” More

As out-of-control wildfires threatened thousands of Los Angeles residents earlier this month, the companies that fight infernos from the air raced to send their air tankers and water bombers to the area. It was supposed to be the off-season.
The California Department of Forestry and Fire Protection, or Cal Fire, has more than 60 fixed-wing and rotor-wing firefighting aircraft, which it calls the largest civil fleet of its kind.

But the federal government, U.S. states and countries from Australia to Chile to South Korea hire companies that have their own private fleets of specially outfitted aircraft to help tame fires.
“I was lucky to have two” aircraft available to help fight the flames, said Joel Kerley, CEO of 10 Tanker Air Carrier, based in Albuquerque, New Mexico. The company has a fleet of four converted DC-10 aircraft, known as very large air tankers, or VLATs.

A plane makes a drop as smoke billows from the Palisades Fire at the Mandeville Canyon, in Los Angeles, California, U.S., January 11, 2025. 
Shannon Stapleton | Reuters

The wildfire season in the U.S. normally runs from April to about November, when 10 Tanker and similar companies are under round-the-clock contracts with the U.S. Forest Service, a federal agency. In 2023, the U.S. Forest Service extended a 10-year contract worth as much as $7.2 billion to 10 Tanker and four other providers.
Outside of those months, providers are generally on a call-when-needed basis. And demand for their services continues to rise, year-round, these firms say.
Wildfires are expected to become even more prevalent and severe in the 21st century, according to the United Nations Environment Program. The United States Environmental Protection Agency said data appears to show that the area destroyed by wildfires in the U.S. has gone up over the last two decades.

“There’s not enough air tankers to go around,” said Kerley, the former aviation manager for the Bureau of Indian Affairs, part of the Department of the Interior.

Flowers and a car are covered by fire retardant as the Palisades Fire, one of simultaneous blazes that have ripped across Los Angeles County, burns at the Mandeville Canyon, a neighborhood of Los Angeles, California, U.S. Jan. 11, 2025. 
Ringo Chiu | Reuters

Some countries that have faced severe wildfires in recent years, like Australia, have been building up their own fleets of firefighting aircraft. Kerley said they will need to expand their fleets or companies like his will have to get bigger to meet growing demand.
Kerley said the Palisades and Eaton fires were some of the most complicated to fight. Fed by hurricane-force winds, they leveled entire neighborhoods like Altadena and were some of the worst ever in California. They were also a reminder to firefighters, government officials and the public that fires could spring up when they’re least expected.
Those two fires have consumed more than 37,000 acres and damaged or destroyed over 16,000 homes, buildings and other structures, making them two of the most destructive wildfires ever in California. At least 28 people were killed, according to Cal Fire.
Kerley said days into the new year he was asking his crews of pilots and mechanics to travel to blazes he equated to “the Super Bowl” of fire response. 10 Tanker’s planes have dropped more than 273,000 gallons of fire retardant on the Eaton and Palisades fires.
Both of those fires were largely contained as of Friday, but companies like Kerley’s were still on call as the Hughes fire was spreading rapidly north of Los Angeles, prompting a new round of evacuations.

An air tanker drops fire retardant at the Palisades Fire, one of simultaneous blazes that have ripped across Los Angeles County, as seen from Woodland Hills, neighborhood of Los Angeles, California, U.S. Jan. 11, 2025. 
Ringo Chiu | Reuters

Since the devastating Los Angeles blazes struck during what is supposed to be the region’s off-season for wildfires, some of 10 Tanker’s aircraft were stuck in routine maintenance earlier on in the battle. And he wasn’t alone.
“We’re in heavy winter maintenance on all of our aircraft,” said Sam Davis, CEO of Belgrade, Montana-based Bridger Aerospace, which has a fleet of Canada-made Super Scoopers that scoop up water as they’re flying along the water and dump the water near fires. They can make several trips on one flight.
“It was a push to get the first aircraft out the door,” Davis said.
In November, Bridger reported record revenue and profits for its third quarter, saying “continued dry weather in the western U.S. kept multiple aircraft operating into November.” It increased its revenue estimates for the year to as much as $95 million from a previous range of between $70 million to $86 million.
Growing fleets of new aircraft isn’t easy or fast. 
Kevin McCullough, president of Aero Air, which also provides air tankers, sent some of its MD-87s to the Los Angeles fires. He said it can take about a year and a half to convert a jet into a tanker to fight fires.
“It isn’t like you just throw a tank in and you’re doing this,” he said. “You’re completely modifying the aircraft and turning it into a fire bomber.”
McCullough said development of these jet tankers were done privately, with hopes that there would eventually be government contracts for their services, but “there were never any guarantees.”

How to fight fires from the air

Specially trained pilots drop water or fire retardant from the air to help assist firefighters on the ground. The heavy, bright-red fire retardant is generally dropped in front of fires, blocking the flames’ path.
“The challenge of dropping water or retardant is when these fires break out, most of the time it’s not in a flat area and not one of these blue-sky, calm-wind days,” said Paul Petersen, executive director of the United Aerial Firefighters Association.
Some of these pilots come from military backgrounds, while others shift over from passenger airlines, 10 Tanker’s Kerley said. Aerial firefighting pilots’ ages span decades. He has nearly 30 on staff.
Eight mechanics are assigned to each of the company’s DC-10s.
“It’s an odd duck in terms of careers,” Kerley said.

A Super Scooper plane drops water on the Palisades fire on Tuesday, Jan. 7, 2025 in Pacific Palisades, CA. 
Brian Van Der Brug | Los Angeles Times | Getty Images

There’s also natural forces to contend with: The fierce Santa Ana winds, which were blowing with hurricane force in early January, helped spread the Los Angeles-area fires and also grounded some planes early on from their aerial missions.
The last DC-10 aircraft rolled off the McDonnell Douglas production line in nearby Long Beach, California, nearly four decades ago, but 10 Tanker’s planes have been reoutfitted to carry and precisely drop 9,500 gallons of fire retardant.

A super scooper water-dropping firefighting aircraft refills with water from the Pacific Ocean at Will Rogers State Beach in Los Angeles, California, US, on Thursday, Jan. 9, 2025.
Jill Connelly | Bloomberg | Getty Images

Water scoopers like those used by Bridger Aerospace are made by Canada’s De Havilland Aircraft, and are also becoming more highly sought after. These special planes can scoop up 1,600 gallons from nearby bodies of water.
And some governments are beefing up their fleets by ordering the newest model of the plane, which is under development.
Calgary-based De Havilland last August said it won orders for European Union countries for the new generation of the aircraft, the DHC-515, which it expects to enter operations in 2028.
Earlier generations of the Scoopers were first built in the 1970s. De Havilland’s new generation plans to improve things like cockpit air conditioning for high temperatures, water-drop control and anti-corrosion, which helps avoid damage from salt water.
“Given the age of the aircraft and the impact of climate change, demand is just going to increase,” said Neil Sweeney, vice president of corporate affairs at the company. “What was considered an off-season no longer really exists.”
— CNBC’s Erin Black contributed to this report. More

There’s a Shark entering one of the greatest profit pools for American automakers globally, as Chinese automaker BYD Auto expands its reach and product portfolio with a pickup truck.
BYD has not announced plans to sell the Shark in the U.S., but it has entered countries where GM, Ford and Toyota have sold pickup trucks globally, including Australia, Brazil and Mexico.
There’s fear among global automakers that Chinese rivals could flood their markets, undercutting domestic production and vehicle prices to the detriment of their own auto industries.

BYD Shark plug-in hybrid electric pickup truck
Michael Wayland / CNBC

DETROIT — There’s a Shark circling one of the greatest profit pools for American automakers globally, as Chinese automaker BYD Auto expands its reach and product portfolio with a pickup truck.
Without the vehicle’s branding badge, the BYD Shark could pass as an American-made product. In many ways, it looks like a smaller pickup from Ford Motor. The China-made truck features uncanny exterior resemblances to a Ford Explorer mixed with the popular F-150 — part of the Ford brand’s best-selling truck lineup in the U.S. for 48 years.

Much like BYD’s Seagull — a small all-electric hatchback that starts at just 69,800 yuan (or less than $10,000) — there’s fear among global automakers that Chinese rivals like the Warren Buffett-backed BYD could flood their markets, undercutting domestic production and vehicle prices to the detriment of their own auto industries.
BYD has not announced plans to sell the Shark in the U.S., but it has entered countries where General Motors, Ford and Toyota Motor sell pickup trucks, including Australia, Brazil and Mexico.
In the U.S., pickup trucks are the bread-and-butter vehicles for the Detroit automakers, combining for millions of units of sales annually. They’ve also become increasingly important for Toyota in the U.S. and globally.

BYD Shark plug-in hybrid electric pickup truck
Michael Wayland / CNBC

“When you consider the importance, from a revenue perspective, that these products bring to manufacturers, it’s the franchise,” said Terry Woychowski, president of automotive at Caresoft Global who formerly was a chief engineer of GM’s full-size trucks. “There’s been a lot of interest in this vehicle because of the market.”
Caresoft, an engineering benchmarking and consulting firm, has torn down and examined roughly 40 China-built EVs from the likes of BYD, Nio and others.

The Michigan-based company digitally and physically analyzes every part of a vehicle, from bolts and latches to seats, motors and battery casings. It then determines how its clients — mainly automakers and suppliers — can improve efficiencies and cut costs in their products.

Drawing attention

Automakers such as Ford and Toyota that rely heavily on sales of smaller pickup trucks globally have taken notice of the BYD Shark.
“It’s a great product. It’s sold well. They’re trying to sell in high volume in Mexico, but it’s also being localized in Thailand,” Ford CEO Jim Farley said when asked by CNBC earlier this month about the BYD Shark. “If we want to be a global player in pickups, like we are now, we have to compete.”

2024 Ford Ranger XLT Sport

While Ford’s F-150 reigns supreme in the U.S., Toyota’s Hilux has been the top-selling truck outside of North America for many years.
When asked about Chinese competitors earlier this month, Toyota Chairman Akio Toyoda said the company “needs to be prepared to respond to the global needs of the global markets,” regardless of the competition.
“We try to focus on the needs of each individual market and try to be best in town. So that will be the strategy that we have,” Toyoda said during a media roundtable at the CES tech conference.
BYD reportedly exported more than more than 10,000 BYD Sharks in 2024. Such sales are expected to increase going forward, especially as the company prepares to expand production.
BYD has grown its share of vehicle exports from China from 2%, or less than 56,000 units, in 2022 to 8% in 2024, or 350,500 units, according to BofA Securities.
Exporting has continued to assist BYD in increasing its sales globally to approximately 4.3 million vehicles in 2024, up from roughly 3 million a year earlier. Wall Street analysts expect that to continue to grow this year to roughly 5.5 million this year, according to Goldman Sachs.

BYD Shark plug-in hybrid electric pickup truck
Michael Wayland / CNBC

“BYD is starting to tap into the overseas market with compelling (highly competitive, innovative) products, which we expect could become a second growth driver for the company, contributing 31% of incremental vehicle sales volume over 2022-2030E, Goldman Sachs analyst Tina Hou said in a Jan. 14 investor note.
The BYD Shark is expected to help the automaker grow its sales and profits. It’s a midsize pickup truck — which has a smaller market in the U.S. compared to globally — with a plug-in hybrid powertrain that combines electric vehicle components such as a battery and electric motors with a small 1.5-liter internal combustion engine.
The vehicle can operate as an all-electric vehicle or have the engine power its batteries and electric motors, with a range of more than 500 combined miles between the battery and engine, according to BYD.
The Shark starts at about 899,980 pesos ($44,000) in Mexico. That’s far more than BYD’s other models but still much cheaper than many hybrid or all-electric trucks in the U.S. It’s in line with pricing of midrange models of the Ford Ranger and Toyota Tacoma midsize pickup trucks in Mexico.

Benchmarking Ford, GM

Taking the BYD Shark for a spin on private property with a mix of smooth and broken pavement in Michigan, the pickup truck drives well. Its acceleration is quick, but not as fast as the Tesla Cybertruck or GM’s all-electric pickups. It’s quiet, but there’s definitely room for improvements to the ride and handling, which feel a bit less refined than current trucks in the U.S.
The overall build quality of the Shark is impressive, but there are quirky elements of the vehicle as well as some “shared” best practices with current pickups by Ford and GM, according to Woychowski.

The F-150 Lightning on display at the New York International Auto Show on March 28, 2024.
Danielle DeVries | CNBC

Some familiar practices and elements include the overall exterior design being similar to the F-150, including its lighting and a pullout tailgate step; the front seat interior design resembling Toyota; and certain production aspects of the vehicle being used from other trucks. Most notably, its frame — the backbone of the vehicle — is dipped in wax. That’s a process to reduce corrosion that GM has been doing for decades, according to Woychowski.
“You can tell where they benchmarked and whom,” Woychowski said while inspecting the vehicle’s underbody. “Ford back here, GM under there and Toyota over there.”
That’s not to say the vehicle isn’t unique. While Caresoft still needs to tear down the Shark to understand its build processes and parts better, the vehicle’s interior design and, most notably, its hybrid powertrain is unlike anything currently offered in the U.S.

Terry Woychowski, president of automotive at engineering consulting firm Caresoft Global, inside the company’s large teardown and benchmarking facility in Livonia, Michigan.
Caresoft Global

For example, some of the battery technologies are placed under the back seats, eliminating storage space, and there are bungee cords to hold up the vehicle’s back bench seat when it’s folded.
“This is actually quite poorly done,” Woychowski said regarding the back seat. “I would watch this space. I bet they fix this up quite nicely.”
Other not-so-easy to spot unusual elements include an over-engineered rear suspension with dual control arms (instead of one each); a considerably straight frame; an unnecessary amount of jack lifts under the vehicle for lifting it; and using hydraulic arms for the heavy tailgate, he said.
Woychowski said clients have taken particular interest in Chinese automakers, including BYD, because of their growth and quickness in developing new products and making improvements to existing models.
“It’s a credible truck,” Woychowski said about the Shark. “There’s some things they did very well. There’s some things that they can do to clean it up, but that’s not a hard job to do.”
— CNBC’s Michael Bloom contributed to this report. More

JetBlue is offering early retirement packages to pilots nearing mandatory retirement age.
Eligible pilots will be 59 years old on or before March 31, according to a pilot memo.

A passenger arrives at Ronald Reagan Washington National Airport on November 21, 2023 in Arlington, Virginia.
Alex Wong | Getty Images

JetBlue Airways is offering early retirement packages to some of its pilots, their labor union told members on Friday.
The carrier has been working to cut costs and raise up revenue with initiatives such as new first-class seats while dealing with a Pratt & Whitney engine recall that has grounded some of its airplanes.

The company has opened voluntary separation bids and they will close on Feb. 7, said the Air Line Pilots Association note, which was seen by CNBC.
JetBlue and the union agreed to pay pilots out for 55 hours of their hourly pay rate to their mandatory retirement day or 18 months from the separation agreement, whichever was less. As an example, the letter of agreement said an Airbus A320 captain, 12 years in and who turns 65 in December 2027 would receive $416,293.02, while an Embraer E190 captain with eight years of experience who turns 65 at the end of the year would get $160,858.91.
JetBlue, which reports quarterly results on Tuesday, didn’t immediately respond to a request for comment.
The letter of agreement between the company and union from earlier this week states eligible pilots will be 59 years old on or before March 31. The federally-mandated retirement age for U.S. commercial airline pilots is 65.

Read more CNBC airline news More

Target is rolling back its diversity, equity and inclusion programs, joining major companies like Walmart, Meta and McDonald’s.
In a memo sent to its employees, Target it will end its three-year DEI goals, stop reports to external groups like the Human Rights Campaign’s Corporate Equality Index and end a program focused on carrying more products from Black- or minority-owned businesses.
In prior years, Target had said the murder of George Floyd in the company’s hometown of Minneapolis motivated it to strengthen its DEI programs.

Customers exit a Target store on November 20, 2024 in Austin, Texas. 
Brandon Bell | Getty Images

Target on Friday said it’s rolling back diversity, equity and inclusion programs — including some that aim to make its workforce and merchandise better reflect its customers.
In a memo sent to its employees, the Minneapolis-based retailer said it will end its three-year DEI goals, stop reports to external diversity-focused groups like the Human Rights Campaign’s Corporate Equality Index and end a program focused on carrying more products from Black- or minority-owned businesses.

The memo was sent to staff Friday and viewed by CNBC. It was written by Kiera Fernandez, chief community impact and equity officer at Target.
“Many years of data, insights, listening and learning have been shaping this next chapter in our strategy,” she said in the memo. “And as a retailer that serves millions of consumers every day, we understand the importance of staying in step with the evolving external landscape, now and in the future – all in service of driving Target’s growth and winning together.”
A Target spokesperson said there are no job cuts as part of Friday’s DEI announcement.
With the move, the discounter joins a growing list of companies including Tractor Supply, Facebook’s parent Meta, Walmart and McDonald’s that have dropped DEI-related pledges and goals. Some of those companies faced pressure from conservative activists or cited the Supreme Court’s ruling blocking affirmative action at colleges — which may not compel corporations to take any action on the issue.
The company’s decision also follows President Donald Trump’s executive orders, made almost immediately after his Inauguration, to end the government’s DEI programs and put federal officials overseeing those initiatives on leave.

Not all companies have joined the trend. On Thursday, Costco said at its annual meeting that more than 98% of shareholders voted against a proposal to review risks of its DEI programs. Costco’s board of director had urged shareholders to vote it down.
Many corporations’ diversity commitments, including Target’s go back for years and were strengthened in the wake of the “Black Lives Matter” protests and the murder of George Floyd in 2020.
Four years ago, Target CEO Brian Cornell said the murder — which happened just a short distance from Target’s headquarters in its hometown — felt personal. He said it motivated him to step up Target’s diversity and equity efforts.
“That could have been one of my Target team members,” he said at the time, recounting his thoughts as he watched the video of Floyd taking his final breaths.
Target expanded its diversity goals at the time, saying it would increase representation of Black employees across its workforce by 20% over the next year. The company started a new program to help Black entrepreneurs develop, test and scale products to sell at mass retailers like Target. And it promised to spend more than $2 billion with Black-owned businesses by 2025, from construction companies that build or remodel stores to advertising firms that market its brand.
The company and its foundation also gave $10 million to support social justice groups, including the National Urban League and African American Leadership Forum.
On its website in recent years, Target has touted Cornell’s and the company’s “steadfast commitment to stand with Black families and fight against racism.” In other posts on its website, the company provided updates on its efforts to add more officers of color, reduce turnover of people of color, and increase promotions of women and minorities.
One post was titled “We Are Never Done,” and started off with a quote from Black poet and civil rights activist Maya Angelou.
Target dissolved the goals at a time when conservative politicians and activists have increasingly turned their focus on company efforts to be more inclusive.
Target had already felt the heat from conservative groups over some of its other longstanding initiatives. About two years ago, the retailer pulled items from its Pride Month collection after backlash and threats to employees about some merchandise it sold, such as “tuck-friendly” swimsuits for trans people.
Cornell said in 2023 that the backlash contributed to weaker quarterly sales for the company. He said, however, that it would continue to mark heritage months with merchandise collections, such as Black History Month and Pride Month.
Target’s employee base had grown more diverse in recent years.
About 43% of Target’s workforce was white, 31% was Hispanic/Latino, 15% was Black and 5% was Asian in the fiscal year that ended in early February 2024, according to the company’s most recent diversity report.
The company’s leadership team is less diverse than its overall workforce. Seventy-two percent of the leadership was white, followed by 11% Hispanic/Latino, 11% Asian and 6% Black.

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Universal garnered 10 Academy Award nominations for “Wicked,” a boon for marketing efforts for the second part of the duology, “Wicked: For Good.”
The film already has pent-up audience demand following a record-breaking box office run both domestically and globally.
The overall marketing plan for “Wicked: For Good” is expected to be similar to the playbook used for “Wicked,” with a few alterations to keep it fresh and avoid oversaturating audiences.

A still from the film “Wicked.”
Source: Universal Studios

Universal is hoping the excitement around “Wicked” can hang around — for good.
The movie studio faces a unique challenge: promote and release two build-on films just one year apart. Part one of the “Wicked” cinematic project dazzled at the box office, collecting more than $700 million in global ticket sales through Sunday. Not only did it have the highest opening of any theatrical Broadway adaptation, but it is also now the highest-grossing film based on a Broadway musical, according to data from Comscore.

The question for Universal ahead of the release of part two — “Wicked: For Good,” due out in November — is how to keep its biggest fans engaged without alienating its more casual audiences.
Marketing experts told CNBC that pent-up demand for the movie, combined with the first film’s success, makes promoting its follow-up much easier.
“[Generating] close to $500 million is an amazing feat for that film,” said Mike Polydoros, CEO at cinematic marketing agency PaperAirplane Media. “They have all these fans who have seen the movie over and over again and came to the sing-alongs. They’ve marked their calendars for the second part of the movie.
“So, the marketing of it is more about keeping that group engaged and keeping them [informed] … and giving them just enough nuggets without oversaturating,” Polydoros said.
Universal already has one thing working in its favor: When it launches the marketing campaign for “Wicked: For Good,” it will be able to add best picture Academy Award nominee to its franchise promotions.

On Thursday, the studio snared 10 nominations for “Wicked,” including for lead actress, supporting actress, film editing, sound, score, production design, costume, visual effects and makeup and hairstyling.

A yellow brick road map

The overall marketing plan for “Wicked: For Good” is expected to be similar to the playbook used for “Wicked” with a few alterations to keep it fresh and avoid oversaturating audiences.
Universal jumpstarted the first film’s advertising strategy with a teaser trailer that ran during the Super Bowl in February. The nearly 90-second spot gave fans their first glimpse of Oz, as well as Cynthia Erivo’s triumphant battle cry from “Defying Gravity,” the closing number of the first act of the Broadway musical.
“There wasn’t a debate,” Michael Moses, Universal’s chief marketing officer, told Variety back in November. “When you’re working on materials, you always have those kinds of conversations. But if there’s a single sound associated with ‘Wicked,’ it’s certainly that end to ‘Defying Gravity.’ … Ending that spot with it felt assured and inescapably the right call.”
The Super Bowl ad spot was followed up by another teaser trailer at the annual CinemaCon in Las Vegas in April and a quick appearance from Elphaba (Erivo) and Glinda (Ariana Grande). The co-stars attended the Met Gala in New York City a month later, walking the red carpet together and closing out the evening with a surprise performance. Then, in July, the pair were spotted at the Paris Olympics, which was televised by NBC.

Ariana Grande and Cynthia Erivo perform onstage during the 2024 Met Gala celebrating “Sleeping Beauties: Reawakening Fashion” at the Metropolitan Museum of Art in New York City on May 6, 2024.
Kevin Mazur/mg24 | Getty Images Entertainment | Getty Images

“Our filmmakers and our talent were very accessible throughout this process,” said Dave O’Connor, president of franchise management and brand strategy at Universal. “Many of them participated in various parts of our campaign, from the straight marketing that we did for the film, but also with our partnerships and some of the unique opportunities that our company brought to the table. So I think that was also something that felt organic and authentic to the process.”
Universal peppered audiences with different iterations of the film’s trailer and teaser videos throughout the summer, leading into its big marketing push — more than 400 corporate brand partnerships. Retail stores were flooded with pink and green merchandise, from apparel, accessories, footwear, beauty and costumes to home decor, toys and even one-of-a-kind cars. The collections ranged in price, allowing consumers to choose from affordable and luxury options to show off their love of all things “Wicked.”
“I get asked a lot, ‘What is the state of exhibition?'” said Brandon Jones, president and chief marketing officer of FilmFrog. “And I think that ‘Wicked’ is the perfect example of this. The state of exhibition is, and has always been, to influence culture.”
With nine months before the release of “Wicked: For Good,” Universal will look to repeat the success of the first film’s marketing campaign, but with some variation.
“I think our intent would not be to replicate, but certainly to evolve and to continue to do incredible work and find the right balance of partnerships that can innovate and really match the heart of the next film,” O’Connor said.

A ‘Wicked’ cinematic experience

Like “Wicked,” “Wicked: For Good” arrives the weekend before Thanksgiving. This gives the film breathing room for a solid opening weekend before Disney drops its traditional animated release the day before the holiday. This year, it will be “Zootopia 2.”
“Wicked: For Good” will then be able to capitalize on school vacations and family gatherings to fuel a strong second week of ticket sales — the same strategy employed for “Wicked” amid the surprise release of Disney’s “Moana 2” on the Thanksgiving holiday last year.
Cinemas will also look to capitalize on the prior success of “Wicked” when promoting “Wicked: For Good.” While Universal will provide creative assets such as trailers, standees and other digital and physical materials, theaters big and small will look for ways to lure audiences to their locations with special collectible popcorn buckets and unique food and drink options.
“Until, really, the last [decade], exhibitors just relied on studios to do most of the marketing and that really started to change around 2016 or 2017,” said Jones. “Because the relationship between the film and the moviegoer is actually managed by exhibitors. Because you don’t buy your ticket for ‘Wicked’ from Universal. You buy it from your local movie theater.”

A poster for the movie “Wicked” outside the Vue Cinema in Leicester Square in London, U.K., on Dec. 4, 2024.
Mike Kemp | In Pictures | Getty Images

Jones noted that the quick release of “Wicked: For Good,” almost exactly one year after “Wicked,” allows movie theaters to engage with guests more acutely.
Using ticket sales data, cinemas can market on a one-to-one basis during the 12-month period between releases to not only promote the second film, but also entice moviegoers to return for other in-theater programming that is similar to “Wicked.”
“It’s one thing to market the movie, it’s another thing to market the experience of going to the movies,” Jones added.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Wicked” and owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032. More

Strong demand and limited capacity growth are set to push airfares higher.
Aircraft delays have added to growth limitations.
Some carriers have pulled back from the oversupplied domestic market.

Travelers walk through O’Hare International Airport in Chicago on Dec. 20, 2024.
Kamil Krzaczynski | AFP | Getty Images

Higher airfare is in store this year as strong demand, even during the dead of winter, and limited capacity growth prompt airlines to flex their pricing power.
Fare-tracking platform Hopper this month said domestic “good deal” U.S. airfare in January is at $304, up 12% over last year, with more domestic flights going for more than they did last year through at least June.

Late deliveries of new aircraft from Boeing and Airbus, air traffic constraints and financial pressures have limited airlines’ ability to expand flights, which has pushed fares higher. Spirit Airlines, which filed for Chapter 11 bankruptcy protection in November, was the most dramatic case and has slashed its flights to cut costs.
American Airlines on Thursday forecast a jump in revenue of as much as 5% in the first quarter over the same three months of 2024, while capacity will be flat or even down as much as 2%.
“We do expect airfare to come up,” American Airlines Chief Financial Officer Devon May said in an interview. The airline forecast a wider-than-expected-loss for the first quarter, however, disappointing investors as it expects an increase in costs, such as higher wages from new labor contracts signed last year.
Startup carrier Breeze Airways on Thursday reported its first quarterly operating profit, for the fourth quarter, and founder David Neeleman, who is also the founder of JetBlue Airways, said conservative industry growth is boding well for future results.
“The tide is lifting a lot of boats,” he said in an interview. “We’re exceeding our targets in revenue. Momentum we saw in the fourth quarter is continuing into the first.”

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Alaska Airlines late Wednesday said it expects revenue growth for the first quarter to rise by “high single digit” percentage points with capacity up no more than 3.5%.
United Airlines, which had a first-quarter earnings forecast that far surpassed analysts’ expectations, shared a similar sentiment, particularly for domestic trips.

“The domestic pricing environment is improving as underperforming airlines remove unprofitable capacity at an increasing rate and business traffic growth accelerates,” United’s Chief Commercial Officer Andrew Nocella said on the company’s earnings call on Wednesday. “Industry fare sales are less prevalent with lower discount rates as airlines are prioritizing profitability.”
Delta Air Lines, which kicked off airline earnings season earlier this month, forecast revenue growth of 7% to 9% for the first quarter, with unit sales growing across its globe-spanning network.
Off-season travel, particularly to Europe, has been a big bright spot for large U.S. carriers. Delta’s president, Glen Hauenstein, for example, said on the Jan. 10 earnings call that trans-Atlantic unit revenue should be up mid-single digits with demand “benefiting from strong U.S. point of sale and an extension of the season with unprecedented off-peak results.”
Carriers are also seeing more customers buy up for roomier — and pricier — seats.
JetBlue Airways and Southwest Airlines are scheduled to report fourth-quarter results and provide their 2025 outlooks next week. Both carriers are trying to ramp up revenue with more new premium seating and by debuting other amenities. More