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Southwest said it removed the Boeing 737 Max 7 from its capacity plans in 2024.
The smallest model in the 737 Max family hasn’t yet been certified by the FAA.
Southwest is the latest airline to rethink its fleet plans because of certification delays.

Southwest Airlines ranked as the second-best domestic airline, according to Bounce’s 2023 Airline Index.
Aaronp/bauer-griffin | Gc Images | Getty Images

Southwest Airlines has taken the Boeing 737 Max 7 out of its fleet plans as regulators haven’t yet certified the smallest model of the manufacturer’s best-selling plane.
Southwest became the latest of the major airlines this week to rethink its fleet plans because of certification delays at Boeing.

Earlier this week, United Airlines said it was removing the the 737 Max 10, the largest model of the Max family, from its internal fleet plans after delays with certification.
Scrutiny on Boeing has mounted in recent weeks after a door panel blew out midflight from a 737 Max 9 that was operated by Alaska Airlines on Jan. 5, prompting the FAA to ground that model. The FAA on Wednesday cleared inspection instructions to allow the planes to return to service as early as this week.
Southwest said in a quarterly earnings and outlook report on Thursday that it expects to receive 79 aircraft this year and that it was removing the Max 7 from its plans “due to Boeing’s continued supply chain challenges and the current status of the -7 certification” down from a contracted 85 aircraft.
FAA Administrator Mike Whitaker told CNBC earlier this week that even before the Alaska Airlines incident, the agency had concluded it needed a more “hands-on approach” with the certification of the Max 7 and Max 10 aircraft. He said the agency has no timelines for those aircraft certifications.
“As I prepared for this job and went through the nomination and confirmation and really did a deep dive into what happened with the Max originally, I think the message was extra vigilance,” said Whitaker, who is about three months into the agency’s top job. “So we had already teed up greater visibility in our front office on what these certification programs are, just to have a better understanding of what’s coming. I think that higher level of vigilance is going to remain.” More

A Hamptons estate that once listed for $150 million before falling into bankruptcy was sold at auction Wednesday for $88.5 million.
The property, once the most expensive listing the Hamptons and famed for an appearance in the Woody Allen film “Interiors,” had been on and off the market since 2016.
The compound includes 23 bedrooms, two pools, a sunken tennis court, a home theater, spa, sauna and two gyms.

A Hamptons estate that once listed for $150 million before falling into bankruptcy was sold at auction Wednesday for $88.5 million.
The four-acre estate in Southampton, New York, known as La Dune, was sold by Concierge Auctions at a starting bid of $66 million. The property was sold in two parts — one house sold for $40.5 million and the other for $38.5 million. The buyer premium brings the total sale to $88.5 million.

The property, once the most expensive listing the Hamptons and famed for an appearance in the Woody Allen film “Interiors,” had been on and off the market since 2016. It was most recently listed in 2022 at $150 million.
Last year, the two properties on the compound were put into Chapter 11 bankruptcy after a foreclosure judgement.

The Atlantic Ocean offers a stunning backdrop for a pair of mansions for sale on Gin Lane in Southampton.
Liam Gifkins

The previous owner, Louise Blouin, purchased the property in the 1990s for $13.5 million. She spent millions building a second mansion on the property in 2001, adding to the existing mansion, which was built in the 1890s.
The compound includes 23 bedrooms, two pools, a sunken tennis court, a home theater, spa, sauna and two gyms. Located on coveted Gin Lane, the property has 400 feet of oceanfront and lush landscaping.
Blouin, a Canadian art magazine publisher, owned Art+Auction, Gallery Guide, Modern Painters and other publications before the business started to falter. The loans on the La Dune property reached $40 million, according to media reports, and the estate was placed into Chapter 11 bankruptcy last year to avoid a foreclosure auction.

The pair of beachfront homes with two pools and a tennis court in the foreground of the photo are the La Dune estate.
Liam Gifkins

Real estate sales slowed in the Hamptons last year, largely due to a lack of inventory, according to industry analysts. Yet prices and demand at the high end of the market remain strong.
Two properties sold in the Hamptons last year for over $50 million each, including a 6.7-acre compound in East Hampton that went for $91.5 million, more than double its sale price three years earlier.
La Dune is among the most expensive homes sold at auction. In 2022, Concierge sold an estate in the Los Angeles area at auction for $141 million.
Concierge auctioned La Dune in partnership with Harald Grant of Sotheby’s International Realty, Tim Davis of The Corcoran Group, and Cody Vichinsky, president and founding partner of Bespoke Real Estate. More

Skydance Media is interested in leading a deal to take all of Paramount Global private, according to people familiar with the matter.
Skydance hasn’t reached out for additional outside financing and may not pursue a deal, the people said.
Any deal for Paramount Global would conditionally require approval from Shari Redstone, whose National Amusements owns 77% of Paramount’s voting shares.

Shari Redstone, president of National Amusements and Vice Chairman, CBS and Viacom speaks at the WSJTECH live conference in Laguna Beach, California, U.S. October 21, 2019. 
Mike Blake | Reuters

David Ellison’s Skydance Media and its financial backers are exploring a deal to take private all of Paramount Global, people familiar with the matter told CNBC.
Skydance, the film and TV studio run by Ellison, has exchanged preliminary information with Paramount, said the people, who asked not to be named because the deal talks are private. Full due diligence hasn’t started, the people said.

Skydance has been working with private equity firms RedBird Capital Partners and KKR & Co. on a deal to buy National Amusements, the holding company owned by Shari Redstone. It controls 77% of Paramount’s voting stock.
But that deal is contingent on merging Skydance with Paramount, and the likely structure for a merger would be a complete take private of the larger media company, said the people.
Redstone is considering selling as the media landscape shifts away from traditional TV toward streaming. While Paramount Global has run a profitable business for decades, it is smaller than Netflix, Google’s YouTube, Apple, Amazon, and other larger streamers that have bigger balance sheets to afford sports and entertainment content.
No acquisition is assured, and talks could fall apart.
It is unclear if Redstone would demand a different premium for selling National Amusements than the remaining shareholders of Paramount Global would obtain.

Skydance would need additional capital to acquire Paramount, which has a market capitalization of $8.2 billion and about $15 billion of debt. Some of that funding could come from Skydance’s private equity partners and Larry Ellison, the billionaire co-founder of Oracle and David Ellison’s father. Skydance hasn’t reached out for outside financing yet, as it hasn’t decided if it wants to move forward with a deal, said the people.
Skydance isn’t interested in a deal where it would only acquire National Amusements but not all of Paramount, said the people. While such a deal would give Skydance control of Paramount, it wouldn’t solve Paramount’s problems as a publicly traded company, which include running the growing but money-losing Paramount+ streaming service, and operating declining linear cable assets such as MTV, VH1, Comedy Central and Nickelodeon.
Spokespeople for RedBird, Skydance, Paramount Global and National Amusements declined to comment.
Warner Bros. Discovery has also had preliminary discussions about acquiring Paramount Global, according to people familiar with the matter. If Redstone sells to Skydance, one motivating factor would be her fear that Warner Bros. Discovery would prefer to merge with Comcast’s NBCUniversal, one of the people said.
Puck first reported Skydance’s interest in acquiring National Amusements. The Wall Street Journal reported last week that Skydance was interested in a two-part deal that would include merging Skydance and National Amusements. Bloomberg first reported on the initial exchange of company information.
Disclosure: Comcast NBCUniversal is the parent company of CNBC.
WATCH: Mad Money on Netflix’s earnings surprise More

The Federal Aviation Administration said it would halt any Boeing 737 Max production expansion.
The FAA also cleared 737 Max 9 inspection instructions, paving the way for the planes to be ungrounded in the coming days.
The FAA grounded the jets after a door panel blew out on a Alaska Airlines flight earlier this month.

Alaska Airlines N704AL is seen grounded in a hangar at Portland International Airport in Portland, Oregon, on Jan. 9, 2024.
Mathieu Lewis-rolland | Getty Images

The Federal Aviation Administration on Wednesday halted Boeing’s planned expansion of its 737 Max aircraft production, but it cleared a path for the manufacturer’s Max 9 to return to service in the coming days, nearly three weeks after a door plug blew out during an Alaska Airlines flight.
“Let me be clear: This won’t be back to business as usual for Boeing,” said FAA Administrator Mike Whitaker in a statement Wednesday. “We will not agree to any request from Boeing for an expansion in production or approve additional production lines for the 737 MAX until we are satisfied that the quality control issues uncovered during this process are resolved.”

Boeing has been scrambling to ramp up output of its best-selling aircraft as airlines clamor for new jets in the wake of the Covid-19 pandemic.
“We will continue to cooperate fully and transparently with the FAA and follow their direction as we take action to strengthen safety and quality at Boeing,” the company said in a statement.
Boeing shares were down roughly 1% in after-hours trading after the FAA’s announcement.
The FAA on Wednesday also said it approved inspection instructions for the Max 9 aircraft. Airlines had been awaiting that approval to review their fleets to return those planes to service.
The FAA grounded the 737 Max 9 planes after a fuselage panel blew out as Flight 1282 climbed out of Portland, Oregon, on Jan. 5. The grounding forced United Airlines and Alaska Airlines, the two U.S. airlines with the planes, to cancel hundreds of flights.

Alaska said it would resume 737 Max 9 flights on Friday “with more planes added every day as inspections are completed and each aircraft is deemed airworthy.”
United plans to return the planes to service beginning on Sunday, according to a message to employees from Chief Operating Officer Toby Enqvist.
“In the days ahead, our teams will continue to proceed in a way that is thorough and puts safety and compliance first,” Enqvist said in the internal message.
The CEOs of both carriers have expressed frustration with Boeing after the issue, the most serious in a recent spate of apparent manufacturing flaws on Boeing aircraft. The aircraft on the Alaska flight was delivered late last year.
The FAA is investigating Boeing’s production lines after the Alaska flight. Whitaker told CNBC on Tuesday that the FAA will keep “boots on the ground” at Boeing’s factory until the agency is convinced quality assurance systems are working. He said the agency is switching to a “direct inspection” approach with Boeing.Don’t miss these stories from CNBC PRO: More

Tim Cook, boss of Apple, is having a rough start to 2024. In the past month his company has faced an unusual barrage of unpleasantness. A patent dispute forced it to remove features from two of its smartwatches. It found out that America’s Department of Justice (DoJ) would be suing it shortly over antitrust transgressions. It reported that it was losing market share in smartphones in China, its second-biggest market. Adding insult to injury, a few Wall Street analysts said something that would have been unthinkable until recently—that Apple’s shares were overvalued. On January 11th Microsoft, a rival tech titan, duly dethroned the iPhone-maker, temporarily, as the world’s most valuable company.The run of bad news may continue on February 1st, when Apple reports its latest quarterly earnings. Equity researchers estimate that its revenues barely grew in the last quarter of 2023, if at all. Then, on February 2nd, Apple will be tested once again. It will start shipping the Vision Pro, an augmented-reality (AR) headset that it has been working on—and talking up—for a few years. The high-end gadget, which will sell for $3,499, represents a big bet on a new technology “platform” that, Apple may be hoping, could one day replace the smartphone as the core of consumers’ digital experience—and the iPhone as the source of its maker’s riches. Early indications hint that Apple should worry about the device’s prospects. Netflix, Spotify and YouTube have announced that they will not make their popular streaming apps work on the headset. None said why. But it could be because they all compete with Apple’s own streaming services, and developing an AR app is likely to be costly.Mr Cook can brush off some of these worries. Despite everything, Apple’s share price has not moved meaningfully in January. A few days after being overtaken by Microsoft, it reclaimed its heavyweight stockmarket title—and its $3trn valuation. And if the Vision Pro’s launch is a flop, the short-term effect on Apple’s revenues will be nugatory, given the headset’s limited initial production.Nevertheless, Apple’s boss would be unwise to dismiss the new year’s niggles. For they point to larger challenges for the company. These fall into three broad categories: antitrust and legal issues; slowing iPhone sales; and growing geopolitical tensions. None of these is existential right now. But each carries with it a risk of causing a big upset. Could they cost Apple its position as the world’s most valuable company for longer than a week or so?image: The EconomistThough Apple’s market value has been among the world’s top ten since 2010, until a few years ago it traded at a low valuation relative to profits. It was thought of as a maker of hardware, a business that is more difficult to scale than software. For much of the 2010s its price-to-earnings (p/e) ratio, which captures investor’s expectations of future profits, was below 20, comparable to that of HPE or Lenovo, boring computer-makers with low growth and tight margins. It was also below the average for big American companies in the S&P 500 index (see chart 1).image: The EconomistThis started to change around 2019, notes Toni Sacconaghi of Bernstein, a broker. Revenue from Apple’s “services” business, which provides software to its devices’ 1bn or so users, began to grow. The two biggest parts of this category are an advertising business, which Bernstein puts at $24bn a year (including around $20bn a year from Google for making the search engine the default option on Apple’s devices), and the App Store (another $24bn). Services also includes Apple Music and Apple TV, its streaming offerings, as well as a fast-growing payments business. All told, revenues from services amount to $85bn a year, or a fifth of total sales. In 2016 they contributed just $24bn, or a tenth of overall revenues (see chart 2).This helped convince investors that Apple was no longer a stodgy hardware provider. It was a software platform, where new paying users could be added at little extra cost. That meant higher profits—the gross-profit margin for Apple’s services arm is 71%, compared with 37% for devices—and more recurring revenue. As services became a bigger part of the business, Apple’s overall profitability swelled, too, from 38% in 2018 to 44% last year. That was also aided by the fact it was selling more high-end, high-margin iPhone models. All of this helped lift Apple’s p/e ratio to around 30, comfortably above the S&P 500 average and higher than that of Alphabet (Google’s parent company), though still below Microsoft’s (38) and Amazon’s (72).One set of risks that could undo Apple’s p/e progress has to do with its legal headaches. Some, such as the patent problem, look like minor threats. In October the International Trade Commission ruled that Apple infringed patents related to an oxygen-measuring sensor that were owned by Masimo, a medical-device maker. Apple stopped selling the models which contained the offending technology. But on January 18th it started to sell them again, minus the disputed sensor.Apple’s bigger legal problems have to do with its services business. In March new rules will come into force in the EU, a huge market, that force Apple to allow apps to be installed on its devices without going through its App Store. That makes it harder for it to charge the 30% fee it levies on most in-app purchases (Apple has filed a lawsuit against the rules).In America, the DoJ is reportedly looking into whether Apple’s smartwatch works better with the iPhone than with other smartphones and why its messaging service is not available on rival devices. If, in a separate case against Google, the courts agree with the DoJ that its default-search deals with device-makers are anticompetitive, Apple could be deprived of roughly $20bn a year in virtually free money. As a result of a lawsuit filed in 2021 by Epic Games, a video-game developer, Apple has already had to change the way the App Store charges developers to sell apps there.The orb is in your courtApple is not defenceless in the legal battles. It quickly found a workaround to the Epic-induced changes to its App Store policy that lets it keep collecting hefty fees. A final ruling in the DoJ’s case against Google is probably years away. The same is true of its expected case against Apple. As with many antitrust cases against big tech, investors seem nonplussed.The company is more vulnerable to the second area of concern—its slowing core business. According to a poll of analysts, Apple sold about 220m iPhones last year, barely more than the 217m it shifted in 2017. In 2024 the number might not be much higher. For a while, Apple could offset the slowing volumes with higher prices. But annual revenue growth has slipped to 1% in the past three years, down from an average of 9% between 2012 and 2019.Some rivals are trying to eat into Apple’s market share in high-end devices by exploiting consumers’ appetite for ChatGPT-like “generative” artificial intelligence (AI). Samsung, a South Korean tech titan, said that it would launch a new range of AI-powered phones by the end of January. Flashy features will include real-time voice translation and turbocharged photo- and video-editing. The devices may be on sale eight months before Apple’s next iPhones. Apple, by contrast, has said little about its plans for the hottest thing in tech since, well, the iPhone. “We’re investing quite a bit,” Mr Cook noted cryptically on the company’s most recent earnings call.Apple is also being given a run for its money in China, the source of 17% of its overall revenues. According to Jefferies, an investment bank, Apple’s share of smartphones in the country declined last year. Meanwhile that of Huawei, a domestic tech champion, grew by around six percentage points. In August Huawei stunned industry-watchers—and America’s government, which has for years barred sales of American technology to the firm on national-security grounds—by launching the first 5G device containing advanced chips that were Chinese-made rather than imported. Patriotic shoppers in China snapped up the phone and, for good measure, other Huawei devices.When it comes to AI, worries about Apple’s progress may be overstated. Erik Woodring of Morgan Stanley, an investment bank, points to signs that the company is indeed investing quite a bit. In October the firm’s boffins and researchers at Columbia University jointly released an open-source AI model called Ferret. Two months later Apple published a paper about how such models could run on smartphones, which are much less powerful than the data centres typically used for the purpose. In January a South Korean tech blogger reported that an update to Apple’s operating system possibly as early as June would include AI enhancements for Siri, Apple’s robot assistant. Rumours swirl that Apple is planning to use generative AI in its own search engine.China represents a bigger threat—and not just because of a revitalised Huawei. Apple’s plans for future growth depend in large part on success in emerging markets, including the biggest one of all. Mr Cook kicked off Apple’s past three earnings calls by talking about the company’s sales outside the rich world. China was doubtless on his mind.Apple is also exposed to China risk through its supply chain. Despite much-publicised efforts to move some production to India, around 90% of iPhones are still manufactured in Chinese factories. So are most Mac computers and iPads. Mr Sacconaghi of Bernstein says that Apple will be hugely exposed to a serious geopolitical escalation, such as a conflict over Taiwan, for at least the next five years.Events short of a Chinese invasion of Taiwan could also hurt the company. The return of Donald Trump to the White House, a serious possibility now that he has all but wrapped up the Republican nomination, would almost certainly raise barriers to trade and heighten Sino-American tensions. Even if Joe Biden defeats Mr Trump in the presidential election in November, he is hardly a China dove. The Chinese government is beginning to hit back against American sanctions. It has already banned products made by Micron, a chipmaker from Idaho, from some infrastructure projects. In September reports surfaced of a ban on Apple products among government officials. Although the authorities later denied the claims, the episode put investors on edge.Any Chinese action that hurts Apple in China would hurt China, too. Apple says 3m people work in its supply chain. Many of those workers are Chinese. One analyst likens Apple’s position vis-à-vis China’s government to “mutually assured destruction”. The same could be said of the commercial balance between America and China. Try explaining that to Mr Trump. ■ More

The United Auto Workers union is endorsing President Joe Biden for reelection.
UAW President Shawn Fain said in May the union would withhold a reelection endorsement for Biden until the UAW’s concerns about the auto industry’s transition to all-electric vehicles were addressed.
In September Biden became the first sitting U.S. president to join an active UAW picket line, rallying alongside workers as part of roughly six weeks of strikes.

President Joe Biden celebrates with United Auto Workers President Shawn Fain after Fain and the UAW endorsed Biden for president at a Community Action Program legislative conference in Washington, Jan. 24, 2024.
Leah Millis | Reuters

The United Auto Workers union is endorsing President Joe Biden for reelection this year, UAW President Shawn Fain announced Wednesday at a union conference in Washington, D.C.
“Today, I’m proud to stand up here with your International Executive Board and announce that the UAW is endorsing Joe Biden for President of the United States,” Fain said. “We will reelect Joe Biden.”

The union’s endorsement of a Democratic presidential candidate shouldn’t be surprising; however, it comes after months of apparent resistance by Fain, who said politicians, including Biden, would have to earn UAW endorsements.
“Look, I kept my commitment to be the most pro-union president ever,” Biden said following the endorsement announcement. “Let me just say I’m honored to have your back and you have mine. That’s the deal.”
It also comes on the heels of the New Hampshire primary, in which former President Donald Trump defeated former South Carolina Gov. Nikki Haley.
“This November, we can stand up and elect someone who stands with us and supports our cause, or we can elect someone who will divide us and fight us every step of the way,” Fain said before the endorsement. “That’s what this choice is about.”
The endorsement is crucial for any candidate looking to secure the battleground state of Michigan, because of the UAW’s potential influence there. The Detroit-based union has more than 400,000 active members and more than 580,000 retired members, many of which reside in the state.

In endorsing Biden, Fain had some strong criticism for his likely Republican opponent, at one point setting up a slide of “what Trump said and what actions he took to help the American auto workers” during his first term. The slide was blank.
“He did nothing, not a damn thing because he doesn’t care about the American worker,” Fain said. “Donald Trump stands against everything we stand for as a union, as a society.”
Biden threw his own punches at Trump, whom he expects to face in a general election rematch in November.
“During the Trump administration, a lot of administrations before that, what did they do? So many, so many people around America, lost their sense of pride,” he said. “Corporate America found the cheapest labor in the world and they sent the jobs to those laborers and sent the product back to us. But not anymore.”
The Trump campaign did not immediately respond to requests for comment.

From the front lines

Fain in May said the union would withhold a reelection endorsement for Biden until the UAW’s concerns about the auto industry’s transition to all-electric vehicles were addressed.
That message was heard loud and clear. In September Biden became the first sitting U.S. president to join an active UAW picket line, rallying alongside workers outside a General Motors parts facility. The visit came a week after Fain invited supporters — “from our friends and families all the way up to the president of the United States” — to join union picket lines against GM, Ford Motor and Chrysler parent Stellantis.
Fain, on the picket line with Biden at GM’s Willow Run Redistribution Center, called the moment “historic.”
The official reelection endorsement comes months after the union led strikes against the Detroit automakers after the sides failed to reach new contracts covering about 150,000 autoworkers.
The strikes, which lasted roughly six weeks, ended after each of the companies reached tentative agreements with the union in late October.
Fain has touted the agreements as assisting in the union’s “just transition” to electric vehicles, noting that workers at many battery cell plants would be included under the UAW’s national negotiations.

Former U.S. President Donald Trump speaks during an autoworker-focused campaign rally at auto supplier Drake Enterprises, on Sept. 27, 2023 in Clinton Township, Michigan.
Michael Wayland / CNBC

Prior UAW leaders endorsed Biden for election against President Donald Trump in 2020. However, Trump notably gained the support of many blue-collar autoworkers during his presidential campaigns.
Michigan voters helped both Biden and Trump to win the White House during the past two presidential elections.
Trump, the front-runner among Republicans in the 2024 presidential race, hosted a rally at a Michigan plant of a nonunion supplier the week of Biden’s picket-line visit.
Trump’s visit and rally, which largely focused on the auto industry, was criticized by the union and Fain, who has repeatedly said he believes another Trump presidency would be a “disaster.”
During the event, Trump several times asked UAW members to encourage union leaders to endorse him. More

Boeing CEO Dave Calhoun sought out meetings with several U.S. senators this week after the midflight blowout of a 737 Max 9 door plug.
The FAA grounded the planes after the Jan. 5 Alaska Airlines accident.
Calhoun said he was meeting with lawmakers to “answer all their questions, because they have a lot of them.”

Alaska Airlines N704AL, a 737 Max 9, which made an emergency landing at Portland International Airport on January 5 is parked at a maintenance hanger in Portland, Oregon on January 23, 2024. 
Patrick T. Fallon | AFP | Getty Images

Boeing CEO Dave Calhoun met with several U.S. senators Wednesday on Capitol Hill as scrutiny on the company’s leaders intensifies over a blown door plug on one of the company’s 737 Max 9 planes.
“I’m here today in the spirit of transparency … [and to] answer all their questions, because they have a lot of them,” Calhoun told reporters.

The meetings were organized at Calhoun’s request, according to people familiar with the matter.
The Federal Aviation Administration grounded the planes after a door plug blew out Jan. 5 as Alaska Airlines Flight 1282, a nearly new 737 Max 9, was climbing out of Portland, Oregon, exposing passengers to a force so violent it sucked out headrests and seatbacks.
The FAA is still reviewing data from 40 early inspections of the planes before it can approve safety review instructions that would clear the path for the planes to return to service.
“It’s been difficult to predict [how long that process will take], so we’ve sort of stopped trying,” FAA Administrator Mike Whitaker told CNBC on Tuesday. “But as soon as we get it sorted out it’ll be up again.”
Sen. Dan Sullivan, a Republican from Alaska, told reporters after his meeting with Calhoun that the Senate is looking into addressing airline safety in the FAA reauthorization bill.

“Aviation safety can’t be reactive. It has to be proactive. And that is why we need to get this darn FAA reauthorization done,” Sullivan said.
Earlier Wednesday The Seattle Times reported that the fuselage panel that blew out during the Alaska Airlines flight, manufactured by Spirit AeroSystems, was removed for repair and then improperly reinstalled by Boeing’s mechanics, not Spirit’s.

Boeing CEO Dave Calhoun speaks with reporters on Capitol Hill in Washington, DC, on January 24, 2024, before meeting with a group of senators.
Jim Watson | AFP | Getty Images

Calhoun and Boeing declined to comment on that report Wednesday, citing an ongoing federal investigation.
“As the air safety agency responsible for investigating this accident, only the U.S. National Transportation Safety Board can release information about the investigation,” Boeing said in a statement about the Seattle Times report. “As a party to this investigation, Boeing is not able to comment and will refer you to the NTSB for any information.”
The NTSB didn’t immediately respond to a request for comment.
Spirit AeroSystems shares were up 6% midday Wednesday, boosted by that report. The stock is down more than 10% since the Jan. 5 Alaska Airlines incident. Boeing’s stock was trading about 2% higher Wednesday but has shed more than 10% since the incident. More

Tyson Foods has switched from CVS’ Caremark as its pharmacy benefit manager, in an effort to lower the amount it spends on providing drug benefits to its 140,000 employees
The food giant chose Rightway, a PBM startup which works on a fee basis and guarantees employers it can save them 15% on pharmacy benefit costs
Small PBMs like Rightway have mostly worked with small and medium-sized employers.
Tyson will become one of the first Fortune 100 companies to work with an upstart PBM, at a time when the large pharmacy benefit mangers are under pressure for their business models.

Tyson Foods Inc., sign at Tyson headquarters in Springdale, Ark.
April L. Brown | AP

Tyson Foods will become one of the first Fortune 100 companies to stop using the nation’s traditional large pharmacy benefits managers, as it looks to cut spending on high-cost drugs.   
After putting its benefits contract up for bid, Tyson dropped CVS Health’s Caremark and chose PBM startup Rightway to manage drug benefits for its 140,000 employees starting this year, the companies said Wednesday. Rightway guarantees it can save employers 15% on pharmacy costs by using a transparent model where it passes drug discounts to employers and plan members, while also providing concierge care to help employees find lower-cost alternatives like generics and biosimilars.

Tyson’s decision adds to an upheaval in the industry, as startups promising lower costs and transparency challenge the largest benefit managers, and pushed them to change their own business models. Tyson made the decision as it saw pharmacy costs soar.
“We were going anywhere between 12% to 14% increases for pharmacy — and on a $200 million spend that’s quite a bit. We found that the specialty (drug) component of our trends … were picking up a lot of the increase year over year,” said Renu Chhabra, Tyson vice president and head of global benefits.
When she tried to get answers on what was driving those trends from the company’s old pharmacy benefit manger, or PBM, Chhabra says she couldn’t get the kind of data she wanted.
“I wanted to look at Humira, and I wanted to see what the acquisition cost was. And then I wanted to understand what Tyson was paying for that; it was very difficult to get to those numbers,” she said. “Part of this was to really get a partner who can help us organize the information, make sure we understand how to manage specialty, and really looking at how to get the best net cost.”
A CVS spokesman told CNBC that while the company will no longer handle Tyson’s overall pharmacy benefits contract, it will continue to provide specialty drug pharmacy services in conjunction with Rightway.

“Our specialty pharmacy services support members managing high cost, complex conditions and typically represent over 50 percent of pharmacy benefit spend in the marketplace,” said CVS Caremark spokesman Phil Blando.
“Historically, we have provided Tyson Foods with significant transparency, including point of sale rebates for its members, a custom retail pharmacy network and unique utilization management strategies that resulted in flat trend over the last several years. Our most recent comprehensive bid would have exceeded the 15 percent savings rate claimed by a competitor and reported by a news outlet,” Blando said.

More CNBC health coverage

Choosing a transparent PBM startup

Most large employers work with the three biggest PBM players: CVS’ Caremark, Cigna’s Evernorth and UnitedHealth Group’s OptumRx. By the end of 2022, those big three PBMs controlled nearly 80% of the pharmacy benefits market in the U.S., according to a Health Industries Research Center report.
The large players contend that they have the scale to save employers on drugs costs, by negotiating big rebates from drugmakers. But they have come under increasing scrutiny from Congress and regulators at the Federal Trade Commission over the lack of transparency into the way they negotiate those discounts, and how much of those savings they actually pass on to employers and patients.
Smaller PBMs like Rightway have marketed themselves as more transparent alternatives, without the conflicts of interest that the more vertically integrated players have.
“The traditional PBM model has operated on a taxi-meter type approach. The more drugs that your members are on, the higher cost drugs that your members are receiving, the more money PBMs have made or are making,” said Rightway co-founder and CEO Jordan Feldman. “We wanted to fundamentally re-architect what it meant to be a PBM … we don’t trap margin because we don’t retain rebates.”

New competition in the industry

Until now, the upstarts challenging the big PBMs have only won over small and medium-sized companies. Tyson is Rightway’s first employer with more than 100,000 workers; its previous biggest client had 10,000 employees.
University of Southern California economist Karen Van Nuys said if more large employers turn to alternatives PBM players, it could improve competition and bring costs down.
“If they’re presented with a broader variety of transparent options where they can actually kind of see and compare … across different PBM providers what it’s going to cost them — I think that enables all of them to make better decisions about which provider to use,” said Van Nuys, a senior fellow at the USC Schaeffer Center for Health Policy and Economics.
But Lawton Robert Burns, a professor at the University of Pennsylvania’s Wharton School, is not convinced that the movement toward greater price transparency will be a magic bullet that brings down drug prices.
“They’ve undertaken a lot of competitive strategies to try to deal with this. So, they’re responsive,” Burns said. “Whether or not that’s going to make a huge difference, I don’t know. All I know is that price transparency, in general, just hasn’t solved many of our problems.”
At Tyson, the biggest health problem it hopes to tackle in the year ahead with its new PBM is diabetes management, and finding the right balance when it comes to coverage for GLP-1, or glucagon-like peptide-1, weight loss drugs like Wegovy and Zepbound, which carry a list price of more than $1,000 per month.  
“In June we’ll make those decisions on how we want to treat that, but we have to balance cost with access to care,” said Chhabra. “This is one of the biggest reasons why we also chose Rightway — because we have a lot more flexibility … going forward to make those joint decisions.”
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