Air France-KLM is creating a more “competitive” long-haul airline to win back customers from Gulf carriers.
Air France’s new boss, Jean-Marc Janaillac, unveiled the plan, saying the firm is “battling on all fronts”.
The new brand does not have a name yet, but Air France plans for it to offer economy and business travel on new and reopened routes.
To compete with lower-cost rivals, its pilots and cabin crew will be employed differently to the main company.
“The status quo is not an option. We must launch a new dynamic to return to a leadership position in our markets,” Mr Janaillac said.
Image copyrightGETTY IMAGESImage captionJean-Marc Janaillac was appointed Air France chief executive in May
The plan is a sign that Air France’s new boss is determined to win back market share after years of painful job losses and clashes with trade unions.
But the SNPNC cabin crew union expressed concern that the new airline’s staff would not have the same work benefits and that it would end up being “low cost” for its workers.
Air France plans for the new airline to have 10 long haul planes by 2020.
It will “constitute the group’s response to the Gulf State airlines which are developing at low production costs”, the firm said.
Federal Reserve keeps rates on hold ahead of election
The US Federal Reserve has kept interest rates on hold but kept the door open for a rise in December.
The central bank’s interest rate-setting committee had not been expected to take any action less than a week before the presidential election on Tuesday.
However, the Fed said the case for a rate rise “continued to strengthen”.
That means it could take action next month when the committee gathers for its final meeting of 2016.
“The committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives,” the Fed statement said.
Markets were little changed following the announcement, with most analysts expecting the bank to raise borrowing costs at the December meeting.
Federal Reserve chair Janet Yellen is due to hold a news conference after the meeting concludes on 14 December. That will allow her to explain any action the bank takes and perhaps give guidance on how many further rises can be expected next year.
Analysis: Michelle Fleury, New York business correspondent
America’s central bank looks poised to raise interest rates in December.
Only a nasty economic surprise would stop it this time – so what might one look like?
In the statement from the Federal Reserve, the one word missing from the list of risks facing the US economy was “election”.
With just days to go, the Fed was never likely to stray into politics. But Fed chair Janet Yellen has already been criticised by Donald Trump for playing politics by keeping interest rates lows to help President Obama and his Democratic rival Hillary Clinton look good.
And yet various indications in the US have made clear that investors are worried.
The so-called “fear index”, the Vix, has been at its highest level this week since the Brexit vote in late June following recent developments involving the FBI and Hillary Clinton’s emails.
Clearly a Trump victory is something that could shift the trajectory of financial markets – and possibly the course of US monetary policy.
Image copyrightGETTY IMAGES
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: “Only a shock – the election of Trump, or an external geopolitical or market event – can now prevent a December hike.”
Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, agreed that December was “the most likely scenario” for a rise in US interest rates.
Two committee members called for an immediate rate rise, but that was one fewer than had done so at the last meeting in September.
The Fed policymakers said the US economy had gained steam, with job creation remaining solid, and were more confident that inflation was moving towards the bank’s 2% target.
Inflation stood at 1.5% in September, according to official figures.
The Fed last raised rates, to a range between 0.25% to 0.5%, last December – its first move in almost a decade following the financial crisis.
Oil giant BP has reported a near 50% fall in third-quarter profits from last year as the sector continues to struggle with low prices.
The company made $933m (£763m) on an underlying replacement cost basis, compared with $1.8bn a year earlier.
BP blamed falling oil prices for its fall, saying it was affected by a “weaker price and margin environment”.
Rival oil company Royal Dutch Shell also warned over oil prices, although its profits rose by 18% from last year.
The company reported better-than-expected third-quarter profits of $2.8bn (£2.2bn),.
‘On track’
BP’s chief financial officer Brian Gilvary said: “We continue to make good progress in adapting to the challenging price and margin environment.
“We remain on track to rebalance organic cash flows next year at $50 to $55 a barrel, underpinned by continued strong operating reliability and momentum in resetting costs and capital spending.
“At the same time, we are investing in the projects, businesses and options to deliver growth in the years ahead.”
BP also cut its investment plans for this year. It now expects to spend $16bn on capital expenditure, compared with a previous prediction of $17-19bn. For 2017, it is forecasting investment of $15-17bn.
‘Significant challenge’
Shell chief executive Ben van Beurden said: “Shell delivered better results this quarter, reflecting strong operational and cost performance.”
He added: “But lower oil prices continue to be a significant challenge across the business and the outlook remains uncertain.”
Earlier this year, Shell completed its purchase of BG Group for $50bn. It is now aiming to cut costs and sell $30bn of assets in order to reduce debts.
Image copyrightPA
Last week, Shell said it had sold Canadian oil and gas assets for $1bn as part of its asset-sale programme.
“Our investment plans and portfolio actions are focused firmly on reshaping Shell into a world-class investment case at all points in the oil-price cycle,” said Mr van Beurden.
“We are making good progress towards this aim in spite of current challenging market conditions.”
Shares in Shell rose by nearly 4% in London as investors welcomed the results.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Despite the respite provided by an improved oil price, conditions remain tough in the oil and gas sector.
“Nonetheless, the return to profit in the upstream division is symbolically important as the group heaves itself out of the well it found itself in after the oil price collapsed.
“Unless the oil price stages a miraculous recovery, there’s a long way to go before Shell returns to rude health; nonetheless the group is making progress in climbing the oil pole.”
‘Long-term view’
David Hunter, an energy analyst at Schneider Electric, told BBC Radio 4’s Today programme that he believed the two companies were banking on a recovery in oil prices to boost their future profits.
“They’re a big contributor in FTSE 100 dividend payouts and have continued to maintain those levels despite the fall in oil prices,” he said.
“The long-term bet is in the oil price recovering to maintain their ability to pay these dividends.
“There has been generally some momentum building in the oil price relatively recently. Obviously in January it bottomed out at $27 and it’s now flirting with the $50 mark – a little bit above and below in recent weeks – so that’s a recovery of sorts.”
The oil price peaked at about $115 a barrel in the summer of 2014, but then fell sharply due to a combination of increased supply and slowing demand.
Last month, news that the Opec oil producers’ cartel had agreed a limit on production sent the oil price to its highest in a year. However, doubts over whether the group will be able to deliver production cuts have seen crude prices slip recently.
An investigation by the BBC and The Guardian has found new evidence that suggests Rolls-Royce was involved in corruption.
Panorama understands that the company made secret payments of around £10m to an unregistered Indian agent.
And the programme has found evidence of a suspicious payment of cash that may have helped Rolls-Royce win a major contract for engines on Hawk aircraft.
Rolls-Royce says it has zero tolerance of bribery and corruption.
It is illegal to pay secret middlemen to win defence contracts in India, but Panorama’s investigation suggests Rolls-Royce paid the money to companies linked to arms dealer Sudhir Choudhrie.
Mr Choudhrie is also on an Indian government blacklist of people suspected of “corrupt or irregular practice”‘.
The Undesirable Contact Men list warns Indian civil servants and government ministers to take extra care when dealing with such “unscrupulous persons”.
Mr Choudhrie’s lawyers told the BBC he “has never paid bribes to government officials or acted as an illegal middleman in defence deals”. They said he has “no knowledge of the contents” of the list.
Mr Choudhrie – who is a billionaire and lives in London – has been pictured collecting a business award from Prime Minister Theresa May.
Image copyrightALPHA PRESSImage captionSudhir Choudhrie is on an Indian government blacklist
He is an adviser on India to the Liberal Democrat leader Tim Farron and his family has donated more than £1.6m to the party.
The joint investigation has also found evidence of a suspicious payment that was made in cash.
It involves Mr Choudhrie’s son, Bhanu, who accompanied an arms executive called Peter Ginger on a trip to Switzerland in 2007.
During the trip, Mr Ginger made a cash payment amounting to hundreds of thousands of pounds into a secret bank account.
The account was opened in the name of “Portsmouth” and bank documents seen by Panorama later showed a balance of more than 1m Swiss francs.
Mr Ginger was a key negotiator on the sale of Hawk aircraft to the Indian government. All of the planes had Rolls-Royce engines and the deal was worth around £400m to the company.
Bhanu Choudhrie’s lawyers told the BBC he has never been paid to secure deals for Rolls-Royce in India, including the sale of Hawk jets.
Image captionIndia bought 123 Hawk jets with Rolls-Royce engines
“Mr Choudhrie has never paid any bribe to Mr Ginger or anyone else,” his lawyers said. “Mr Choudhrie has no knowledge of what bank accounts have been set up or operated by Mr Ginger or what sums (if any) he has deposited in them in cash.”
Mr Ginger told the BBC he has never acted for Rolls-Royce or had any financial dealings with them. He says he has “never taken nor paid any bribes”.
Rolls-Royce says it is “fully co-operating with the authorities” and “cannot comment on ongoing investigations”.
Rolls-Royce, which employs 23,000 people in the UK, makes engines for commercial and military aircraft, along with power systems used by ships, oil rigs and trains, but no longer makes cars. That part of the business was sold to BMW nearly 20 years ago.
Panorama has also been told by a Brazilian prosecutor that Rolls-Royce is co-operating with an investigation looking at bribery allegations in Brazil.
It is alleged Rolls-Royce paid bribes to win a $100m contract to supply power systems to the Brazilian state oil company Petrobras.
The arms dealer welcomed by the establishment
Billionaire Sudhir Choudhrie has been welcomed by the British establishment.
His family’s Stellar International Art Foundation owns more than 600 rare works of art by artists including Picasso, Renoir and Andy Warhol.
He has been photographed receiving a business award from Theresa May and his family has given more than £1.6m to the Liberal Democrats. The 67-year-old is now an adviser to Lib Dem party leader Tim Farron.
Mr Choudhrie and his family run a global business empire that includes hotels, healthcare and aviation.
Pedro Barusco was one of the Petrobras executives who allegedly received illegal payments. In official documents seen by the BBC, he told prosecutors the Rolls-Royce payments were split up and that he received at least $200,000.
Rolls-Royce says it has completed a thorough review of its anti-corruption policies, including the use of advisers and intermediaries.
The company said: “We have made it clear that Rolls-Royce will not tolerate business misconduct or inappropriate behaviour of any kind and in recent years we have intensified our focus on ethics and compliance, which are foundations of our culture.’
The BBC understands there are more than 30 investigators working on a UK Serious Fraud Office investigation. Rolls-Royce could face large fines and employees – past or present – could face jail sentences if found guilty of any wrongdoing.
There is a separate investigation into the company in the United States.
Image copyrightGETTY IMAGES
VIYAPARIKA LOKAYA 