Air France crash probe blames pilots, equipment

The final report on the crash of Air France Flight 447— which killed 228 people when it went down off the coast of Brazil more than three years ago — puts the blame on the aircraft’s pilots and equipment failure.

The Paris-bound Airbus A330-203 went into a stall and crashed into the Atlantic Ocean during a thunderstorm in the early morning of June 1, 2009, more than two hours after it took off from Rio de Janeiro.

All of the 216 passengers, including Guelph, Ont., native Brad Clemes, and 12 crew members died. It was the worst accident in Air France’s history.

The report says a co-pilot pulled the nose of the aircraft up, even though it was already in a stall, because of faulty data from flight sensors.

The crew never understood they had lost control of the aircraft, said Alain Bouillard, chief investigator at the French civil aviation safety authority, Bureau d’Enquêtes et d’Analyses.

“The crew never understood that they were stalling,” he said.

In response, Air France said the pilots on the flight “acted in line with the information provided by the cockpit instruments and systems. …. The reading of the various data did not enable them to apply the appropriate action.”

The BEA is recommending better pilot training and stricter plane certification rules as part of its report.

Airbus said in a statement that it is working to improve the flight sensors.

Investigators had released three interim reports since the crash, but had not drawn a conclusion on what caused the crash.

Its third report, released in July 2011, said the crew did not appear to know the plane was in a stall moments before it crashed.

A stall warning sounded numerous times, and once for a full 54 seconds, but the crew made no reference to it in cockpit exchanges before the jet crashed, according to the BEA.


FINAL MOMENTS
Chronology: The mysterious crash of Air France Flight 447
Tracking the plane’s deadly descent into the Atlantic Ocean

There was no evidence of task-sharing during the crisis by the two co-pilots in the cockpit at the time, according to the BEA’s 2011 findings. The captain was on a rest break when the warnings began.

The BEA says it’s unclear why the co-pilot at the controls, flying manually maintained a nose-up input — contrary to the usual procedure to come out of an aerodynamic stall. Normally, the nose should be pointed slightly downward to regain lift in such a stall, which is often caused because the plane is travelling too slowly.

The crew also did not inform passengers that there was anything wrong before the jet plunged into the sea.

The same report also said external speed sensors, called Pitot tubes, were obstructed by ice crystals, producing irregular speed readings on the plane.

Air France replaced the speed monitors on all its Airbus A330 and A340 aircraft following the crash.

A separate judicial report, which is due to be presented to the victims’ families next week, has concluded that pilot error and malfunctioning speed sensors played a role in the crash, according to Agence France-Presse.

Plane plunged for 3½ minutes

The investigation into the accident was helped after the plane’s flight data and cockpit voice recorder were recovered from the ocean in May 2011, following a long and costly search operation.

The passenger jet last made contact with air traffic controllers at 1:35 a.m. on June 1, 2009, approximately 600 kilometres from the northeastern coast of Brazil, according to the BEA’s third interim report.

The captain took a scheduled break around 2 a.m., leaving the plane in the hands of two co-pilots.

Ten minutes later, the Pitot tubes became obstructed causing speed indicators to become unreliable and several automatic flight systems disconnected.

The captain re-entered the cockpit shortly thereafter but the plane’s stall continued.

The plane plunged for a total 3½ minutes before slamming into the Atlantic Ocean at 2:14 a.m.

According to the BEA, many of the passengers may have been asleep or nodding off as the plane fell, and likely didn’t realize what was happening.

With files from The Associated Press

Stephen Harper says no cabinet shuffle until mid-term

Prime Minister Stephen Harper says he doesn’t foresee any major changes in his government until midway through its majority mandate.

Speaking on an Alberta radio show Thursday, Harper ruled out both a major cabinet shuffle and prorogation of the House of Commons until then.

Prorogation is when the legislature “re-sets” itself with a new throne speech and new bills.

“To be honest, I thought about doing that, but some time ago I made a decision that I probably wouldn’t do it. I didn’t see any reason to do it right now. We’ve still got a number of pieces of legislation we do want to pass,” Harper told host Dave Rutherford, whose show is broadcast provincewide on CHQR and CHED.

“I think what I am more likely to do … is probably in mid-term — we will probably have a new session mid-term.”

Harper said the performance of cabinet ministers will be assessed halfway through his government’s mandate and that’s when any big changes will be made.

“We’ll take a look at how everybody is performing and make some major changes at that point,” he said. “But I think between now and then let’s keep everybody focused on the job we got elected to do.”

Harper’s Conservatives won a majority in May 2011 and the next election is tentatively set for October 2015. If those timelines hold, the halfway point would be August of next year.

© The Canadian Press, 2012
The Canadian Press

Bank of England votes to inject extra £50bn into economy but holds interest rates at 0.5 per cent

The UK economy – threatened by the deepening crisis on the continent – received a £50 billion injection from the Bank as the country struggles to emerge from recession.

In Frankfurt, the European Central Bank (ECB) cut its key interest rate to a record low of 0.75% amid signs the 17-nation currency bloc contracted in the second quarter.

The action comes after a period of escalating turmoil in the eurozone, which has seen borrowing costs in countries such as Spain and Italy climb higher.

But economists questioned how much further central banks can go to help.

Tim Ohlenburg, senior economist at the Centre for Economics and Business Research, said: “Central bankers need to reach deep into their toolbox to find ways of propping up prices by somehow stimulating economic growth.

“With quantitative easing bringing little effect and interest rates near rock bottom, it’s likely that new tools will be devised in due course.”

The measures provided an initial boost to world markets but the rally was shortlived. Both the pound and the euro weakened.

The Bank – which also held interest rates at 0.5% – said its decision came as the eurozone crisis weighed on confidence and hit some of the UK’s main export markets.

The UK’s economy has barely grown for a year and a half and it warned the weak outlook meant “the margin of economic slack is now likely to be greater and more persistent”.

It said inflation, which fell to 2.8% in May, was in danger of slipping below its 2% target and its stimulus measures should help sustain a gradual strengthening in output.

The gloomy assessment came amid signs the economy deteriorated in June as industry surveys showed that the construction sector went into reverse and the powerhouse services sector suffered its worst performance for eight months.

Most economists think gross domestic product – a broad measure for the total economy – fell slightly in the second quarter of 2012, following declines of 0.4% and 0.3% in the previous two quarters.

But while business body the CBI said today’s QE may boost confidence, the stimulus package was criticised because it will hurt pensioners by pushing down annuity rates and may also push up inflation.

David Kern, chief economist at the British Chambers of Commerce, said the effect of QE will be “marginal” and “could be counter-productive”.

He said: “It may limit the decline in inflation in the long term, at a time when we need falling inflation to underpin real incomes and boost demand in the UK economy.”

He called on the Treasury to set up a bank specifically to lend to businesses, and said new schemes to encourage banks to lend money to businesses must be implemented quickly and forcefully.

Howard Archer, chief economist at IHS Global Insight, said there might still be more money printing to come, even though he thinks the economy will return to growth in the third quarter of this year.

He said: “We certainly would not rule out further QE in the fourth quarter.

“The economy is likely to remain fragile and prone to relapses, especially if there is not any sustained marked easing in the eurozone’s problems.

“So it is very possible that the Bank of England will decide that more support is warranted for the economy, particularly if inflation heads down further.”

Some economists think the Bank’s QE programme could eventually be expanded to £500 billion.

Meanwhile, the ECB’s rate cut came amid signs that even the powerhouse German economy contracted in the second quarter as the debt crisis drags on.

European leaders last week agreed on new steps to try to get to grips with the crisis, including allowing banks to get direct bail-outs from central rescue funds.

The cut in the refinancing rate could mean lower borrowing costs for banks, businesses and consumers.

The rate is what banks pay the ECB for loans and through them influences many other rates in the economy. In theory, cheap borrowing makes it easier for businesses and people to decide to spend, but some economists say it may have little effect since interest rates are already very low.

China’s central bank, meanwhile, cut interest rates for the second time in a month to shore up its economy, the second-largest in the world, as growth is also slowed by developments in the eurozone.

The Bank’s quantitative easing programme now stands at £375 billion.

PA

European Central Bank cuts key rate to record low

The UK economy – threatened by the deepening crisis on the continent – received a £50 billion injection from the Bank as the country struggles to emerge from recession.

In Frankfurt, the European Central Bank (ECB) cut its key interest rate to a record low of 0.75% amid signs the 17-nation currency bloc contracted in the second quarter.

The action comes after a period of escalating turmoil in the eurozone, which has seen borrowing costs in countries such as Spain and Italy climb higher.

But economists questioned how much further central banks can go to help.

Tim Ohlenburg, senior economist at the Centre for Economics and Business Research, said: “Central bankers need to reach deep into their toolbox to find ways of propping up prices by somehow stimulating economic growth.

“With quantitative easing bringing little effect and interest rates near rock bottom, it’s likely that new tools will be devised in due course.”

The measures provided an initial boost to world markets but the rally was shortlived. Both the pound and the euro weakened.

The Bank – which also held interest rates at 0.5% – said its decision came as the eurozone crisis weighed on confidence and hit some of the UK’s main export markets.

The UK’s economy has barely grown for a year and a half and it warned the weak outlook meant “the margin of economic slack is now likely to be greater and more persistent”.

It said inflation, which fell to 2.8% in May, was in danger of slipping below its 2% target and its stimulus measures should help sustain a gradual strengthening in output.

The gloomy assessment came amid signs the economy deteriorated in June as industry surveys showed that the construction sector went into reverse and the powerhouse services sector suffered its worst performance for eight months.

Most economists think gross domestic product – a broad measure for the total economy – fell slightly in the second quarter of 2012, following declines of 0.4% and 0.3% in the previous two quarters.

But while business body the CBI said today’s QE may boost confidence, the stimulus package was criticised because it will hurt pensioners by pushing down annuity rates and may also push up inflation.

David Kern, chief economist at the British Chambers of Commerce, said the effect of QE will be “marginal” and “could be counter-productive”.

He said: “It may limit the decline in inflation in the long term, at a time when we need falling inflation to underpin real incomes and boost demand in the UK economy.”

He called on the Treasury to set up a bank specifically to lend to businesses, and said new schemes to encourage banks to lend money to businesses must be implemented quickly and forcefully.

Howard Archer, chief economist at IHS Global Insight, said there might still be more money printing to come, even though he thinks the economy will return to growth in the third quarter of this year.

He said: “We certainly would not rule out further QE in the fourth quarter.

“The economy is likely to remain fragile and prone to relapses, especially if there is not any sustained marked easing in the eurozone’s problems.

“So it is very possible that the Bank of England will decide that more support is warranted for the economy, particularly if inflation heads down further.”

Some economists think the Bank’s QE programme could eventually be expanded to £500 billion.

Meanwhile, the ECB’s rate cut came amid signs that even the powerhouse German economy contracted in the second quarter as the debt crisis drags on.

European leaders last week agreed on new steps to try to get to grips with the crisis, including allowing banks to get direct bail-outs from central rescue funds.

The cut in the refinancing rate could mean lower borrowing costs for banks, businesses and consumers.

The rate is what banks pay the ECB for loans and through them influences many other rates in the economy. In theory, cheap borrowing makes it easier for businesses and people to decide to spend, but some economists say it may have little effect since interest rates are already very low.

China’s central bank, meanwhile, cut interest rates for the second time in a month to shore up its economy, the second-largest in the world, as growth is also slowed by developments in the eurozone.

The Bank’s quantitative easing programme now stands at £375 billion.

PA

Bank of England and ECB act to boost economies

The UK economy – threatened by the deepening crisis on the continent – received a £50 billion injection from the Bank as the country struggles to emerge from recession.

In Frankfurt, the European Central Bank (ECB) cut its key interest rate to a record low of 0.75% amid signs the 17-nation currency bloc contracted in the second quarter.

The action comes after a period of escalating turmoil in the eurozone, which has seen borrowing costs in countries such as Spain and Italy climb higher.

But economists questioned how much further central banks can go to help.

Tim Ohlenburg, senior economist at the Centre for Economics and Business Research, said: “Central bankers need to reach deep into their toolbox to find ways of propping up prices by somehow stimulating economic growth.

“With quantitative easing bringing little effect and interest rates near rock bottom, it’s likely that new tools will be devised in due course.”

The measures provided an initial boost to world markets but the rally was shortlived. Both the pound and the euro weakened.

The Bank – which also held interest rates at 0.5% – said its decision came as the eurozone crisis weighed on confidence and hit some of the UK’s main export markets.

The UK’s economy has barely grown for a year and a half and it warned the weak outlook meant “the margin of economic slack is now likely to be greater and more persistent”.

It said inflation, which fell to 2.8% in May, was in danger of slipping below its 2% target and its stimulus measures should help sustain a gradual strengthening in output.

The gloomy assessment came amid signs the economy deteriorated in June as industry surveys showed that the construction sector went into reverse and the powerhouse services sector suffered its worst performance for eight months.

Most economists think gross domestic product – a broad measure for the total economy – fell slightly in the second quarter of 2012, following declines of 0.4% and 0.3% in the previous two quarters.

But while business body the CBI said today’s QE may boost confidence, the stimulus package was criticised because it will hurt pensioners by pushing down annuity rates and may also push up inflation.

David Kern, chief economist at the British Chambers of Commerce, said the effect of QE will be “marginal” and “could be counter-productive”.

He said: “It may limit the decline in inflation in the long term, at a time when we need falling inflation to underpin real incomes and boost demand in the UK economy.”

He called on the Treasury to set up a bank specifically to lend to businesses, and said new schemes to encourage banks to lend money to businesses must be implemented quickly and forcefully.

Howard Archer, chief economist at IHS Global Insight, said there might still be more money printing to come, even though he thinks the economy will return to growth in the third quarter of this year.

He said: “We certainly would not rule out further QE in the fourth quarter.

“The economy is likely to remain fragile and prone to relapses, especially if there is not any sustained marked easing in the eurozone’s problems.

“So it is very possible that the Bank of England will decide that more support is warranted for the economy, particularly if inflation heads down further.”

Some economists think the Bank’s QE programme could eventually be expanded to £500 billion.

Meanwhile, the ECB’s rate cut came amid signs that even the powerhouse German economy contracted in the second quarter as the debt crisis drags on.

European leaders last week agreed on new steps to try to get to grips with the crisis, including allowing banks to get direct bail-outs from central rescue funds.

The cut in the refinancing rate could mean lower borrowing costs for banks, businesses and consumers.

The rate is what banks pay the ECB for loans and through them influences many other rates in the economy. In theory, cheap borrowing makes it easier for businesses and people to decide to spend, but some economists say it may have little effect since interest rates are already very low.

China’s central bank, meanwhile, cut interest rates for the second time in a month to shore up its economy, the second-largest in the world, as growth is also slowed by developments in the eurozone.

The Bank’s quantitative easing programme now stands at £375 billion.

PA

Eurozone exit plan wins Wolfson Economics Prize

The economic consultancy, founded by Mr Bootle, was awarded the £250,000 Wolfson prize for its blueprint showing how Greece and other troubled eurozone nations could exit the single currency with the minimum of economic disruption and also, in the process, lay the foundations for future growth.

Capital Economics recommended that the key officials of a nation planning to exit should meet in secret one month before the departure is announced to make preparations. They should inform their eurozone partners and international bodies like the IMF no sooner than three days before. Then they should re-introduce a new currency overnight, impose border controls and announce their intention to restructure national debts.

Mr Bootle said that, if executed correctly, the pain of exit would relatively soon be replaced by a return to growth, something that would encourage other distressed states still in the currency zone to exit too. “The biggest danger of contagion will be if Greece makes a success of leaving the union” said Mr Bootle.

Many economists have argued that any nation that crashed out of the eurozone would face a collapse in living standards and financial chaos. But Mr Bootle insisted these problems could be mitigated. “Overall, our analysis has revealed a series of very tricky issues which any exiting country would need to face, but all of these difficulties can be overcome” he said.

The competition to design a practical exit strategy for eurozone states was launched last November by Lord Wolfson, the chief executive of Next and a prominent Conservative supporter. It attracted more than 400 entrants from around the world. The judges said that the Capital Economic plan was the “most credible solution”.

Other plans which made the shortlist along with Capital Economics were submitted by Jens Nordvig and Nick Firoozye from Nomura Securities, Neil Record from Record Currency Management, Jonathan Tepper from Variant Perception and Cathy Dobbs, a private investor.

12 airlines agree to scrap surprise surcharges

Under a peace deal announced by the Office of Fair Trading today, the carriers will incorporate debit card surcharges into advertised prices rather than introducing them at the end of the booking process.

Surcharges for credit cards – which cost more to process – will still be allowed, but the airlines have promised to make those more transparent.

The airlines – Aer Lingus, BMI Baby, Eastern Airways, easyJet, Flybe, German Wings, Jet2, Lufthansa, Ryanair, Thomas Cook, Thomson and Wizz Air – are likely to raise their ‘headline’ fares to make up the lost revenue.

Most have already changed their pricing, advertising and websites; the others will change advertising this month and complete the changes over coming months.

Welcoming the deal, the Office of Fair Trading said that customers should not have to pay fees for using a debit card which it described as the “online equivalent of cash.”

Clive Maxwell, chief executive, said: “It is important that the cost presented when they search for a flight is realistic and that they are not surprised by extra charges.”

The OFT began investigating the debit card fees last March following a super-complaint from the consumer group Which? and had warned airlines to scrap the fees – or face court action.

Mr Maxwell said: “We made it clear from the start that we would use all of our enforcement powers, including court action if necessary, but are pleased to have reached agreement with the airlines before court proceedings were required.”

The fees are a costly hidden extra: Ryanair currently charges a £6 ‘administration fee’ for debit cards, adding £48 to a holiday for a family of four.

Sarah Brooks, director of financial services at Consumer Focus said: “Nothing is more frustrating for consumers than seeing a good online deal disappear on the final screen before booking.”

Over half of 4,500 people worldwide who had purchased an airline ticket online within the last 12 months told a recent survey by the card processing company WorldPay that they did not think surcharges were made clear enough by airlines, and 38 per cent expressed frustration at paying for using debit cards. The UK was the country where consumers were mostly likely to be sprung with last minute charges (41 per cent), ahead of Finland and Brazil.

Phil McGriskin, WorldPay’s chief product officer, said: “Customers understand that purchasing an airline ticket will involve associated taxes and charges but what really aggrieves them is a lack of transparency about what airlines are charging and why. It’s a positive step forward that airlines are pledging to be upfront about these costs.”

Peter Vicary-Smith, the chief executive of Which? – whose campaign was supported by 50,000 people – said it was important that credit card charges – which will remain – were clearly displayed throughout the booking process.

Last Christmas the Government promised to ban excessive surcharges for debit and credit charges by all travel companies by the end of this year.

CEO of Hastie MidEast flees UAE over bounced cheques

The regional CEO of Australian engineering firm Hastie Group – which went bust in May – has fled the UAE after bouncing two cheques worth around $700,000, it was reported on Wednesday.

Dubai-based executive Gavin Appleby and former human resources manager Gary Allen have returned to Australia after a lack of company funds caused a series of cheques to bounce, which is a criminal offence in the UAE.

“Basically, the bottom line for me is that I found out (on June 1) that there were still four cheques in the market with my signature on. These were signed last year [while] I was employed by Hastie Group Middle East for workers’ accommodation and the head office in the UAE.

“I am also now aware that one of those cheques has bounced and officials have turned up at the Hastie UAE office yesterday,” he was quoted as saying in a report by the Australian newspaper on Wednesday.


“Mr Appleby said he hoped to clear his name in the UAE, saying he understands the government takes a case to Interpol if it can’t find action against an individual within six months,” the report added.

Appleby left his role with Hastie in January, but he claimed his name remained on a number of cheques, which made him personally liable.

Hastie, which has 7,000 employees in Australia and overseas, provides refrigeration and air conditioning services for the building industry and worked on projects in the UAE, including Abu Dhabi’s Dalma Mall and Dubai’s JAL Towers.

Hastie posted a loss of $145m in the six months to December and earlier this year it reported a $19.5m “accounting irregularity”, saying that an initial investigation showed an employee had falsified accounts to meet profit forecasts.

According to documents published in May by Australia’s ABC news network, senior executives wired AED11m ($11.29m) funds back to Sydney days before the company formally went into administration, leaving up to 1,500 workers in the UAE out of pocket.

Three executives then left the country and returned to Australia, the report added.

ABC claimed the transfer was ordered by Hastie’s head office in Sydney and came after executives had failed to negotiate a restructuring deal with banks

While no unlawful activity has been suggested, ABC said the transfer of funds and the exodus of management has “left Hastie’s head office in Dubai with little or no money to cover the entitlements of around 1,500 workers, some of whom are expatriate Australians.”

Former Hastie Group chief executive Bill Wild said a lot of the blame for the company going bust can be attributed to a series of bad acquisitions in the Middle East. Wild highlighted the purchase mechanical and electrical contractor Rotary Humm, whose losses resulted in a massive writedown for Hastie.

”They bought companies that were worth nothing, it was a disaster,” he told ABC News. ”But the companies weren’t worth two bob. They started hiding losses and burying stuff in the balance sheet,” he added.

Wild reported that issues with Rotary Humm’s projects in Dubai and Abu Dhabi also led problems and resulted in a writedown of US$50m November.

According to reports, if administrators do not reach an agreement with creditors, they will embark on steps to wind up the business.

The UK and Ireland subsidiaries of Hastie Group are separate corporate entities, and have not gone into administration.

Saudia catering unit to list on July 9

Saudi Airlines Catering Co will commence trading on the kingdom’s stock exchange on July 9, a bourse statement said, after completing a 30-percent initial public offering which was more than twice covered by investors.

The catering unit of Saudi Arabian Airlines raised 1.3 billion riyals ($346.7 million) from the share sale, which was sold to the public between June 18-24 following a bookbuilding period involving institutional investors.

The sale of shares in the firm, delayed since late-2010 due to issues securing regulatory approval, had been keenly awaited by investors as it is the first part of the Saudi flag carrier, one of the kingdom’s largest state-owned entities, to be listed on the stock market.

Saudi Arabian Airlines started a process of privatisation in 2006 by splitting into six units: catering, cargo, maintenance, airlines, flight academy and ground handling. It plans to privatise each unit and offer shares in them to the public.


The ground services unit is expected to be the next to offer shares to the public, according to bankers in the kingdom.

In total, 24.6 million shares priced at 54 riyals were offered in Saudi Airlines Catering Co, with half of each being allocated to retail and institutional investors.

The retail tranche was 2.2-times covered, while the institutional piece saw subscription worth twice the allocation, according to figures from the lead manager, Saudi Fransi Capital – the investment banking arm of Banque Saudi Fransi.

Saudi Hollandi Capital, a unit of Saudi Hollandi Bank, underwrote the offering alongside Saudi Fransi.

Shares in Saudi Airlines Catering Co will be classified under the Agriculture and Food Industries section of the Tadawul index.

GCC urged to allocate more funds to setting up customs union

A GCC committee has recommended finance ministers allocate more funds to the development of clearing house operations in the six member states, in a bid to speed up the process towards setting up a GCC-wide customs union, it was announced on Wednesday.

Up until the end of 2011, around $2bn was spent on developing clearing house operations in the Gulf, but a special clearing house committee of the recently established GCC Customs Union has recommended more funds be allocated to improve and streamline procedures.

The comments came following a three-day meeting in Riyadh, which was held to discuss ways to “remove impediments in the way of some member states that are experiencing difficulties in running their clearing houses’ operations with aplomb,” the GCC Secretariat said in a statement.

“The committee also agreed on allocating to each member state the right to impose a certain quota of tariffs on foreign imports that have been transported from one member state to another,” the Kuwait News Agency reported.


The meeting in the Saudi capital was part of a step towards setting up a common customs union across the six GCC states, in a bit to improve the flow of goods and services.

The amount of red tape involved in the movement of goods among the GCC member states has long been cited as one of the main obstacles to trade in the region.

“There is still too much red tape. Too much paperwork… [the] challenge of moving goods is very frustrating,” Mohammed Alshaya, executive chairman of Kuwait-based MH Alshaya Co, which manages over 55 brands, including HM, Debenhams and Starbucks, told Arabian Business recently.