By David Shepardson and Jamie Freed
WASHINGTON (Reuters) – Damage to a fan blade on an engine that failed on a United Airlines Boeing 777 flight is consistent with metal fatigue, based on a preliminary assessment, the chairman of the U.S. air accident investigator said on Monday.
The Pratt & Whitney PW4000 engine failed on Saturday with a “loud bang” four minutes after takeoff from Denver, National Transportation Safety Board (NTSB) Chairman Robert Sumwalt told reporters following an initial analysis of the flight data recorder and cockpit voice recorder.
There was minor damage to the aircraft body but no structural damage, he said.
He said it remained unclear whether the incident is consistent with an engine failure on a different Hawaii-bound United flight in February 2018 that was attributed to a fatigue fracture in a fan blade.
“What is important that we really truly understand the facts, circumstances and conditions around this particular event before we can compare it to any other event,” Sumwalt said.
The engine that failed on the 26-year-old Boeing Co 777 and shed parts over a Denver suburb was a PW4000 used on 128 planes, or less than 10% of the global fleet of more than 1,600 delivered 777 widebody jets.
In another incident on Japan Airlines (JAL) 777 with a PW4000 engine in December 2020, Japan’s Transport Safety Board reported it found two damaged fan blades, one with a metal fatigue crack. An investigation is ongoing.
The focus is more on engine maker Pratt and analysts expect little financial impact on Boeing, but the PW4000 issues are a fresh headache for the planemaker as it recovers from the far more serious 737 MAX crisis. Boeing’s flagship narrowbody jet was grounded for nearly two years after two deadly crashes.
The United engine’s fan blade will be examined on Tuesday after being flown to a Pratt laboratory where it will examined under supervision of NTSB investigators.
The U.S. Federal Aviation Administration (FAA) said on Monday it had already been evaluating whether to adjust fan blade inspections in the wake of the December incident in Japan after reviewing maintenance records and conducting a metallurgical examination of the fan blade fragment.
Boeing recommended that airlines suspend the use of the planes while the FAA identified an appropriate inspection protocol, and Japan imposed a temporary suspension on flights.
Pratt & Whitney, owned by Raytheon Technologies Corp., has recommended airlines increase inspections in a plan that is being reviewed by the FAA, sources with knowledge of the matter said. Pratt did not respond immediately to a request for comment.
The FAA has said it plans to issue an emergency airworthiness directive soon that will require stepped-up inspections of the fan blades for fatigue.
“United Airlines has grounded all of the affected airplanes with these engines, and I understand the FAA is also working very quickly as well as Pratt & Whitney has reiterated or revised a service bulletin,” Sumwalt said. “It looks like action is being taken.”
In March 2019, after the 2018 United engine failure attributed to fan blade fatigue, the FAA ordered inspections every 6,500 cycles. A cycle is one take-off and landing.
South Korea’s transport ministry said on Tuesday it had told its airlines to inspect the fan blades every 1,000 cycles following guidance from Pratt after the United incident.
Sumwalt said the United incident was not considered an uncontained engine failure because the containment ring contained the parts as they were flying out.
NTSB will look into why the engine cowling separated from the plane and also why there was a fire despite indications fuel to the engine had been turned off, Sumwalt added.
Industry sources said that although the engine is made by Pratt, the cowling, or casing, is manufactured by Boeing. Boeing referred questions on the part to the NTSB.
Nearly half of the global fleet of PW4000-equipped Boeing 777 jets operated by airlines including United, JAL, ANA Holdings, Korean Air and Asiana Airlines had already been grounded amid a plunge in travel demand due to the coronavirus pandemic.
(Reporting by David Shepardson in Washington and Jamie Freed in Sydney; additional reporting by Tracy Rucinski in Chicago, Joyce Lee in Seoul and Tim Hepher in Paris; Editing by Kim Coghill and Gerry Doyle)
Oil prices jump more than $1 as U.S. output slow to restart
By Jessica Jaganathan
SINGAPORE (Reuters) – Oil prices jumped by more than $1 on Tuesday, underpinned by optimism over COVID-19 vaccine rollouts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut in crude production last week.
Shale oil producers in the southern United States could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output that shut down because of cold weather, as frozen pipes and power supply interruptions slow their recovery, sources said.
Brent crude was up $1.08, or 1.7%, at $66.32 a barrel by 0437 GMT, after earlier hitting a high of $66.79. U.S. crude rose 92 cents, or 1.5%, to $62.62 a barrel, having reached a session high of $63. Both benchmarks have risen more than 2% on Tuesday after climbing nearly 4% in the previous session.
“The positive momentum continues in the oil complex, with investors unabashedly predisposed to a bullish view,” said Stephen Innes, chief global markets strategist at Axi in a note.
Goldman Sachs Commodities Research raised its Brent crude oil price forecasts by $10 for the second and third quarters of 2021, citing lower expected inventories, higher marginal costs to restart upstream activity and speculative inflows.
The Wall Street bank expects Brent prices to reach $70 per barrel in the second quarter from the $60 it predicted previously and $75 in the third quarter from $65 earlier.
Morgan Stanley expects Brent crude prices to climb to $70 per barrel in the third quarter on “signs of a much improved market” including prospects of a pick-up in demand.
“It is hard not to be bullish with oil prices now that the deep freeze disruption practically guarantees the summer pickup in crude demand will erase whatever supply glut is left,” said Edward Moya, senior market analyst at OANDA in New York.
“The global oil demand is looking a lot better now that the Pfizer vaccine shows positive results after one dose, the U.K. sees the end of the pandemic ‘in sight’, and as hospitalizations and deaths continue to decline after peaking in early January.”
Stockpiles of U.S. crude oil and refined products likely declined last week, a preliminary Reuters poll showed on Monday, due to the disruption in Texas.
(Reporting by Jessica Jaganathan; editing by Richard Pullin & Shri Navaratnam)
Unlocking the potential of APIs
Corporate expectations for fast, efficient and convenient payment services are now the norm. BNY Mellon Treasury Services’s Sindhu Vadakath, Head of Global Digital Channels and Asia Payments Product Management, explores how banks are leveraging APIs to keep pace with these demands and maintain a competitive edge.
The expectation for a quick, seamless and user-friendly banking experience has long been the norm in the consumer space. Today, treasurers expect no less from their corporate banking applications. The gap between this desire for new and improved offerings and delivering greater levels of client service is being bridged by APIs (Application Programming Interface) – a key innovation that banks are harnessing.
APIs are a type of computing interface that enable streamlined, efficient communication and integration between software components. Benefits include operational speed and efficiency and, where process automation is also deployed, rapid – or even real-time – data flows, superior analytics, and real-time visibility over balances and payments statuses.
APIs have become a familiar term in the finance space. In the past few years, regulators and industry bodies have helped drive adoption – with uptake currently varying from market segment to market segment and region to region. Traction has been highest in the US, with momentum building in APAC, EMEA and LatAm.
While many banks have already incorporated APIs into their strategies, the overall progress has been somewhat limited by a lack of standardized, interoperable systems and processes across the financial services industry. But, with upcoming industry initiatives, such as the global migration to the ISO 20022 messaging standard, pushing the industry further towards greater harmonization, the full potential of APIs can be unlocked. Now, therefore, is the opportune time for banks and their clients to invest in their API capabilities.
In today’s fast-paced world, an effective and successful bank needs to deliver optimized payment capabilities, with accurate and efficient processes. This is being achieved through API solutions targeted at specific use cases.
For example, while making a payment may appear straightforward at the point of execution, the underlying processes are complex. Ensuring the streamlined and successful completion of these processes – which include payment initiation, reporting and sanctions screening – is critical for businesses, with any lapses potentially causing financial and reputational damage. As a result, banks are increasingly looking to APIs to provide real-time visibility for the entire payment process – meaning that any potential issue can be spotted and resolved in a timely manner.
APIs can also be used to integrate real-time account balances and transactional data across multiple channels, including Treasury Management Systems (TMS) and Enterprise Resource Planning (ERP). For example, BNY Mellon’s Treasury APIs enables the bank to integrate its solutions with its clients’ internal systems. This allows clients to streamline efficiencies by automating payment processes – with necessary tasks, such as reconciliation, able to be performed seamlessly. Automating previously manual functions via APIs saves time and frees up resources previously spent on repetitive tasks, thereby enabling this capacity to be redirected to value-added processes, such as forecasting analysis, customised reporting and transaction capabilities. Through this solution, clients can also securely access global payment capabilities through a single endpoint to initiate payments and track the status of transactions, from initiation to completion.
Elsewhere, as the Covid-19 pandemic has proved, it is important to have a robust business continuity plan (BCP) in place to offset against the impact of any unexpected events. APIs can be used in BCPs to help create an effective, resilient active-active alternate channel solution for contingency scenarios. For example, if a bank suffers a disruption or outage to their network provider, they will have to ensure they are able to seamlessly switch to an alternate digital channel to process their payments in a timely manner with no financial implications. Traditionally, banks relied on the provider’s online bank portal to instruct payment orders – a process that, to execute accurately and within the cut-off time, uses a significant amount of resources. Depending on the timing and intensity of the disruption, these resource are sometimes challenging to mobilize and activate within a short interval and could lead to serious financial and reputational implications. APIs offer a good alternative to these traditional contingency plan solutions. By enabling a fully functional integration with their network bank providers, banks can process a certain share of daily volumes via an API in addition to their usual channels – allowing for a smooth transition during a contingency scenario.
The next steps for APIs
Though enthusiasm for API adoption is relatively strong, we have only just started to scratch the surface in the B2B space. So far, the biggest strides have been made by Big Techs, which have been particularly adept at delivering API solutions thanks to their nimble business models. While the financial industry is making efforts to evolve – embracing the start-up work culture, breaking silos and developing an open and collaborative work environment – the success and speed of delivery is often hindered by the size and complexity of the solution required. For instance, an API might need to work for multiple parties across various jurisdictions that are each bound by unique regulations in their domestic markets. As a result, consortiums formed by fintech and financial firms, various market network providers and regulators are each working on ways to simplify these processes.
One path forward is increased industry standardization. For example, the lack of cross-border interoperability between market infrastructures and networks currently makes the exchange of data and APIs much less effective. The upcoming migration to ISO 20022 – the new global payments messaging standard – looks set reduce these frictions. With major market infrastructures and network providers each migrating to the new standard, banks looking to leverage APIs and other messaging channels may no longer be required to maintain multiple variations of the message specifications by channels, currency and markets – something that today represents one of the biggest barriers for adoption. Elsewhere, plans are also underway to connect the various domestic real-time payment infrastructures to create an interoperable system for digital payments – one that could eventually support API adoption for cross-border real-time payments.
As the industry standardizes and simplifies its processes, and banks begin to integrate APIs into their own and their clients’ infrastructures, a host of new opportunities, including real-time data feed of balances to drive more proactive functions for treasuries, is set to be unlocked. Importantly, the onus is now on banks to invest in APIs and advocate their adoption to clients.
Sindhu, who is based in the BNY Mellon Singapore Branch, recently took part in the “Executing business strategies with the power of APIs” Sibos webinar. To sign up to Sibos to view the webinar, please click here.
The views expressed herein are those of the author only and may not reflect the views of BNY Mellon. This does not constitute Treasury Services advice, or any other business or legal advice, and it should not be relied upon as such.
Tapping into the right minds
By David Holden-White, co-founder and managing director, techspert.io
The world is awash with information. Analyst house IDC estimated that more than 59 zettabytes of data would be created, captured, copied and consumed in 2020, and that the amount of data created over the next three years will be more than what was created in the past 30. The boom in consumer technology and the rapid improvement in mobile connectivity has meant that the 48% of the globe that owns a smartphone has near instant access to all the digitised, publicly available information in the world in their pocket.
A world overloaded by information
It’s no surprise that people talk of information overload, or how much it impacts productivity. It’s not new either. A 2012 study from McKinsey & Co highlighted that nearly a fifth of professionals’ time was spent searching for and gathering information, half of the time they spent undertaking role-specific tasks. This is only likely to have increased as we’ve become more dependent on digital tools and services.
On top of that is the realisation that, thanks to social media, we’re living in a time when anyone can be an influencer or thought leader if they shout loud enough. It doesn’t matter whether you’re pushing trainers or cloud computing, whether your audience is a broad spectrum of consumers or a niche group of B2B buyers; the tools and resources are pretty much freely available to build a profile and push your message out there.
The result is that it’s becoming increasingly hard to find the value amongst vast and accelerating volumes of online data and noise, and to use that data to make accurate, effective decisions.
This is something we need to be able to do. We’re all expected to work faster, to make better decisions more quickly. The pandemic showed that certain changes don’t need five committees, two working groups and a proof of concept to take place before decisions can be rubber stamped. At the same time, no matter what industry you work in, there will be competitors who are more agile, more flexible, and seem to be much better at making decisions and capitalising on opportunities.
Yet those decisions still need to be backed by evidence, by irrefutable knowledge. What’s more, there’s only so much data can give us. We need the insights stored in the minds of true experts, with lived experiences of the particular problems, markets and technologies in question. In accessing this, we can develop a decision-making edge in businesses that competitors don’t have, that can be used to drive entrance into new markets, or for winning investment decisions.
Limiting risk in investment decisions
As we all know, investments are inherently risk-related, so, anyone making such a decision will do all they can to minimise their risk exposure, especially in volatile post-covid markets.
To do that requires being able to identify, consume and process information quickly. Investment opportunities, particularly in industries with significant growth capacity, come around quickly and get snapped up fast.
Those decisions will incorporate analysing and drawing insights from raw data, using publicly available and analyst-produced information. But there is also an opportunity to draw on human insights, from leading experts in relevant fields, to get a sense of the story that 0s and 1s can’t properly tell yet. Tapping into the right minds is essential to informing investment decision-making in 2021.
In an ever-growing haystack of information, the challenge is finding them quickly. Plus, once they are found, there’s a tendency to keep using them, or to use them as a gateway to others in their network. While there’s nothing inherently wrong with this approach, it leaves investors exposed to a lack of diversity in thought that makes getting to an unbiased view of the world impossible. At the same time, casting their net wide and finding lots of experts is resource and time-intensive, at a point when time is one commodity in short supply.
So, what’s the solution? Ironically, given that the challenge is bringing the right human insight into the process, the answer could lie in technology, specifically artificial intelligence (AI). AI-powered platforms can take a request for expertise and run searches through all available published and credible material to recommend the most appropriate experts for the project in question.
It’s true that there are already services that recommend experts, but they are heavily manual and therefore slow and imprecise. It’s also true, there are also both negative and positive connotations being attached to AI. No technology is without its flaws, and if investors were relying on the AI platform itself to provide expertise then there would be cause for concern. Services that provide access to the experts themselves, however, are providing a fast way through the noise and data – it’s a car to the destination, not the destination itself. Once investors and experts are connected, the former has access to the relevant insight the latter holds in their heads. What AI has done is rapidly scan through millions of people of talent to highlight the relevant knowledge holders with pin-point accuracy.
Using technology to highlight the best human knowledge
Using an AI technology platform to find the most relevant human is a way of taking a resource-consuming process and finding what’s needed in a thousandth of the time. In that way, investors can get fast access to the human insight they need to make the best decisions, allowing them to capitalise on opportunities and not miss the next big growth opportunity.
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