Business
As Delta Reports Profits, Airlines Are Optimistic About 2025
 
																								
												
												
											This year just got started, but it is already shaping up nicely for U.S. airlines.
After several setbacks, the industry ended 2024 in a fairly strong position because of healthy demand for tickets and the ability of several airlines to control costs and raise fares, experts said. Barring any big problems, airlines — especially the largest ones — should enjoy a great year, analysts said.
“I think it’s going to be pretty blue skies,” said Tom Fitzgerald, an airline industry analyst for the investment bank TD Cowen.
In recent weeks, many major airlines upgraded forecasts for the all-important last three months of the year. And on Friday, Delta Air Lines said it collected more than $15.5 billion in revenue in the fourth quarter of 2024, a record.
“As we move into 2025, we expect strong demand for travel to continue,” Delta’s chief executive, Ed Bastian, said in a statement. That put the airline on track to “deliver the best financial year in Delta’s 100-year history,” he said.
The airline also beat analysts’ profit estimates and said it expected earnings per share, a measure of profitability, to rise more than 10 percent this year.
Delta’s upbeat report offers a preview of what are expected to be similarly rosy updates from other carriers that will report earnings in the next few weeks. That should come as welcome news to an industry that has been stifled by various challenges even as demand for travel has rocketed back after the pandemic.
“For the last five years, it’s felt like every bird in the sky was a black swan,” said Ravi Shanker, an analyst focused on airlines at Morgan Stanley. “But it appears that this industry does have its ducks in a row.”
That is, of course, if everything goes according to plan, which it rarely does. Geopolitics, terrorist attacks, air safety problems and, perhaps most important, an economic downturn could tank demand for travel. Rising costs, particularly for jet fuel, could erode profits. Or the industry could face problems like a supply chain disruption that limits availability of new planes or makes it harder to repair older ones.
Early last year, a panel blew off a Boeing 737 Max during an Alaska Airlines flight, resurfacing concerns about the safety of the manufacturer’s planes, which are used on most flights operated by U.S. airlines, according to Cirium, an aviation data firm.
The incident forced Boeing to slow production and delay deliveries of jets. That disrupted the plans of some airlines that had hoped to carry more passengers. And there was little airlines could do to adjust because the world’s largest jet manufacturer, Airbus, didn’t have the capacity to pick up the slack — both it and Boeing have long order backlogs. In addition, some Airbus planes were afflicted by an engine problem that has forced carriers to pull the jets out of service for inspections.
There was other tumult, too. Spirit Airlines filed for bankruptcy. A brief technology outage wreaked havoc on many airlines, disrupting travel and resulting in thousands of canceled flights in the heart of the busy summer season. And during the summer, smaller airlines flooded popular domestic routes with seats, squeezing profits during what is normally the most lucrative time of year.
But the industry’s financial position started improving when airlines reduced the number of flights and seats. While that was bad for travelers, it lifted fares and profits for airlines.
“You’re in a demand-over-supply imbalance, which gives the industry pricing power,” said Andrew Didora, an analyst at the Bank of America.
At the same time, airlines have been trying to improve their businesses. American Airlines overhauled a sales strategy that had frustrated corporate customers, helping it win back some travelers. Southwest Airlines made changes aimed at lowering costs and increasing profits after a push by the hedge fund Elliott Management. And JetBlue Airways unveiled a strategy with similar aims, after a less contentious battle with the investor Carl C. Icahn.
Those improvements and industry trends, along with the stabilization of fuel, labor and other costs, have created the conditions for what could be a banner 2025. “All of this is the best setup we’ve had in decades,” Mr. Shanker said.
That won’t materialize right away, though. Travel demand tends to be subdued in the winter. But business trips pick up somewhat, driven by events like this week’s Consumer Electronics Show in Las Vegas.
The positive outlook for 2025 is probably strongest for the largest U.S. airlines — Delta, United and American. All three are well positioned to take advantage of buoyant trends, including steadily rebounding business travel and customers who are eager to spend more on better seats and international flights.
But some smaller airlines may do well, too. JetBlue, Alaska Airlines and others have been adding more premium seats, which should help lift profits.
While he is optimistic overall, Mr. Shanker acknowledged that the industry was vulnerable to a host of potential problems.
“I mean, this time last year you were talking about doors falling off planes,” he said. “So who knows what might happen.”
 
																	
																															Business
Universal Music Group settles with AI music startup Udio
 
														
Universal Music Group said Wednesday it has reached licensing agreements with artificial intelligence music startup Udio, settling a lawsuit that had accused Udio of using copyrighted music to train its AI.
Millions of users create music using Udio’s AI, which can compose original songs — including voices and instruments — from text prompts.
Udio has agreed with UMG to launch a new platform next year that is only trained on “authorized and licensed music,” and will let users customize, stream and share music.
“These new agreements with Udio demonstrate our commitment to do what’s right by our artists and songwriters, whether that means embracing new technologies, developing new business models, diversifying revenue streams or beyond,” Lucian Grainge, UMG’s chairman and chief executive, said in a statement.
Udio declined to disclose the financial terms of the settlement and licensing agreements. UMG did not immediately return a request for comment on the terms.
Artificial intelligence has brought new opportunities as well as challenges to the entertainment industry, as AI startups have been training their models on information on the internet, which entertainment companies say infringes on their copyrighted work.
In the music industry, music businesses have accused New York City-based Udio and other AI music startups of training on copyrighted music to generate new songs that are based on popular hits without compensation or permission.
UMG, Sony Music Entertainment, Warner Music Group and other music businesses sued Udio last year. In the lawsuit, Udio was accused of using hits like The Temptations’ “My Girl,” to create a similar melody called “Sunshine Melody.” UMG owns the copyright to “My Girl.”
“A comparison of one section of the Udio-generated file and ‘My Girl’ reflects a number of similarities, including a very similar melody, the same chords, and very similar backing vocals,” according to the lawsuit. “These similarities are further reflected in the side-by-side transcriptions of the musical scores for the Udio file and the original recording.”
Udio said on its website at the time that it stands by its technology and that its AI model learns from examples, similar to how students listen to music and study scores.
“The goal of model training is to develop an understanding of musical ideas — the basic building blocks of musical expression that are owned by no one,” Udio had said in a statement. “We are completely uninterested in reproducing content in our training set.”
On Wednesday, Udio’s CEO and co-founder, Andrew Sanchez, said he was thrilled at the opportunity to work with UMG “to redefine how AI empowers artists and fans.”
The collaboration is the first music licensing agreement that Udio has reached with a major music label.
“This moment brings to life everything we’ve been building toward — uniting AI and the music industry in a way that truly champions artists,” Sanchez said in a statement. “Together, we’re building the technological and business landscape that will fundamentally expand what’s possible in music creation and engagement.”
Udio said that artists can opt in to the new platform and will be compensated, but declined to go into the specifics or the artists involved.
Udio, launched in 2024, was co-founded by former Google DeepMind employees. Udio’s backers include music artist will.i.am, Instagram co-founder and Anthropic’s chief product officer Mike Krieger and venture capital firm Andreessen Horowitz.
Udio has had 128,000 app downloads in Apple’s App Store since it launched, according to estimates from New York-based mobile analytics firm Appfigures.
On Thursday, UMG also announced a partnership with London-based Stability AI to develop music creation tools powered by AI for artists, producers and songwriters.
Business
Disneyland Resort lays off 100 people in Anaheim
Disneyland Resort has laid off about 100 people in Anaheim, as Walt Disney Co. becomes the latest media and entertainment company to cut jobs.
The layoffs occurred Tuesday and came from multiple teams, Disney confirmed.
“With our business in a period of steady, sustained operation, we are recalibrating our organization to ensure we continue to deliver exceptional experiences for our guests, while positioning Disneyland Resort for the future,” a Disneyland spokesperson said in a statement. “As part of this, we’ve made the difficult decision to eliminate a limited number of salaried positions.”
Disney attributed the cuts to an increase in hiring after the parks reopened once the COVID-19 pandemic waned.
Disney’s theme parks are a major economic engine for the Burbank media and entertainment giant.
Last year, the company’s experiences division — which includes its theme parks, cruise line and Aulani resort and spa in Hawaii — brought in nearly 60% of Disney’s operating income.
Earlier this month, the company announced price hikes on most of its single-day, one-park tickets.
The Disneyland Resort layoffs come as entertainment and tech companies have recently shed thousands of jobs.
On Wednesday, Paramount laid off 1,000 employees in a first round of cuts after the company’s takeover by tech scion David Ellison’s Skydance Media. Amazon, Meta, Charter Corp. and NBC News also have announced cuts.
Business
News Analysis: Trade deal or trade truce? Questions remain as Trump meets with China’s Xi
 
														WASHINGTON — President Trump faces the most important international meeting of his second term so far on Thursday: face-to-face negotiations with Xi Jinping, who has made China a formidable economic and military challenger to the United States.
The two presidents face a vast agenda during their meeting in Seoul, beginning with the two countries’ escalating trade war over tariffs and high-tech exports. The list also includes U.S. demands for a Chinese crackdown on fentanyl, China’s aid to Russia in its war with Ukraine, the future of Taiwan and China’s growing nuclear arsenal.
Trump has already promised, characteristically, that the meeting will be a major success.
“It’s going to be fantastic for both countries, and it’s going to be fantastic for the entire world,” he said last week.
But it isn’t yet clear that the summit’s concrete results will measure up to that high standard.
Treasury Secretary Scott Bessent said Sunday that the two sides have agreed to a “framework” under which China would delay implementing tight controls on rare earth elements, minerals crucial for the production of high-tech products from smartphones and electric vehicles to military aircraft and missiles. He said China has also agreed to resume buying soybeans from U.S. farmers and to crack down on fentanyl components.
In return, Bessent said, the United States will back down from its stinging tariffs on Chinese goods.
Nicholas Burns, the U.S. ambassador in Beijing under then-President Biden, said that kind of deal would amount to “an uneasy trade truce rather than a comprehensive trade deal.”
“That may be the best we can expect,” he said in an interview Monday. Still, he added, “it will be a positive step to stabilize world markets and allow the continuation of U.S.-China trade for the time being.”
But U.S. and Chinese officials have been close-mouthed on what, if anything, has been agreed on regarding Xi’s other big trade demand: easier U.S. restrictions on high-tech exports to China, especially advanced semiconductor chips used for artificial intelligence.
Burns said the two superpowers’ technology competition is “the most sensitive … in terms of where this relationship will head, which country will emerge more powerful.”
Giving China easy access to advanced semiconductors “would only help [the Chinese army] in its competition with the U.S. military for power in the Indo-Pacific,” he warned.
Other former officials and China hawks outside the administration have said, even more pointedly, that they worry that Trump may be too willing to trade long-term technology assets for short-term trade deals.
In August, Trump eased export controls to allow Nvidia, the world leader in AI chips, to sell more semiconductors to China — in an unusual deal under which the U.S. company would pay 15% of its revenue from the sales to the U.S. Treasury.
Matthew Pottinger, Trump’s top China advisor in his first term, protested in a recent podcast interview that the deal risked trading a strategic technology advantage “for $20 billion and Nvidia’s bottom line.”
Underlying the controversy over technology, some China watchers warn, is a basic mismatch between the two presidents: Trump is focused almost entirely on trade and commercial deals, while Xi is focused on displacing the United States as the biggest economic and military power in Asia.
“I don’t think the administration has a strategy toward China,” said Bonnie Glaser, a China expert at the German Marshall Fund of the United States. “It has a trade strategy, not a China strategy.”
“The administration does not seem to be focused on competition with China,” said Jonathan Czin, a former CIA analyst now at Washington’s Brookings Institution. “It’s focused on deal making. … It’s tactics without strategy.”
“We’ve fallen into a kind of trade and technology myopia,” he added. “We’re not talking about issues like China’s coercion [of smaller countries] in the South China Sea. … China doesn’t want to have that bigger, broader conversation.”
It isn’t clear that Trump and Xi will have either the time or inclination to talk in detail about anything other than trade.
And even on the front-burner economic issues, this week’s ceasefire is unlikely to produce a permanent peace.
“As with all such agreements, the devil will be in the details,” Burns, the former ambassador, said. “The two countries will remain fierce trade rivals. Expect friction ahead and further trade duels well into 2026.”
“Buckle up,” Czin said. “There are likely more sudden moves from Beijing ahead.”
In the long run, Trump’s legacy in U.S.-China relations will rest not only on trade deals but on the larger competition for economic and military power in the Pacific Rim. No matter how this week’s meetings go, those challenges still lie ahead.
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