Kremlin dismisses U.S. call to destroy chemical weapons, says it has none

MOSCOW (Reuters) – The Kremlin on Thursday dismissed as baseless and illogical U.S. calls for Russia to destroy its chemical weapons, saying that Moscow had destroyed them long ago in line with the Chemical Weapons Convention.

The U.S. State Department called on Moscow at a news briefing on Tuesday “to comply with its obligations under the Chemical Weapons Convention and to declare and destroy its chemical weapons program under international verification”.

Washington announced sanctions that day on senior Russian government officials and Russian entities in response to what U.S. officials said was Moscow’s attempt to kill Navalny with a nerve agent.

Kremlin spokesman Dmitry Peskov dismissed the State Department comment regarding chemical weapons.

“Such statements are devoid of logic and grounds and are nothing more than an attempt to unsuccessfully camouflage their policy to further contain Russia,” he said.

“Russia announced many years ago and verified the destruction of all the chemical weapons on its territory… Russia has no chemical weapons,” he told reporters on a call.

He said that the United States should also fulfil its obligations under the convention.

(Reporting by Dmitry Antonov in Moscow and Daphne Psaledakis in Washington; writing by Tom Balmforth; editing by Andrew Osborn and Hugh Lawson)

U.S. budget airlines plot pandemic breakthrough

By Tracy Rucinski

PALM COAST, Fla. (Reuters) – The COVID-19 pandemic has reshaped the global travel landscape and U.S. no-frills carriers are pouncing.

As legacy airlines shrink to contain costs, budget carriers Spirit Airlines, Allegiant Travel and privately-owned Frontier Airlines are resuming pilot hiring and expanding networks to seize turf dominated by larger rivals.

The three airlines’ combined U.S. market share, which barely topped 10% before the pandemic, could grow by 10 percentage points this year alone, said RenĂ© Armas Maes of UK-based consultancy MIDAS Aviation.

“Ultra low-cost carriers want to attack head-to-head; they believe they’re in a better position to rebuild travel demand,” he said.

Las Vegas-based Allegiant has told prospective pilots whose hiring was halted as the pandemic unfolded: “We have recalled all of our furloughed pilots and are now planning for exciting growth opportunities.”

Spirit and Frontier have posted pilot job ads and are taking delivery of Airbus A320neo jets that could open longer routes, including coast-to-coast flying traditionally controlled by legacy, or full-service, carriers.

By contrast, American Airlines has gone from hiring 100 pilots a month before the pandemic to threatening 1,850 furloughs without fresh government assistance on labor costs.

Allegiant also stands to benefit if Congress approves a third round of COVID-19 payroll relief for U.S. airlines, but “would be just fine without it,” Chief Financial Officer Greg Anderson told Reuters.

“The leading indicators suggest that there is a nice growth trajectory for Allegiant,” said Anderson, citing Google searches, indices that track changes in city populations and infection and vaccination trends from the Institute for Health Metrics and Evaluation.

He said customer surveys also show an increased preference for smaller airports and non-stop flights, cornerstones of budget carriers’ business models.

TRIAL AND ERROR

Ultra low-cost carriers, or ULCCs, offer a no-frills experience at rock-bottom fares and charge heavily for extras like bags. They wage fare wars and are pervasive in Europe’s fragmented market but have lagged in the United States.

ULCCs are a tier below carriers like Southwest Airlines, which pioneered the low-cost concept in the 1970’s and has grown to become the leading domestic airline. It provides free beverages and checked bags but keeps costs low in part by flying a single fleet-type of Boeing 737’s.

U.S. mainline legacy carriers American, Delta Air Lines and United Airlines have diverse fleets that include expensive wide-body jets geared for the kind of business and international travel that has suffered most in the pandemic.

American’s unit costs excluding fuel, a key metric of efficiency, were $0.18 per available mile in 2020, more than double that of budget rivals like Allegiant, according to data compiled by financial services firm Raymond James.

This means Allegiant, which primarily uses second-hand planes and only flies on peak travel days like weekends, can more easily profit on discount fares.

And whereas legacy carriers use a hub-and-spoke network that shuttles people through costly big-city airports, the ULCC business model is based on point-to-point travel to smaller airports where they outsource much of their infrastructure.

Allegiant’s fixed costs account for just around a quarter of its total.

That flexibility helps budget carriers open new routes on a trial-and-error basis. During the pandemic, for example, they have pivoted toward beach and mountain destinations.

“Then if the route is not performing, they won’t hesitate to shut it down,” said George Dimitroff of consultants Ascend by Cirium.

But there are risks.

American, United and Delta have also shifted flights during the pandemic to pick up leisure demand and their market power and geographical reach remain formidable.

Competing with them can lure upstart airlines into relaxing cost discipline – a move described as a “path to hell” by budget airlines entrepreneur Bill Franke, who championed the ULCC model.

Together the three large airlines control around 60% of domestic travel and could chase away rivals on smaller routes if they choose, industry critics said.

But they are more burdened by debt than the ULCCs and continue to burn through millions of dollars every day, hampering their ability to grow, the critics said.

BUDGET SHIFT

Beyond low fares, experts said the pandemic has given budget carriers a fresh argument for previously wary customers.

Traditional airline perks like catering services have lost their luster in an era of masks, and budget airplanes feature the same hospital-grade aircraft filtration systems as others.

And they could benefit from more cost-conscious small and medium sized businesses changing travel policies to favor lower-cost airlines, albeit constrained by their more limited flying through large hubs.

“More price-sensitive travel will be the new normal for the next couple of years at least,” Armas Maes said.

Even so, today’s outsiders will face a competitive cycle.

After the last downturn, low-cost carrier JetBlue Airways grabbed market share from American on the U.S. east coast. Now it is grappling with competition from ULCCs and is teaming up with its old rival.

(Reporting by Tracy Rucinski; editing by Barbara Lewis and Nick Zieminski)

Israeli defense chief sees ‘special security arrangement’ with Gulf allies

By Dan Williams

KEREM SHALOM, Israel (Reuters) – Israel’s defense minister said on Tuesday it intends to develop a “special security arrangement” with Gulf Arab allies, who share common concerns over Iran.

The United Arab Emirate and Bahrain established formal relations with Israel last year. As part of their U.S.-backed rapprochement, Israel and the UAE have proposed defense and military cooperation.

On a visit to an Israel-Gaza border crossing, Defense Minister Benny Gantz played down a report by public radio Kan that Israel was considering a defense agreement with Gulf Arab countries, but said security ties would be pursued.

“I don’t think it’s going to be a defense pact but we are going to develop defense relations with every country that we have relations with,” Gantz told Reuters.

“We have this process of setting up (a) special security arrangement, and within this arrangement we can continue and develop our relations,” he said.

Gantz declined to go into details on what such an arrangement would entail.

He signaled that Israel had no opposition to the sale, approved during former U.S. President Donald Trump’s last days in office, of 50 Lockheed Martin’s F-35 stealth jets to the UAE. The deal is now under review by U.S. President Joe Biden’s administration.

Asked about Israel’s view of the sale, Gantz said Israel’s “qualitative military edge” must be preserved by the United States, adding that the advanced warplane was already in the country’s arsenal.

On Monday, the UAE’s ambassador to Israel took up his post, pledging to build up new bilateral relations. Israel opened an embassy in Abu Dhabi in January.

Their so-called U.S.-brokered “Abraham Accords,” joined by Bahrain, have uncorked tourism and commerce between Israel and Gulf Arab countries. Palestinians have been critical of the rapprochement, worried that their own unmet statehood goal might be sidelined.

(Writing by Jeffrey Heller; Editing by Angus MacSwan)

U.S. to give Americans COVID-19 vaccines before discussing sharing with Mexico: White House

By Steve Holland and Dave Graham

WASHINGTON/MEXICO CITY (Reuters) – The Biden administration on Monday downplayed the prospect of sharing coronavirus vaccines with Mexico, saying it is focused first on getting its own population protected against a pandemic that has killed more than 500,000 Americans.

The remarks by White House press secretary Jen Psaki came hours before Mexican President Andres Manuel Lopez Obrador is expected to ask U.S. President Joe Biden to consider sharing some of its COVID-19 vaccine supply.

“The administration’s focus is on ensuring that every American is vaccinated. And once we accomplish that objective we’re happy to discuss further steps,” Psaki said at a White House news conference.

The two leaders are due to hold a virtual meeting later on Monday that is also likely to encompass immigration and trade.

Biden has predicted the United States will have enough supply by late July to inoculate all Americans. U.S. authorities have administered 76.9 million doses to date, according to the U.S. Centers for Disease Control and Prevention, enough for 23% of the population to get the two doses recommended for full protection under the vaccines that have been deployed so far.

Mexico has vaccinated roughly 2.5 million doses so far, enough for about 1% of the population, according to data compiled by Reuters. Officials have been frustrated by bottlenecks in supply and raised concerns that wealthy countries are hoarding vaccines.

According to Reuters reporting, Mexico would aim to pay back Washington once pharmaceutical companies have delivered on their orders.

Mexican magazine Proceso said Lopez Obrador had asked Biden for help on vaccines in January.

“We’d like to get an answer on a request that we’ve already made … about the vaccines,” Lopez Obrador told a regular news conference on Monday. “Provided he’s of the view the matter should be addressed. We must be respectful.”

IMMIGRATION AND ENERGY

Immigration, security, climate change and the United States-Mexico-Canada Agreement (USMCA) trade deal were also likely to feature in talks, said Lopez Obrador, a left-wing nationalist.

Mindful of pressure to curb unlawful immigration, Lopez Obrador said on Saturday he wants Biden to help secure U.S. work permits for Mexicans and Central Americans, saying the United States needed another 600,000-800,000 workers.

On Monday, Lopez Obrador said he wanted to broker an agreement that covered all kinds of workers, including “professionals.”

The two leaders could also discuss Lopez Obrador’s efforts to strengthen a state-run electricity utility, the Comision Federal de Electricidad (CFE).

The Mexican president has cast the legislation as a matter of national sovereignty, arguing that past governments skewed the electricity market in favor of private operators.

Business groups have condemned the bill, saying it risks violating the USMCA and endangers Mexico’s renewable energy targets because it puts wind and solar generators at a disadvantage against the CFE, a heavy user of fossil fuels.

(Reporting by Dave Graham, Steve Holland and Alexandra Alper; Additional reporting by Nandita Bose and David Alire Garcia; Writing by Andy Sullivan; Editing by Giles Elgood and Aurora Ellis)

U.S. CDC says trend of decline in COVID-19 cases may be stalling

WASHINGTON (Reuters) – The head of the U.S. Centers for Disease Control and Prevention said on Friday that a recent decline in COVID-19 cases may be stalling, a development she described as concerning while urging that restrictions to fight the virus remain in place.

Dr. Rochelle Walensky told reporters the CDC was watching the concerning data closely.

The White House on Friday also urged companies to join efforts to help fight the pandemic by requiring mask wearing by employees and educating customers.

Andy Slavitt, a senior adviser on the White House’s COVID-19 response team, listed a number of companies that were taking measures to help with the pandemic fight and urged more to join.

Ford and the Gap were producing and donating millions of masks, he said, while Best Buy, Target and Dollar General were giving workers paid time off to get vaccines.

The White House is working on a broad campaign to educate Americans about the vaccine as it seeks to bring the pandemic that has killed more than 500,000 people in the United States under control.

President Joe Biden on Thursday noted concerns that later this spring supply of the vaccines would outstrip demand because of vaccine hesitancy.

(Reporting by Jeff Mason, Carl O’Donnell and Lisa Lambert; Editing by Chizu Nomiyama)

First asylum-seekers from Mexico’s Matamoros border camp enter U.S.

MEXICO CITY (Reuters) – U.S. officials on Thursday brought a first group of people from the Matamoros migrant camp at Mexico’s border with Texas into the United States, where they will be allowed to carry out their asylum applications, migrant rights organizations said.

Some camp residents have lived there for more than a year under former President Donald Trump’s Migrant Protection Protocols (MPP) program requiring asylum seekers to wait in Mexico for U.S. court hearings.

President Joe Biden’s administration has said a new process will gradually allow thousands of MPP asylum seekers to await courts’ decisions within the United States, and some migrants last week were permitted to cross into San Ysidro, California.

The International Organization for Migration (IOM) said 27 migrants crossed the bridge from Matamoros into Texas on Thursday morning.

Francisco Gallardo, who runs a migrant shelter in Matamoros and provides humanitarian aid at the camp, welcomed the news but said the transfer of asylum-seekers to the United States should have come sooner.

“It’s good that they are doing it, but unfortunately coming late,” he said.

Freezing temperatures at the U.S.-Mexico border had made the Matamoros camp a priority, the Department of Homeland Security said on Wednesday.

Mexico’s migration institute did not immediately respond to a request for comment.

(Reporting by Lizbeth Diaz and Daina Beth Solomon; Editing by Frances Kerry)

COVID-19 vaccine makers tell Congress U.S. supply will surge soon

By Michael Erman and Manojna Maddipatla

NEW YORK (Reuters) – COVID-19 vaccine makers told Congress on Tuesday that U.S. supplies should surge in the coming weeks due to manufacturing expansions and new vaccine authorizations.

Executives from Pfizer Inc, Moderna Inc and Johnson & Johnson – speaking at a hearing at the U.S. House of Representatives – said they would be able to supply enough vaccine to fully inoculate 130 million people in the United States by the end of March.

The drugmakers also reaffirmed their commitments to supply more than enough doses necessary to vaccinate all Americans by the end of July.

Pfizer Chief Business Officer John Young said it was plausible that there could be a surplus of vaccine in the United States sometime in the second quarter of this year.

“We certainly hope that we’re going to be in a position where every eligible adult will be able to receive vaccinations,” Young said.

Around 44.5 million people in the United States had received at least one dose of two-shot vaccines developed by Pfizer and BioNTech or Moderna, as of Tuesday morning.

Johnson & Johnson’s single-dose vaccine will be considered by an outside advisory committee to the U.S. Food and Drug Administration later this week, and emergency use authorization could come shortly afterward.

Richard Nettles, Vice President of Medical Affairs at J&J’s Janssen Pharmaceuticals unit, said the company would be able to ship nearly 4 million doses of its COVID-19 vaccine upon authorization and 20 million doses by the end of March.

Additional doses could also come from AstraZeneca Plc and from Novavax Inc, which are currently running clinical trials of their experimental vaccines.

An AstraZeneca executive said the drugmaker could supply doses necessary to vaccinate another 25 million people by the end of April if their vaccine is authorized by U.S. regulators.

(Reporting by Michael Erman; Editing by Bill Berkrot)

Israel aims to resolve Iran disputes with Biden at adviser level

By Dan Williams

JERUSALEM (Reuters) – Israel hopes to prevent personal tension between Prime Minister Benjamin Netanyahu and U.S. President Joe Biden over their differences on the Iranian nuclear question by delegating talks on the topic to their senior staff, an Israeli official said.

Netanyahu’s foreign-policy fortunes have waned since Biden succeeded Republican president Donald Trump, who withdrew the United States from world powers’ 2015 Iranian nuclear deal, deeming it too advantageous for Tehran – a view Israel shared.

Biden, a Democrat, wants to rejoin the deal. That has set the stage for possible new strains in the U.S.-Israel alliance.

On Monday, Netanyahu conferred with Defense Minister Benny Gantz and Foreign Minister Gabi Ashkenazi to present a united Israeli front on Iran – even as the conservative premier runs against the two centrists in a March election.

An official briefed on Monday’s meeting said it was agreed that Israeli misgivings about, and proposed improvements to, the deal would be relayed by Netanyahu’s National Security Council to the counterpart National Security Council in the White House.

“The intent is to work everything out at that level, and to keep that communication channel open,” the official told Reuters on Tuesday on condition on anonymity. “Obviously this has benefits where there is a risk of a ‘cold shoulder’ at chief-executive level.”

Citing unnamed sources involved in the meeting, Israel’s Army Radio reported the Netanyahu and the other ministers had decided to keep disputes with Biden “under the radar” for now.

Netanyahu’s office declined comment.

When the 2015 deal was being put together, Netanyahu’s opposition – including in a speech he delivered to the U.S. Congress – led to feuds with the then Democratic administration of Barack Obama, whom Biden served as vice president.

Netanyahu’s office said on Friday that Israel was “in close contact” with Washington on the issue and asserted that a return to the 2015 deal would “pave Iran’s path to a nuclear arsenal”.

Israel previously hinted it might shun Iran talks with Washington in the event of a new deal that it still opposes, lest such engagement give the impression of consent.

Iran, which denies seeking the bomb, began breaching the deal in 2019, following the U.S. withdrawal. It has recently stepped up violations and was cool to an administration announcement on Thursday that Washington was ready to talk about a mutual return to compliance.

Israel is reputed to have the region’s only nuclear arsenal, something it neither confirms nor denies under an “ambiguity” policy designed to ward off foes while avoiding arms races.

(Writing by Dan Williams, Editing by William Maclean)

A day that will live in infamy: U.S. crosses 500,000th COVID-19 death

By Maria Caspani and Anurag Maan

NEW YORK (Reuters) – The United States on Monday crossed the staggering milestone of 500,000 COVID-19 deaths just over a year to the day since the coronavirus pandemic claimed its first known U.S. victims in Santa Clara County, California.

The country had recorded more than 28 million COVID-19 cases and 500,054 lives lost as of Monday afternoon, according to a Reuters tally of public health data, although daily deaths and hospitalizations have fallen to the lowest level since before the Thanksgiving and Christmas holidays.

About 19% of total global coronavirus deaths have occurred in the United States, an outsized figure given that the nation accounts for just 4% of the world’s population.

“These numbers are stunning,” Dr. Anthony Fauci, a top infectious disease adviser to President Joe Biden told ABC News’ “Good Morning America” program. “If you look back historically, we’ve done worse than almost any other country and we’re a highly developed, rich country.”

Biden and Vice President Kamala Harris are set to commemorate the huge loss of life due to COVID-19 later on Monday during an event at the White House that will include a speech by the president, a moment of silence and a candle lighting ceremony.

Biden will also order that U.S. flags on federal property be lowered to half staff for five days, White House spokeswoman Jen Psaki told reporters.

The National Cathedral in Washington will also toll its bells 500 times on Monday evening to honor the lives lost to COVID-19 in a livestream event, according to a notice on its website.

In 2020, the virus has taken a full year off the average life expectancy in the United States, the biggest decline since World War Two.

Sweeping through the country at the beginning of last year, the U.S. epidemic had claimed its first 100,000 lives by May.

The death toll doubled by September as the virus ebbed and surged during the summer months.

Pandemic-weary Americans, like so many around the world, grappled with the mountain of loss brought by COVID-19 as health experts warned of yet another coronavirus resurgence during the upcoming fall and winter months.

Americans lost mothers and fathers, husbands and wives, brothers, sisters and friends to the virus. For many, the grief was amplified by the inability to see loved ones in hospitals or nursing homes and by the physical distancing imposed by authorities to curb the virus spread.

By December, the death toll had reached 300,000 as the United States entered a deadly post-holiday season that would claim 230,000 lives in the span of less than three months.

With numbers that made the appalling toll early in the pandemic pale by comparison, deaths recorded between December and February accounted for 46% of all U.S. COVID-19 fatalities, even as vaccines finally became available and a monumental effort to inoculate the American public got underway.

Despite the grim milestone, the virus appears to have loosened its grip as COVID-19 cases in United States fell for the sixth consecutive week. However, health experts have warned that coronavirus variants initially discovered in Britain, South Africa and Brazil could unleash another wave that threatens to reverse the recent positive trends.

Fauci cautioned against complacency and urged Americans to continue public health measures such as wearing masks, physical distancing and avoiding crowds while officials race to inoculate the population, particularly with these more contagious new variants circulating.

“We’ve got be really careful and not just say ‘OK we’re finished now, we’re through it,” he told ABC.

(Reporting by Maria Caspani in New York and Anurag Maan in Bengaluru and Susan Heavey in Washington; Writing by Maria Caspani; Editing by Bill Berkrot and Lisa Shumaker)

Fed sees ‘considerable’ risk of ongoing U.S. business failures

WASHINGTON (Reuters) – The risks of ongoing business failures in the United States “remain considerable” even as the economy emerges from the coronavirus pandemic, the Federal Reserve said on Friday in its semi-annual monetary policy report to Congress.

Business borrowing “now stands near historic highs,” the U.S. central bank said in the report. Even though large cash balances, low interest rates, and renewed economic growth may dampen problems in the near term, “insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.”

Fed Chair Jerome Powell will present the report in hearings before the U.S. Senate Banking Committee on Tuesday and the U.S. House of Representatives Financial Services Committee on Wednesday.

After presenting his own summary of where the economy stands he will field questions from lawmakers that are likely to focus on how much more help the economy needs from the federal government to reach the point where ongoing COVID-19 vaccinations make it safe to resume normal commerce.

The Biden administration is pushing a $1.9 trillion stimulus plan that has already cleared a major hurdle in the Senate, money on top of the nearly $900 billion approved late last year and the roughly $3 trillion appropriated at the start of the crisis in 2020.

Those federal payments, including one-time checks to families, increased unemployment insurance, and loans to small businesses, led to faster-than-expected economic growth and less-than-anticipated financial stress among households and the banks that hold their mortgages and credit card loans.

But while banks and household balance sheets remain in reasonable shape, the Fed’s reference to business debt highlights the potential economic hangover still to come after a historically trying year.

Along with business failures, the report noted how changes to the economy that are still underway could, for example, cut the market for already highly-valued commercial real estate and lead to “sharp declines” in prices – a potential blow to investors or lenders involved with those properties.

The report also noted that the borrowing and spending used in some countries to fight the pandemic had made their financial systems “more vulnerable” than before, and the situation may be getting worse. Stress in some emerging market nations, the report warned, could spill over “and produce additional strains for the U.S. financial system and economic activity.”

Next week will be Powell’s first appearance on Capitol Hill since Democrats won the White House and control of both chambers of Congress.

The Fed has pledged to keep its current policy of low interest rates and $120 billion in monthly bond purchases intact until the recovery is more complete. That may be tested in coming months if, as expected, the reopened U.S. economy begins to generate rising inflation.

(Reporting by Howard Schneider; Editing by Paul Simao)