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      Revealed: how world’s biggest fossil fuel firms ‘profited in Myanmar after coup’

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      Revealed: how world’s biggest fossil fuel firms ‘profited in Myanmar after coup’Leaked tax records suggest subsidiaries of international gas field contractors continued to make millions after the coup In the two years since a murderous junta launched a coup in Myanmar, some of the world’s biggest oil and gas service companies continued to make millions of dollars from operations that have helped prop up the military regime, tax documents seen by the Guardian suggest.The Myanmar military seized power in February 2021 and according to the United Nations special rapporteur on Myanmar, it is “committing war crimes and crimes against humanity daily”. More than 2,940 people, including children, pro-democracy activists and other civilians have been killed, according to Assistance Association for Political Prisoners.Amid this violence, leaked Myanmar tax records and other reports appear to show that US, UK and Irish oil and gas field contractors – which provide essential drilling and other services to Myanamar’s gas field operators – have continued to make millions in profit in the country after the coup.The documents were obtained by transparency non-profit Distributed Denial of Secrets and analysed by Myanmar activist group Justice For Myanmar, investigative journalism organisation Finance Uncovered and the Guardian.The documents suggest that in some cases the subsidiaries of major US gas field service firms continued working in Myanmar – even after the US state department warned in January last year there were significant risks in doing business in the country – including with state-owned entities that financially benefit the junta, such as the national oil and gas company Myanma Oil and Gas Enterprise (MOGE).On Tuesday the US, UK, Australia and Canada announced more Myanmar sanctions, including on the managing director and deputy managing director of MOGE. But they stopped short of sanctioning MOGE itself.Last February the European Union became the first jurisdiction to announce sanctions against MOGE itself in light of the “intensifying human rights violations in Myanmar” and the “substantive resources” MOGE provides the junta.The EU sanctions prohibit European companies from working on Myanmar’s oil and gas field projects. But the US and UK have not yet introduced similar measures and such work – which may involve direct or indirect dealings with MOGE – is not prohibited.Among the findings, the leaked tax documents show that:
      US oil services giant Halliburton’s Singapore-based subsidiary Myanmar Energy Services reported pre-tax profits of $6.3m in Myanmar in the year to September 2021, which includes eight months while the junta was in power.

      Houston-headquartered oil services company Baker Hughes branch in Yangon reported pre-tax profits of $2.64m in the country in the six months to March 2022.

      US firm Diamond Offshore Drilling reported $37m in fees to the Myanmar tax authority during the year to September 2021 and another $24.2m from then until March 2022.

      Schlumberger Logelco (Yangon Branch), the Panama-based subsidiary of the US-listed world’s largest offshore drilling company, earned revenues of $51.7m in the year to September 2021 in Myanmar and as late as September 2022 was owed $200,000 in service fees from the junta’s energy ministry.
      The services provided to Myanmar’s Asia-owned gas field operators by these companies gave vital support to MOGE, which is a major shareholder in all of the country’s most important oil and gas projects.MOGE collects taxes and royalties for the state on gas field projects, ensuring that the junta gets lucrative tax and royalty payments, as well as a vast share of profits. According to the junta’s own figures the oil and gas industry is its biggest source of foreign-currency revenue, bringing in $1.72bn in the six months to 31 March 2022 alone.Yadanar Maung, Justice For Myanmar spokesperson, called the situation “deplorable”.“Oilfield service companies in Myanmar have blood on their hands for operating in an industry that bankrolls the illegal Myanmar military junta, as it wages a campaign of terror against the people,” Maung said.“These companies have breached their international human rights responsibilities and may be complicit in the junta’s war crimes and crimes against humanity by servicing oil and gas projects that fund the junta’s atrocities.”Maung welcomed the latest sanctions but said “far more needs to be done.“So far, only the EU has sanctioned MOGE, which bankrolls the junta. We call on the US, UK, Canada and Australia to follow the EU and also sanction MOGE,” Maung said.Myanmar is one of the poorest countries in Asia but is also rich in oil and gas deposits. The country’s major projects export gas to China and Thailand, with around 20% of the gas retained for domestic use.The major gas projects in which MOGE has significant shareholdings are run by the South Korean corporation Posco International, Thailand’s PTTEP and Gulf Petroleum Myanmar, also from Thailand. Gulf Myanmar Petroleum, PTTEP and Posco were contacted for comment.Map of major oil and gas fields in MyanmarActivists argue that any role played by western gas field contractors in Myanmar’s gas and oil industry after the coup makes them complicit in the junta’s war of aggression. Some legal experts argue the contractors could face future legal issues from their activities in the country.Baker Hughes told the Guardian its contracts were signed before the coup and completed in early 2022. The company said it had not signed new contracts since the coup and had “a very limited number of personnel in the country to support critical safety and operations needs”.Halliburton, Schlumberger and Diamond Offshore Drilling did not respond to repeated requests for comment.Last January, France’s Total and US’s Chevron – which have long been criticised for their roles as gas project operators in the country – announced plans to exit Myanmar.Chevron told the Guardian that it had now sold its 41.1% interest in the Yadana Project to Et Martem Holdings, a wholly owned subsidiary of MTI Energy, a Canadian company.The situation is complicated by the US’s ambiguous stance on MOGE. Myanmar’s state-owned gems, pearl and timber industries have been sanctioned by the US but Washington has not yet tackled MOGE, the linchpin in the junta’s largest single source of foreign revenue.In 2021 the New York Times reported that the oil giant Chevron had led an intense lobbying effort against sanctions that would disrupt oil operations in the country. That report came after the UN’s special rapporteur on Myanmar, Tom Andrews, had told Congress that MOGE was “now effectively controlled by a murderous criminal enterprise” and called on it and other state entities to be sanctioned in order to “meaningfully degrade the junta’s sources of revenue”.Last January, the state department did specifically warn of the dangers of doing business in the country and cited MOGE as particularly problematic. MOGE and other state-owned enterprises “not only generate revenue for a military regime that is responsible for lethal attacks against the people of Burma, but many of them also are subject to allegations of corruption, child and forced labor, surveillance, and other human and labor rights abuses”, it warned.But while the US has put sanctions on the State Administration Council – the junta’s ruling body which controls MOGE through the ministry of energy – it has stopped short of imposing tougher sanctions on MOGE itself. And the US commerce department’s country commercial guide for Myanmar, last updated in July 2022, describes the “dynamic” oil and gas sector as a “best prospect industry” with “significant opportunities for US investors”.The Biden administration is understood to be struggling with a desire to implement stronger sanctions while maintaining good relations with Thailand, a strategic partner, and also a major buyer of Myanmar’s natural gas.Justice for Myanmr’s Maung said the Biden administration’s contradictory approach to Myanmar “has allowed US oil and gas corporations to continue business as usual in Myanmar, enabling the junta’s international crimes”.“While the Department of State has warned that dealing with MOGE risks money laundering, furthering corruption and contributing to serious human rights violations, the US Department of Commerce is advising US companies to seek profits in the oil and gas sectors in Myanmar and to compete for MOGE tenders,” Maung said. “We call on the US to stand with the people of Myanmar by imposing sanctions on MOGE and helping to cut the flow of funds to the junta.”Pressure is mounting on the Biden administration to act. Last year, the Democratic senators Jeff Merkley, Cory Booker, Dianne Feinstein, Edward Markey and Gary Peters wrote to the US treasury urging the Biden administration to impose sanctions to help stem the junta’s brutality, especially by cutting off revenues from MOGE. “MOGE sanctions are one of the most significant actions the United States could take to degrade the junta’s ability to operate,” they wrote.In December, the US House passed the National Defense Authorization Act (NDAA), which included a section outlining action on Myanmar that raised the possibility of Joe Biden imposing sanctions on MOGE but stopped short of issuing a stronger ruling.“At the end of last year, Congress made great progress in authorizing sanctions on Burma’s energy sector, which represents nearly half of the junta’s foreign currency income. The administration must use these authorities and work with regional partners to cut off the junta’s ability to fuel its brutal campaign against civilians,” Merkley told the Guardian.The European Union toughened its stance on MOGE in February 2022, expanding its sanctions against the junta, becoming the first jurisdiction to sanction MOGE itself and prohibiting the provision of technical assistance that directly or indirectly benefits the state-owned entity, with a narrow exemption for decommissioning a project.One European company, Dublin-based Gavin & Doherty Geosolutions, a specialist geotechnical engineering consultancy, secured a contract to work on Thai-owned PTTEP International’s Zawtika development project off the coast of Myanmar, according to August 2021 reports. The contract was announced before EU sanctions were imposed on MOGE but seven months after the coup. Gavin & Doherty declined repeated inquiries about the nature of the contract or whether it was still working in the country.MOGE owns a 20% of Zawtika and profits from the project flow directly to the junta.The tax documents suggest Intermoor, a subsidiary of UK-based Acteon, a subsea services company, also continued to profit from work in Myanmar until at least February 2022. The UK has issued sanctions against some individuals and entities in Myanmar. But like the US, it has so far stopped short of sanctioning MOGE and no UK sanctions prohibit working directly or indirectly with the junta-controlled entity.Filings to Myanmar’s tax authority by Diamond Offshore Drilling indicate it made repeated payments to Intermoor between October 2021 and February 2022 for work done on behalf of Posco International. Posco runs the Shwe gas project, which in 2020 Intermoor had publicly announced it was working on. MOGE has a 15% stake in Shwe, in addition to the revenue it gets from taxes and royalties.A Justice For Myanmar source, verified by the Guardian, has confirmed the presence of InterMoor personnel in Myanmar in 2021 and 2022.Neither Intermoor nor its parent company, Acteon Group responded to repeated requests to comment on this story.Despite US and UK reluctance to target MOGE, environmental lawyers claimed companies working on gas projects in Myanmar still faced legal risks from their activities.Ben Hardman, Myanmar policy and legal adviser at Earthrights, a Washington-based human rights and environmental non-profit, said: “Oil field service companies are not just working with international oil majors, they are supporting joint ventures with MOGE, a government agency that has effectively been taken hostage by the junta. When the companies submit an invoice, the junta ultimately pays a share of them and the support of these companies ensures that the junta can keep seizing revenues that flow through MOGE.“If these companies have an EU presence, they are at severe risk of breaching EU sanctions on MOGE. Companies in the US and the UK also face risks because both governments have sanctioned the junta’s State Administration Council, which controls MOGE’s management and revenues.”TopicsMyanmarMyanmar coupOil and gas companiesSouth and central AsiaUS politicsIrelandThailandnewsReuse this content More

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      US heads for debt-ceiling standoff as House Republicans refuse to budge

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      AnalysisUS heads for debt-ceiling standoff as House Republicans refuse to budgeJoan E GreveHard-right Republicans say no to ‘clean’ debt ceiling increase, raising dire possibility of US defaulting on financial obligations The US economy could be headed for a crisis manufactured by a handful of House Republicans.The treasury secretary, Janet Yellen, informed congressional leaders on Thursday that the US has hit its debt ceiling, which limits the amount of money that the government can borrow to pay all of its bills. Yellen urged Congress to work as quickly as possible to raise the debt ceiling and prevent the US from defaulting on any of its financial obligations, which would have catastrophic consequences.What is the US debt ceiling and what happens if it isn’t raised?Read more“It is therefore critical that Congress act in a timely manner to increase or suspend the debt limit,” Yellen warned in a letter sent last week. “Failure to meet the government’s obligations would cause irreparable harm to the US economy, the livelihoods of all Americans, and global financial stability.”The dire language from the nation’s top economic official underscored the urgency of Congress’s task and appeared to represent an attempt to deter any lawmaker from toying with the idea of a default. Some House Republicans have chosen to do so anyway.Members of the hard-right House Freedom Caucus have already promised to oppose a “clean” debt ceiling increase, meaning a bill that raises the national borrowing limit without any other policy concessions.“We cannot raise the debt ceiling,” the Arizona congressman Andy Biggs said on Tuesday. “Democrats have carelessly spent our taxpayer money and devalued our currency. They’ve made their bed, so they must lie in it.”Congresswoman Marjorie Taylor Greene, from Georgia, echoed that sentiment on Wednesday, telling Fox News: “I for one will not sign a clean bill raising the debt limit.”Setting aside the fact that individual members of Congress do not sign bills, the comments from lawmakers like Greene have intensified concerns over a potential default this summer. As of now, the treasury is deploying “extraordinary” measures to keep paying its bills, but those options may be exhausted as early as June.The US has never failed to raise or suspend its debt ceiling, so most Americans are probably unfamiliar with the potential consequences of a default. Experts fear that the crisis would force the treasury to essentially choose which of its creditors to pay, and those decisions would carry legal ramifications while financially harming any number of institutions that rely on government funding.“Doctors in hospitals who provide services to Medicare beneficiaries wouldn’t be getting paid what they’re owed,” said Paul van de Water, senior fellow at Center on Budget and Policy Priorities, a progressive thinktank. “Defense contractors wouldn’t be getting paid in their full amounts. Veterans wouldn’t receive the full benefits to which they’re entitled and on and on and on.”A failure to address the debt ceiling would simultaneously cause irreparable damage to the reputation of the US treasury, and that recalculation would trickle down to consumers.If Congress fails to raise the debt ceiling, it would trigger a “risk premium” for any financial transaction benchmarked to the treasury, said Gordon Gray, director of fiscal policy at the center-right thinktank American Action Forum. “And what’s benchmarked to the treasury? Pretty much every financial instrument that consumers have: your credit card, your mortgage,” Gray said. “Any number of interactions that the public has with financial markets would be affected by this.”For many economic experts, the looming crisis has sparked grim flashbacks to the 2011 standoff over the debt ceiling. At the time, Republicans had just regained control of the House and found themselves going toe to toe with Barack Obama over the debt ceiling. Republicans were demanding cuts in government spending in exchange for supporting a debt ceiling increase, leading to Democrats’ accusations that they were recklessly endangering the US economy to advance their own political agenda.The standoff ended with the passage of the Budget Control Act, which raised the debt ceiling and outlined significant cuts in government spending. Some House Republicans now appear to be hoping for similar spending cuts in exchange for a debt ceiling hike, escalating the risk of a default.Gray was as a policy adviser to former Republican senator Rob Portman when the 2011 crisis unfolded, and he expressed concern that the next debt ceiling fight could bring the US economy even closer to calamity.“I believe that the risks are heightened now in a way that they have not been certainly since 2011, and very possibly the risks are greater now than they were then,” he said.The protracted fight over the House speakership earlier this month only heightened Gray’s fears. Kevin McCarthy was elected speaker on the 15th ballot, following a days-long revolt from 20 members of the House Republican conference.“They couldn’t agree that the sky was blue for a week,” Gray said.“The individuals involved in that episode are the same folks who are signaling a disinclination to increase the debt limit.”McCarthy has indicated his interest in negotiating with the White House over a debt ceiling bill, downplaying concerns over a potential default.“We don’t want to put any fiscal problems on our economy and we won’t,” he said last week. “But fiscal problems would be continuing to do business as usual.”So far, Joe Biden has shown no willingness to entertain the idea of cutting government spending in exchange for raising the debt ceiling.“We are not going to be negotiating over the debt ceiling,” the White House press secretary, Karine Jean-Pierre, said on Tuesday. “This should not be a political football. And we should do it without conditions.”The demands from House Republicans strike Democrats as particularly outrageous because of their own bipartisan approach to the debt ceiling in the past. During Donald Trump’s presidency, Democrats worked with Republicans to suspend the debt ceiling three times. At the time, congressional Republicans made no attempt to lower government spending while addressing the debt ceiling.During Trump’s presidency, Republicans took a seemingly cavalier attitude when it came to reducing government debt. In 2017, Republicans passed the Tax Cuts and Jobs Act, even after the Congressional Budget Office projected that the legislation would increase the federal deficit by nearly $1.5tn over the following decade.“Clearly the approach that is taken seems to vary depending upon the political climate of the moment,” Van de Water said. As of now, it remains unclear how the latest debt ceiling standoff will resolve itself. The White House and the holdout Republican lawmakers have only reiterated their demands, and the clock is ticking to avoid severe economic tumult that could be felt worldwide.“Something’s got to give. Something’s going to give,” Gray said. “My hope is that it’s not the financial markets first.”TopicsUS CongressUS economyUS politicsnewsReuse this content More

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      JP Morgan chief says US should not be ‘playing games’ with debt ceiling

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      JP Morgan chief says US should not be ‘playing games’ with debt ceilingJamie Dimon warns that US creditworthiness should be ‘sacrosanct’ as country’s debt races toward $31.4tn limit The US should not be “playing games” with the debt ceiling, the JP Morgan chief executive, Jamie Dimon, warned warring US political factions on Thursday as a heated row over the federal borrowing limit reached a crisis point.“We should never question the creditworthiness of the US government. That is sacrosanct and it should never happen,” Dimon said on Thursday in an interview on CNBC. “This is not something we should be playing games with at all.”​Dimon’s comments came as the US treasury department announced later Thursday it would take steps to keep paying the federal government’s bills as the US hit its $31.4tn debt limit as expected.In a letter addressed to the Republican House speaker, Kevin McCarthy, the treasury secretary, Janet Yellen, said the department will suspend new investments in the civil service retirement and disability fund, as well as the postal service retiree health benefits fund until June.Yellen warned that moves were subject to “considerable uncertainty” if Congress does not pass a bill to increase the borrowing limit. Last week, she had sought to head off an impasse over the US’s borrowing that if breached could begin to seize up debt repayments and send shock waves throughout the US and global economies.What is the US debt ceiling and what happens if it isn’t raised?Read more“Failure to meet the government’s obligations would cause irreparable harm to the US economy, the livelihoods of all Americans and global financial stability,” Yellen told Congress.She said that the Biden administration would try to keep the country under that debt cap and able to finance its operations as long as possible by using “extraordinary measures” that involves shifting money and suspending investments in savings plans for government workers.In theory that could give lawmakers until June to come up with a solution, but Yellen also warned that the US treasury “is not currently able to provide an estimate of how long extraordinary measures will enable us to continue to pay the government’s obligations”.Political wrangling over US treasury debt, which has doubled in a decade, is a traditional battlefield for political parties. Since 1960, politicians have moved to raise, extend or revise the debt limit 78 times.The White House maintains that the ceiling should be increased without conditions and will not negotiate on the issue. Republicans are urging a “debt prioritization” plan that would seek to avert default.“We’re not going to default on the debt. We have the ability to manage servicing and paying our interest. But we similarly should not blindly increase the debt ceiling,” Representative Chip Roy, a leading conservative Republican, told Reuters.But Dimon, regarded as America’s most powerful and most forthright banker, warned against playing political football with the issue.“Of course Democrats will blame the Republicans and Republicans will blame the Democrats,” Dimon told CNBC. “I don’t care who blames who. Even questioning it is the wrong thing to do … That is just a part of the financial structure of the world. This is not something you should be playing games with at all.”TopicsUS economyJamie DimonEconomicsUS politicsnewsReuse this content More

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      What is the US debt ceiling and what happens if it isn’t raised?

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      ExplainerWhat is the US debt ceiling and what happens if it isn’t raised?The US treasury secretary warned ‘extraordinary measures’ will have to be put in place to prevent defaulting – here’s what that means for the government The US government will hit its borrowing limit – or the debt ceiling – on 19 January, the beginning of what looks to be a vicious fight over the government’s budget and one that threatens to worsen an already precarious economic outlook.The US treasury secretary, Janet Yellen, sent an ominous letter of warning to Congress last Friday that “certain extraordinary measures” will have to be put in place to prevent the United States from defaulting on its obligations” – essentially moving some money around so the government does not default just yet. Those measures will last a few months, but if the limit is ultimately not raised, the federal government will run out of funds.Here is more on the debt ceiling and what it means for the federal government.What is the debt ceiling?Congress has the ability to set a limit on how much the US government can borrow to pay for its expenses. This limit is called the debt ceiling, and right now the limit is $31.4tn. Borrowing money helps the federal government pay for expenses passed in its budgets, like social security and Medicare benefits and the salaries of US military service members.What happens if the debt ceiling isn’t raised?If Congress does not raise the debt ceiling in the coming months, things will quickly go south for the economy, Yellen warned.“Failure to meet the government’s obligations would cause irreparable harm to the US economy, the livelihoods of all Americans, and global financial stability,” she wrote.If the federal government defaults on its loans, investors could lose faith in the US dollar, causing the US dollar to weaken, stocks to fall and triggering job cuts.Even if the debt ceiling is raised, a prolonged fight over it could still cause long-term financial harm. During a particularly vicious debt-ceiling battle in 2011, credit rating agency Standard & Poor downgraded the US government’s credit rating for the first time in history, making it more costly for the US government to borrow money thereafter.Why isn’t Congress raising the debt ceiling?Republicans have a fresh majority in the House, and they see the debt ceiling as a possible bargaining chip for negotiating spending cuts.House speaker Kevin McCarthy said on Fox News Sunday that reaching the debt ceiling is a test for the party on its commitment to cutting spending.“You couldn’t just keep increasing it,” he said. “Let’s sit down and change our behavior for the good of America. Because what we’re going to do is bankrupt this country and bankrupt these entitlements if we don’t change their behavior today.”The White House press secretary, Karine Jean-Pierre, said the administration will not be doing “any negotiations”.“It should be … done without condition,” she said.With Republicans holding onto the necessary votes needed to lift the ceiling, the fight to raise it could get ugly.In a joint statement, the Senate majority leader, Chuck Schumer, and the House minority leader, Hakeem Jeffries, said Democrats want to move quickly on passing a new debt ceiling.“We’ve seen in previous debt ceiling stand-offs that even the threat of default leads to even higher costs for working families,” they said. “Default forced by extreme Maga Republicans could plunge the country into a deep recession.”What do Republicans want?Exactly how much Republicans want to cut, and what they want to target, is still unclear. And while Republicans often rally against government spending, raising the debt ceiling funds government expenses that have already been passed by Congress. Not being able to borrow more money will put existing federal programs at risk.But Republicans, particularly the more conservative members of the party, are gearing themselves up for a battle over the ceiling.Some are even thinking Republicans can push for a payment prioritization plan that would call on the Biden administration to make only critical federal payments, like social security and Medicare. The Washington Post reported that McCarthy privately made a deal with conservative Republicans when he was fighting to get the speaker title to pass a prioritization plan in the first quarter of the year. The details of the plan are not set but make clear that Republicans are gunning for cuts.Responding to the Post’s report of the plan, the White House chief of staff, Ron Klain, tweeted that Republicans want to make “payments to wealthy foreign bondholders” in lieu of funding other federal programs like national parks and food stamps.Why does the debt ceiling exist?Experts have pointed out for years that there is no good reason why the debt ceiling exists and that raises should be routine. Few other nations have similar limits, and in recent history, it has largely been a political negotiating chip between parties – one that carries heavy consequences.What happens next?Expect months of wrangling and leaks. The Republican plan is not yet clear but it is clear that the newly empowered party – and especially its more conservative wing – wants to make its mark.Fights to raise the debt ceiling have led to government shutdowns in the past. The longest-ever shutdown was 35 days between 22 December 2018 and 25 January 2019 at a cost of $11bn – $3bn of which was permanent.So far stock markets do not seem to be rattled, suggesting investors think this is another war of words. Over the next few months, that could change.TopicsUS economyUS CongressUS politicsEconomicsexplainersReuse this content More

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      ‘It’s been rough’: passengers weather another day of chaos at US airports

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      ‘It’s been rough’: passengers weather another day of chaos at US airportsFrom weather disruptions to computer problems to crew shortages, customers are once again caught in travel limbo After an $8bn makeover, New York’s new LaGuardia airport complex is finally an airport the city can be proud of. Unfortunately the same can not be said for the industry it serves.For the second time in almost two weeks thousands of flights were canceled across the US on Wednesday – this time because of what appears to be a snafu with an antiquated computer system. Passengers have had enough.“It’s been rough this last couple of years,” said Deb Alexis, who had traveled to New York from Orlando. “The flight was great but now there’s stress because the bags haven’t come. Seems like there’s a lot of confusion and delays nowadays.”‘A wild Christmas eve’: strangers stranded by airline chaos team up for road tripsRead moreAsked if airline travel is becoming altogether too much trouble, Danny Dividu, on his way to Georgia when his Southwest plane was canceled, said simply: “Hell yes. Now I’ve got to go back upstairs to check in again. I usually go Greyhound. Best way to go. I hate flying. It’s too much hassle, always has been.”Another day, another crisis at US airports.It might have been the cascading weather-related disruptions the US experienced over the holidays, or computer issues, scheduling, pilot or crew shortages but the outcome was familiar: customers left in a helpless state of air travel limbo.Whatever the precise cause of Wednesday’s issues, they are part of a wider set of problems for travelers, airlines and the FAA, said Robert Mann, a former airline executive who now runs the consulting firm RW Mann & Company.“The FAA runs on hardware and software that is in many cases decades old,” he said. “And it’s a multi-year effort to build and install them.”Even a small, regional failure can have knock-on effects for the entire network, he said, but this “seems to be a system failure” and travelers could expect more issues unless something is done.The FAA estimates that delayed and canceled flights cost the US economy $33bn in 2019. “Everyone – the department of transportation, the general accounting office, Congress – agree that there is a significant cost to this but nobody does anything about it,” Mann said.Congress is set to debate the funding of the FAA this year and the hearings are expected to be heated. The FAA is currently without a leader and has been since last March.Biden has nominated Phillip Washington, currently the chief executive of Denver International Airport, to the position. But his nomination has been clouded by criticism of his lack of experience in the aviation industry and ties to a corruption scandal.With Republicans now in charge of the House, Biden’s nomination looks more uncertain and the latest mess will expose the transport secretary, Pete Buttigieg, to more criticism following the chaos at US airports over the holidays.After the flight restrictions were lifted, Buttigieg said his department was not ruling out the possibility that nefarious activity was to blame for the computer system outage.“We’re not prepared to rule that out,” Buttigieg said in an interview on MSNBC. “There is no direct indication of any kind of external or nefarious activity, but we are not yet prepared to rule that out,” Buttigieg said.After the incident senator Ted Cruz, the top Republican on the Senate committee on commerce, science and transportation, called for congressional reforms to the FAA.Southwest Airlines under investigation as more flights canceled after stormRead more“The flying public deserves safety in the sky,” the Texas senator said in a statement. “The administration needs to explain to Congress what happened, and Congress should enact reforms in this year’s FAA reauthorization legislation.”Wednesday’s incident, Cruz added, “highlights why the public needs a competent, proven leader with substantive aviation experience leading the FAA”.By mid-morning, the FAA issued its fifth bulletin. “Normal air traffic operations are resuming gradually across the United States following an overnight outage,” the agency said in a statement.By then, it was too late for many passengers. Jordan Cousins, 25, on his way to Nashville on Southwest from New York’s LaGuardia, said his Southwest flight had been delayed twice and then canceled entirely.“It’s this and then it’s that. You never know. You may have a smooth flight or there may be a problem. It may be at the counter, with the plane, or something,” he said. “Plans never go as planned.”TopicsAirline industryUS politicsNew YorkAir transportfeaturesReuse this content More

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      US flights resuming after FAA alert system outage causes disruption

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      US flights resuming after FAA alert system outage causes disruptionThousands of flights delayed because of problem with system that alerts pilots about hazards or changes at airports Domestic flights across the US were temporarily grounded on Wednesday morning, after an IT failure in a critical aviation safety system.The Federal Aviation Administration (FAA) said that the system that alerts pilots and airlines about any hazards was not functioning. The breakdown led to more than 7,800 flights being delayed and 1,200 being canceled , the flight tracking website FlightAware showed. The ground stop was lifted at 9am with the FAA declaring that operations were “resuming gradually across the United States”, but travelers were still left facing another chaotic day of air travel following severe disruptions over the holiday period.“They don’t know what the cause is,” Joe Biden told reporters after speaking to the transportation secretary, Pete Buttigieg. “Aircraft can still land safely, just not take off right now. They don’t know what the cause of it is, they expect in a couple of hours they’ll have a good sense of what caused it and will respond at that time.”The White House said there was no evidence of a cyber-attack but the causes of the IT failure would be investigated in full by the Department of Transportation.International US-bound flights were continuing to take off from Europe and elsewhere.The aviation regulator said its Notam (Notice to Air Missions) system had “failed” and it was working to restore it.It said: “While some functions are beginning to come back on line, National Airspace System operations remain limited.”The FAA said it had “ordered airlines to pause all domestic departures until 9am ET to allow the agency to validate the integrity of flight and safety information”.Jordan Cousins, 25, on his way to Nashville on Southwest Airlines from New York’s LaGuardia, said his flight had been delayed twice and then canceled entirely.“I’ve been here since 7am and this pushes back everything I was trying to do. First I thought it was a cyber-attack, but they said it was some kind of malfunction. So I had all sorts of curiosities,” he said.Crowley said he had noticed that US air travel had become precarious.“Travelling is coming a bit of a hassle. It’s this and then it’s that. You never know. You may have a smooth flight or there may be a problem. It may be at the counter, with the plane, or something,” he said. “Plans never go as planned.”The White House press secretary, Karine Jean-Pierre, said: “There is no evidence of a cyber-attack at this point, but the president directed [the Department of Transportation] to conduct a full investigation into the causes. The FAA will provide regular updates.”Wednesday’s chaos came after a troubled holiday season for air travelers. Bad weather led to the cancellation of thousands of flights, a situation compounded by issues at Southwest Airlines that led to the cancellation of thousands more.More than 20,000 flights were scheduled to depart airports in the US on Wednesday, according to aviation analytics firm Cirium, with almost 2.9m seats.The delays affected carriers around the US. American Airlines, the biggest carrier by volume, said it was working with the FAA to minimise disruption. United Airlines said it had paused all domestic flights.A Notam is a notice containing information essential to personnel concerned with flight operations, but not known far enough in advance to be publicised by other means.Information can go up to 200 pages for long-haul international flights and may include items such as runway closures, general bird hazard warnings or low-altitude construction obstacles.TopicsAir transportUS politicsnewsReuse this content More