Friday, May 6, 2011
U.S. TAXPAYER BAILED OUT AIG ILLEGALLY SUBSIDIZING AIRBUS AT AMERICAN TAXPAYERS' EXPENSE IN BIGGEST LOSS EVER - WELCOME TO GEITNAMANO BAY!
– Thu May 5, 8:01 pm ET
NEW YORK – Repayment of bailout aid and losses from the earthquake and ensuing tsunami that ravaged Japan's northeast coast led to a first-quarter loss at American International Group Inc.
The global insurance company on Thursday reported a loss, after paying preferred dividends, of $543 million, or 35 cents a share. That compared with net income of $359 million, or $2.66 a share, a year earlier.
Its revenue fell to $17.44 billion from $18.56 billion last year.
The loss was mainly linked to AIG booking a $2.4 billion charge over its repayment of a Federal Reserve Bank of New York loan more than two years early. Meanwhile, Chartis, its recently reorganized property-casualty business, posted $1.7 billion in catastrophe losses from disasters including the March 11 earthquake and tsunami in Japan, the New Zealand earthquake and massive flooding in Australia. That was up from $500 million in catastrophe losses in 2010's first quarter.
AIG also set aside $385 million to pay the U.S. Treasury for the costs related to selling its shares. Operating income, however, rose to $2.0 billion for the quarter from $637 million in the prior-year period.
As the value of its investments increased, its capital markets portfolio earned $277 million. Its life insurance business, SunAmerica Financial Group, reported flat operating income of $1.1 billion.
In March, AIG paid the Treasury Department nearly $7 billion to trim its outstanding balance to just under $60 billion of the $182 billion bailout it received in 2008, as the U.S. government saved it from collapse. The Treasury Department still owns 92 percent of AIG through its holdings of the company's common stock, which it is expected to begin selling in May. Treasury officials have said they expect to recoup the full amount of the bailout.
Since 2008, AIG has sold 33 businesses and raised more than $57 billion in cash and securities. Last year alone, AIG raised more than $37 billion, primarily by selling two international life insurance divisions.
AIG's stock fell 46 cents to $30.33 in after-hours trading following the release of the earnings report. The stock had closed the regular session down 85 cents, or 2.7 percent, at $30.79.
AIG pushes Airbus past Boeing in jet sales
PARIS (Reuters) - A $9 billion, 100-plane order from the leasing arm of U.S. insurance group AIG (AIG.N) has lifted Airbus above Boeing Co (BA.N) in new jetliner sales this year, putting pressure on the EADS (EAD.PA) unit rival to clarify its next plane design.
Fueled by a turnaround from the worst aviation recession in memory, the two plane-makers are battling for control of the next stage of a $1.7 trillion market for the 100- to 200-seat planes favored by airlines on medium-length routes.
Europe's Airbus saw its April order book boosted by confirmation of a deal by American International Group Inc's International Lease Finance Corp to buy the newest Airbus narrow-body planes, even though it also lost a prestige order for 10 A380 superjumbos from the same company.
The purchase confirms a stronger outlook for ILFC after it was hit by the financial crisis and is a sign of confidence in upcoming revamped versions of the best-selling A320 family. The "A320neo" will feature new engines with greater fuel-efficiency.
Boeing has poured cold water on the Airbus project, saying it will be obsolete in a decade.
It has promised to announce its own plans for the largest segment of the aircraft market around the middle of the year; but powerful ILFC said when announcing a preliminary version of the deal that it was not prepared to wait for Boeing's plans.
"Common sense says this will put further pressure on Boeing to fast-forward their 737 update," said Howard Wheeldon, senior strategist at BGC Partners in London.
Airbus said it sold 169 jets between January 1 and the end of April, pushing it past Boeing's 153 gross orders. But after cancellations, Boeing remained ahead of Airbus with net orders of 106 aircraft compared with the European tally of 90.
The Boeing figures are based on data up to April 26. The U.S. company said on Thursday it took four new orders in the latest reporting week and lost one, bringing its net 2011 orders to 109 and its gross orders to 157.
There were also fresh signs on Thursday that airlines, especially those facing the worst cost pressures, are favoring a new generation of lightweight aircraft as rising fuel prices threaten to drive the industry's recovery off-course.
Irish carrier Aer Lingus (AERL.I) canceled a remaining order for three undelivered, aluminum-built Airbus A330 passenger jets and switched to the carbon-composite A350-900, boosting its order for the $270-million jet to nine from six, Airbus data showed.
Dutch lessor AerCap (AER.N) trimmed an order for the A330 -- an aircraft which has sold well as Boeing has run into production delays on its next-generation 787 Dreamliner, but which is based on older technology than either the 787 or the
Aer Lingus says it may ramp up a controversial cost-cutting program after confirming profit this year will be significantly below 2010 levels.
Shares in Airbus parent EADS (EAD.PA) fell 1 percent on Thursday in line with a weaker European market.
ILFC confirmed a decision to cancel an order for 10 A380s worth $3.8 billion at current prices. The order had been in jeopardy because airlines prefer to customize the double-decker aircraft, making it harder for leasing companies to own the aircraft and switch them among customers' fleets.
With 234 sales, Airbus is seen as a long way off reaching the break-even point on the world's largest airliner as production costs have been driven up by a slow recovery from manufacturing delays.
Airbus said it had delivered 167 aircraft in the first four months of the year, including five A350s.
(Additional reporting by Carmel Crimmins and Kyle Peterson; Editing by Erica Billingham and Gerald E. McCormick)
Posted by Eileen at 11:46 AM