The Week in Business: More Air Travel Chaos

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The Week in Business: More Air Travel Chaos

On the heels of Southwest Airlines’ holiday travel meltdown, a much wider systemic breakdown grounded planes last week. The source of the problem lay with the Federal Aviation Administration, whose system alerting pilots to safety issues went down on Wednesday. In total, the disruption caused more than 9,000 delays and 1,300 cancellations, leaving many passengers stranded with no airline to blame. The cause was a damaged database file, according to the agency, and the White House said there was no evidence of a cyberattack. But the system failure is nonetheless unsettling, revealing the fragility of the infrastructure that the country relies on to manage commercial air traffic. Critics say the F.A.A. has struggled to keep up with technological advances as well as the rise in the number of flights and passengers. The air travel chaos again put Transportation Secretary Pete Buttigieg, who oversees the agency, in the hot seat. He said he was trying to determine “how this could have happened in the first place.”

To the relief of American households and policymakers in Washington, consumer prices — climbing at a blistering pace not so long ago — are continuing to cool down. Inflation is slowing on an annual basis, according to the latest numbers, with the Consumer Price Index rising 6.5 percent over the year through December, down from 7.1 percent in November. That drop was largely due to falling prices for gas and plane tickets. A pullback in inflation of the prices of goods and moderating rent costs this year could help ease overall inflation. The report should be encouraging for central bankers at the Federal Reserve, who are beginning to see clearer signs that their campaign to tame rising prices is having the desired effect — which is why they are considering raising interest rates a quarter point at their February meeting rather than carrying out another half- or three-quarter-point increase.

Last week, Goldman Sachs began one of its largest rounds of layoffs since the 2008 financial crisis. The bank plans to cut 3,200 jobs in total, or about 6 percent of its work force, as it struggles with a downturn in deal-making and sagging markets. And on Friday it disclosed that its effort to expand into consumer banking had resulted in $3 billion in losses since 2020. It is far from the only Wall Street giant experiencing these challenges: JPMorgan Chase, the country’s largest bank, reported that its investment banking revenue in the fourth quarter fell 57 percent and said it had set aside $1 billion to prepare for the possibility of a “mild recession.” Bank of America, Citigroup and Wells Fargo have also each earmarked hundreds of millions of dollars to account for future loan losses. Goldman’s earnings, which will be released this week, are likely to closely mirror those of its peers.

Even before Elon Musk took over Twitter, he was not known for his discretion on the platform. This week, Mr. Musk is scheduled to go to trial over a tweet he posted in August 2018, telling his millions of followers: “Am considering taking Tesla private at $420. Funding secured.” With that declaration — suggesting a more than $70 billion deal — he sent the electric vehicle company’s stock soaring and ended up with $40 million in fines from the Securities and Exchange Commission. Shareholders have sought their own recourse, too, filing a lawsuit seeking damages and accusing Mr. Musk and other current and former Tesla board members of stock manipulation. Mr. Musk has said the tweet referred to a potential investment from Saudi Arabia’s government investment fund, but some familiar with the workings of the Saudi fund cast doubt on those claims, and board members at Tesla were blindsided by Mr. Musk’s tweet.