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Boeing signs first deal for 737 Max jet since deadly crashes

Paris, Jun 18 (AP) Boeing is selling its 737 Max planes again.

The company announced at the Paris Air Show on Tuesday that International Airlines Group, the parent company of British Airways and other carriers, signed a letter of intent for 200 Boeing 737 aircraft.

Boeing said it's the first sale of the jetliner since the crash of an Ethiopian Airlines 737 Max in March. Another 737 Max crashed in Indonesia last year.

All planes of the same model are now grounded amid an investigation of problematic software.

The letter of intent is subject to final agreement, but is a vote of confidence in Boeing as it struggles to win back trust from airlines, pilots, regulators and the traveling public.

The combination of 737-Max 8 and 737-Max 10 planes would cost USD 24 billion at list prices, though companies usually strike deals for discounts. The planes would be delivered between 2023 and 2027 to airlines owned by IAG.

IAG expressed optimism that regulators will allow amended Max jets to fly again soon. But it's unclear when that will be, notably for regulators outside the U.S.

The Ethiopian Airlines and Lion Air crashes killed 346 people. Boeing executives started off the Paris Air Show on Monday with a sweeping apology to victims' families and airlines.

Analysts had predicted that Boeing might try to announce some Max orders at the air show to demonstrate that the plane - one of Boeing's most popular models - still has support.

Boeing depends heavily on the aircraft and has said it is costing at least $1 billion to address problems with the troubled jet. But the company has struggled to get a handle on the Max controversy.

The CEO says Boeing botched communication with regulators and is promising more transparency.

After lackluster sales in recent months, Boeing's orders picked up Tuesday. It announced a deal with Korean Air and Air Lease Corporation for a total of 30 long-range 787 jets, worth USD 6.3 billion at list prices.

European rival Airbus also announced several orders Tuesday. Before announcing its Boeing Max deal, industry powerhouse IAG signed a firm order with Airbus for new A321XLR long-range jets, for its airlines Aer Lingus and Iberia.

Airbus also reported sales to Delta Air Lines, Saudi Arabian Airlines and Atlantic Airways, and announced a feasibility study for vertical takeoff and landing aircraft that could shuttle visitors to the Paris 2024 Olympics.

Both Airbus and Boeing face a slowing economy that tempered the mood at the air show .

The companies, along with other manufacturers, came together Tuesday to promise more investment in reducing aviation emissions even as global air travel is expected to rise significantly in the decades to come.

Plane makers are under increased pressure from regulators and passengers concerned about climate-damaging emissions. They are looking at hybrid, electric or hydrogen technology to eventually replace existing fuel. AP

Europe wary as Facebook takes up cryptocurrency challenge

Paris, Jun 18 (AFP) European financial leaders on Tuesday vowed vigilance after Facebook announced it was diving into the cryptocurrency market, as analysts warned the social media giant could face major regulatory questions.

French Finance Minister Bruno Le Maire, whose government initiated a new tax on digital giants like Facebook that has angered the United States, said such digital money could never replace sovereign currencies of governments and insisted Facebook's plan required guarantees.

Bank of England Governor Mark Carney said Facebook's new currency would have to withstand scrutiny of its operational resilience and not allow itself to be used for money laundering or terror financing.

Facebook and some two dozen partners on Tuesday released a prototype of a cryptocurrency called Libra, whose rollout as global digital money is expected next year.

"If Facebook wants to create an instrument for transactions, why not? But there is no question that this can become a sovereign currency," Le Maire told Europe 1 radio, saying a "limit" had to be set.

"It cannot and must not become a sovereign currency, with all of attributes of a currency", such as the capacity to issue sovereign debt and serve as a reserve currency.

"The aspect of sovereignty must stay in the hands of states and not private companies which respond to private interests," Le Maire added.

There need to be "guarantees" so that "this transaction instrument is not misused, for example, for the financing of terrorism or illicit activities," he said.

With France currently holds the G7 presidency, Le Maire said he had asked the group's central bank governors to prepare a report by mid-July to lay out the guarantees required from cryptocurrencies.

Speaking in Portugal, Carney echoed Le Maire's concerns, saying the new cryptocurrency would require the strictest regulation.

"Anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation," Carney said, Bloomberg reported.

"So open mind, but not open door," he said, Libra will be introduced in the wake of other cryptocurrencies such as bitcoin but aims to avoid the roller-coaster valuations that have attracted speculation and caused ruin.

Cathy Mulligan, a cryptocurrency expert at London's Imperial College, said Facebook faced a huge challenge to win regulatory approval for such a service in its markets.

"Financial services operators act to protect consumers first -- this is not something that Facebook are known for so we can expect difficulties for them," she told AFP.

Mulligan said that if Facebook wished to act like a "nation state" it would have to expect "governments to react quite strongly".

She added given that Facebook has no track record in fiscal and monetary policy, "we can expect regulators to take a strong approach to this." AFP

Shanahan drops bid to lead Pentagon, citing 'painful' past

Washington, Jun 18 (AP) After months of unexplained delays, Acting Defense Secretary Patrick Shanahan stepped down Tuesday before his formal nomination ever went to the Senate, citing a "painful" family situation that would hurt his children and reopen "wounds we have worked years to heal." President Donald Trump announced Shanahan's departure in a tweet, and said that Army Secretary Mark Esper would be the new acting Pentagon chief.

"It is unfortunate that a painful and deeply personal family situation from long ago is being dredged up and painted in an incomplete and therefore misleading way in the course of this process," Shanahan said in a statement. "I believe my continuing in the confirmation process would force my three children to relive a traumatic chapter in our family's life and reopen wounds we have worked years to heal. Ultimately, their safety and well-being is my highest priority."

The acting defense secretary did not provide specifics about the family situation but media outlets including The Washington Post and USA Today published extensive reports Tuesday about circumstances surrounding his 2011 divorce shortly before Trump tweeted that Shanahan's nomination would not go forward.

In his statement, Shanahan said he asked to be withdrawn from the nomination process and he resigned from his previous post as deputy defense secretary.

He said he would work on an "appropriate transition" but it wasn't clear how quickly he will leave the job.

Defense officials said that leaders are trying to decide when Esper would take over the job. Officials were meeting Tuesday afternoon to discuss transition plans. The officials spoke on condition of anonymity because they weren't authorized to publicly discuss internal deliberations.

In his tweet, Trump simply said that Shanahan had done "a wonderful job" but would step aside to "devote more time to his family." And, in noting Esper's move, Trump added, "I know Mark, and have no doubt he will do a fantastic job!" The post atop the Pentagon has not been filled permanently since Gen. James Mattis retired in January following policy differences with Trump.

Trump announced in May that he would nominate Shanahan but the formal nomination process in the Senate had been inexplicably delayed.

Shanahan, a former Boeing executive, has been leading the Pentagon as acting secretary since Jan 1, a highly unusual arrangement for arguably the most sensitive Cabinet position.

His prospects for confirmation have been spotty due in large part to questions about his lengthy work as former Boeing executive and persistent questions about possible conflicts of interest.

The Defense Department's Inspector General cleared Shanahan of any wrongdoing in connection with accusations he had shown favoritism toward Boeing during his time as deputy defense secretary, while disparaging Boeing competitors.

In Shanahan's tenure at the department he's had to deal with a wide array of international hotspots, ranging from missile launches by North Korea to the sudden shift of military ships and aircraft to the Middle East to deal with potential threats from Iran.

Shanahan, 56, had extensive of experience in the defense industry but little in government. In more than four months as the acting secretary, he focused on implementing the national defense strategy that was developed during Mattis' tenure and emphasizes a shift from the resources and tactics required to fight small wars against extremist groups to what Shanahan calls "great power" competition with China and Russia. AP