Airbus rounds part of its A320 fleet for urgent software upgrades.
About 900 aircraft will, initially at least, be taken out of service until they can be repaired, and that will cause problems.
That unfortunately, may mean there is some disruption, maybe some delays, maybe some cancellations over the coming days.
This is World Business Report from the BBC World Service.
I am Bissi Adibayo.
What's behind the recall and how much disruption could it cause?
Also on the way, Germany pushes Brussels to soften the 2035 ban on combustion engine cars.
What does this mean for Europe's biggest automakers?
And it's Black Friday, but are shoppers splurging or simply becoming more selective?
So the European planemaker Airbus, is ordering urgent modifications to thousands of its aircraft after discovering that intense solar radiation can corrupt data vital to flight controls.
Around 6,000 planes and nearly half of the global Airbus fleet are affected.
Our international business correspondent Theo Liggett has more.
Well, we know that Airbus, the European aircraft maker, has asked operators of A320 family aircraft, that's the A320, its main workhorse, and also other variants of it like the A319 and the A321.
And it wants them, in the majority of cases, to change some computer software.
That's a process that in each case should take about three hours and be fairly straightforward.
But in Some cases and this will affect about 900 aircraft out of 6000 around the world that are affected it'll need a computer to be changed out as well.
And the reason it's doing this.
It's a safety precaution and it's because back in October, a flight en route from Cancun in Mexico to Newark in New Jersey experienced a sudden, rather strange problem and went into.
I wouldn't call it a dive, but a sudden, uncontrolled descent.
And...
As a result of that, it had to make an emergency landing.
Somewhere between 15 and 20 people were sent to hospital with minor injuries, as we understand it.
An Airbus was left wondering what had happened.
And it concluded, after some study, that a solar storm had affected a flight computer, one of the computers on board.
There are many, and that flight computer was responsible for operating a lot of the aircraft's control surfaces.
So this disrupted the pilot's control of the aircraft and sent it into an unexpected descent.
Airbus says this has never happened before and that it only happened after the software in that aircraft had been changed for a newer version.
It had never happened with the old software.
So what it's doing is it's modifying aircraft to try and ensure that this doesn't happen again.
It requested airlines to do this.
It notified the authorities.
And here in Europe at least, the European Aviation Safety Agency has mandated that people offer it off operating the worst affected aircraft, the ones that need the computers stripped out and replaced to do that pretty much immediately.
The directive applies from tomorrow.
And as of tomorrow, those planes cannot fly until they've had the modification.
And that would be unpleasant news for these airlines and, of course, even their passengers.
So are we hearing of any flight cancellations as we speak?
Not as yet, but there will almost certainly be cancellations as of Saturday.
Remember, we're talking here about 6000 aircraft around the world, but the vast majority of those will only need a software update.
And, as I said, a software update will take in the region of three hours, but you don't need to have any specialised parts for it.
It's basically plugging in a computer and pushing go.
But for some aircrafts, mainly older aircraft, they will need to strip out a computer and replace it.
And the problem with that is it requires those computers to be available from the manufacturer.
So we don't know how long those aircraft are going to be out of service, but about 900 aircraft will, initially at least, be taken out of service until they can be repaired.
And that will cause problems, obviously, for the airlines that own and rely on those aircraft.
The BBC's international business correspondent Teal Leggett there.
Joining me now from Chicago is aviation consultant Scott Hamilton.
Many thanks for joining us, Scott.
So Teal has taken us through what happened there.
Airbus says this hasn't happened before.
But let me ask you this.
How big a deal is it for the European planemaker to have to ground its aircraft?
It's obviously something that you don't like to do, and particularly with the numbers that are involved.
But with most of the airplanes needing what is described as a three-hour software upgrade, that can basically be done overnight and there should be very little disruption for those airplanes.
And for an aircraft that's widely used as the A320, does this in any way raise interest?
Any broader concerns?
No, I wouldn't say so.
We have to remember that the A320 has been in service since 1988, with various technological upgrades over the decades.
And the A320 has a very good safety record.
And as Airbus points out, this sort of thing has never happened before.
And we often talk about Boeing when it comes to safety issues, but this time we're talking about Airbus.
Do you think this incident in any way shifts perhaps industry perceptions at all?
Or is this simply the reality of increasingly complex software and modern jets?
I think it's probably the latter.
And let's remember too that The experts have long said that if the solar flares which produce the beautiful northern lights are of such magnitude that it could disrupt various softwares through various parts of the society, this is a perfect example of what they're talking about.
And would it be fair really to say that these problems are perhaps becoming more common as these aircraft actually become more digital?
I don't know that I could answer that with any degree of accuracy.
I just don't have any data that would be able to enable me to answer that question.
Fair enough.
Well, let's talk about the airlines now, from their own perspective.
We're talking about disruptions, even though airbus says it would take about three hours to carry uh out of this upgrade.
But are these carriers likely to feel operational pain over the weekend, or can most of them absorb this kind of temporary grounding?
Well, it depends on how many of the older models they have in uh in service that require that computer swap out and how long it would take.
Now, over here in the United States, of course, this is a Thanksgiving holiday weekend.
And there are a lot of the older model A320 family airplanes called the CEO for current engine option.
Those are the ones that are going to have to have the computer swap out, as I understand it.
And Losing those airplanes, particularly on this holiday weekend, will cause fairly significant disruption for the airlines.
And one last question for you, Scott.
Could this lead to tougher testing requirements for flight control systems?
Boy.
I don't know if tougher is is the correct word, but it could certainly lead to more comprehensive ones now that we know there's a problem directly related to this issue of solar flares.
Aviation consultant Scott Hamilton, many thanks for sharing your thoughts with us.
Well, let's get a market perspective to this story from George Conboy, who's chairman at Brighton Segurities.
George, so we know the troubles Boeing has gone through recently.
Now it's Airbus.
Is this likely to have any impact on its share price?
Airbus shares have been doing fine BC and, with the expectation for them prior to this news, they'll probably still do well, maybe a little constrained, but it's likely investors will have the realization these are incredibly complex products, these aircraft, and they're not going to get less complex.
Investors have to learn to ride with these potential problems.
The good news, they found it before it became a problem and caused a crash.
All right, we'll come back to you in just a moment, George.
Let's go to Germany, where Chancellor Friedrich Merz is urging the European Commission to soften the planned 2035 ban on new petrol and diesel cars, arguing that the country's automakers need more flexibility as the shift to electric vehicles slows.
And Berlin says competition from China and weaker EV demand mean the timeline is no longer realistic.
So what does this mean for Europe's biggest car industry?
A question I asked Beatrix Keim, director of the CAR Center for Automotive Research in Duisburg, Germany.
It was to be expected, as the government already was going back and forward with the automotive industry.
There was no way that e-mobility is hitting the targets, as they were once set to have 15 million battery electric vehicles by 2030.
And is this really about buying the industry some more time, or does it actually show that the sector is genuinely struggling to meet the deadlines?
Yes, there is in general a struggle to meet the deadline because the take rate of especially battery electric vehicles in Germany is not as good as everybody thought back in, let's say before the pandemic.
And overall, even on the combustion engine cars, the new car take rate is not as high.
We are in general way below the numbers of new car registration prior to the pandemic.
So how bad is the situation right now for big manufacturers like BMW and Mercedes and VW.
In Europe.
If you look at the car market in comparison to the pandemic, we are having a gap of nearly 25 million cars.
Until the pandemic, until 2019, it was... always rising, rising, rising.
Sales volume was very good.
Everybody was happy.
And of course, didn't look into what was happening afterwards if there is a hit.
So it's two and a half million cars.
This is quite a lot for everybody.
And as the German manufacturers are in Europe pretty much taking the big tickets, especially Volkswagen Group with all these brands, they usually have a market share of 25.
If then 25% of 2.5 million cars are missing, this is going down into production.
And this is what we then had one year ago that they are looking into cutting jobs, closing companies, closing factories because there is not sufficient margin.
And what about stiff competition coming from China?
How much of a huge role is this playing in this situation?
I think this is rather a role in mid to long term.
At current point of time.
If I look at the market numbers in Germany for this year, so from January to October, they only have a rate of 2 if you really look into the pure Chinese brands.
And it's only 2%.
They have not yet reached... an image, a trust as the established manufacturers.
But this is comparable to when the Japanese back in the 70s came into the European market.
People were very cautious about quality, about image and trust.
So I think, again, this is more a mid to long term consideration because they can produce cheaper.
They have the advantage of the battery supply out of their own country.
And they will gain traction.
So, of course, there will become a competition.
And this is, again, where manufacturers have to brace for impact.
So looking ahead now, Beatrix, do you think the EU is likely to soften its stance?
Actually, I think so, because there was another meeting in Stuttgart just a few days ago, where even Monsieur Zerroni, who is in charge actually of technology and automotive, was present as well.
And he made one comment.
He said that, looking forward to the announcement of December 10th, that they are looking more into being more pragmatic about then looking after ideology.
So I think they will soften the regulations down because the automotive industry, the manufacturers, the supply chain is a very, very big factor in the overall European, EU or even UK business acumen.
But what if they don't?
I think they will.
If they don't, well, then we are still having 2035.
So I think it is as well taking bracing for impact, being prepared for 2035, which is still nine years out.
In that time, a lot can happen.
So I think, number one, there will be adjustments.
On the other side.
If not, the manufacturers will even more work, move into the battery electric vehicles and showing that it is possible.
But on the other side, if they are not softening it down, it will be a very high financial burden for all the manufacturers.
Again, not only the Germans.
It will be too much.
And I think even in two years, then we would be talking again about it.
Beatrix Klein, Director of the CAR Center for Automotive Research in Germany there.
Well, George Convoy at Brighton Securities is still with us.
George, so what do you make of this?
Is Europe in any way losing the EV battle with China?
It may be that Europe is looking at the subsidy battle and not wanting to subsidize these vehicles.
The best way to get consumers to take them is to subsidize them worldwide.
Those subsidies are ebbing a bit.
Plus, the manufacturers look at the average price of a Chinese-built EV, around €30,000.
Compare that to the average price of a European-built EV, about €45,000.
Big, big price difference.
I'm not sure the big EU makers are keen to give up that much market share.
And if you compare this to the situation in the US, what would you say?
Well, we've already seen a steep fall off in the uptake of EVs ever since the Biden administration subsidies have expired.
Recent legislation this year took away a lot of the subsidies.
Without a subsidy, consumers will take a much lower rate of EV.
The question is, should you, the taxpayer, help buy your neighbor's car?
So far, the answer here is no.
Right, George, stick around.
We'll bring you back in just a moment.
You're with World Business Report from the BBC World Service.
All right, let's talk about the Black Friday frenzy which is underway, with shoppers across the US flooding stores and websites.
The National Retail Federation says nearly 187 million people are expected to spend between Thanksgiving and Cyber Monday.
And in New York, the hunt for bargains is well underway.
Even though not everyone seems convinced, the deals are worth it.
It's very good.
They got very good stuff here.
Each and every item out here is very nice.
It's very nice.
We're looking for phones and a new laptop and some clothes and that's about it.
We've been actually researching for the past whole week and it seems like there's no real discount today.
It is a good time to buy things, you know, to get a substantial deal, yeah.
More or less just fun to do together.
If we find some great deals, then good, but it's a nice time.
Well, this is the first year I have off on Black Friday, so I'm actually trying to take advantage of it.
But I usually don't go out on Black Friday because it's usually really crowded, but there's nobody here right now.
Michelle Mayer is Chief Economist at Mastercard Economic Institute and she joins us now.
Michelle, you've just heard those voices there.
Some are excited to spend, others much more cautious.
When you look at the data, which side of the story actually feels closer to the reality?
I'd argue that both are accurate, in that consumers are certainly engaged, but they are actively searching for value.
They're looking for deals.
They're looking for discounts.
They're looking for ways to make their dollars work the best that they can.
And I think they're achieving that.
We're certainly seeing an environment where there's been a lot of consumer choice between e-commerce and technology more experience-based in-store spending, really targeting the consumer to get the consumer to come out and to spend and to engage during the holiday season.
And you've talked about how consumers are becoming more selective.
How is that playing out this Black Friday?
Where are people still splurging and where are they holding back?
So when we were preparing our research and looking at all of our data and our insights heading into the holiday season, we explored a few themes that really stood out in our data in the run up to the holiday season.
One is on the wellness economy.
We saw a significant increase in spending on gadgets related to wellness, to longevity, to fitness, to in general spending on health, maybe even gifting on health as well.
So that was certainly one of the hot themes heading into the holiday season.
And we're really excited to see how that plays out once we get the final numbers in for this critical Black Friday period.
And we also saw pretty strong spending in apparel, clearly driven by some of the influencer names the younger generation that it's a must buy for some of these items.
But the trend in apparel, both e-commerce and in-store, has been pretty robust this holiday season.
That's really interesting because we've still got inflation pressures and higher borrowing costs, of course.
All of that is still very much in the mix.
But how are those factors shaping how people approach a day like today?
Well, I think it makes them ever more focused on making sure they get the discounts that they seem to work for them, that make the math work in terms of finding that right value.
So, in a world where there's been a lot of volatility in prices over the last several years, we went from the pre-pandemic period of very low, sustainably low prices and inflation to this massive price level shock that happened during the pandemic.
And then to very low pricing again last year.
Now prices are creeping up again.
So they've experienced this volatility.
They've experienced a level shift in pricing over the last few years.
And I think they're that much more sensitive to that pricing and to make sure that they could get the best deal.
And in a world where there's a lot more technology, there's a lot more information at the consumer fingertips to make sure that they are getting the best value.
So it looks like the customers are actually adjusting to this.
I think the whole economy has been adjusting actually pretty spectacularly well.
We're proving that it's a much more dynamic economy across the globe, in the face of what has been some heightened uncertainty, significant policy changes, particularly around trade, and a world that is still evolving from such a substantial shock from the pandemic.
And I think one of the ways that the global economy has evolved is to embrace much more innovation, much more technology.
And ultimately I think that has been a really important way for particularly households and consumers to adapt.
Michelle, thank you very much.
Let's widen this lens now and bring back George from Brighton Securities.
You've had Michelle talk about this mix of cautious and confident consumers there.
When you look at the broader economy, what does that balance tell you where the US is right now?
Yeah, it's a puzzlement, basically because we see consumer confidence lower, yet we see spending mildly higher.
Part of that might be that, with the US stock market up so much this year and the SP 500 up about 17 percent, consumers are feeling that wealth effect and inclined to go out and spend a little bit this holiday.
The early retail numbers from Black Friday look fairly positive, and the wealth effect may have part of that.
And we're seeing people out shopping today, of course, but We've talked about the real pressures a bit with Michelle.
We're talking inflation, we're talking high interest rates and rising household debt.
But how worried should we be about the strain on family finances?
Well, we don't see as much of a problem in our business because we're dealing with people who are investors.
And unfortunately that gives us a little bit narrower focus, because those folks tend to be willing to spend and feeling very prosperous.
That certainly is not the average family.
At the lower end of the spectrum, you do see much more cautiousness in household spending.
But in the aggregate nationwide, spending is up and consumers feel good going into the holidays.
But there's also the question of credit there, with borrowing costs which are of course still high.
But how sustainable is this level of consumer spending then?
Well, you know, I think about that a lot because over a 40-year period I've been hearing that consistently throughout my career.
Personal debt is up, mortgage debt is up, all these things are up.
But if you look at it relative to household income, that debt remains serviceable.
So, so far, it looks okay.
Is there a housing bubble?
Will there be one?
There are some concerns about that, but I don't think it happens tomorrow.
OK, let's wait.
We'll talk about interest rates now.
If they stay where they are, do you then expect a slowdown in 2026?
Interest rates are still fairly moderate, certainly up from where they were at their very lows a few years ago.
But what happens is, when rates first went up, consumers backed away in a big way, buying fewer cars and certainly buying fewer homes.
But if you don't buy that house you're looking for and you wait a couple of years for rates to go back down And they don't.
You step back into that marketplace and often are willing to buy.
So we see interest rates as a self-regulating environment where consumers will adjust, and we're not seeing a problem in the economy.
Thanks, George.
Well, let's stay in the US, where we've seen retailers taking on a record low number of seasonal employees this holiday season.
And that's despite a rise in demand from Americans who rely on them to make ends meet.
The BBC's North American business correspondent, Michelle Fleury, has the details.
New York's feeling festive.
From the magic of Macy's holiday windows... to the glow of Sax's light show along Fifth Avenue.
But behind the holiday sparkle, a different story.
For many who rely on seasonal work, this year brings fewer jobs and fewer opportunities.
At New Jersey's Garden State Parkway Mall, the marketing director, Will Lewis, tells me shops are hiring just not nearly enough to meet the surge of people looking for seasonal work.
We had over 11000 job applicants come out on a Saturday afternoon to our job fair, of which we had 35-plus Garden State Plaza retailers at the job fair.
But we filled on the day 150 positions.
According to the National Retail Federation, shops are expected to hire fewer than 365000 temporary workers this November and December, the lowest seasonal hiring level in years.
And yet holiday sales are projected to top $1 trillion in 2025.
So what's going on?
Inside this New Jersey shopping mall, retailers are gearing up for the holidays.
But around the country, many are pulling back on seasonal hiring.
Inflation is, Tariffs and rising costs are creating real uncertainty, making it harder to justify bringing on extra staff.
We do see that this is one of the worst hiring years we've seen in some time.
Corey Stahl is senior economist from the online job site Indeed.
What we see is that the broader labor market has slowed down.
And what that means is there are fewer opportunities for job seekers.
So they're becoming more interested in these jobs.
But that slowing labor market also means that employers are less interested in hiring those people.
And that's obviously a concern and a challenge.
And it means that this is going to be a much more competitive hiring year for these seasonal type jobs than it has been in years past.
For some shoppers, the economic uncertainty means tightening their budgets.
I feel like I'm spending less this holiday season because I just feel like there's a lot going on money-wise in the economy, so I'm just trying to look for the good deals.
Others say they won't let rising prices dampen their holiday spirit.
I'm a big shopper, so I'm going to definitely shop the same amount.
I'm not cutting back.
I think we're going to be shopping more.
And with fewer seasonal workers...
Shoppers may face longer lines and a little less holiday cheer.
Would you be shopping more there?
Well, that's the BBC's North American business correspondent, Michelle Flurry, reporting or wrapping up this edition of World Business Report with me, Bissi Adebayo.
Have a good weekend.
