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Putin’s Kuril Islands Visit Exposes Japan’s Russian Energy Dilemma

Japan’s protest over Putin’s visit to the Kuril Islands is loud because its response is capped: Tokyo cannot meaningfully sanction the one Russian energy relationship — Sakhalin-2 LNG — it now depends on more than ever, after the Strait of Hormuz closure gutted its Gulf oil access and made that supply a load-bearing pillar of its energy security through at least December 2026.

On August 13th, Vladimir Putin toured a fish-processing plant on Iturup Island, the largest of the four southern Kuril Islands Japan calls its Northern Territories, with Sakhalin’s regional governor at his side. It was his first visit there in twenty-six years in power. He called the islands’ status “enshrined” as a permanent outcome of the Second World War and pointedly invoked the late Shinzo Abe, who spent years personally courting him toward a peace treaty that never materialised. Tokyo’s response was immediate: Prime Minister Sanae Takaichi called the visit “absolutely unacceptable,” and her Foreign Ministry says an “additional sanctions package” is under consideration. What went unmentioned is that this same government told Washington, in writing, ten months earlier that a full ban on Russian LNG would be “difficult.” That contradiction, not the visit itself, is the story.

The dispute is old: the Soviet Union seized the four islands in the war’s final days, and the missing peace treaty has been Tokyo and Moscow’s unfinished business for eighty years. What is new is the energy math surrounding it. Sakhalin-2, the LNG project sitting directly across the strait from where Putin stood, supplied Japan roughly 3.6–3.9 million tonnes last year — about 9% of its total LNG imports, and enough to make Japan the project’s largest single buyer. The US Treasury sanctions waiver permitting those imports, along with the Gazprombank clearing that finances them, was just extended to December 18th, 2026, pushed back from an original June deadline. Washington’s stated reason was blunt: global supply is “constrained amid the continued closure of the Strait of Hormuz.”

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That closure is the piece most coverage of the Kuril visit leaves out. Since February 28th, when the US and Israel launched their air campaign against Iran, the Strait of Hormuz has been effectively shut, with roughly 20,000 mariners and 2,000 ships stranded and Brent crude spiking to $126 a barrel at its peak. Around 90% of Japan’s crude oil and 11% of its LNG normally transit Hormuz. Tokyo has spent 2026 losing its largest energy artery to a war in the Gulf, which means Sakhalin-2 has quietly gone from “one Russian supplier among several” to one of the few pillars still standing under Japan’s winter power grid. Putin picked this year, not an arbitrary one, to make his sovereignty claim visible on the ground.

The waiver renewal is the tell. Washington and Tokyo did not merely tolerate the Sakhalin-2 exemption through the Ukraine-sanctions years — they actively rebuilt it in 2026, in the middle of the Hormuz crisis, explicitly carving out maritime transport, financial clearing, and joint-operations funding through the end of the year. Putin then chose that same window, with that same regional government’s leadership standing next to him, to plant a public flag on the neighbouring islands. He is not testing whether Japan objects. He knows it will. He is testing whether the general logic of sanctioning Russia survives contact with the specific, recently-renewed exemption that keeps Japanese lights on. Compare that to 2010, when Dmitry Medvedev made the first-ever Russian presidential visit to the same islands: Tokyo protested loudly, recalled its ambassador briefly, and moved on within weeks, because no comparable energy dependency was on the table at the time. The script is recognisable. The stakes underneath it are not.

Takaichi’s own words undercut her “absolutely unacceptable” framing before she said it. In October 2025, briefing President Trump on the LNG relationship, she told him directly that a total ban on Russian gas “would be difficult” — an unusually candid admission from a leader now weighing a fresh sanctions package over the same relationship’s home islands. A prime minister who has already told Washington, on the record, that cutting the energy tie is impractical cannot now credibly threaten it without the threat being understood, in Moscow as much as in Tokyo, as theatre. What remains available is a narrow band of symbolic measures — travel restrictions, asset freezes on individuals connected to the visit or the regional administration — that let Tokyo be seen to act without touching a single LNG cargo.

The standard objection is that Japan has options: JERA, its largest buyer, points to a 30–35 million tonne portfolio and spot-market access, and Tokyo Electric-linked utilities cite early-stage interest in the $44 billion Alaska LNG project as a long-term alternative. That is capability, not near-term relief. Japanese firms remain openly cautious about Alaska LNG’s cost and logistics, with no binding offtake timeline in sight, and the global spot market Japan would lean on is the same market already absorbing cargoes redirected from Hormuz-blocked routes — tighter, not looser, than in a normal year. Sanctioning the actual molecules, rather than a list of names, risks the electricity-price and blackout warnings Japanese officials themselves used to justify keeping the Sakhalin-2 waiver alive in the first place.

THE SCENARIOS

Base case (~55%): Japan announces a narrow, largely symbolic sanctions package — individual travel bans and targeted asset freezes tied to the Far East regional government — while explicitly leaving Sakhalin-2 supply and Gazprombank clearing untouched, repeating the 2010 script almost exactly. The December 18th waiver renewal proceeds quietly, folded into the broader Hormuz-driven energy calculus, and Moscow reads the episode as confirmation that its Pacific energy leverage over Japan is durable regardless of who occupies the Kremlin’s chair on any given August.

Downside case: domestic backlash — the same “hardened public sentiment” Takaichi herself warned the visit would produce — pushes her government into a genuine review of the Sakhalin-2 exemption as its December deadline approaches, right as Hormuz remains tight heading into winter and Asian spot LNG prices stay elevated from redirected Gulf cargoes. The result is Japan’s first real taste of sanctions-driven energy pain from the Ukraine-era regime, a burden that has so far landed almost entirely on European households rather than Japanese ones, arriving in the worst possible month of the heating season and forcing utilities into the kind of emergency rationing talk Tokyo has avoided since 2022.

Upside case: Tokyo treats the compounding shock — Hormuz plus the Kuril visit landing in the same year — as the forcing function it has lacked for three years, converting Minister Yoji Muto’s long-stated goal of “steadily reducing dependence” on Russian LNG into actual contracted volume rather than a talking point: accelerated Alaska LNG offtake commitments, expanded US Gulf Coast term deals, and a public timeline for winding down Sakhalin-2 purchases that uses the December waiver deadline as a hard exit ramp instead of an automatic renewal. Even here, the earliest realistic substitution volumes arrive on a multi-year timeline, not by next winter.

THE AFTERMATH

Putin’s flag on Iturup was never really a test of Japan’s territorial resolve — Tokyo’s position on the Northern Territories has not moved in eighty years and was never going to move now. It was a test of whether that resolve has any economic weight behind it at the one moment Japan’s alternatives are thinnest.

Watch for: what actually happens to the Sakhalin-2 waiver around December 18th, not the sanctions package announced this week. A quiet renewal, carved out exactly as before, will tell you Japan’s outrage and Japan’s energy security are now permanently on separate tracks — and that Moscow understands the gap between them better than Tokyo would like to admit.

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The Gold Was Never About Inflation

On 23 July, the EU adopted its 21st and largest sanctions package against Russia — 218 listings, asset freezes on 94 banks, the first-ever threat of blanket third-country crypto bans. Within 24 hours Beijing retaliated with export controls on 14 European firms, including Germany’s Rheinmetall. The same day, five of China’s largest state banks quietly stopped retail investors trading paper gold and pushed them toward physical bars instead. Four days later the US Senate voted 86-12 to advance a bill authorising tariffs of up to 100% on the top buyers of Russian energy — a list headed by China and India. And on 30 July, the World Gold Council confirmed central banks had bought a record 289 tonnes of gold in the second quarter, up 74% year on year. Nobody reported these five events as one story. They are one story.

De-dollarization is the shorthand for a genuine structural shift: the dollar’s share of global central bank reserves fell below 57% last year, the lowest since 1995 and down 15 points from its 2001 peak, while gold’s share of reserves has climbed from roughly 13% to 30% over the same stretch. The proximate cause is well documented — when Washington and Brussels froze roughly $300 billion of Russian central bank reserves in 2022, every finance ministry outside the Western alliance drew the same lesson: dollar and euro reserves are conditional assets, seizable by political decision, while gold sitting in a domestic vault is not. Since then Russia and China have pushed bilateral trade settlement into rubles and yuan to 99.1%, built out China’s CIPS payment network as a working SWIFT alternative, and are preparing to unveil BRICS Pay — linking Russian, Chinese, Indian and Brazilian domestic payment rails — at September’s summit in New Delhi. That is the infrastructure this week is testing.

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To Beat a State-Capitalist Rival, Washington Became One: Inside the New Critical Minerals Race

On July 10, almost exactly a year after the Pentagon announced it was becoming the largest shareholder in MP Materials, the International Energy Agency put a number on what that deal was designed to prevent: $6.5 trillion in global downstream production now sits exposed to China’s rare-earth export curbs — restrictions currently suspended under an October 2025 truce that lapses again around October 2026. In the year between those two dates, Washington did not simply subsidize its way out of dependency on Chinese processing. It bought in: $400 million for 15 percent of MP Materials, a decade-long price floor for neodymium-praseodymium set nearly double the market rate, and a ten-year promise to buy everything a new Texas magnet plant produces. The Pentagon is now, functionally, a mining shareholder. The interesting question is not whether that has worked — MP’s private financing round attracted $1 billion from J.P. Morgan and Goldman Sachs within weeks — but what it costs to win a state-capitalist contest by becoming a state capitalist.

The stakes are structural, not cyclical. China controls roughly 70 percent of the world’s rare-earth and critical-mineral refining capacity, a chokepoint built over three decades while Western producers treated minerals as ordinary commodities rather than strategic assets. Beijing’s October 2025 tariff-war truce with Washington postponed, rather than cancelled, an expanded licensing regime that already cut U.S. yttrium imports from 333 tonnes to 17 tonnes in eight months — a squeeze aerospace manufacturers say could force production pauses. Washington’s answer has three parts: Project Vault, a $12 billion public-private stockpile signed by executive order on February 2, 2026, covering all 60 minerals on the USGS critical list; a fast-growing portfolio of direct government equity stakes in miners and processors; and a parallel push to sign allied-supply agreements with eight partners, including Australia, Japan, the UK and the UAE. Europe, meanwhile, is running a different playbook: a €3 billion RESourceEU plan, a joint-purchasing platform, and a stockpiling pilot — procurement and coordination, not ownership.

The MP Materials deal is the template, and its mechanics matter more than its headline. The Department of Defense’s July 2025 investment made it MP’s largest shareholder, attached a $150 million loan for expanding the Mountain Pass mine, and guaranteed a $110-per-kilogram floor price for NdPr oxide — a level industry analysts put at nearly double the prevailing market price — alongside a ten-year offtake covering the full output of a planned magnet facility in Fort Worth. Private capital followed the government’s signal almost immediately, which is precisely the point: Washington concluded that a guarantee was worth more to investors than a grant. That logic has since scaled. The administration has taken a $670 million stake in magnet producer Vulcan Elements, a 10 percent, $35.6 million position in Trilogy Metals, converted a renegotiated Energy Department loan into equity in Lithium Americas, and expanded the official critical-minerals list to include copper and metallurgical coal. Total direct equity commitments now exceed $1 billion, on top of Project Vault’s $12 billion stockpile.

The backlash has been immediate and specific, and it is worth taking seriously rather than waving off as sour grapes. Rival producers argue the price floor lets MP “undercut commercial bids, using federal subsidies to shield its margins,” while former White House and Pentagon officials warn the arrangement could “distort global NdPr pricing, crowd out innovation, and deter private investment in alternative supply chains” — in effect, recreating the very state-directed monopoly the policy exists to counter. That is the strongest objection, and it does not fully land: a government willing to take equity risk, rather than hand out grants, at least has an incentive to see the investment succeed and can in principle profit from the upside, which is the argument the Treasury and National Energy Dominance Council make for why this is smarter policy than Cold War-style stockpiling alone. But the objection identifies a real cost even if it doesn’t defeat the policy: an above-market, government-guaranteed price for one company makes every unsubsidized competitor in the same commodity harder to finance, which narrows rather than widens the eventual supplier base — the opposite of the diversification the strategy claims to deliver.

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There is a second problem the price-floor logic obscures: capital committed is not the same as metal produced. The Center for Strategic and International Studies frames this as the difference between “distance” — how much progress has been announced — and “displacement” — how far supply chains have actually moved from their starting point. Japan’s experience with Lynas Rare Earths is the sobering comparison: fifteen years and $250 million of patient, low-drama investment before Lynas achieved the first commercial dysprosium production outside China, in 2025. Washington’s approach substitutes speed and scale for that patience, which may be the correct trade given the urgency, but it means the MP deal’s real test has not yet arrived — it arrives when the Fort Worth facility is supposed to reach full commercial output, not when Wall Street decides to match the Pentagon’s bet.

None of this is happening in a China-versus-America vacuum, either. The Democratic Republic of Congo has extended its cobalt export suspension specifically to tighten leverage over Chinese refiners, and Indonesia has repeatedly resisted pressure to loosen nickel export quotas, forcing processing onshore on its own terms. Producer states, not only the two superpowers, are now treating minerals as instruments of strategic leverage rather than commodities to be sold at whatever price clears the market. That reframes the whole contest: this is not simply Washington racing to catch Beijing, but a broader shift in which every government that sits on a mineral deposit is deciding whether to sell it or wield it.

Which is where Europe’s exposure becomes concrete. RESourceEU gives Brussels coordination and buying power, but no board seats and no offtake priority — and Chatham House’s own assessment is blunt that the UK and EU “cannot match the scale of what the US is attempting” and risk being “left behind” without equity of their own. That matters because Washington’s price floors do not stay domestic: a guaranteed $110/kg for MP’s output resets the benchmark every other buyer, including European manufacturers, has to price against, while offtake agreements tied to U.S. defense production can put European buyers behind the queue when supply tightens. The diversification Europe wants — away from dependence on Beijing — is real, but the replacement supply chain now runs increasingly through companies Washington part-owns and whose output is pre-committed to American industry first. Substituting one chokepoint for another is not the same as building a market.

What Happens Next

Base case (our estimate: roughly 55 percent probability). Washington’s equity-and-price-floor model extends to more minerals — copper and metallurgical coal are already on the list — and more companies, Project Vault’s stockpile builds through 2026–27, and the October 2025 China truce holds past its lapse date. Europe continues a purchasing-only strategy, remaining a price-taker on a benchmark increasingly set in Washington rather than Shanghai. This depends on Congress and private markets continuing to treat government equity as a credible signal rather than a fiscal liability, and on China preferring managed leverage over an open rupture.

Downside case. China allows the truce to lapse on schedule around October 2026 and resumes full licensing enforcement — already quietly restarting, according to recent customs-audit reports — before Vault-funded and MP-style projects reach meaningful output. Aerospace and defense manufacturers, already forced to ration yttrium and dysprosium at a fraction of pre-2025 volumes, face renewed production pauses in the exact window (2026–2028) when domestic capacity is still years from scale, exposing the gap between announced investment and actual tonnage.

Upside case. Government stakes prove to be a bridge rather than a permanent structure: MP, Vulcan Elements and Lithium Americas hit production targets on schedule, price floors become unnecessary as Japan’s Lynas eventually showed is possible after fifteen years of patient investment, and the eight-nation allied-supply framework matures into a genuinely plural, competitively priced market that Europe can buy into on equal terms rather than through Washington’s balance sheet.

The Pentagon’s bet on MP Materials shows that the fastest way to out-compete a state-directed rival was to become one — and by the only metric available so far, capital raised, that gamble is working. But capital raised is not resilience, and every mineral now being withheld or weaponized elsewhere, from Congolese cobalt to Indonesian nickel, shows the world’s supply chains are being redrawn along political lines everywhere, not simply rerouted away from Beijing.

Watch whether China lets its rare-earth export truce lapse on schedule around October 2026, and whether MP Materials’ Fort Worth magnet plant is producing at commercial scale when it does. If the truce holds and the plant delivers, Washington’s ownership model will keep expanding. If either fails, the U.S. will have discovered it bought a shareholding in a company, not a supply chain immune to the country it was built to out-manoeuvre.

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NBCUniversal’s Peacock to join YouTube Premium

NBCUniversal’s Peacock is stretching its wings by joining the subscription YouTube Premium service — a significant boost for the streaming platform that has struggled to find its niche in the increasingly crowded landscape.

NBCUniversal and YouTube on Monday announced the multi-year partnership. Beginning early next year, Peacock will be available as part of YouTube Premium’s U.S. subscription bundle, which also includes ad-free videos and music.

The pact represents Peacock’s largest wholesale distribution agreement to date, one that will introduce the service into millions of new homes.

On Friday, NBCUniversal owner Comcast disclosed the service had finally reached profitability in the second quarter after billions of dollars of investment.

The important benchmark comes as Comcast prepares to spin off NBCUniversal entertainment and news media businesses into a separate company. Peacock, which launched in 2020, grew its paid subscribers by 4% to 48 million in the second quarter, compared to the first quarter.

Comcast has long tried to make Peacock an asset for its Xfinity broadband and cable TV subscribers, but recently began to expand its partnerships in recognition that consumers were getting overloaded with pricey choices.

As part of the agreement, NBCUniversal’s linear television channels will remain on the YouTube TV service.

“This partnership brings NBCUniversal’s world-class content and iconic franchises to YouTube’s unmatched scale and global platforms,” Mike Cavanagh, NBCUniversal’s chief, said in a statement. “We’re excited to deepen our relationship with YouTube through a collaboration that reflects our strategy of partnering with industry leaders to drive sustained growth for NBCUniversal.”

The deal will give YouTube, owned by Google, a bevy of sports, including NFL football, NBA basketball, soccer and Major League Baseball.

“We’re incredibly excited to expand our partnership with NBCUniversal to redefine what a modern entertainment subscription can be for consumers,” YouTube Chief Executive Neal Mohan said in the statement. “YouTube Premium brings your favorite creators, artists and cultural moments together uninterrupted, and now, we’re pairing that ultimate viewing experience with Peacock’s expansive lineup of live sports.”

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California employer health premiums will cost as much as a new car in 2027

Employers are bracing for what could be the highest rise in health insurance premiums in 16 years in 2027, driving up the average cost of family coverage in California to more than $30,000 — the price of a new compact car.

Health insurance companies expect the cost of medical services and prescription drugs to soar by 9% in 2027, according to a new survey by PwC, the highest rise the researchers have found since 2011. Insurers use those expected medical costs to calculate the price of premiums in the coming year. Many employers require workers to pay part of that cost.

Experts say the escalating costs of employers’ premiums are reducing workers’ wages and take-home pay, while raising the prices of goods and services in California and across the country.

“It’s going to erode the standard of living for lots of California families,” said Glenn Melnick, a USC professor of healthcare finance.

Melnick said when employers are forced to spend more on health insurance, there is less money available for wages. The skyrocketing premiums, he said, are like a hidden pay cut for working families.

The higher cost also has small-business owners wondering whether they can continue paying for their workers’ health insurance.

Camden Avery

Co-owner Camden Avery makes a sale at the Booksmith in San Francisco.

(Josh Edelson / For The Times)

This year, premiums for staff at the Booksmith, an independent bookstore on Haight Street in San Francisco, leaped by 17%, said Christin Evans, the store’s owner. Next year could bring even more pain. The monthly premium for four employees is $3,250.

To try to cope, Evans said, she has reduced staff hours by closing the store earlier.

“We have to absorb it,” she said. “We’re not paying the wages we want to pay or delivering the customer service we’d like to deliver.”

Seventeen million Californians receive health benefits from an employer. Those premiums have been rising faster in California than the national average.

Between 2022 and 2025, the average family premium for employers in the state rose by 24% to $28,397, according to a survey by KFF and the California Healthcare Foundation. That was nearly double the 12.2% increase in consumer prices during those years.

Hospital, pharmaceutical and other medical costs escalated even faster after 2025.

PwC’s annual survey of insurers last year found an expected rise of 8.5% in 2026, which its researchers later revised to 9%.

A key driver of the rising medical costs, according to experts, is prices charged by hospitals. In recent years, some health systems, including UCLA and Cedars-Sinai, have grown larger by buying nearby hospitals and expanding their clinics, becoming more dominant in the community and reducing competition.

Melnick said the expansion of some health systems into giant organizations means that they can “tell insurance companies what the price will be.”

A Cedars-Sinai spokesperson pointed to a 2022 paper that found that for-profit health system prices had escalated faster than those at nonprofit systems like Cedars. The paper was partly funded by Cedars.

“Cedars-Sinai Health System’s growth in recent years has expanded access to the highest levels of patient care and medical innovation across the Los Angeles region,” the spokesperson said.

UCLA did not respond to requests for comment.

Another factor is the rising cost of prescription drugs. Spending on cancer drugs, the most costly category, reached $143 billion in 2025, an annual increase of 12%, the PwC survey found.

The nation’s spending on obesity medicines, including GLP-1 drugs such as Ozempic and Wegovy, soared by 81% last year, PwC said. A 30-day supply of the drugs lists for more than $1,000.

An Ozempic injection pen.

An Ozempic injection pen.

(Christina House / Los Angeles Times)

Gallup said this month that its survey found that 11% of U.S. adults are now taking the GLP-1 drugs for weight loss.

The obesity drug manufacturers say the medicines can reduce medical expenses by preventing other costly conditions such as diabetes and heart disease, but data don’t yet show such reductions, PwC said.

Researchers at the California Healthcare Foundation say a large part of the problem is that hospital operating costs, prescription drug prices and doctor fees have been allowed to grow unchecked for decades.

The foundation estimated in a report last year that 25 cents of every dollar spent in California — more than $73 billion each year — does nothing to help patients. Instead it goes to excessive profits for providers, administrative red tape and other waste, the foundation found.

California employer premiums are expected to rise next year for another reason: Gov. Gavin Newsom and lawmakers agreed in June to raise taxes on the private plans to help pay for the cost of Medi-Cal, which covers the medical costs for the poor, and to help balance the state budget.

The California Assn. of Health Plans said insurers will add the tax to next year’s premiums. The trade group estimates the higher tax will cost each insured person $100 next year or $400 for a family of four.

The higher tax must still be approved by the Trump administration. Republicans in the state Assembly wrote a letter to the administration this month, asking officials to deny the request.

Researchers also expect a jump in premiums for families without employer insurance who purchase policies on state marketplaces such as Covered California. Some of those families faced double-digit increases this year because of rising medical costs and the end of enhanced federal subsidies that Congress had approved as a temporary measure during the pandemic. Almost 400,000 Californians dropped their Obamacare plans this year as prices soared.

To deal with the higher premiums, some employers are changing the design of their health plans to shift more of the cost to workers by raising deductibles and co-pays.

Those higher out-of-pocket costs are just the beginning of the fallout. Twenty-two percent of chief financial officers surveyed by Mercer in February said the high price of health benefits had forced them to stop hiring or led to layoffs. Thirty-six percent of those executives said the rising premium costs have harmed workers’ wages and raises.

Candice Elliott, a human resources consultant in Santa Cruz, said smaller businesses such as restaurants struggle to find ways to cover the higher costs.

Many restaurants, Elliott said, already have a slim margin between their revenues and expenses. When premiums rise, she said, some restaurants have added a fee to the customer bill to help cover workers’ health costs. Others have hiked menu prices.

“That impacts affordability for the consumer,” Elliott said. “It makes inflation greater.”

Some small businesses have moved from so-called silver plans to the lower-priced bronze plans, she said, which cover less of the employee’s monthly premium. “It’s effectively a decrease in pay for the employee,” she said.

Others are hiring employees overseas, Elliott said. “You can pay someone in the global south half of what you pay an American and still afford them a good standard of living and benefits that are unaffordable in the U.S.,” she said.

Melnick, the USC professor, said many workers don’t realize how much they are losing as their employers’ premiums rise. He tells people to look at their W-2 tax form from last year, where employers are required to report the cost of the employee’s premium in box 12, under “Code DD.”

He said USC’s premium for his family of four is $45,000.

“The base is so high that even a small increase has a big impact,” he said. The continuing annual increases, he said, are “bad news for everybody.”

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Delta strips perks from premium seats as flyers chase first-class deals

Delta Air Lines Inc. Chief Executive Ed Bastian said travelers care more about their seat than extras like lounge access or limousine shuttles often thrown into costly tickets, as he defended a stripped-down premium product that has irked some customers.

“Consumers want different value decisions to take,” Bastian said in a Bloomberg Television interview on Monday. “If you can give people the opportunity to sit in first class, they may not want different elements and they may not need to go in the lounge.”

Delta is bringing the basic-economy playbook to Delta First, Delta Premium Select and Delta One, offering passengers the same onboard seats, meals and service at a lower price in exchange for fewer benefits. Depending on the product, restrictions can include reduced mileage earnings, lower checked-bag allowances, fees for changes or cancellations and limits on lounge access and advance seat selection.

“What consumers care more about than anything is the seat,” Bastian said. “All the other things are nice, but it’s the seat and the comfort of the seat that’s most important.”

Bastian’s comments contrast Delta’s recent investments in its ground amenities. The airline has spent years opening and expanding swanky Sky Clubs and Delta One lounges, which remain in such high demand that crowding and lines have prompted tighter access rules.

Delta last month opened the first phase of a second Delta One Lounge at Los Angeles International Airport, a 4,000-square-foot space with table-service dining, showers and a premium bar. By 2028, Delta plans to operate four lounges at LAX spanning 60,000 square feet and seating more than 1,000 guests, part of a global network that now includes five Delta One Lounges and more than 50 Sky Clubs.

“One of the things we’re disappointed about is the continued segmentation of the fare structure,” Jefferies analyst Sheila Kahyaoglu said in an interview with Bloomberg Television, referring to how Delta has refined its premium offering into different, sometimes hard-to-follow groups. “You could accidentally get locked out of a lounge if you don’t pick that main business fare.”

Delta last week reported second-quarter earnings that beat Wall Street expectations despite recording the highest quarterly fuel expense in its history. The airline earned an adjusted $1.56 a share, topping analysts’ estimate of $1.51, while revenue rose 14% from a year earlier and capacity increased just 1%. Delta also reaffirmed its full-year profit guidance.

Bastian said strong demand for premium, corporate and international travel helped offset the surge in fuel prices caused by fighting in the Middle East. Although fuel costs eased as the war in Iran appeared to be winding down, renewed US military strikes have raised the risk of another escalation and kept energy markets volatile.

The CEO reiterated that Delta would continue pricing tickets to recover those higher costs and did not expect airfares to decline. The new basic premium fares give the airline another way to appeal to price-conscious travelers without broadly discounting its most valuable seats.

The strategy also allows Delta to widen the pool of passengers who can afford premium cabins while still charging more to corporate travelers and frequent fliers who value flexibility, loyalty benefits and lounge access. It reflects how airlines are increasingly selling each component of the travel experience separately.

But it risks alienating premium and loyalty travelers by introducing complexity or making it seem harder to get the same level of access.

“Delta’s change to its premium-seating offerings suggests competition is weighing on pricing at the front of the cabin, a negative for earnings,” Bloomberg Intelligence analyst George Ferguson said.

Taylor and Abramowicz write for Bloomberg.

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Europe’s best airline to launch premium economy seats

A MULTI award-winning airline has revealed it will be adding premium economy seats to its aircraft.

The boss of Turkish Airlines has said that it will bring back the seats for its passengers despite discontinuing them in 2013.

Multiple Turkish Airlines Airbus A330 planes parked at an airport.
Turkish Airlines has confirmed it will bring back premium economy class to its aircraft Credit: Alamy

Talking to Skift, chairman of the airline, Murat Şeker said: “We are going to have premium economy.

“Our thinking is as early as 2028 – at the beginning of 2028 – we will be able to introduce a premium economy class in our Airbus A350s.”

These are expected to be rolled out later on the Boeing 787.

The hope is that it will be extended to all of the long-haul aircraft for Turkish Airlines.

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This isn’t the first time that Turkish Airlines has offered premium-style seats onboard.

It used to offer Comfort Class on some of its routes on Boeing 777 aircraft – but these were withdrawn in 2013.

On the subject, Murat Şeker added that the previous offerings were “not the right time” or “the right configuration”.

Currently, Turkish Airlines has economy seats which have adjustable headrests and arms as well as entertainment screens and USB ports in the seats.

The other are in business class which have lie-flat seats with a massage feature, a cocktail table, touchscreen media screens and adjustable head rests.

Turkish Airlines is considered one of the best in the world, and picked up the Skytrax Award for the ‘Best Airline in Europe’ last year.

NINTCHDBPICT001087204557
Previously, the airline had Comfort Class but discontinued these in 2013 Credit: Flickr/Luke Lai

This isn’t the first time either, in fact that award marked the tenth win in a row for the airline.

At the same awards, it scooped up eight accolades in total and placed sixth in the rankings for ‘World’s Best Airline’.

Turkish Airlines also won the ‘Best Economy Class in Europe‘, ‘Best Economy Class Onboard Catering in Europe’, ‘Best Business Class Onboard Catering’.

It also was awarded the ‘Best Business Class in Europe’, ‘Best Business Class in Southern Europe’, ‘Best Business Class Onboard Catering in Europe’, and ‘Best Airline in Southern Europe.’

Turkish Airlines also offers cheap flights from the UK to destinations like Istanbul, Antalya, and other Turkish cities, as well as other destinations like New YorkSharm El Sheikh, and Cape Town.



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I fly every month – this is the economy seat I choose EVERY time that’s better and cheaper than premium

A woman in an airplane seat, wearing a blue shirt, glasses, and a cap, takes a selfie.

HAVING racked up nearly 60 countries in just a couple of decades, it’s fair to say I’ve been on a LOT of flights.

But at the same time, I’ve been cursed with the double whammy of being unable to sleep on public transport, and old knee injuries that swell up on planes. Not ideal for a Travel Editor.

I fly every month and there is a great economy seat more people need to know about

So when it comes to choosing a seat on a plane, I think I’ve got it down to a fine art.

(Sadly the days of constantly flying business class everywhere are over).

When faced with spending 11 hours in economy, there is actually a great seat that I found I slept better in, even compared to premium economy.

Not all planes have this seat, so it is worth using something like SeatMap when you know what kind of plane you are flying with.

DOUBLE TAKE

Unusual double decker plane seats that could make economy travel MUCH better


NO GO

Passengers are fuming about new plane seat dividers that could end in flight ban

But my favourite seat is the one behind the bulkhead row on either the left or the right side of the plane.

Some of the bulkhead rows only have two seats on either side of the centre, due to the layout of the aircraft door.

This seat feels like a bulkhead but has no one walking in front of you

That means the seat behind these by the window has a crazy amount of legroom, but is more tucked away than the bulkhead.

Bulkhead seats, while often the best for legroom in economy, also come with the downside of lots of passenger traffic of people using the toilet or stretching their legs.

But this tucked away seat is a gem when it comes to economy.

In fact, I think it can be even better than premium economy, especially when you factor in the price.

Unlike other rows, seats 68A and 68K are tucked away but with legroom

I paid around £65 to pick this seat, whereas Premium Economy seats can be hundreds of pounds more expensive.

Not only that, but a lot of Premium Economy seats have built in arm rests you can’t lift.

If I lucked out with no one next to me on this seat, I could even lift the arm rests and have a double set to myself.

As a non-sleeper, I managed to get about five hours on and off of sleep, something unheard of for me normally on planes.

Not all planes will have this seat, so if it doesn’t I still recommend paying for the bulkhead seat if they are still available.

Here’s a plane hack you should NEVER try for better seats – unless you want to annoy other passengers.

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