Boeing wins $8.5 billion for largest order ever of 737s

Monday, November 10th, 2014

Boeing‘s Renton factory is going to be busy! Yesterday, Boeing Co. won an $8.5 billion order from SMBC Aviation Capital Ltd for 80 737 Max 8 model planes. This marks the largest single order ever of 737 Max’s by a lessor, which will be delivered between 2018 and 2022.

SMBC Aviation Capital LTD is a Japanese company that has made a commitment to purchase over “$13.5 billion from Airbus and Boeing in the coming year”, as stated on their website. As of October 2014, the company owns 376 aircraft that are on lease to clients in over 40 countries, two of which are US Airways and American Airlines. Their aircraft fleet is valued at over $10 billion, making them the fourth-largest aircraft leasing company in the world.

Their order falls in line with economic growth in China, India and Southeast Asia, resulting in a growing demand for more aircraft. According to CIT Aerospace, one of the industry’s largest plane-leasing companies, some carriers in these regions may not have placed orders large enough to meet future demand.

It is predicted that commercial aircraft sales in China will increase to $5.3 trillion in the next 20 years, as the nation surpasses the U.S. as the world’s largest aviation market. Currently, aviation is China’s third most invested overseas industry, with an investment total of US$5.1 billion in the third quarter of 2014.

Production has already begun on the fuselage stringers at Boeing Fabrication Integrated AeroStructures in Auburn, Washington. From there, the stringers will be sent to Wichita, Kansas for incorporation into the 737 MAX fuselages. These will then be sent to the Boeing’s facility in Renton, Washington where employees will build the 737 MAX models.

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Amazon starts same-day delivery to Vancouver & Toronto

Wednesday, November 5th, 2014

Amazon is bringing its beloved same-day delivery to two lucky Canadian cities, Vancouver and Toronto, starting today. The service, which is already offered in major U.S. markets (including hometown Seattle), will allow people from those cities to order items before noon and receive it by 9 PM that same day, every day of the week. Thousands of items are eligible for this service in Vancouver and over a million in Toronto.

According to Geekwire, there are no other competing same-day delivery options in Vancouver and Toronto so this new service could be a valuable incentive for customers in Canada to choose Amazon for rush orders and sign up for Prime. Prime members there will pay a flat fee of $6.99 for same-day delivery, whereas non-Prime the deal is $11.99 per shipment and an additional $1.99 per item.

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Alaska Airlines to launch nonstop route to Cancun

Monday, November 3rd, 2014

Alaska Airlines is launching a new nonstop international route from Seattle to Cancun, Mexico. The airline, which is also headquartered in Seattle, will start the new route on November 6th – just in time for those who want to escape the rain and cooling temperatures. It will be a daily route, departing Seattle every morning at 8:10 a.m. and from Cancun every afternoon at 4:55 p.m.

Alaska has been expanding its service heavily over the past year especially out of Seattle. In September alone it launched new nonstop routes from Seattle to Baltimore, Detroit, and Albuquerque. With the new Cancun route added, Alaska now offers 3 nonstop flights from Seattle to Mexico including San Jose del Cabo and Puerto Vallarta. The airline also has 5 nonstop flights between Seattle and Canada.

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Cray, Inc Awarded Largest International Contract Ever

Tuesday, October 28th, 2014

On October 27 Seattle-based supercomputer company Cray, Inc. was awarded the largest foreign contract in the company’s history, a $128 million (USD) contract with the UK Met Office. The Met Office is the United Kingdom’s national weather service, providing weather monitoring and tailored forecasts to more than 3,000 clients each day from headquarters in Exeter, England. With over ten million daily recordings and observations to factor in these forecasts, accurately predicting a sunny day in London is no small feat.

“We are truly honored that one of the most prestigious weather centers in the world has awarded us with the largest international contract in Cray’s history,” said Peter Ungaro, president and CEO of Cray. “The award is symbolic for Cray on a number of fronts — it demonstrates that our systems continue to be the supercomputers of choice […] and it reinforces the role that Cray plays in impacting society on a daily basis in a wide range of areas […].”

The deal comes just months after Cray was awarded its largest contract ever, partnering with the National Nuclear Security Administration for $174m (USD) to provide computing power for research purposes.

Seattle has been long known as a hotbed of technological innovation, with expertise now extending across the pond for forecasting in the other “Rainy City.”

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Alibaba making moves in Seattle

Monday, October 27th, 2014

Looks like Seattle is now home to not one but two of the largest e-commerce companies in the world. There are some clear indications that Alibaba, an e-commerce giant that controls 80% of the Chinese online market and is seeking to expand in the U.S., has recently opened a Seattle office. Although the company has not made any official statements, Alibaba has posted job openings this week for engineers and software developers in Seattle. And according to the Puget Sound Business Journal, a representative from the Association of Entrepreneurs and Experts in Seattle has also confirmed that the office is already open.

Seattle would be Alibaba’s second U.S. location – the company already has an office in Silicon Valley. It is interesting that Alibaba is moving into the hometown of what would be its largest competitor in Amazon – although Alibaba doesn’t currently operate in the U.S. online marketplace it has voiced its intention in doing so. The company recently went public in the U.S. and its CEO, Jack Ma, has stated that it plans to expand aggressively here.

Moving into Amazon territory can be considered a bold move, but to us here at TDA it makes a lot of sense. Seattle has one of the fastest growing high-tech industries in the world and is one of the closest U.S. cities to China. The abundance of tech talent and proximity to its headquarters in Hangzhou, China are very compelling factors.

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Boeing announces first sales to Iran

Thursday, October 23rd, 2014

The Boeing Company is one of the most innovative companies in the world, pioneering in the fields of aerospace and defense in remarkable ways. The company has also been a trailblazer when it comes to global reach – it is currently the largest exporter in the US by dollar value and has customers in 150 countries. So it is not too surprising that Boeing is the first U.S. aerospace company to sell products to Iran since the 1979 U.S. hostage crisis.

Boeing announced today that it has sold $120,000 worth of products to Iran Air which include aircraft manuals, drawings, navigation charts, and data. The deal was thanks to reduced sanctions against Iran, with the U.S. Treasury Department issuing a license allowing Boeing to provide products to Iran, so long as they are used for safety purposes.

U.S. airplanes still cannot be sold to Iran, whose flagship airline is currently operating a fleet of very old Boeing airplanes in need of updates. However the sale is a good sign of warming relations between the U.S. and Iran and the potential of Iran as a market for American companies.

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Costco expands into China’s online market

Tuesday, October 14th, 2014

Costco, the world’s seventh largest retailer headquartered in King County, has been growing its international presence for quite some time – its warehouses can be found in Canada, Mexico, the United Kingdom, Japan, South Korea, Taiwan, Australia, and Spain. Today marks the company’s first official foray into China, Washington State’s #1 two-way trading partner, thanks to a partnership with Alibaba Group and its Tmall Global Platform.

Costco, in partnership with Alibaba, has opened an online flagship store on Tmall.com, China’s largest third-party platform for brands and retailers. The site allows foreign companies to sell their products into China without needing to open a physical store. Costco plans to initially offer food and healthcare products plus its Kirkland Signature products. “Costco sees tremendous growth opportunities in China, especially in light of Chinese consumers’ increasing appetite for imported products. We have chosen a great partner, Alibaba, for the official launch of Costco’s Flagship Store.” notes Jim Murphy, Costco’s Executive Vice President in a statement.

During these first few months, Costco will be carefully analyzing the data from this new site to find out what items are popular and what new items to introduce in later months. Maggie Wu, General Manager of International B2C Division of Alibaba Group, emphasizes that “…Together we will develop and explore innovative market campaigns to unlock Costco’s membership value.”

The new online store can be found here: http://costco.tmall.hk/

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Port of Seattle & Port of Tacoma announce plans to form seaport alliance

Thursday, October 9th, 2014

In a statement released yesterday, the Port of Seattle & Port of Tacoma have announced the formation of a new seaport alliance that will unify the management of both ports’ marine cargo terminal operations and related functions. The groundbreaking decision will allow for both ports to retain their existing commission governance and asset ownership, but will allow for unprecedented cooperation as the global shipping industry only continues to become more globally competitive. “The ports of Seattle and Tacoma face fierce competition from ports throughout North America, as shipping lines form alliances, share space on ever-larger vessels and call at consolidated terminals at fewer ports,” said Port of Tacoma Commission President Clare Petrich. “Working together, we can better focus on financially sustainable business models that support customer success and ensure our ability to reinvest in terminal assets and infrastructure.”

Together, the Ports of Seattle & Tacoma are the third-largest container gateway in North America, and its marine cargo operations supports more than 48,000 jobs. The new alliance will manage the ports marine cargo terminal investments and operations as well as planning and marketing. Where we were once rivals, we now intend to be partners,” said Stephanie Bowman, co-President of the Port of Seattle Commission. “Instead of competing against one another, we are combining our strengths to create the strongest maritime gateway in North America.”

The Port of Seattle & Tacoma commissions will formally adopt and submit this Interlocal Agreement  (ILA) to the Federal Maritime Commission (FMC) for approval at a joint meeting on October 14th.  Once the ILA is approved by the FMC and after a period of due diligence, it is expected that Port of Tacoma CEO, John Wolfe, will be hired as the CEO of the new Seaport Alliance.

 

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Starbucks to acquire Japanese Coffee Partner

Wednesday, September 24th, 2014

Seattle’s most famous coffee chain is making big moves in Japan, where it plans to buy out its partner, Sazaby League, for $913 million. Already it’s largest market outside of the U.S. in terms of store sales, Starbucks is using this acquisition to take full ownership of Starbucks Japan and further expand in the country.

In a press statement, the company explains the opportunity for continued growth in Japan and the potential to introduce new store concepts such as Teavana. The acquisition will be a two-step process and is expected to be completed sometime early next year. Starbucks CEO, Howard Schultz, notes that “Japan is a market we know well and care deeply about, with more than 25,000 partners serving millions of customers every week at more than 1,000 stores.”

Fun Fact: The first Starbucks store that opened outside of the U.S. was in Tokyo, Japan nearly 20 years ago

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Columbia Asia Pouring 150M into Southeast Asia, India Hospital Network

Friday, September 12th, 2014

Columbia Asia, a Seattle-based firm that operates a chain of hospitals in Southeast Asia and India, announced earlier this week that it will be investing another $150 million into its hospital network. The investment will help expand the network to up to 34 hospitals and one clinic by 2018.

As the populations in Southeast Asia and India continue to rapidly grow and enter the middle class, modern hospitals that can provide high-quality and affordable healthcare is in high demand. Columbia Asia predicted this need over 20 years ago and was able to come up with an innovative and successful business model to create clusters of hospitals in large urban areas. The company currently has more than 8,000 employees serving 2 million patients every year in its 26 hospitals and one clinic, serving the countries of Malaysia, India, Indonesia, and Vietnam.

Today, they have a strong and well respected brand in the region, making it easier to continue opening new hospitals. In the last few months they have already opened four new hospitals, 2 in Indonesia and 2 in India. “No other healthcare provider in Asia has hospitals in as many countries operating under a single brand,” said Daniel R. Baty, the founder of Columbia Pacific Management. Columbia Asia has also been able to help expand insurance coverage in the region. When they first started in Malaysia, most patients paid directly for their care. Today, 70% of their patients have coverage.

Columbia Asia’s parent company, Columbia Pacific Management, also owns Cascade Healthcare which builds and operates senior living facilities in China.

 

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