Oil Prices Have Fallen. So Why Haven’t Airfares?

SPEAKER_1 (0:00)

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Alex Ossola (0:34)

AI companies are competing for clients the old-fashioned way, with discounts. And oil prices have fallen. So why are airfares still flying high?

Alison Sider (0:44)

Well, airlines have realized that they have some pricing power right now, and they're not wanting to give it up easily.

Alex Ossola (0:50)

Plus, the Trump administration revokes a key financial benefit for Iran. It's Tuesday, July 7th. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

Starting today with a big US political story. Bernie Sanders is the latest progressive to call for Graham Plattner to drop out of the Maine Senate race. Democrats are rescinding their endorsements and cutting off funding a day after a woman alleged that Plattner sexually assaulted her. Plattner has denied the allegation. Maine is key for Democrats' hopes of taking back the majority in the Senate. If Plattner drops out, Democrats would have until July 27th to pick someone else. Potential candidates include people who fell short in the governor's primary race earlier this year, like Maine Secretary of State Shenna Bellows, the state's former Senate president, Troy Jackson, and its former state health director, Nirav Shah. The discussions around a replacement are exposing the ideological rifts in the Democratic Party. Some progressives want a candidate with similar policy positions to Plattner's, someone like Jackson. The party's centrist wing says that Shah is better equipped for the general election.

At the White House, President Trump's latest construction project is underway. A new granite helipad on the South Lawn. Pentagon contractor Lockheed Martin is putting about $5 million towards the project. Lockheed's Sikorsky unit makes the Marine One helicopters that fly presidents around. There have been concerns that new models of the helicopter were too powerful to safely land on the lawn surface. A Lockheed spokeswoman said that the company donated the funds to the National Park Service and that the donation is part of a history of supporting projects in Washington and across the country.

Today, the Trump administration revoked a license allowing Iran to sell oil on the open market, the main economic benefit for Tehran in the interim peace deal. It's a reprimand coming hours after the Islamic Revolutionary Guard Corps fired missiles and drones at ships near the Strait of Hormuz and is a clear sign that Washington isn't happy with how the peace talks are going.

Separately, President Trump landed in Ankara, Turkey today for a summit of NATO leaders. Speaking alongside Turkish President Recep Tayyip Erdogan, Trump said that he would consider selling the F-35 jet fighter to Turkey. That sets up a potential clash with Congress, which in 2020 passed a law barring the US from selling F-35s to Turkey as long as Turkey relies on Russian air defense technology.

Erdogan in 2017 approved Turkey's import of a Russian air defense system. The decision triggered American sanctions on Turkey. Today, Trump said he wanted to undo that.

John Esposito (3:29)

We're going to be taking the sanctions off.

Berber Jin (3:30)

It's time to do that.

SPEAKER_1 (3:36)

We don't want to sanction friends. It's very simple.

Alex Ossola (3:39)

And in France, far-right leader Maureen Le Pen says she plans to run in next year's presidential elections. She made the announcement after a court reduced her sentence, clearing her path to run again. She had been convicted for misusing European Parliament funds. Now, she's expected to enter the race as a front-runner.

Top artificial intelligence companies like OpenAI and Anthropic aren't just in a race to have the best models. They're desperate for enterprise customers that will provide lasting revenue. To get them in the door, these high-tech companies are using an old-school tactic, the reliable old discount. I'm joined now by Berber Jin, who covers startups for the journal. Berber, what companies are offering these discounts, and what kinds of discounts are they, exactly?

Berber Jin (4:25)

These discounts are mainly being offered by OpenAI and Anthropic, and they are essentially competing against one another to get customers to purchase, mostly their coding tools, which have really taken off across Silicon Valley. What we're kind of seeing is sort of a price war that maybe looks similar to a mattress sale, or some of the one-time discounts that you'll see during holiday sales. It's kind of funny because it's such an advanced technology, but they're using very basic sales tactics to try and get customers, mainly startups, hooked onto their technology.