Brazil's air trouble due to politics, analysts say

Brazil's aviation crisis, which led to two major accidents in 10 months, is due largely to inexperience, negligence and aviation safety budget cutbacks, experts say.
An air crash that killed at least 199 people in Sao Paulo last week follows nearly a year of chaotic air travel in which flight delays and cancellations became routine.
Critics say President Luiz Inacio Lula da Silva appointed friends and allies rather than career civil servants when he created the new aviation authority ANAC last year. Previously, the Air Force controlled civil aviation.
"Lula threw out the country's accumulated experience in civil aviation," said Alcebiades Santini, vice-president of Andep, a group that represents airline passengers.
Since coming to power in January 2003, Lula curtailed the powers and budgets of regulators in several industries, including oil, electricity and telecommunications. Investors complained of uncertainty and many delayed new projects.
"Lula has politicized state institutions, undermining their efficiency and expertise," said Joao Paulo Peixoto, an expert in public administration at the University of Brasilia.
Paying political favors with government appointments is not new but became more widespread under Lula, said Peixoto.
The government has repeatedly denied such accusations, defending many of its appointments as "technically" sound.
Only one of five directors at the aviation authority ANAC has any experience in aviation, said Respicio Espirito Santo, aviation professor at Rio de Janeiro's Federal University.
This government never believed in regulators and ANAC shows it," said Espirito Santo.
Two ANAC directors, including its president Milton Zuanazzi, have close ties to leaders in Lula's Workers' Party. Three days after the crash, Zuanazzi was given an Air Force medal for his contributions to aviation, causing an uproar.
TECHNICAL STAFF
Zuanazzi defended ANAC's diverse board of directors on Tuesday and said it had taken over much of the technical staff from the agency that preceded it.
"My appointment was a technical decision," he said.
The airports authority Infraero is being investigated by a congressional committee on charges of fraud.
The Lula administration also curtailed spending on aviation safety, according to the committee. ANAC's 151 million reais budget this year was one-third less than what it requested.
Authorities failed to hire more air traffic controllers, modernize equipment and expand airport capacity, experts said.
"Inexperience led to negligence and air travel became less safe and more susceptible to collapse," said Gustavo de Cunha Mello, an air safety expert in Rio de Janeiro.
Infraero President Jose Carlos Pereira agrees.
This country has no civil aviation policy, there's a conflict of interests among (authorities)," said Pereira.
Industry experts said Defense Minister Waldir Pires, a Lula confidant, lacks leadership to coordinate authorities including the Air Force, which still handles air traffic controls.
"Pires and the other top aviation authorities need to go, we need to bring the professionals back," said Santini.
The air crisis began after a collision of two airplanes over the Amazon last September killed 154 people and unveiled a stretched capacity of controllers and airlines.
Air traffic controllers since staged periodic work slowdowns to protest poor security and work conditions.
The presidency declined to comment. One aide, who requested anonymity, said the idea to create ANAC was not Lula's but former President Fernando Henrique Cardoso's.

BestWeek: Motorcyclists' Age, Affluence Trending Upward -- And So Are Accidents

America's motorcyclists are trending away from the old stereotype of the leather-jacket-wearing thug. Today, motorcycle riders are more educated and more affluent than they've ever been before. But this means the insurance risk is rising, according to an exclusive story in BestWeek U.S./Canada. "There's been a huge shift over the last 20 years, perhaps even longer," says Rick Stern, motorcycle product manager for Progressive, which says it is the largest U.S. writer of motorcycle policies. "Today, we're seeing that motorcycle riders are more educated and more affluent than they've ever been before."
Brian Opoloski, director of product management for Foremost Insurance, a unit of Farmers Group, said judging by both sales and registrations, there are lot more bikes on the road today. "And there are a lot more writers, too," he said.
Also in BestWeek Europe:
There is growing confidence within the London market that it is gaining ground in establishing contract certainty as cornerstone in its international competitive position.
Also in BestWeek U.S./Canada:
Larry Frakes, United America Indemnity's recently appointed president and chief executive officer, says the insurance sector is battling softening market trends, but the excess and surplus lines world remains an attractive market for the short and long term.
And in both editions of BestWeek:
The Best's Global Insurance Composite Index finished the week of July 19 up 22.68% from a year ago. The composite index reflects the performance of 180 insurance stocks. The week's top performers were China Insurance International, Alfa Corp., Penn Treaty American, Humana, and Meadowbrook Insurance Group.
The bottom five performers were Gainsco, Novae Group, IPC Holdings, Safety Insurance Group, and Commerce Group.
BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, please call A.M. Best's customer service department at (908) 439-2200, ext. 5742, or e-mail your request to customer_service@ambest.com.
Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.

Optimizing Inventory Management and Supply Chain Finance Practices Improves Working Capital Metrics; Technology Plays an Important Role

Sixty-Five Percent of 400 Supply Chain and Finance Professionals Surveyed Say Working Capital Optimization Is a High Priority for Their Company
Aberdeen, a Harte-Hanks Company (NYSE:HHS - News), has just released the latest benchmark report on working capital optimization based on a survey of 400 supply chain and finance professionals. This report helps companies identify best practices in moving from working capital optimization theory to practical initiatives that can improve their corporate financial performance.
The top 20% of performers (named Best-in-Class) exhibit noticeable differences in financial metrics compared to the rest of survey respondents (Industry Average and Laggard firms): the cash conversion cycle of the Best-in-Class companies in this study is 5-6 times shorter than that of Average and Lagging companies.
Best-in-Class companies differ significantly in their use of innovative supply chain/inventory and finance strategies and new-generation technologies.
Best-in-Class companies are:

-- Almost twice as likely as Laggards to be using an inventory
optimization tool
-- 2.4 times as likely as Laggards to be using inventory collaboration
technology
-- 1.6 times as likely as Laggards to be using supply chain/inventory
visibility technology
-- More than twice as likely as Laggards to be using working capital/
cash management tools and the supporting business analytics
-- Twice as likely as Laggards to have access to
receivables/payables/inventory financing at various stages in their supply
chains.
"Supply chain, procurement and finance professionals have an opportunity to use new approaches to working capital management to create a business advantage for their companies. Based on the survey results, technology has emerged as a very important factor in driving long-term working capital improvement," says Viktoriya Sadlovska, supply chain finance and global trade research analyst at Aberdeen. "The top performers are using working capital optimization to fuel growth initiatives at their organizations."
This study is made available to the public through the underwriting of: ABN AMRO, TradeBeam, BMO Capital Markets, Citi, IBM Global Financing, Ariba.
Download a complimentary report copy at: http://www.aberdeen.com/link/sponsor.asp?cid=3996
About Aberdeen Group, a Harte-Hanks Company
Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.
As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.