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Russian Aeroflot remains China’s ‘Favorite International Airline’

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Russia’s Aeroflot has been once again named the Favorite International Airline in China. The award was given to Aeroflot for the third consecutive year at the Flyer Award Ceremony 2019. The award ceremony was held today in Shanghai, the economic capital of China.

The awards are supported by the Civil Aviation Administration of China (CAAC). Winners are selected by the jury and by votes from frequent flyers and travelers.

The awards recognize outstanding participants in China’s dynamically developing tourism market. Previous winners include leading global airlines, including carriers that hold Skytrax 5-Star Airline status.

Aeroflot retained the title of Favorite International Airline at the competitive Flyer Awards due to its key competitive advantages: high service quality and flexible fare policy.

“The recognition of Aeroflot as the Favorite International Airline in China is confirmation of the effectiveness of our strategic efforts in China,” Aeroflot CEO Vitaly Saveliev said. “We offer our customers a wide route network and one of the youngest fleets in the world. Millions of Chinese passengers choose our airline for affordable ticket prices, convenient transit via our hub airport Sheremetyevo and high-quality service. Further development of service on Europe-Asia transit routes – one of the most competitive aviation markets globally – is one of Aeroflot’s key goals, along with the active expansion of the domestic route network.”

Aeroflot’s convenient routes encompass four key locations in China: Beijing, Shanghai, Hong Kong and Guangzhou. Aeroflot continuously adds new services oriented at the Chinese market. Earlier Aeroflot signed a partnership agreement with Alipay, China’s most popular payment system.

Aeroflot’s official website has a Chinese-language interface. Passengers receive menus in Chinese, and the in-flight entertainment system is available in Chinese. Onboard announcements are made in Chinese and the menu offers a special Asian set.

Aeroflot consistently enjoys wide recognition and popularity among consumers in the Chinese market. In January, Aeroflot was named Best China – Europe Transit Airline at the 2019 Stars Awards in China.

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Indian travelers expected to spend $136 billion by 2021

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The Indian traveler has come of age, spending approximately $94 billion in 2018, on around 2 billion domestic and international trips, helping the Indian travel and tourism industry achieve unprecedented scale.

The momentum is expected to continue and the industry will grow at a 13 percent CAGR to $136 billion by 2021, according to a report, ‘How Does India Travel’. The report outlines how India spends on travel, the influence of online channels in their purchase journey and potential growth opportunities for travel businesses till 2021.

Deep diving into the $136 billion spends, the report cites a 12 percent growth in transportation ($50 billion), 13 percent growth in lodging ($21 billion) and consumption, which includes spends on shopping, recreation and food, to grow at 13 percent ($65 billion) over the next three years. Additionally, as more people come online, smartphone penetration improves and use of digital payments goes up, the report estimates that Indian travelers will spend an additional $24 billion on online travel bookings over the next three years, a growth from 25 percent in 2018 to 35 percent in 2021.

Online is a significant source of research

Elucidating the planning journey of Indian travelers, both for business and leisure, the report calls out five phases of a customer journey – Interest, Research, Booking, Experience and Sharing. The report states that during key research-heavy phase of interest, research and experience, digital plays a pivotal role with over 86 percent of consumers being influenced by online channels. During this phase, travelers spend their maximum time on search, travel tour provider websites, price comparison websites, and travel articles. Online video too plays a significant role with 21 percent of travelers being influenced by this platform. In the booking and sharing phase, the report states that nearly 60 percent of customers book transport and lodging online, and over 50 percent share feedback online with social media being the dominant platform.

Talking about the market opportunities for online travel players, Vikas Agnihotri, Country Director – Sales, Google India said, “New users perceive that online channels are geared towards the more frequent flyers and experience-oriented travellers; and existing travelers research online but the lack of trust in payments and booking experience make them end up booking offline. If travel players tap these online users through personalised marketing, messaging and travel plans, they can further augment online travel bookings. This can be done by adopting digital technologies to influence customers early in the journey and moving from one-time engagement to ongoing relationships to have a positive impact.”

“There is a perception amongst consumers that online channels are geared towards premium customers, along with a marked distrust around payment and pricing terms. It is imperative for businesses to address these concerns in order to effectively tap into the growing base of users.” Arpan Sheth, partner Bain & Company said.

Decoding the Indian travelers

The report further identified the five cohorts of travelers in India, across business and leisure travel, and categorised each against their online research behavior:

Frequent flyers: Nearly 70 percent of them booked online, cumulatively spent $17 billion in 2018. They make their choices based on convenience, availability, brand preference and past experiences.

Budget business traveler: 86 percent of them researched online whereas only 60 percent book online, cumulatively spent $20 billion in 2018. This cohort makes their decisions based on cost of travel, availability and consultation amongst their personal business network.

Experience-oriented traveler: Around 70 percent of their bookings were done online and cumulatively spent $22 billion in 2018. They extensively research both online and offline for ‘authentic’ experiences and convenience of options; display high loyalty towards preferred brand of airlines or hotels and actively share experiences.

Budget group traveler: 90 percent researched online and 55 percent booked online, cumulatively spent $29 billion in 2018. They make multiple decision-makers in the process and take the final decisions based on minimal cost.

Occasional travel visiting friends/relatives: 92 percent researched online but only 60 percent booked online, spent $6 billion in 2018. They maximize family convenience within a budget and believe online terms and conditions are restrictive.

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Barbican beefs up sales team

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The Barbican, a conference and international arts venue located in London, has appointed Jenny Waller as head of sales. The expanded role will see Jenny managing the growing sales team, which includes a renewed focus on international and association markets. Jenny will be supported in her role by the newly-appointed deputy head of sales, Charlie Smith.

Jenny has been promoted from the role of senior account manager within the Barbican team, where she has already achieved a number of significant wins for the world-leading arts and conference venue. These include major corporate and association events due to take place over the coming 24 months. Prior to working at the Barbican Jenny spent four years developing industry knowledge and expertise at Park Plaza Hotels.

Charlie returns to the Barbican, where he worked as an account manager for two years between 2016 and 2018. Other experience includes time developing sales skills at both Dreamland and HMS President.

“The Barbican is going from strength to strength,” commented Jackie Boughton, head of business events at the Barbican. “Last year we opened and showcased our new cinema offering, comprised of two cinemas and supporting food and beverage, as well as exhibition or networking space capable of seating up to 150 for conferences, meetings and private screenings. When added to our wider offering it makes the Barbican one of Europe’s most comprehensive venues. This in turn has led to an increase in both association and international bookings. Jenny has been instrumental in that success over the last year and was therefore the perfect choice to take on the demanding role leading our sales team. It is also a real pleasure to welcome Charlie back to the team – his in-depth knowledge of the venue is already having a significant impact on new business development.”

Jenny responded by saying: “This is a new and exciting challenge for me. Over the course of the next year I am particularly looking forward to working alongside our association specialists as we develop that market, whilst supporting our work with a strong presence at major international trade shows and events. The UK of course remains our core market and we are delighted by the ongoing support we receive from domestic clients booking direct or via our agency partners. However, there is still significant opportunity for us to develop internationally – particularly given our ability to partner with the Barbican International Enterprises team to deliver truly inspiring content and theming. The addition of Charlie to the team ensures we have the ongoing experience and depth of knowledge needed to deliver to the highest standards for our clients.”

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Allegiant Air to offer scheduled service to Mexico

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Allegiant Air today filed an application with the U.S. Department of Transportation to offer scheduled service between the United States and Mexico.

Allegiant Air currently serves more than 450 domestic routes. This will be the company’s initial venture into scheduled international service.

“Unlike other U.S. carriers, Allegiant has always been laser-focused on leisure travel and providing access to affordable, non-stop flights for those who wouldn’t otherwise be able to go on vacation,” said Maury Gallagher, Allegiant chairman and chief executive officer. “Offering service to Mexico will provide a whole new array of options for travelers to discover world-class destinations that may have been previously out of reach.”

“We believe that providing scheduled service to Mexico will also be of great economic benefit, by stimulating traffic and providing additional competition in the international leisure market,” he continued. “It will not only bring exceptional value to travelers, but will also enhance both tourism and business impact in the communities we serve.”

The DOT application is the first step in the process for Allegiant to begin scheduled service to Mexico. Projected dates and locations for commencement of service will be announced at later dates as the process moves forward.

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Delta Air Lines offsets most carbon emissions for over 300K customers on Earth Day

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In celebration of Earth Day today, Delta is offsetting the emissions of all domestic leisure and business travel into and out of New York, Boston, Seattle, Los Angeles, Raleigh-Durham and Atlanta for over 300,000 customers across the country.

Plantable seed paper cutouts shaped like airplanes will be distributed on these selected flights to let customers know the environmental impact of their flight has been offset and inspire them to offset additional travel on delta.com/co2. Once planted, this special paper airplane will sprout non-invasive wildflowers.

“Delta led the U.S. aviation industry by launching the first carbon offset program in 2007, making it easy for customers to reduce the environmental impact of their travel,” said John Laughter, Senior Vice President – Corporate Safety, Security and Compliance. “Delta is also the only major airline to voluntarily cap carbon emissions at 2012 levels by purchasing carbon offsets.”

Since 2013, Delta has voluntarily purchased over 12 million carbon offsets, which is equivalent to the emissions from 1.7 million cars or electricity use for one year in nearly 2 million homes. This is more than any other U.S. airline. Today alone, Delta will buy almost 50,000 carbon offsets. To put this in perspective, 50,000 offsets will equal the emissions from more than 10,000 cars driven for one year.

Delta’s carbon offsets to benefit Conservation Coast project in Guatemala

Every offset Delta purchases today will benefit the Conservation Coast offset project, which provides environmental protection from deforestation and sustainable livelihood opportunities for communities in Guatemala. These offsets will help conserve over 400 bird species and 54,000 hectares of threatened rainforests situated along the Caribbean coastline of Guatemala.

The Conservation Coast project also supports sustainable livelihoods within local communities by teaching things like economically viable and environmentally sustainable agricultural practices that work with the environment rather than against it. To date, over 700 jobs are being supported by the project, 30 percent of which are held by women.

“At Delta, we believe connecting the world begins with caring for it,” said Laughter. “The offset projects we support are holistic, going beyond addressing the environmental impact of travel to provide resources, empowerment and financial opportunities to underserved communities like those involved in the Conservation Coast project.”
Offsetting is affordable. A roundtrip ticket from Atlanta to New York emits 0.28 metric tons of CO2, which can be offset for less than $5.

These offsetting efforts and more are why Delta was honored the Vision For America Award by Keep America Beautiful in 2017, recognized with Captain Planet Foundation’s Superhero Corporate Award in 2018, named to the FTSE4Good Index for four consecutive years, included in the Dow Jones Sustainability North America Index for eight consecutive years, given an honorable mention in Fast Company’s 2019 World Changing Ideas Awards and named one of America’s 100 most sustainable companies according to an in-depth Barron’s study.

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No surprises: New York, London and Tokyo top the list of world’s 15 richest cities

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Boston, Calgary, Perth and Macau – all associated with material wealth – have failed to make this list of the 15 richest cities in the world, compiled by market research firm New World Wealth.

The data gathered by the researchers reflects the total amount of private wealth held by all the individuals living in each of the cities on the list. Unlike traditional ratings, this top 15 is not based on Gross Domestic Product (GDP), but reflects analysis that covers all assets, such as property, cash, equities and business interests, excluding liabilities. Government funds are included.

1. New York City – $3 trillion

2. London – $2.7 trillion

3. Tokyo – $2.5 trillion

4. San Francisco Bay Area – 2.3 trillion

5. Beijing – $2.2 trillion

6. Shanghai – $2 trillion

7. Los Angeles – $1.4 trillion

8. Hong Kong – $1.3 trillion

9. Sydney – $1 trillion

10. Singapore – $1 trillion

11. Chicago – $988 billion

12. Mumbai – $950 billion

13. Toronto – $944 billion

14 Frankfurt – $912 billion

15. Paris – $860 billion

According to New World Wealth, wealth is a measure that differs from a GDP indicator, which is another common metric used to gauge economic power. The research firm revealed that Houston, Geneva, Osaka, Seoul, Shenzhen, Melbourne, Zurich and Dallas had just missed out on the top 15.

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India: Jet Airways’ demise leads to spike in airfares, massive hotel cancellations

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The abrupt shutdown of Jet Airways operations has left Indian tourism industry a worried lot as it has led to an average 25 percent spike in airfares across the sectors leading to massive hotel cancellations, says industry experts.

Some key sectors like Mumbai-Hyderabad, Mumbai-Delhi and Delhi-Mumbai have seen the fares flying by 62 percent, 52 percent and 49 percent, while the Bengaluru-Delhi sector has had the lowest impact with a 10 percent surge shortly before and soon after the grounding of Jet.

Financially struggling for months, Jet Airways decided to call it quits from Wednesday night, leaving 22,000 jobs at stake and inconveniencing lakhs of passengers both domestic as well as international as Jet was the single largest airline out of and into the country.

“The impact of grounding of Jet Airways is not only restricted to the airlines sector as tourism has taken a severe beating due to the massive surge in airfares during the peak demand season. The impact is unlikely to fade away anytime soon and may continue into the rest of the year,” Travel Agents Association of India (TAAI) president Sunil Kumar said Friday.

He said, both the domestic as well as international travel and related sectors are affected as travelers are cancelling their hotel bookings as airfares have surged by over 25 percent on average.

Leading tour operator Cox & Kings’ Karan Anand said the shuttering of Jet has upset the travel plans of many who have booked on Jet.

“This is the peak travel season and the airfares for the next 10-12 days are up by at least 25 percent as the capacity has fallen massively dissuading last minute travelers,” he added.

However, online travel aggregator Easemyyrip.com co- founder Nishant Pitti tried to downplay the impact saying airfares normally fluctuate as the aviation industry is always unpredictable.

“It is true that passengers are in panic now but going forward there will not be much impact as other airlines like Spicejet and Indigo are adding more planes into their fleet which will help balance demand-supply gap,” he said.

Train booking and discovery platform Confirmtkt cofounder Sripad Vaidya said due to the flight charges going up, there is a huge surge in people opting for trains and buses.

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Japan’s first domestic passenger plane since 1960s to challenge Boeing and Airbus

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Mitsubishi Aircraft Corporation, an aviation unit of Japanese industrial giant, is planning to start deliveries of Japan’s first domestically-produced passenger plane since the 1960s as soon as next year.

The 88-passenger jet has a flight range of about 2,000 miles, while a smaller variant can fly up to 76 people for about the same distance. The MRJ (Mitsubishi Regional Jet) made its maiden flight in November 2015 with the first deliveries slated for mid-2020.

Mitsubishi Aircraft Corporation initially planned the first deliveries of the jet for 2008. However, the date was pushed back five times due to production difficulties. Orders for the aircraft that once totaled 474 units from US and Japanese carriers have been reportedly reduced to 407 jets so far.

The Japanese conglomerate, a longtime supplier of aircraft components to Boeing, invested over 600 billion yen ($5.36 billion) into MRJ as of March 2018 with another 200 billion yen ($1.8bn) expected to be pumped into the project by the end of 2020. In October, Mitsubishi announced plans to invest an extra 170 billion yen ($1.5bn) in capital into its aircraft unit, canceling 50 billion yen ($446mn) of the debt owed by the division.

The long-anticipated MRJ, which is designed for local air transportation, may become a peer competitor for such mainstays as Canada’s Bombardier, whose C Series regional planes are marketed as the Airbus A220, after the 2017 acquisition of the unit by the European aerospace giant. The Japanese jet is also expected to provide keen competition to Brazil’s Embraer that announced plans to create a joint venture for Embraer’s airliners in 2018.

The newcomers in the sector of regional air service, such as the Russian Sukhoi Superjet-100 and the Chinese Comac ARJ21, which are currently undergoing test flights, may also challenge Airbus and Boeing.

Mitsubishi is currently involved in legal proceedings with Montreal–based Bombardier. In October, the Canadian aircraft manufacturer filed a lawsuit, accusing the Japanese corporation of stealing secret information and causing Bombardier “to suffer irreparable financial loss.”

Mitsubishi counter-sued, saying that the Canadian aircraft producer had violated antitrust regulations through “a multifaceted scheme to expand its power within the regional jet market by impeding the entrance of a new competing aircraft.”

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How does India travel? Let us count the 94 billion ways

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Bain & Company and Google India are together launching a report on “How Does India Travel.” According to the report, the Indian traveler has come of age, spending approximately $94 billion in 2018 on around 2 billion domestic and international trips. This has helped the Indian travel and tourism industry achieve unprecedented scale, and the momentum is expected to continue with the industry growing at a 13 percent CAGR to $136 billion by 2021, according to a report.

Fueled by digital, Indian travelers are expected to spend an additional $24 billion on online travel bookings over the next 3 years. The report outlines how India spends on travel, the influence of online channels in their purchase journey, and potential growth opportunities for travel businesses until 2021.

Deep diving into the $136 billion spends, the report cites a 12 percent growth in transportation ($50 billion), 13 percent growth in lodging ($21 billion) and consumption, which includes spends on shopping, recreation and food, to grow at 13 percent ($65 billion) over the next three years. Additionally, as more people come online, smartphone penetration improves and use of digital payments goes up, the report estimates that Indian travelers will spend an additional $24 billion on online travel bookings over the next three years, a growth from 25 percent in 2018 to 35 percent in 2021.

Online is a significant source of research

Elucidating the planning journey of Indian travelers, both for business and leisure, the report calls out five phases of a customer journey – Interest, Research, Booking, Experience and Sharing.  The report states that during key research-heavy phase of interest, research and experience, digital plays a pivotal role with over 86 percent of consumers being influenced by online channels. During this phase, travelers spend their maximum time on search, travel tour provider websites, price comparison websites, and travel articles. Online video too plays a significant role with 21 percent of travelers being influenced by this platform. In the booking and sharing phase, the report states that nearly 60 percent of customers book transport and lodging online, and over 50 percent share feedback online with social media being the dominant platform.

Talking about the market opportunities for online travel players, Vikas Agnihotri, Country Director – Sales, Google India said, “New users perceive that online channels are geared towards the more frequent flyers and experience-oriented travelers; and existing travelers research online but the lack of trust in payments and booking experience make them end up booking offline. If travel players tap these online users through personalized marketing, messaging and travel plans, they can further augment online travel bookings. This can be done by adopting digital technologies to influence customers early in the journey and moving from one-time engagement to ongoing relationships to have a positive impact.”

“There is a perception amongst consumers that online channels are geared towards premium customers, along with a marked distrust around payment and pricing terms. It is imperative for businesses to address these concerns in order to effectively tap into the growing base of users.” Arpan Sheth, partner Bain & Company said.

Decoding the Indian travelers

The report further identified the five cohorts of travelers in India, across business and leisure travel, and categorized each against their online research behavior:

  • Frequent flyers: Nearly 70 percent of them booked online, cumulatively spent $17 billion in 2018. They make their choices based on convenience, availability, brand preference and past experiences.
  • Budget business traveler: 86 percent of them researched online whereas only 60 percent book online, cumulatively spent $20 billion in 2018. This cohort makes their decisions based on cost of travel, availability and consultation amongst their personal business network.
  • Experience-oriented traveler: Around 70 percent of their bookings were done online. and cumulatively spent $22 billion in 2018. They extensively research both online and offline for ‘authentic’ experiences and convenience of options; display high loyalty towards preferred brand of airlines or hotels and actively share experiences.
  • Budget group traveler: 90 percent researched online and 55 percent booked online, cumulatively spent $29 billion in 2018. They make multiple decision-makers in the process and take the final decisions based on minimal cost.
  • Occasional travel visiting friends/relatives: 92 percent researched online but only 60 percent booked online, spent $6 billion in 2018. They maximize family convenience within a budget and believe online terms and conditions are restrictive.

However, challenges remain in meeting the expectations of these travelers. Customers perceive online channels geared towards premium cohorts (frequent flyer and experience-oriented traveler), while mass cohorts, with $55 billion in spending, remain underpenetrated. There are about 160 million non-transacting active Internet users in India with only 5 percent of online travelers from Tier-2 or Tier-3 cities. There is a significant (20 percent) difference between the booking rates of premium cohorts and mass cohorts, the latter being also dissatisfied with online channels (~33 percent satisfied) vs. premium cohorts (~42 percent). The second challenge is in penetrating existing users who exhibit a marked distrust in use of online channels to make bookings, especially around payment and pricing terms and booking experience compared with offline channels. Consequently, their online usage drops between the research (>86 percent online influence) and booking phases (~40 percent offline bookings).

How travel businesses need to adapt to the needs of online consumers

The report cites five major shifts that marketers need to make to market to the online travelers – First, alleviate consumer concerns by improving the booking and payment experience to build a trusted brand and increase adoption. Second, they need to address the negative customer perception issues by mass customization to drive higher share in the segment. They also need to utilize consumer technology to penetrate mass segments (standardize, enable sharing), reach non-transactors (build offline presence), and create new user access.  Moreover, they need to find innovative and frugal ways to package the experience to increase both adoption and retention.  Finally, they need to create a robust digital backend to adapt to customer needs across the purchase journey.

“The contribution of travel and tourism’s spend in India has reached developed market levels, from 6.7percent of GDP in 2013 to 9.4 percent in 2018. This growth, combined with a rapidly growing internet user base and adoption of online bookings will lead to $24 billion in incremental revenues through online channels by 2021. In order to benefit from this trend, businesses need to actively increase new user adoption and increase penetration in the existing user base across the purchase journey.” Joydeep Bhattacharya, partner Bain & Company said.

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India’s Jet Airways halts all international and domestic operations

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One of India’s major airlines, Jet Airways, has announced it is temporarily halting flight operations on Wednesday after the carrier failed to secure the “critical interim funding” necessary for the company to remain afloat.

Jet Airways will operate the last flight on Wednesday as it cancels all its international and domestic flights, the airline said in a statement. It explained that it cannot afford to pay for fuel or other critical services to keep the operations going, as all its months-long attempts to seek both interim and long-term funding were in vain.

“Unfortunately, despite its very best efforts, the airline has been left with no other choice today but to go ahead with a temporary suspension of flight operations,” the statement reads.

Earlier this month, the airline’s fleet was significantly reduced to just five aircraft and it was forced to suspend international operations. On Wednesday, the Jet Airways website listed only 37 domestic flights and had an additional nine-page list of canceled flights, saying that the schedule was impacted by “operational reasons.”

The troubled company failed to receive a stop-gap loan of about $217 million from its lenders as part of a rescue deal agreed in late March, Reuters earlier reported.

“Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding,” an unnamed bank source in the negotiations on the debt resolution process told the agency.

The uncertainty over the crucial funding crashed Jet Airways stock on Tuesday, with shares plunging around 20 percent.

Employees have been hit hardest by the crisis in the company and have reportedly not been paid in months. The pilots even called on the State Bank of India (SBI) to release the necessary funds and appealed to India’s Prime Minister Narendra Modi to save 20,000 jobs which may be lost in the shutdown.

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