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tv   Talking Business  BBC News  June 23, 2024 12:30am-1:01am BST

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and they want to travel and experience other parts of the world. up, up, and away! yep, the global airline industry — it is soaring to new heights, as millions of us look to take to the skies for a summer getaway. record numbers of passengers — they're predicted to fly this year, with airlines raking in healthy profits and airports fit to bursting. but against a backdrop of war, economic uncertainty, and the yearfor global elections, can it continue? and, with our climate in crisis, can any of it be done sustainably? i'm going to be discussing all of that and more — here they are — with a host of experts for our bumper aviation special. also, i'm catching up with one of the longest—serving airline leaders, the industry heavyweight — yep, the big boss of emirates airline, sir tim clark. wherever you'rejoining me from around the world,
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once again, a big hello and a warm welcome to the show. now, for many of us, it's that time of the year where we're checking our passports, getting our bags out of the cupboards, and dusting off our shades as we prepare for a summer getaway, jumping on a plane in search of the summer heat — or trying to escape it. the airline industry is now officially back on track, after the dark days of the pandemic. and i tell you what, their outlook is very bullish. a record high of nearly five billion travellers are predicted to take to the skies this year, with the world's airlines expected to post over $30 billion in profits on the back of it. and that increase in demand, it's projected to continue — with passenger numbers heading in one direction — and that's up — with around eight billion expected to take to the skies by 2043. good news for the airlines, but it is raising concerns over its potential environmental impact. aviation is currently responsible for around 2—3% of total global carbon emissions, which is significant on a per—head basis,
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as it's one of the most climate—intensive forms of transport. so, in answer to this, the airline industry has committed to a net zero carbon target by 2050. and the most significant current tool in the box to reach that is the use of so—called sustainable aviation fuel known as saf. that's jet fuel made from sustainable sources such as agricultural waste. currently, there are major hurdles over its availability, but significant progress is being made in its potential. and in fact, last year, we saw the first transatlantic flight by a large passengerjet powered only by those alternative fuels flying from london to new york. ok, so let's get stuck into all of this — and where better to start than with the voice for the airline industry? so, i caught up with the big boss of the international air transport association — of course, known as iata. willie walsh, fabulous to see you as always. and, willie, let me start
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with this, because on the show, i've just outlined some of the huge passenger numbers and predictions from you, from iata. so, let me start with that, willie — what do you see behind these phenomenal numbers, and where are the biggest areas of growth? where are they coming from? well, it's great to see the industry back now in growth above where we were in 2019. it's taken a long time to get back. and, you know, still a number of challenges facing the industry, but demand's actually quite strong right across the world. i think if you look at the asia pacific region, where it was slower to reopen, it is now gathering pace. but still some restrictions in place, you know, traffic between china and the us is still only at around 20% of where it was back in 2019. so, i think there's still scope for growth, but the growth really is pretty much everywhere globally. but, willie, i mean, do you think these phenomenal passenger numbers are sustainable given — well, given what travellers
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all say are hugely increased airfares since pre—pandemic? everybody has suffered from inflation. you know, it's not unique to the airline industry. and in fact, when we look at fares back in 2019 and today, they're just about keeping pace with inflation. so, yes, ticket prices are higher than they were, but it doesn't appear to be impacting on demand. and i think it proves what we said right through that period of the pandemic, that people want to fly, and they need to fly, you know, they need to connect for business, they need to connect to meet their family, and they want to travel and experience other parts of the world. so, it's good to see where it is. willie, are these airfares now the new norm? because i know you and others have said that the airlines, they have to fund this greener transition, well, somehow. yeah, i think that's a great question, aaron. you know, if you look at the profitability that we're forecasting for the industry this year, in margin terms — and i think it is important to look at it in terms of net margin — we're forecasting just over 3%, 3.1%.
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so, a very, very thin margin for an industry that's as important as aviation. and, if you consider the long—term outlook and the transition to net zero, you know, we know that sustainable aviation fuel is very expensive compared to traditional fuel. it can be anything up to six times the price. and that's going to have to be paid by somebody, and, given the margins that the industry traditionally operates with, you know, i don't think there's any way you can avoid the reality of higher fares. i think this is where politicians need to be honest, you know, i think some people have tried to portray this view that it won't cost us anything to transition to net zero. it will be challenging and it will be expensive, and ultimately, consumers will have to pay more. well, on that note, willie walsh, the big boss
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i think they know what the problems are and solving those problems. it's not possible to do, itjust requires the right focus, right attitude, the right culture. and i think boeing is on the rightjourney at the moment. what would we need is an industry to see a strong boeing and will work with them to get them where they need to be because you know, we can't have an industry that's almost totally dependent on one manufacturer, we need confidence that boeing is going to play a critical part of the future.
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well, on that note, willie walsh, the big boss of iata, always great to have you on the show. thanks forjoining us, willie, and i'll talk to you soon. thanks, aaron. ok, so that's the overview for the whole industry, and, of course, the problems of reaching climate targets. but how are the airlines themselves dealing with all of this? well, to find out, i also caught up with the boss of sustainability at the world's biggest carrier, united airlines. lauren riley, great to have you on the show. and, lauren, let me start with this, because united airlines — the biggest airline in the world, your home market, north america, the biggest aviation market in the world — and, lauren, this phenomenal demand to fly, five billion expected this year. i mean, the industry's growing at great speeds, so i guess it does beg the question, how can all of this be done sustainably? well, it's great to be here, and it's really wonderful to talk about this subject in particular. you know, at united, we are very passionate about connecting the world
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and enjoying all the beauties of the planet. and our commitment, though, is to make sure that we do it responsibly and sustainably. you know, as we grow, as we rebound from a historic pandemic and we go back to normalflying, and hopefully continue to grow as an industry, we have a worldwide commitment across the industry to really develop sustainable aviation paths forward. and that's going to require a whole host of solutions, from sustainable aviation fuels to new fleet, to new technologies, all the way through electric and hydrogen, and beyond. and, as an industry, we're looking at all of those solutions. 0k, lauren, so the vast majority of the carbon footprint comes from burning fossil fuel. but we know sustainable aviation fuel — saf — it's been touted as the, well, as the ready—to—run option. but just for the uninitiated, lauren, can you just explain to us what it is, and how saf saves on emissions? you know, sustainable aviation fuels are pretty remarkable. so, just to give you some context, for united airlines, 98% of the emissions that we put into the atmosphere are from combusting jet fuel. so, when you think about moving towards sustainable flight, what we're really talking about is finding a way to either use less fuel,
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so we create less emissions, or replace the fuel with sustainable alternatives. and that's where sustainable aviation fuels comes in, saf. saf is chemically identical to conventionaljet fuel, exactly the same, but it's derived from waste or renewable feedstocks. and it uses renewable power, a little bit of carbon capture, and all of these great new technologies to produce a jet fuel that today has up to 85% less emissions on a life cycle basis. and the challenge is that we simply don't have enough production coming online yet. and what do i mean by that? let me give you a couple of numbers. last year, worldwide, about 150 million gallons of saf were produced — which sounds like a lot, and it's a massive progress over the previous years. but united alone, as a single airline, uses four—and—a—quarter billion gallons of jet fuel. and that's just one airline. but why, lauren? i mean, such a huge industry with such huge demand, why
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are they not ramping this up? all of these technologies are very nascent. they're very early—stage. and so, we're essentially in the business of creating a marketplace for alternative fuels. so, that's why we're working very hard with policy—makers here in the united states, across europe, and in geographies everywhere, so that we can help kick—start the marketplace through incentives, through mandates, with policies that enable us to scale sustainable aviation fuel, so that we can have a robust marketplace. well, on that point, lauren riley, chief sustainability officer at united airlines, great to have you on the show, good luck with everything. i'll talk to you soon. thank you. right, so we've heard from a major airline — but what about the airports? how are they gearing up for all of this new traffic sustainably? well, to find out, i spoke to the big boss of one of the world's newest megahubs, the ceo of iga istanbul airport. selahattin bilgen, great to have you on the show. and, selahattin, let me start
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with this, because on this week's show, we're looking at this phenomenal demand for air travel that continues to rise. and this year, 2024, you, istanbulairport, a major global hub, you're expecting your passenger numbers to hit 85 million. now, if you do that, you'll become number one in europe, the biggest airport in europe, taking the top spot from london's heathrow. so, i guess the question is, how do you do that? are you ready? thank you, aaron, it's very good — nice to see you again. actually, we've been quite prepared for this, and the project has been expecting a large scale of growth from its initial start. and maybe, you know, we've been the number one airport in europe for the fourth consecutive year now, with respect to the air traffic movements. and now, this year, with this growth in air traffic numbers, the passenger number will follow, as well. istanbul airport broke the record for daily passenger
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numbers last year injuly. we are quite prepared to be the number one in europe, and we are looking forward to be number one in the world, as well. we've also been looking, selahattin, at the sustainability push by the aviation industry to improve its carbon footprint. and we know the new istanbul airport, you fly the flag as one of the world's most sustainable airports. so, just briefly, can you highlight a few of the reasons why you're such a sustainable airport? we are a pretty new airport. we had the chance to design and build the airport with the latest state—of—the—art technology. building the latest airport has given us the advantage. but at the same time, our mentality has always been to be a sustainable airport from the beginning, as well. currently, we are investing in a solar power plant which will be able to provide
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the electricity of the whole airport ecosystem from renewable sources. looking at saf, our airport has its own seaport. so, we are able to connect our airport fuel farm from any port, in any seaport placed in any part of the world. we were able to increase our energy consumption more than 16%. we recycled water from energy consumption more than 16%. we recycled waterfrom our roof, we were able to decrease our water footprint more than by 5%. currently we are enlisting in solar power plant, which will be able to provide electricity for whole airport
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ecosystem from renewable sources. our ecosystem from renewable sources. 0urairport ecosystem from renewable sources. our airport is only seaport, so we are able to connect our airport's fuel farm from place in any part of the world. well, on that point, selahattin bilgen, the big boss of iga istanbul airport, fabulous to have you on the show. good luck with everything, and we'll talk to you soon. thank you so much, aaron. see you in istanbul. ok, so there you go, that's istanbul airport, the home of turkish airlines which, along with united airlines and 2a others, is part of the world's largest airline, club star alliance. spanning the globe, the network offers a unique view of the industry. so, i decided to sit down with the big boss of star alliance. theo panagiotoulias, a real pleasure having you on the show, my friend. and let's start with this, theo. we're looking at bumper passenger numbers this year predicted, five billion to take to the skies. i mean, it's incredible. and i'm just wondering, how are your members seeing things? and i guess, importantly,
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how does star alliance help them to... well, how do you help them to meet this demand? well, thanks for having me, aaron. yeah, demand is really robust. the market is staying up, really resilient. we're coming into a very bumper summer this year, which is great after all the challenges we experienced in the past. what is our role? 0ur role is to make sure that we look at the problems along the customerjourney, and deliver upon customer experience enhancements across those journeys. and that's across all your members, right, the 26 members? across all our members. yeah, yeah, we focus on solutions, especially through technology. when you think about the booking experience, the customer experience, the connection experience, the loyalty experience — along that pathway, we look for problems, and we look through technology to make it more seamless for customers. but as the alliance, some will say, "isn't that the actual airline's role?" so, where does that balance, where you want to make it seamless, but also, the airline has a say in all of that? yeah, so the solutions we provide to the airlines are things that those airlines
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can't otherwise do on their own. right. so, i'll give you a really quick example. when you look at — we offer bag tracking now across multiple airlines. the various member carriers cannot do that unless they try and do it with all 26 members. they use us, star alliance, as the conduit, and they connect into us, and it allows us to fulfil that for them across the entire membership. how much is the capacity of airports around the world an issue for this growing demand? i think it's always an ongoing issue, and you've got different geographies tackling this at a much early stage. 0ther geographies are playing catch—up. but this is a very important issue, and the way to deal with it is to be making sure there is ongoing dialogue and understanding the repercussions and consequences, if you don't have thoughtful planning to anticipate and capitalise upon that demand, which continues to grow. let's talk about boeing. of course, you know, constantly making the headlines
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we are now sitting here in london, how important is london heathrow airport to star alliance? i5 heathrow airport to star alliance?— heathrow airport to star alliance? , . . ., ., , alliance? is crucial for us. this is one _ alliance? is crucial for us. this is one market - alliance? is crucial for us. this is one market where | alliance? is crucial for us. i this is one market where we alliance? is crucial for us. - this is one market where we had 23 out of 26 members serving. it's the busiest market globally for star alliance in terms of member participation. we have 20% of the six year from london so it is critical important... from london so it is critical important. . ._ from london so it is critical important... star alliance you have 2096 _ important... star alliance you have 2096 of _ important... star alliance you have 2096 of all _ important... star alliance you have 2096 of all seats - important... star alliance you have 2096 of all seats going i have 20% of all seats going out... have 2096 of all seats going out... ., ., ., �*, out... out of london. so it's uuite out... out of london. so it's quite significant. _ out... out of london. so it's quite significant. it's - out... out of london. so it's quite significant. it's a - quite significant. it's a competitive alternative to the local market home carriers, but most importantly if we go back to what i was referring to before, one of the main reasons why it's been a huge success for us over the last decade has been focused on customer experience on month multiple touch points where we've got a
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connection to assist customers when there's a missed connection, gold track for premium customers going through. and we have all these other customer experience infrastructure that we've invested into and something we are very proud of. it is all about the customer as i touched on at the outset, that's where the differentiation exists and we look forward to another ten very successful years at heathrow.— very successful years at heathrow. �*, , ., ~ ., heathrow. let's be frank, theo. it's an airport — heathrow. let's be frank, theo. it's an airport not _ heathrow. let's be frank, theo. it's an airport not without - heathrow. let's be frank, theo. it's an airport not without its - it's an airport not without its critics. you know, and airport that charges very high fees to land and take off and use the airport, and we've got the long saga of expansion plans, etc, all of that surely can't be that helpful to your members. 0bviously that helpful to your members. obviously it's challenging, but we are also in pretty constructive conversations with heathrow. i hope so. ithink
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they recognise the success of having all the star alliance carriers under one roof at heathrow, and all the benefits that come with it from a customer service perspective. let's talk about boeing. of course, you know, constantly making the headlines for all the wrong reasons. there's still safety concerns, boeing not delivering your members the planes that it needs. i'm just wondering what you are hearing from your 26 member airlines? i mean, do they have confidence in boeing? what i can tell you, from our 26 members, is that safety is paramount. everything else is a moot point unless you get that right. and i think you'll find that all our members have made that point, and communicated that point very clearly to all aircraft manufacturers. and so, i think, from that point of view, we leave it to them to resolve. but i think, from a membership perspective, that's been made very clear. well, on that point — and as a fellow aussie — theo, mate, a real pleasure having you on the show. good luck with everything. thank you, aaron,
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i appreciate it. talk to you soon, thanks, mate. to think the temperature of all things from flying, i decided to catch up with one of the aviation industry's leading figures, the president of emirates airline. sir tim clark, always a pleasure having you on the show. and, tim, let me start with this. i mean, the world is in an interesting place right now, to say the least. i mean, nothing new for your industry, which always deals very well, really, with one crisis after another. but there's a lot up in the air at the moment, tim. i mean, a huge year for elections, a lot of uncertainty and financial pressures — and yet,
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the bums on airline seats continues to be phenomenal. the airline industry at the moment is very strong. so, i've got to ask you, tim, what do you think is behind all of this? well, you probably hit the nail on the head when you said there's a lot of geopolitical, political uncertainty at the moment. people are facing multiple elections in europe and the us, of course, as we know. it's a troubled planet, and i think people are just getting on aeroplanes to go and enjoy themselves. it's probably a little bit of a facetious answer to it, but, you know, the people that are travelling on leisure, visiting friends and relatives, occupying our premium cabins, as well as the other cabins, has been quite a surprise to all of us, including — notjust emirates, but the whole industry. and, tim, there's been a lot of talk post—pandemic about the higher airfares. so, i guess the question is, tim, are there much higher airfares that you're all charging? are they sustainable? there is currently a strong level of demand, as you mentioned. supply is not back to where it used to be, in many areas of the world.
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so, i think that's having an upward pressure on prices. but, you know, the economies are not exactly stagnant. the global economy is continuing to move despite everything that's going on. and, you know, traditionally when you get major election periods in the western 0ecd economies, you tend to see a slow—down in demand. well, the reverse seems to be happening. the more froth there is on the political side of things in europe and america, the more people are travelling. so, this is a new one to all of us, and, you know, we are trying to adjust our capacity as best we can in emirates. but what are the hold—ups, i mean, your hurdles for emirates' continued growth story? although i think i know the answer, right? it's the plane—makers boeing and airbus. and, i mean, let's be frank — you can't get your hands on new planes fast enough, can you? no, we should've had the 777—9, the latest 777 lookalike should have been delivered to us
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in april 2020. now, if we get it by april 26th, i'll be quite surprised. now, how do we deal with that? the short term, we are retaining a lot of the old aircraft, completely refurbishing them in the first stage. and then, the second stage will be to knock them all out completely in the cabins, and rebuild the cabins with a brand—new range of products. but, tim, i mean, you have hundreds of new planes on order, and we all know that boeing keeps making the headlines for all the wrong reasons. airbus have big delays. if they're not delivered, the planes are not delivered to you on time, that is surely going to have a huge impact on your future strategies. of course it does. the order books for boeing are colossal. single aisle and wide body. so, the biggest single problem, once they crack the quality
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control issues, the safety issues, and all the systems and process issues that need to be brought into play in the factories, they've then got to scale production back to where it was prior to covid. and, of course, that is probably the most herculean task they've got in front of them, to meet the order requirements of the contracts that already are signed. and on top of that, there are lots of carriers that want to buy more boeing aircraft. they're being pushed out to the early �*30s — �*28 �*29, �*30. so, for us, our delivery stream is critical to the point. and, tim, let me end on this — in, say, five years' time, or at least by 2030, and i know — we all know — you're going to be retired by then, given the fact that you were going to retire just before the pandemic hit — but, tim, by 2030, what's the picture look like for the global airline industry? the airline community is far more resilient than it ever used to be. it's had so many knocks, whether it be wars, you know,
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global traumas, you name it, you look back over the last 30—110 years, and they've had to sort of keep going and navigate through all of that. so, they've got some pretty skilled people now who can work through, whether it be the new thing on the block, which is environmentalism, you talk about turbulence, whatever it may be. so, we're better at doing what we're doing. for me, if you can get through covid and you can come out profitable as the airline industry, you can get through anything. and, in fact, it tells you that you're resilient enough and you're strong enough to deal with anything. five years' time, it's going to be a good story. well, on that point, sir tim clark, the big boss of emirates, always a pleasure having you on the show. thanks for your time, and we'll talk to you soon. yeah, keep in touch. well, that's it for this week's show, i hope you enjoyed it. don't forget, you can keep up with the latest on our global economy on the bbc website or the smartphone app. of course, you can also follow me on x —
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x me, i'll x you back! you can get me at @bbcaaron. thanks for watching, i'll see you soon. bye— bye. hello. the next few days look set to bring the warmest weather of the summer so far. 2a celsius was our top temperature on saturday, but over the next few days, as this warm and rather humid air surges northwards, we can expect higher temperatures than that, perhaps into the high 20s celsius. some good spells of sunshine, but not necessarily clear blue skies all the time. there will be some areas of cloud. indeed, on sunday mornings, some areas of cloud, mist and murk for parts of western england and wales, particularly over some of the hills and around some of the coasts. we'll keep some patches of cloud through the day on sunday. sea breezes developing around some of the coasts. northern ireland having a nice—looking day, spells of sunshine. similar story for scotland, although a little bit breezy in the western isles — 16 celsius for stornoway, but more generally 19 to 25 celsius, a very warm—feeling
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day. and quite a warm night, actually, sunday night into monday. still some areas of cloud, a bit of mist and murk here and there, but those temperatures in the centre of london, no lower than 15 degrees, maybe getting down to ten in aberdeen and glasgow and in newcastle. but with this area of high pressure in charge for monday, it's going to be mainly dry and actually even warmer. this frontal system out to the west — we'll have to keep an eye on that — will start to bring a little bit more cloud, i think, into parts of northern ireland and western scotland with just a small chance for a shower. but elsewhere, some spells of sunshine, a bit of patchy cloud at times. but look at the temperatures — 26 for parts of northern ireland, 26 in northern scotland, across england and wales, widely into the mid—20s, 27 or 28 across the south—east corner. now through monday night into tuesday, that weather front in the west will start to make inroads — more cloud, perhaps some outbreaks of rain across northern ireland, parts of scotland, maybe into the north of england as well. so here a little bit cooler for tuesday, but further south and east, if anything, those temperatures climbing further, 28, perhaps 29 celsius. now, the big uncertainty
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in our weather story is about how quickly things will change, because it looks like our area of high pressure will loosen its grip, fronts pushing in from the west, low pressure drifting up from the south. one or both of those features will bring something more unsettled and a little bit cooler by the end of the week, but there is huge uncertainty about how quickly that change will take place and before it does some very warm weather on the way.
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live from washington, this is bbc news. the israeli military has admitted its forces violated protocol in strapping a wounded palestinian to the front of their jeep during a raid. ukraine's president has appealed for more help to counter russian glide bombs, after another attack on the city of kharkiv. and we take a closer look at the gang violence in haiti that's forced over half a million people
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to flee their homes. i'm helena humphrey. good to have you with us. we begin in the middle east where israel is responding to this footage from the occupied west bank. video has been shared online of a palestinian man strapped to the front of an israeli military vehicle as it drives throuthenin. the man is injured — his family said he had been shot by israeli forces. the idf said the incident was — quote — "in violation of orders and standard operating procedures" and is being investigated. in gaza, at least 120 civilians have been killed in israeli raids on several neighborhoods over the last 48 hours, according to the hamas—run health ministry. officials say israeli air strikes on the al—sharti refugee camp on saturday killed at least 38 people.
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israel's military said its fighter jets struck "two

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