|Bid||0.0000 x 0|
|Ask||0.0000 x 0|
|Day's Range||4.8200 - 5.0140|
|52 Week Range||3.8100 - 11.3500|
|Beta (5Y Monthly)||1.06|
|PE Ratio (TTM)||8.16|
|Earnings Date||May 07, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Jul 14, 2008|
|1y Target Est||10.25|
The chief executive of airline KLM said on Wednesday the Dutch company is not considering a break with its parent, Air France-KLM , as the company attempts to cope with the financial consequences of the coronavirus outbreak. "We are not working on disentanglement scenarios," broadcaster RTL quoted CEO Pieter Elbers as saying on a call with journalists. A spokesman for KLM confirmed the quotes made on a video call with Dutch journalists and reported by RTL were accurate.
Moody's Investors Service, ("Moody's") today changed the outlook on the A1 senior unsecured debt ratings of Royal Schiphol Group N.V. and the provisional (P)A1 rating on the EUR3 billion medium-term note (EMTN) programme of Royal Schiphol Group N.V. and Schiphol Nederland B.V. (together, Royal Schiphol Group) to negative from stable. As events continue to unfold, there is a higher than usual degree of uncertainty around the length of travel restrictions and drop in travel demand.
(Bloomberg) -- Over the course of more than three decades, Dubai has morphed from distant desert outpost into business metropolis, relying on state-owned airline Emirates to funnel many millions of travelers through the bustling hub each year. Now that the coronavirus has forced the carrier to suspend operations, the government is quickly swooping in to protect its most important growth engine.Dubai’s deputy ruler, Sheikh Hamdan bin Rashid Al Maktoum, said on Tuesday that the state will grant unspecified financial aid to Emirates, and that the government is committed to providing the full support by injecting fresh capital. It’s among the first state-sponsored bailouts of a carrier due to the coronavirus, which has upended the industry on an unprecedented scale.Emirates is the most visible emblem of Dubai’s transformation over the years, starting out with a pair of used aircraft in the mid-1980s to become an aviation force unmatched in global reach and boasting the biggest fleet of wide-body aircraft by far. Emirates has more than 100 Airbus SE A380s in operation alone, which rain down around the clock on Dubai International, the busiest airport by international traffic and a key transfer hub for global travel.Now Emirates, like most other airlines around the world, has been forced to ground virtually its entire passenger fleet after countries sealed off access to fight the virus. That has dramatically suffocated demand, which was already in decline as a depressed oil price weighed on corporate travel. Tourism from China also took a hit after the virus first erupted there late last year.“We don’t know how much demand is going to come back and when,” said John Strickland, an independent aviation consultant at JLS Consulting in London. “Emirates and other airlines will be carrying overcapacity for quite some time.”Airlines have been particularly hard hit by the abrupt collapse in air travel as countries lock down to slow the spread of the virus. The International Air Transport Association, which represents 290 airlines around the world, estimates the industry may suffer more than $250 billion in lost revenue this year. Carriers like Deutsche Lufthansa AG and EasyJet Plc have grounded their fleets, and many carriers have called on government aid to help them weather the crisis.Emirates is the largest of the major Middle East carriers, which also include Qatar Airways QCSC and Etihad Airways PJSC. Qatar said last week that it has maintained about a third of its operating schedule, in part because the country’s flag carrier has a more diverse fleet that also includes narrow-body airliners. Emirates, by contrast, only flies the biggest category of jets, including 115 A380s, which most carriers have mothballed for the time being.The three Middle East airlines are all state owned, giving them a potential advantage in swiftly securing bailout packages. In Europe, carriers from Air France-KLM Group to Lufthansa have asked for aid, while the massive U.S. stimulus package also includes support for the ailing industry. Airbus has said that while it doesn’t require state aid for now, it supports airlines’ efforts to secure government lifelines.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
European airlines waiting in line for coronavirus bailouts want to tap another source of interest-free loans: their customers. Cash-strapped carriers are seeking to suspend European Union rules requiring refunds for cancellations and instead issue vouchers to clients left out of pocket as hundreds of thousands of flights are grounded by the pandemic. Consumer organisations say some major airlines are already flouting the refund rules and condemn what they describe as an attempt to force consumers to lend them cash.
European hedge funds struggled to navigate the coronavirus-induced extreme market volatility during March, with many down by double-digits in the space of a few weeks as short-selling bans hampered their strategies. Regulators in France, Italy, Belgium and Spain ordered temporary short-selling bans to stop investors betting on a fall in the share price of companies ranging from Spanish bank Santander to Air France-KLM and Italian automaker Fiat Chrysler. Short-selling is a strategy often used by so-called 'event-driven' or 'merger-arbitrage' hedge funds that bet on takeover or merger deals, reducing their risk by shorting, or selling, the acquirer and buying the target company.
(Bloomberg Opinion) -- Faced with an industry heading toward a wave of bankruptcies, an investor’s first instinct is often turning to the first three pages of the financial statements.How much cash does the business have on hand, and what inventories and due payments can be used to meet short-term debts? What assets does it have, and how productive are they in generating earnings?Singapore Airlines Ltd.’s announcement Friday of a shock-and-awe sale of new shares and convertible bonds worth up to S$15 billion ($10.5 billion) suggests that the clues about who will survive the virus-induced crisis sweeping the airline industry are further back.Don’t look to the balance sheet and statements of income and cashflows: The answer, as we’ve argued, is buried in the list of major shareholders that most companies include toward the end of their annual reports.There isn’t an airline on the planet that would be able to hunker down and survive the worst-case scenario for the Covid-19 pandemic — an 18-month-plus shutdown of much of the global aviation industry.Take one rough-and-ready measure, the cash ratio, which is the ability to pay for liabilities over the next 12 months out of cash and easily sold securities. Of the 29 largest carriers by revenue, not a single airline can boast a cash ratio higher than one, meaning they’d all run short of money before satisfying their creditors.If less reliable short-term assets such as receivables and inventories are deployed, things improve a little, bringing Ryanair Holdings Plc, Japan Airlines Co., ANA Holdings Inc. and Eva Airways Corp. above one.Alternatively, if you can cut general operating expenses and aircraft lease liabilities by, say, 60% and assume that all prepaid tickets are refunded with no drain on net assets, you can add Air Canada, IAG SA, JetBlue Airways Corp., Alaska Air Group Inc., and Southwest Airlines Co. to that group. On that sort of adjusted cash ratio, all of those carriers would have enough funds to see them through the year — but the rest of the global airline industry would go to the wall.That’s why having a rich patron is more important than ever. In the case of Singapore Air, the key player is state-owned investment fund Temasek Holdings Pte., which already owns 55% of the stock and may end up with far more if other investors don’t take up their entitlements under Friday’s cash call.Aviation has been a cornerstone of Singapore’s national development policy since the 1970s, both through Singapore Air and another Temasek investment, Changi Airport. Economic downturns — with Singapore’s growth contracting 10.6% in the first quarter — are no time for governments to shirk their commitment to long-term expansion, and SIA has been at the core of that vision.The S$5.3 billion equity issue will be the largest rights offering the global airline industry has ever seen, and implies drastic dilution for existing shareholders who don’t subscribe — especially once the S$9.7 billion bond tranche converts to equity 10 years from now. That prospect pushed the shares down more than 10% before recovering to a 3.5% drop midday.Still, the amount is so gobsmacking that it should put to rest any questions about Singapore Air's ability to weather this crisis. The S$15 billion total would be sufficient to cover two years’ worth of short-term liabilities at current levels, and is roughly equivalent to its entire market capitalization before the announcement.What does this mean for other airlines? The ones most at risk are those that neither have the relatively ample liquidity of the Japanese, North American and western European carriers mentioned above, nor the benefit of a friendly government shareholder or wealthy parent to bail them out.As Anurag Kotoky of Bloomberg News has shown by looking at another measure of bankruptcy risk, the truly vulnerable carriers make up a surprisingly short list with surprisingly few major names.Among the less-liquid carriers with a free float of more than 50%, Air France-KLM, Turk Hava Yollari AO, and SAS AB still retain government shareholdings that might be called upon to help out in a crisis; Qantas Airways Ltd. and Deutsche Lufthansa AG have a history of state ownership which may serve the same purpose; and Korean Air Lines Co. and Asiana Airlines Inc. have historically been indulged within South Korea’s chaebol system of conglomerates.The three most prominent players left — major U.S. carriers Delta Air Lines Inc., American Airlines Group Inc. and United Airlines Holdings Inc. — saw their shares surge this week after Congress moved through a bailout bill providing around $25 billion of support. Still, that amount would only cover about six months of liabilities, and their competitors would likely want a piece of the action too.Three low-cost carriers — EasyJet Plc, Norwegian Air Shuttle ASA and SpiceJet Ltd. — may also find themselves in a spot, dependent on the ability and willingness of their entrepreneurial founders to dig into their pockets if things get tight.There will be plenty of bankruptcies in aviation over the coming year, but this industry has always lived close to the edge. Most of the biggest players have gotten where they are by working their connections to governments and wealthy patrons to backstop their commercial ambitions. If one thing survives the crisis of coronavirus, it will be the strength of nation states.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The global airline industry has never had it so bad. Not even after the 9/11 terrorist attacks.Airlines could lose a quarter of a trillion dollars in revenue this year, according to the International Air Transport Association, as travel comes to a standstill with countries locked down to fight the coronavirus. Most carriers will go bankrupt by the end of May if they can’t find support, Sydney-based CAPA Centre for Aviation said last week.“In this very difficult period, it will only be the survival of the fittest” - Qatar Airways CEO Akbar Al BakerWhich airlines are most at risk? Like the virus, the crisis is indiscriminate, affecting everyone from budget operators to national flag carriers. Aircraft manufacturers and their suppliers also are under immense pressure, with Boeing Co. calling for billions of dollars in state support and Airbus SE extending credit lines and canceling its dividend.Using the Z-score method developed by Edward Altman in the 1960s to predict bankruptcies, Bloomberg News filtered out listed commercial airlines to identify the ones most at risk of going bust, based on available data. The calculations don’t take into account government bailouts or other funding sources that could help keep operators alive.While the list is concentrated in Asia, mostly due to high debt levels, European carriers aren’t immune, as the collapse of U.K. regional airline Flybe Group Plc proved. According to Altman, scores of 1.8 or below indicate a risk of bankruptcy and scores over 3 suggest sound footing. Indebted low-cost carrier Norwegian Air Shuttle ASA and Air France-KLM both landed below the threshold, as did American Airlines Group Inc. and SkyWest Inc.Governments around the world are in talks with aviation companies about financial support, and those with deep-pocketed backers -- such as Delta Air Lines Inc. with billionaire investor Warren Buffett -- will have access to other avenues for cash.Qatar Airways Chief Executive Officer Akbar Al Baker warned that many airlines will go bust, limiting the scope for takeovers.“People that were bragging about not taking state aid and being independent are now themselves all over the world asking for state aid,” he said Thursday on Bloomberg Television.The Z-score involves five variables measuring liquidity, solvency, profitability, leverage and recent performance. The model initially had accuracy rates of over 95% in predicting bankruptcies, but has come down to between 80% and 90% based on a year before insolvency, Altman said in a 2018 interview.A spokesman for Pakistan International Airlines Corp. said losses and debt have become too much for the company to handle alone and that options suggested to the government include a debt-to-equity swap and long-term bond issue. A representative for AirAsia Group Bhd declined to comment, while PNG Air Ltd. didn’t respond to a request for comments. The communications director for Kenya Airways Plc, which is now operating only a handful of local flights, couldn’t immediately comment.SpiceJet Ltd. sees “no possibility at all” of failing, has maintained adequate cash flows and expects a surge in demand as the virus is contained, a spokesman said. Virgin Australia Holdings Ltd., which has furloughed 80% of its workforce and slashed flights to a bare minimum, said it is taking measures to rapidly reduce its cost base to preserve cash.Asiana Airlines Inc. said it secured a bridge loan and will receive 1.6 trillion won ($1.3 billion) from Korea Development Bank and other creditors. It also said financials will improve once HDC Hyundai Development Co. and its partners complete their acquisition of Kumho Industrial Co.’s stake. Also, the Korean government will meet Friday to discuss the airline industry and measures to provide emergency funds to large companies, Yonhap News reported Thursday.Avianca Holdings SA didn’t respond to requests for comment. The Bogota-based company has offered its 21,000 employees unpaid leave and is negotiating payment terms with suppliers.Norwegian Air is trying to secure a government lifeline worth up to $270 million under certain conditions, and this week two Nordic banks were approved to provide a guarantee for the required 10% for the first tranche. The airline declined to comment further.A spokeswoman for Air France-KLM declined to comment. The airline counts the French and Dutch governments as its biggest shareholders, and both governments have signaled they will provide support if needed.American and SkyWest declined to comment. U.S. passenger carriers are poised to receive up to $25 billion in payroll support funds and cargo haulers $4 billion -- earmarked for items like salaries, benefits and healthcare -- with a like amount of loans.Much hinges on an airline’s ability to use cash in hand or access more money. Some in Asia, including Korean Air, Asiana, China Southern Airlines Co. and China Eastern Airlines Corp. have reserves to last only weeks, according to Bloomberg Intelligence. IndiGo, operated by InterGlobe Aviation Ltd., has enough to last about a year even if its fleet remains grounded (and staff costs drop only 30%), BI analysts including James Teo wrote in a note Wednesday.Different methods of estimating airline viability give out varying results, and not all airlines that are short of cash are going to go bust.The model used by BI uses publicly available data on cash in hand and operating expenses to reach estimates on monthly cash burn. That method doesn’t take into account undrawn credit facilities or unencumbered aircraft assets, which are often used as a cash buffer, said Teo. The model assumes 100% capacity cuts and zero cash inflow.Singapore Airlines Ltd. unveiled a plan to initially raise about S$8.8 billion ($6.2 billion) to contend with the impact of the virus, with state investor Temasek Holdings Pte., the carrier’s biggest shareholder, saying it would back the resolutions. The carrier’s shares fell as much as 10% Friday following the announcement, before paring the loss to 3.2% at 11:50 a.m. local time.Air China Ltd. declined to comment and China Southern didn’t respond to an email for comments. China Eastern said it maintains sufficient liquidity funds, which can fully guarantee normal production and operation. Qantas Airways Ltd., Cathay Pacific Airways Ltd. and IndiGo declined to comment.A Korean Air spokeswoman said the company is about to raise funds through asset-backed securities, reflecting market confidence in the carrier. “We also expect the government to provide support measures,” she said, adding that the airline plans to generate more revenue by increasing cargo operations.Japan Airlines Co. issued bonds earlier than originally planned based on the trend in interest rates, according to a spokesman, who said details on the company’s financials will be revealed in its next earnings. All Nippon Airways Co. declined to comment, saying the health and safety of its passengers and employees was its priority.Airlines could sell assets including planes to raise cash. Without taking that step, assuming revenue from ticket bookings is kept, some may still last more than a year, according to analysts at Credit Suisse Group AG. While the liquidity situation is fluid and doesn’t take into account potential bailouts, this list gives a sense of which airlines are best-positioned if travel is suspended for longer.Ryanair Holdings Plc said it had cash and equivalents of over 4 billion euros as of March 12, undrawn credit lines and nearly 300 owned aircraft valued at about $8 billion to $10 billion. It declined further comment.EasyJet Plc declined to comment.Panama’s Copa Holdings SA grounded its fleet as of Monday. It said earlier in the month that the impact on its finances depended on the extent of the pandemic and related travel hit. A spokesman declined to comment further.(Updates with Singapore Airlines’ fundraising plan in 20th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
European lawmakers overwhelmingly agreed on Thursday to suspend until Oct. 24 a rule requiring airlines to use at least 80% of their flight slots to keep them the following year so as to ease an industry crisis unleashed by the coronavirus pandemic. Following a deal reached last week by envoys of the EU's 27 member states, the European Parliament voted in its first-ever remote session in Brussels to suspend the EU slots rule until the summer season ends in late October as European flights fell 60% this week with several major airlines forced to ground their fleets. The last time the EU waived the airport slots rule was in 2009 because of the financial crisis.
European Union lawmakers are expected on Thursday to approve emergency funds to cushion the bloc's economic slump triggered by the coronavirus pandemic and shore up hard-hit airlines by preserving their landing slots. It will be the European Parliament's first ever remote vote following the suspension of sessions at headquarters due to the risk of coronavirus transmission. Only a handful of lawmakers gathered in a Brussels plenary chamber with the rest of more than 700 MEPs scattered under lockdown across Europe.
(Bloomberg) -- Air France-KLM and Airbus SE are poised to tap French government-backed loans as the coronavirus outbreak drains corporate cash reserves, according to people familiar with the matter.With the aviation industry among sectors most under pressure from the pandemic, the airline and planemaker, based in Paris and Toulouse respectively, will be among the first firms to receive French support, according to the people, who asked not to be named discussing private negotiations.Airbus has also signaled to the German government that it might need to tap a state loan facility, a government official there said.Airbus said it’s having regular dialogue with home-nation governments that are non-public in nature. Spokespeople for Air France-KLM and the French Finance Ministry declined to comment.Air France-KLM traded 4.2% higher at 4.74 euros as of 4:40 p.m. in Paris, while Airbus was up 22% at 65.41 euros.Like other carriers, Air France-KLM has seen demand all but wiped out as people stop traveling and nations close borders, with the company saying it may cancel 90% of flights. The situation has been exacerbated by political clashes over French and Dutch state holdings in the airline group, with France saying Wednesday it will consult the Netherlands before stepping in.Airbus is grappling with an unprecedented reversal in fortunes as customers push back against deliveries and new orders dry up with build rates at record levels. The manufacturer hasn’t yet said whether it will dramatically slow production, but for both companies state-backed credit lines will provide a safety net while as they hunker down to protect vital cash reserves.The company plans to resume production on Monday at plants in France and Spain, increasing the pace over coming days while following health and safety guidelines for keeping workers apart, an Airbus spokesman said.Airbus said it participated in a meeting with the German Economy Ministry, alongside representatives of airlines and airports. Chancellor Angela Merkel has earmarked 550 billion euros ($590 billion) of lending to support business, with German airline Deutsche Lufthansa AG saying it held talks with a state bank.French President Emmanuel Macron promised to guarantee up to 300 billion euros of bank loans Monday in an effort to bolster firms threatened by the impact of the virus, saying France was “at war” and that all government and parliamentary forces must be focused on fighting the epidemic.While governments around the world have been laying out the bare bones of national rescue packages, most have yet to specify which companies and sectors will be a focus for bailouts.Scandinavian AidCountries in Scandinavia have provided the most detail on aid to airlines, with Sweden and Denmark lining up behind SAS AB, in which they each have stakes, and Finland backing Finnair Oyj, in which it also has a holding, boosting the stock 13%.Norway said that Norwegian Air Shuttle ASA could get the equivalent of $263 million, though most will be available only if commercial institutions also dip into their pockets. The bonds hit a record low Friday and the stock fell as much as 12%.(Updates with production restart in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Airbus said on Friday it is in regular dialogue with European governments, but declined to comment on a report that the European planemaker may seek government support to tackle the coronavirus crisis. On Monday, Airbus told the German government and industry leaders that some government support may be needed if the crisis lasts for several months, Reuters reported. On Friday, Bloomberg News reported Airbus and Air France-KLM may tap planned French government-backed loans.
The EU agreed on Friday to suspend requirements that oblige airlines to use at least 80% of their take-off and landing slots in order to keep them the following year until Oct. 24 due to the aviation industry crisis unleashed by coronavirus. Ambassadors representing the 27 EU nations agreed on the move, saying the waiver would also apply retroactively from 23 Jan. to 29 Feb. 2020 for flights between the EU and China or Hong Kong. The Council said the measure could be extended quickly if the current serious situation persists.
SYDNEY/SINGAPORE, March 20 (Reuters) - The collapse in global passenger flights has left airlines with fresh challenges: how to manage overhedged jet fuel positions as oil prices crashed to just a third of some contracts agreed in anticipation of rising prices and solid air travel demand. With a sharp plunge in oil prices and the rapid spread of the flu-like virus globally raising uncertainty when and how strongly air travel demand will recover, airlines are now left counting the cost of their heavy fuel hedging. "Given the substantial reduction in our capacity, we do have an overhedged position and that will come at a cost... that we'll realize in the next couple of months," Australia's Qantas Airways Ltd Chief Financial Officer Vanessa Hudson told analysts this week.
Passenger traffic has slumped more than 60% at Amsterdam's Schiphol airport, Europe's fourth-largest flight hub, as the coronavirus epidemic shuts down much of the global airline industry. "The number of travellers at Schiphol has now fallen by more than 60% and the number of flights is also falling sharply," the airport said in a statement on Wednesday.
Gold, the dollar and global equity markets rose on Tuesday after the Federal Reserve said it would buy short-term corporate debt directly from companies to help relieve credit markets under strain from the economic impact of the coronavirus epidemic. The renewal of the financial crisis-era Commercial Paper Funding Facility, first used in 2008, will provide a backstop to that market, a key funding source for a range of U.S. businesses that have seen liquidity dry up. The Fed said the Treasury would provide $10 billion of credit protection to the central bank's commercial paper operation.
It's official, the EU is on lockdown as of noon (Central European Standard Time) as the World Health Organization has declared a global pandemic of COVID-19 and Europe as its new epicenter. This literally means no one enters nor gets to leave the Union for at least 20 days in an effort to contain the spread as flattening the curve is the world's best bet against the coronavirus which contaminated 179,400 people in at least 140 countries, taking more than 7,000 lives.For now, among the most severely hit countries are Italy and Spain. As French President Emmanuel Macron declared on Monday evening, we are at war with an invisible enemy. And besides Europe's citizens mentally suffering in isolation that will last for several weeks, the airline industry is living its worst nightmare as flights are canceled and demand is dropping severely in several months ahead. And it's extending far beyond Europe as Trump's decision to set curbs on European flights capped a tumultuous week and is expected to upend a trans-Atlantic market that's usually the world's most lucrative.Airlines Bleeding The Italian government is considering pumping $333 million into an already struggling Alitalia SpA which was already in an urgent need for restructuring. The troubled airline is burning cash at a rate of around $334 million a year so the coronavirus might just be the last drop. Additionally, the government might even take over the airline, according to Bloomberg. The head of Norwegian Air Shuttle ASA (OTC: NWARF) admitted the discount carrier is on the brink of a fall out as he pleaded for help.Lufthansa AG Deutsche Lufthansa AG (OTC: DLAKY) Already last week before the lockdowns took place, in order to avoid layoffs due to the slashing demand and capacity by as much as 50%, the airline announced to Bloomberg it will resort to the option of short time work, known as "Kurzarbeit," when the government offsets wages lost when companies are forced to temporarily halt activities.The government has loosened rules for short-term work compensation to make it easier for those companies which are heavily affected by the virus to apply. Lufthansa is expected to seek a loan from Germany's state-run bank to weather the fallout from the virus, after it already cut forecasts and suspended its dividend.Air France-KLM Air France-KLM's (OTC: AFLYY) business already took quite a hit on Sunday when the French government said it would gradually reduce domestic air, rail and bus operations to limit non-essential travel in the nation that has already shut down everything but the 'necessary' stores such as food shops and pharmacies. But now it's even worse as all is stopped as of Tuesday, there's no way in or a way out. But Air France can at least count on the help of two governments, as France owns 14% and the Netherlands has a stake of a bit less than 13%.On Friday, the company already announced it is building up cash reserves and preparing an emergency plan to cut costs. It has drawn down 1.1 billion euros ($1.2 billion) from a revolving credit facility, bringing available liquidity to 5.5 billion euros, a move it said is aimed at preserving its financial flexibility. In addition to supporting its liquidity, the government is also helping with a shorter working hour arrangement that allows firms to pay employees less in times of such Black Swan events.UK Until today before the PM addressed the public, the UK did not have such drastic measures such as Europe. But it was still severely hit as Bloomberg reported that British Airways owned by IAG SA (OTC: ICAGY) chief Alex Cruz called it a crisis of global proportions like no other the industry has known and even worse than the SARS outbreak in the early 2000s, 9/11 in 2001 and the financial meltdown of 2008-2009. The Financial Times reported that BA has held talks with multiple banks regarding urgent financing. The U.K. government is also making efforts to support workers, businesses and passengers,A Grim Outlook The stock is going down at an abnormal speed as IAG SA and Air France-KLM already reached a lowest point in more than the last three years, while Norwegian Air Shuttle ASA reached its 15-year bottom. And things are only to get worse as the pandemic continues. Jobs will be lost as the airlines idle planes, cut back on flights and move to protect their balance sheet. The International Air Transport Association estimated that they may lose as much as $113 billion in ticket sales this year.The virus first swept through Asia, decimating air traffic and leading to a Chinese government decision to take charge of the parent of Hainan Airlines and a similar scenario seems to be in the cards for European airlines but the whole world will be affected by this pandemic. According to the World Travel & Tourism Council, measures taken by states could cost the tourism industry 50 million jobs. There's no doubt that the survival of many airline companies is on the line and of the travel industry as a whole considering that the COVID-19 pandemic is at its initial stage and we are to fight this battle for quite a few months ahead along with fighting the fears that yet another recession is upon us. The key challenge for the coming days and weeks to come is to bring the epidemic under control as soon as possible as otherwise we risk it inflicting a lasting damage on the economy.This Publication is contributed by IAMNewswire.comPress Releases - If you are looking for full Press release distribution contact: firstname.lastname@example.orgContributors - IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: email@example.comCopyright (C) 2019 Benzinga (BZ Newswire, http://www.benzinga.com/licensing).Benzinga does not provide investmentadvice. All rights reserved.Write to firstname.lastname@example.org with any questions about this content.Subscribe to Benzinga Pro (http://pro.benzinga.com).Image by ionutscripcaru from PixabaySee more from Benzinga * Oil Falls Deeper Into Turmoil Due To An Epic Collapse In Demand * US Automakers Readying For A Fight Against COVID-19 * Oil War Vs The Coronavirus – Which One Is the Lesser Of Two Evils?(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
LONDON/PARIS, March 17 (Reuters) - European airlines demanded urgent tax relief to avoid multiple bankruptcies, as coronavirus disruption continued to spread around the global industry on Tuesday. As the region's transport ministers prepared to discuss financial support, the Airlines for Europe group called for widespread tax deferrals "to ensure that as many airlines as possible survive" the crisis. The call came as the aviation industry's main global body, IATA, said total support needed from governments worldwide could reach $150-200 billion.
The Zacks Analyst Blog Highlights: Ryanair, Air France KLM, Delta Air Lines, American Airlines and Southwest Airlines
European airlines on Tuesday called on governments to draw up a package of measures including deferring taxes to rescue the struggling industry as the crisis caused by the coronavirus pandemic deepens. In an open letter to EU transport ministers ahead a ministerial meeting on Wednesday, the European airlines industry group A4A said Brussels should extend until October the suspension of a rule requiring airlines to run most of their scheduled services or else forfeit landing slots.
(Bloomberg) -- European equities ended at their lowest level in seven years as mounting fears over the economic damage from the spreading coronavirus heightened despite the U.S. Federal Reserve’s actions.The Stoxx Europe 600 Index tumbled as much as 10% during the session, before trimming losses in afternoon trading after the European Commission president proposed a restriction on non-essential travel to the European Union in an effort to limit the spread of the coronavirus. The benchmark, which has plummeted 34% since its February peak, closed down 4.9% at a level not seen since mid-2013.European leaders are racing to reduce the fallout from the pandemic, which has erased about $20 trillion from global equities amid concerns about the damage to growth and earnings.While the Fed on Sunday slashed its benchmark interest rate by a full percentage point to near zero and other central banks strengthened efforts to stabilize capital markets, investors remain concerned about the growing economic fallout from the virus.“The equity markets fear that the Fed might know something investors do not know,” said Ulrich Urbahn, head of multi-asset strategy and research at Joh Berenberg Gossler & Co. “Moreover, there is skepticism about the extent to which further rate cuts can help the economy. Investors want to see fiscal policy action.”Air France-KLM ended the session down 10% while International Consolidated Airlines Group SA plummeted 27% and EasyJet Plc sank 19%. The Stoxx travel & leisure sector index has tumbled 49% since the start of the market rout last month.Here’s what investors and strategists are saying about today’s market:Slow Intervention“Despite most central bankers doing all they can to help through coordinated action, it is fiscal policy that is ultimately needed. However, this intervention has been slow,” said Amlan Roy, head of global macro policy research at State Street Global Advisors. “The current ecosystem the world is currently faced with is different to any other financial crises or recessions.”Strong Nerves Required“The economic impacts are likely to be significant; and any bounce-back as the year wears on may not bring bourses back to immediately preceding levels,” said Paul Markham, global equities portfolio manager at Newton Investment Management. “A strong nerve will be required and it may well get darker before we see the light; but, for those taking a long-term view, attractive entry points are beginning to emerge.”Avoid Leverage“The market situation is a very difficult situation,” said Wells Fargo strategists, including Christopher Harvey, “The tough steps to mitigate the coronavirus are occurring -- though only time will tell. High quality is the way to go and we recommend avoiding levered situations as they may have going-concern problems with the stress in credit markets.”Deep But Short“Any way you look at it, it’s now almost certain that there will be a coronavirus-triggered recession as both global supply and demand are impacted,” said Nigel Green, CEO and founder of DeVere Group. “We can expect this recession to be deep, but short. The slowdown will be temporary because it’s not caused by deep-rooted problems and imbalances in the economy, rather by a wholly unexpected shock that’s gripped the world.”Buying Time“This is buying time to assess reality. The Fed has again proven its agility and willingness to protect consumer confidence from Covid-19 economic fallout, something other central banks failed to do thus far,” said Frederik Hildner, a portfolio manager at Salm-Salm & Partner “The arm-wrestling of markets and institutions goes into its next round.”Yield Curve“Eventually, the steepening of the yield curve, which might be starting now, could become a positive catalyst, but it needs a sustained bounce in 10-year yields, and a significant amount of time needs to pass from the point of emergency Fed cuts for this to be the case,”said JPMorgan strategists led by Mislav Matejka. “This is because the inter-meeting Fed cuts were also typically a negative signal for the market.”Improving Prospects“We remain of the view that beyond short-term panic from weak hands, prospects are starting to improve in a decisive way for risk assets altogether,” said Stephane Barbier de la Serre, strategist at Makor Securities. “Beyond monetary efforts, markets are still focusing essentially on the fiscal policy tool. More concrete announcements are expected today onwards on that front.”\--With assistance from Jan-Patrick Barnert, Michael Msika and Filipe Pacheco.To contact the reporter on this story: Ksenia Galouchko in London at email@example.comTo contact the editors responsible for this story: Blaise Robinson at firstname.lastname@example.org, Paul Jarvis, Jon MenonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
LONDON/PARIS (Reuters) - Airlines made unprecedented cuts to flights, costs and staffing on Monday, stepping up calls for emergency aid as coronavirus lockdowns and new travel restrictions hit more major routes. Already battered shares in British Airways parent IAG, easyJet and Air France-KLM plunged again as they scrapped most flights for the coming weeks, joining other major carriers that are all but halting operations in the face of the pandemic. "It is now clear that the coronavirus is by far the biggest crisis in the history of aviation," Finnair Chief Executive Topi Manner said, as the carrier announced a 90% capacity reduction and its second profit warning in three weeks.
(Bloomberg) -- Airlines worldwide will shrink operations to only a trickle of flights, severing global links and putting hundreds of thousands of jobs at risk as they fight to preserve cash and survive the coronavirus pandemic.British Airways owner IAG SA will slash capacity for April and May by at least 75% amid the collapse in demand and government restrictions aimed at slowing the disease. Partner American Airlines Group Inc. will cut international long-haul flights by the same degree in the biggest reductions by a U.S. carrier.Ryanair Holdings Plc and Air France-KLM announced even deeper cuts at 80% and 90% respectively, and the Irish firm said its entire fleet may be grounded. Paris’s two biggest airports plan to shutter terminals as travel hubs stand almost empty, while TUI AG, the largest vacation firm, will suspend the bulk of its hotel and cruise-ship operations.Job cuts mounted as Norwegian Air Shuttle, already mired in debt and losses, cut 7,300 posts, and Virgin Atlantic Airways offered staff 12 months of leave.The actions reflect mounting fears that Covid-19 threatens the survival of even healthy travel companies as people stay home and the disease wipes out economic growth. White House officials are looking at letting cash-strapped carriers keep some taxes and passenger fees, while European governments are exploring measures that could go as far as partial nationalization.“Coordinated government and industry action is needed now if catastrophe is to be avoided,” the Sydney-based CAPA Centre for Aviation said Monday. Otherwise, “emerging from the crisis will be like entering a brutal battlefield, littered with casualties.”Many airlines have probably substantially breached debt covenants already, and the pandemic will bankrupt most carriers worldwide by the end of May without coordinated action, the report said.Fallout from the outbreak is sparing few airlines anywhere.Delta Air Lines Inc. and United Airlines Holdings Inc., the biggest U.S. network operators alongside American, further reduced schedules. And in Australia, Qantas Airways Ltd. said it plans a fourth round of capacity cuts after the government forced anyone arriving from overseas to isolate themselves.IAG, which owns airlines in Spain and Ireland as well as BA, will freeze hiring and veteran Chief Executive Officer Willie Walsh, who was due to stand down this month, will delay his retirement. Like many airlines the company said it’s no longer possible to provide estimates for full-year earnings.Pay CutAt Air France-KLM, CEO Ben Smith addressed staff in a video following an extraordinary board meeting and talks with the French and Dutch governments, which hold stakes in the carrier, on support that could include postponing taxes, fees and charges.“We don’t know when this will end,” said Smith, who is taking a 25% pay cut. The company has begun talks with unions on shorter working hours and has pulled wide-body jets including Airbus SE A380s. The superjumbo is also suffering a cull elsewhere, with Dubai-based Emirates grounding 29.Global airport operator Aeroports de Paris said that in addition to closing some Paris terminals and suspending airline fees for parking jets, it has shut shut down hubs in Amman, Jordan, Ohrid and Riga, Latvia.Cuts at Finnair Oyj will be among the steepest, with the carrier eliminating about 90% of normal capacity from April “until the situation improves.” It had already taken a battering from the earlier collapse in Asian travel after following a strategy focused on serving China, Japan and South Korea.Companies have sought to provide reassurance about their liquidity, with EasyJet Plc saying it has a 1.6 billion-pound ($2 billion) cash balance, an undrawn $500 million revolving credit and aircraft worth more than 4 billion pounds. Europe’s second-biggest discounter said it expects to ground most planes while operating what it called “rescue flights” for short periods.Ryanair said it has 4 billion euros ($4.5 billion) in cash and will also defer capital spending and share buybacks to bolster reserves.TUI fell as much as 39% in London, the most ever, after sayingit was winding down travel. The group’s airlines are nowfocused on bringing people home, and the last two or threecruise ships will stay in port once they dock. Destinations where some outbound flights continue include Egypt, Cape Verde and Mexico.Virgin Atlantic Airways Ltd. chief Shai Weiss has written to U.K. Prime Minister Boris Johnson saying British carriers and airports may need credit of 7.5 billion pounds. The airline will have terminated four-fifths of daily services by the end of next week and could ground all-but 15% of its planes in April.Job cuts are racking up, most of them temporary for now. The ax has come down hardest in Scandinavia, with Norwegian Air laying off 90% of staff, the same proportion as at tri-national rival SAS AB, where up to 10,000 people will be sent home as it cancels most flights.Elsewhere, recruitment freezes have become the norm. Virgin’s staff will also be required to take eight weeks of unpaid leave over the next six months, and it’s touting voluntary severance packages and year-long sabbaticals.American announced additional cuts hours after President Donald Trump extended a ban on some flights into the U.S. to include those from the U.K. and Ireland, while U.S. capacity will fall 20% in April and 30% in May from a year earlier. The carrier is also cutting flights to numerous cities in South America, Australia, New Zealand and Asia.United will reduce its capacity about 50% in April and May, deepening previous cuts, the company said late Sunday. Executive salaries will be halved and talks will begin with unions to lower wages, with CEO Oscar Munoz warning that the process will “be painful for all of us.”(Adds Norwegian Air, Virgin Atlantic plans from fourth paragraph. A previous version of this story corrected the spelling of Covid-19.)\--With assistance from Ania Nussbaum, Angus Whitley, Siddharth Philip and Richard Weiss.To contact the reporters on this story: Mary Schlangenstein in Dallas at email@example.com;Anurag Kotoky in New Delhi at firstname.lastname@example.org;Christopher Jasper in London at email@example.comTo contact the editors responsible for this story: Brendan Case at firstname.lastname@example.org, ;Anthony Palazzo at email@example.com, Tara Patel, Andrew NoëlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.