|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||5.35 - 5.48|
|52 Week Range||4.22 - 12.67|
|Beta (5Y Monthly)||1.06|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Jul 13, 2008|
|1y Target Est||7.00|
U.S. airlines and contractors faced a deadline of 5 p.m. on Friday to tap the federal government for up to $32 billion in payroll grants to help them ride out a dramatic drop in air travel demand due to the new coronavirus outbreak. The U.S. Treasury set that deadline for the airline sector to receive funds as soon as possible and to propose financial instruments such as warrants or equity options to compensate taxpayers for the money. Many Democrats and airline labor unions have urged U.S. Treasury Secretary Steven Mnuchin not to demand equity or warrants in return for the grants because they are meant to ensure carriers take the funds and pay workers until Sept. 30, by which time many hope travel demand will have started to recover.
Air France-KLM is in talks with banks to receive up to 6 billion euros ($6.5 billion) in loans guaranteed by the French and Dutch governments, as the airline group braces for a sustained coronavirus shutdown, sources told Reuters. The two states, which each own 14% of Air France-KLM, have paused a long-running boardroom feud to address the cash crunch, according to three people close to the discussions. Under the most likely scenario, Air France could get about 4 billion euros in French-guaranteed loans while KLM receives close to 2 billion backed by The Hague, two sources said.
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(Bloomberg Opinion) -- In 2017, the British billionaire Richard Branson agreed to cut his stake in Virgin Atlantic Airways Ltd. to just 20% by selling one-third of the airline to Air France-KLM. In December, he had a change of heart about that 220 million-pound ($274 million) deal, and opted to keep his shareholding in the company he founded at 51%. America’s Delta Air Lines Inc. owns the other half. Branson has referred to the transatlantic carrier as “one of my children”. But with most of the Virgin Atlantic fleet now grounded because of the coronavirus restrictions, he probably wishes he’d taken Air France’s money. The company is now consuming cash at a rapid clip.To help alleviate a financial crunch, Virgin Atlantic is calling on Boris Johnson’s British government to provide 500 million pounds of government-backed loans and credit guarantees, so that credit card processors don’t hold onto its cash. Airbus SE and Rolls-Royce Holdings Plc, which respectively sold planes and engines to Virgin Atlantic, have also been lobbying the U.K. on Virgin Atlantic’s behalf, the Financial Times reported.It’s hard to fathom why Johnson would throw Virgin Atlantic a lifeline before its American and British Virgin Islands domiciled shareholders have reached deeper into their own pockets. Branson himself is worth $5.2 billion, according to the Bloomberg Billionaires Index.So far, the tycoon has injected $250 million into his various Virgin companies, of which more than $100 million has gone to the airline, according to Sky News. But that clearly isn’t enough. While Virgin Atlantic’s financial performance may have improved before the coronavirus hits, in total it lost more than $100 million during 2017 and 2018 — the two most recent years for which its accounts are available.That’s one reason its balance sheet is weaker than its European peers. Lease-adjusted net debt was five times higher than a comparable measure of earnings, according to the latest group accounts (which includes the travel operator Virgin Holidays). Air France-KLM — by no means the strongest airline financially — has net debt of 1.5 times the same earnings measure. While Virgin Atlantic had almost 500 million pounds of cash at the end of December 2018, much of that money came from customers paying for tickets long before they traveled. Its current liabilities far exceeded its current assets, which is a problem if customers start asking for their money back because they can’t fly.It’s hardly surprising that Airbus and Rolls-Royce are taking Branson’s side, but neither of them were under any obligation to sell aircraft and equipment to a financially stretched airline. Virgin Atlantic had 2.6 billion pounds of future capital commitments for things like planes and engines, according to the 2018 accounts, a pile it added to last summer by placing an order for 14 Airbus A330neos.The parent company, Virgin Travel Group Ltd, further extended itself by providing about 40 million pounds of funding to a regional U.K., airline Flybe Ltd, which subsequently went bust. Pandemics are a known risk when you’re running an airline, but nobody could anticipate a shock as widespread and potentially long-lasting as this. So some government assistance is probably justified — in view of the roughly 8,500 jobs at stake. However, the British government’s offer to cover 80% of the wages of furloughed workers is already pretty generous; Virgin Atlantic’s yearly wage bill is more than 300 million pounds.It’s harder to understand why a government should provide loans or guarantees to Virgin Atlantic, when its shareholders or commercial lenders don’t seem willing to — beyond what Branson has chipped in.In fairness, the other big shareholder, Delta, is also in a tight spot. It’s burning through about $50 million of cash a day and Standard & Poor’s, a credit rating agency, has downgraded its debt to junk. However, the U.S. airline successfully extended its credit lines and its government has promised $50 billion in assistance for the industry. Delta’s market value remains above $15 billion. If Branson is short of ready cash, there are other assets he could perhaps monetize, including a majority stake in space company Virgin Galactic Holdings Inc., whose market capitalization is a lofty $2.9 billion. If no more money is forthcoming from the owners, the British government should insist that Branson dilutes his ownership of Virgin Atlantic as originally planned; only this time by signing over the equity to taxpayers.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.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.
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.