|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||17.85 - 19.51|
|52 Week Range||12.80 - 38.45|
|Beta (5Y Monthly)||1.29|
|PE Ratio (TTM)||17.67|
|Forward Dividend & Yield||0.50 (2.38%)|
|Ex-Dividend Date||Apr 15, 2020|
|1y Target Est||N/A|
EasyJet is seeking to “defer and reduce” payments for the multibillion-dollar aircraft it has on order from Airbus, the low cost carrier said in response to a threat from founder Stelios Haji-Ioannou to call a series of meetings aimed at ousting the group’s non-executive directors one by one. Sir Stelios, who recently received a £60m dividend from the group, wrote to the carrier at the weekend demanding it cancel its order for 107 Airbus single aisle aircraft, which he said represented a cost of £4.5bn. The payment, cited in a letter first reported by SkyNews and seen by the Financial Times, “constitutes the largest single threat to the solvency of the company”, Sir Stelios said.
(Bloomberg) -- SoftBank Group Corp. fell as much as 10% after a satellite operator it invested in filed for bankruptcy, ceding some gains from an unprecedented plan to sell assets and buy back shares.OneWeb made the filing late Friday U.S. time after raising about $3.3 billion in debt and equity financing from shareholders including SoftBank, Airbus SE and Qualcomm Inc. since its inception. At least $1 billion of that came from SoftBank, which said it first invested in December 2016 and declined to give a total amount.It is the latest blow to SoftBank founder Masayoshi Son, who last week unveiled a plan to raise $41 billion to buy back shares and slash debt. The announcement sent the shares soaring more than 50% in just a few days. The rally was interrupted when Moody’s Corp. cut its debt rating by two notches, saying the Japanese investment firm’s plan to sell off assets during a market downturn threatened its total value. SoftBank’s shares traded 6.7% lower on Monday morning in Tokyo.Son had often pointed to OneWeb as one of the cornerstones of an investment portfolio that ranges from ride sharing, co-working and robotics to agriculture, cancer detection and autonomous driving. The startup was working on providing affordable high-speed access anywhere in the world and targeting 1 billion subscribers by 2025. Son has painted a picture of a future where satellite networks cover every inch of the Earth and a trillion devices connected to the internet disgorge data into the cloud where it is analyzed by artificial intelligence.OneWeb listed liabilities and assets of more than $1 billion each in its Chapter 11 petition in U.S. Bankruptcy Court in White Plains, New York. The company had been in advanced discussions earlier in the year for a fresh investment, it said in a statement. But the discussions fell apart after the coronavirus pandemic sent markets into a tailspin, it said.The company had been mulling a Chapter 11 filing even as it continued to review possible out-of-court alternatives, people with knowledge of the matter told Bloomberg News on March 19.The satellite operator said it will pursue a sale process during the court reorganization and is in talks for so-called debtor-in-possession financing that would allow the company to fund its obligations during the proceedings.OneWeb makes low-orbit satellites that provide high-speed communications. It faces high-profile competition, including from Elon Musk’s SpaceX Starlink project and Jeff Bezos’s Amazon-linked Project Kuiper effort, while incumbents in the space include Inmarsat, Intelsat SA and Eutelsat Communications SA.At the time of its filing, OneWeb owed $238 million to Arianespace, its satellite launch operator, according to the court document. Arianespace, headquartered near Paris, describes itself on its website as the world’s first commercial space transportation company.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.
Ratings agency Standard & Poors placed Airbus <AIR.PA> on its watch list for a possible downgrade as doubts surfaced over the future level of aircraft deliveries and advance payments from airlines battered by the coronavirus crisis. Airbus said earlier this week a large majority of its airlines continued to pay pre-delivery payments or advances against future deliveries, and that it would adjust production to cope with any gaps. "In the short term, we assume no deliveries or pre-delivery payments, but that Airbus will continue production," said S&P Global Ratings credit analyst Tuomas E. Ekholm in a statement.
Tesla, Louis Vuitton and other companies are re-directing their resources for COVID-19 relief measures.
European stocks reversed early losses to trade higher as Wall Street reacted positively to the passage by the Senate of the stimulus bill as well as a report on the spike in jobless claims.
European stock markets are set to weaken Thursday, amid concerns about the impact on unemployment from the coronavirus pandemic as investors still wait for a massive rescue package to pass through the U.S. political process. At 3:15 ET (0715 GMT), the DAX futures contract in Germany traded 2.2% lower. France's CAC 40 futures were down 2.7%, while the FTSE 100 futures contract in the U.K. fell 2.5%.
As airlines continue to delay delivery of aircraft, the near-term outlook for aircraft stocks does not seem bright.
(Bloomberg Opinion) -- Boeing Co. is the least deserving of the corporate needy in the coronavirus crisis, but the nature of its position means it must get a special cut of a $2 trillion aid package working its way through Congress. As the only U.S. company capable of producing a major commercial jetliner, the country’s biggest exporter, and a major defense contractor, it’s the linchpin in a supply chain responsible for 2.5 million jobs. It’s not too big to fail; it’s too important to fail. Lawmakers are understandably balking but their consternation would be better directed at a conversation around what kind of conditions can make the concept of U.S taxpayer assistance palatable for a company whose 737 Max jets ferried 346 people to their deaths and whose history of risky decision-making is at least partly to blame for the current cash crunch.The sticking point for Congress on much-needed fiscal stimulus to blunt the economic impact of coronavirus-related shutdowns across the country is how to distribute a $500 billion pot of corporate-leaning bailout money and what sort of strings should be attached. Of that, $50 billion in loans would reportedly go to the commercial-airline industry, while cargo carriers would get $8 billion. Another $17 billion would go to “businesses critical to maintaining national security.” The remaining $425 billion is for businesses, state and local governments, with little detail beyond that of who would be eligible for the funds and most of the decision-making left to Treasury Secretary Steven Mnuchin. That’s to the chagrin of Democrats, who have blocked the bill in an effort to put more parameters on how the money is used and ensure protections for workers. The two sides appeared to be approaching an agreement that would ensure more oversight over the money.Boeing had sought a minimum of $60 billion in support for itself and its suppliers, but negotiators were at one point looking at language that would have effectively blocked Boeing from tapping into government funds because of its pre-coronavirus problems, according to the Washington Post. The current status of aid for Boeing is unclear, although President Donald Trump reiterated his support for a bailout on Monday, saying Boeing will “need some help,” the same day the company said it was shutting down its Seattle-area manufacturing hub for two weeks after a worker died of coronavirus complications.In an apparent attempt to get ahead of lawmaker’s criticism, Boeing late Friday announced that it was suspending its dividend and that CEO Dave Calhoun and chairman Larry Kellner would forgo their pay until the end of the year. That’s the bare minimum that should be expected of all companies that take government funds and it’s reasonable to expect special conditions for Boeing given its unique situation. Some ideas:Resetting Relations with the FAA: The Max crisis highlighted the degree to which the Federal Aviation Administration had delegated certification work for new airplanes to company employees, allowing for obfuscation and an apparent cozy deference among agency management to Boeing's own goals and timelines. When then-CEO Dennis Muilenburg was hauled in front of Congress last October, he repeatedly deferred when questioned about the company's relationship with the FAA and declined to provide any public suggestions for guardrails that would improve the certification process. The general impression was that Boeing was hoping for more minor revamps, rather than a wholesale reevaluation. Any bailout money should be tied to a commitment to work with Congress on reforms that make aviation regulation safer and protect against future crises. Included in this should be tougher rules around the revolving door for Boeing lobbyists and the FAA. It seems unhealthy that an executive like Ali Bahrami be allowed to flip-flop between safety oversight for the FAA and lobbying for Boeing and other manufacturers’ interests at the Aerospace Industries Association.Restricting M&A: In the wake of its own bailout during the 2008-2009 recession, General Electric Co. sold assets to convince regulators to drop the cumbersome label of systemically important financial institution. But a breakup doesn't seem to be an answer for Boeing here: Splitting its defense and commercial businesses would likely render both sides of the company less competitive and wouldn't make either less important. There should, however, be a rethink of whether it’s in the country’s interest to allow Boeing to get even bigger from here. Before the Max crisis and the coronavirus crisis, Boeing had been aggressively pushing into the realm of its suppliers with a series of acquisitions and joint ventures aimed at capturing more lucrative maintenance and repair work for itself. One possible bailout parameter could be an end to this foray in vertical integration. Meanwhile, Boeing’s $4.2 billion purchase of a majority stake in Embraer SA’s commercial-jet program is still pending because of a holdup by European Union regulators. Without the deal, Boeing would essentially cede the market for regional planes to Airbus SE, which acquired the A220 program from Bombardier Inc. But following through with it adds to the debt load and it may be hard to justify prioritizing the purchase over, say, workforce protections.Backstopping the Pension: While the Republican proposal reportedly includes a ban on new buybacks for the duration of the bailout loan and a two-year limit on salary increases for the upper echelons of management, the duration of these prohibitions should be expanded for Boeing. One potential benchmark is returning its pension to healthier funding levels. The company decided in 2017 to plug its wide pension deficit with $3.5 billion of its own stock. “It’s an irresponsible thing to do certainly from the perspective of the plan participants,” Daniel Bergstresser, a finance professor at the Brandeis International Business School, told Bloomberg News at the time. “Ideally, you would like to put assets in the pension plan that won’t fall in value at exactly the same time that the company is suffering.” You can say that again. A portion of Boeing’s pension may be recoverable given its defense work for the U.S. government, but even factoring in that adjustment based on ratings firm standards, the unfunded balance was about $13 billion at the end of 2019, according to Bloomberg Intelligence analyst Matthew Geudtner. That’s higher than any company on the S&P 500 Index apart from General Electric Co. and Exxon Mobil Corp.(1)And that was before the 70% drop in Boeing’s shares in this year’s coronavirus sell-off and the plunge in interest rates following two emergency Federal Reserve cuts. Every 25-basis-point decrease to the 3.3% discount rate assumption at the end of 2019 adds about $2.8 billion to that obligation. Should the current market moves hold, Boeing’s net pension deficit will have widened by about $10 billion, Vertical Research Partners analyst Rob Stallard estimated last week. Boeing deserves to be punished for its mistakes, but its rank-and-file workers do not. Allowing a bailout that prevents mass layoffs while ensuring that Boeing is a better corporate citizen seems like the best way forward. (1) This assumes a similar adjustment for defense contractor Lockheed Martin Corp.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.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.
DUBLIN/OSLO (Reuters) - The grounding of virtually all flights by Europe's largest budget airline and European air traffic data on Tuesday highlighted the enormity of the shock to aviation industries from the coronavirus now emptying skies around the globe. Ryanair <RYA.I> told customers it had virtually written off the next two months, while European air traffic management body Eurocontrol said volumes on Monday were down more than 75% from the same day last year. "We do not expect to operate flights during the months of April and May at this time," Ryanair boss Michael O'Leary said in a message to customers.
With "substantial fear priced in" due to the coronavirus pandemic and adequate liquidity, analysts say that Boeing stock is a buy.
Boeing Co. (NYSE: BA) said Monday it is shutting down production for two weeks at its aircraft manufacturing plants in northwest Washington to protect the health of employees and their families as the coronavirus pandemic continues to spread in the U.S.Assembly lines will gradually reduce work levels through Wednesday and then close for 14 days, during which time the company will conduct deep cleaning and establish rigorous criteria for return to work.2020 was already shaping up as a difficult year for Boeing, which stopped production of the troubled 737 MAX production line in January while waiting for safety regulators to approve its return to service following two deadly crashes in 2018 and 2019. Boeing has designed software fixes for the anti-stall system blamed for contributing to the accidents by pitching the nose sharply downward and is correcting other safety issues found in subsequent audits. Company officials had indicated they expected to get the green light to proceed by early summer.The aerospace manufacturing industry, including Boeing, is seeking $60 billion from the federal government as part of a $1.6 trillion emergency economic package for businesses and workers. But a deal fell apart Sunday night over differences on what types of conditions should be placed on large corporations for aid.Boeing's production delay means it will take longer for airlines to receive scheduled deliveries, but with the aviation market cratering because of COVID-19, lack of capacity will be the least of airlines' concerns once the spread is contained and economic activity resumes. Experts forecast travel demand will return slowly and that it could take a couple of years for airlines to get back to last year's traffic level.Boeing employs nearly 66,000 people in Washington, where it makes the 737, 747-8 and 747-8 freighters, the 767 and 767 freighter, the 777, and the 787. The shutdown will also push back development of the 777X, the next-generation of the wide-body plane that Boeing intended to start delivering next year. Suppliers will also be hurt by Boeing's decision because Boeing will not accept any shipments during the shutdown.General Electric Company (NYSE: GE) aviation arm, which manufactures engines, said it will cut its U.S. workforce by 10%. GE also said that there will be a temporary lack of work impacting about 50% of its U.S. maintenance, repair and overhaul employees for 90 days.The aerospace giant's announcement made no mention of its Charleston, South Carolina, plant, where the 787 Dreamliner is also produced.Boeing said employees in Everett and Renton will receive pay for the initial 10 working days of the suspension — double the company policy, which will provide coverage for the two-week period. Other employees will continue to work from home.The company said it will restart production in an orderly fashion when the suspension is lifted. Critical distribution of parts to support airline, government and maintenance shop customers will continue. "We continue to work closely with public health officials, and we're in contact with our customers, suppliers and other stakeholders who are affected by this temporary suspension. We regret the difficulty this will cause them, as well as our employees, but it's vital to maintain health and safety for all those who support our products and services, and to assist in the national effort to combat the spread of COVID-19," Boeing CEO David Calhoun said in a statement.Meanwhile, Boeing's European rival Airbus, resumed partial production at plants in France and Spain after a four-day pause to sterilize equipment and develop efficient work protocols while practicing social distancing. The manufacturer said work stations will only reopen if they comply with new hygiene standards and safety measures, which are being implemented at all sites without full interruption.Boeing sharply lagged Airbus in deliveries and orders last year due to the MAX crisis and is likely to lose even more ground this year.In February, the Airbus assembly line in Tianjin, China, reopened following a temporary production stoppage related to mass quarantines in that country. Airbus said the plant is operating at normal levels now.Airbus said it is canceling a planned dividend payment and lining up $16 billion in new credit to help keep its doors open.Over the weekend, Airbus used an A330-800 test plane to transport about 2 million protective masks from Tianjin back to Europe to help protect people in France and Spain. Additional flights are planned to take place in the coming days, Airbus said.Major truck and auto manufacturers are also temporarily closing plants because of the health risk associated with the coronavirus.In related news, Canadian airline Transat A.T. announced it has temporarily laid off 3,600 people, about 70% of its workforce, in Canada due to the lack of business. Last week, the company said it was shutting down flight operations through the end of April.Air Canada is laying off 3,600 flight attendants and 1,549 flight attendants at low-cost subsidiary Rouge, about 60% of its cabin crews, according to a post from the Canadian Union of Public Employees. The layoffs are effective until April 30, at the earliest. Air Canada is suspending most international and U.S. flights at the end of the month.See more from Benzinga * US Will Raise Import Tariffs On EU Aircraft In March * After Years Of High Growth, Daseke Finds Itself In Need Of A Tune-Up * Boeing, Airbus Conversion Programs Win Orders For Small Freighters(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Airbus <AIR.PA> said in a stock market filing on Monday that customers could seek to cancel or postpone delivery of airliners and helicopters as the coronavirus crisis continues to escalate. Airbus Chief Executive Guillaume Faury said earlier that several airlines had asked to defer deliveries, but that most were continuing to pay their deposits. Airbus also detailed steps to improve compliance practices after paying a 3.6-billion-euro fine last month to settle a four-year multinational bribery probe.
Even an unprecedented Federal Reserve action couldn’t lift European stocks into positive territory on Monday.
(Bloomberg Opinion) -- Is the coronavirus a temporary shock or will it do lasting damage to the global economy? This question will dictate the severity of the measures companies are taking to cut costs and preserve cash, and determine the shape and effectiveness of government bailouts.The short answer is: companies don’t know yet, because none of them have dealt with a pandemic of this magnitude before. Hence their early assessments of the seriousness of the problem have been quite different to those of their peers; and they’re being revised continually, mostly not for the better.Last week some carmakers still sounded relatively optimistic, pointing to the reopening of dealerships in China and signs that sales there are rebounding as new coronavirus cases slow. BMW AG thinks the improvement in China could serve as a blueprint for what might happen in the rest of the world as governments implement draconian measures to contain the virus. That could explain why the German auto giant still plans to pay its shareholders 1.65 billion euros ($1.8 billion) of dividends. Volvo Cars is planning on a “return to normality” after Easter.While the aircraft maker Airbus SE is scrapping its dividend and has beefed up credit lines, it’s poised to resume partial production at its French and Spanish sites this week and points to signs of recovery in domestic Chinese air traffic. This somewhat reassuring message has been contradicted, however, by Deutsche Lufthansa AG’s chief executive officer, Carsten Spohr, who has warned that when the coronavirus is over “there will be a smaller global economy and that means smaller airlines.” The implication of his message was the German carrier should start preparing now for that lower level of demand.Such divergent views reflect partly how the travel and hospitality sectors will be hit harder by the virus than other parts of the manufacturing world. Customers needing a new car might delay their purchase but they won’t do so indefinitely. Eventually their old vehicle will wear out. In contrast, consumers probably won’t take two summer holidays next year just because they didn’t have one this time. Until the new coronavirus is fully under control, they might not book an overseas leisure trip at all.It’s possible too that some industrial executives (beyond those exposed to travel) are underestimating the difficulty of containing Covid-19, including its impact on demand and supply chains. While Japanese schoolchildren are set to return to class in April, virus cases in Hong Kong have started increasing again. If governments keep having to reimpose quarantines until a vaccine is found — which might take more than a year — a swift rebound could prove illusory.Even if companies can keep their own factories running, the flow of crucial components and systems would be interrupted by further outbreaks or countermeasures. When China quarantined a large part of its population, the rest of the global economy was still humming. But as the U.S. follows Europe in ordering many citizens to stay at home, the impact on consumption and employment will be severe. Germany’s gross domestic product is expected to contract by as much as 5% this year, while the U.S. jobless rate is set to rocket.Much will depend of course on the success of governments in channeling money to vulnerable citizens and businesses, and what form that assistance takes. If companies have to cope with months of negligible revenues, government ownership of large chunks of the economy may become unavoidable. Businesses borrowing more would only worsen corporate solvency issues.Given such acute uncertainty, companies should hope for the best but plan for the worst.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.
Airbus <AIR.PA> boosted its liquidity with a 15 billion euro ($16 billion) expanded credit facility on Monday while suspending its 2020 outlook in response to the coronavirus crisis that has grounded much of the global airlines fleet. The European planemaker also joined U.S. rival Boeing <BA.N> in scrapping its 2019 dividend, worth a total of 1.4 billion euros. "These measures are designed to protect the future of Airbus and to ensure we can resume normal business or future business as soon as the situation improves," CEO Guillaume Faury told reporters.
(Bloomberg) -- Airbus SE extended credit lines and clamped down on cash outlays to give it access to 30 billion euros ($32 billion), taking steps to protect liquidity after the coronavirus pandemic pushed its airline customers to halt flights and stop ordering planes.The European manufacturer also withheld its dividend and tore up earnings guidance for the year on Monday, while pushing governments to support carriers and its vast supplier network. The company itself isn’t at the moment seeking a bailout, but is open to aid as a fall-back, its CEO said.Airbus is erecting a credit safety net as the virus leaves the aviation industry struggling for viability following a collapse in travel. Chief Executive Officer Guillaume Faury said the company entered the crisis in better shape than rivals, and held out the prospect of boosting market share if it survives intact, especially in the narrow-body plane sector where it has left Boeing Co. trailing.“These are indeed exceptional times,” Faury said in a telephone briefing, adding that the fortification of funding is aimed at “safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers.”Airlines are pushing back against taking existing deliveries, let alone purchasing extra jets. The CEO said that Airbus plans to continue production for the moment but that the wide-body market in particular will be depressed and that “operational scenarios” could be activated depending on the spread and duration of the virus.The company is meanwhile looking at possibilities for storing finished aircraft, according to Faury, who said there should be a return to a higher number of handovers sometime in the second half, while side-stepping questions on whether build rates will be cut in the near term.Airlines Carnage Deepens With Emirates, Singapore Air CutsAir France, Airbus Line Up for Government-Backed BailoutsU.K. Airline Bailout in Flux With Range of Steps Under ReviewBoeing Closes In on U.S. Lifeline After $142 Billion WipeoutAirbus shares fell as much as 14% and were trading 7.4% lower at 59.05 euros as of 10:08 a.m. in Paris, taking the stock’s decline this year to 55% and valuing the company at 46 billion euros.As part of the drive to boost liquidity, or cash available, by 50%, Airbus canned a shareholder dividend that would have cost it 1.4 billion euros and has converted a credit facility of about 5 billion euros into a new line amounting to 15 billion euros.Belt and BracesThe Toulouse, France-based company, which has an existing 3 billion-euro credit and a further 12 billion euros in financial assets, will also suspend a top-up in pension funding.Jefferies International analyst Sandy Morris said the measures were as anticipated and provide the “belt” of efforts to stabilize Airbus, while suggesting the company will still likely need “the braces” of government support.Airbus fell into line with most other businesses in dropping outlook guidance. The group had aimed to hand over about 880 jets this year, up from 863 in 2019, which was already a record, and had targeted free cash flow of 4 billion euros, a 500 million-euro increase.Boeing CrunchAirbus moved to shore up its finances without immediate recourse to state support as arch-rival Boeing edges closer to a government bailout. The U.S. company was in crisis even before the coronavirus outbreak, with its 737 Max plane grounded for a year after two fatal crashes, leading to a dearth in orders and billions of dollars in charges.Airbus could still be in line to receive French state support, according to people familiar with the matter, and the company said it “highly welcomes” governmental efforts to stabilize the industry. Both the French and the German states already hold stakes in the manufacturer.Facilities in France and Spain that were shuttered last week for cleaning and to separate workers into smaller groups were due to reopen Monday, while the same measures are being implemented at a Hamburg site, which closed on Friday. The company said it’s taking all practical steps to ensure the safety of staff, and that workstations will close where that can’t be 100% guaranteed.Faury said managers are “very actively” speaking with airline customers, and that the wide-body jet market in particular may be badly impacted as the pandemic hurts demand. At the same time an extensive single-aisle backlog should help protect the business.China may provide the best guide to the speed industry will recover, the CEO said, adding that the Asian nation, where the virus is now receding, has kept supply chains running and that 99% of people involved are now back working.(Updates share price, adds Boeing background)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.
(Bloomberg) -- Emirates, the world’s largest long-haul airline, will suspend all of its passenger operations this week, in the latest concession to the coronavirus pandemic that has devastated global travel.Flights to all destinations will cease from March 25, Dubai-based Emirates said Sunday in an email. Cargo service will remain in operations, the company said.“We cannot viably operate passenger services until countries re-open their borders, and travel confidence returns,” Chairman and Chief Executive Officer Ahmed bin Saeed Al Maktoum said in a memo to employees seen by Bloomberg. “Some of our competitors, or even our supply chain partners, may not survive this crisis.”The airline’s announcement came a few hours before the United Arab Emirates’ General Civil Aviation Authority said it will halt all inbound and outbound passenger flights for two weeks. The U.A.E. is also home to Flydubai, Abu Dhabi’s Etihad Airways and Air Arabia, the Middle East’s largest discount carrier.With its fleet of all wide-body aircraft, the Emirates has turned Dubai into a hub for global travel, typically operating more than 500 flights a day. That mission, which has fed the city’s growth since Emirates was founded in the mid-1980s, is now under assault by the coronavirus pandemic.Shutting DownCountries are closing off access to protect their populace, dealing a body blow to the global airline industry. Carriers that were in relatively good health at the start of the year have had to ground fleets, lay off staff and request government aid for survival.U.S. Airlines Want Cash Grants Included in $58 Billion Bailout BillU.K. Airline Bailout in Flux With Range of Steps Under ReviewWorld’s Major Airlines Ground Jets, Idle Thousands of Staff (1)U.A.E. Blocks Almost All Travel, Halts Work Permits on VirusMajor U.S. carriers like Delta Air Lines Inc. and American Airlines Group Inc. are waiting on lawmakers to clear a bailout package, while in London, where Heathrow airport, the busiest hub in Europe, the government is considering moves to support the industry that include loans and potentially equity infusions.Similar scenarios are playing out in Germany, France and Scandinavia, while China has already nationalized the parent of Hainan Airlines Holding Co., as is Italy with bankrupt flag-carrier Alitalia.Long-Distance HubThe Emirates business model is built around a fleet of Airbus SE and Boeing Co. long-distance aircraft carrying passengers between all corners of the globe, and while the spread of the virus is easing in parts of Asia, it’s accelerating in Europe and North America.The airline was just emerging from another downturn, completing a strategy rethink late last year after persistent low oil prices weighed on regional economic growth.Emirates dropped the Airbus A380 from its long-term plans, ordered smaller wide-body aircraft and reviewed its route network, while increasing cooperation with regional discount carrier Flydubai -- also state-owned.Now a recovery in oil prices has been reversed by the outbreak, with a price war between Saudi Arabia and Russia exacerbating the economic hit on the Gulf.“Until January 2020, the Emirates Group was doing well against our current financial year targets,” Sheikh Ahmed said. “But COVID-19 has brought all that to a sudden and painful halt over the past six weeks.”The airline’s base at Dubai International Airport, the world’s busiest in terms of international passengers, has followed other jurisdictions in banning tourists and residence visa holders from entering the country.Emirates plans to ground 230 planes, or 85% of its fleet, Chief Operating Officer Adel Al Redha told Alarabiya News Channel on Sunday.The Gulf carrier was considering idling the bulk of its 115 Airbus A380 super-jumbo aircraft, and plans to delay the handovers of the final handful of planes that are due, Bloomberg News has reported. The airline also operates 155 Boeing 777 jets.Salary CutsThe outlook for travel demand remains weak across markets in the short to medium term, Emirates said, adding that it will take the following measures:A temporary reduction of basic salary for the majority of Emirates Group employees for three months, ranging from 25% to 50%.Employees will continue to be paid their other allowances during this time. Junior level employees will be exempt from basic salary reduction.Emirates President Tim Clark and Dnata President Gary Chapman will take a 100% basic salary cut for three months.Cabin service attendants’ basic salaries or fixed allowances will not be reduced, according to the memo.“If any employee had volunteered previously for unpaid leave, they can now opt to cancel that leave in lieu of the above,” Sheikh Ahmed said.Flydubai, which has an extensive partnership with Emirates, canceled more than 85% of its flights.Read more: Halt Travel to Fight Coronavirus? The Pros and Cons: QuickTake(Updates with U.A.E. decision to halt all flights in fourth 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 is preparing for an era of lower than expected production after moving on Monday to bolster its finances in the face of a near shutdown in global aviation . Europe’s flagship aircraft manufacturer ...
European stock markets are set to open lower Monday, with investors worried about the extent of support from policymakers to combat the economic damage from the coronavirus as the number of cases continue to rise sharply around the world. At 3:29 AM ET (0729 GMT), the DAX futures contract traded 0.9% lower. France's CAC 40 futures were down 1.1%, while the FTSE 100 futures contract in the U.K. fell 1.3%.
Airbus <AIR.PA> confirmed on Sunday it would resume only partial aircraft production when its French and Spanish factories reopen on Monday after a four-down shutdown to tackle health concerns over the coronavirus. France and Spain host some Airbus civil and military assembly lines and manufacture parts needed to preserve Airbus operations in other countries, mainly in the UK and Germany but also at satellite assembly sites in the United States and China. Workstations will only open when it is safe to do so, Airbus said, without saying how steeply its production would fall.
(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.
The Farnborough Airshow, the biggest event of the year for Boeing, Airbus and other aviation companies has been canceled.
Airbus <AIR.PA> 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 <AIRF.PA> may tap planned French government-backed loans.
Airbus will on Monday reopen its factories in France and Spain at lower initial production rates than before the closure, raising questions over future output as airlines seek to defer aircraft deliveries amid an unprecedented global crisis in aviation. The group is also understood to have held discussions with the French and German governments about support for the aerospace sector. In that context Airbus is pressing ahead with plans to keep production going even as its customers ground the majority of their fleets and seek to defer deliveries.
AirAsia Group Bhd said on Friday an independent probe into corruption allegations from Britain's Serious Fraud Office (SFO) has found the Malaysian airline's procurement process with European planemaker Airbus SE robust and justifiable. In a filing to the stock exchange, AirAsia said Airbus' sponsorship of a sports team the airline's top executives co-owned was at the relevant time disclosed to and supported by the board of AirAsia Bhd (AAB), since renamed AirAsia Group.