|Bid||8.84 x 948200|
|Ask||8.85 x 1900800|
|Day's Range||8.68 - 8.99|
|52 Week Range||7.81 - 22.70|
|Beta (5Y Monthly)||1.25|
|PE Ratio (TTM)||3.46|
|Earnings Date||Apr 30, 2020|
|Forward Dividend & Yield||0.80 (9.25%)|
|Ex-Dividend Date||May 08, 2019|
|1y Target Est||N/A|
Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Adam Shapiro discuss how the airlines are faring amid the coronavirus outbreak.
(Bloomberg) -- Airlines are seeking to change the rules of a global system that’s set to limit their pollution starting next year.The adjustment would make 2019 the only baseline year against which the airline’s carbon emissions are measured, an adjustment the industry says is necessary to reflect the grounding of many flights during the caronavirus pandemic this year. Currently, baseline emissions are set to be measured over 2019 and 2020.By including this year in the baseline, airlines would need to buy extra emission credits to cover their greenhouse gas output starting in 2021.Industry group the International Air Transport Association has requested a rule change to limit costs of the program. It said that 2019 emissions alone should form the baseline, easing the impact of the program on the industry.Yet that could completely wipe out the need to buy any offset credits in the planned market if airline emissions remain below 2019 levels through 2023, said Louis Redshaw, founder of Redshaw Advisors Ltd. in London, a carbon trading outfit.That would hit a small trickle of investments into renewables. Developers of emissions-cutting projects like wind and solar farms had planned to make facilities that generate carbon credits that they could sell to the airlines to cover compliance in the system. Without demand for those credits, the market won’t generate funds for projects or put pressure on airlines to rein in the greenhouse gases they produce.“There would be no demand,” said Redshaw. “It puts business plans at risk in the offsetting market.”One program deemed eligible for the market is the Clean Development Mechanism, where demand is already scarce and prices are near zero. That was an early form of a global carbon market that came out of the 1997 Kyoto Protocol on climate change, a predecessor to the 2015 Paris Agreement. CDM credits fell out of favor in the last decade after the European Union limited those securities for compliance in its own cap-and-trade system.Yet prices of these credits, only a portion of which will probably be suitable for the airline program, have picked up slightly this year.The planned airline emissions market is known as Corsia, or the Carbon Offsetting and Reduction Scheme for International Aviation. It has attracted countries hosting three quarters of the world’s flights.IATA said the baseline rule change is needed to relieve financial pressure on the airlines at a time it’s been strained like never before. Without a change, many nations may decide not to participate in what’s a voluntary system.Because of the pandemic, airlines will cancel more than 2 million flights through June and face a revenue plunge for 2020 of 44%, or $252 billion, IATA estimates.“It is very clear that 2020 is a completely abnormal situation and that the impact of Covid-19 on the world’s aviation sector is unprecedented in its severity,” said Andrew Stevens, environment spokesperson at IATA, in an emailed reply to questions.The International Civil Aviation Organization said it would consider the baseline question at a meeting of its governing council in June.Should IATA win the argument, then Corsia might be deemed so weak the European Union could seek to bring international flights into alternative carbon pricing systems, such as fuel taxes, said Redshaw, who has traded carbon for almost two decades. The EU carbon market currently covers only flights within the bloc.“The European Commission is likely to seek to contain airline emissions in another way,” Redshaw said.Should existing rules remain, demand in 2021 alone could be for about 150 million tons, he said. That would cost airlines $750 million at $5 a ton.Specific carbon offset prices have already increased, since ICAO published eligible programs last month, according to Viridios Capital Pty Ltd.The price of a 2016-2020 vintage voluntary carbon unit, known as a VCU, has jumped to $1.10 a ton from about $0.70 in early March, Eddie Listorti, chief executive of Viridios, a carbon trading company and emissions-cutting project developer in Sydney, said in an interview.“Prices gapped higher,” he said. “And this is while airlines are grounded.”If demand isn’t wiped out, some credits could triple in value, or even jump more than 10 times, based on EU carbon market values above 21 euros ($23) a ton, Listorti said. Other industries such as technology, palm oil, utilities and oil companies are also boosting demand for offsets, even if airlines don’t want many of them, he said.“The long-term trend is higher because the private sector is behind this,” Listorti said. “When industries reopen as they are in China, demand will come back strongly -- I am not concerned by an interim emissions glut.”There’s further evidence of some demand for EU airline carbon allowances in a small auction held Wednesday. The cover ratio in that sale was 4 times, the highest since May 2018, according to data from the European Energy Exchange AG.Ultimately, ICAO will probably adjust the baseline in some way, because 2020 is turning out to be so unusual, said Trevor Sikorski, an analyst at research company Energy Aspects Ltd. in London.This year is “going to be a very distorted level for setting an average-year baseline,” Sikorski said. “It would be very weird not to see them make that baseline adjustment.”(Updates with potential fuel tax in 15th 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.
Lufthansa will seek state aid in Germany, Switzerland, Belgium and Austria as the coronavirus crisis that forced it to ground almost all of its planes will persist longer than feared, the German airline's chief executive said. "I am optimistic that the talks in Bern, Berlin, Brussels and Vienna will lead to good and positive results," CEO Carsten Spohr said in a video message to staff that was posted online. People close to the matter told Reuters last week that Germany was in talks to provide Lufthansa, which has grounded 95% of its fleet due to the pandemic, with billions of euros in state aid and could take a stake in the airline.
Moody's Investors Service, ("Moody's") has today changed the ratings outlook to negative from stable for Connect Bidco Limited, the top-entity of the ring-fenced group that owns Inmarsat Limited after its acquisition in late 2019 by Connect Top Co Limited (a joint venture company formed by private equity groups Apax and Warburg Pincus alongside Canada's CPPIB and Ontario Teachers' Pension Plan Board) as well as for its rated subsidiaries. At the same time, Moody's has affirmed the B1 corporate family rating (CFR) and B1-PD probability of default rating (PDR) at Connect Bidco Limited.
Austrian Airlines is in negotiations with the government regarding state aid to save jobs and keep Vienna as a transfer hub for long-haul flights, the carrier said on Wednesday, adding the talks were at an early stage and will probably take weeks. The Austrian arm of Germany's Lufthansa , which has announced that it would close its Germanwings low-cost carrier and reduce capacity across the group, also signalled job cuts. How many of its 7,000 employees will lose their jobs will depend on the state aid and how soon the industry will be able to ramp up services, an AUA spokesman said.
Airlines must reimburse customers for flights cancelled because of the COVID-19 pandemic, the European Union transport chief said on Wednesday, rejecting calls by carriers to relax EU rules and allow an EU-wide waiver of refund obligations. EU Transport Commissioner Adina Valean also said the parameters could be changed for compliance with a U.N. climate scheme, scheduled to begin in 2021, following so many flight cancellations because of restrictions on movement to contain the novel coronavirus. As airlines seek government support, carriers say refunding hundreds of thousands of tickets will drain them of money.
Lufthansa is to permanently decommission more than 40 of its aircraft and axe its Germanwings low-cost arm, warning it will take years for the airline industry to return to its pre-coronavirus peak in passenger numbers. After a board meeting on Tuesday, the German group added that it would reduce the capacity of its Eurowings brand by cutting its long-haul operations. It will also accelerate the restructuring of its Austrian Airlines and Brussels Airlines subsidiaries.
Global airlines warned that 25 million jobs across the world could be at risk from the coronavirus air travel downturn, and held out against offering refunds to passengers as cash runs out. The International Air Transport Association (IATA) issued the warning as part of a series of messages about the state of airline industry, while urging governments to help. As it did so, Germanwings became the latest corporate casualty of the crisis as German parent Lufthansa announced its closure as part of a broader overhaul.
- Deutsche Lufthansa will permanently ground more than 40 of its aircraft as well as its Germanwings low-cost airline, as it warned it could take years for the industry to recover from the coronavirus crisis. - The Financial Conduct Authority, Britain's financial regulator, said its main objective of protecting consumers from harm due to the coronavirus outbreak will remain the regulator's focus in 2021 and "into the medium term" as well. - An attempt by the Chinese to take control of British chipmaker Imagination Technologies was stalled after the U.K. government intervened.
Speculation that the demand destruction from the coronavirus will be long-lasting and result in a smaller airline industry after the pandemic is starting to become a reality.On Tuesday, Deutsche Lufthansa AG (OTCMKTS: DLAKY) announced a significant restructuring that includes a permanent reduction in capacity and the consolidation of several flight operations within the airline group. The company said the board of directors made the decisions because it expects global travel restrictions won't be completely lifted for months and that it will take years until worldwide demand for air travel returns to levels before the coronavirus crisis.Vasu Raja, American Airlines' senior vice president for network strategy, said in The Wall Street Journal that few people are making plans to travel in the next three to five months.The Lufthansa Group has already cut capacity by more than 90% and parked about 700 aircraft.Based on the estimate of a slow recovery, Lufthansa Airlines is decommissioning six Airbus A380 double-decker planes, seven A340-600s and five Boeing 747-400s. The carrier is also withdrawing 11 A320 single-aisle planes from short-haul operations.The six A380 aircraft were already scheduled to be sold back to Airbus in 2022. The decision to phase out the A340s and B747s was made because they burn more fuel and pollute more than more modern aircraft, Deutsche Lufthansa said. With fewer planes, Lufthansa will have less capacity at its hubs in Munich and Frankfurt, Germany.Meanwhile, Lufthansa Cityline, which operates in Europe, will withdraw three A340-300 aircraft from service and end long-haul flights to tourist destinations for Lufthansa.Another subsidiary, Eurowings, will also phase out 10 A320s used on short-haul routes and reduce its long-haul business that is sold through Lufthansa. And the company will accelerate its decision to bundle flight operations into one unit, while Germanwings flight operations will be discontinued altogether.The restructuring already initiated at Austrian Airlines and Brussels Airlines will also go faster due to the coronavirus crisis, Deutsche Lufthansa said. The downsizing includes fleet reductions. And SWISS International Air Lines will delay deliveries of new short-haul aircraft and consider early retirement of older aircraft.All Lufthansa Group airlines have also terminated almost all wet lease agreements with other airlines flying under their name."The aim remains the same for all employees affected by the restructuring measures: to offer as many people as possible continued employment within the Lufthansa Group. Therefore, talks with unions and workers councils are to be arranged quickly to discuss, among other things, new employment models in order to keep as many jobs as possible," Deutsche Lufthansa said in a statement.In an effort to maintain customers, Lufthansa Group is also offering more flexible travel arrangements. Lufthansa, SWISS and Austrian Airlines are allowing all tickets to be rebooked at new fares, while Brussels Airlines will apply the new fare structure on routes to and from North America. Customers who keep their reservations for flights that have been canceled are able to retain the ticket and value and can convert it to a new booking through April 30, 2021, and those who rebook by the end of the year will receive a $50 discount. Fares are likely to be considerably lower for the foreseeable future as airlines try to attract business. Lufthansa is also responding to the coronavirus on the humanitarian front. On Tuesday, a Lufthansa Cargo B777 freighter arrived in Munich from Shanghai with 8 million protective face masks in 4,000 cartons. The shipment was transported on behalf of the Bavarian state government in cooperation with logistics provider Fiege. Face masks being unloaded at Munich Airport (Image: Lufthansa Airlines)The masks will be used at medical facilities as well as other companies that need to protect workers from infection.Lufthansa Cargo's 17 freighters are completely booked moving critical goods around the world, and the airline said it is operating 25 special flights with passenger aircraft dedicated solely to cargo. An additional 60 cargo flights with passenger aircraft are planned for next week, Lufthansa said.Many airlines are deploying passenger planes for cargo-only flights to alleviate an equipment shortage resulting from the widespread grounding of passenger fleets. But Lufthansa is the first to transform passenger planes into freighters at such scale.Image: Aero IcarusSee more from Benzinga * California Regulators: Full Steam Ahead On Trucking Pollution Programs * CargoMetrics Data Reveals Resilience Of Ocean Trade (So Far) * Market Visibility For The Always Responders(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Lufthansa will close its Germanwings low-cost airline as part of a broader overhaul including capacity cuts across the group, it said on Tuesday as it warned it could take years for the industry to recover from the coronavirus crisis. The group, which also owns the Austrian Airlines, Swiss and Eurowings brands, said the coronavirus had forced it to accelerate radical restructuring steps. "Based on this evaluation, today the Executive Board has decided on extensive measures to reduce the capacity of flight operations and administration long term."
Germany's Lufthansa is working on a package to raise money from the debt and equity markets to help see it through the coronavirus pandemic that has caused the collapse of passenger flights, two sources familiar with the matter said. The plan, which has yet to be finalised, could include a combination of convertible bonds, the sale of new shares and a rights issue, where existing shareholders buy additional shares in a company at a discount, the sources said, adding that it could happen within the next two weeks. Lufthansa declined to comment.
Lufthansa will discuss permanently grounding its Germanwings low-cost airline unit at a management board meeting on Tuesday, two sources familiar with the matter told Reuters. It remains unclear whether a decision will be reached about closing down Germanwings, the sources said. A Lufthansa spokesman said no decisions had been taken and reiterated that all options were being considered as it reviews its business and ways to cut costs to mitigate the loss of business caused by the coronavirus crisis.
Belgium's Brussels Airlines, a Lufthansa subsidiary, has extended its suspension of flights until at least May 15, it said on Monday. The Belgian carrier had previously grounded flights until Apr. 19 but said it was extending that by four weeks because of "low to no demand", owing to travel restrictions aimed at curbing the spread of the coronavirus. Airlines have been among the hardest-hit industries as the spread of the COVID-19 respiratory disease trigerred by the new coronavirus has brought travel to a grinding halt in many parts of the world.
(Bloomberg Opinion) -- Writing to shareholders this week, BlackRock Inc.s chief executive officer Larry Fink ruminated on how business and society will be reshaped by the searing experience of the new coronavirus:“People worldwide are fundamentally rethinking the way we work, shop, travel and gather. When we exit this crisis, the world will be different. Investors’ psychology will change. Business will change. Consumption will change. And we will be more deeply reliant on our families and each other to stay safe.”I had a similar epiphany this week while trying to cut my own hair — it turns out my regular $30 haircut isn’t as essential as I’d thought. Preparing a meal for my family later that evening made me think that eating out or getting dinner delivered isn’t as rewarding as home cooking. Right now the do-it-yourself version also feels a whole lot safer, and probably will do for a while.Compared to the courage shown by medical workers and those in other essential functions, and the devastation wrought by coronavirus on already vulnerable communities, many of us in the western world have it easy. We’re asked to do no more than stay home. But in between worrying about our jobs, our parents and how to entertain or home-school children, we’re reevaluating priorities. What will we do differently when this is over? What will we prize more and what will we give up? Once the immediate battle to protect employees and remain solvent has passed, the business world will have to confront these questions too. Two themes stand out: Instead of visiting far-flung places and seeking out mass entertainment, I’m sure there will be a bias toward more modest, local activities. And where the coronavirus has exposed dependency or vulnerability, as with the business world’s complex cross-border supply chains, we’ll seek more security and resilience.Looming above all of this is the damage that the lockdowns are inflicting on people’s incomes. The longer the economic shutdown lasts, the more reluctant the world’s consumers will be to spend, period. With more than 10 million Americans filing new unemployment claims in the past fortnight, the omens aren’t good.In the worst-affected sectors such as travel, hospitality and leisure, businesses are already facing a bleaker future. Increased consumer awareness about the negative environmental and social impact of mass tourism has now been compounded by the realization that people on planes and pleasure boats carried the virus around the globe. Lufthansa AG’s boss, Carsten Spohr, thinks the German airline will have to shrink because the economy will be smaller than before. Easyjet Plc’s founder, Stelios Haji-Ioannou, said similar this week when calling on the carrier to cancel a big order from Airbus SE.Even once travel restrictions are lifted, demand for cruises may remain weak for a “significant length of time,” Carnival Corp. warned. The beleaguered company had to offer bond-buyers an 11.5% interest rate to get them to back a $4 billion debt offering. That’s a bad sign.Fitness is another industry that relies on cramming people into confined spaces. Until recently it was booming but customers are discovering much cheaper ways to work out. Having sampled online classes and the time-saving benefit of exercising at, or close to, home, some memberships won’t be renewed. Good news for Peloton Interactive Inc.’s indoor cycling business, perhaps not for Planet Fitness Inc. or The Gym Group Plc. Until coronavirus came along, the tech world seemed hell-bent on taking agency away from individuals and consigning ownership to the dustbin. Why learn to cook when you can have food delivered in 30 minutes? Why own a car when you can take an Uber? Why look after your gadgets, when those nice people at Apple will fix them for you. But as my colleague Adam Minter pointed out this week, it’s only in a crisis that you discover the drawbacks of not being able to repair your own phone.There will be winners from this realignment too. Right now, auto sales are collapsing in Europe because you can’t go to a showroom and you’re not meant to drive far, but the freedom and security of owning a vehicle might cause sales to rebound more quickly than other discretionary purchases (provided of course that governments can curb unemployment). In China, emerging from the first virus wave, cautious consumers have begun returning to car dealers. Home improvement stores saw a brisk trade from customers wanting to fix up their homes, balconies and allotments whilst on lockdown, and some hardware stores remain open. Once the housing market reopens, urbanites may decide they’ve had enough of crowded cities and tiny apartments. The countryside is suddenly more appealing — the more so if employers become more trusting of those who want to work from home. Coronavirus has exposed our vulnerability and it won’t be the last crisis. Our planet-warming emissions mean more pain is preordained. Faced with uncertainty or disaster, humans respond by trying to strengthen their communities. We’ll also seek more control over our lives. For societies, that means equipping our health services, paying key workers properly and securing supplies. As individuals, it means out-sourcing fewer decisions and mastering things for ourselves. 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.
Lufthansa is reviewing options for its Germanwings business after ruling out a union proposal to consider shortened work hours, also known as Kurzarbeit, as a stop-gap solution for helping the low-cost unit conserve cash. "There is no agreement on Kurzarbeit, the management board is reviewing options," a Lufthansa spokesman said in response to a question about whether Germanwings was slated for closure or whether shortened work hours would be implemented. Kurzarbeit is a policy tool in Germany which allows companies to slash wage bills by tapping an unemployment fund overseen by Germany's Federal Employment Office.
German companies with international experience and supply chains have been commissioned to help the government procure difficult-to-obtain supplies as part of the country's response to the coronavirus crisis, a government document showed. Essential equipment like protective masks are in short supply around the world due to the spike in demand caused by the pandemic.
British Airways is set to suspend 36,000 staff — 80% of its global workforce — following German carrier Lufthansa, as European airlines bid to save cash in the fight for survival amid the coronavirus pandemic.
Germany is in talks to provide Lufthansa with billions of euros in state aid and could take a stake in the airline, which has grounded 95% of its fleet due to the coronavirus pandemic, people close to the matter said. The government and airline are discussing loans as well as a possible equity investment as Lufthansa grapples to cope with Berlin's order to all but halt its operations, the people said. "We are in close contact with the federal government to secure our liquidity", a Lufthansa spokesman said, but declined to comment on the details.