|Bid||0.0000 x 0|
|Ask||0.0000 x 0|
|Day's Range||2.4150 - 2.5100|
|52 Week Range||1.5000 - 6.9600|
|Beta (5Y Monthly)||1.57|
|PE Ratio (TTM)||3.45|
|Forward Dividend & Yield||0.29 (11.70%)|
|Ex-Dividend Date||Feb 11, 2020|
|1y Target Est||N/A|
TUI Group, Europe's biggest tour operator, said beach holidays for its British and Irish customers would be cancelled until mid-May due to travel restrictions caused by the coronavirus pandemic and uncertainty about when those will end. The United Kingdom changed its travel guidance on April 4, advising against all non-essential global travel indefinitely. Previously Britons had been told to avoid global travel for 30 days from 17 March.
(Bloomberg) -- Adidas AG is seeking more than 1 billion euros ($1.1 billion) in German government aid as it grapples with the fallout of the coronavirus pandemic, people familiar with the matter said.The sporting goods maker is in talks with German state-owned bank KfW about a financing package, according to the people, who asked not to be identified because the information is private. Adidas has been discussing a range of around 1 billion euros to 2 billion euros in loans, though the final amount and timing haven’t been decided, the people said.Shares of Adidas fell as much as 4.9% Friday. They were down 3.9% at 2:55 p.m. in Frankfurt, making the company the worst performer on Germany’s benchmark DAX index, which was little changed.Adidas said this week it’s reversing an earlier decision to not make April rent payments for its shops in Germany following a public backlash. Most non-food retailers in Europe’s largest economy are closed until at least April 20 to stop the further spread of Covid-19.Chief Executive Officer Kasper Rorsted recently told a German newspaper that while the company won’t need direct government support, Adidas and the economy as a whole will need credit. A representative for Adidas declined to comment further. A representative for KfW also declined to comment.The state-owned bank launched a loan program on March 23 to help companies facing a liquidity shortage. About 2,500 companies have applied for loans totaling 10.6 billion euros.Tour operator TUI AG said last week it secured a 1.8 billion-euro loan from KfW in one of the biggest bailouts in Germany so far. Consumer electronics retailer Ceconomy AG is also among firms that are seeking to participate in the program, Bloomberg News has reported.(Updates with share movement in third 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.
(Bloomberg) -- German listed companies will be asked to suspend dividend payments to qualify for assistance designed to ease the impact of the coronavirus crisis.The government will be able to set conditions on dividends as part of an aid program involving loans and guarantees from state bank KfW and the goal is that credit does not end up being disbursed to shareholders, an Economy Ministry spokesman said at a regular news conference in Berlin. He confirmed an earlier Bloomberg News report. The KfW declined to comment.Chancellor Angela Merkel’s government on Friday secured final parliamentary approval for a package of measures totaling more than 750 billion euros ($827 billion) to address the economic fallout from the virus. On top of that, the KfW has 500 billion euros available to boost the liquidity of companies struggling with a collapse in demand.As the impact of the virus spreads, companies across Europe are coming under increased pressure to defer dividend payments to preserve cash. Regulators such as the European Central Bank have already pushed banks to hold off on such payouts to increase their resilience.Germany’s Commerzbank AG, in which the government holds a stake of 15.6% -- a legacy of the financial crisis -- said Monday it won’t propose a 2019 dividend due to the ECB’s recommendation.Germany is in line with neighbor France in insisting firms asking for aid forgo dividend payments. All companies that have delayed tax liabilities will have to reimburse the state and pay penalties if they proceed with dividends, Finance Minister Bruno Le Maire has said. Any big corporations that flaunt the call to stop payouts will also cease to be eligible for 300 billion euros of loan guarantees.Emergency ContributionsThe German policy on dividends was evident in a 1.8 billion-euro credit line for TUI AG announced March 27. “One of the conditions of the KfW loan is that TUI de facto waives dividend payments for the term of the credit line,” the tourism company said in a statement.Deutsche Lufthansa AG is among German firms to have said they will suspend their dividends, along with the likes of battery maker Varta AG and car rental company Sixt SE. Lufthansa has also said it’s talking to KfW about a loan.Germany will also demand cuts in wages and bonuses for senior managers of companies that apply for financial aid, German Economy Minister Peter Altmaier said at the weekend.“It’s important to me that management boards and senior executives contribute in emergencies, especially with respect to bonus payments,” Altmaier said in an interview with the Frankfurter Allgemeine Zeitung newspaper.(Updates with background on dividends from fifth 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.
(Bloomberg) -- The U.S. surpassed Italy in cases, with more than 80,700, and is poised to overtake China as having the most infections in the world.President Donald Trump offered a plan that may help restore normal business. U.S. stocks jumped on optimism the $2 trillion U.S. stimulus package will blunt the pandemic’s impact.China, where the outbreak began, will temporarily suspend the entry of foreigners holding valid visas and residence permits starting Saturday.Key Developments:Cases top 523,000; 23,000 dead, 122,000 recovered: Johns HopkinsU.S. fatalities top 1,000; confirmed cases in Canada surge 72%Fauci warns of potential for another cycle of infectionsWashington state’s new-case rate slowsChina’s Wuhan lockdown may delay feared second wave: studySpanish doctors are forced to choose who to let die from virusSubscribe to a daily update on the virus from Bloomberg’s Prognosis team here.Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts. For analysis of the impact from Bloomberg Economics, click here. To see the impact on oil and commodities demand, click here.U.S. Poised to Have World’s Largest Outbreak (5:06 p.m. NY)The U.S. has at least 80,703 confirmed cases of coronavirus, surpassing Italy and positioning the country to overtake China as the site of the world’s largest outbreak.The American tally was bolstered by a large jump in New York, which had 6,448 new cases Thursday, bringing the state’s total to 37,258. That accounts for almost half the outbreak nationwide, according to data collected by Bloomberg.New Jersey and California also saw large increases in patients, and smaller hot spots in states like Michigan and Illinois began to grow more quickly.Italian health officials reported 6,153 new cases Thursday, the most in five days, bringing the country’s total to 80,539. The outbreak in mainland China remains the largest globallyWashington’s New Cases Slow (3 p.m. NY)Washington state has seen a drop in the rate of new cases being reported, Governor Jay Inslee said at a press conference, led by improvement in three counties in near Seattle where the outbreak began a month ago. Other counties aren’t seeing the pace of new cases slow, he said.While hospitals are not yet full, the state -- which ranks fourth in U.S. cases -- needs to see a significant further reduction in cases in order to avoid running out of beds and equipment in the coming days, he said.“We should not be within 10,000 miles of champagne corks on this,” Inslee said. Without further decreases to the case count “a lot of people in the state of Washington are going to die.”Inslee called for a national system for buying personal protective equipment and other supplies in order to use the federal government’s buying power and avoid putting Washington in a “mad scramble” with all the other states for supplies.U.K. Helps Self-Employed Workers (2:30 p.m. NY)The U.K. government offered self-employed workers cash grants of as much as 2,500 pounds ($3,040) a month.Chancellor of the Exchequer Rishi Sunak announced the three-month plan, at a cost the Treasury estimates will be about 9 billion pounds, after his offer last week to pay a portion of citizens’ wages was widely criticized for omitting self-employed workers.About 95% of self-employed workers, 3.8 million people, will be eligible for the grants, Sunak said.Full story here.Latin Bank Offers Aid (2:30 p.m. NY)The Inter-American Development Bank will make $12 billion available to countries for responding to the crisis and its aftermath. That includes $8.8 billion for other purposes that the nations can redirect, and $3.2 billion added to the the 2020 lending program.The IDB wants to support the immediate public health response, safety nets for economically vulnerable people, aid for small- and medium-sized businesses and fiscal policies that support member countries.The Washington-based IDB provided loans and technical assistance in a region with chronic infrastructure and financial shortages.Trump Considers Plan to Rank Counties by Risk (2:15 p.m. NY)President Donald Trump said his administration is working on a plan that would rank U.S. counties into one of three categories as a step toward the relaxing the tight restrictions put in place to halt the spread of the coronavirus.The administration, using criteria developed based on expanded testing capabilities and in consultation with health officials, proposes to designate counties as high-risk, medium-risk and low-risk. This ranking will help local officials decide on maintaining, increasing or relaxing social distancing and other measures, the president said in a letter to U.S. governors.“Americans across the country are hoping the day will soon arrive when they can resume their normal economic, social and religious lives,” Trump wrote in the letter released by the White House.Read the full story hereItaly Virus Cases Rise, Fueled by Lombardy (1:11 p.m. NY)Italy reported its biggest rise in coronavirus infections in the past five days, as the disease spread further in the northern Lombardy region, even after weeks of rigid lockdown rules.The civil protection agency reported 6,153 new cases on Thursday, up from 5,210 a day earlier.Fatalities from the outbreak over the past 24 hours totaled 662, down from 683 for the previous day, according to figures provided at the agency’s daily news conference on Thursday. Confirmed cases in the country now total 80,539.Read the full store hereN.Y. Patients Staying on Ventilators (12:20 p.m.)Some New Yorkers are staying on ventilators as long as 30 days, dimming hopes for their recovery and adding to the shortage of the lifesaving machines, Governor Andrew Cuomo said.Cuomo reported 100 more fatalities, for a total of 385, as hospitals brace for more. The city is deploying refrigerated trailers for use as temporary morgues. Until the outbreak is under control, Cuomo said officials are focused on reducing the rate of increase, not the reducing the number of cases, so hospitals don’t run out of beds.New York added almost 6,500 cases, for a total of more than 37,000.China Blocks Foreigners (11:55 a.m. NY)China will temporarily suspend the entry of foreigners starting Saturday as cases worldwide surge, the Ministry of Foreign Affairs and National Immigration Administration said on its website.China has to take “necessary and temporary” measures in response to the current coronavirus situation, using practices of various countries as reference, the agencies said. Adjustments will be made according to the situation, they said.U.K. Police Get Extra Powers (11:50 a.m. NY)The U.K. government gave police strengthened enforcement powers to ensure people stay at home unless their trip is essential. From Thursday, the police may issue a penalty of 60 pounds ($73), rising to 120 pounds for second-time offenders.Those not paying the fine can be taken to court and police can arrest those who continuously refuse to comply.U.S. Delays New ID Deadline by Year (11:40 a.m. NY)The U.S. delayed by a year, until October 2021, the deadline for states to issue new identification documents that meet the federal Real ID standards. Chad Wolf, acting Homeland Security secretary, said states needed time because motor vehicle offices that issue driver’s licenses have been closed in response to Covid-19.U.K. Warns on ‘Coughing’ as Harassment (11:26 a.m. NY)The U.K. is ready to crack down on coughing as a way to threaten or intimidate police officers and shop workers. The nation’s prosecution office issued a statement after reports that emergency workers were coughed at by people claiming to be infected. That could lead to assault charges and two years in jail, the prosecution service said.Expo in Dubai Could be Delayed (11:26 a.m. NY)A global exposition set for Dubai in late October could be delayed for up to a year, a setback for organizers who for years have touted the event as a potential bonanza for the United Arab Emirates. Dubai has spent billions of dollars building hotels and facilities in anticipation of attracting 25 million visitors during the six-month event.A final decision must be made by member states of the Paris-based International Bureau of Expositions, which awarded the event to Dubai and the U.A.E. in 2013.Iran Bans In-Country Travel (10:15 a.m. NY)Iran banned travel between cities and ordered people to return to their hometowns or face fines after millions defied calls to stay indoors and went out to celebrate the Persian new year. President Hassan Rouhani warned of a second surge of the disease after new cases surged followed the holiday period.Emergency services and cargo vehicles are exempt from the travel ban, the semi-official Tasnim news agency quoted Iran’s police chief as saying.Europe Shies Away from Retooling Production for Gear (9:36 a.m. NY)The European Union signaled that efforts to increase the supply of medical gear will involve ramping up existing production capacity. The European Commission said converting production lines at the likes of automotive and aeronautics businesses “would be time-consuming and not always necessarily successful.” The EU’s executive arm commented after President Ursula von der Leyen and European Industry Commissioner Thierry Breton held a phone call with representatives of various businesses.U.K. Should Brace for $240 Billion Budget Deficit (9:28 a.m. NY)Britain’s budget deficit could easily exceed 200 billion pounds ($240 billion) in the coming fiscal year as the coronavirus crisis hammers the economy and forces the government to unleash a huge package of fiscal stimulus. The warning came Thursday from the Institute for Fiscal Studies.Caterpillar Withdraws Forecast, Halts Some Operations (9:11 a.m. NY)Caterpillar Inc. is suspending operations at some U.S. facilities and withdrawing its 2020 financial guidance. The heavy-equipment maker said Thursday that the virus is starting to affect its supply chain.U.S. Jobless Claims Surged to Record (8:31 a.m. NY)The number of Americans filing for unemployment benefits surged to a record 3.28 million last week. Initial jobless claims in the week ended March 21 were up from 282,000 in the prior week and more than quadruple the previous record of 695,000 in 1982, according to Labor Department data released Thursday. The figures date to 1967.Economists’ projections had ranged as high as 4.4 million.Faster Virus Tests (8:30 a.m. NY)Henry Schein said an antibody rapid blood test, known as Standard Q COVID-19 IgM/IgG Rapid Test, is now available. The test is intended to be administered at the point of care and delivers results within 15 minutes from a pinprick with no instrumentation required.Earlier, Robert Bosch GmbH said it developed a test that can diagnose Covid-19 in less than 2.5 hours. The new test uses the Vivalytic molecular diagnostics platform made by Bosch’s healthcare division, used in hospitals, laboratories and medical practices. Patients typically must wait one or two days before they get test results.Separately, U.K.-based Mologic Ltd. has sent prototypes of a 10-minute coronavirus test to laboratories for validation before it can begin full-scale manufacturing. The company and its partner, the Senegalese research foundation Institut Pasteur de Dakar, have developed a finger-prick test to determine whether a person had the illness and the state of their immune system. The company is also working on a separate saliva test to detect the presence of the virus.Walmart Hires Thousands (8:25 a.m. NY)Walmart Inc. has taken on 25,000 new employees and given offers to thousands more in the first week of a hiring push, as the biggest private employer in the U.S. scrambles to keep its shelves stocked and checkouts staffed.The retailer has compressed a hiring process that can often take two weeks into as little as three hours by eliminating formal interviews and written job offers.German Tour Operator TUI Said to Near State Aid (8:20 a.m. NY)TUI AG, the world’s biggest tour operator, is close to securing almost 2 billion euros ($2.2 billion) in government aid in what’s seen as a litmus test for Germany’s pledge to rescue businesses ravaged by the pandemic.The company and its adviser reached an agreement with Germany’s state-owned KfW development bank on the terms of loans earlier this week, said the people, who asked not to be identified because discussions are private. That financing package is now with TUI’s lending banks, which are expected to sign off in the coming days, they said.BOE Warns of Long-Term Damage; Holds Rates (8 a.m. NY)The Bank of England left rates unchanged, but said it’s ready to provide more support for the economy after warning that a very sharp reduction in activity was likely. The pound stayed stronger in a broad trend for a weaker dollar across global markets and gilts continued to gain.“Given the severity of that disruption, there is a risk of longer-term damage to the economy, especially if there are business failures on a large scale or significant increases in unemployment,” the central bank said.Ford Plans Gradual Restart of Plants (7:30 a.m. NY)Ford Motor Co. plans to resume production in Mexico on April 6, with some U.S. plants cranking up again about a week later. After halting North American production as of March 19, Ford said it’s aiming to restart production first in Hermosillo, Mexico, which builds the Fusion and Lincoln MKZ sedans.Ford then plans to restart production on April 14 at Michigan, Kentucky and Ohio plants that assemble profitable F-Series pickups and commercial vans. Other factories that make transmissions and press metal parts for those vehicles are due to resume that day.Powell Says Fed Will Keep Credit Flowing (7:18 a.m. NY)“We will keep doing that aggressively and forthrightly, as we have been,” Powell said in an interview on NBC Thursday. “When it comes to this lending we’re not going to run out of ammunition.” Over the past three weeks, the U.S. central bank has introduced an unprecedented series of measures pushing it deep into uncharted territory.Powell said the U.S. may well be in recession, but expects activity to resume and move back up in the second half of the year. He said “we would tend to listen to the experts” on when normal activity should resume and added that the virus would dictate the timetable.Spain Reports Fewer Deaths, Cases Surge (6:32 a.m. NY)Total cases rose to 56,188 from 47,610 and fatalities jumped by 655, fewer than on Wednesday, to 4,089. Hospitals in the country are struggling to cope with the surge.Europe Accounts for 7 out of 10 Virus Deaths, WHO Says (6:20 a.m. NY)The number of cases tripled in the past week in Europe, with the disease spreading faster in Spain, France, Germany and Switzerland, Hans Kluge, the World Health Organization’s director for Europe, said at a press briefing in Copenhagen. Italy’s infection rate has slowed slightly, but it’s too early to say the disease has peaked there, he said. The country has 6,200 infected health-care workers, he added.Kluge said Europe needs to attack the disease in solidarity, because if the European Union manages to fight it but it takes hold in eastern Europe, it will just come back.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) -- TUI AG, the world’s biggest tour operator, is close to securing nearly 2 billion euros ($2.2 billion) in government aid in what’s seen as a litmus test for Germany’s pledge to rescue businesses ravaged by the coronavirus pandemic.The company and its adviser reached an agreement with Germany’s state-owned KfW development bank on the terms of loans earlier this week, said the people, who asked not to be identified because discussions are private. That financing package is now with TUI’s lending banks, which are expected to sign off in the coming days, they said.Under the preliminary agreement, KfW would provide about 80% of the loans, with the commercial banks shouldering the remaining 20% as part of the state bank’s special program, said the people. Negotiations are ongoing and the exact structure and timing could still change, the people said.A TUI spokesman said the Hanover-based travel giant is in “constructive talks” regarding aid, while declining to provide details. TUI, which has so far scrapped all vacations through the end of April, said on March 15 it would apply for state guarantees following a collapse in sales.TUI shares traded 2.8% higher at 363.9 pence as of 12:31 p.m. in London, where they have their main listing.Governments in Europe and North America are crystallizing plans for bailouts as they become new epicenters for the virus. The U.S. Senate has passed a $2 trillion rescue plan that includes a $61 billion lifeline for struggling airlines and contractors. In the U.K., carriers will have to request bespoke aid beyond 330 billion pounds ($390 billion) of general loan guarantees to business.Read More: Desperate Airlines Turn to European Governments for SupportGermany this week signed off on taking on 156 billion euros of new debt as part of an unprecedented package to cushion economic fallout from the virus. It has also agreed to set up a 600 billion-euro fund to provide companies with loans and guarantees as well as buy stakes in stricken businesses.The package-holiday business in which TUI competes is highly seasonal, with northern hemisphere operators typically recording losses between October and March as they buy hotel capacity, and then generating a profit in the summer. The Covid-19 outbreak could mean the earnings peak is wiped out this year.TUI’s shares have lost almost two-thirds of their value since the start of the year, cutting its market value to 2.3 billion euros. Its credit rating is respectively five and six levels below investment grade at Moody’s Investors Service and S&P Global Ratings, while 300 million euros of bonds due in October 2021 are indicated at 66 cents on the euro, according to data compiled by Bloomberg.(Updates with share price in fifth 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.
Moody's Investors Service, ("Moody's") has today downgraded the corporate family rating (CFR) of the German tourism company TUI AG (TUI) to B2 from Ba3. Concurrently, the senior unsecured rating was downgraded to B2 from Ba3 and the probability of default rating (PDR) was downgraded to B2-PD from Ba3-PD.
Airlines fly into one of the bloodiest weeks for the industry, as they battle to survive travel restrictions and country lockdowns in the face of the coronavirus crisis.
(Bloomberg Opinion) -- ↵The coronavirus will leave no industry untouched but the impact is particularly acute for companies that depend on prompt payment from customers to fund their businesses.In sectors such as car making and the travel industry, it’s common for companies to hold little inventory and settle with suppliers long after they’ve received payment from their customers.As a result they often have what’s called negative working capital: Their trade payables exceed the sum of inventories and customer receivables. In other words, they owe more to their suppliers than their customers owe them.When revenues are growing, this is a big advantage. Cash pours into the business which can be used to fund investments.Customer payments and deposits effectively serve as a free form of finance and that float gets bigger as sales expand.It’s certainly a very efficient way to run a business — Amazon.com Inc. excels at it — but negative working capital can make a balance sheet look stronger than it really is. That’s because the effect is reversed when sales suddenly slow down or shrink. Suppliers still need paying but there’s little new customer cash coming in. As a result, cash rushes out the door. This is what threatens to happen now that much of the world is cooped up at home due to coronavirus.“In periods in which our vehicle shipments decline materially we will suffer a significant negative impact on cash flow and liquidity as we continue to pay suppliers for components purchased in a high volume environment during a period in which we receive lower proceeds from vehicle shipment,” Fiat Chrysler Automobiles NV warned in its annual report. A rule of thumb is that French, Italian and U.S. automakers have negative working capital, while their German peers do not. A six-week production hiatus caused by strike action lowered General Motors Co.’s free cash flow by $5.4 billion.Optimizing working capital has been a key focus for carmaker Peugeot SA and boss Carlos Tavares repeated the trick when he acquired Opel/Vauxhall from GM.Like merger partner Fiat, Peugeot has now been forced to shutter its European car plants. If sales slump for a prolonged period, its 17 billion-euro ($19 billion) cash buffer could dwindle.Tour operators are accustomed to large swings in working capital: They typically get paid by customers ahead of the busy summer season and pay their suppliers afterwards.(1) Bank overdrafts can tide them over during the winter period when cash tends to be lower.Still, a sudden slowdown in demand can upset those calculations, as Thomas Cook Group Plc discovered last year. Customers delayed bookings, suppliers tightened credit terms and the U.K. tour operator went bust.Shares in rival TUI AG slumped this week after it suspended the vast majority of its travel, cruise and hotel operations and said it would apply for state-aid guarantees. The company has 1.4 billion euros in cash and available banking facilities but this is far exceeded by a deeply negative working capital position — at the end of December it held about 2.9 billion euros of advance payments from customers.The cash spring, once a big advantage for many firms, could be about to recoil. (1) They are however required to make pre-payments to hotelsTo contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: Chris Hughes at firstname.lastname@example.orgThis 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.
European stocks traded sharply lower on Monday as the impact of the spreading coronavirus on the world economy offset dramatic efforts by the U.S. Federal Reserve to limit the fallout.
(Bloomberg) -- Airlines worldwide will shrink operations to only a trickle of flights, severing global links and putting hundreds of thousands of jobs at risk as they fight to preserve cash and survive the coronavirus pandemic.British Airways owner IAG SA will slash capacity for April and May by at least 75% amid the collapse in demand and government restrictions aimed at slowing the disease. Partner American Airlines Group Inc. will cut international long-haul flights by the same degree in the biggest reductions by a U.S. carrier.Ryanair Holdings Plc and Air France-KLM announced even deeper cuts at 80% and 90% respectively, and the Irish firm said its entire fleet may be grounded. Paris’s two biggest airports plan to shutter terminals as travel hubs stand almost empty, while TUI AG, the largest vacation firm, will suspend the bulk of its hotel and cruise-ship operations.Job cuts mounted as Norwegian Air Shuttle, already mired in debt and losses, cut 7,300 posts, and Virgin Atlantic Airways offered staff 12 months of leave.The actions reflect mounting fears that Covid-19 threatens the survival of even healthy travel companies as people stay home and the disease wipes out economic growth. White House officials are looking at letting cash-strapped carriers keep some taxes and passenger fees, while European governments are exploring measures that could go as far as partial nationalization.“Coordinated government and industry action is needed now if catastrophe is to be avoided,” the Sydney-based CAPA Centre for Aviation said Monday. Otherwise, “emerging from the crisis will be like entering a brutal battlefield, littered with casualties.”Many airlines have probably substantially breached debt covenants already, and the pandemic will bankrupt most carriers worldwide by the end of May without coordinated action, the report said.Fallout from the outbreak is sparing few airlines anywhere.Delta Air Lines Inc. and United Airlines Holdings Inc., the biggest U.S. network operators alongside American, further reduced schedules. And in Australia, Qantas Airways Ltd. said it plans a fourth round of capacity cuts after the government forced anyone arriving from overseas to isolate themselves.IAG, which owns airlines in Spain and Ireland as well as BA, will freeze hiring and veteran Chief Executive Officer Willie Walsh, who was due to stand down this month, will delay his retirement. Like many airlines the company said it’s no longer possible to provide estimates for full-year earnings.Pay CutAt Air France-KLM, CEO Ben Smith addressed staff in a video following an extraordinary board meeting and talks with the French and Dutch governments, which hold stakes in the carrier, on support that could include postponing taxes, fees and charges.“We don’t know when this will end,” said Smith, who is taking a 25% pay cut. The company has begun talks with unions on shorter working hours and has pulled wide-body jets including Airbus SE A380s. The superjumbo is also suffering a cull elsewhere, with Dubai-based Emirates grounding 29.Global airport operator Aeroports de Paris said that in addition to closing some Paris terminals and suspending airline fees for parking jets, it has shut shut down hubs in Amman, Jordan, Ohrid and Riga, Latvia.Cuts at Finnair Oyj will be among the steepest, with the carrier eliminating about 90% of normal capacity from April “until the situation improves.” It had already taken a battering from the earlier collapse in Asian travel after following a strategy focused on serving China, Japan and South Korea.Companies have sought to provide reassurance about their liquidity, with EasyJet Plc saying it has a 1.6 billion-pound ($2 billion) cash balance, an undrawn $500 million revolving credit and aircraft worth more than 4 billion pounds. Europe’s second-biggest discounter said it expects to ground most planes while operating what it called “rescue flights” for short periods.Ryanair said it has 4 billion euros ($4.5 billion) in cash and will also defer capital spending and share buybacks to bolster reserves.TUI fell as much as 39% in London, the most ever, after sayingit was winding down travel. The group’s airlines are nowfocused on bringing people home, and the last two or threecruise ships will stay in port once they dock. Destinations where some outbound flights continue include Egypt, Cape Verde and Mexico.Virgin Atlantic Airways Ltd. chief Shai Weiss has written to U.K. Prime Minister Boris Johnson saying British carriers and airports may need credit of 7.5 billion pounds. The airline will have terminated four-fifths of daily services by the end of next week and could ground all-but 15% of its planes in April.Job cuts are racking up, most of them temporary for now. The ax has come down hardest in Scandinavia, with Norwegian Air laying off 90% of staff, the same proportion as at tri-national rival SAS AB, where up to 10,000 people will be sent home as it cancels most flights.Elsewhere, recruitment freezes have become the norm. Virgin’s staff will also be required to take eight weeks of unpaid leave over the next six months, and it’s touting voluntary severance packages and year-long sabbaticals.American announced additional cuts hours after President Donald Trump extended a ban on some flights into the U.S. to include those from the U.K. and Ireland, while U.S. capacity will fall 20% in April and 30% in May from a year earlier. The carrier is also cutting flights to numerous cities in South America, Australia, New Zealand and Asia.United will reduce its capacity about 50% in April and May, deepening previous cuts, the company said late Sunday. Executive salaries will be halved and talks will begin with unions to lower wages, with CEO Oscar Munoz warning that the process will “be painful for all of us.”(Adds Norwegian Air, Virgin Atlantic plans from fourth paragraph. A previous version of this story corrected the spelling of Covid-19.)\--With assistance from Ania Nussbaum, Angus Whitley, Siddharth Philip and Richard Weiss.To contact the reporters on this story: Mary Schlangenstein in Dallas at email@example.com;Anurag Kotoky in New Delhi at firstname.lastname@example.org;Christopher Jasper in London at email@example.comTo contact the editors responsible for this story: Brendan Case at firstname.lastname@example.org, ;Anthony Palazzo at email@example.com, Tara Patel, Andrew NoëlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
LONDON/PARIS, March 16 (Reuters) - Airlines made unprecedented cuts to flights, costs and staffing on Monday, and stepped up calls for emergency government aid, as coronavirus lockdowns and new travel restrictions hit more major routes. Already battered shares in British Airways parent IAG , easyJet and Air France-KLM plunged again as they scrapped most of their flights for the coming weeks, joining other major carriers that are all but halting operations in the face of the pandemic. "It is now clear that the coronavirus is by far the biggest crisis in the history of aviation," Finnair Chief Executive Topi Manner said as the carrier announced a 90% capacity reduction and its second profit warning in three weeks.
(Bloomberg Opinion) -- In the wake of the coronavirus, enticing people to set a course for adventure on a floating mega-palace will be a difficult proposition.The public image of cruises, which for many older people are still associated with the 1970s American TV series “The Love Boat,” has been tarnished by the pandemic. On Thursday, Carnival Corp. said it would suspend all voyages by its Princess Cruises division, which suffered the only known outbreaks of coronavirus at sea, for 60 days. Cruising divides opinion at the best of times. Fans see it as a fun, hassle-free and cost-effective way to explore several often sun-drenched destinations in one go, particularly when food, drinks and entertainment are thrown in. For others, it conjures up a horror of claustrophobia, seasickness and way too much proximity to other holiday makers. Headlines about passengers stuck on ships turned away from ports for fear there may be a deadly virus on board will only serve to reinforce their aversion.The images of Carnival’s majestic Grand Princess, a behemoth that spent days circling the waters around San Francisco because 21 passengers tested positive for the virus, will be particularly damaging. As will an unprecedented warning from the U.S. State Department not to take cruises because they hold an elevated risk of Covid-19 infection and potentially landing in quarantine on a foreign shore. After all, North America is the world’s biggest cruise market by some distance.It’s hard to see how a $60 billion industry that’s already made such an effort to remake its image as more than a retirement pastime can easily overcome this hit. It still depends in large part on passengers over 50 who may be more likely to think twice getting on board. And before embarking, those over 70 may even be required to present a doctor’s note that they have a clean bill of health, not exactly reassuring for a carefree getaway. But first for the immediate pain. The global pandemic could hurt the cruise industry worse than both the 9/11 terrorist attacks in 2001 and the financial crisis of 2008-2009, according to Brian Egger, an analyst at Bloomberg Intelligence. Even before Carnival’s decision to suspend its 18 Princess vessels, he was estimating that revenue yields, a measure that reflects both pricing and occupancy leverls, could fall by as much as 20% this year.Richard Clarke, an analyst at Bernstein, estimates that most bookings for travel packages are down around 40% across the market. The drop off in cruise demand may be even worse.That’s a worry for the big U.S. operators — Carnival, Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. — as well as TUI AG, the German tour operator that’s been developing its ocean-vacation arm to give it an edge against rivals. Carnival’s response is a dramatic one. But more lines could take this option, both to stem losses from operating half-empty vessels and to give them a very deep clean as a way to reassure holidaymakers that they are safe once the pandemic has subsided. On Friday, travel-to-insurance group Saga Plc said it was spending its cruise operations, cutting profit by up to 15 million pounds ($18.9 million).Alternatively, cruise operators could look to continue filling vessels with deep discounts. Analysts at Nomura have estimated that pricing could drop by at least 10% this year. That may encourage enthusiasts to take to the high seas, but at a lower profit. Yet as the pandemic spreads, and people around the world question how far from home they’re willing to travel, it’s unclear just how many takers there will be. And that’s before any official travel restrictions, such as President Donald Trump’s decision to temporarily curtail European travel to the U.S. It’s understandable that shares have tumbled since the coronavirus took hold.To weather the shock, Royal Caribbean and Norwegian have boosted liquidity in recent days. Even so, Royal Caribbean looks to face the most difficult challenges ahead, with net debt reaching 3.7 times Ebitda at the end of this year, according to the Bloomberg consensus of analysts’ estimates. That’s compared to Norwegian at 3.3 times and Carnival at 2.5 times. The industry may recover from the latest shock. After all, demand returned after the Costa Concordia disaster in 2012, when 32 people died after the cruise ship ran aground off the Italian coast. But it may never be the same again.Previous contagious outbreaks had prompted the industry to tighten hygiene standards. It will have to elevate them further given the spotlight on the dangers of thousands of people living in close quarters. Additional steps, such as more stringent screening of guests and staff, could raise expenses. Cruise lines will likely look methodically to ensure they have agreements with all ports on every itinerary so ships with sick passengers can dock. Putting such arrangements in place would take time and involve more cost.With the focus on the heightened risks faced by older travelers, especially those with underlying health conditions, cruise operators will need to intensify efforts to capture younger consumers, with all the associated marketing expense and investment in amenities to attract them. TUI Cruises is already focused on family vacations, while Walt Disney Co. has plans to almost double its fleet to seven ships by 2023. Virgin Voyages, Richard Branson’s over-18s luxury cruise offering, recently took delivery of its first liner, boasting Instagrammable spots, yoga classes and a festival-like lineup of shows, although it has postponed the Scarlet Lady’s maiden voyage.Winning over young adults won’t necessarily be easy. Cruise liners are associated with a list of environmental problems. So while “cruise shaming” hasn’t yet caught on, expect more focus on the industry’s impact on the planet, as well as its role in over-tourism in cities from Barcelona to Venice and Copenhagen.For the time being though, cruise operators’ main focus will be keeping passengers healthy and making sure that any ships that do sail are as full as possible. With ever more alarming headlines, that means more struggles for the Love Boat.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: Melissa Pozsgay at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at 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 coronavirus epidemic could have a worse impact on stocks and the travel industry than the SARS outbreak, Cowen analysts are warning.
(Bloomberg Opinion) -- The biggest coronavirus risk to retailers on both sides of the Atlantic may turn out to be empty stores, rather than empty shelves.As the outbreak has spread from Asia to Europe and the U.S., concern has shifted from the impact on supply chains because of closed Chinese factories to the potential of the deadly disease to put a sudden brake on consumer spending.While fashion chains and do-it-yourself merchandisers rely less on China today than they did a decade ago, it’s inevitable there will be some supply problems. The country is still the world’s biggest clothing exporter, and it makes everything from paddling pools to power tools. Associated British Foods Plc, owner of cheap chic fashion chain Primark, and U.S. athletic apparel maker Under Armour Inc. have recently warned of the risks.A full understanding of the impact will only come later. Many spring fashions and home furnishings were shipped before the outbreak, and there is evidence that factories are returning to work. But the closures in February will mean that some orders for the summer and potentially even the back-to-school shopping seasons may not reach stores in time. For apparel retailers this is a particular risk. If say, pastel hued coats designed to be worn in the spring arrive when the weather is warmer, those coats will need to be discounted to sell.But some canceled orders may be a blessing.The worry now is not that shoppers won’t find what they are looking for, it’s that they won’t hit the mall and spend time browsing for it in the first place. Almost half of U.K. retailers surveyed by consultancy Retail Economics and law firm Squire Patton Boggs had already seen a negative impact on their sales, with three quarters expecting revenue to be hit if the virus continues, according to a report published on Wednesday.This adds to anecdotal evidence, from some retailers finding trading tougher than expected to others seeing footfall weaken. In the U.K., traffic to stores held up until Thursday, but as bad news about the virus intensified, shopper numbers dropped, particularly in malls. Even for a Tuesday evening in March, London’s Oxford Street seemed unusually quiet yesterday. Expect the same pattern in the U.S. as new cases pop up in new cities. It would be understandable if people hesitate to head to the mall and avoid lingering at the supermarket after filling their cart with hand sanitizer, toilet paper and food staples for a month. After all, employers such as Amazon.com Inc. are telling workers to limit non-essential travel and governments in countries like France are banning events for more than 5,000, leaving worried citizens to wonder how many people is too many people in one place. And with Covid-19’s symptoms silent for a long incubation period it can be tempting to avoid public spaces altogether. Reasons for splurging at the shops are also evaporating as major events get canceled or delayed, and by extension people contemplate skipping parties, weddings or graduations. For example, tech giants including Facebook Inc. and Twitter Inc. have pulled out of the South by Southwest tech conference in Austin, Texas. That means purchases that would have been made — from trendy sneakers to wear at SXSW to the suit to impress at any number of industry conferences — may be lost.Travel is another boon to spending that risks being sapped. Tour operator TUI AG said holiday bookings have weakened over the past week. Unless they come back later on, that means fewer bikinis and tubes of suntan lotion filling shopping carts. If the problem is consumers hibernating, then online retailers such as Amazon and Britain’s Asos Plc, could be protected. But if the issue is a lack of stimulants to spending, no one will be spared. There’s also the knock on effect on restaurants and bars if consumers stay home.There may be some offsetting factors. For example, Brits and Americans have been bulk buying essentials in retailers such as Costco Wholesale Corp. Long-life milk, nappies and bottled water are all in demand at supermarkets. At the other end of the spectrum, shares in Peloton Interactive Inc. defied the market rout last week on hopes that more fitness fanatics would work out at home, rather than go to the gym.Any short-term silver linings will be lost if consumers simply hunker down. The risk of a pandemic, as well as market uncertainty or worse, are hardly conducive to splashing out. Britons had started spending again after pulling in their purse strings during the impasse over their departure from the European Union. In contrast, U.S. consumer confidence has remained remarkably robust. But cracks are emerging. U.K. consumer confidence dropped for the first time in five months, according to YouGov and the Centre for Economics and Business Research. Meanwhile, in the U.S., the Bloomberg Weekly Consumer Comfort Index suffered its largest one-week drop since late October in the week ending Feb. 23.As with trading, it’s hard to separate out what’s due to the virus and what’s down to other factors. But either way, it’s a timely reminder that faced with an epidemic, consumer demand also isn’t immune.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: Melissa Pozsgay at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at 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.
(Bloomberg Opinion) -- The deadly coronavirus has spread to European holiday destinations. That’s of huge concern to a travel industry that will soon be gearing up for its peak summer season.When the outbreak emerged in China, worries centered on airlines and hotels in that region, as well as valuable outbound tourism from the country. But now the disease has shown up in Italy, and notably in Spain’s Canary Islands, shorter haul European travel is being drawn into the fray.Shares in TUI AG, Europe’s biggest travel operator, have fallen about 18% this week, while those of the budget airlines EasyJet Plc and Ryanair Holdings Plc are down by about 20%.Already reeling from the “flight shame” phenomenon, which has seen some environmentally conscious consumers shunning air travel, and disruption from grounded Boeing 737 Max jets, a global viral outbreak will have a profound effect on the confidence of travelers and vacationers everywhere.Europe’s peak period for early holiday bookings, stretching from Boxing Day to the third week of January, ended just as the virus was emerging. The first Saturday in January is known as “Sunshine Saturday,” when holidaymakers hit the travel agents or, more probably, buy their flight and accommodation on the internet.But even booked trips are at risk of cancellation as Europeans digest what’s happening in the Spanish holiday island of Tenerife, where 700 people have been contained in a hotel after several guests were found to have the virus. What’s more troubling for the travel industry is that most of their profit doesn’t come from early bookers, but rather from people who are buying holidays from now onward.The outbreak in northern Italy is equally difficult for the airlines (it is a big part of Ryanair’s business) and travel companies, but that country tends to offer more upmarket destinations. The Canary Islands and mainland Spain — where some cases have also been identified — are firmly in the middle and mass markets, so the impact there could be bigger. TUI AG’s RIU hotel chain has a strong presence in Spain and the Canary Islands.Cruises, obviously, have been hit hard by the outbreak, given the pictures of passengers quarantined on ships being beamed around the world. That’s another big worry for TUI, which which has been building its ships business. Analysts at Morgan Stanley estimate that the volume of bookings has fallen by double digits across the whole of the cruise market in the U.S. and Europe in recent weeks.If the outbreak is contained relatively soon, the effect on tour operators might be short-lived. Holidaymakers who have held off from booking should come back to the market. But if infections continue beyond May, as looks increasingly likely, the industry’s problems will intensify.At this point, the travel groups are usually snapping up airline capacity for the peak summer months. As they make all of their profit during this period, a prolonged outbreak now would be doubly damaging. One poor summer season in 2018, because of a European heatwave, helped to sink the British travel giant Thomas Cook. That company was also burdened by more than 1 billion pounds ($1.3 billion) of debt, but it’s fate underlines just how dependent the travel industry is on the traditional beach getaway.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at 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.
European stocks rebounded on Tuesday in a broad-based advance, with the travel sector rallying as tour operator Tui demonstrated how it has benefited from the collapse of a rival.
The roller-coaster ride of NMC Health continued on Tuesday after a private equity group tersely dismissed takeover speculation.
TUI AG on Tuesday widened its full-year profit forecast due to the grounding of Boeing Co.’s (BA) 737 MAX aircraft, as it reported a slightly narrowed net loss for the first quarter of the fiscal year.