AIR.PA - Airbus SE
| Previous close | 52.20 |
| Open | 54.71 |
| Bid | 0.00 x 0 |
| Ask | 0.00 x 0 |
| Day's range | 50.12 - 54.97 |
| 52-week range | 48.12 - 139.40 |
| Volume | 4,727,133 |
| Avg. volume | 2,693,646 |
| Market cap | 39.327B |
| Beta (5Y monthly) | 1.29 |
| PE ratio (TTM) | N/A |
| EPS (TTM) | -1.75 |
| Earnings date | 29 Apr 2020 |
| Forward dividend & yield | N/A (N/A) |
| Ex-dividend date | 20 Apr 2020 |
| 1y target est | 120.82 |
- Bloomberg
EasyJet Founder Escalates Feud With Board Over Jet Order
(Bloomberg) -- EasyJet Plc’s founder escalated his feud with the board, calling for the ouster of a director in a bid to pressure the discount airline into canceling a 4.5 billion-pound ($5.6 billion) aircraft order.Stelios Haji-Ioannou, EasyJet’s biggest owner with a 34% stake, proposed a general meeting to remove director Andreas Bierwirth, according to a letter sent late Wednesday to the airline’s chairman, John Barton. He threatened to challenge one non-executive director every seven weeks, tying up the board with a series of cumbersome and divisive general meetings until it succumbs.Haji-Ioannou, who has long opposed buying new aircraft, this week turned up the heat on a low-simmering campaign to halt the purchase of more than 100 Airbus SE narrow-body jets. The 53-year-old entrepreneur, emboldened by the coronavirus crisis that’s suddenly turned large spending commitments into a millstone, on Sunday demanded the deal for A320-family planes be terminated.“The board is focused on managing the unprecedented challenges facing the airline and the aviation sector as a whole,” EasyJet said in response to Haji-Ioannou’s letter. “We believe that holding a general meeting would be an unhelpful distraction from tackling the many immediate issues our business faces.”EasyJet shares fell 5.4% in London. The stock has declined 65% this year. The airline said Thursday in a stock exchange filing that the board was considering the contents of Haji-Ioannou’s letter and “further announcements will be made as appropriate.”Bloomberg News reported on Wednesday that EasyJet is considering options including raising new debt and equity to provide a buffer against the downturn, which has forced the U.K. airline to ground its fleet.The U.K. carrier is exploring various fundraising scenarios, including commercial and government sources, as well as a delay in plane orders to conserve cash if needed for a longer-term downturn, people familiar with the matter said, asking not to be named because the discussions are confidential. The airline would prefer loans to selling new shares, one of the people said.EasyJet, which is seen as one of the European airlines better-equipped because of its existing cash and credit lines, is discussing the best options to navigate the pandemic-related slowdown and traditionally slower winter season, the people said.The carrier said it had received confirmation Thursday that it is eligible for loans under the Bank of England’s Covid Corporate Financing Facility.Adding liquidity would fortify EasyJet as it digs in for an undetermined period with little revenue. The International Air Transport Association this week warned that airlines will burn through as much as $61 billion worldwide in the second quarter as travel hits bottom.Haji-Ioannou has also called on the company to raise 600 million pounds in equity through a rights issue to existing shareholders. He quit the board in 2010 in a dispute over growth, and has consistently objected to the airline’s growth plans.“There is no doubt in our mind that all airlines have to attempt to delay all capex in the immediate future,” Bernstein analyst Daniel Roeska wrote in a reasearch note. He said he’s uncertain how practical it would be to cancel the order outright, given the potential penalties. “From a strategic point of view, we would see the new aircraft strengthening EasyJet’s long term position.”(Updates with EasyJet statement about access to loan in ninth 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.
- Reuters
Planemakers brace for sharp cuts in wide-body output: sources
Planemakers are looking at drastic cuts in wide-body production amid a slump in demand for the industry's largest jetliners, manufacturing and supplier sources said on Thursday. Deliveries of long-range jets like the Boeing 777 or 787 and Airbus A350 or A330 have been particularly badly hit as airlines seek deferrals and many withhold progress payments. "At a minimum, the (Boeing ) rate could fall by at least half," one industry source said, speaking on condition of anonymity.
- Reuters
Planemakers brace for sharp cuts in wide-body output - sources
Planemakers are looking at drastic cuts in wide-body production amid a slump in demand for the industry's largest jetliners, manufacturing and supplier sources said on Thursday. Deliveries of long-range jets like the Boeing 777 or 787 and Airbus A350 or A330 have been particularly badly hit as airlines seek deferrals and many withhold progress payments. "At a minimum, the (Boeing ) rate could fall by at least half," one industry source said, speaking on condition of anonymity.
- Bloomberg
Richard Branson Wants a Virgin Atlantic Bailout. Really?
(Bloomberg Opinion) -- In 2017, the British billionaire Richard Branson agreed to cut his stake in Virgin Atlantic Airways Ltd. to just 20% by selling one-third of the airline to Air France-KLM. In December, he had a change of heart about that 220 million-pound ($274 million) deal, and opted to keep his shareholding in the company he founded at 51%. America’s Delta Air Lines Inc. owns the other half. Branson has referred to the transatlantic carrier as “one of my children”. But with most of the Virgin Atlantic fleet now grounded because of the coronavirus restrictions, he probably wishes he’d taken Air France’s money. The company is now consuming cash at a rapid clip.To help alleviate a financial crunch, Virgin Atlantic is calling on Boris Johnson’s British government to provide 500 million pounds of government-backed loans and credit guarantees, so that credit card processors don’t hold onto its cash. Airbus SE and Rolls-Royce Holdings Plc, which respectively sold planes and engines to Virgin Atlantic, have also been lobbying the U.K. on Virgin Atlantic’s behalf, the Financial Times reported.It’s hard to fathom why Johnson would throw Virgin Atlantic a lifeline before its American and British Virgin Islands domiciled shareholders have reached deeper into their own pockets. Branson himself is worth $5.2 billion, according to the Bloomberg Billionaires Index.So far, the tycoon has injected $250 million into his various Virgin companies, of which more than $100 million has gone to the airline, according to Sky News. But that clearly isn’t enough. While Virgin Atlantic’s financial performance may have improved before the coronavirus hits, in total it lost more than $100 million during 2017 and 2018 — the two most recent years for which its accounts are available.That’s one reason its balance sheet is weaker than its European peers. Lease-adjusted net debt was five times higher than a comparable measure of earnings, according to the latest group accounts (which includes the travel operator Virgin Holidays). Air France-KLM — by no means the strongest airline financially — has net debt of 1.5 times the same earnings measure. While Virgin Atlantic had almost 500 million pounds of cash at the end of December 2018, much of that money came from customers paying for tickets long before they traveled. Its current liabilities far exceeded its current assets, which is a problem if customers start asking for their money back because they can’t fly.It’s hardly surprising that Airbus and Rolls-Royce are taking Branson’s side, but neither of them were under any obligation to sell aircraft and equipment to a financially stretched airline. Virgin Atlantic had 2.6 billion pounds of future capital commitments for things like planes and engines, according to the 2018 accounts, a pile it added to last summer by placing an order for 14 Airbus A330neos.The parent company, Virgin Travel Group Ltd, further extended itself by providing about 40 million pounds of funding to a regional U.K., airline Flybe Ltd, which subsequently went bust. Pandemics are a known risk when you’re running an airline, but nobody could anticipate a shock as widespread and potentially long-lasting as this. So some government assistance is probably justified — in view of the roughly 8,500 jobs at stake. However, the British government’s offer to cover 80% of the wages of furloughed workers is already pretty generous; Virgin Atlantic’s yearly wage bill is more than 300 million pounds.It’s harder to understand why a government should provide loans or guarantees to Virgin Atlantic, when its shareholders or commercial lenders don’t seem willing to — beyond what Branson has chipped in.In fairness, the other big shareholder, Delta, is also in a tight spot. It’s burning through about $50 million of cash a day and Standard & Poor’s, a credit rating agency, has downgraded its debt to junk. However, the U.S. airline successfully extended its credit lines and its government has promised $50 billion in assistance for the industry. Delta’s market value remains above $15 billion. If Branson is short of ready cash, there are other assets he could perhaps monetize, including a majority stake in space company Virgin Galactic Holdings Inc., whose market capitalization is a lofty $2.9 billion. If no more money is forthcoming from the owners, the British government should insist that Branson dilutes his ownership of Virgin Atlantic as originally planned; only this time by signing over the equity to taxpayers.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Dubai Moves to Shield Prized Emirates Airline From Virus Fallout
(Bloomberg) -- Over the course of more than three decades, Dubai has morphed from distant desert outpost into business metropolis, relying on state-owned airline Emirates to funnel many millions of travelers through the bustling hub each year. Now that the coronavirus has forced the carrier to suspend operations, the government is quickly swooping in to protect its most important growth engine.Dubai’s deputy ruler, Sheikh Hamdan bin Rashid Al Maktoum, said on Tuesday that the state will grant unspecified financial aid to Emirates, and that the government is committed to providing the full support by injecting fresh capital. It’s among the first state-sponsored bailouts of a carrier due to the coronavirus, which has upended the industry on an unprecedented scale.Emirates is the most visible emblem of Dubai’s transformation over the years, starting out with a pair of used aircraft in the mid-1980s to become an aviation force unmatched in global reach and boasting the biggest fleet of wide-body aircraft by far. Emirates has more than 100 Airbus SE A380s in operation alone, which rain down around the clock on Dubai International, the busiest airport by international traffic and a key transfer hub for global travel.Now Emirates, like most other airlines around the world, has been forced to ground virtually its entire passenger fleet after countries sealed off access to fight the virus. That has dramatically suffocated demand, which was already in decline as a depressed oil price weighed on corporate travel. Tourism from China also took a hit after the virus first erupted there late last year.“We don’t know how much demand is going to come back and when,” said John Strickland, an independent aviation consultant at JLS Consulting in London. “Emirates and other airlines will be carrying overcapacity for quite some time.”Airlines have been particularly hard hit by the abrupt collapse in air travel as countries lock down to slow the spread of the virus. The International Air Transport Association, which represents 290 airlines around the world, estimates the industry may suffer more than $250 billion in lost revenue this year. Carriers like Deutsche Lufthansa AG and EasyJet Plc have grounded their fleets, and many carriers have called on government aid to help them weather the crisis.Emirates is the largest of the major Middle East carriers, which also include Qatar Airways QCSC and Etihad Airways PJSC. Qatar said last week that it has maintained about a third of its operating schedule, in part because the country’s flag carrier has a more diverse fleet that also includes narrow-body airliners. Emirates, by contrast, only flies the biggest category of jets, including 115 A380s, which most carriers have mothballed for the time being.The three Middle East airlines are all state owned, giving them a potential advantage in swiftly securing bailout packages. In Europe, carriers from Air France-KLM Group to Lufthansa have asked for aid, while the massive U.S. stimulus package also includes support for the ailing industry. Airbus has said that while it doesn’t require state aid for now, it supports airlines’ efforts to secure government lifelines.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Reuters
Airbus struggles to lift crisis-hit jet output - sources
PARIS/TOULOUSE (Reuters) - Europe's Airbus is grappling with labour and supply chain shortages and may only be able to restore aircraft production to some 10-20% of normal levels for now because of partial shutdowns, industry and union sources said. The European planemaker, whose factories are spread across Europe, restored output at French and Spanish plants a week ago after a four-day shutdown. On Monday it announced a new closure of Spanish plants that make tail sections of Airbus jets.
- Reuters
Airbus struggles to lift crisis-hit jet output
PARIS/TOULOUSE (Reuters) - Europe's Airbus is grappling with labor and supply chain shortages and may only be able to restore aircraft production to some 10-20% of normal levels for now because of partial shutdowns, industry and union sources said. The European planemaker, whose factories are spread across Europe, restored output at French and Spanish plants a week ago after a four-day shutdown. On Monday it announced a new closure of Spanish plants that make tail sections of Airbus jets.
- Yahoo Finance UK
Some of the UK's biggest firms are pooling resources to build NHS ventilators
UK government has ordered 10,000 ventilators from industrial consortium including Airbus, Bae Systems, Meggit, Ford and Rolls-Royce.
- Bloomberg
SoftBank Drops 10% After OneWeb Files For Bankruptcy Protection
(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.
- Bloomberg
U.S. Infections Top 100,000; L.A. Warns of Surge: Virus Update
(Bloomberg) -- The U.S. became the first country to reach 100,000 coronavirus cases. Italy had its deadliest day with almost 1,000 fatalities. British Prime Minister Boris Johnson and his health secretary tested positive.President Donald Trump ordered General Motors to start making ventilators by invoking a Cold War-era law. Toyota’s idled U.S. manufacturing facilities will make much-needed face shields and masks.New York Mayor Bill de Blasio said new infections will be “astronomical.” Los Angeles Mayor Eric Garcetti warned his city may see a New York-like surge in less than a week.Key Developments:Cases top 585,000; 26,800 dead, 130,000 recovered: Johns HopkinsU.S. cases top 100,000, more than Italy, ChinaU.S. ramps up virus testing, but demand still outpaces supplyWorkers critical to world’s food supply falling illU.K. orders unprecedented shutdown of housing marketTokyo braces for critical weekendFrom Spain to Germany, farmers warn of fresh food shortagesSubscribe 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. Becomes First Nation With 100,000 Cases (5:27 p.m. NY)The U.S. became the first country to surpass 100,000 confirmed cases of the coronavirus on Friday, a day after it overtook China to become the largest outbreak in the world. America’s most prominent hot spots are New York and New Jersey, which together account for half the country’s total cases. California has more than 4,000.L.A. Warns of New York-Level Surge in Five Days (5:06 p.m. NY)Los Angeles could see a coronavirus surge similar to New York City’s in five days if the spread continues at the rate it’s been going, Mayor Eric Garcetti said.“We will have doctors making excruciating decisions,” Garcetti said at a press briefing alongside Governor Gavin Newsom. They spoke in front of the U.S. Navy hospital ship Mercy, which docked in Los Angeles to lend extra medical space for non-coronavirus needs. It will be the largest hospital in the city, Garcetti said.Rhode Island Stops Cars With N.Y. Plates (5 p.m. NY)Rhode Island police, aided by the National Guard, on Saturday will conduct house-to-house searches to find people who traveled from New York to demand they begin 14 days of self-quarantine. State police are already stopping cars with New York license plates.“Right now we have a pin-pointed risk,” Governor Gina Raimondo said. “And that risk is called New York City.”Raimondo, a Democrat, said she consulted lawyers and while she couldn’t close the border, she felt confident she could enforce a quarantine. Many New Yorkers have summer houses in the state, especially in tony Newport, and the governor said authorities would be checking there.Trump Signs $2 Trillion Stimulus Bill (4:47 p.m. NY)President Donald Trump signed the largest stimulus package in U.S. history, a $2 trillion aid bill intended to rescue the economy. The plan will provide a massive injection of loans, tax breaks and direct payments to large corporations, small businesses and individuals whose revenue and income have plummeted under social distancing restrictions.Read full story hereFour Die on Holland America Cruise Ship (4:30 p.m. NY)Carnival Corp.’s Holland America line said four passengers died on its Zaandam ship, which has had an outbreak of flu-like symptoms on board, including at least two confirmed cases of Covid-19. The cruise line said the passengers were “older” but didn’t say how they died.The Zaandam, currently near Panama, was still at sea when cruise companies halted new voyages earlier this month.Trump Orders GM to Make Ventilators (4 p.m. NY)President Donald Trump ordered General Motors Co. to immediately begin making ventilators, invoking a Cold War-era defense act amid productive talks with the automaker.“Our negotiations with GM regarding its ability to supply ventilators have been productive, but our fight against the virus is too urgent to allow the give-and-take of the contracting process to continue to run its normal course. GM was wasting time,” Trump said in a statement. “Today’s action will help ensure the quick production of ventilators that will save American lives.”GM and ventilator maker Ventec Life Systems Inc. had much of what they needed in place to ramp up production of the breathing machines. They were just waiting on the Trump administration to place orders and cut checks.Belgium May Keep Limits Until May 2 (3 p.m. NY)Belgium extended restrictions on citizens and businesses, which took effect March 14, by two weeks until April 19, and Prime Minister Sophie Wilmes signaled a further extension to May 3, saying it’s too early to declare the epidemic under control. Belgians must stay at home except for essential activities such as grocery shopping. Gatherings by more than two people are banned and stores selling non-essential goods remain closed.N.Y. Seeks Aid for Four New Hospitals (2:45 p.m. NY)New York is seeking federal assistance for four new emergency hospitals, Governor Andrew Cuomo said, as the number of state deaths spiked 35% in a day to more than 500.The new sites would join four centers the U.S. is setting up in the city, he said. The state wants more beds for Nassau, Suffolk and Westchester counties. Cuomo spoke from the Jacob K. Javits Convention Center on Manhattan’s west side, which is being converted into a 1,000-bed emergency hospital that will open Monday.Cuomo said current demand for medical equipment is adequately covered and that the state is stockpiling additional supplies for a potential peak of infections three weeks from now. “We don’t need them yet,” he said. “We need them for the apex.”The governor said he would keep the state’s schools closed for an additional two weeks, at which time the situation will be reassessed.Luxembourg Plans to Test for Herd Immunity (1:30 p.m. NY)Luxembourg is in an intensive planing phase to be among the first nations to research so-called herd immunity based on new blood tests the country is expecting to get, Health Minister Paulette Lenert said Friday.The new tests wouldn’t check for Covid-19 infections but whether people have developed immunity against the new virus. Luxembourg, due to its small population of just over 600,000 people, is in a fortunate position to do this, the minister said. Scientists would be able to test samples that would be representative of the entire population, the minister said.Italy’s Daily Toll Nears 1,000 (12:35 pm. NY)Italy had its highest daily death toll even as the number of new cases declined on Friday. Fatalities shot up to 969, the most in a 24-hour period since the start of the outbreak.New infections totaled 5,959, compared with 6,153 the previous day, civil protection authorities said at their daily news conference in Rome. Italy now has 86,498 total cases, roughly the same number as the U.S. and more than China, where the disease’s first outbreak occurred.U.S. Buys More Ventilators (12:30 p.m. NY)President Donald Trump said the federal government bought “many ventilators” from several companies he didn’t identify. Trump in a tweet said the names will be announced later.State and local officials have been pleading with the federal government for more ventilators as cases of the coronavirus mount.France Extends Restrictions (12:20 p.m. NY)French Prime Minister Edouard Philippe said public confinement is being extended to April 15. The restrictions could be further extended if needed, he said in a press conference after a cabinet meeting on Friday. A scientific committee consulted by the government recommends at least six weeks of confinement, he said.Portugal’s Cases Rise 20% (12:14 p.m. NY)Portugal’s cases rose 20% to 4,268 from 3,544 a day earlier, the government’s Directorate-General of Health said. That compares with a daily increase of 18% reported Thursday and a 27% rise on Wednesday. The total number of deaths increased to 76 on Friday from 60 reported through Thursday morning.Director-General of Health Graça Freitas said the data suggest the peak won’t be a moment in time but rather a plateau, and may not occur before May.Libya, Syria Face Catastrophe: WHO (11:35 a.m. NY)Libya reported its first case this week, meaning 21 of 22 Eastern Mediterranean nations have infections. The World Health Organization said Libya’s capacity to respond is extremely limited in some areas and non-existent in others, with a large movement of people from neighboring countries.The outbreak also threatens to cause a catastrophe in Syria, the WHO said. Half of the nation’s hospitals are not functioning after nine years of war and thousands of health workers having fled the country. Millions of displaced people live in overcrowded camps in the country’s northwest, but after two days of tests using 300 WHO kits, no cases so far have been detected, the agency said.Toyota Shifts Factories to Face Shields (11:07 a.m. NY)Toyota Motor Corp.’s idled manufacturing facilities in the U.S. will make much-needed face shields and masks, and the Japanese automaker is closing in on deals with medical-device makers to help them boost production.The carmaker said Friday it will start mass production of face shields early next week to supply hospitals near its plants in Indiana, Kentucky, Michigan and Texas. Toyota also said it is finalizing pacts with at least two companies to make breathing ventilators and respirator hoods, and it’s looking for partners to make protective masks. The company on Thursday extended its shutdown of North American factories for two weeks.U.K. Virus Deaths Jump 30% (10:29 a.m. NY)The number of people in the U.K. who have died from coronavirus increased by 31% to 759 as of Thursday, the Department of Health said. That’s higher than the five-day average of 20%.Some 14,579 have tested positive for the disease as of Friday, an increase of about 25%, above the five-day average of 20%.Two Fed Bankers Confident of Rebound (10:29 a.m. NY)Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan expressed confidence the U.S. economy will rebound when restrictions on activity are lifted.“This is a public health crisis” and different from a typical recession, Bostic said on Bloomberg Television Friday. Kaplan offered a similar view a few minutes earlier. “We were strong before we went into this, and we believe that we’ve got a great chance to come out of this very strong,” he said.Kaplan said unemployment would peak “in the low to mid teens” before recovering to around 7%-to-8% by year-end.Coronavirus Response Leaves U.K. Vulnerable: Lancet (9:29 a.m. NY)A delayed response by the U.K. government to the coronavirus pandemic has left the health system “wholly unprepared” for an expected surge of critically ill patients, according to the editor of the medical journal The Lancet.In a letter posted on the journal’s website, Richard Horton described chaos and panic across the National Health Service, basing his comments on messages he received from workers. The government last month should have expanded testing capacity, ensured the distribution of protective equipment and stepped up training, he said.U.K. Prime Minister, Health Secretary Have Virus (9:17 a.m. NY)British Prime Minister Boris Johnson will self-isolate in Downing Street for seven days after a test found he had the coronavirus, spokesman James Slack told reporters on Friday. Health Secretary Matt Hancock has also contracted the illness, in a double blow to the U.K. government’s response to the crisis.Both men have reported mild symptoms. Meals will be left at Johnson’s door while he continues to work by video-conference, Slack said. Hancock is self-isolating and working from home.These are the latest high-profile individuals to contract the virus in Britain after Prince Charles, the heir to the throne, tested positive.U.K. Sees No Change to Brexit Timetable (8:29 a.m. NY)“In terms of the timetable there’s no change from our point of view,” the U.K. prime minister’s spokesman James Slack told reporters in a conference call. Slack was asked if there would be an extension to the Brexit transition period beyond December.NYC Mayor Says Trump Needs to Face Reality on Ventilators (8:20 a.m. NY)New York Mayor Bill de Blasio said cases of the new coronavirus are going to become “astronomical,” putting unprecedented strain on the hospital system. Trump said in an interview on Fox News that he didn’t think New York state needed the 30,000 ventilators that Governor Andrew Cuomo has asked for to treat Covid-19 patents with respiratory conditions.“When the president says the state of New York doesn’t need 30,000 ventilators, with all due respect to him, he’s not looking at the facts of this astronomical growth of this crisis,” de Blasio said. “If they don’t have a ventilator, a lot of people are just not going to make it.”Rolls-Royce Pauses U.K. Civil-Engine Output (8:07 a.m. NY)Rolls-Royce Holdings Plc will wind down jetliner-engine production in the U.K. as it spends a week implementing cleanup and safety measures to cope with the coronavirus outbreak. The company, which makes turbines for wide-body planes, will “significantly reduce” all but essential activities within its U.K. civil aerospace facilities from midnight, it said in a statement Friday.Rolls-Royce is taking a break from manufacturing after customer Airbus SE also paused production to check on measures to protect employees from Covid-19. Boeing Co. has gone a step further, winding down planemaking in the Seattle area for two weeks after a worker died of virus-related complications.China Ramps Up Stimulus Measures (8 a.m. NY)China will “appropriately” raise its fiscal deficit as a share of gross domestic product, issue special sovereign debt and allow local governments to sell more infrastructure bonds as part of a stimulus package to stabilize the economy, according to a politburo meeting on Wednesday, central China television reported late on Friday.Italy Virus Curve Seen Flattening Slightly (7:49 a.m. NY)The curve of new coronavirus cases in Italy appears to have started flattening slightly since March 20, Silvio Brusaferro, head of the country’s National Health Institute, said at a press conference on Friday. The mortality rate in the country is proportional to patients’ age, Brusaferro said.The National Health Institute said the country wasn’t at the peak of the contagion yet, but the head of the Superior Health Council Franco Locatelli said there were clear signs that the containment measures “are efficient, so people must respect them.”Italy reported its biggest rise in coronavirus infections in the last five days on Thursday, as the disease spread further in the northern Lombardy region, even after weeks of rigid lockdown rules.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.
- Reuters
S&P cuts Airbus outlook amid concern over deliveries, advances
Ratings agency Standard & Poors placed Airbus 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.
- Investing.com
Stocks - Europe Heads Lower Ahead of Key Unemployment Data
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%.
- Zacks
Coronavirus Jolts Commercial Jet Market: Stocks in Focus
As airlines continue to delay delivery of aircraft, the near-term outlook for aircraft stocks does not seem bright.
- Bloomberg
How to Make a Boeing Bailout More Palatable
(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.
- Reuters
Coronavirus crisis rocks airlines and planemakers
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 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.
- Reuters
Airbus sees airlines seeking to defer or cancel orders
Airbus 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.
- Bloomberg
The World's Biggest Companies Should Plan for the Worst
(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.
- Reuters
Airbus adds 15 billion euro credit line, scraps dividend
Airbus 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 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 Builds $32 Billion Buffer to Contain Coronavirus Fallout
(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.
