GLOBAL MARKETS LIVE: Turmoil continues for the airline sector
|05/28/2020 | 10:25am|
Ongoing troubles for the airline sector, with U.S. carriers and Boeing cutting their workforce, Lufthansa reluctant to take the government bailout and Air France going reducing its flights.
The saga continues. Lufthansa's supervisory board has refused to approve the €9 billion rescue plan proposed by the German State as it stands, on the grounds that the concessions demanded by Brussels (in particular the return of large slots) are too penalizing. The Council continues to believe that the plan proposed by Berlin is the only viable solution, but is preparing to study possible alternatives.
-40% on the domestic network of Air France. Air France-KLM will reduce its offer on French domestic flights by 40% by 2021. "Capacity will be reduced by 40% over the period between now and 2021, with the closure of destinations when there is a rail alternative of less than 2H30 and when this service does not feed the Roissy-Charles-De-Gaulle hub," said the airline's managing director, Benjamin Smith, at the airline's general meeting.
A huge social plan. easyJet plans to cut 4,500 jobs, i.e. up to 30% of its workforce, and to drastically reduce its fleet of aircraft to adapt to the new context, the British company has announced. A staff consultation procedure will be launched in the coming days.
Takeover and departures at Boeing. Boeing has restarted production of the B737 Max in Washington State, albeit at a slow pace for the time being. The single-aisle aircraft is still not allowed to resume commercial operations. The date of the first test flight after the modifications required by the regulators is not yet certain. At the same time, the manufacturer has announced 12,000 job cuts, including 7,000 voluntary departures as of this week. 10,000 of these jobs concern the company's birthplace, the State of Washington. Boeing had warned in April that it would cut about 10% of its 160,000 jobs.
Tough times. American Airlines is expected to reduce its support staff by about 30 percent, according to a letter sent by the company to its employees. A level identical to that announced by United Airlines.
Two against Covid. Roche and Gilead are launching a joint phase III against Covid-19, using a combination of actemra/roactemra and remdesivir. The study, called Remdacta, is expected to recruit 450 patients.
Amazon says no. At the annual general meeting of Amazon.com, shareholders submitted proposals, which were rejected, to reform the group's policies on several social issues, such as ecology and equality at work. "In many cases, we already support initiatives or share the concerns set out in some of the proposals, and we have often already taken steps to address them," the company said in response comments.
That's recovery. Nissan is going to reopen its U.S. plants starting June 1st. Production will resume on that date in Canton, Mississippi and Decherd, Tennessee, and then on June 8 in Smyrna, Tennessee.
Icahn ends with losses. Carl Icahn exits Hertz with heavy losses. The billionaire investor is far from having made his best deal with the car rental company, which filed for bankruptcy protection a few days ago. He owned 39% of the company's capital, which was sold on Tuesday at USD 0.72 per share, for a gross amount of around $40 M, while the shares were still worth $700 M at the end of 2019.
In other news. The results of HP Inc. do not convince investors. According to an internal document obtained by Reuters, Chevron could cut between 10 and 15% of its workforce. Apple will produce Martin Scorsese's next film, starring Leonardo DiCaprio and Robert De Niro, which will be distributed in theatres by Paramount (ViacomCBS). Givaudan acquires French bioengineering specialist Alderys.