Qantas Group shares came perilously close to dropping below $2 on the day the airline announced it was suspending two-thirds of its staff.
Shares plummeted from $2.53 on Wednesday to a low of $2.03 before making a partial recovery to close out the day on $2.14. In December, stocks in Qantas were selling for $7.46.
Virgin Australia had a difficult day itself, with shares closing down 12 per cent to just $0.059.
Earlier in the day, Qantas Group dramatically said it was cancelling all international flights from late March and “standing down” 20,000 employees.
MONTREAL, Feb 28 (Reuters) – Canadian National Railway Co has started calling back many of the 450 workers it laid off earlier this month in eastern Canada, when blockades crippled operations on strategic rail lines, according to a company email sent to customers on Friday.
Earlier this week, police made 10 arrests and cleared a blockade in eastern Canada that had been stopping freight and passenger traffic for almost three weeks on one of Canada’s busiest lines.
The blockades were held in solidarity with the Wet’suwet’en people in the Pacific province of British Columbia, who are seeking to stop TC Energy Corp from building a gas pipeline over their land.
“In the absence of illegal blockades on our network over the last 24 hours, and while we are keeping a close watch for any further disruptions, we have started calling back many of the temporarily laid off employees based in Eastern Canada,” CN chief executive Jean-Jacques Ruest said in the email seen by Reuters.
The email did not specify how many of the 450 workers were being called back.
After 21 days of disruptions, “there is a significant backlog of trains parked on our tracks and in our yards that will be processed,” the email said.
“The complete network recovery process will take several weeks.”
Montreal-based CN said the company was on its way to recovering in Western Canada, and said products like export grain, imported containerized goods, coal, potash and other commodities are moving to market.
Canada relies on CN and rival Canadian Pacific Railway to move crops, oil, potash, coal and manufactured goods to ports and the United States. About half of Canada’s exports move by rail, according to industry data.
(Reporting By Allison Lampert; editing by Grant McCool)
ISTANBUL (AP) — A Turkish airliner skidded off a runway, crashed into a ditch and broke apart while landing in bad weather in Istanbul Wednesday, killing three people and injuring dozens more. Passengers had to scramble through the split fuselage to escape.
The aircraft, operated by low-cost carrier Pegasus Airlines, was arriving at Istanbul’s Sabiha Gokcen airport from the western Turkish city of Izmir with 183 passengers and crew on board when it had what the Transportation Ministry described as a “rough landing.”
Istanbul Gov. Ali Yerlikaya said the plane failed to “hold onto the runway” and skidded some 50-60 meters (yards) before it dropped into the ditch from a height of about 30 meters (98 feet.)
“We are deeply saddened … (But) we are very happy that we escaped a greater accident,” Yerlikaya said, adding that the plane could have burst into flames.
Health Minister Fahrettin Koca reported early Thursday that three people had died and 179 required care at multiple hospitals.
Emergency workers, assisted by an excavator, recovered one body from beneath the wreckage before the rescue mission ended.
The airport was shut down after the incident, which occurred at around 6:30 p.m. local time (1530 GMT), and flights were diverted to Istanbul’s main airport.
DEARBORN, Mich. (Reuters) – Investors sent Ford Motor Co shares skidding on Tuesday after the company delivered a weaker-than-expected 2020 forecast, warning of higher warranty costs, lower profits at its credit arm and continued investments in future technology such as self-driving cars.
Shares in the No. 2 U.S. automaker plunged 9.4% in after-hours trading, shaving more than $3 billion off the company’s value. In comparison, electric carmaker Tesla closed up nearly 14%, pushing its market cap to $160 billion, more than four times the size of Ford’s $36.4 billion.
“The results were not OK in 2019,” Ford Chief Financial Officer Tim Stone told reporters at the company’s headquarters outside Detroit.
“As I look to 2020 and beyond, I’m very optimistic,” he said, while cautioning that Ford’s lower guidance does not yet account for the potential impact of the coronavirus outbreak in China.
In an after-hours call with financial analysts, Chief Executive Jim Hackett was more blunt about the challenge of balancing Ford’s protracted turnaround efforts with its continuing work on future technology, including electric and self-driving cars.
“I don’t think this company can keep straddling the old and new worlds forever … This company has to change,” Hackett said.
Ford said it expects 2020 operating earnings to be in the range of 94 cents to $1.20 a share. Analysts were expecting $1.26 a share.
Stone said Ford expects to continue its quarterly dividend of 15 cents, which could cost the company $2.4 billion in 2020. Asked about continuing the dividend after lowering its 2020 guidance, Hackett said, “We like to return value to shareholders.”
The disappointing 2020 forecast, coming after Ford previously trimmed its 2019 outlook, is a blow for Hackett, who took the helm in May 2017.
He has been asking investors to be patient with a restructuring that has seen the formation of a wide-ranging alliance on commercial, electric and autonomous vehicles with Volkswagen AG <VOWG_p.DE> and the sale of its money-losing operations in India to a venture controlled by India’s Mahindra & Mahindra.
But by Ford’s own accounting, the restructuring is far from complete. It has booked $3.7 billion of the projected $11 billion in charges it previously said it would take, and expects to book another $900 million to $1.4 billion this year.
For the fourth quarter of 2019, Ford reported a net loss of $1.7 billion, or 42 cents a share, compared with a loss of $100 million, or 3 cents a share, a year earlier.
The quarter included a loss of $2.2 billion due to higher contributions to its employee pension plans, something it disclosed last month.
Revenue in the quarter fell 5% to $39.7 billion, above the $36.5 billion Wall Street had expected.
Ford’s adjusted free cash flow fell 67% in the fourth quarter to $500 million, including the $600 million cost of bonuses related to a new labor deal with the United Auto Workers union. The UAW deal also played a role in driving North American automotive profit margins down to 2.8% in the fourth quarter.
Ford said its operating losses in China last year totaled $771 million, including a loss of $207 million in the fourth quarter. It lost $1.5 billion in 2018. Ford’s market share in China in the fourth quarter fell to 2% from 2.3% last year.
In December, Ford said it would halve its operating loss in 2019 and nearly halve it again in 2020, followed by further improvement in 2021.
However, that forecast was before the appearance of the fast-spreading coronavirus and its crippling effects on China’s economy.
Ford’s China sales fell about 15% in the fourth quarter and 26% for the year as it continued to lose ground in its second-biggest market. Ford has been struggling to revive sales in China since its business began slumping in late 2017.
Detroit rivals General Motors Co and Fiat Chrysler Automobiles are scheduled to report their results on Wednesday and Thursday, respectively.
(Reporting by Ben Klayman and Paul Lienert; Editing by Tom Brown)
The Indian government is in the market to sell its stake of Air India – and on Monday set a March 17 deadline for initial expressions of interest.
Indian conglomerate Hinduja Group and US-based fund Interups are already reported to be submitting theirs.
It’s not the first attempt at a sale: in 2018 the government failed to divest 76 per cent of the airline, and with it over five billion dollars of debt.
Air India workers protested ….
And potential bidders opted out because of stringent conditions attached – such as retaining all employees.
This time, the government has indicated, it’s open to revising some provisions.
Though bidders must assume liabilities, including debt at just under 3.3 billion dollars.
And substantial ownership and control must remain with an Indian entity.
The sale might face opposition from within prime minister Narendra Modi’s ruling BJP Party – one lawmaker describes the deal as quote ‘anti-national’.
But if successful, the buyer gets over 7,000 landing slots in India and overseas …
Together with the carrier’s low-cost arm and a stake in its cargo and ground-handling operations.
As for staff, Air India currently has around 13,000 permanent and contract personnel on its books …
Workers leave the General Motors CAMI car assembly plant where the GMC Terrain and Chevrolet Equinox are built in Ingersoll
WASHINGTON (Reuters) – General Motors Co <GM> will revive the Hummer name to sell a new family of electric pickup trucks and sport utility vehicles and will tout the return with a Super Bowl ad featuring NBA star LeBron James, two people briefed on the matter said on Friday.
The vehicles will be sold under the GMC nameplate. Reuters reported in October that GM planned to build a new family of premium electric pickup trucks at its Detroit-Hamtramck plant beginning in late 2021 and was considering reviving the Hummer name, citing several people familiar with the plans.
The Wall Street Journal reported GM’s decision to move forward earlier on Friday. GM declined to comment.
The electric truck and SUV program is the centerpiece of a planned $3 billion investment in the Detroit-Hamtramck plant to make electric trucks and vans, and part of a broader $7.7 billion (5.9 billion pounds) investment in GM’s U.S. plants over the next four years that was part of a new contract signed with the United Auto Workers union last year.
The investment moves the automaker into a part of the EV market that is largely untested and where GM has a higher likelihood of turning a profit, analysts said.
Reuters reported GM plans to first build EV pickups in late 2021 and then an electric SUV in 2023.
Tesla <TSLA> CEO Elon Musk in November unveiled an electric pickup called “Cybertruck” it plans to build starting in late 2021.
Rivian, a start-up electric company backed by Amazon.com <AMZN>, will begin building 100,000 electric delivery vans for Amazon starting in 2021.
Hummers were rugged civilian utility vehicles with low gas mileage that were inspired by military vehicles and were popular with such celebrities as actor Arnold Schwarzenegger but derided by environmentalists as gas-guzzlers. GM shut down its Hummer brand after a deal to sell the SUV-line to an obscure Chinese machinery maker was blocked by Chinese regulators in 2010.
Michael Harley, executive editor for Kelley Blue Book, noted “the original Hummer was ostracized out of showrooms for being heavy and ponderous with an insatiable appetite for gasoline. An all-electric powertrain essentially exonerates the truck on all charges.”
Electric pickups and SUVs – the heart of the U.S. market – could help Ford Motor Co <F> and GM generate significant sales of EVs needed to meet tougher California emission standards and electric vehicle mandates.
The Trump administration is moving to roll back those standards – and eliminate extra credits that automakers receive from EV sales but electric trucks are a hedge if California prevails.
(Reporting by David Shepardson; Editing by Sandra Maler and Alistair Bell)
WASHINGTON (Reuters) – U.S. President Donald Trump called Boeing <BA> Chief Executive Dennis Muilenburg this week to ask about the status of 737 MAX production, two people briefed on the matter confirmed.
The call on Sunday was brief and Muilenburg assured Trump that the planned production halt was temporary and that the company would not be laying off any workers. The production halt, set to begin in January, was announced by Boeing Monday after a board meeting.
Boeing and the White House declined to comment on the call, reported earlier by the New York Times.
Separately, S&P Global Ratings on Thursday downgraded Boeing’s credit rating to “A-” from “A” and lowered the short-term rating to “A-2” from “A-1.”
The change “reflects the uncertainty over when the 737 MAX will return to service, the risk to the supply chain from the planned production halt, and possible long-term impact to Boeing’s competitive position.”
U.S. officials have repeatedly said they are waiting for additional answers from Boeing and have at time faulted the quality of submissions from the planemaker since the plane was grounded in March after two fatal crashes killed 346 people.
“We’ve had conversations about the importance of making sure that we are looking at complete documentation and not piecemeal documentation,” FAA Administrator Steve Dickson told Reuters in September. “It’s really better to be very methodical and very detailed rather than try to rush a partially completed product and then say, ‘We’ll get back to you with the rest of it.’”
Boeing has repeatedly said it is working with regulators to safely return the plane to service and acknowledged last week it would not occur until 2020.
Dickson said last week there are nearly a dozen milestones that must be completed before the MAX returns to service. Approval is not likely until at least February and could be delayed until March, U.S. officials told Reuters last week.
American Airlines Group Inc <AAL> and Southwest Airlines Co <LUV> have canceled flights into April because of the grounding.
(Reporting by David Shepardson; Editing by Nick Zieminski)
Sun Country will start cargo service with a big first customer: Amazon
Minnesota airline will add 10 planes, 70 pilots under 6-year cargo service deal.
Amazon is hiring Sun Country Airlines to fly packages around the country, a windfall deal that thrusts the Minnesota carrier into the cargo business.
The six-year deal, announced Tuesday, will immediately create a massive expansion for Sun Country. From the first flights next spring, the new cargo service for Amazon Air will quickly grow to represent 20% of all of Sun Country’s flying.
It is the first time Amazon has hired a commercial passenger airline for air service.
Sun Country will add 10 airplanes to its fleet and hire an additional 70 pilots to its existing force of 350. The Twin Cities-based airline will also hire more maintenance workers and 20 to 30 headquarters staffers to support Amazon Air operations.
“These are pretty highly compensated positions. … We are very excited about this,” Jude Bricker, Sun Country’s chief executive, said Tuesday. “This is going to be a great growth opportunity for our company, and the important thing for the Twin Cities is it will make us a better airline for Minnesota leisure travelers.”
Amazon is hiring Sun Country to fly shipments under its Amazon Air business. The six-year deal puts Sun Country into the scheduled cargo business for the first time. It will hire 70 pilots to fly the routes.
DETROIT (Reuters) – Fiat Chrysler Automobiles NV and the United Auto Workers (UAW) union on Saturday announced a tentative agreement for a four-year labor contract, a boost for the automaker as it works to merge with France’s Groupe PSA.
Italian-American Fiat Chrysler and PSA, the maker of Peugeot and Citroen, last month announced a planned $50 billion merger to create the world’s fourth-largest automaker.
The tentative agreement with Fiat Chrysler, which is subject to ratification by the union members, follows contracts that the UAW already concluded with Ford Motor Co and General Motors Co.
The deal with GM followed a 40-day strike in the United States that virtually shuttered GM’s North American operations and cost the automaker $3 billion.
The UAW on Saturday said the contract with Fiat Chrysler included a commitment from FCA to invest $9 billion, creating 7,900 new jobs over the course of the four-year contract. Of the $9 billion, $4.5 billion was announced earlier this year, to be invested in five plants and creating 6,500 jobs.
Detailed terms of the tentative agreement were not released, but they are expected to echo those under the new contracts with GM and Ford, as the UAW typically uses the first deal as a pattern for the others.
“FCA has been a great American success story thanks to the hard work of our members,” UAW acting President Rory Gamble said in a statement. “We have achieved substantial gains and job security provisions for the fastest growing auto company in the United States.”
Ratification is not a sure thing. Rank-and-file UAW members at FCA in 2015 rejected the first version of a contract. In addition, a lawsuit related to a federal corruption probe could also raise doubts among union members about the terms agreed.
The federal corruption led GM to file a racketeering lawsuit against FCA, alleging that its rival bribed union officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. FCA has brushed off the lawsuit as groundless.
Under the UAW’s deal with GM, the automaker agreed to invest $9 billion in the United States, including $7.7 billion directly in its plants, and to create or retain 9,000 UAW jobs.
Ford’s contract included commitments to invest more than $6 billion in its U.S. plants and to create or retain more than 8,500 UAW jobs.
The deals with GM and Ford also created a pathway to full-time employment for temporary workers and left healthcare insurance coverage unchanged.
Both automakers also agreed to signing bonuses, with $9,000 for full-time Ford workers and $11,000 for workers at GM.
(Reporting by Nick Carey; Editing by Leslie Adler)
FILE PHOTO: FCA’s Manley and Elkann speaks at the North American International Auto Show in Detroit, Michigan
MONTREAL/WINNIPEG (Reuters) – Canada’s longest railroad strike in a decade ended on Tuesday as Canadian National Railway Co reached a tentative agreement with workers, but shippers warned it could take weeks before service bounces back to normal.
Industry groups celebrated the end of the eight-day strike at the country’s biggest railroad, which had cost them sales and raised their expenses. News of the deal, which must still be ratified by union members, sent CN shares up by as much as 2%.
Thousands of unionized workers began heading back to their jobs, CN said, with operations expected to be in full swing on Wednesday. Union members should vote on the deal within eight weeks.
CN has rescinded 70 temporary layoff notices at an auto shipment terminal in Nova Scotia following the deal, another union said.
Canada relies on CN and Canadian Pacific Railway to move crops, oil, potash, coal and manufactured goods to ports and the United States.
Details of the agreement were not available but some 3,200 striking conductors and yard workers had been demanding improved working conditions, including rest breaks.
Prime Minister Justin Trudeau acknowledged CN and union officials in a tweet on Tuesday and thanked workers, industry and all Canadians for their patience.
Trudeau’s minority government had faced pressure from industry and farmers to end the strike and force workers back to their jobs.
Transport Minister Marc Garneau told reporters on Tuesday that if Ottawa had intervened with legislation, “we would not have had a solution today.”
Teamsters Canada President Francois Laporte noted the federal government “remained calm and focused.” CEO of Montreal-based CN J.J. Ruest thanked customers for their patience.
About half of Canada’s exports move by rail, according to industry data, and the strike would likely cost the Canadian economy less than C$1 billion ($750 million) and cut fourth-quarter growth by about 0.1 percentage point, Brian DePratto, a senior economist at TD, said.
PROPANE SHORTAGE TO PERSIST
The Canadian Propane Association warned severe shortages of the fuel in several eastern Canadian provinces could last weeks. “We need to get the inventory back up,” said association President Nathalie St-Pierre, noting the “crisis” was not over.
Garneau said CN will work quickly to clear the backlog, but added the process is complex and would take time.
Bob Masterson, chief executive of the Chemistry Industry Association of Canada, said some plants had slowed production during the strike.
Based on past rail disruptions, he said CN is likely to move critical commodities first, like propane for farms and homes and chlorine for drinking water, leaving other shippers to face delays.
PAIN FOR MINERS, FARMERS
Brendan Marshall, a vice president with the Mining Association of Canada, said miners faced hefty costs due to lost sales and plant disruptions. He said restoring normal operations could take a week for every day of disrupted service.
“Now we can hope that things can get back to normal in quick fashion. It’s cost a lot of money to farmers already,” said Markus Haerle, chairman of the Grain Farmers of Ontario. Wet conditions have stalled the harvest across much of Canada, including much of Haerle’s corn crop near St. Isidore, Ontario. Those crops must be dried before they can be sold, but the rail strike held up deliveries of propane, forcing farmers to use costlier alternatives.
(Reporting by Allison Lampert in Montreal and Rod Nickel in Winnipeg. Additional reporting by Kelsey Johnson in Ottawa, writing by Steve Scherer, editing by Louise Heavens, Steve Orlofsky and David Gregorio)
FILE PHOTO: Railcars stand idle at the CN railyards in Edmonton
