LONDON, March 31 (Reuters) – British Airways said it is temporarily suspending flights from Gatwick Airport in southern England, Britain’s second busiest airport, due to the coronavirus.
BA’s boss warned earlier in March that the airline was in a battle for survival and would have to cut jobs and park planes.
“Due to the considerable restrictions and challenging market environment, like many other airlines, we will temporarily suspend our flying schedule at Gatwick,” a BA spokesman said.
BA said it will contact affected customers. The airline continues to operate some flights from its main hub at Heathrow.
Parent company IAG said flying capacity would be down 75% in April and May.
Rival airline easyJet said on Monday that it had grounded its entire fleet.
Gatwick Airport said last week it would shut one of its two terminals on Wednesday.
MILAN (Reuters) – Luxury carmaker Ferrari <RACE> said on Friday it would extend the shutdown of its two Italian plants and reopen on April 14, provided it had supplies, and update 2020 forecasts in May when it releases its first-quarter earnings.
Ferrari this month closed factories in Maranello and Modena, in the northern Italian region of Emilia-Romagna, for two weeks until March 27 in a response to the coronavirus outbreak and a shortage of parts.
Investment firm Exor <EXXRF>, which controls Ferrari, on Wednesday said that current plant closures at Ferrari as well as at other controlled companies Fiat Chrysler <FCAU> and CNH Industrial <CNHI>, though temporary, might continue.
Ferrari – which cited “the huge uncertainty and lack of predictability that the COVID-19 has created” – said it would continue to cover all days of absence for those employees who could not work remotely.
The company added it would give further financial guidance during a conference call on its first-quarter earnings, scheduled for May 4.
In February, Ferrari said it planned its adjusted core profit to increase to between 1.38-1.43 billion euros this year, compared to a previous guidance of over 1.3 billion euros.
Ferrari said on Friday it remained confident that it would “continue to create value for all stakeholders beyond the near-term uncertainties”.
(Reporting by Giulio Piovaccari; Editing by Nick Macfie)
BEIJING/TOKYO (Reuters) – U.S. electric carmaker Tesla Inc <TSLA> plans to slash on-site staff at its Nevada battery plant by around 75% due to the coronavirus pandemic, the local county manager said on Thursday.
The move comes after its Japanese battery partner Panasonic Corp <6752.T> said it would scale down operations at the Nevada factory this week before closing it for 14 days.
The factory produces electric motors and battery packs for Tesla’s popular Model 3 sedans.
“Tesla has informed us that the Gigafactory in Storey County is reducing on-site staff by roughly 75% in the coming days,” Austin Osborne said in a post on the county’s website.
No further details were available and it was not clear how many employees work in the factory. Tesla did not immediately respond to a Reuters request for comment.
The Reno Gazette Journal, which earlier reported the planned suspension, said Panasonic has about 3,500 employees at the Nevada plant.
Tesla said last week it would temporarily suspend production at its vehicle factory in San Francisco Bay Area from end of March 23, as well as at its New York solar roof tile factory.
However, Tesla CEO Elon Musk said the company will reopen the New York plant “as soon as humanly possible” to manufacture ventilators for coronavirus patients.
Two employees of Tesla have tested positive for coronavirus but have been working from home for the past two weeks and had not been symptomatic at work, Tesla said in an email to employees on Thursday. It did not disclose which unit or at what location the employees work.
(Reporting by Yilei Sun and Makiko Yamazaki; Editing by Miyoung Kim and Himani Sarkar)
The Qantas Group has completed a new round of debt funding, securing $1.05 billion in additional liquidity to strengthen its position as it manages through the Coronavirus outbreak.
This debt has been secured against part of the Group’s fleet of unencumbered aircraft, which were bought with cash in recent years. The loan has a tenure of up to 10 years at an interest rate of 2.75 per cent.
This funding increases the Group’s available cash balance to $2.95 billion with an additional $1 billion undrawn facility remaining available.
The Group’s net debt position remains at the low end of its target range, at $5.1 billion, with no major debt maturities until June 2021. In line with the rest of the Qantas debt book, the new funding contains no financial covenants.
With a further $3.5 billion in unencumbered assets, the Qantas Group retains flexibility to increase its cash balance as a prudent measure in the current climate. As previously announced, various steps have been taken to significantly reduce activity levels and costs given the dramatic revenue impact of the Coronavirus pandemic and the related travel restrictions on Jetstar and Qantas passenger services.
Qantas Group CEO Alan Joyce said: “Over the past few years we’ve significantly strengthened our balance sheet and we’re now able to draw on that strength under what are exceptional circumstances. Everything we’re doing at the moment is focused on guaranteeing the long term future of the national carrier, including making sure our people have jobs to return to when we have work for them again.”
Seven of the Group’s 11 wholly-owned Boeing 787-9’s have been securitised against this funding.
PARIS (Reuters) – Airbus <EADSY> 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.
It issued the warning in an annual reference document ahead of its upcoming Amsterdam shareholder meeting, for which it urged participants to vote by proxy rather than attend in person due to widespread measures to slow the spread of the disease.
Airbus Chief Executive Guillaume Faury said earlier that several airlines had asked to defer deliveries, but that most were continuing to pay their deposits.
“Weaker market and economic conditions in China and their knock-on effects in other markets could result in requests by customers to postpone delivery or cancel existing orders for aircraft (including helicopters),” the filing said, though Faury said earlier there were some signs of recovery in China.
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.
But it warned that possible further investigations in other jurisdictions could trigger claims against it by shareholders, impact its ability to raise finance or limit its eligibility for public contracts, as well as harm future commercial sales.
Malaysian authorities last week cleared AirAsia Group <5099.KL> after Britain’s Serious Fraud Office faulted a sponsorship deal between former Airbus parent EADS and a motor racing team owned by the airline’s co-founders.
But the SFO probe, supported by Airbus’s own lawyers, caused a severe rift between AirAsia and its sole supplier, adding to doubts over whether long-haul unit AirAsiaX will take delivery of A330neo jets on order, three people close to the matter said.
AirAsia officials could not be reached for comment. Airbus declined comment.
Loss-making AirAsiaX has said only that it wants to defer delivery of A330neo jets due to the coronavirus crisis.
Deliveries of the wide-body aircraft have also been hit by the impact of U.S. tariffs on Airbus aircraft under a long-running trade dispute, as well as concerns about overcapacity.
Airbus trimmed A330 output in January from about four a month in 2019, Reuters reported earlier this month.
In Monday’s filing, Airbus said it would maintain production of the A330neo at 3.5 aircraft a month.
(Reporting by Tim Hepher; Editing by Mark Potter, William Maclean)
The safety of Amtrak’s customers and employees is our top priority. We continue to monitor the coronavirus situation closely and we are taking action based on guidance from public health experts; that includes restoring service to trains and routes once demand returns. In order to maintain a safe environment and address customer concerns and potential business impact, we are taking the following measures:
Before You Travel
If you are traveling with Amtrak:
Providing an essential transportation service: We are waiving change fees on all existing or new reservations made before April 30, 2020. Simply log in to your account or go to Modify Trip on Amtrak.com, or find your reservation from your account on the home screen in the Amtrak app. A fare difference may apply to your new itinerary. If you want to cancel your reservation with no fee, you must call 800-USA-RAIL and speak with an agent (not available via Amtrak.com or the app).
Take care of yourself and keep others safe: If you are feeling ill, please stay home until feeling better.
Maintaining a Safe Environment
To reduce risk, we are:
Enhancing cleaning protocols: We have increased the frequency of cleaning services on our trains and at our stations.
Increasing disinfectant supplies: We have increased the quantity of sanitizers and disinfectant wipes available for customers and employees on our trains and stations.
Reinforcing good hygiene practices: We are regularly sharing best practices with employees and customers on ways to protect against communicable diseases.
We continue to recommend that everyone follow CDC guidelines around social distancing. If you do need to travel with us, know that we are taking extra steps to keep our stations and trains clean, keep you safe, and remain an essential part of transportation in America. See what we are doing here.
Service Impacts
While Amtrak continues to operate, we have temporarily suspended the following services due to reduced demand. See details on service impacts here.
What You Can Do
To protect against all communicable diseases:
Wash your hands: Wash hands frequently with soap and water – and for 20 seconds. If you can’t wash your hands, use hand sanitizer.
Cover your mouth: When sneezing or coughing, use tissues and promptly dispose of them or cover your mouth with your sleeve or elbow.
While we are running reduced service across the country, it is still essential to exercise caution around railroad tracks and crossings. #SeeTracksThinkTrain
FRANKFURT (Reuters) – Swedish carmaker Volvo is suspending production at its factories in Sweden, the United States and Belgium, to curb the spread of the coronavirus, it said on Friday, even as it resumes manufacturing in China where the infection rate has slowed.
Volvo’s Swedish factories in Torslanda, Skovde, Olofstrom, and its U.S. plant in South Carolina will close between March 26 and April 14, the company said. Its plant in Ghent, Belgium has already been temporarily shut down.
“Our primary concerns are the health of our employees and the future of our business,” Chief Executive Hakan Samuelsson said. “I think for the economy, we need to do something drastic, rather then trying half-hearted measures that drag on forever.”
“We are seeing the effect from this coronavirus is increasing every day. We see problems in the logistics supply side,” he told Reuters. “We have to help contributing to social distancing.”
Samuelsson said the financial impact of the shutdown would become clearer when the carmaker published first-half earnings. The company will reduce the working hours of white-collar staff during the factory closures and will take advantage of government incentives, Samuelsson said.
The financial impact on Volvo also depended on how different countries reacted to contain the virus.
“There is a big difference between countries. Some have curfews, with restaurants and schools closed. In other countries there are less drastic measures. I just think we need to synchronise that more.”
(Reporting by Edward Taylor; Editing by Pravin Char)
(Reuters) – Former U.N. ambassador Nikki Haley has resigned from Boeing Co’s board after opposing its bid for government financial assistance due to the crisis caused by the coronavirus outbreak.
“I cannot support a move to lean on the federal government for a stimulus or bailout that prioritizes our company over others and relies on taxpayers to guarantee our financial position,” Haley said in a letter to the company’s management released by Boeing on Thursday.
“I have long held strong convictions that this is not the role of government.”
Haley, a former South Carolina governor, has often been mentioned as a future presidential candidate. “The board and executive team are going in a direction I cannot support,” she wrote.
When asked to respond to Haley’s concerns, Boeing said only the company appreciated her service on the board and wished her well.
Boeing this week said it was seeking on behalf of itself and the aviation manufacturing industry at least $60 billion in government loan guarantees and other assistance. The sector faces huge losses from the coronavirus pandemic as airlines halt flights and some delay orders.
A Senate Republican proposal introduced Thursday would allow aviation manufacturing firms like Boeing to seek collateralized loans and loan guarantees from a $150 billion fund but not provide any cash. The final decision on eligibility would be up to the U.S. Treasury.
“We are not bailing out the airlines or other industries – period,” said Senator Richard Shelby, a Republican who chairs the Appropriations Committee.
To ensure the government is compensated for risks in making loans, the U.S. Treasury could seek equity, warrants stock or other instruments to ensure the government participates in any gains.
Haley’s resignation letter was dated Monday, the same day Boeing confirmed it was in talks to seek short-term assistance from the U.S. government.
Boeing has racked up nearly $19 billion in costs tied to its 737 MAX aircraft, which has been grounded for the past year after two fatal crashes in five months. The company has been working to win approval for the plane to return to service.
(Reporting by Ankit Ajmera in Bengaluru and David Shepardson in Washington and Michelle Nichols in New York; Editing by Arun Koyyur and Tom Brown)
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.
JetBlue (NASDAQ: JBLU) has issued the following message to its 23,000 crew members.
It has been a very tough few weeks. We are so proud to see once again how the JetBlue culture brings us together during times of crisis. Thank you for continuing to serve our Customers and deliver the JetBlue experience, particularly when your own lives are being disrupted in so many ways.
With safety our #1 value, we continue to take the measures necessary to protect your health. But as it relates to our business, we are not going to sugarcoat it. Demand continues to worsen, and the writing is on the wall that travel will not bounce back quickly.
We’d like to give you some color on what we are seeing. Last year on a typical day in March we took in about $22 million from bookings and ancillary fees. Throughout this March, our sales have fallen sharply and in the last several days we have taken in an average of less than $4 million per day while also issuing over $20 million per day of credits to Customers for canceled bookings. This is a stunning shift, which is being driven by fewer new bookings, much lower fares, and a Customer cancel rate more than 10 times the norm. If you do the math, $4 million per day does not come anywhere close to covering our daily expenses. It is hard to predict how long these conditions will last and how much more challenging the environment may become.
We are not alone. Virtually every major carrier is taking actions that were almost unthinkable a few weeks ago, making huge schedule reductions and parking significant portions of their fleets.
Even though we entered this from a position of strength with a strong balance sheet and cash in the bank, because of the dramatic fall-off in bookings, we need to reduce our spending immediately so that we can continue to fund JetBlue’s operations and ensure your jobs are protected. We have already announced an initial capacity reduction, pay cuts for our officers (VPs and above), voluntary time off programs, re-negotiated Business Partners agreements, and other spending reductions.
We’ve taken swift and decisive actions to protect you, but we must do more and do so quickly to weather this storm.
Reducing our flying to reflect demand We are reducing our capacity in the coming months, with a reduction of at least 40% in April and May. We also expect substantial cuts in June and July, and given the unpredictability of this event, we will ground some of our aircraft. We know this is not an easy move – it will impact hours for many frontline Crewmembers, but it is also essential that we reduce capacity in the face of dramatically falling demand.
We will be notifying Customers of their specific cancellations in a phased approach so that we do not overwhelm Customer Support as they continue to receive exponentially more calls than they ever have before.
Reviewing our fleet plan One of our most substantial capital expenses is the purchase of new airplanes. In collaboration with Airbus, we are looking at our order book for opportunities to slow deliveries and reduce aircraft pre-delivery payments (PDPs). We will also defer the four previously used airplanes that we announced earlier this year.
Cutting our capital and operational spending We will reduce spending wherever we can to preserve our cash, and both of us will be taking a 50% pay reduction during this crisis.
We entered the year with a list of major initiatives to invest in our infrastructure, technology and real estate. As of today, we have paused or stopped more than 75% of these projects and will continue to stand down work wherever we can.
Increasing our cash reserves The dramatic loss of revenue in recent days means we will have to start dipping into our cash savings. Although we came into this with about $1.2 billion, our expenses total millions of dollars each day. The good news is we have secured a new liquidity facility – an extra credit line – which allowed us to borrow $1 billion. This is not free money – it’s a band-aid solution that holds us over and we have to pay it back with interest. Even with these cash reserves we, like the rest of the industry, will need significant government support to help us through these losses.
Calling for government intervention The governmental warnings and actions taken to manage this health crisis have hit both domestic and international travel hard. We have been coordinating with Airlines for America (A4A) and other U.S. airlines to ensure government leaders understand the threat to our global economy if air travel is not supported. When this pandemic passes – and it will – air travel will play a major role in getting life back to normal and supporting economic recovery. We are going to need significant government help to do that. This is not a position we’d like to be in, but government assistance will help us protect our 23,000 Crewmembers who are our most important priority as we navigate these turbulent times.
From the beginning we have faced many challenges and, against all odds, we have thrived through some incredibly difficult events. Now we are faced with what is by far the biggest challenge our company and our industry has ever seen. While we know this is an incredibly difficult time for all of you as you work to juggle your own concerns around coronavirus, we have come through other challenges in our 20 year history and we can – and will – come through this together.
The next few months won’t be easy, but please know that all the steps we’re taking today are focused on protecting the health and safety of our Crewmembers and Customers and ensuring JetBlue remains a great place for you to work well into the future.
