Tag: Susan Fenton

Air France-KLM’s Future in Doubt Without Cost Cuts – Dutch minister

September 13, 2020 / WIL BALDWIN

AMSTERDAM (Reuters) – Air France-KLM <AF.PA> might not survive its current crisis if the airline group cannot lower its costs, Dutch Finance minister Wopke Hoekstra said on Sunday.

“The survival of Air France-KLM is not a given,” Hoekstra said in an interview on Dutch public television.

“They will have to address their cost base even as things stand now. And suppose this situation lasts until the end of next year, then they will have to cut even deeper.”

Air France-KLM’s immediate future was secured by the French and Dutch governments in July, as they provided a total of 10.4 billion euros ($12.3 billion) in bailout loans and guarantees to help the group survive the disastrous effects of the COVID-19 pandemic on air travel.

In return for the support, Dutch arm KLM has said it would cut another 1,500 jobs, reducing its staff by 20%, while a pay hike agreed for 2020 was frozen by the company.

French arm Air France plans to cut 6,500 jobs, or 16% of its workforce, through 2022.

So far, however, KLM has failed to reach an agreement with unions on the cuts needed to meet the requirements set by the Dutch government.

Hoekstra indicated a thorough restructuring would be necessary for governments to contemplate further support.

“KLM will always be very important for the Dutch economy. But the question is whether that will be enough”, he said.

Air France-KLM said last month that it was losing 10 million euros per day due to the coronavirus crisis.

(Reporting by Bart Meijer; Editing by Susan Fenton)

VW Not Seeking Deal With Tesla – CEO Diess

September 7, 2020 / WIL BALDWIN

FRANKFURT, Sept 7 (Reuters) – Volkswagen’s Chief Executive Herbert Diess on Monday sought to quell speculation that the world’s largest carmaker, which is on a mass production push for electric cars, has plans to develop deeper ties with start-up rival Tesla.

Diess met with Tesla’s Chief Executive Elon Musk in Braunschweig, Germany, last week, and during his visit VW let Musk drive its new ID.3 electric car.

“Just to be clear: We just drove the ID.3 and had a chat – there is no deal/cooperation in the making,” Diess said in a post on Linkedin which included a video of the two executives driving the vehicle on an airfield.

“Thanks for the visit, Elon! Hope you like the video. It was great driving the ID.3 with you! You were just quite critical with the available torque at higher speed. I told you: “Yes, we are on the runway – but no need for take off – its not a sports car.”

For a link to the video click: https://www.linkedin.com/feed/update/urn:li:activity:6708741329091866625/?commentUrn=urn%3Ali%3Acomment%3A(ugcPost%3A6708652585454190592%2C6708741309508673536)

(Reporting by Edward Taylor; Editing by Susan Fenton)

Norwegian Air Shares Plummet 60% After Proposed Rescue Plan

April 14, 2020 / WIL BALDWIN

OSLO (Reuters) – The shares of Norwegian Air plunged by more than 60% on Tuesday as they resumed trade after the airline proposed a financial rescue package on April 8 that would significantly dilute existing equity.

If approved by creditors and shareholders, the plan would convert $4.3 billion of debt into equity, and also raise some new equity, wiping out much of the remaining value of the company’s current shares.

The budget carrier has grounded most of its fleet due to the impact of the COVID-19 outbreak on travel and on March 16 announced the temporary layoff of 7,300 staff, about 90% of its workforce.

Norwegian’s shares plunged 62.5% in early trade to an all-time low of 3.10 crowns, valuing the company at just 500 million Norwegian crowns ($48.8 million).

Norwegian was facing financial problems even before the coronavirus outbreak. Before Tuesday’s fall, its shares were down 78% this year, underperforming other major European airlines, which were down between 30% and 60%.

The airline must now convince its creditors to agree to the rescue plan before it is put to a shareholders’ vote on May 4.

The Oslo stock exchange said on Tuesday that trading in Norwegian’s shares would be subject to special observation until there was further clarification of the airline’s situation.

Special observation is used under circumstances that may make the valuation of a security particularly uncertain, according to the market operator’s guidelines.

($1 = 10.2490 Norwegian crowns)

(Reporting by Terje Solsvik, editing by Gwladys Fouche/Victoria Klesty/Susan Fenton)

Air France-KLM’s Future in Doubt Without Cost Cuts – Dutch minister

VW Not Seeking Deal With Tesla – CEO Diess

Norwegian Air Shares Plummet 60% After Proposed Rescue Plan

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