The UK competition watchdog has put the squeeze on the Three-O2 deal, Vedanta has persuaded lenders to amend debt covenants, Tata Steel is beginning the formal sale process for its UK assets. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
Japan shares down, China and HK up || Japan GDP growth misses expectations || European banks need to shed another €3.2tn in assets by 2018 || Charges prepared against two JP Morgan traders || US probes antipsychotic drug use in children || World’s biggest airlines want to stick with Heathrow || Growth momentum moves back to developed countries || Brazil considering own EU trade deal
Japanese stocks soar || Yen weakens further beyond 100 || Vietnam cuts interest rates || Report criticises ENRC Congo deals || Hester determined to lead RBS sell-off || Schauble warns of monetary easing risks || Japan CA surplus highest for a year || Europe households’ debt burden exceeds US
China’s PMIs more positive || Panasonic plunges on big loss warning || Comet likely to go into administration || CIC buying stake in Heathrow || European short selling ban starts today || United Continental looks at A-350s || A year on from MF Global’s collapse || Who wants to work in banking, now?
Night flight restrictions at Heathrow will be eased over the next four days in an effort to help resolve the travel chaos that has left thousands of passengers stranded at Europe’s busiest airport, the government announced on Monday, according to the FT. “Operating hours will be permitted to continue until 1am and arrivals for repatriation flights will be allowed throughout the night,” said Philip Hammond, transport secretary, who was due to make a statement to parliament later in the day. His comments came shortly after British Airways urged passengers trying to fly out of its home hub of Heathrow to cancel their flights unless they absolutely had to travel. The BBC reports how the rest of northern Europe is also struggling yet Helsinki manages to stay open despite periodic blizzards.
France was slowed down this morning as truck drivers, refinery operators and rail staff continued strikes in protest against proposals to raise the retirement age by two years. Strikes at France’s main refineries, which help supply Germany and Switzerland, are now beginning their third week and petrol stations reported shortages over the weekend.
Some UK airports were closed on Sunday and remained closed early Monday as a cloud of volcanic ash from an Icelandic volcano disrupted air passengers for the third time in a month, reports the FT. Heathrow and Gatwick were due to be shut down from 1am BST on Monday following closures that hit airports from noon on Sunday including Manchester, Liverpool, Doncaster, Carlisle, Humberside and East Midlands as well as Northern Ireland, forcing the cancellation of dozens of flights.
Airports in Ireland and Scotland were closed on Wednesday after a plume of volcanic ash drifting south from Iceland caused a second day of disruption. The busiest airports in the south-east of England, including Heathrow and Gatwick, are not expected to be affected, although a buffer zone keeping aircraft away from the plume could affect flights as far south as Manchester, the FT said.
Ryanair could shift many of its flights from Stansted to Gatwick if the Sussex airport’s new owner lives up to promises to improve its services and keep charges down . . . That’s from the Evening Standard earlier this month, based on comments from Ryanair COO Michael Cawley made as the Irish carrier presented its third-quarter results.
Based on the contents of this delirious court filing we would argue that the answer is an unequivocal “yes.” That’s not because Guy Hands, the founder of Terra Firma and, by extension, the boss of EMI, may have lost touch with reality in his wild accusations of fraud against Citigroup and its clubbable corporate financier, David Wormsley.
One thing we know about the South Koreans — they have reversed course in recent years to become big spenders and poor savers. They have also become much bolder investors, after decades of adhering to a more cautious approach. All this is perhaps why the country’s biggest pension fund, the National Pension Service (NPS), is revelling in a worldwide shopping spree after nearly two decades of conservative investing, which even now sees just 10 per cent of its $240bn funds abroad — with about 77 per cent still in fixed-income holdings, almost all of them Korean.
Lawrence Hunt was CEO of Silverjet, the British all-business class airline that operated between January 2007 and May 2008. Here he gives his thoughts on British Airways’ new all-business class service, which began flights between London’s City airport and New York’s JFK last week. The opinions expressed are Hunt’s own. The launch last week of British Airways’ all-business class service to New York from London City airport has polarised industry opinions about the validity and sustainability of such a niche business model. Following the demise of my own all-business class airline, Silverjet, in May 2008 and the two American variants, Maxjet and Eos, six months before that, industry protagonists, pundits and analysts called the end of the niche for good. The evidence, of course, points to further challenges in trying to make the model work.
The Virgin Atlantic CEO writes: Our industry has never seen anything like it. It’s been a year in which airline management teams have had to cope with major swings in oil prices and a swingeing cut in demand in recent months. While other sectors in the economy are now talking about green shoots it’s difficult to see many, if any, in aviation.
BAA, owner of London’s Heathrow airport, has just released its first-quarter results. They are not pretty. The debt-laden airport-operator, currently under regulatory orders to dispose of its two other London airports, suffered not just from the global downturn in the period, but also the heavy snowfall in February and a late Easter (April 2009 instead of March 2008), making the post-tax loss widen from £37.8m in Q1 2008 to £228.8m in 2009. Passenger numbers, meanwhile, dropped a solid 6.4 per cent at Heathrow and a staggering 14.6 per cent at Gatwick and Stansted.
A sign of the times for airlines: March 10 (Bloomberg) — European Union regulators proposed to suspend an obligation on airlines to use their airport slots at least 80 percent of the time to avoid losing them, offering relief amid the economic decline.
London’s Luton airport may once again see all-business-class flights as BWAA prepares to start services this year. BWAA, which stands for British West African Airways, plans to fly between London Luton and Nigeria, where it’s based, according to a source. The carrier will take over Silverjet’s private terminal, which has stoody largely empty since the business-class only carrier went bust in June last year.
All buyers are not created equal, at least in the UK Competition Commission’s eyes. The antitrust watchdog has set out some very strict criteria for any potential buyer of BAA’s assets today, after confirming the airports company, bought by Spain’s Ferrovial for £10bn in a debt-funded deal in 2006, will have to sell Gatwick and Stansted airports in London, and Edinburgh airport in Scotland.
That’s quite some boardroom brawl brewing between EasyJet and founder Sir Stelios Haji-Ioannou. The Greek entrepreneur and shipping tycoon is refusing to sign off on the airline’s annual accounts, in a statement, attached to EasyJet’s annual results out today. The boardroom spat centres on the airline’s expansion plans — though today’s escalation revolved around rather technical accounting issues. Selected excerpts are below:
For anyone who’s had the pleasure of circling Heathrow at 13,000 feet for two hours (capacity-restrictions) or queuing in line at security for 40 minutes (new anti-terror rules), today’s report on the BAA monopoly from the UK Competition Commission will be welcomed. The CC pulls no punches, lambasting BAA’s “lack of responsiveness to the needs of its airline customers and a lack of initiative in planning capacity.” It recommends BAA-owner Ferrovial be forced to sell two London airports (likely Stansted and Gatwick) and one Scottish airport (likely Glasgow, in Alphaville’s opinion), to remedy a lack of competition.
A break-up of BAA, the world’s biggest airport operator, is looking increasingly likely. One of the company’s three Scottish airports (probably Glasgow) and at least one London airport look set to go. Prices of around £2-3bn have been mooted for Gatwick, London’s second-biggest airport after the infamous Heathrow. Michael O’Leary, the outspoken CEO of low-cost-carrier Ryanair, told the Telegraph last week he would pay £2bn for the slightly smaller London Stansted.
BAA has won bondholders’ backing for changes that the highly geared UK airports operator hopes will help it complete a £9bn refinancing within the next few weeks. BAA said Wednesday it had “secured overwhelming support” for the plan, which involves “migrating” about £4.8bn in bonds to a new ring-fenced structure backed by the regulated assets of London’s Heathrow, Gatwick and Stansted airports and the Heathrow Express rail service. Getting the bondholders on side was crucial to securing an investment grade rating for the new vehicle. Last week BAA said UBS held more than 25% of its outstanding £900m bonds due in 2031, on behalf of a client, believed to be Polygon Investment Parnters, and had not indicated how they would vote by a July 29 deadline.