Dutch minister says survival of Air France-KLM 'not a given'

Yahoo – AFP, September 13, 2020

Many Air France-KLM planes have been grounded for months because of
the coronavirus

The survival of the Air France-KLM group is not guaranteed if the economic crisis caused by the coronavirus pandemic continues, Dutch Finance Minister Wopke Hoekstra warned Sunday.

France and the Netherlands, each with a 14-percent share of the group, have poured out billions of euros in aid to help national carriers that virtually came to a standstill in the first half of 2020.

"It's not a given," Hoekstra said in an interview with Dutch public television NPO, stressing the need to cut costs.

In the spring, Paris gave Air France seven billion euros ($8.3 billion) in loans, and The Hague granted KLM similar aid worth 3.4 billion euros.

The bailout for KLM must be accompanied by "a comprehensive restructuring plan" as well as commitments to reestablish performance and competitiveness.

Hoekstra said he had insisted in talks with KLM on the importance of changing direction.

Dutch press agency ANP said KLM has to develop a restructuring plan by October 1.

Air France-KLM suffered a loss of 2.6 billion euros in the second quarter as air traffic virtually shut down because of the coronavirus pandemic.

This followed a loss of 1.8 billion euros in the first quarter.

Air France said it would cut almost 7,600 jobs by the end of 2022 and KLM up to 5,000 jobs.

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Boeing 747 and Airbus A380: End of the jumbos of the skies?

Jakarta Post – AFP, ALI BEKHTAOUI WITH AFP BUREAUS, July 18, 2020

In this file photograph taken on May 3, 2019, a British Airways Boeing 747
passenger aircraft prepares to land at London Heathrow Airport, west of
London. (AFP/Ben Stansall)

The Boeing 747's slow descent into retirement from commercial service just got steeper with British Airways' announcement Friday it would be pulling the jumbo jet from the skies as the coronavirus pandemic forces it to cut back operations and cut costs.

BA's announcement follows moves by a number of other airlines that have retired their 747s and their Airbus A380, another jumbo-sized four-engine jet made by Boeing's European rival.

The fact the planes have four engines means they consume more fuel, which means they can cost more to operate and cause more pollution if not full.

Who has grounded their jumbos?

Lufthansa announced in April that it is grounding five of its 32 747s and 14 A380s, saying the move was related to their higher environmental and economic footprint.

Air France, which had already planned to retire its A380s in 2022 because of their higher operating costs, also took advantage of the reduced demand for traffic due to coronavirus lockdowns to mothball them early.

Australia's Qantas also accelerated its phase out of its three 747s, and its A380s are also set to go.

Korean Air is only flying 12 out of its 23 Boeing 747s -- 11 cargo and one passenger jet, according to the airline.

Air India's four 747s are being used to fly VIPs and take part in evacuations.

America said goodbye to the Boeing 747 in December 2017, when Delta, the last US airline to use the jet, retired the aircraft.

Coronavirus to blame?

"Coronavirus is an accelerant," said Remy Bonnery, an aviation expert at Archery Consulting.

Both the 747 and A380 "are much more difficult to manage in a fleet... They are not the easiest aircrafts to fill, they consume more" fuel, he said.

Launched in 1970, Boeing's jumbo jet can transport more than 600 passengers in certain configurations. The A380 can carry up to 853.

"Even before the crisis there was a trend towards smaller and more flexible aircraft" that are less costly to operate and can be used very different types of routes, said Bonnery.

Aviation expert Sebastien Maire at Kea & Partners recently told AFP that the A380 offers airlines the lowest operating cost per seat, provided every seat is occupied.

Filling the planes was proving difficult for airlines on many routes, however.

End of the giants of the skies?

"It is clear there won't be trend towards jumbos in the coming years," said Bonnery, adding that the "manufacturers will above all focus on short-haul planes and single-aisle aircraft capable of assuring long routes."

Emirates, which has the largest fleet of A380s at 115, has said it will continue to fly the aircraft that entered service just 15 years ago.

But Emirates acknowledged that the days are numbered for jumbo jets.

Airbus has already announced it will make the final delivery of a 251st A380 next year.

Bloomberg reported earlier this month that the final 747 will roll off the assembly line in two years, but the manufacturer has yet to officially confirm when it will halt production.

There is one customer still waiting for delivery of new 747s: the White House.

Two of the latest version the aircraft, the 747-8, the largest, fastest an most fuel efficient version of the aircraft are due to made to serve as Air Force 1.

Micro cars which park on Amsterdam pavements face €95 fine from July

DutchNews, May 14, 2020 

Photo: DutchNews.nl

The drivers of micro electric cars such as Biros are being offered the chance to buy a two-year Amsterdam-wide parking permit for the discounted price of €450 as part of efforts to get them off the pavements. 

The city plans to ban the micro cars from parking on the pavement from July 1, but says wardens will only be able to issue fines if the vehicles have number plates – and only about 50% currently do so. 

The coronavirus crisis has led to long delays at the licencing board RDW and, according to alderman Sharon Dijksma, as long as owners do not have a number plate, the city will not be able to fine owners who still park on pavements, according to the Parool. 

Dijksma said the city sees the micro cars as a good alternative to the car, and a welcome addition to public transport and bikes. 

Initially, the city will issue 3,000 trial parking permits. The fine for parking on the pavement from July 1 is €95. 

People who drive micro cars because of a physical handicap will not have to have a licence plate but their car must be specially adapted to meet their needs and be checked by the RDW.

Coronavirus could put export of Dutch cycle expertise into gear

DutchNews, May 14, 2020 

Photo: Depositphotos.com

The coronavirus crisis could boost the export of Dutch cycling infrastructure expertise and products as countries are turning to the bicycle for a safer means of transport, RTL Nieuws reports. 

‘Coronavirus is accelerating the cycling infrastructure projects of many cities,’ says Lucas Harms, who heads the Dutch Cycling Embassy, a network of Dutch companies specialising in products like bike parks and other bike-related infrastructure. 

As coronavirus is turning people away from using public transport, the local authorities in Brussels have been turning car lanes into bike lanes over the last few days, as has Paris, RTL said. And in Milan, plans have been presented to limit space for cars in favour of bikes. 

‘We don’t yet know if this is a temporary thing. People may be just panicking and improvising but the good thing is that a seed is planted,’ said Harms, whose Cycling Embassy has advised hundreds of local authorities around the world on emulating Dutch cycling infrastructure. 

To build an infrastructure for cycling involves expertise in many areas, Harms said. ‘You need traffic experts, marketing people to create awareness,  and policy advisors. We have a lot of companies with specialised knowledge, just think of the multi-storey bike parks, like the one at Amsterdam’s main railway station. We are used to them but in other countries they are far from usual.’ 

It is not known how much the export of cycle expertise and products is currently worth but, Harms said, the 60 partners of his network are all involved in projects abroad.

Saudi Aramco tips difficult 2020 as virus hits quarterly profit

Yahoo – AFP, May 12, 2020

Aramco was listed on the Saudi stock market in December following the world's
largest initial public offering but has since been hit by a slump in world oil prices
as the coronavirus pandemic has sent the world into recession (AFP Photo/
Fayez Nureldine)

Riyadh (AFP) - Energy giant Saudi Aramco on Tuesday posted a 25 percent slump in first-quarter profit and said the coronavirus crisis which triggered a crash in oil prices would weigh heavily on demand in the year ahead.

Aramco was listed on the Saudi stock market in December following a historic $29.4 billion initial public offering -- the world's largest -- but since then has faced a torrid environment.

Oil prices slumped to nearly two-decade lows in March, losing almost two-thirds of their value as the coronavirus pandemic sent the world into recession.

Prices plummeted further in April amid a price war between Russia and Saudi Arabia as the major producers scrambled to secure market share.

"The COVID-19 crisis is unlike anything the world has experienced in recent history and we are adapting to a highly complex and rapidly changing business environment," CEO Amin Nasser said in a statement.

Aramco said that a steep decline in global demand for energy and prices caused by the pandemic would undermine its full-year results.

"Longer term we remain confident that demand for energy will rebound as global economies recover," Nasser said.

The world's largest listed firm posted a net profit of 62.5 billion riyals ($16.66 billion) in the three months to March, compared to $22.2 billion a year earlier.

The company said the drop in earnings mostly reflected a decline in crude oil prices, as well as shrinking margins in the refining and chemicals businesses.

Price war truce

During the price war in April, Saudi oil production soared to a record 12.3 million barrels per day, pushing stockpiles to unsustainably high levels and causing chaos on global oil markets.

However, top producers agreed last month to slash output by 9.7 million bpd to try to arrest the freefall.

During the crisis, prices for benchmark West Texas Intermediate dipped below zero for the first time ever as abundant supplies wiped out storage capacity in the United States.

The coronavirus lockdowns, which have kept billions of people in their homes in order to contain the pandemic, have sapped global demand by more than 20 million bpd.

On Monday, Riyadh announced it would cut output by more than it had pledged -- shaving an additional 1.0 million bpd -- providing markets with a much-needed boost as the world economy cautiously emerges from the shutdown.

The move means that in June, Aramco production will drop to 7.5 million bpd -- its lowest level since mid-2002, according to analysts.

Aramco said Tuesday that its first quarter revenues were calculated on the basis of an average production of 9.8 million barrels per day and an average oil price of $51.8 a barrel.

However, factoring in the cuts in May and June, profits in the coming quarters are likely to plummet, meaning that Saudi state revenues, which heavily rely on Aramco results, will take a substantial hit.

The kingdom, which has posted a budget deficit since 2014, resorted to austerity measures on Monday, tripling value-added tax to 15 percent, delaying or cancelling projects and abolishing citizens' cost-of-living allowance.

The cuts risk stoking public resentment over an already high cost of living and demands for greater scrutiny of major projects such as the proposed purchase of English Premer League football club Newcastle United.

Industry reeling

Almost all global energy giants, including Exxon Mobil, Chevron and BP, have reported huge losses in the first quarter.

Aramco, which is responsible for the stewardship of Saudi's huge energy reserves, has relied on its extremely low production costs to remain profitable.

The company said however that capital spending will be trimmed this year, in a range between $25 billion and $30 billion, down from $32.8 billion in 2019.

Investors brushed off the drop in profits as Aramco's share price closed the day up 1.3 percent at 31.30 riyals.

Since the start of the year, Aramco shares have lost 11.2 percent and its current market value stands at $1.67 trillion, way down from levels of just over $2 trillion that it hit soon after listing.

Aramco, which is headquartered in the eastern city of Dhahran, last year posted a 20.6 percent decline in its annual net profit to $88.2 billion due to chronically low oil prices and production levels.

Boeing to cut staff, plane output after big Q1 loss

Yahoo – AFP, April 29, 2020

Boeing announced sweeping cost-cutting measures after reporting a first-quarter loss
of $641 million following the hit to the airline business from the coronavirus pandemic
(AFP Photo/SCOTT OLSON)

New York (AFP) - Boeing announced sweeping cost-cutting measures Wednesday after reporting a first-quarter loss of $641 million following the hit to the airline business from the coronavirus pandemic.

The aerospace giant plans to reduce its workforce by 10 percent through a combination of voluntary and involuntary layoffs and will slash production of its main commercial planes, including the 787 and 777, Chief Executive David Calhoun said in a message to employees that accompanied an earnings release.

"The aviation industry will take years to return to the levels of traffic we saw just a few months ago," Calhoun said. "We have to prepare for that."

Calhoun said the job cuts would be deeper -- more than 15 percent -- in commercial airplanes and services, as compared with defense and space systems, where the business has been more stable.

The quarterly loss of $641 million compared to profits of $2.1 billion in the year-ago period. Revenues fell 26.2 percent to $16.9 billion.

Total debt at the end of the quarter was $38.9 billion, up from $27.3 billion at the end of December.

Calhoun said the belt-tightening was needed to maintain adequate liquidity at a time its revenues are depressed, adding that the company is "exploring potential government funding options" in the wake of COVID-19.

Boeing has previously called for $60 billion in government support for the US aerospace industry. Federal relief legislation includes $17 billion aimed at Boeing. Calhoun has previously balked at the idea of the US taking a stake in Boeing.

The loss reflected "abnormal production costs" connected to the temporary suspension of Puget Sound manufacturing operations due to COVID-19 and due to the suspension of production of the 737 MAX, which remains grounded following two deadly crashes.

Boeing said the pandemic crisis has hit demand for new planes and services, with airlines delaying purchases of jets, slowing delivery schedules and deferring elective maintenance.

It will cut production of the 787 from 14 per month to 10 per month in 2020 and gradually to seven per month by 2022.

Boeing also will trim output on the 777 and lower its targets for the 737 MAX.

"We have done a tremendous job of increasing our production rates and services offerings in recent years," Calhoun said. "But the sharp reduction in our demand for our products and services over the next several years simply won't support the higher levels of output."

Boeing shares jumped 4.1 percent to $136.36 in pre-market trading.

Icelandair Cuts 2,000 Staff Over Coronavirus Impact

Barron’s – AFP, Alexander Klein, April 28, 2020

Icelandic airline Icelandair announced deep job cuts due to the effects of the
novel coronavirus crisis

Icelandic airline Icelandair said Tuesday it would lay off about 2,000 of its staff as the COVID-19 pandemic continues to impact air travel "for the unforeseeable future."

In response to the impact, Icelandair said the company was preparing for an "extended period of minimum operations."

The company said that "the employment of around two thousand employees will be terminated," adding that crew, maintenance and ground operations, would be most affected.

Icelandair added that the "majority of the remaining employees continue in part-time roles" and those in full-time positions would be affected by salary reductions.

"These measures are very painful yet necessary. We are facing considerable uncertainty for the unforeseeable future," Bogi Nils Bogason, CEO of Icelandair, said in a statement.

Bogason added that they hoped to be able to offer those affected employment again once markets started to recover.

In 2018, Icelandair had some 4,600 full-time employees and carried 4.4 million passengers, according to the company.

As of Tuesday, Iceland had confirmed 1,795 cases of the new coronavirus and 10 deaths.

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