Parent company plans 3,500 job cuts worldwide “in coming years”
ZURICH, SWITZERLAND – Airline Swiss and its mother company Lufthansa both showed losses for the first quarter of 2012, a year that the parent firm expects to remain difficult. Lufthansa posted a loss of euros 397, despite higher passenger traffic that resulted in revenues of euros 6.6 billion, a 5.6 percent increase.
High oil prices were the main culprit but the company noted its earning were also hit by “the air traffic tax imposed in Germany and Austria and the costs of emissions trading in force in Germany since 2012 all had an adverse effect on the Group’s operating result.”
Swiss showed an operating loss of euros 6 million and its sister airline in the Lufthansa Passenger Airlines group had a loss of euros 67m, out of a total loss of euros 442m for the group.
Lufthansa says its cost-cutting plan “is to be achieved partly by cancelling loss-making routes and restricting capacity growth, which has been set at zero for 2012 and a maximum of four per cent for the years 2013 and 2014 each.” It is stepping up its investment in first-class service, saying it intends “to remain the European airline with the most First Class seats by far.”
Cucumbers: when will we learn to love them again?
GENEVA, SWITZERLAND – “It’s the bean sprouts”, the source of the E. coli outbreak in Germany, Reinhard Burger, Germany’s head of infectious diseases programme, said Friday morning 10 June. The actual sprouts that are behind what the WHO labels the “the unusual enteroaggregative verocytotoxin-producing Escherichia coli (EAggEC VTEC) O104:H4 bacterium” have not yet been pinpointed.
Germany’s Federal Institute for Risk Assessment and Food Safety and the Robert Koch-Institute will publish a joint press release Friday.
The number of new infections has been falling in recent days, but E.coli itself has killed 6 people in Germany and the HUS complication has killed 26, with an additional death in Sweden, according to WHO worldwide figures for the outbreak. In total, 2,909 people have been infected.
The European Union said Tuesday it would set aside €210 million for farmers touched by the outbreak, but a European farmers organization, Colos, says the losses are reaching €400m a week. Spanish farmers, the largest fruit and vegetable producers in Europe, calculate they have lost €200m in business since the start of the outbreak at the end of April, and German farmers say they have lost €60m, according to news agency AFP/TSR (Fr).
Zurich, Switzerland (GenevaLunch) - Five natural disasters in the Asia-Pacific region in the first three months of 2011 are likely to cost Zurich Financial Services Group $500 million, the company said in a statement Thursday 31 March.
The figure represents an amount net of reinsurance and before tax. They are estimates only, the company cautions: “The full loss assessment, and therefore the ultimate cost, will take time to complete due to the extreme nature of the losses and the limited access to the damaged areas particularly in Japan but also in New Zealand.”
The five events are: the Brisbane floods, the Victoria storms and cyclone Yasi in Australia in January and February, the Christchurch earthquake in New Zealand in late February and the recent earthquake and Tsunami in Japan. The losses will be recorded in the first quarter results 2011,to be released 5 May 2011.
Tablets are “additive”, mouse not about to disappear
Lausanne, Switzerland (GenevaLunch) – Logitech, based in Romanel-sur-Morges, will have a “tablet focus” to its “product launches in 2012, and 25 percent of its new retail products will be tablet friendly,” reports the Dow Jones Newswire of the company that made its name with computer peripherals, notably the mouse.
Logitech sales in the third quarter of 2010 were up 22 percent and it has raised its forecast for the final quarter of its fiscal year, which ends in March.
Dow Jones, which interviewed the company’s chief executive, Gerald Quindlen on its plans for the future, notes that while consumer analysts have been predicting the death of the mouse for years, Quindlen says he disagrees with them.
Decision
Zurich, Switzerland (GenevaLunch) - Bank UBS took too long to in July to give shareholders information about looming losses in 2007, the Swiss Stock Exchange sanctions commission has ruled. Friday 14 January it handed the bank a CHF100,000 fine, the end of a three-year investigation. The bank was bailed out by the Swiss government when it posted large losses in 2008.
UBS shareholders in May 2010 refused to give the bank’s directors a requested discharge of responsibilities for 2007, highly unusual for a Swiss company.
Timing of loss announcements broke the rules, says sanctions commission
“In accordance with stock exchange rules, an issuer must inform the market of any potentially price-sensitive information as soon as it becomes itself aware of the main points of such information,” explains Six, the Swiss exchange, in a press release.
BP Tuesday announced it will sell $30 billion in assets to cover a record UK quarterly loss of $17 billion, part of $32.2b in pre-tax provisions it is setting aside for losses from the Gulf of Mexico oil spill and to compensate victims. The company also confirmed that chief executive officer Tony Hayward is leaving the job, by mutual agreement, in October; it appears likely he will stay on with the company in another capacity. Bob Dudley, who is currently in charge of day-to-day clean-up operations in the Gulf, will take over as CEO.
Link to other sites: Bloomberg, Financial Times
Video, BBC
Inter-Europe air traffic remains weak
Worldwide improvement is concentrated in Asia, Latin America
Brands, not flags, must guide the industry to profitability, says Iata head
Geneva, Switzerland (GenevaLunch) – The airline industry is expected to have an overall loss of $9.4 billion for 2009, according to Iata, the Geneva-based air transport industry organization, which released new figures Thursday 11 March. The loss is lower than Iata’s December projected figure of $11b. “More significantly, we now forecast smaller losses in 2010 of $2.8b, compared to our previous forecast of $5.6b.”
The improvement is due to year-end growth in traffic that carried on into January, but it was much led by Asia and Latin America, with the US and Europe far more sluggish.
Growth in passenger demand, world airlines 2006-2009 (Iata)
Click on image to view larger
“We can be optimistic but with due caution,” Giovanni Bisignani, CEO and director-general says. “Important risks remain. Oil is a wild-card, over-capacity is still a danger, and costs must be kept under control – throughout the value chain and with labour.”
Asian and Latin American carriers posted international passenger demand gains of 6.5 percent and 11.0 percent respectively in January. North America and Europe lagged, with international passenger demand gains of 2.1 and 3.1 percent.
Zurich, Switzerland (GenevaLunch) – Fourth quarter profits for 2009 were CHF1.205 million, says Swiss bank UBS, offering investors a brighter face after months of gloomy news about its financial results and legal problems. The figure was three times that projected by analysts contacted by Swiss news agency AWP. It leaves the bank with a loss for the year 2009 of CHF2.74 million, from a loss of CHF21.30m in 2008. The company published the figures Tuesday morning 9 February.
All business divisions reported a pre-tax profit. The improved performance, after four straight quarters of losses, was due to cost-cutting and efficiency, with fixed costs reduced to CHF20.2 billion, “broadly in line with the CHF20b target set for 2010″ the financial report indicates.
Analysts had predicted losses of up to £150 million for BA (British Airways) for the final three months of 2009, but the company weighed in with a loss of £50m, down significantly from the £122 it lost during that period in 2008. Its financial year ends in March, so the figures are for the company’s third quarter. Willie Walsh, chief executive, told journalists Friday morning 5 February that cost-cutting was responsible for the improvement, with costs reduced by more than 10 percent. The figures look less rosy for the financial year as a whole, compared to the first three quarters of 2008-09, with a loss more than four times as great. But Q3 did show an operating profit, and Walsh insists that the company’s structural changes are having a positive impact on its finances. Difficult negotiations continue with staff over pay cuts and the BA pension plan, with staff voting until 22 February on whether to strike.
Links to other sites: BA, BBC, Financial Times
Giovanni Bisignani, Iata
Cointrin Airport, Geneva
Geneva, Switzerland (GenevaLunch) – The world’s airlines are expected to lose $5.6 billion in 2010, nearly twice earlier forecasts of $3.8b. The losses will come on the heels of an “Annus Horribilis” in 2009 where losses will likely be $11b for the industry worldwide, IATA (International Air and Transport Association) announced Tuesday 15 December. Between 2000 and 2009 airlines lost $49.1b, a Decennis Horribilis, according to Giovanni Bisignani, the industry group’s director general and CEO.
Bisignani, at the group’s annual press conference in Geneva, pleaded for less government regulation and a more competitive environment to ensure that the industry does not suffer another decade with this level of losses. “Government regulation is keeping the airline industry financially crippled,” he noted. “It is 30 percent cheaper to fly today than a decade ago. This is a very competitive industry but governments still refuse to let airlines operate competititively.”
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Spanish air carrier Iberia and British company British Air (BA) have ended 16 months of negotiations with an agreement to merge as equal partners, but the deal is far from done. The new company would be tax resident in Spain, but the head office would be in Britain. BA’s pension plan debt of £2.66 billion, exactly equal to the value of the company, must be brought under control or Iberia could still back out of the deal, according to the terms of the agreement. Iberia Friday morning 13 November posted a nine-month pre-tax and interest operating loss of €331 million, higher than analysts expected, for a net loss of €181m during the period. The new airline, which does not yet have a name (TopCo is being used temporarily), would be Europe’s third largest, after Lufthansa and Air France-KLM.
Links to other sites: El Pais (Spa), Financial Times, London Stock Exchange news, Times, UK
Zurich, Switzerland (GenevaLunch) – Bank Julius Baer has announced a fall of 37 percent in consolidated net profit to CHF 324 million in the first six months of 2009, compared to the same period a year earlier.
Geneva, Switzerland and Kuala Lumpur (GenevaLunch) - Airlines are likely to lose $9 billion in 2009, twice the figure predicted in March, says Iata, the airline industry association. The figure was given by Iata’s director-general and CEO, Giovanni Bisignani, in his state of the industry address at the Geneva-based group’s annual general meeting this week in Kuala Lumpur. He says the revised figures reflect “a rapidly deteriorating revenue environment.” Bisignani pointed out that it took the industry three years to recover after the drop in travel post-September 2001, and that was after a 7 percent fall in reveneus. This time the revenue drop is expected to be 15 percent.
Two major US city newspapers, the New York Times and the Washington Post, are cutting salaries and jobs as well as other costs in a dismal market that is worsening, they say, with print advertising revenue falling off sharply and online revenue, growing from a small base, not increasing rapidly enough to offset the losses. Reuters
Sony will keep wages unchanged for this year and cut bonuses from six to four months. The global financial crisis has hit the Japanese technology sector, causing Sony to freeze workers’ salaries in order to recover, reports Reuters. Sony, unlike some of its competitors, does not raise wages automatically based on seniority. Instead, wages increase annually based on role and performance, and rivals may follow suit as the crisis worsens. Reuters
2009: stormy days for airlines
Geneva, Switzerland (GenevaLunch) – Airlines around the world are expected to lose $5 billion in 2008, of which European airlines will lose $1b, a 10-fold drop. Overall, revenues will fall to $501b with losses rather than profits the story in every region except North America, where profits will be less than 1% of revenue.
