Live News: Cathay Pacific records up to $783m in losses in 2021 as Covid curbs bite

Cathay Pacific records up to $783m in losses in 2021 as Covid curbs bite

Empty Cathay Pacific check-in counters at Hong Kong International Airport © Chan Long Hei/Bloomberg

Cathay Pacific posted losses of up to HK$6.1 billion ($783 million) last year as continued reduced demand and strict coronavirus travel restrictions imposed on the Hong Kong airline .

The de facto flagship carrier expects to see a loss to shareholders of $719 million to $783 million in the fiscal year ending Dec. 31, it said in a preliminary review Monday. The figure still marks an improvement from the nearly $2.8 billion hit its accounts took in 2020 following a recovery in freight demand.

Cathay faced intense pressure from Hong Kong authorities who accused its staff of fomenting the first outbreak of the Omicron variant. The company warned that a tightening of aircrew quarantine measures and other restrictions last month could cause an estimated cash burn of nearly $193 million a month from February.

“These measures will have a significant impact on our capacity for passenger and cargo flights,” Chief Executive Augustus Tang said.

The airline also said it carried 92,219 passengers last month, an increase of over 130% from the previous year but still a 95% drop from pre-pandemic levels in 2019.

Hong Kong adopted a zero Covid strategy similar to that of mainland China, which included three-week hotel quarantines and a ban on flights from eight countries until at least next month. Despite those measures, authorities recorded 140 infections on Sunday, the highest number in a single day for 18 months, as the territory battles a spiraling outbreak of the Omicron variant.

Australian private sector contracts for first time in four months, PMI shows

Customers sit outside a cafe at Sydney's Bondi Beach

Customers sit outside a cafe at Bondi Beach in Sydney © Mark Baker/AP

Australia’s private sector shrank for the first time in four months as the Omicron variant of the coronavirus disrupted operations, according to the latest Purchasing Managers’ Index data.

The IHS Markit Flash Australia Composite Production Index fell to a five-month low of 45.3 in January from 54.9 in December 2021 as output and private sector demand fell while job growth stopped.

Australia’s economy appears to have rebounded in the second half of 2021. But a sharp rise in Omicron infections, which hit a daily record of nearly 90,000 last week, has dampened growth, hurt consumer confidence and the business optimism and affected supply chains, with supermarkets and the hospitality sector hit by anemic workforces. These factors have contributed to runaway price inflation.

The mineral-rich state of Western Australia continued to keep its border closed to other Australian territories due to the spread of Omicron.

Jingyi Pan, economist at IHS Markit, said: “Australia’s economy had moved from a state of strong recovery [at] end of 2021 to be affected by the upsurge in Covid-19 infections in early 2022.”

Despite the disruption posed by Omicron, Pan said there was cause for optimism: “There have been some early positive signs of Covid-19 infections peaking in Australia, which may offer some hope for ‘a turnaround in the absence of new restrictions imposed’.

Australian Fortescue to buy Williams F1 battery and tech arm for £164m

Fortescue Metals Group’s green investment division has agreed to buy the battery and technology arm of Williams Formula One racing team for £164m.

The Australian mining group said it would use battery systems and electrification technology acquired by Fortescue Future Industries to help achieve its goal of being carbon neutral by 2030.

It plans to use the new systems to adapt its 3 km long freight trains, heavy industrial equipment and 400 tonne haul trucks to reduce emissions at its mine sites, he said.

The first major project will be an electric train concept, Fortescue said, which is expected to become a significant development in the green industrial transportation sector.

Andrew Forrest, President and Founder of Fortescue, said: “This announcement is the key to unlocking the formula to phase out fossil fuel-powered machinery and replace it with zero-carbon technology.”

Williams, one of motor racing’s most famous names, was sold in 2020 to US fund Dorilton Capital for £152m in what was seen as an admission that the team could no longer compete with better-funded rivals such as Red Bull and Mercedes-Benz. .

What to watch in Asia today

Macau: The Chinese territory’s legislature will conduct its first reading of a gambling bill. The proposal would increase government oversight of the lucrative industry, halve the length of casino licenses to 10 years and regulate junket operations in one of the casino hub’s biggest upheavals.

Singapore: Singapore is about to release its consumer price index for December, which will give an indication of the pace of recovery in domestic economic activity.

Taiwan: Taiwan will release industrial production data for December following coronavirus-related disruptions, such as staff shortages, in manufacturing activities.

Pakistan: The State Bank of Pakistan is expected to stick to its monetary policy announcement, hoping that a global surge in commodity prices will subside as central banks turn hawkish.

Markets: Futures for Australia, Hong Kong and Japan signal that the region’s major exchanges are set to fall after global stock markets posted their biggest weekly declines since the start of the pandemic as the Federal Reserve moved lower. about to tighten financial conditions.

Rolls-Royce invites tenders for a site to manufacture small nuclear power plants

An image of what mini nuclear facilities might look like

A Rolls-Royce image of what mini-nuclear facilities might look like © Rolls-Royce

Rolls-Royce, the British aero engine manufacturer, has launched a competition between regions of England and Wales to be the location of the main factory to build a planned fleet of small nuclear reactors.

An industry consortium led by Rolls-Royce has written to several English regional development bodies and the Welsh government asking them to present the manufacturing site, promising an investment of up to £200m and the creation of up to 200 jobs direct.

The consortium secured £210m from the government last year for the development of a fleet of mini-reactors after raising a similar amount of private sector funding.

British Prime Minister Boris Johnson has backed small modular reactors as part of his 10-point plan for a “green industrial revolution” to help meet the government’s 2050 net zero carbon target. The technology is seen within the government as a good way to create jobs in the manufacturing sector as well as implement Johnson’s “upgrading” program to help less developed regions.

According to plans, the reactors will be built in factories across the country and then assembled on site, reducing the risks and huge costs of building large nuclear power plants. The main plant will build the high pressure vessels that are part of the reactors.

Activist hedge fund Trian takes stake in Unilever

Nelson Peltz’s activist hedge fund Trian Partners has taken a stake in Unilever, increasing pressure on the FTSE 100 company after its abortive pursuit of GlaxoSmithKline’s consumer health business.

People with direct knowledge of the matter told the Financial Times that the $8.5 billion New York-based hedge fund had taken a position in shares of the British group, adding to the challenges faced by chief executive Alan Joe.

The Unilever boss is already facing simmering shareholder discontent after his attempted £50bn takeover of GSK Consumer Health. He now takes on a fierce militant fund known for demanding streamlining and governance reforms at consumer goods groups such as Procter & Gamble, Sysco and Mondelez.

People with knowledge of the staking did not provide details on its size or when precisely it began.

The revelation comes after a tumultuous week for Unilever in which it was forced to acquiesce to shareholder demands to end its pursuit of GSK’s consumer healthcare business after three unsuccessful bids.

The investor revolt last week caused Unilever’s share price to fall by 11%. He recouped some of the losses after the company said it would not increase its offer further.

Fed set to back first pandemic-era interest rate hike in March

Jay Powell, Chairman of the US Federal Reserve, listens during a Senate hearing on January 11
Jay Powell, Chairman of the US Federal Reserve, listens during a Senate hearing on January 11 © Brendan Smialowski/AFP via Bloomberg

The Federal Reserve is expected to confirm its intention to raise interest rates in March for the first time since the start of the pandemic, as the US central bank considers a more aggressive path to monetary tightening in the face of persistent inflation.

Fed officials will gather this week for their inaugural policy meeting of 2022, the first since the central bank made its fight against rapid consumer price growth in the United States its top priority.

The Fed has toughened its rhetoric in recent weeks on the risks posed by high inflation, with Chairman Jay Powell this month calling it a “serious threat” to sustained economic expansion and a robust labor market recovery.

Its top policymakers have also made it clear they are ready to act forcefully to ensure inflation does not take hold, considering raising interest rates “sooner or at a faster pace.” than expected and rapidly reducing the Fed’s huge balance sheet this year.

Coupled with mounting evidence that inflation is widening and the labor market is recovering rapidly, the central bank is well positioned to act in March, say many Fed officials and Wall Street economists .

About Elizabeth Smith

Check Also

The UK’s worst hotels revealed

The Grand Hotel de Britannia in Llandudno, Wales. Britannia has been named the UK’s worst …