From 1h ago 08. 01 Introduction: Ryanair signals risk of new Covid variants Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets. Budget airline Ryanair has warned that the recovery in air travel is “very strong but still fragile,” as a jump in passenger numbers helped it return to profit.
Ryanair posted a pre-tax profit of €203m for April-June this morning, its first profit for this quarter since the Covid-19 pandemic began. But chief executive Michael O’Leary has signalled that the autumn could bring fresh disruption, if new variants of the virus emerge. O’Leary told shareholders this morning it was too soon to provide a meaningful profit guidance for the current financial year, given the uncertainty: .
css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} While we remain hopeful that the high rate of vaccinations in Europe will allow the airline and tourism industry to fully recover and finally put Covid behind us, we cannot ignore the risk of new Covid variants in Autumn 2022. Our experience with Omicron last November, and the Ukraine invasion in February, shows how fragile the air travel market remains, and the strength of any recovery will be hugely dependent upon there being no adverse or unexpected developments over the remainder of FY23.
Several variants of the fast-spreading Omicron strain of Covid-19 have already been detected this year, leading to an increase in cases and hospitalisations in some countries. Why are there so many Omicron subvariants and why have BA. 4 and BA.
5 taken hold? Read more ‘Centaurus’: virologists express concern at new Covid subvariant Read more Ryanair’s Q1 profit was a recovery on a €324. 5m pre-tax loss a year ago, lifted by a strong recovery in traffic. Passenger numbers rose to 45.
5m in the quarter, up from 8. 1m in 2021 when travel restrictions were in place, and 9% more than pre-Covid. But Easter bookings and fares were “badly damaged” by the Russian invasion of Ukraine in February, the airline adds, pushing average fares 4% below pre-Covid levels.
O’Leary says there are “clear signs” of pent-up demand, but people are bookings flights closer to their travel day than they did before Covid. Striking a cautious note, O’Leary says this ‘later booking profile’, plus the lack of visibility over the outlook, volatile oil prices, and “potential Covid, geopolitical and supply chain” make it difficult to forecasting earnings this year. .
css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} We hope to be in a better position to do so at the half year results in November, but, as our experience with Omicron last November and Ukraine in February shows, any guidance is subject to a very rapid change from unexpected events which are well beyond our control during what remains a very strong but still fragile recovery. ” Also coming up today Drivers face the risk of further delays as the summer getaway continues.
Port officials at Dover said yesterday that services were finally back to normal, following days of chaos and very lengthy queues. Cars queue at the check-in at the Port of Dover in Kent yesterday. Photograph: Andrew Matthews/PA Border and ferry staff worked “through the night” to clear the huge volumes of tourist and freight traffic, after a “critical incident” was declared last week.
The situation got back to normal by the early hours of Sunday morning, a port spokesman said, but drivers could face another busy day crossing the Channel. Queues of traffic are building again at the Port of Dover with predictions of another busy day for people trying to cross the Channel. Congestion at the Eurotunnel at Folkestone has eased.
We’ll speak to @_NatalieChapman @LogisticsUKNews #bbcgms 0740 — Gary Robertson (@BBCGaryR) July 25, 2022 Warning Dover port chaos could spill into weekend as queues last six hours Read more The AA has warned that Folkestone has replaced Dover as Britain’s ‘hotspot of holiday hell’, as holidaymakers try to negotiate jams in the area and reach the Eurotunnel terminal. Channel travel chaos continues with ‘holiday hell’ at Eurotunnel Read more After gains last week, the UK’s FTSE 100 index is set to open around 0. 4% lower as economic slowdown worries continue to weigh on markets.
Last week global equities enjoyed upbeat sessions. Markets had looked over-sold. Inflation & mixed earnings remain a concern.
Profit taking in evidence early doors. Oil $102. Asia tepid.
Suggested opening calls: FTSE -30 @ 7246 DAX -82 @ 13171 CAC40 -32 @ 6184 DJIA -27 @ 13871 — David Buik (@truemagic68) July 25, 2022 On the economic front, the CBI’s latest healthcheck on UK factories is released this morning, alongside German business confidence data and a survey of economic activity in the US. Hundreds of dockworkers at one of Britain’s largest container ports in Liverpool will be balloted for strike action, in a dispute over pay and conditions . The Unite union said last week that more than 500 dockworkers at MDHC Container Services, part of Peel Ports, in Liverpool would be asked to vote over industrial action after a 7% pay offer was deemed inadequate and workers were not given an agreed bonus.
“The Unite union said more than 500 dockworkers at MDHC Container Services, part of Peel Ports, in Liverpool would be asked to vote over industrial action after a 7% pay offer was deemed inadequate and workers were not given an agreed bonus. ” https://t. co/m5NIZ4EEiU — OL USA (@OLOGUSA) July 19, 2022 The agenda 9am BST: IFO survey of German business climate 11am BST: CBI’s industrial trends report into UK manufacturing 1.
30pm BST: Chicago Fed National Activity Index Updated at 08. 03 BST Key events 29m ago More queues at Dover amid fears for ‘vulnerable’ summer 38m ago UK restaurant insolvencies jump by more than 60% 42m ago Two in five airport workers ‘thinking of quitting’ 53m ago Ryanair shares dip 1h ago Introduction: Ryanair signals risk of new Covid variants Filters BETA Key events ( 5 ) Ryanair ( 5 ) UK ( 3 ) Covid ( 2 ) Dover ( 2 ) Ukraine ( 2 ) 4m ago 09. 12 A European Central Bank policymaker has signalled that further large interest rate rises may be coming, after it surprised markets with a larger-than-expected hike last week.
Martins Kazaks has told Bloomberg that a further ‘quite significant’ increase to rates may be needed in September, on top of the 50-basis point rise agreed at July’s meeting. European Central Bank raises interest rates for first time in 11 years Read more Kazaks , who is a hawkish member of the EBC’s governing council, says: . css-knbk2a{height:1em;width:1.
5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “I would not say that this was the only front-loading, I would say that the rate increase in September also needs to be quite significant. ” Kazaks declined to speak about possible scenarios for the October meeting but said he’d have “no major objections” to recent market expectations for 150 basis points of tightening by next June. More here.
🇪🇺 The European Central Bank may not be done with big increases in interest rates after surprising with an initial half-point hike last week, according to Governing Council member Martins Kazaks – BBG https://t. co/u5Ndswa58h — Anthony Barton (@ABartonMacro) July 25, 2022 12m ago 09. 04 European stock markets have begun the week with small losses, as recession worries continue to weigh on shares.
Oil companies are among the fallers in London, along with gambling group Entain (-2. 7%) and Haleon (-2. 6%), the consumer health business spun off by GSK last week.
FTSE 100 : down 21 points or 0. 3% at 7,254 points Germany’s DAX : down 55 points or 0. 45 at 13,196 points France’s CAC : down 7 points or 0.
1% at 6,209 points 29m ago 08. 47 More queues at Dover amid fears for ‘vulnerable’ summer Queues are building at the Port of Dover amid fears that the severe disruption seen in recent days could return to Kent throughout the summer, PA Media reports. Ferry operator DFDS told passengers that there were “queues of around an hour” for French border checks on Monday morning, and to “allow a minimum of 120 minutes before your departure to complete all controls”.
P&O Ferries wrote on Twitter: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “The queues have picked up and it is taking approximately one hour to clear passport control.
” #PODOVER – There are queues at the entrance to the Port of Dover. It’s currently taking approximately 45 – 60 minutes to clear passport control. Please allow extra time on your journey if possible and rest assured that if you miss your sailing you will be on the next available — P&O Ferries Updates (@POferriesupdate) July 25, 2022 There’s also a one-hour wait time to get through border control at Calais to travel to Dover, P&O adds, although the roads approaching Calais were clear.
#POCALAIS – The approach roads to Calais are clear however there are currently wait times of approximately one hour at border controls. Please allow extra time if possible on your journey. Please rest assured if you miss your crossing you will be on the next available — P&O Ferries Updates (@POferriesupdate) July 25, 2022 Toby Howe, senior highways manager at Kent County Council and tactical lead at Kent Resilience Forum, said the current queues at the Port of Dover were “normal for a Monday morning”.
He told BBC Radio 4’s Today programme that next weekend is likely to be “very busy”. Howe said: . css-knbk2a{height:1em;width:1.
5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “It’s the second busiest getaway weekend of the summer holidays. “As we’ve just found out the weekend just gone, traffic numbers travelling across the Channel were back to pre-pandemic levels and with the increased checks it is slower to get through, so it takes very little to cause those tailbacks. ” Howe added that “Basically it’s a very vulnerable situation”, and that it wouldn’t take much to cause further problems.
Queues are building at the Port of Dover amid fears that the severe disruption seen in recent days could return to Kent throughout the summer https://t. co/AsCtvVHDD0 — Bloomberg UK (@BloombergUK) July 25, 2022 38m ago 08. 38 UK restaurant insolvencies jump by more than 60% Kalyeena Makortoff Photograph: Robbin Lee/Alamy Worker shortages and the cost of living crisis has forced more UK restaurants to shut their doors for good.
The number of restaurants falling into insolvency has increased by more than 60% in the past year, according to accountancy firm UHY Hacker Young. It reports that 1,406 restaurants in the UK closed their doors in the 12 months to May, up 64% on the previous year. Peter Kubik , a partner at UHY Hacker Young , says pressure on hospitality firms is intensifying.
. css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “Restaurants that only just managed to survive the pandemic thanks to government support are now facing fresh challenges in the form of rising inflation, a post-Brexit labour shortage and consumers who simply cannot afford to spend as much.
” Here’s the full story: UK restaurant insolvencies jump by more than 60% in year, data shows Read more That follows a number of high-profile restaurant businesses – including Byron, Gourmet Burger Kitchen and the Italian chains Strada and Carluccio’s – being forced to shut dozens of sites at the height of the pandemic as they incurred heavy financial losses during repeated lockdowns and other Covid restrictions. 42m ago 08. 33 Two in five airport workers ‘thinking of quitting’ More than two in five airport workers are considering quitting, research suggests, which could escalate delays already seen at terminals this year.
A survey of 1,700 workers by the UK jobs site CV-Library found reasons for wanting to leave the industry included wanting better pay and less stress. Two out of three of those surveyed said they had not had a pay rise in the past 12 months, despite staff shortages that left airlines and airports scrambling to hire staff. More here : Two in five airport workers thinking of quitting, says UK jobs site Read more 53m ago 08.
23 Ryanair shares dip Shares in Ryanair have dropped almost 1% in early trading, as traders digest Michael O’Leary’s warning that the recovery is ‘still fragile’ . Victoria Scholar, head of investment at interactive investor , points out that Ryanair’s shares are down around a third this year, due to a series of problems: . css-knbk2a{height:1em;width:1.
5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} The industry is grappling with a series of headwinds from volatile fuel prices, the war in Ukraine, staff shortages and the spread of Covid-19. Unhappy passengers have been on the front pages this summer with strikes, cancellations and delays affecting the whole travel industry. As a result, shares in Ryanair have struggled, shedding around 30% since the February high and the onset of war in Ukraine.
” Updated at 08. 38 BST 1h ago 08. 17 Analysts are impressed with Ryanair’s performance as it returned to profit for the last quarter [ the results are online here ].
Stephen Furlong, analyst at Davy , says its operation, growth, cost and balance sheet are “best in class,” with after-tax profits of €170m beating forecasts. Stockbrokers Goodbody described the release as “a very strong set of numbers”. Citi said a Q1 cost outperformance and comments that fares are now ahead of pre-Covid levels were “likely to drive FY consensus upgrade.
” 1h ago 08. 10 Aviation export Richard Schuurman has more details on Ryanair’s results: . @Ryanair reports €170mln net profit for its Q1 of FY23, compared to €-272.
6mln last year. Operating profit €219. 6mln versus €-304.
5mln. Total revenues €2. 6bln compared to €370.
5mln, but expenses up to €2. 4bln from €681mln. Fuel costs soared to €1.
0bln from €156. 6mln. — Richard_on_aviation (@rschuur_aero) July 25, 2022 .
@Ryanair says it has “limited visibility” into Q2, although fares are ahead of FY19. No guidance for FY23, but Ryanair is worried of new Covid variants coming autumn/winter. It blames lower punctuality on unprecedented ATC delays, not on recent strikes.
— Richard_on_aviation (@rschuur_aero) July 25, 2022 1h ago 08. 10 Ryanair also points out that the jump in fuel prices this year will push up its costs: . css-knbk2a{height:1em;width:1.
5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Despite being one of the best hedged airlines in Europe, high oil prices will lead to increased costs on our 20% unhedged fuel for the remainder of FY23. It also blames a drop in customer satisfaction ratings on ongoing air traffic control delays, and the chaos at airport security this year. 1h ago 08.
01 Introduction: Ryanair signals risk of new Covid variants Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets. Budget airline Ryanair has warned that the recovery in air travel is “very strong but still fragile,” as a jump in passenger numbers helped it return to profit. Ryanair posted a pre-tax profit of €203m for April-June this morning, its first profit for this quarter since the Covid-19 pandemic began.
But chief executive Michael O’Leary has signalled that the autumn could bring fresh disruption, if new variants of the virus emerge. O’Leary told shareholders this morning it was too soon to provide a meaningful profit guidance for the current financial year, given the uncertainty: . css-knbk2a{height:1em;width:1.
5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} While we remain hopeful that the high rate of vaccinations in Europe will allow the airline and tourism industry to fully recover and finally put Covid behind us, we cannot ignore the risk of new Covid variants in Autumn 2022. Our experience with Omicron last November, and the Ukraine invasion in February, shows how fragile the air travel market remains, and the strength of any recovery will be hugely dependent upon there being no adverse or unexpected developments over the remainder of FY23. Several variants of the fast-spreading Omicron strain of Covid-19 have already been detected this year, leading to an increase in cases and hospitalisations in some countries.
Why are there so many Omicron subvariants and why have BA. 4 and BA. 5 taken hold? Read more ‘Centaurus’: virologists express concern at new Covid subvariant Read more Ryanair’s Q1 profit was a recovery on a €324.
5m pre-tax loss a year ago, lifted by a strong recovery in traffic. Passenger numbers rose to 45. 5m in the quarter, up from 8.
1m in 2021 when travel restrictions were in place, and 9% more than pre-Covid. But Easter bookings and fares were “badly damaged” by the Russian invasion of Ukraine in February, the airline adds, pushing average fares 4% below pre-Covid levels. O’Leary says there are “clear signs” of pent-up demand, but people are bookings flights closer to their travel day than they did before Covid.
Striking a cautious note, O’Leary says this ‘later booking profile’, plus the lack of visibility over the outlook, volatile oil prices, and “potential Covid, geopolitical and supply chain” make it difficult to forecasting earnings this year. . css-knbk2a{height:1em;width:1.
5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} We hope to be in a better position to do so at the half year results in November, but, as our experience with Omicron last November and Ukraine in February shows, any guidance is subject to a very rapid change from unexpected events which are well beyond our control during what remains a very strong but still fragile recovery. ” Also coming up today Drivers face the risk of further delays as the summer getaway continues. Port officials at Dover said yesterday that services were finally back to normal, following days of chaos and very lengthy queues.
Cars queue at the check-in at the Port of Dover in Kent yesterday. Photograph: Andrew Matthews/PA Border and ferry staff worked “through the night” to clear the huge volumes of tourist and freight traffic, after a “critical incident” was declared last week. The situation got back to normal by the early hours of Sunday morning, a port spokesman said, but drivers could face another busy day crossing the Channel.
Queues of traffic are building again at the Port of Dover with predictions of another busy day for people trying to cross the Channel. Congestion at the Eurotunnel at Folkestone has eased. We’ll speak to @_NatalieChapman @LogisticsUKNews #bbcgms 0740 — Gary Robertson (@BBCGaryR) July 25, 2022 Warning Dover port chaos could spill into weekend as queues last six hours Read more The AA has warned that Folkestone has replaced Dover as Britain’s ‘hotspot of holiday hell’, as holidaymakers try to negotiate jams in the area and reach the Eurotunnel terminal.
Channel travel chaos continues with ‘holiday hell’ at Eurotunnel Read more After gains last week, the UK’s FTSE 100 index is set to open around 0. 4% lower as economic slowdown worries continue to weigh on markets. Last week global equities enjoyed upbeat sessions.
Markets had looked over-sold. Inflation & mixed earnings remain a concern. Profit taking in evidence early doors.
Oil $102. Asia tepid. Suggested opening calls: FTSE -30 @ 7246 DAX -82 @ 13171 CAC40 -32 @ 6184 DJIA -27 @ 13871 — David Buik (@truemagic68) July 25, 2022 On the economic front, the CBI’s latest healthcheck on UK factories is released this morning, alongside German business confidence data and a survey of economic activity in the US.
Hundreds of dockworkers at one of Britain’s largest container ports in Liverpool will be balloted for strike action, in a dispute over pay and conditions . The Unite union said last week that more than 500 dockworkers at MDHC Container Services, part of Peel Ports, in Liverpool would be asked to vote over industrial action after a 7% pay offer was deemed inadequate and workers were not given an agreed bonus. “The Unite union said more than 500 dockworkers at MDHC Container Services, part of Peel Ports, in Liverpool would be asked to vote over industrial action after a 7% pay offer was deemed inadequate and workers were not given an agreed bonus.
” https://t. co/m5NIZ4EEiU — OL USA (@OLOGUSA) July 19, 2022 The agenda 9am BST: IFO survey of German business climate 11am BST: CBI’s industrial trends report into UK manufacturing 1. 30pm BST: Chicago Fed National Activity Index Updated at 08.
03 BST Topics Business Business live Economics Stock markets Airline industry Ryanair Reuse this content.
From: theguardian
URL: https://www.theguardian.com/business/live/2022/jul/25/ryanair-covid-19-variants-recovery-oil-recession-markets-dover-disruption-business-live
