Connect with us


Coronavirus shockwave rocks airplane manufacturers, suppliers By Reuters –




© Reuters. Planes are seen parked at gates at San Francisco International Airport


By Jamie Freed and Allison Lampert

SYDNEY/MONTREAL (Reuters) – The pandemic is taking its toll on aerospace manufacturing, as Boeing Co (N:) announced it would halt production of most widebody jets and Airbus SE (PA:) restarted only partial output after a four-day shutdown as suppliers cut jobs.

With airlines unable to fly because of a collapse of demand over fears of contagion, reinforced by air travel restrictions, planemakers and their suppliers are under pressure to save cash to ride out a squeeze on liquidity.

Moody’s cut its outlook for the aerospace and defense industry to negative from stable and warned that even when markets recover, the damaged balance sheets of most airlines would hurt demand for new aircraft.

Global passenger capacity fell by 35% last week, the worst since the start of the crisis, according to data from airline schedules firm OAG, which said deeper cuts were likely in the coming weeks.

More than 2,500 planes have already been grounded this year, data from Cirium shows, with taxiways, maintenance hangars and even runways at major global airports turning into giant parking lots.

Large U.S. carriers have drafted plans for a possible halt in U.S. passenger air traffic, four officials said on condition of anonymity, though there is no plan in place and U.S. President Donald Trump said on Monday he was not considering a domestic travel ban.

Boeing faces the shutdown of key assembly lines for the second time in a year after being forced to halt production of its grounded 737 MAX aircraft in January.

Production of long-haul jets like the 787 and 777 in Washington state will pause for 14 days starting Wednesday, forcing the world’s largest industrial building, the giant Boeing wide-body plant at Everett north of Seattle, to fall silent for the first time in recent memory.

As the crisis deepens, U.S. lawmakers are considering changing some of about $58 billion in proposed emergency loans to the airline industry to cash grants to cover payroll costs, four people familiar with the matter said.

Democratic U.S. lawmakers late on Monday proposed giving struggling U.S. airlines and contractors $40 billion in cash grants that would not be paid back and would require significant new environmental, labor and other conditions.

Brazil’s Embraer SA (SA:), the world’s third-largest aircraft maker, said on Sunday it would furlough all non-essential workers in Brazil where it makes regional jets and further measures could be announced later this week.

Joining the list of temporary shutdowns is Bombardier, which is suspending Canadian production of business jets, according to a source familiar with the matter.

Airbus chief executive Guillaume Faury had called for strong government support for airlines and suppliers but stopped short of calling for direct aid for Airbus itself, which has secured an extra 15 billion euros ($16.14 billion) of commercial credit lines.

The European planemaker has, however, told officials privately that it may need European government help if the crisis lasts for several months, Reuters reported last week.

Industry executives said the biggest source of alarm was the global supply chain of thousands of suppliers who would be severely hurt by abrupt stop-start movements in plane output. Many are already severely stressed by the year-long 737 MAX grounding.

The International Association of Machinists and Aerospace Workers on Monday said in a letter to Congress that more than 500,000 U.S. aerospace production jobs could be in jeopardy and called for a relief package that included provisions to protect against layoffs.

Engine maker GE Aviation (N:) announced plans to cut its U.S. workforce by around 10%, according to a letter to staff.

GE’s aviation unit employed about 52,000 people globally as of 2019, with about half of them working in the United States.

Montreal-based training specialist CAE Inc (TO:) has temporarily closed three commercial aviation training centers and is laying off 465 manufacturing workers and slashing executive salaries and capital spending to contain costs.

German aircraft engine maker MTU Aero Engines (DE:) said it would shut output in some European plants for three weeks.

The shutdowns are designed in part to allow for deep cleaning and the re-organisation of factory workers, who must stand further apart and avoid working in clusters, slowing output.

But analysts expressed doubts over the strength of future demand as the industry recovers from its worst crisis.

A global recession combined with the possibility that corporate travel does not recover could hamper a full recovery, said Martin Hallmark, a senior vice president at Moody’s Investors Service.

The ratings agency expects airline passenger volumes to fall by 25% to 35% this year.

Let’s block ads! (Why?)

Source link


China shows strong factory activity in March – MarketWatch



BEIJING–An official gauge of China’s manufacturing activity rebounded strongly in March as factory production resumed after the coronavirus epidemic was largely put under control in the country.

The official manufacturing purchasing managers’ index rose to 52.0 in March from a record low of 35.7 in February, the National Bureau of Statistics said Tuesday. The 50 mark separates expansion of activity from contraction.

The March result came in above the median forecast of 51.5 by economists surveyed by The Wall Street Journal. Purchasing by manufacturers is a leading indicator of business activity because factories buy supplies in anticipation of demand.

The statistics bureau said the reading only reflects work resumption from February and it doesn’t mean China’s economic activity has returned to normal.

The production subindex climbed to 54.1 from 27.8 in February. The new-export-orders subindex, a gauge of external demand, rose to 46.4 in March from 28.7 in February. The subindex measuring imports increased to 48.4 from February’s 31.9.

The government has rolled out a slew of measures to help factories resume production and retain workers, including offering tax cuts and cash returns. The People’s Bank of China on Monday lowered a key interest rate in the country’s interbank market, the latest effort by Beijing to restart an economy struggling to recover due to the coronavirus.

Let’s block ads! (Why?)

Source link

Continue Reading


Most actively traded companies on the TSX – Yahoo Canada Finance



TORONTO — Some of the most active companies traded Monday on the Toronto Stock Exchange:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Toronto Stock Exchange (13,038.50, up 350.76 points.)” data-reactid=”13″>Toronto Stock Exchange (13,038.50, up 350.76 points.)

Bombardier Inc. (TSX:BBD.B). Industrials. Down three cents, or 6.59 per cent, to 42.5 cents on 17.5 million shares.

Suncor Energy Inc. (TSX:SU). Energy. Up $2.54, or 15.46 per cent, to $18.97 on 15.6 million shares.

Canadian Natural Resources Ltd. (TSX:CNQ). Energy. Up $2.40, or 18.02 per cent, to $15.72 on 15.5 million shares.

Aurora Cannabis Inc. (TSX:ACB). Health care. Down 17 cents, or 11.64 per cent, to $1.29 on 15.2 million shares.

Cenovus Energy Inc. (TSX:CVE). Energy. Up six cents, or 2.55 per cent, to $2.41 on 11.4 million shares.

MEG Energy Corp. (TSX:MEG). Energy. Up 27 cents, or 22.13 per cent, to $1.49 on 11.4 million shares.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Companies in the news:” data-reactid=”20″>Companies in the news:

Transat AT. (TSX:TRZ). Down 74 cents or 7.8 per cent, to $8.75. The Competition Bureau’s warning about Air Canada’s proposed takeover of Transat AT Inc., which owns Air Transat, should be taken in context, analysts say. The watchdog said Friday that eliminating the rivalry between the two Montreal-based carriers would discourage competition by prompting higher prices and fewer services. Desjardins Securities analyst Benoit Poirier said he believes the purchase will still be approved “considering the companies’ willingness to address the bureau’s competition concerns,” such as potential dominance of airport slots.

Canadian Imperial Bank of Commerce (TSX:CM). Up $1.33 to $79. An Ontario Superior Court judge has ruled against the CIBC in an overtime class-action lawsuit filed more than a decade ago. Judge Edward Belobaba found the bank liable for breaching its overtime obligations to a class of about 31,000 current and former tellers, personal bankers and other front-line workers in branches across Canada.

Canadian Apartment Properties Real Estate Investment Trust. (TSX:CAR.UN). down 23 cents to $41.90. Some of Canada’s biggest landlords say they’re committed to working with tenants who have lost their job because of the coronavirus pandemic. Mark Kenney, CEO of Canadian Apartment Properties Real Estate Investment Trust, says the company is committed to working with those who have suddenly lost their job, and is “violently against” evicting anyone who’s in distress.

Freshii Inc. (TSX:FRII). Down one cent to $1.23. Freshii Inc. is delaying the filing of its latest financial results as it deals with the COVID-19 pandemic and its impact on its restaurants and franchise partners. The company says it has also temporarily “streamlined its head office workforce” in a move to cut costs. It did not say how many people were affected. Freshii says the COVID-19 pandemic is expected to have a material impact on its business, operations and financial performance for at least the first half of 2020.

Parkland Fuel Corp. (TSX:PKI). Up 85 cents or 3.5 per cent to $25.05. Parkland Fuel Corp. is cutting its 2020 capital spending budget by 52 per cent and trimming executive salaries in response to the uncertain economic impact of the novel coronavirus. The Calgary-based company, which sells fuel through more than 2,600 service stations throughout Canada and in the United States and Caribbean, says it plans to spend $275 million this year, down from its earlier guidance of $575 million.

Air Canada (TSX:AC). Down 67 cents or four per cent to $1608. Air Canada will temporarily lay off more than 15,000 unionized workers beginning this week as the airline struggles with fallout from the COVID-19 pandemic. The layoffs will continue through April and May amid drastically reduced flight capacity from the Montreal-based airline. Air Canada says the two-month furloughs will affect about one-third of management and administrative and support staff, including head office employees, in addition to the front-line workers.

This report by The Canadian Press was first published March 30, 2020.

The Canadian Press

Let’s block ads! (Why?)

Source link

Continue Reading


Air Canada To Furlough 16,500 Employees And Slash Capacity – Simple Flying



From April 3rd, Air Canada will furlough 16,500 employees. This comes as the airline slashes capacity by 85-90% and faces the unprecedented COVID-19 pandemic.

Air Canada is furloughing 16,500 employees. Photo: Air Canada

Air Canada to furlough 16,500 staff

From April 3rd, Air Canada announced that it will have to furlough employees due to the “unprecedented impact of COVID-19.” This will include 15,200 of its unionized workforce moving to “Off Duty Status” while another 1,300 managers will face a furlough. These are temporary measures according to the airline. Although, given the fluctuating nature of the situation, it is really anyone’s best guess when Air Canada will return to full operations.

President and CEO Calin Rovinescu had the following comment on the situation:


“The unpredictable extent and duration of the Covid-19 pandemic requires a significant overall response.  To furlough such a large proportion of our employees is an extremely painful decision but one we are required to take given our dramatically smaller operations for the next while.”


Air Canada staff
The furlough is intended to be temporary. Photo: Air Canada

In addition to these furloughs, Air Canada is taking other steps. It ended the share repurchase program on March 2nd, engaged in company-wide cost reduction and capital deferral program which saves about $500 million CAD, drawing down operating lines of credit to the tune of $1 billion CAD, and cutting salaries of executives. The CEO and Deputy CEO will cut their salaries by 100% while the Board of Directors will cut theirs by 25%. Senior Executives will cut 25-50% of their salary. Meanwhile, Air Canada managers will cut their salaries by 10% for the entire second quarter.

In addition to the furloughs, Air Canada is taking other steps to preserve its cash. Photo: Air Canada

Significant capacity reductions at Air Canada

Amid the ongoing crisis, Air Canada will cut its capacity in the second quarter of 2020 by 85-90% compared to operations in the same time last year. With so few flights operating, it makes sense for Air Canada to furlough some staff until capacity can be restored.


In response to the crisis, operations have taken a huge hit. Photo: Air Canada

Repatriation flights

However, one place where Air Canada has been a leader in Canada is repatriation flights. The airline has devoted a number of resources to bringing Canadians home from abroad.

Air Canada crew
The Air Canada crew which operated a rescue flight from Casablanca. Photo: Air Canada

In the coming days, the flag carrier will likely work with the Canadian government to issue more repatriation flights. Organizing these flights have a lot of pieces. Governments have to coordinate to bring citizens to and from airports, the airline has to schedule crews and implement cleaning and sanitation procedures, and health agencies have to monitor and work with the passengers coming home in order to reduce the spread of COVID-19.


For 16,500 Air Canada employees, this cannot be an easy time. The situation is incredibly fluid and it is unclear how long these furloughs will last and whether more will be necessary as the airline seeks to survive with significantly reduced operations.

What do you make of Air Canada’s furloughs? Let us know in the comments!


Let’s block ads! (Why?)

Source link

Continue Reading