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Travel company Transat AT lays off 3,600 staff, about 70 per cent of workforce – CTV News

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MONTREAL —
Transat AT Inc. has temporarily laid off about 70 per cent of its workforce in Canada, about 3,600 people.

The decision comes as non-essential travel around the world comes to a standstill as governments close borders in an effort to slow the COVID-19 pandemic.

Transat said Monday some of these layoffs are effective immediately, while others will take effect following advance notice of up to one month.

The layoffs include all flight crew personnel.

The company says similar measures are being implemented in the other countries where Transat has employees.

Executives who are not being laid off have accepted voluntary pay cuts, as have members of its board of directors.

Transat said operations are being stopped gradually in order to enable it to repatriate as many of its customers as possible to their home countries.

The company said the final Air Transat flight prior to the full suspension of its operations is scheduled for April 1.

“At the same time, in order to safeguard the company, we have unfortunately had to proceed with layoffs that affect a significant portion of our employees,” Transat chief executive Jean-Marc Eustache said in a statement.

“We are doing this with great sadness and we hope that everyone will be able to return to work as quickly as possible.

Transat said that by March 22, about 40,000, or more than 60 per cent of its customers, had been returned to Canada.

This report by The Canadian Press was first published March 23, 2020

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CIBC, RBC cut credit card rates to give relief to customers amid COVID-19 pandemic – Financial Post

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Royal Bank of Canada and Canadian Imperial Bank of Commerce said on Friday they are cutting interest rates on credit cards to provide relief to customers as the economic fallout from the COVID-19 pandemic deepens.

Royal Bank will reduce credit card interest charges by 50 per cent for clients receiving minimum payment deferrals, Canada’s biggest lender said in a statement.

CIBC personal credit card users who request to skip a payment will get a temporary lower annual rate of 10.99 per cent, Canada’s fifth-largest lender said in a separate statement.

Most Royal Bank and CIBC credit cards charge 19.99 per cent interest on purchases.

Canada’s six biggest banks unveiled a mortgage-relief plan two weeks ago to allow homeowners to defer or skip mortgage payments for up to six months as businesses come to a grinding halt due to the pandemic.

Since the mortgage-relief plan was announced, the banks have received nearly half a million requests that have been completed or were being processed.

© Thomson Reuters 2020

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Has Russia Reached Its Limit In The Oil Price War – OilPrice.com

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Has Russia Reached Its Limit In The Oil Price War? | OilPrice.com

RFE/RL staff

RFE/RL journalists report the news in 21 countries where a free press is banned by the government or not fully established. We provide what many…

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    Russia Oil Price War

    When Vladimir Putin was given a dire forecast of the economy under the cloud of a crippling coronavirus pandemic and a sharp fall in global demand for petroleum, the Russian president was much less bullish about his country’s prospects in a price war with oil-producing rival Saudi Arabia. “For our economy, yes definitely, this is a very serious challenge,” Putin told Audit Chamber head Aleksei Kudrin on April 1, adding that the United States, which recently surpassed Russia and Saudi Arabia to become the world’s largest oil producer, would also suffer.

    It was a big step back from the line being floated just two weeks ago when, despite Russia’s economic dependence on natural resources, Moscow engaged in a bit of chest-thumping about its chances in a price war, arguing that Russia was in a stronger position than its main competitors to ride it out.

    But that was before the true impact of the coronavirus on the global economy was understood, and before Kudrin — a former finance minister and trusted ally — told Putin in a government meeting held by video that the Russian economy could decline this year by between 3 and 5 percent.

    And that was a moderate outlook, according to Kudrin, who went on to warn that the situation could be as bad as the nearly 8 percent decline the country suffered in 2009 during the financial crisis.

    When faced with slumping oil demand as the global economy suffered from the effects of the coronavirus pandemic, Riyadh’s demands for output cuts were refused by fellow OPEC+ member Moscow. After walking away from the table, the Saudis instead took the surprising route of increasing oil output, causing the largest one-day drop in prices in nearly three decades.

    Putin’s comment is one sign that Russia, which always expressed openness to continue negotiations with Riyadh, may be keen on coming to an agreement. “Today’s acknowledgement by Putin shows Russia is interested in the dialogue process and wants to go ahead with it,” Rauf Mammadov, an energy analyst at the Middle East Institute in Washington, told RFE/RL on April 1.

    High-Stakes Game

    From the beginning, the price war has raised questions about who would cave first: Moscow, Riyadh, or U.S. production, which depends on shale-oil producers that have gained market share at the expense of Russia and Saudi Arabia but require higher oil prices to stay in business.

    Russia is now preparing to ramp up spending to support millions of citizens and thousands of companies affected by quarantines and shutdowns. The Kremlin has thus far announced an increase of spending by $17.5 billion to counter the outbreak.

    Related: $1 Oil: Saudi Arabia’s Attempt To Crush U.S. Shale But according to Kudrin, the country may need to spend 5 percent of gross domestic product — or about $70 billion — to combat the impact of the coronavirus, which Russia has officially said has infected more than 3,500 people, but which skeptics suggest is a low-ball figure.

    Those costs will be difficult to cover if oil prices are low — but on April 2, the price of Russia’s Urals crude blend fell below $11 a barrel, the lowest since Putin came to power two decades ago. The international benchmark Brent crude, meanwhile, was going for just over $26 a barrel on April 2, whereas Russia depends on a price of about $40 a barrel to balance its budget.

    Russia as of March 20 had $551 billion in foreign-currency reserves at its disposal, although economists suggested that Putin would prefer not to tap into them. In just one week, however, those reserves had already fallen by $30 billion.

    Even before Putin’s government meeting, there were signs that Russia was having second thoughts about engaging in a price war with Riyadh, with Energy Minister Aleksandr Novak saying earlier on April 1 that Russia would not increase oil production in April, a reversal of earlier comments by officials.

    Analysts have said that Saudi Crown Prince Muhammad bin Salman’s surprise decision to increase oil production was intended to get Putin back to the negotiating table.

    And there is reason to believe that the Saudis might not want to keep the price war going either. Like Russia, the sharp decline in the price and volume of oil threatens Saudi Arabia’s aggressive spending programs aimed at lifting living standards and diversifying its economy.

    But Riyadh needs a much higher Brent crude price to balance its budget, nearly $80 per barrel, analysts have said. And while Saudi Arabia has $480 billion in foreign-currency reserves to lean on, it has already announced $13 billion in spending to deal with the lower budget revenue.

    “Despite the bravado that we have been hearing on both sides, this is not about who has the lowest cost of production and higher profitability. This is about funding budgets, and for both Russia and Saudi budget expansion has been significant in recent years,” Chris Weafer, the co-founder of Macro Advisory in Moscow, told RFE/RL on March 28. “The reality is that both of them need a deal to put a better price support in place.”

    Trump Wants A Deal

    The other oil-producing elephant in the room is the United States, which has seen its shale-oil producers suffer as a result of the price dispute.

    U.S. President Donald Trump, who has called the price war “crazy,” has been trying to accelerate talks between Russia and Saudi Arabia while members of Congress have been calling for sanctions and tariffs if they don’t find an agreement.

    Related: An Oilman’s Plea To President Trump

    Trump has said he recently spoke with the leaders of both countries and that Moscow and Riyadh were “going to get together” but he gave no further details. He expressed optimism on April 1 that an agreement was near.

    “I think that Russia and Saudi Arabia, at some point, are going to make a deal in the not-too-distant future because it’s very bad for Russia. It’s very bad for Saudi Arabia,” Trump said.

    The U.S. president reiterated that hope on April 2, saying in a tweet that he expected Russia and Saudi Arabia to cut 10 million barrels a day, though it was unclear if he was referring just to the two countries or to OPEC+, the alliance of two dozen oil-producing states that Moscow and Riyadh lead. It was also unclear if U.S. companies would be involved in the output cut.

    Just minutes after Trump’s tweet, Saudi Arabia called for an emergency meeting of OPEC+ members.

    Macro Advisory co-founder Weafer said he expected Moscow and Riyadh to find a short-term solution to their dispute that would get them through the crisis period.

    The Middle East Institute’s Mammadov suggested that Russia and Saudi Arabia could reach an agreement with other countries through the Group of 20 (G20) format, as it would offer both Putin and Prince Salman a way to claim victory. “It would eliminate the face-saving confrontation between Saudi Arabia and Russia because it’s not about the old OPEC+ deal” that they fought over, he said.

    Trump will meet with U.S. oil executives on April 3 to discuss measures to support the domestic market, including possible tariffs on oil imports from Russia and Saudi Arabia as well as American production cuts.

    Analysts have said that Riyadh and Moscow will want to see U.S. producers share the burden of stabilizing the market by cutting supply.

    By RFE/RL

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      Canadian banks pause payments on 10% of mortgages as they field 500,000 requests for deferrals – Financial Post

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      Canadian banks have already received nearly half-a-million requests by borrowers to defer or skip mortgage payments in just a little more than two weeks, amid the swift financial uncertainty caused by the coronavirus pandemic.

      The Canadian Bankers Association said Friday almost 500,000 requests had been completed or were being processed since lenders announced last month they would offer some financial relief, such as up to six months of deferred home-loan payments.

      Borrowers quickly tried to take the banks up on their offer, flooding their phone lines with thousands of calls seeking assistance or information. The CBA said Canada’s six biggest banks have already deferred payments on more than 10 per cent of mortgages in their portfolio.

      “The large number of customers who have been helped continues to grow as a result of concerted efforts by front-line workers, contact centre agents and operations teams working diligently,” the CBA said in a press release.

      Combining the deferral requests with reports of slower real-estate activity and of massive layoffs across the Canadian economy, the negative economic effects of the coronavirus are becoming clear. The food-service industry alone has lost an estimated 800,000 jobs because of COVID-19, according to Restaurants Canada, while the aviation and oil industry workers have also been hit hard.

      Toronto-Dominion Bank chief executive Bharat Masrani said Thursday that the lender had approved 60,000 requests for deferrals so far, which was “virtually all” of the applications.

      Asked about his confidence in borrowers being able to resume repaying their mortgages when the deferral period ends, Masrani noted the “unprecedented” levels of government support and the recent talk of the crisis easing in a few months.

      “And if that’s the case, then I think the support provided should provide flexibility to Canadians who have taken on the deferral program,” Masrani told reporters following the bank’s annual shareholder meeting, which was conducted virtually due to the coronavirus. “I would expect if this continues for a longer period, that governments will act.”

      The broad conclusion is that the Canadian banks are well positioned to weather the coming storm

      Eight Capital analyst Steve Theriault

      Meantime, some borrowers are seeing more cash flow coming their way. The CBA noted in its press release, citing Canada Mortgage and Housing Corp., that the average monthly mortgage payment for a Canadian homeowner was $1,326. In other words, roughly $663 million in cash per month could be freed up by the deferrals, which borrowers could spend on other necessities.

      “This number will increase over the coming weeks,” the CBA said.

      As these mortgage payments are pushed back, Canada’s housing market is also beginning to show signs of a COVID-19-related slowdown. The Toronto Regional Real Estate Board reported Friday that the first 14 days of March saw a 49 per cent increase in sales year-over-year, at 4,643, but sales for the rest of the month were down by 15.9 per cent from a year ago, at 3,369. Total Toronto sales for the month were 8,012, a 12.3 per cent increase compared to March 2019.

      “The overall sales result for March was strong relative to last year, but the impact of COVID-19 was certainly evident in the number of sales reported in the second half of March,” TRREB President Michael Collins said in a press release.

      Similar findings were reported by the Real Estate Board of Greater Vancouver, which saw “steady home buyer demand to begin March and a levelling off of activity as the month went on and concerns about the COVID-19 outbreak intensified.”

      Slackening demand in the housing market would be another headwind for the lending business, but the consensus remains that Canada’s banks are up for the challenge.

      Eight Capital analyst Steve Theriault wrote recently that he had examined “a reasonable worst case for credit losses and the direct impact to earnings, capital and dividend payouts,” for Canada’s big banks.

      “The broad conclusion is that the Canadian banks are well positioned to weather the coming storm,” Theriault wrote in a report. “We will not pretend to have a full view of the stresses that are sure to weigh on bank results in 2020 and 2021; however, we do believe that the group as a whole is well positioned from a capital perspective and that dividends will remain safe and equity raises unlikely.”

      • Email: gzochodne@nationalpost.com | Twitter:

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