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| Coronavirus crisis drags down Flybe; HSBC evacuates staff – business live | |
| (32 minutes later) | |
| The coronavirus’s grip on the UK economy deepens as regional airline Flybe collapses, and experts fear others will follow | The coronavirus’s grip on the UK economy deepens as regional airline Flybe collapses, and experts fear others will follow |
| The incident at HSBC comes as City firms prepare to let more staff work from home. | |
| They already have contingency plans for an epidemic -- including splitting teams up so that everyone doesn’t catch the virus at the same time. | |
| They’re also getting ready for an explosion in remote working, although the Financial Times reports that there are concerns: | |
| HSBC has evacuated a floor of its Canary Wharf office after an employee was feared to have caught coronavirus. | |
| The bank has ordered a deep clean of the area, which houses its research department, a source said. | |
| It has so far not affected HSBC’s trading floor, which carries out large transactions on financial markets for big institutions.The evacuation was first reported by Financial News. | |
| Newsflash: Pioneering low-cost airline Southwest has just issued a warning about coronavirus. | Newsflash: Pioneering low-cost airline Southwest has just issued a warning about coronavirus. |
| Southwest, which basically created the budget airline model in the early 1970s, says customers demand has declined. | Southwest, which basically created the budget airline model in the early 1970s, says customers demand has declined. |
| It fears the crisis will wipe $200m-$300m off its operating revenues this quarter. | It fears the crisis will wipe $200m-$300m off its operating revenues this quarter. |
| Aviation minister Kelly Tolhurst also told MPs that the government “stands ready” to support the regional airlines that will be hit by Flybe’s collapse. | Aviation minister Kelly Tolhurst also told MPs that the government “stands ready” to support the regional airlines that will be hit by Flybe’s collapse. |
| Tolhurst does have one piece of good news - Scotland’s Loganair has committed to keep 16 Flybe routes running. | Tolhurst does have one piece of good news - Scotland’s Loganair has committed to keep 16 Flybe routes running. |
| In parliament, transport minister Kelly Tolhurst is giving a statement on Flybe’s collapse. | In parliament, transport minister Kelly Tolhurst is giving a statement on Flybe’s collapse. |
| She says the government has been working “tirelessly” with Flybe’s owners since January (when the firm nearly collapsed). | She says the government has been working “tirelessly” with Flybe’s owners since January (when the firm nearly collapsed). |
| Ministers are reviewing Air Passenger Duty, to see how it can support the government’s ‘levelling up’ agenda, Tolhurst adds. | Ministers are reviewing Air Passenger Duty, to see how it can support the government’s ‘levelling up’ agenda, Tolhurst adds. |
| She explains that existing problems at Flybe have been compounded by the coronavirus outbreak, which had a “signifiant impact on demand’. As such, the directors decided it did not have a viable future. | She explains that existing problems at Flybe have been compounded by the coronavirus outbreak, which had a “signifiant impact on demand’. As such, the directors decided it did not have a viable future. |
| Tolhurst explains: | Tolhurst explains: |
| Tolhurst says there is sufficient capacity on other airlines to bring Flybe passengers home, and is pleased to see some airlines such as easyJet are offering rescue fares | Tolhurst says there is sufficient capacity on other airlines to bring Flybe passengers home, and is pleased to see some airlines such as easyJet are offering rescue fares |
| Flybe passengers should not got to the airport, she continues - they should look at the Civil Aviation Authorities website instead. | Flybe passengers should not got to the airport, she continues - they should look at the Civil Aviation Authorities website instead. |
| And she expresses “sincere sympathy to those who have lost their jobs”, including cabin crew and ground staff. It is a worrying time for them and their families. | And she expresses “sincere sympathy to those who have lost their jobs”, including cabin crew and ground staff. It is a worrying time for them and their families. |
| Finally, Tolhurst reveals she will hold a meeting with the airline industry to discuss coronavirus’s impact next week. | Finally, Tolhurst reveals she will hold a meeting with the airline industry to discuss coronavirus’s impact next week. |
| European stock markets have fallen sharply this morning, as fears of a global downturn rise again. | European stock markets have fallen sharply this morning, as fears of a global downturn rise again. |
| The FTSE 100 index has dropped by over 1.5%, wiping out Wednesday’s recovery, as shares continue to whip-saw around. | The FTSE 100 index has dropped by over 1.5%, wiping out Wednesday’s recovery, as shares continue to whip-saw around. |
| Investors appear to jumping between pessimism about a global recession, and optimism that policymakers will announce stimulus measures to avert it. | Investors appear to jumping between pessimism about a global recession, and optimism that policymakers will announce stimulus measures to avert it. |
| Yesterday the Dow Jones industrial average surged by 4.5%, or 1173 points, but pessimism now has the upper hand: | Yesterday the Dow Jones industrial average surged by 4.5%, or 1173 points, but pessimism now has the upper hand: |
| Financial data firm MSCI fear Wall Street could tumble by another 10% in the short term, warning: | Financial data firm MSCI fear Wall Street could tumble by another 10% in the short term, warning: |
| The global spread of coronavirus is already affecting global growth. We’ve conducted a what-if scenario analysis that assumes a short-term drop in growth of 2 percentage points and a risk-premium increase of 2 percentage points. | The global spread of coronavirus is already affecting global growth. We’ve conducted a what-if scenario analysis that assumes a short-term drop in growth of 2 percentage points and a risk-premium increase of 2 percentage points. |
| Our model indicates that, in such a scenario, there’s room for further short-term losses: U.S. equities — already down 11% from Feb. 19 through March 3 — could drop a further 11%, while a hypothetical 60/40 global multi-asset-class portfolio could lose another 7%. | Our model indicates that, in such a scenario, there’s room for further short-term losses: U.S. equities — already down 11% from Feb. 19 through March 3 — could drop a further 11%, while a hypothetical 60/40 global multi-asset-class portfolio could lose another 7%. |
| In other travel news, the British Chambers of Commerce has called on the government should press ahead with Heathrow expansion. | In other travel news, the British Chambers of Commerce has called on the government should press ahead with Heathrow expansion. |
| Speaking at the BCC’s annual conference in London, director general Adam Marshall said a third runway should be a broad agenda of infrastructure spending. | Speaking at the BCC’s annual conference in London, director general Adam Marshall said a third runway should be a broad agenda of infrastructure spending. |
| It must also pump more money into trade support “to give a leg up to the many thousands of companies whose overseas efforts will make global Britain a reality,” Marshall added. | It must also pump more money into trade support “to give a leg up to the many thousands of companies whose overseas efforts will make global Britain a reality,” Marshall added. |
| At Manchester Airport, Flybe customers are also coming to terms with the airline’s collapse. | At Manchester Airport, Flybe customers are also coming to terms with the airline’s collapse. |
| Patrick Greenford, 77, retired, from Leeds, tells my colleague Gregory Robinson: | Patrick Greenford, 77, retired, from Leeds, tells my colleague Gregory Robinson: |
| Margaret Shepherd (75) and Stuart Shepherd (69) from Bradford, had been planning to fly to Knock, on the west coast of Ireland, for Margaret’s birthday. Now they’ll have to fly to Dublin and hire a car instead. | Margaret Shepherd (75) and Stuart Shepherd (69) from Bradford, had been planning to fly to Knock, on the west coast of Ireland, for Margaret’s birthday. Now they’ll have to fly to Dublin and hire a car instead. |
| It’s really sad especially after Thomas Cook, they say, pointing out that there isn’t another airline which serves the UK’s regional airports. | It’s really sad especially after Thomas Cook, they say, pointing out that there isn’t another airline which serves the UK’s regional airports. |
| Student Lauren Rose, 20, was flying home to Jersey - and says many people will miss Flybe. | Student Lauren Rose, 20, was flying home to Jersey - and says many people will miss Flybe. |
| Niamh Kennedy, 66, a retired teacher from Manchester, adds: | Niamh Kennedy, 66, a retired teacher from Manchester, adds: |
| French contract worker Sebastien Cressent is also stranded at Birmingham Airport by Flybe’s collapse. | French contract worker Sebastien Cressent is also stranded at Birmingham Airport by Flybe’s collapse. |
| Cressent, who doesn’t speak English, works at a local car plant. He returned his hire car to fly back home to Paris for a few days off and discovered what had happened. | Cressent, who doesn’t speak English, works at a local car plant. He returned his hire car to fly back home to Paris for a few days off and discovered what had happened. |
| He’s been told the 2pm flight to Paris is full, so he might need to go to Manchester to get an evening flight to the French capital. | He’s been told the 2pm flight to Paris is full, so he might need to go to Manchester to get an evening flight to the French capital. |
| The 10 Flybe check-in desks at Birmingham airport are deserted, following the airline’s collapse in the early hours of this morning, my colleague Joanna Partridge reports. | The 10 Flybe check-in desks at Birmingham airport are deserted, following the airline’s collapse in the early hours of this morning, my colleague Joanna Partridge reports. |
| Several people in hi-vis vests from the Civil Aviation Authority, a government surge response team and from the airport are on hand to help any passengers who have travelled to the airport, unaware of Flybe’s demise. | Several people in hi-vis vests from the Civil Aviation Authority, a government surge response team and from the airport are on hand to help any passengers who have travelled to the airport, unaware of Flybe’s demise. |
| An airport spokesperson said as many as 30 passengers had arrived at the terminal during the morning, hoping to depart for a range of domestic destinations such as Belfast, Aberdeen, Isle of Man and Jersey, as well as continental Europe. | An airport spokesperson said as many as 30 passengers had arrived at the terminal during the morning, hoping to depart for a range of domestic destinations such as Belfast, Aberdeen, Isle of Man and Jersey, as well as continental Europe. |
| Departure screens in the terminal listing the cancelled flights inform Flybe passengers to “seek alternative arrangements”. | Departure screens in the terminal listing the cancelled flights inform Flybe passengers to “seek alternative arrangements”. |
| One of those disappointed was Carole Lewis, due to fly to Inverness to visit family. She’d taken an early train to the airport from her home in Shrewsbury and hadn’t heard the news. | One of those disappointed was Carole Lewis, due to fly to Inverness to visit family. She’d taken an early train to the airport from her home in Shrewsbury and hadn’t heard the news. |
| Lewis tells us: | Lewis tells us: |
| She was hoping to be able to book a seat on a coach, but was expecting the journey to take a long time. | She was hoping to be able to book a seat on a coach, but was expecting the journey to take a long time. |
| An airport spokesperson said there have been “very positive discussions” with other airlines interested in taking on some of Flybe’s routes. | An airport spokesperson said there have been “very positive discussions” with other airlines interested in taking on some of Flybe’s routes. |
| Back outside Exeter Airport, Michelle Fegan, who sells pasties, sandwiches and snacks says she is devastated by Flybe’s collapse. | Back outside Exeter Airport, Michelle Fegan, who sells pasties, sandwiches and snacks says she is devastated by Flybe’s collapse. |
| IATA are urging governments to help airlines ‘stay afloat’ - an admission that others could follow Flybe into administration. | IATA are urging governments to help airlines ‘stay afloat’ - an admission that others could follow Flybe into administration. |
| Alexandre de Juniac, Iata’s director general, says: | Alexandre de Juniac, Iata’s director general, says: |
| If IATA’s worst-case scenario comes to pass, then the airline industry is going to be in serious trouble. | If IATA’s worst-case scenario comes to pass, then the airline industry is going to be in serious trouble. |
| Here’s some reaction: | Here’s some reaction: |
| NEWSFLASH: The global coronavirus outbreak could be as severe a blow to the airline industry as the global financial crisis a decade ago. | NEWSFLASH: The global coronavirus outbreak could be as severe a blow to the airline industry as the global financial crisis a decade ago. |
| That’s according to IATA, which represents the airline industry. In a new report, it warns that Covid-19 is set to cost the airline industry at least $63bn of lost revenue -- or $113bn if the virus spreads ‘extensively’ across more countries. | That’s according to IATA, which represents the airline industry. In a new report, it warns that Covid-19 is set to cost the airline industry at least $63bn of lost revenue -- or $113bn if the virus spreads ‘extensively’ across more countries. |
| IATA had previously expected a $30bn hit -- but has dramatically raised its forecast as the crisis escalates. | IATA had previously expected a $30bn hit -- but has dramatically raised its forecast as the crisis escalates. |
| Its worst-case scenario now shows a fifth of revenues being wiped out, with heavy losses in Asia, Europe and the US. That would be a severe blow to the airline sector. | Its worst-case scenario now shows a fifth of revenues being wiped out, with heavy losses in Asia, Europe and the US. That would be a severe blow to the airline sector. |
| In new analysis, IATA sees 2020 global revenue losses for the passenger business of between $63bn (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113bn (in a scenario with a broader spreading of COVID-19). | In new analysis, IATA sees 2020 global revenue losses for the passenger business of between $63bn (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113bn (in a scenario with a broader spreading of COVID-19). |
| IATA says the situation has deteriorated fast in the last fortnight. | IATA says the situation has deteriorated fast in the last fortnight. |
| IATA’s “limited” scenario is based on counties with more than 100 confirmed COVID-19 cases (as of Monday) experiencing a sharp downturn followed by a V-shaped recovery profile. This would wipe out $63bn of revenues this year. | IATA’s “limited” scenario is based on counties with more than 100 confirmed COVID-19 cases (as of Monday) experiencing a sharp downturn followed by a V-shaped recovery profile. This would wipe out $63bn of revenues this year. |
| IATA’s “extensive spread” scenario uses a similar methodology but to all markets that currently have 10 or more confirmed COVID-19 cases. The outcome is a 19% loss in worldwide passenger revenues, which equates to $113bn. | IATA’s “extensive spread” scenario uses a similar methodology but to all markets that currently have 10 or more confirmed COVID-19 cases. The outcome is a 19% loss in worldwide passenger revenues, which equates to $113bn. |
| Investment bank Goldman Sachs has warned that the coronavirus will push the UK economy to the ‘brink of recession’. | Investment bank Goldman Sachs has warned that the coronavirus will push the UK economy to the ‘brink of recession’. |
| In a new research note, Goldman say Britain faces “a substantial hit to growth in coming months. | In a new research note, Goldman say Britain faces “a substantial hit to growth in coming months. |
| It now expects the UK economy will stagnate in January-March, and contract by 0.2% in April-June. | It now expects the UK economy will stagnate in January-March, and contract by 0.2% in April-June. |
| Deutsche Bank are also anxious -- they’ve halved their forecast for British economic growth this year to just 0.5% this morning. | Deutsche Bank are also anxious -- they’ve halved their forecast for British economic growth this year to just 0.5% this morning. |
| Other travel companies are stepping in to help Flybe customers who have been stranded. | Other travel companies are stepping in to help Flybe customers who have been stranded. |
| London North Eastern Railway (LNER) is offering free travel for stranded staff and customers on its East Coast line today. | London North Eastern Railway (LNER) is offering free travel for stranded staff and customers on its East Coast line today. |
| EasyJet is offering to fly customers home free today and tomorrow, or for a small fee until the end of May: | EasyJet is offering to fly customers home free today and tomorrow, or for a small fee until the end of May: |
| John Cullen, business recovery partner at accountancy firm Menzies LLP, says the coronavirus outbreak made a bad situation worse at Flybe: | John Cullen, business recovery partner at accountancy firm Menzies LLP, says the coronavirus outbreak made a bad situation worse at Flybe: |
| Michael Mulligan, insolvency partner at law firm Shakespeare Martineau, fears more companies will follow: | Michael Mulligan, insolvency partner at law firm Shakespeare Martineau, fears more companies will follow: |
| James Goodall, Transport & Leisure analyst at Redburn, agrees: | James Goodall, Transport & Leisure analyst at Redburn, agrees: |