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  • Chile‚Äôs LATAM Airlines files for US Chapter 11 bankruptcy protection

    Tue, 2020-05-26 05:48

    LATAM Airlines Group SA said on Tuesday the company and its affiliates in Chile, Peru, Colombia, Ecuador and US have filed for Chapter 11 bankruptcy protection in the United States, due to a slump in travel worldwide amid the coronavirus crisis.
    Latin America’s largest airline said it secured funding from shareholders, including two of its largest the Cueto and Amaro families, and Qatar Airways, to provide up to $900 million in debtor-in-possession financing.
    The company said it had about $1.3 billion in cash on hand.
    “We have implemented a series of difficult measures to mitigate the impact of this unprecedented industry disruption, but ultimately this path represents the best option,” Chief Executive Officer Roberto Alvo said.
    LATAM Airlines Group listed assets and liabilities in the range of $10 billion and $50 billion, according to a filing with the US Bankruptcy Court in Southern District of New York.
    The airlines and its affiliates will continue to fly with no impact on passenger or cargo operations and reservations, the company said.
    The company said its affiliates in Argentina, Brazil and Paraguay were not included in the Chapter 11 filing.
    LATAM Airlines’ Brazilian affiliates are in discussions with the Brazilian government about the next steps and financial support for operations in the country.

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    Tiffs over mask-wearing trouble US airlines tooSingapore Airlines cuts capital spending estimate by at least 12% amid coronavirus crisis

    Posted: by Arab News

  • Energy investment to take big hit from pandemic, IEA forecasts

    Wed, 2020-05-27 08:53

    DUBAI: Global investment in energy is set to drop by 20 percent, or by nearly $400 billion, this year as demand plummets in the wake of the coronavirus pandemic, the International Energy Agency (IEA) forecast.

    What the IEA called “an historic plunge” in new spending on all energy sources – from fossil fuels like oil and gas through to renewables like solar and wind – is caused by the biggest ever fall in demand for energy as economies try to edge out of the global economic lockdown brought about by the pandemic.

    Revenue from energy is forecast to fall by $1 trillion this year, with earnings from sales of crude oil – essential for Saudi Arabian and other producers – accounting for most of that decline, the IEA said. For the first time in history, consumers will spend more annually on electricity than on oil.

    Fatih Birol, the IAE’s executive director, said the forecasts were “deeply troubling” after the turmoil in energy markets since early March.

    “It means lost jobs and economic opportunities today, as well as lost energy supply that we might well need tomorrow once the economy recovers. The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems,” he added.

    Global investment in oil and gas – forecast to fall by more than 30 percent – is the biggest element of the drop in energy investment, and will be felt by all producers.

    “The shale industry was already under pressure, and investor confidence and access to capital has now dried up: investment in shale is anticipated to fall by 50 percent in 2020. At the same time, many national oil companies are now desperately short of funding,” IEA said.

    The world’s largest oil company, Saudi Aramco, has said it would maintain investment plans at between $25bn and $30bn this year, but that spending plans for 2021 are under review.

    Most of the big independent oil companies have already announced plans to cut back near term investment.

    “For oil markets, if investment stays at 2020 levels then this would reduce the previously-expected level of supply in 2025 by almost 9 million barrels a day, creating a clear risk of tighter markets if demand starts to move back towards its pre-crisis trajectory,” the agency added.

    Investment in renewables like solar panels has been more resilient than traditional energy sources during the crisis, but is expected to lose the gains it has made in the past three years as investment decisions are scaled back.

    Overall investment in cleaner energy sources will comprise 40 percent of the global total this year as the proportion spent on oil, gas and coal falls significantly. “In absolute terms, it remains far below the levels that would be required to accelerate energy transitions,” the IEA said.

    The so-called “silver lining” of the pandemic crisis – less-polluted environment as motor and industrial emissions decline dramatically – is downplayed by the IEA.

    ““The crisis has brought lower emissions but for all the wrong reasons. If we are to achieve a lasting reduction in global emissions, then we will need to see a rapid increase in clean energy investment. The response of policy makers – and the extent to which energy and sustainability concerns are integrated into their recovery strategies – will be critical,” Birol said.

    Nor is there any sign of a greater uptake of more energy-efficient electric vehicles because of the crisis. “Estimated investment in efficiency and end-use applications is set to fall by an estimated 10 to 15 percent as vehicle sales and construction activity weaken and spending on more efficient appliances and equipment is dialed back,” the IEA said.

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    Oil prices rise as faith in supply cuts growsIraq reaches agreement with Saudi companies to invest in the Okaz gas fields

    Posted: by Arab News

  • Oil prices rise as faith in supply cuts grows

    Tue, 2020-05-26 17:18

    NEW YORK: Oil prices rose on Tuesday, supported by growing confidence that producers are following through on commitments to cut supplies and as fuel demand picks up with coronavirus restrictions easing.
    Brent crude futures were up 45 cents, or 1.3%, at $35.98 a barrel by 1:09 p.m. EDT (1709 GMT). US West Texas Intermediate (WTI) crude futures gained 89 cents, or 2.7%, to $34.14.
    The Organization of the Petroleum Exporting Countries and other leading oil producers including Russia, a group known as OPEC+, agreed last month to cut their combined output by almost 10 million barrels per day in May-June to shore up prices and demand, which has been hit by the coronavirus pandemic.
    Russian Energy Minister Alexander Novak is due to meet oil major producers on Tuesday to discuss the possible extension of the current level of cuts beyond June, sources familiar with the plans told Reuters.
    The RIA news agency said Russian oil production volumes were near the country’s target of 8.5 million bpd for May and June.
    On Monday, Russia’s energy ministry quoted Novak as saying that a rise in fuel demand should help to cut a global surplus of about 7 million to 12 million bpd by June or July.
    OPEC+ countries are due to meet again in early June to discuss maintaining their supply cuts to shore up prices, which are still down about 45% since the start of the year.
    “The 16 million bpd oversupply in crude during April could be reversed altogether by June, helped by a 4 million-bpd recovery in crude demand and a 12 million-bpd cut in crude supply,” said Bjornar Tonhaugen, head of oil markets for Rystad Energy.
    “OPEC+ is pulling the most weight by far, effectively reducing supply by nearly 9 million bpd while non-OPEC+ crude supply is down by more than 3.5 million bpd from March levels.”
    In an indication of lower supply in the future, data from energy services business Baker Hughes showed that the US rig count hit a record low of 318 last week.

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    Oil steadies as demand uncertainty tempers supply cutsOPEC slashes oil demand forecast, cuts to restore balance

    Posted: by Arab News

  • Turkish Airlines may delay delivery of Airbus, Boeing planes

    Wed, 2020-05-27 08:34

    ISTANBUL: Turkish Airlines, which halted nearly all of its passenger flights as a result of the coronavirus crisis, may delay the delivery of some Boeing and Airbus planes, its chairman was quoted as saying on Wednesday.
    The carrier plans to begin some domestic flights on June 4 and some international flights on June 10 as airlines worldwide try to get planes flying again after a global travel slump.
    But Turkish Airlines chairman Ilker Ayci said in an interview with Turkey’s Hurriyet newspaper that the impact of the coronavirus could last up to five years and that it would take a while to reach 2019 load factor levels.
    Turkish Airlines had received half of its order for 25 Boeing 787-9 planes, he said, adding that the delivery of the rest could be delayed.
    The airline is in talks to take delivery of Airbus 350-900s that are ready from an order of 25, and that it was working to delay the delivery of the rest, he said.
    “We are trying to lighten the serious loads that could arise. We are getting our narrow-body planes.”
    Ayci said Turkish Airlines would no longer offer free in-flight food and drinks on domestic flights and other flights shorter than two hours.
    He also repeated that the company would try to maintain employment, but that salaries would have to be adjusted, with the aim of supporting those paid the least.

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    Resumed cargo flights: Thaw in Israel-Turkey ties?Turkey seeks health kick for sickly tourism sector

    Posted: by Arab News

  • UK lends $22bn to small firms hit by coronavirus

    Wed, 2020-05-27 08:44

    LONDON: British small businesses have borrowed more than $22 billion under a government-guaranteed coronavirus credit program during its first three weeks of operation, outpacing bank lending under other schemes for bigger firms.
    The finance ministry offers banks a 100% credit guarantee on loans of up to 50,000 pounds under its Bounce Back Loan Scheme, after an 80% guarantee slowed lending under an earlier program.
    The BBLS has lent $22.74 billion to 608,069 small businesses as of May 24, up from $17.36 billion by May 17.
    By contrast an earlier program that lends up to 5 million pounds, the Coronavirus Business Interruption Loan Scheme, has only lent $10 billion since its launch in March.
    Banks have approved about half of loan applications under CBILS so far, compared with 79% for the BBLS.
    Finance minister Rishi Sunak initially opposed offering full state guarantees for bank lending, due partly to the risk of bad debts, but allowed it for the smallest firms after pressure from business groups, legislators and the Bank of England.

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    Under-fire UK government aide Cummings has Johnson’s loyaltyLIVE: Countries gradually lift restrictions to an uncertain world

    Posted: by Arab News

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