As the UK awaits Prime Minister Boris Johnson’s update in today’s daily briefing on whether there will be any changes to the social distancing measures currently in place, here’s a short round-up of how the outbreak continues to affect the business and legal worlds, among other news.
- Spain’s Santander, the Eurozone’s largest bank by market value, has revealed an 82% drop in profit for 2020’s first quarter. Responding to the effect of coronavirus on the macroeconomy and its expected decline, the bank’s loan-loss provisions increased 80% after it set aside €1.6 billion.
- Meanwhile, HSBC revealed a 51% decline in profits in the last quarter due to a surge in credit losses, with further declines in income likely if the pandemic continues.
- Following the collapse of the global travel industry, British Airways is set to make up to 12,000 staff redundant. IAG, the airline’s parent company, revealed a redundancy and restructuring plan to trade unions as the company plans for a future beyond coronavirus. The group’s operating losses, primarily linked to British Airways, amounted to €535 million during 2020’s first quarter.
- In other aviation news, CEO of aviation-giant Airbus – which employs 13,500 people in the UK – Guillaume Faury said it is “bleeding cash at an unprecedented speed” and immediate action is required to ensure the manufacturing company’s survival, including further cuts. Production was recently cut by a third as demand collapses, with further reductions likely, an internal letter from Faury revealed.
- Tui has extended its holiday cancellation date from 14 May until and including 11 June, with no news that holidays will resume following this date. The holiday company has cancelled holidays for around 900,000 of its customers, with full cash refunds due by 13 May under the Package Travel Regulations; although Tui has revealed that it will need more time to pay such refunds. EasyJet Holidays is permitting passengers to revise their bookings to 2021 without losing their deposit and the company has processed refunds within the designated two-week window.
- In a bid to avoid its likely bankruptcy, car-rental company Hertz is attempting to reduce its debt payments and secure a forbearance agreement, Wednesday’s Wall Street Journal report revealed.
- Recent analysis of the housing market in UK cities indicates that around 373,000 property sales – with a collective value of £82 billion – are on hold as lockdown continues. Property portal Zoopla revealed that it was the day that UK lockdown began (23 March) that the falling through of house sales peaked, with demand down 60% from the start of March. Completed sales across the UK in 2020 will be around half that seen last year, Zoopla expects.
- Adidas’ quarter one 2020 earnings report revealed the pandemic’s impact on the company. Prior to the outbreak, it was predicted that the sportswear giant would bring in around €263 million but its first-quarter earnings of €65 million did not meet this target. More than 70% of the company’s storefronts remain closed, with its net income from continuing operations falling 90% to €20 million, following an income of €631 million last year.
- The coronavirus pandemic continues to effect high street retailers, with Next warning that its full-year sales could fall by around 40%: “The fall off in sales to date has been faster and steeper than anticipated in our March stress test and we are now modelling lower sales for both the first and second half of the year,” the retailer said. Retail Economics Chief Executive Richard Lim said: “The reality of the sales drop was worse than previously feared. It feels like the industry is coming to terms with a recovery that will undoubtedly be slow and protracted.”
- Following accusations that Johnson & Johnson’s baby powder and talc products were contaminated with asbestos, a judge has ruled that certain expert testimony can be heard in the lawsuit. However, there will be limits on what expert testimony will be permitted.
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