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(Alliance News) - The Competition & Markets Authority said Wednesday it is probing whether British Airways and Ryanair have broken UK consumer law over ticket refunds.
The CMA has opened enforcement cases into both firms over concerns that, during periods of lockdown across the UK, BA, part of International Consolidated Airlines Group, and Ryanair refused to give refunds to consumers that were lawfully unable to fly. The firms instead offered vouchers or the option to rebook.
"While we understand that airlines have had a tough time during the pandemic, people should not be left unfairly out of pocket for following the law. Customers booked these flights in good faith and were legally unable to take them due to circumstances entirely outside of their control. We believe these people should have been offered their money back," said CMA Chief Executive Andrea Coscelli.
The probe into flight refunds comes as an industry body warned the "failed and damaging" traffic light system for international travel must be abandoned if the UK travel and tourism sector is to be saved from total collapse.
London-based World Travel & Tourism Council said the UK government must scrap the system which has "wreaked havoc" among consumers and businesses in order to save hundreds of thousands of jobs, PA reports.
The risk-based system with red, amber and green ratings for countries around the world determines the quarantine and coronavirus testing requirements people face when returning to the UK.
But Portugal being moved from the green to amber caught many holidaymakers by surprise and left thousands of UK tourists scrambling to get home before new quarantine rules came into force on Tuesday morning.
It led to the government facing accusations it had not kept to promises over a "green watchlist" that would have given travellers increased warning about a country potentially coming off the safe list.
The WTTC said that moving to a more transparent and easier to understand system will restore consumer confidence and provide a "much-needed" boost to the travel and tourism sector.
IAG shares were up 0.6% early Wednesday, while Ryanair shares were up 0.1%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: marginally lower, down 2.23 points at 7,074.99
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Hang Seng: down 0.2% at 28,733.65
Nikkei 225: closed down 0.4% at 28,860.80
DJIA: closed down 30.42 points, or 0.1%, at 34,599.82
S&P 500: closed up 0.74 of a point at 4,227.26
Nasdaq Composite: closed up 43.19 points, or 0.3%, at 13,924.91
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EUR: unchanged at USD1.2180 (USD1.2181)
GBP: up at USD1.4179 (USD1.4147)
USD: soft at JPY109.41 (JPY109.47)
Gold: down at USD1,891.27 per ounce (USD1,892.50)
Oil (Brent): up at USD72.52 a barrel (USD71.52)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
1000 EDT US monthly wholesale trade
1030 EDT US EIA weekly petroleum status report
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The UK government is hoping to make an exception for the country's financial services sector in the new new global tax system signed by G7 finance ministers last weekend, the Financial Times reported. Chancellor of the Exchequer Rishi Sunak is pushing for a carve-out for the City of London, with the UK looking for an exemption on financial services, the newspaper said. Sunak had said the weekend's deal was an "historic agreement" and would force "the largest multinational tech giants to pay their fair share of tax in the UK". The FT said Sunak raised the issue at the G7 meeting and will continue to do so at the G20 talks next month. The FT also cited a British official, who said: "Our position is we want financial services companies to be exempt and EU countries are in the same position."
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G7 nations must overhaul global trade rules to stop powerful countries using economic coercion, Australian Prime Minister Scott Morrison said ahead of a meeting of the group's leaders in the UK. As Australia's shadow trade war with its largest trading partner China shows few signs of abating, Morrison told the Perth USAsia Centre that the global rules-based order is "under serious strain". "The most practical way to address economic coercion is the restoration of the global trading body's binding dispute settlement system," he said. "Where there are no consequences for coercive behaviour, there is little incentive for restraint." Beijing has imposed harsh economic sanctions on a range of Australian products in recent months, including tariffs or disruption across several agricultural sectors, coal, wine and tourism.
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Germany's trade balance grew in April as exports nudged up, figures from Destatis showed. In April, exports were up 0.3% month-on-month at EUR111.8 billion, and surged 48% on the same month a year ago. Imports fell 1.7% on a monthly basis to EUR96.3 billion, though this represented a 33% jump year-on-year. As a result, the trade balance for April, on a calendar and seasonally-adjusted basis, was EUR15.9 billion. However, the market had expected a surplus of EUR19.5 billion, according to FXStreet. March's surplus had been EUR14.0 billion.
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BROKER RATING CHANGES
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ODDO BHF INITIATES RIGHTMOVE WITH 'UNDERPERFORM' - TARGET 600 PENCE
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ODDO BHF INITIATES AUTO TRADER GROUP WITH 'NEUTRAL' - TARGET 585 PENCE
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COMPANIES - FTSE 100
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Jet engine maker Rolls-Royce said it has appointed Anita Frew as a non-executive director and chair designate. Frew is chair of chemicals firm Croda and a non-executive director at miner BHP Group. Until recently, she was deputy chair and senior independent director at lender Lloyds Banking Group. She will join the Rolls-Royce board with effect from July 1, and succeed Ian Davis as chair at the start of October. Davis is departing after nearly nine years as chair. The UK
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COMPANIES - FTSE 250
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SSP Group reported a slump in interim revenue as pandemic countermeasures continued to restrict movement. SSP is an operator of food and beverage outlets in travel locations. Revenue slumped 79% to GBP256.7 million for the half-year ended March 31, with sales severely hit by the pandemic and ensuing reductions in passengers passing through airports and train stations. Like-for-like sales also tumbled 79%. The firm's pretax loss widened to GBP299.7 million from GBP34.3 million a year ago. Passenger numbers remained depressed during the first quarter of the financial year and, with infections picking up in key markets alongside the emergence of new variants, second quarter revenue continued at "similarly low levels". Since the end of March, though, the firm has seen some improvement in trading, driven by the easing of lockdown restrictions in the UK as well as an uptick in passengers numbers in North America.
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COMPANIES - MAIN MARKET AND AIM
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Pharmaceuticals and services provider Clinigen guided to a fall in earnings on pandemic disruption to trading. Covid-19 has hit hospital-based oncology treatments and delayed clinical trials globally, and demand for the company's Proleukin within its current approved indications was "significantly weaker" than expected in recent months. Proleukin is indicated for the treatment of metastatic melanoma and metastatic renal cell carcinoma. As a result, net revenue is expected to be in-line with prior guidance and consensus forecasts, but adjusted earnings before interest, taxes, depreciation and amortisation is seen within a range of GBP114 million to GBP117 million. This would be down from the GBP131 million achieved for the 2020 financial year. Clinigen expects double-digit Ebitda growth in the 2022 financial year, it said, and is focused on paying down debt.
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COMPANIES - GLOBAL
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Honeywell International said its Quantum Solutions unit and Cambridge Quantum Computing will combine to form "the world's largest, most advanced quantum business". The North Carolina, US-based technologies and safety solutions provider said the new company will offer a high-spec quantum computer and a full suite of quantum software, including the first quantum operating system. Honeywell said it will invest between USD270 million and USD300 million in the new company and will have a long-term agreement to help manufacture the ion traps needed to power the quantum hardware. Honeywell Chair & Chief Executive Officer Darius Adamczyk will serve as chair of the new company. The new company will be led by Ilyas Khan, the CEO & founder of Cambridge Quantum Computing, which is based in London.
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Wednesday's Shareholder Meetings
Ascent Resources PLC - AGM
AEX Gold Inc - AGM
Animalcare Group PLC - AGM
Global Ports Holding PLC - GM re loan agreement with Sixth Street
HC Slingsby PLC - AGM
Immedia Group PLC - AGM
IP Group PLC - AGM
Kore Potash PLC - AGM
Kosmos Energy Ltd - AGM
Martin Currie Global Portfolio Trust PLC - AGM
Nostrum Oil & Gas PLC - AGM
Staffline Group PLC - GM re placing, subscription and open offer
WPP PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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