(Alliance News) - easyJet on Tuesday said it expects to fly slightly less than the 40% of planned capacity previously planned for the fourth quarter due to the UK's travel quarantine measures.
"Due to the constantly evolving government restrictions across Europe and quarantine measures in the UK, including yesterday's announcements that removed seven Greek islands from the exemption list, customer confidence to make travel plans has been negatively affected," easyJet said.
easyJet joined other aviation industry leaders in urging the UK government to commit to a coronavirus testing regime for international arrivals, after a new regional approach to England's quarantine policy was announced on Monday.
UK Transport Secretary Grant Shapps said that, should infection rates differ from their mainland countries, islands can be added to or removed from the quarantine list.
This policy change means that from 4am on Wednesday, arrivals from seven Greek islands will need to self-isolate for 14 days, but mainland Greece is to maintain its exemption.
While the move was largely welcomed by the travel industry, industry leaders urged action on testing for those arriving in the UK.
Airport Operators Association Chief Executive Karen Dee said: "Industry has been calling for government action on a testing regime for the aviation system for months while the sector has suffered through its worst summer in a generation."
Tim Alderslade, chief executive of Airlines UK, which represents UK carriers, said: "A comprehensive testing regime is urgently required to enable connectivity to and from countries like the US, one of our most vital trading and strategic partners."
In response to reduced demand for travel, easyJet said Tuesday it expects to fly "slightly less" than the 40% of planned capacity for the fourth quarter that was flagged previously.
The airline added that it "would not be appropriate" to maintain any forward looking financial guidance, for the 2020 and 2021 financial years, at this time.
easyJet Chief Executive Johan Lundgren said: "We know our customers are as frustrated as we are with the unpredictable travel and quarantine restrictions. We called on the government to opt for a targeted, regionalised and more predictable and structured system of quarantine many weeks ago so customers could make travel plans with confidence."
"It is difficult to overstate the impact that the pandemic and associated government policies has had on the whole industry. We again call on the government to provide sector specific support for aviation," Lundgren added.
The stock was down 6.1% early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.4% at 5,962.47
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Hang Seng: up 0.3% at 24,663.17
Nikkei 225: closed up 0.8% at 23,274.13
US markets closed Monday for Labour Day holiday.
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GBP: down at USD1.3142 (USD1.3170)
EUR: soft at USD1.1818 (USD1.1824)
Gold: up at USD1,932.50 per ounce (USD1,929.44)
Oil (Brent): down at USD41.74 a barrel (USD42.10)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
1100 CEST EU gross domestic product estimates
1100 CEST EU employment
0600 EDT US NFIB index of small business optimism
1000 EDT US IBD/TIPP economic optimism index
1000 EDT US employment trends index
1500 EDT US consumer credit
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Retail sales in the UK grew at the fastest pace for over two years in August, but the sector continues to suffer from low footfall with many city centre workers yet to return to the office. Total retail sales were up 3.9% annually in August, following a 0.4% decline a year earlier, numbers from the British Retail Consortium-KPMG sales monitor showed. The performance beats the three-month average growth of 3.5% and the 12-month average rise of 1.6%. According to the BRC, August's growth was the strongest since May 2018, excluding Easter distortions. Like-for-like retail sales in August were 4.7% higher year-on-year.
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China has passed "an extraordinary and historic test" with its handling of the coronavirus, President Xi Jinping said Tuesday at a triumphant awards ceremony for medical professionals decorated with bugle calls and applause. The nation's propaganda machine has churned out praise for China's Covid-19 response, reframing the public health crisis as an example of the agility and organisation of the Communist leadership. "We have passed an extraordinary and historic test," Xi said, praising the country for a "heroic struggle" against the disease. "We quickly achieved initial success in the people's war against the coronavirus. We are leading the world in economic recovery and in the fight against Covid-19."
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BROKER RATING CHANGES
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BERENBERG RAISES STANDARD LIFE ABERDEEN TO 'BUY' ('HOLD') - TARGET 285 PENCE
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BERENBERG RAISES ST JAMES'S PLACE TO 'BUY' ('HOLD') - TARGET 1195 (1030) PENCE
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BERENBERG RAISES HARGREAVES LANSDOWN TO 'BUY' ('HOLD') - TARGET 1915 (1850) PENCE
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COMPANIES - FTSE 100
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JD Sports Fashion it was "reassured" by its performance in the first half. Revenue for the half-year ended August 1 came in at GBP2.54 billion, down 6.6% from GBP2.72 billion a year ago. Pretax profit slumped to GBP41.5 million from GBP129.9 million. JD Sports said the reduction in profitability was due to additional costs associated with the shift in revenue to online channels, particularly during the period of temporary store closures. The retailer added that it is "generally encouraged" with its performance post-lockdown, though noted that retail footfall remains comparatively weak. JD Sports also reinstated guidance for the full-year.
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Experian raised its second-quarter guidance after stronger trading in July and August. The credit checking firm now expects organic revenue growth for the quarter in a range of 3% to 5%, helped by further strength in its US mortgage business. This had previously been guided to a range of flat to down 5%. With "continued investment in our innovation agenda", Experian now expects organic growth in costs of between 2% and 3% for the first half, having been previously guided to being held broadly flat.
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Industrial equipment rental company Ashtead said it posted a "resilient" first quarter performance during the Covid-19 crisis. Revenue fell 6% to GBP1.20 billion and pretax profit was down 37% to GBP192.4 million. While trading volumes were lower than last year as a result of the pandemic, Ashtead said, this was offset to some extent by emergency response efforts. Assuming no significant second wave of Covid-19 infections, Ashtead expects rental revenue to be down mid to high single digits on a constant currency basis for the full-year.
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DS Smith said it has performed in line with expectations since the start of May, despite the challenges thrown up by Covid-19. The packaging firm said its like-for-like corrugated box volume performance has improved over the period since the initial impact of Covid-19, and in August there was a return to positive year-on-year growth. Its operations in northern Europe have continued to perform well, while there has been "pleasing recovery momentum" in southern and eastern Europe since May. DS Smith added that it is "encouraged" by the progress in North America.
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Barclays has withdrawn its riskier mortgage deals after nearing a regulatory lending limit to higher-risk borrowers, the Financial Times reported. The London-based bank, in a surprise move last week, reduced the maximum amount customers could borrow to 4.49 times their income from 5.5 times income, the newspaper reported. Sources briefed on the matter told FT that the decision to withdraw riskier mortgage deals was made after Barclays came close to breaching Prudential Regulation Authority's lending limit, which stipulates that no more than 15% of mortgages for each lender can have an income multiple of 4.5 times or above.
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COMPANIES - GLOBAL
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Belgian-American brewer Anheuser-Busch InBev has begun looking for a successor to Chief Executive Officer Carlos Brito, the Financial Times reported. Citing to three people close to the matter, the newspaper said that AB InBev was considering outside candidates for the role, with the only internal candidate being Michel Doukeris, who is the head of the brewer's North American business. Brito is involved in the process and plans to step down at some point next year, the FT reported, citing one of the sources. However, he may remain in charge for longer should AB InBev not settle on a candidate from the search.
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Tuesday's Shareholder Meetings
DS Smith
Royal Mail
Ashtead Group
Hipgnosis Songs Fund
XPS Pensions Group
Oxford Instruments
Civitas Social Housing
NB Global Floating Rate Income Fund - EGM re changes to investment policy, exit offer
Equatorial Palm Oil - GM re share placing
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By Tom Waite; thomaslwaite@alliancenews.com
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