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The most important news of the day
Germany would supply Ukraine with 14 Leopard 2 tanks in addition to allowing the Allies to send their planes, marking a significant increase in Western military aid. Russia’s ambassador to Germany said the move was a “very dangerous decision” that “brings the conflict to a new level of hostilities.”
US states have stepped up efforts to lure European clean energy companies such as Germany’s Marvel Fusion, with the promise of big tax breaks, despite opposition from Brussels. The Netherlands opposes new EU funding for subsidies, but the Financial Times editorial board said the two blocs needed to find common ground on subsidies and avoid neighbour-begging measures.
MSC and Maersk, the world’s two largest container shipping lines that together control two-fifths of sea freight, are ending their alliance as competition to move global trade intensifies. Meanwhile, in China, weak international demand for its goods has led to increased freight cancellations at its largest ports, limiting the expected economic boom from reopening.
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Today’s forecast for EasyJet to return to profit after three years of a slowdown caused by the pandemic is the latest in a series of announcements confirming that air travel has indeed rebounded.
Shares in the low-cost carrier rose 10 percent, spurring increases in other airlines such as Ryanair, Wizz Air and BA’s owner International Airlines Group. Customers seem to “prioritize spending on holidays,” said Johan Lundgren, CEO of EasyJet, and added that the company sells enough seats to fill five planes every minute during its busiest recent winter sale.
Ryanair told a similar story last week, reporting record bookings at the start of the year. “All the signs are very strong,” company president Michael O’Leary told the Financial Times. “There is a lot of spending out there. The hotels are full and the restaurants are full.”
The global picture is equally encouraging. Last week, Avolon, the world’s second-largest charter company, said reopening China would help push air traffic back to pre-pandemic levels by the middle of the year. The company said that for every two seats of airline capacity added worldwide, there is one seat in Asia. Company bosses warned until recently that a recovery to 2019 levels would not come until 2024 at the earliest.
The return of the itinerant Chinese, the world’s largest number of tourists cut off by zero Covid restrictions, is perhaps the single best news for the world’s airlines so far. In 2019, before the pandemic hit, 155 million people traveled abroad and spent $255 billion. The China Outbound Tourism Research Institute estimates that 18 million will travel internationally in the first half of the year, followed by 40 million in the second half.
Asian airlines had already started expanding their flight options at the end of last year, forming new partnerships to take advantage of the expected boom in demand. Meanwhile, Bain Capital is preparing to rebrand Virgin Australia after it collapsed during the pandemic.
Profits for airlines such as Raytheon also rose as demand for jet engines and parts increased. Boeing reported today that a flurry of aircraft deliveries last month was helping repair its finances after two fatal accidents.
However, there may be some disruptions in the future. Air travelers in Europe face “significant” disruptions as the skies become crowded due to the war in Ukraine, while volatile oil prices could pose a problem. But as airline results season begins, easyJet is unlikely to be the only carrier predicting blue skies ahead.
Need to know: UK and European economy
As we wrote on DT on Monday, economic indicators for Euro-zone Now mainly pointing in the right direction. The S&P Global PMI survey showed an unexpected return to growth in business activity for the first time since June, while German business confidence is recovering.
the uk economy, However, it continues to steer clear of the bright prospects in the European Union and the United States. The Treasury is trying to soften calls for tax cuts after a fresh cut in growth forecasts. The UK PMI reading is at its lowest level in two years, businesses face an increased risk of bankruptcy and public borrowing is at its highest level since monthly records began in 1993. Meanwhile, producer price inflation has fallen to its lowest rate in about a year.
The damage from Brexit continues to become more visible. the eurostar Buss said peak trains were left a third empty because of the new boundary arrangements.
Italian petrol station Owners shut down their pumps in a dispute with the government over ending fuel subsidies that protect motorists from rising costs.
Need to know: The global economy
Chinese families It managed to save a record $2.6 trillion last year as pandemic restrictions crushed consumer demand, but it’s not yet clear whether this could lead them to pour money into “retaliatory spending.”
US Treasury Secretary Janet Yellen said China was a “barrier” to ending its debt crisis Zambia. Debt restructuring is seen as an indication of how China, the developing world’s largest creditor, will respond to a wave of defaults.
Argentina It will be diverted through gas and mining exports, according to the economy minister. The country is suffering from nearly 100 percent inflation and is cut off from international markets after defaulting on its ninth debt in 2020.
Australian inflation It reached a 33-year high of 7.8 percent in the fourth quarter of last year, dashing hopes that interest rate increases would be paused.
Need to know: Business
The global “Big Three”. Oil field services The groups — Halliburton, Baker Hughes and SLB — have reported the most profitable 12 months since the peak of the US shale boom as higher energy prices fueled global drilling activity.
Amazon Workers in Coventry went on strike today over wages, the first time the company’s employees in the UK have taken an industrial strike. British unions have so far struggled to recruit into sectors such as logistics that represent a growing segment of the country’s workforce – often on unsafe terms and in difficult working conditions.
Tensions are rising in the UK, Europe and the US between governments and pharmaceutical companies Medication pricing. An industry spokesperson said authorities had moved from appreciating rapid innovation during the pandemic to needing to “squeeze” drugmakers because of financial pressures elsewhere.
Head of the largest chip company in Europe ASMLwhich plays an important role in the global industry and is caught in the midst of technical tensions between the United States and China, said demand for semiconductors will recover in the second half of the year as it reported a record order backlog and expected sales to increase by 25 percent in 2023.
Microsoft It gave a downbeat forecast for the current quarter, noting that demand for its cloud services fell significantly in December as customers became increasingly wary about the economic outlook.
new “generative” artificial intelligence Systems that can produce on-demand content raise concerns about potential far-reaching social effects including the ability to produce large amounts of disinformation as well as the disappearance of functionality, Big Read explains.
world of work
There are a lot of stereotypes around Millennials (those born between 1981 and 1996), the eldest indicate that they have an overwhelming sense of entitlement. A new Working It podcast discusses whether tropes really hold true.
Some good news
The British Heart Foundation has sold an 18-karat gold Cartier watch that was found in a donation bag for nearly £10,000. The sale is a record for BHF, which is raising money for research into heart and circulatory diseases.
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