DB Live: easyJet jobs axe; Daily Mail slips; markets up
4.45pm: London close
Encouraging indications of a return to work helped push the market to its highest since before the lockdown.
The FTSE 100 closed 74.54 points (1.21%) higher at 6,218.79.
The positive finish for footsie came despite downbeat data from the US where unemployment benefit claims rose by another 2.1 million last week. GDP figures showed that the economy had shrunk at a faster pace than had initially been estimated in the first three months of 2020.
12.20pm: Support needed if firms close again -– FSB
The FSB is asking ministers to consider financial support for workplaces that are required to re-close because staff have been in contact with the virus.
12.15pm: Plea for changes in support
Self-catering properties should be allowed to reopen earlier than the government currently allows, say the Scottish Tories.
The Scottish Tories and Labour have claimed that the government is being too slow in allocating grants to small firms.
8.30am: London open
EasyJet shares flew 4% higher as the airline prepares to restart flying with a smaller fleet and said it has been encouraged by bookings for year-end flights. Rolls-Royce shares slumped 6% after AKO Capital sold 96.7m shares in the aerospace and defence giant which recently announced plans to shed 9,000 jobs.
The FTSE 100 continued to edge higher as more countries announced easing of lockdown measures. In early trading it was 48 points (0.8%) higher at 6,193.
7am easyJet to cut jobs
EasyJet plans to cut is payroll by up to 30%, equal to 4,500 jobs, and will launch a consultation process in the coming days.
It is also removing cost and non-critical expenditure from the business at every level, and will look to revised contracts for airports & ground handling.
EasyJet will resume flying on 15 June where there is sufficient customer demand to support profitable flying. The initial schedule will comprise mainly domestic flying in the UK and France.
Further routes will be announced as customer demand increases and government restrictions across Europe are relaxed.
It says booking trends on the resumed flights have been encouraging, and the demand indications for summer 2020 are improving, albeit from a low base. Bookings for winter are well ahead of the equivalent point last year, which includes customers who are rebooking coronavirus-disrupted flights for later dates.
Current plans are that easyJet expects to fly around 30% of the planned capacity in the fourth quarter.
Looking further forward, easyJet expects its year end 2021 fleet size to be at the bottom end of its fleet range at around 302 aircraft, which is 51 aircraft lower than the anticipated fleet size for year end 2021 which was reported to the market prior to Covid-19.
This will include c.3-4% of un-crewed standby aircraft during peak. The reduction in fleet size will be achieved through the measures previously announced, including the deferral of new aircraft deliveries and the re-delivery of leased aircraft.
EasyJet believes that the levels of market demand seen in 2019 are not likely to be reached again until 2023.
Johan Lundgren, easyJet CEO said: “We realise that these are very difficult times and we are having to consider very difficult decisions which will impact our people, but we want to protect as many jobs as we can for the long-term.
“We are planning to reduce the size of our fleet and to optimise the network and our bases. As a result, we anticipate reducing staff numbers by up to 30% across the business and we will continue to remove cost and non-critical expenditure at every level. We will be launching an employee consultation over the coming days.
“We want to ensure that we emerge from the pandemic an even more competitive business than before, so that easyJet can thrive in the future.”
Daily Mail profits slide
The owner of the Daily Mail newspaper saw its profit almost halve in the first six months of the year as the coronavirus crisis prompted a collapse in the advertising and events markets.
Daily Mail and General Trust (DMGT) reported pre-tax profit of £56m in the six months to the end of March, from £100m in the same period last year.
Revenue fell 5% to £690m, while earnings per share was down by a third at 15p.
In April, the first full month of the lockdown, total group revenues decreased by an underlying 23% and the group made an adjusted operating loss of £3m (April 2019: £5m adjusted operating profit).
The interim dividend increased 3% to 7.5p, reflecting first half trading performance. “Future dividends will reflect the prevailing economic outlook and the trading of our businesses,” said the company
Paul Zwillenberg, CEO, commented: “DMGT delivered a solid performance in the first half of the year, reflecting a strong first five months of trading followed by one month of weakness due to the Covid-19 pandemic.”
“All of our businesses are market leading and I am highly confident that they will come out of this global crisis stronger and fitter.
“The severity and duration of the Covid-19 crisis remains unclear but DMGT has a robust balance sheet, access to significant funding and a diversified portfolio. This gives me, and the Board, confidence that we will weather the current storm and withstand a sustained period of global economic uncertainty.”
Wed 10.30pm: US close
The Dow Jones Industrial Average ended the session up 2.21%, the S&P 500 added 1.48%, and the Nasdaq Composite was ahead 0.77%.