- Lufthansa Warns Brexit to Hit U.K. Airlines as EU Gets Tough
Deutsche Lufthansa AG Chief Executive Officer Carsten Spohr expects France and Germany to take a hard line against the U.K. aviation industry in Brexit negotiations, threatening to disrupt flight connections across Europe.
“Brexit means Brexit – our industry won’t be exempt,” said Spohr, who has accompanied Chancellor Angela Merkel on state visits and discussed the matter with German, French and EU officials. “The basic approach is for every industry to say ‘hey, let’s pretend that nothing has happened.’ That’s something the governments, and also the EU Commission, won’t go along with. You can be sure about that from what I hear.’’
Flights between EU nations are regulated by the Single European Sky treaty and the U.K. will likely need a new agreement once it leaves the bloc. In addition, British carriers that fly from one European state to another will probably require an operating license based somewhere on the continent. The U.K. is set to leave the common market two years after the divorce process is officially triggered on Wednesday.
It’ll be “virtually impossible” for governments to reach a comprehensive agreement in the time available for talks, said Spohr, the CEO of Germany’s largest airline. That means there’ll be a transition period with likely disruptions as the sector adjusts to new rules, he said.
A German transport ministry representative recently told a group of parliamentarians at a closed meeting that Britain would likely lose its membership in the Single European Sky agreement, and that a new deal would then need to be negotiated, according to a person who attended the discussion who asked not to be identified because the gathering was not open to the public.
U.K. airlines including EasyJet Plc and British Airways owner IAG SA have warned that a hard Brexit scenario would hit their business. While IAG already has several European operating certificates via its continental arms, Luton, England-based EasyJet is still in the process of establishing an air operating certificate in an EU state.
Ireland’s Ryanair Holdings Plc has said it needs at least 12 months to adjust its routes and ticket sales once the new rules are decided. As an EU carrier, Dublin-based Ryanair would also require a license to operate its handful of U.K. domestic flights. The company, which draws about 40 percent of its customers from Britain, has said it may have to forego its intra-U.K. routes after Brexit.
EasyJet shares fell as much as 1.5 percent to 997 pence in London trading, while IAG dropped 0.8 percent to 530 pence. Ryanair slid 0.9 percent to 14.37 euros.
Spohr is expecting Merkel and French President Francois Hollande to oppose special treatment for the industry, in spite of calls from the likes of British Transport Minister Chris Grayling to prioritize the airline sector in Brexit negotiations.
“The U.K. airlines say they want a shortcut,” said Spohr, who accompanied Merkel on a trip to China in June. “But that’s something Mr. Hollande and Mrs. Merkel won’t do.”
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.
The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.
The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.
The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.
Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.
The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
Oil Prices Recover from 4 Percent Decline as Joe Biden Wins
Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.
This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.
Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.
On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.
“There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.
“Either you’re crimping energy demand or consumption behavior.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
Revenue of OPEC Members to Drop to 18 Year Low in 2020
The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.
EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.
“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.
The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.
It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.
It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.
“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”
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