Industry Update

The global coronavirus outbreak means millions of travel and tourism jobs are at risk, says a leading industry body. The World Travel and Tourism Council (WTTC) says up to 50 million jobs could be lost because of the pandemic. Its chief executive, Gloria Guevara, said the outbreak "presents a significant threat to the industry". The news comes after thousands of international flights were cancelled and some insurance firms suspended travel cover for new customers. New figures from the WTTC suggest that the travel sector could shrink by up to 25% in 2020.

Source: https://www.bbc.com/news/business-51852505

UAE's Targeted Economic Support Scheme includes a $13bn aid package for banks in the country through collateralised, zero-interest loans. Three of the biggest Arab economies pledged almost $47 billion in stimulus to limit the economic damage of the coronavirus outbreak, joining a global effort meant to soothe markets and salvage growth. Saudi Arabia’s central bank unveiled a 50-billion riyal ($13.3 billion) package to support private businesses, soon after its counterpart in the United Arab Emirates announced a $100-billion dirham ($27.2 billion) programme to assist its lenders. Egypt said it will allocate 100 billion pounds ($6.4 billion) to combat the coronavirus. Timed before the start of the work week in much of the Middle East on Sunday, policy makers are acting as many of the economies in the region are at risk of paralysis, with most countries shutting tourist attractions, closing schools and universities, and limiting public events. The UAE also stopped issuing visas and halted flights to Iraq, Lebanon, Syria and Turkey.

Source: https://www.arabianbusiness.com/banking-finance/442835-uae-saudi-arabia-unveil-40bn-stimulus-packages-to-fight-crisis

Saudi Aramco is slashing planned spending this year in the first sign that plunging demand and the oil-price war the kingdom unleashed are hitting home. Capital expenditure will be between $25 billion and $30 billion in 2020 and spending plans for next year and beyond are being reviewed, Aramco said. The oil giant is lowering that range from the planned $35 billion to $40 billion announced in its IPO prospectus, and compares with $32.8 billion in 2019. “That was the surprise,” Ahmed Hazem Maher, an analyst at EFG Hermes in Cairo, said of the spending cut. “They’re adding production in a low price environment so their cash flows could be impacted.”

Source: https://www.bloomberg.com/news/articles/2020-03-15/aramco-profit-falls-21-on-lower-oil-cuts-2020-capex-guidance?srnd=premium-middle-east

British Airways is to ground flights 'like never before' and lay off staff in response to the coronavirus. In a memo to staff titled "The Survival of British Airways", boss Alex Cruz warned that job cuts could be "short term, perhaps long term”. The airline industry was facing a "crisis of global proportions" that was worse than that caused by the SARS virus or 9/11. Meanwhile, Ryanair told staff they may be forced to take leave from Monday. An internal memo to Ryanair staff, seen by the BBC, said crew may be allocated to take unpaid leave due to cancelled flights and schedule changes. BA boss Mr. Cruz said: "We can no longer sustain our current level of employment and jobs would be lost - perhaps for a short term, perhaps longer term. “The airline is in talks with unions but gave no further details about the scale of the likely job losses in the video message transcript seen by the BBC.

Source: https://www.bbc.com/news/business-51875271

Mubadala Investment Company and OMV, the oil and gas company headquartered in Vienna, on Thursday signed an agreement that will give OMV a majority stake in Borealis, one of Europe’s leading petrochemical companies. OMV, which currently owns a 36 percent stake in Borealis, will acquire an additional 39 percent from Mubadala. The transaction value amounts to $4.68 billion and represents the biggest acquisition in OMV’s history and the largest transaction ever for Mubadala, state news agency WAM reported.

Source: https://www.arabianbusiness.com/energy/442762-uaes-mubadala-omv-ink-468bn-deal-for-borealis-stake

Wells Fargo, a major US bank, has agreed to pay $3bn (£2.3bn) to resolve a government investigation into its sales practices, including opening millions of fake customer accounts. The bank admitted it had wrongly collected millions of dollars in fees, misused customer information and harmed the credit rating of customers. The settlement comes about four years after the scandal first erupted. It has already forced out two chief executives and led to hefty fines. Since 2018, Wells Fargo has been operating under an order from the US Federal Reserve that limits its growth. Last month, former chief executive John Stumpf agreed to pay $17.5m to settle charges, in a rare example of a bank executive being personally punished for failing to stop misconduct.

Source: https://www.bbc.com/news/business-51594117

The global airline industry is facing huge financial losses and its first decline in more than a decade because of the novel coronavirus outbreak. The International Air Transport Authority (IATA) warned on Thursday that the virus' impact on demand could cost airlines more than $29 billion, with Asian carriers bearing the brunt of the losses. The outbreak will also likely reduce global traffic by 4.7%, wiping out IATA's earlier forecast for growth and marking the first overall decline in demand since the global financial crisis of 2008 - 2009.The coronavirus has killed more than 2,200 people worldwide, with all but 11 of those deaths in mainland China. The total number of infected worldwide stands at over 76,000.

Source: https://edition.cnn.com/2020/02/20/business/iata-airlines-coronavirus/index.html

The global airline industry is facing huge financial losses and its first decline in more than a decade because of the novel coronavirus outbreak. The International Air Transport Authority (IATA) warned on Thursday that the virus' impact on demand could cost airlines more than $29 billion, with Asian carriers bearing the brunt of the losses. The outbreak will also likely reduce global traffic by 4.7%, wiping out IATA's earlier forecast for growth and marking the first overall decline in demand since the global financial crisis of 2008 - 2009.The coronavirus has killed more than 2,200 people worldwide, with all but 11 of those deaths in mainland China. The total number of infected worldwide stands at over 76,000.

Source: https://edition.cnn.com/2020/02/20/business/iata-airlines-coronavirus/index.html

Emirates NBD, Dubai's biggest bank, has launched Autoswap, a first-of-its-kind auto loan buyout product that provides a hassle-free financing solution for individuals seeking to buy used cars. Launched in partnership with Dubizzle, the classifieds platform in the UAE, the Autoswap solution will enable car owners looking to sell their vehicles to complete the transaction without having to settle their existing loans. Sellers with outstanding loans can opt for this solution by using Seller Assist, a premium service offered by dubizzle pro which manages the entire selling process on behalf of the owner to help find the right buyer at the right price. While the second-hand market makes car ownership more accessible, many sellers have an outstanding loan on their current vehicle that has to be cleared before the transfer of ownership can take place.

Source:https://www.arabianbusiness.com/banking-finance/440560-dubai-banking-giant-dubizzle-aim-to-simplify-used-car-buying

Richard Branson unveiled the 'Scarlet Lady', a 60,000 tonne cruise liner complete with a tattoo studio and yoga deck aimed at drawing in a younger generation of holiday-makers. Despite the unfortunate timing, with passengers on one ship quarantined after hundreds caught the coronavirus and another turned away by five countries over fears someone on board may be ill, Branson sees cruises as a growth area. With the Virgin brand already offering everything from airlines to banking, TV, health clubs and travel, he has set his sights on a boutique hotel-style pitch.

Source: https://gulfnews.com/photos/business/richard-branson-unveils-his-luxury-adults-only-cruise-ship-1.1582380979689?slide=3