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Dispatches

AVIATION :Airlines lost almost €4bn in 2008 

Global airlines look set to return total losses of €3.88bn for 2008 and are heading for further losses of €1.94bn in 2009 as the economic crisis bites, says the International Air Transport Association. However, the figures are better than the industry body has previously predicted. In September they thought losses would amount to €4.03bn and €3.18bn respectively. Last month British Airways said its proposed mergers with Iberia and Qantas and a tie-up with American Airlines could all happen if regulators agree. Nevertheless, Qantas warned investors the proposed €4.3bn merger faced major obstacles over the terms of the deal. BA announced a 5.9% fall in traffic in November year-on-year, to 8.71 billion revenue passenger kilometres (RPKs). Premium traffic fell by 10.8% and non-premium traffic dipped by 4.8%. BA said it still expects to make a small operating profit for the full year. Meanwhile, Ryanair made its second bid in two years for Aer Lingus, its smaller Irish rival. This time round it bid €748m, half its previous offer.

TELECOMS : Smartphone growth slows but Apple quadruples sales 

Growth in the global smartphone market slowed to an annual 11.5% in the third quarter of 2008, according to Gartner – the weakest growth since the analyst firm began tracking the industry. About 36.5 million handsets were sold worldwide between July and September. Apple was the biggest winner, its sales more than quadrupling from the same period in 2007 after the 3G iPhone became more widely available and at lower prices. Apple sold 4.7 million phones in the quarter, its market share jumping to 12.9%. Nokia, the world’s largest maker of handsets and the largest smartphone producer, continued to lead the market with a 42.4% share but sales fell around 3% for the first time. It sold 15.2 million smartphones in the quarter. Research In Motion (RIM), the BlackBerry maker, maintained second place with a 15.9% share. BlackBerry sales rose 81.7% to 5.8 million units. Gartner said that North America was the fastest-growing smartphone market, with a 68% increase.

ENERGY : EDF to build nuclear around world 

Électricité de France (EDF) – the world’s largest nuclear plant operator, with 58 reactors in France – has announced it expects to spend up to €50bn with its partners by 2020 to build reactors around the world. Buoyed by growing global concern about greenhouse gas emissions, the utility giant said it aims to invest in projects in France, China, the US and the UK. The company’s initial estimate for financing its new nuclear ambitions is €1bn a year over the next three years, then €1.5bn annually from 2012 to 2019. EDF has raised its stake in British Energy Group to 88.67% following its October takeover offer. The deal, which won the approval of the French and British governments, hands over British Energy’s eight nuclear plants to EDF. The French company plans to eventually open four more in Britain. EDF has also offered to pay €3.5bn for half of Constellation Energy’s nuclear-generation business in the US. In September, Constellation rejected EDF’s bid for all its operations, agreeing instead to be bought by Warren Buffett’s Berkshire Hathaway.

MANAGEMENT : Record year for insolvencies ahead 

This year record numbers of companies will go bankrupt, with  200,000 insolvencies in Europe alone, according to the world’s  largest credit insurer. According to a grim report by Euler Hermes, part of German insurer Allianz, insolvencies throughout Western Europe are expected to rise by a third from 149,000 in 2007 to 197,000 in 2009. Euler Hermes said most failures in Europe will be focused around the car, retail, textile and logistics sectors. France is tipped to have the most insolvencies, with 63,000, but Spain, Ireland and the UK are forecast to see the most dramatic rises. Nearly four times as many Spanish firms are predicted to fail in 2009 as in 2007 while it will be nearly double in Ireland and the UK with 640 and 38,000 respectively. The report says the US will see 62,000 companies go to the wall this year and Japan will also be hit with up to 17,000 bankruptcies, up from 14,000 in 2007.

AUTOMOTIVE : Fiat ‘too small to survive alone’ 

Italian carmaker Fiat has said it is too small to survive alone, underscoring the likelihood of mergers in this beleaguered industry. Fiat’s chief executive Sergio Marchionne has said that only six big players would be left in the world once a phase of consolidation, which he expects to start next year, ends. Marchionne said only one of the six big players remaining would be in the US. Meanwhile, at press time, the Swedish government was reportedly poised to bail out its country’s carmakers. Ford and General Motors have both said they want to sell their respective subsidiaries Volvo Cars and Saab Automobile. The two car makers are important to the wider Swedish economy not only because of the thousands of workers they employ directly, but also because of the many companies that supply the firms.

RAILWAYS : German privatisation put on hold 

German rail operator Deutsche Bahn has put on hold  efforts to find potential investors until at least 2010, after the government postponed its part-privatisation indefinitely. Sueddeutsche Zeitung quoted a company source as saying the economic crisis had forced Deutsche Bahn to work out a completely new financial plan for the 2009 to 2013 period. The previous goals are hardly achievable and efforts to find investors are no longer possible at the moment, the newspaper reported. Chairman Hartmut Mehdorn received the green light from the government last November to keep trying to line up investors, even though it had put off the IPO due to uncertain market conditions. Mehdorn had said there was considerable interest in the company from investors in Russia, China and the Middle East. The partial privatisation of Deutsche Bahn would have been Germany’s biggest market listing since 2000 and the political parties took years to thrash out the details. The government originally expected the IPO to raise up to €8bn.