Airbus warns could leave Britain if no Brexit deal

A new Airbus A330neo is pictured after landing at the end of its first flight on October 19, 2017, at the Toulouse-Blagnac airport, near Toulouse. (AFP)
Updated 22 June 2018

Airbus warns could leave Britain if no Brexit deal

  • Industry analysts say Airbus would be unlikely to pull out of the UK abruptly because of long lead times and waiting lists for its planes
  • Airbus, which makes wings for all its passenger jets in the UK, said that leaving both the EU’s single market and customs union immediately

LONDON: Aviation giant Airbus has warned it could pull out of Britain if it leaves the European Union without a deal, upping the pressure Friday on Prime Minister Theresa May to make progress in Brexit negotiations with Brussels.
The European group, which directly employs nearly 15,000 people, warned that crashing out of the bloc would be “catastrophic” and force it to consider its investments.
“Put simply, a ‘no deal’ scenario directly threatens Airbus’ future in the UK,” said chief operating officer Tom Williams.
May’s government holds out the possibility of walking away as a negotiating tactic, but says she expects to get a deal before it exits the bloc on March 29 next year.
“We have made significant progress toward agreeing a deep and special partnership with the EU to ensure trade remains as free and frictionless as possible, including in the aerospace sector,” a spokeswoman said.
However, talks are stalled on the issue of the Irish border and Britain’s indecision over what it wants.
EU leaders, who will meet May at a summit next week, have warned that time is running out, while Brussels has urged them to step up preparations for no deal.
Britain intends to leave the EU’s single market and customs union to forge its own independent trade policy and end free movement of labor.
In a Brexit risk assessment, Airbus said if plans for a transition deal failed and this break happened in March, it “would lead to severe disruption.”
“This scenario would force Airbus to reconsider its investments in the UK, and its long-term footprint in the country,” the report said.
Airbus builds wings and landing gear for commercial aircraft in Britain and also has a space technology center in the country, supporting 117,000 jobs overall.
In Wales, where one of the largest of more than 25 Airbus sites is based, the devolved government run by the UK’s opposition Labour party said the warning was “extremely worrying.”
Labour’s UK Brexit spokesman Keir Starmer said May’s “reckless decision to keep no deal on the table and to rule out a customs union or strong single market deal after Brexit is putting jobs and the economy at risk.”
Former Wales minister Stephen Crabb, a member of May’s Conservative party, said it was a “wake-up call.”
Steve Turner, of Britain’s biggest trade union Unite, added: “People voted to leave the EU, but didn’t back leave to lose their jobs and see their livelihoods smashed on the cliff face of a ‘hard Brexit’.”
However, Ian Paisley Jr., an MP for the Brexit-supporting Democratic Unionist Party (DUP) which props up May’s government, said it was a “scare story.”
“The EU needs a deal and the UK is going to get a deal!“
A string of airlines, banks and other corporate household names have already activated their contingency plans to move jobs or restructure because of Brexit.
The government has agreed a post-Brexit transition period that will last until December 2020, to allow time for a new economic partnership to be struck with the EU.
But Airbus said this was “too short” for a new agreement to be made and “too short for Airbus to implement the required changes with its extensive supply chain.”
It said it would “carefully monitor any new investments,” and Williams admitted that “in any scenario, Brexit has severe negative consequences.”
May’s spokeswoman said there would be talks with Airbus later on Friday, adding: “There is an open dialogue there and we continue to talk to them.”
Carmaker BMW also warned that uncertainty was affecting the investment climate.
“If we don’t get clarity in the next couple of months we have to start making those contingency plans — which means investing money in systems that we might not need, in warehouses that might not be usable in the future, in effectively making the UK automotive industry less competitive than it is in a very competitive world right now,” Ian Robertson, special representative of the BMW Group in the UK, told the BBC.

UAE property developers’ earnings give Gulf markets a boost

Updated 17 February 2019

UAE property developers’ earnings give Gulf markets a boost

  • Real estate sector gets confidence boost
  • DAMAC gains despite 87 pct drop in Q4 net profits

DUBAI: Most stock markets in the Middle East closed higher on Sunday, reflecting a rally in global stock markets on Friday, and were also boosted by better-than-expected company results, particularly in real estate.

The Abu Dhabi index gained 0.7 percent and the Dubai index 0.6 percent, as two of the largest property developers in the United Arab Emirates posted positive fourth-quarter financial results last week that beat market expectations.

“The market is starting to rebuild confidence in earnings as a driver for sentiment,” said Arqaam Capital in a research note. “Sentiment on the UAE was very weak in 2018, specifically for real estate, on concerns over oversupply risk, pricing pressure that is leading to extended payment plans, and a rental yield compression that is continuing to fall,” Arqaam said.

“But Q4 numbers provided evidence that a few developers have emerged as winners (Emaar Co’s, Aldar) out of market consolidation.” Emaar Properties, Dubai’s largest listed developer, reported a 27 percent rise in fourth-quarter profit.

The stock rose 2 percent on Sunday. DAMAC Properties closed up 0.8 percent, despite having reported a nearly 60 percent fall in full-year profit and an 87 percent drop in fourth-quarter net profits.

In Abu Dhabi, Aldar Properties gained 3.6 percent. Last week, the developer reported a rise in fourth-quarter earnings and higher dividends for 2018. In other sectors, Abu Dhabi Islamic Bank rose 0.5 percent after saying it had no merger and acquisition plans. This was in response to a Bloomberg report last week which said the bank was considering such options.

The Saudi index closed 0.4 percent down, in contrast to the rest of the region’s markets. Arab National Bank reported an increase in full- year net profit to 3.13 billion riyals ($834.62 million) from 3.03 billion riyals one year earlier.

The stock remained unchanged and this failed to give support to the banking sector. Alinma Bank < 1150.SE> and Al Rajhi Banking & Investment Corp. lost 0.3 percent and 0.6 percent, respectively.

In Egypt, where the main index gained 1.4 percent, Orascom Investment Holding, up 3.2 percent, was among the stocks attracting the highest trading volume. Shares in the company jumped last week after its chairman, Egyptian billionaire businessman Naguib Sawiris, said he saw possible investment opportunities in North Korea if a summit between its leader Kim Jong Un and US President Donald Trump later this month was successful.

SAUDI The index lost 0.4 pct to 8,592 points ARABIA DUBAI The index rose 0.6 pct to 2,550 points ABU DHABI The index rose 0.7 pct to 5,070 points QATAR The index gained 0.7 pct to 10,011 points EGYPT The index rose 1.4 pct to 15,199 points KUWAIT The index gainedd 0.1 pct to 5,427 points OMAN The index was down 0.8 pct at 4,077 points BAHRAIN

The index went up 0.6 pct to 1,381 points ($1 = 3.7502 riyals)