EasyJet to offset carbon emissions for all flights

Passengers board an easyJet plane at the Nantes Atlantique airport in France. Airlines are under increasing pressure to reduce emissions. (Reuters)
Updated 20 November 2019

EasyJet to offset carbon emissions for all flights

  • Airline works with US startup to produce electric plane for short-haul flights

LONDON: Britain’s easyJet aims to become the world’s first major airline to operate
net-zero carbon flights across its entire network, it said on Tuesday after posting full-year profit toward the top end of expectations.

In addition to the plans to offset emissions from flying, the budget carrier also announced that it would launch easyJet Holidays in Britain by the festive period, offering its own beach and city breaks after the demise of tour operator Thomas Cook.

The carbon offset programs will cost about £25 million ($32.4 million) a year, though Chief Executive Johan Lundgren acknowledged that longer-term solutions are also needed.

“We recognize that offsetting is only an interim measure, but we want to take action on our carbon emissions now,” he said.

Airlines have come under increasing pressure to reduce emissions in the face of the growing “flight shame” movement, formed in Lundgren’s native Sweden.

British Airways owner IAG has said that it will carbon-offset its domestic flights, but moves toward more sustainable fuel or even hybrid or electric planes will take years.

HIGHLIGHTS

● Need to decarbonize aviation.

● Plans to launch easyJet Holidays.

● Better pricing expected next year.

Over the past two years easyJet worked with Wright Electric, which aims to produce an all-electric commerical plane to be used for short-haul flights.

The announcements came as easyJet reported headline pretax profit of £427 million, compared with guidance last month of a figure between £420 million and £430 million. That was down 26 percent from last year because of rising fuel prices and a tough operating environment.

The airline said that forward bookings for the first half of the 2020 financial year were “reassuring” and slightly ahead of last year, reiterating that capacity growth would be toward the lower end of historic guidance between 3 percent and 8 percent.

Analysts at RBC said consensus estimates for 2020 are unlikely to change, with upgrades of 5-7 percent from a better pricing environment being “masked” by the spend on carbon offsetting.

EasyJet said that the new holidays business would break even in the year to September 2020. It is expected to fly routes from Gatwick and Bristol take-off and landing slots that were acquired after the collapse of Thomas Cook, starting as early as next February. 


$8bn blow to Erdogan as investors flee Turkey

Updated 09 July 2020

$8bn blow to Erdogan as investors flee Turkey

  • Overseas holdings in Istanbul stock exchange are at lowest in 16 years

ANKARA: Foreign capital is flooding out of Turkey in a massive vote of no confidence in President Recep Tayyip Erdogan’s economic competence.
Overseas investors have withdrawn nearly $8 billion from Turkish stocks since January, according to Central Bank statistics, reducing foreign investment in the Istanbul stock exchange from $32.3 billion to $24.4 billion.
As recently as 2013, the figure was $82 billion, and foreign investors now own less than 50 percent of stocks for the first time in 16 years.
“Foreign investment has left Turkey for several reasons, both internal and external,” Win Thin, global head of currency strategy at Brown Brothers Harriman, told Arab News.
“Externally, investors fled riskier assets like emerging markets during the height of the coronavirus pandemic. Some of those flows are returning, but investors are being much more discerning and Turkey does not seem so attractive.”
In terms of internal factors, Thin said that Turkish policymakers had made it hard for foreign investors to transact in Turkey. “This includes real money clients, not just speculative.
“By implementing ad hoc measures to try and limit speculative activity, Turkey has made it hard for real money as well. Besides these problems, Turkey’s fundamentals remain poor compared to much of the emerging markets.”
Erdogan allies claim international players are manipulating the Istanbul stock exchange through automated trading, and have demanded action to make it difficult for them to trade in Turkish assets.
Goldman Sachs, JPMorgan, Merrill Lynch, Barclays and Credit Suisse were banned this month from short-selling stocks for up to three months, and this year local lenders were briefly banned by the banking regulator from trading in Turkish lira with Citigroup, BNP Paribas and UBS
JPMorgan was investigated by Turkish authorities last year after the bank published a report that advised its clients to short sell the Turkish lira.
MSCI, the provider of research-based indexes and analytics, warned last month that it may relegate Turkey from emerging market status to frontier-market status because of bans on short selling and stock lending.
With the market becoming less transparent, overseas fund managers, especially with short-term portfolios, are unenthusiastic about the Turkish market and are becoming more concerned about any forthcoming introduction of other liquidity restrictions.
The exodus of foreign capital is likely to undermine Turkey’s drive for economic growth, especially during the coronavirus pandemic when employment and investment levels have gone down, with the Turkish lira facing serious volatility.