Aviation chiefs urge Mideast states to protect airlines

The global outbreak of the coronavirus disease has hit the aviation industry especially hard, as countries enter lockdown, tourism dries up and business grinds to a halt across the world. (AFP)
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Updated 24 April 2020

Aviation chiefs urge Mideast states to protect airlines

  • IATA left dissatisfied with regional efforts to prop up carriers amid pandemic-driven industry crisis §

DUBAI: Middle Eastern and African governments are failing to take the action required to protect their airlines from the economic crisis caused by the new coronavirus pandemic, the International Air Transport Association (IATA) said on Thursday.

Several states have stepped in to help airlines, with travel demand decimated by the outbreak, such as the US, Singapore and Australia, though few in the Middle East have made their intentions clear.

The IATA, which represents 290 global airlines, has been consulting with African and Middle Eastern governments, regulators and stakeholders on how to revive air travel as some countries start to slowly ease lockdowns.

However, IATA vice president for Africa and the Middle East, Muhammad Albakri, said the association was not satisfied with Middle Eastern state efforts to support their airlines.

“We have not seen the desired movements and decisions of governments and decision makers to ... put on the table the economic stimulation packages, rescue packages, financial packages necessary to keep the airlines in the region alive,” Albakri said.

FASTFACT

$24bn

Estimated revenue losses for Middle Eastern carriers from the outbreak have risen to $24 billion.

IATA wants to see Middle Eastern governments “prioritize aviation and announce specific rescue measures for the airlines and aviation industry in line with other nations,” he said.

The industry body also warned African airlines were on the verge of collapse unless governments urgently stepped in.

“Air Mauritius has entered voluntary administration, South African Airways and SA Express are in business rescue, other distressed carriers have placed staff on unpaid leave or signalled their intention to cut jobs. More airlines will follow if urgent financial relief is not provided,” Albakri said.

Estimated revenue losses for Middle Eastern carriers from the outbreak have risen to $24 billion, compared with $7.2 billion on March 11, while estimated African losses have stretched to $6 billion from $4 billion, IATA said.

Few Middle Eastern governments have said whether they would prop up the region’s airlines, which are mostly state-owned.

Dubai has promised new funding to state carrier Emirates, but has not disclosed details, while Qatar Airways has said it would eventually seek government support. 


Oil surges on hopes of new deal on output cuts

Updated 02 June 2020

Oil surges on hopes of new deal on output cuts

  • Brent price has doubled in five weeks
  • OPEC talks may be brought forward

DUBAI: Oil prices surged toward $40 a barrel on Monday as hopes rose for an early agreement to extend the big production cuts agreed by Saudi Arabia and Russia under the OPEC+ alliance.

Brent, the global benchmark, jumped by more 9 percent to nearly $39, continuing the surge that has doubled the price in five weeks — the best performance in its history. It recovered after record supply cuts agreed between the 23 countries of the OPEC+ partnership, and enforced cuts in US shale oil.

DME Oman crude, the regional benchmark in which a lot of Saudi Aramco exports are priced, rose above $40 a barrel for the first time since early March.

Market sentiment was buoyed by the possibility that the Organization of Petroleum Exporting Countries would agree with non-OPEC members to extend the cuts for a longer period than was agreed in April.

Oil analysts expect OPEC to fast track a “virtual” meeting to formally agree to maintaining cuts at the record 9.7 million barrels a day level. The meeting was scheduled for June 9, but bringing it forward would allow producers more time to set pricing levels.

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An official with one OPEC delegation told Arab News there was consensus among the 23 OPEC+ members for the new date, which could be as early as June 4. The meeting will also consider how long the current level of cuts would be maintained. Some OPEC members want it to run to the end of the year, other producers would prefer a two-month extension.

Omar Najia, global head of derivatives with trader BB Energy, told a forum run by Gulf Intelligence consultancy: “I’d be amazed if OPEC did not extend the higher level of cuts. As long as Saudi Arabia and Russia continue saying nice things to each other I’d expect the rally to continue.”

A Moscow source close to the oil industry said energy officials there had come to the conclusion that “the deal is working” and it was important to keep prices at an “acceptable” level.

Sentiment was also affected by a comparatively high level of compliance with the new cuts, running at about 75 percent among OPEC+ members, with only Iraq and Nigeria noticeable under-compliers.

Robin Mills, chief executive of Qamar Energy, said: “That’s where I’d expect it to be after two months in such a fluid situation. It will be even better in June.”