Middle East airlines post losses of $7.1bn in 2020 — IATA

Middle East airlines post losses of $7.1bn in 2020 — IATA
Oman Air resumed flights to Riyadh on April 1. (Supplied)
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Updated 02 April 2021

Middle East airlines post losses of $7.1bn in 2020 — IATA

Middle East airlines post losses of $7.1bn in 2020 — IATA
  • January air passenger traffic in the region was down 82.3% from 2019
  • Middle East airlines received $4.8 billion in government aid in 2020

RIYADH: Middle East airlines posted losses of $7.1 billion in 2020, a loss of $68.47 for each passenger flown, with traffic at less than 20 percent of 2019 levels, the International Air Transport Association (IATA) said.
January air passenger traffic in the region was down 82.3 percent compared with January 2019, according to IATA data.
The ongoing crisis puts over 1.7 million jobs in the Middle East and $105 billion in GDP at risk, IATA said as it called upon governments in the region to develop restart plans for the post-COVID-19 phase, and for regional coordination to ensure that the plans can be efficiently implemented.
Airlines in the Middle East received $4.8 billion in government aid in 2020, $4.1 billion of which was distributed through cash injections, IATA said.
Despite this, several airlines remain at risk of bankruptcy or business administration, it said.
A financially viable air transport sector will be needed to energize the recovery, and both the government and industry must be prepared, said Kamil Al-Awadhi, IATA regional vice president (Africa and the Middle East).
Government relief for airlines has avoided massive failures that would jeopardize a restart but must be prepared to spend more, while those that have not yet stepped up must recognize the growing risk to their economies as the crisis drags on, he said.
“With no clear timeline to recovery the situation is far from resolved,” he said.


IEA issues ‘dire warning’ on CO2 emissions as it predicts 5% rise

IEA issues ‘dire warning’ on CO2 emissions as it predicts 5% rise
Updated 1 min 27 sec ago

IEA issues ‘dire warning’ on CO2 emissions as it predicts 5% rise

IEA issues ‘dire warning’ on CO2 emissions as it predicts 5% rise
  • This year’s rise will likely be driven by a resurgence in coal
  • Global energy demand is set to increase by 4.6 percent in 2021

LONDON: Global CO2 emissions from energy are seen rising nearly 5 percent this year, suggesting the economic rebound from COVID-19 could be “anything but sustainable” for the climate, the International Energy Agency said on Tuesday.
The IEA’s Global Energy Review 2021 predicted carbon dioxide emissions would rise to 33 billion tons this year, up 1.5 billion tons from 2020 levels in the largest single increase in more than a decade.
“This is a dire warning that the economic recovery from the COVID crisis is currently anything but sustainable for our climate,” IEA Executive Director Fatih Birol said.
This year’s rise will likely be driven by a resurgence in coal use in the power sector, Birol added, which the report forecast to be particularly strong in Asia.
It should also put pressure on governments to act on climate change. US President Joe Biden will hold a virtual summit for dozens of world leaders this week to discuss the issue ahead of global talks in Scotland later this year. Last year, when power use dropped due to the COVID-19 pandemic, energy-related CO2 emissions fell by 5.8 percent to 31.5 billion tons, after peaking in 2019 at 33.4 billion tons.
The IEA’s annual review analyzed the latest national data from around the world, economic growth trends and new energy projects that are set to come online.
Global energy demand is set to increase by 4.6 percent in 2021, led by developing economies, pushing it above 2019 levels, the report said.
Demand for all fossil fuels is on course to grow in 2021, with both coal and gas set to rise above 2019 levels.
The expected rise in coal use dwarves that of renewables by almost 60 percent, despite accelerating demand for solar, wind and hydro power. More than 80 percent of the projected growth in coal demand in 2021 is set to come from Asia, led by China.
Coal use in the United States and the European Union is also on course to increase but will remain well below pre-crisis levels, the IEA said.


Saudi Arabia is China's top oil supplier for seventh straight month

Saudi Arabia is China's top oil supplier for seventh straight month
Updated 14 min 47 sec ago

Saudi Arabia is China's top oil supplier for seventh straight month

Saudi Arabia is China's top oil supplier for seventh straight month
  • Shipments from UAE and Oman surge
  • Some Iranian barrels believed to have slipped in

BEIJING: China’s crude oil imports from top supplier Saudi Arabia rose 8.8 percent in March from a year earlier, driven by strong demand and as shipments delayed due to a port congestion finally arrived.
Imports from the United Arab Emirates also rose again, up 86 percent, as some Iranian barrels were believed to have slipped in. Shipments from Saudi Arabia were 7.84 million tons, equivalent to 1.85 million barrels per day (bpd), data issued by China’s General Administration of Customs showed on Tuesday.
That was higher than 1.7 million bpd a year earlier, but below imports of 1.94 million bpd in February. Saudi Arabia retained its position as China’s biggest crude oil supplier for a seventh consecutive month. Ports at China’s oil refining hub Shandong experienced congestion for a few weeks over January and February, slowing oil arrivals. China’s crude oil imports from Russia rose 6 percent in March to 1.75 million bpd from a year ago, but slipped from 1.91 million bpd in February. Analysts from Refinitiv expect arrivals from Saudi Arabia to further drop in April given a voluntary supply cut of 1 million bpd by the producer and increasing prices of Arab light crude for the Asian market.
Appetite of spot oil would turn to more price competitive African sources, with China’s imports from Angola at 0.74 million bpd in March, versus 0.73 mln bpd a month ago. The customs data also showed that crude oil supplies from Kuwait increased to 0.6 million bpd, up 29 percent from a year earlier. China’s imports from the UAE were at 0.71 million bpd last month, up 86 percent on year. Shipments from Oman rose 60 percent from a year ago to 0.86 million bpd.


Saudi Arabia’s key role in fight against climate change

Saudi Arabia’s key role in fight against climate change
Updated 20 April 2021

Saudi Arabia’s key role in fight against climate change

Saudi Arabia’s key role in fight against climate change
  • Aramco has spent billions on research and development into cleaner oil production technologies

DUBAI: Climate change is the big long-term issue of the post-pandemic world, and this weekend we will all be better placed to judge the global state of play when US President Joe Biden convenes the Leaders’ Summit on Climate he promised soon after moving into the White House.

Some 40 leaders have been invited to take part in the two-day event, including King Salman. In a demonstration of the importance Biden puts on the issue, and the impact of summitry drama, the event will be available for global public consumption via livestream.

The aim of the summit is for global leaders to update each other on their progress toward the goals of the Paris Agreements on climate change mitigation ahead of the COP26 (26th UN conference of the parties) meeting in November, when the targets can be adjusted according to the needs of the planet.

Most climate experts accept that there is an urgent need to accelerate the process of reducing greenhouse gas emissions. In Paris, all the nations of the world agreed to reduce emissions, however pollution levels have continued to increase over the past five years.

Even the massive hit to the global economy and transport last year due to the coronavirus disease (COVID-19) pandemic caused only a blip in the rising curve, which is expected to climb sharply upwards this year and next as economic recovery accelerates.

The question — both for the Biden summit and COP26 — is what can be done about it, and this is where Saudi Arabia has a unique contribution to make.

The Kingdom, of course, is the biggest exporter of hydrocarbons in the world, and sits on huge reserves of oil and gas. Its resources have fueled economic development at home and around the globe for decades.

Some people do not appreciate this. The eco-warriors of Europe and North America appear to want nothing at all to do with the most powerful and efficient fuel in history and would like to scrap all further investment in hydrocarbons as a prelude to some green utopia where the streets are crammed with Teslas and all business is conducted via Zoom.

HIGHLIGHTS

• The recent announcement of the Sakaka solar project was a massive step toward the Kingdom’s ambitions in renewables, with the promise of more to come.

• Saudi Aramco already produces the cleanest oil in the world, according to independent scientific studies.

But — and this will probably come as news to Swedish environmental activist Greta Thunberg and her friends — the Kingdom has also been hyperactive in the climate change campaign over the past couple of years. This is the message it wants to reinforce at Biden’s summit.

It pioneered the framework of the Circular Carbon Economy, an integrated intellectual strategy for tackling emissions while enabling economic growth. This was endorsed by G20 leaders at the summit under Saudi presidency last year.

It has committed the Kingdom to satisfying 50 percent of its domestic energy needs from renewables by 2030, at the same time launching a project — the Saudi Green Initiative — to plant 10 billion trees in the country to mitigate CO2 emissions.

The recent announcement of the Sakaka solar project was a massive step toward the Kingdom’s ambitions in renewables, with the promise of more to come.

Saudi Aramco — which already produces the cleanest oil in the world, according to independent scientific studies — has spent billions on research and development into cleaner oil production technologies and more efficient engineering to optimize hydrocarbon fuel usage in internal combustion engines.

The Kingdom has pioneered the use of hydrogen, in “green” and “blue” forms, which some energy visionaries see as the fuel of the future. Saudi Aramco shipped the first ever consignment of the fuel last summer.

Saudi Arabia, similar to the rest of the world, still has plenty of work to do. In particular, along with other participants at the Biden summit, it must refine and adjust its national commitments under the Paris Agreements.

And it must strive to ensure its ambitious measures to combat climate change come through as fully implemented and actionable policies.

It could also take the lead in investment to find an economically viable technology for carbon capture, utilization, and storage, which some experts see as the silver bullet against CO2 pollution.

But above all it must hammer home the point that economic growth, which the world urgently needs after the COVID-19 pandemic recession, can only be fueled by the responsible and sustainable use of the world’s precious hydrocarbon wealth.


Egypt offers treasury bonds worth $1.05bn

Egypt offers treasury bonds worth $1.05bn
Updated 20 April 2021

Egypt offers treasury bonds worth $1.05bn

Egypt offers treasury bonds worth $1.05bn
  • Move aims to help Finance Ministry clear the govt budget deficit

CAIRO: The Central Bank of Egypt has issued treasury bonds worth EGP 16.5 billion ($1.05 billion), as part of efforts to help the Ministry of Finance clear the government budget deficit.

In a statement, the bank said the value of the first offering amounted to EGP 5 billion for a period of three years, the second offering amounted to EGP 6 billion for a period of five years, and the third 10-year term offering was valued at EGP 5.5 billion.

The government resorted to financing the budget deficit by offering bonds and treasury bills as debt instruments, and government banks are their largest buyers.

Last Saturday, Minister of Finance Mohammed Maait announced that JP Morgan decided to include Egypt in its watchlist for government bonds for emerging markets.

FASTFACTS

• In a statement, the bank said the value of the first offering amounted to EGP 5 billion for a period of three years, the second offering amounted to EGP 6 billion for a period of five years, and the third 10-year term offering was valued at EGP 5.5 billion.

• The minister said that Egypt will enter the index with 14 issues, with a total value of $24 billion.

The minister said that Egypt will enter the index with 14 issues, with a total value of $24 billion.

Nevin Mansour, adviser to the deputy minister of finance for financial policies, expected that Egypt would attract new foreign investments in local treasury bonds at about $4.4 billion over a period ranging from six months to a year after Egypt entered the JP Morgan emerging market index in October or November.

Mansour explained that Egypt will receive a 1.78 percent share of any investments that will be pumped into the index and that the inclusion on the index allows international investment banks to evaluate the performance of Egyptian debt instruments and their trading movements, which will result in attracting new foreign investments.


Toyota to review climate stance as investors turn up the heat

Toyota to review climate stance as investors turn up the heat
Updated 20 April 2021

Toyota to review climate stance as investors turn up the heat

Toyota to review climate stance as investors turn up the heat
  • The carmaker came under scrutiny after siding with the Trump administration in 2019 in a bid to bar the state of California from setting its own fuel efficiency rules

TOKYO: Japan’s Toyota Motor Corp. signaled a shift in its climate change stance on Monday, saying it would review its lobbying and be more transparent on what steps it is taking as it faces increased activist and investor pressure.

The carmaker came under scrutiny after siding with the Trump administration in 2019 in a bid to bar the state of California from setting its own fuel efficiency rules. Toyota “will review public policy engagement activities through our company and industry associations to confirm they are consistent with the long-term goals of the Paris Agreement,” it said in a statement, adding that actions will be announced by the end of this year.

The automaker also said it will “strive to provide more information so that our stakeholders can understand our effort to achieve carbon neutrality.”

A company spokeswoman, who confirmed that “public policy engagement activities” includes lobbying, was not able to respond immediately to questions about pressure from investors.

Four funds with about $235 billion in assets under management are pressuring Toyota before its annual shareholder meeting in June to draw a line under its lobbying against international efforts to prevent catastrophic global warming.

“This move must not be a PR exercise but instead signal a clear end to its role in negative climate lobbying which has given it a laggard status,” Jens Munch Holst, chief executive officer of Danish pension fund AkademikerPension, told Reuters.

AkademikerPension has “escalated via intense direct engagement” with Toyota after a decade of communicating with the automaker through a third party, Troels Børrild, spokesman at the Danish fund, told Reuters.

AkademikerPension will consider preparing a shareholders resolution to submit at next year’s annual general meeting if “Toyota fails to deliver on its commitment,” Børrild said.

The fund would consider selling its Toyota holding if there is no change, but the spokesman said fund officials did not believe it would come to that.

“Right up until now, the company has repeatedly undermined climate action, from opposing the UK government’s ban on internal combustion engines by 2030 to opposing car fuel economy standards in the US,” Munch Holst said. The Toyota spokeswoman told Reuters that it would need more time to respond to Munch Holst’s comments.

The other investors are Church of England Pensions Board, Sweden’s AP7 and Norway’s Storebrand.

Toyota was among major automakers that supported the Trump administration in its attempt to bar California from setting its own fuel efficiency rules or zero emission requirements.

They have since dropped that support in a “gesture of good faith an to find a constructive path forward” with the Biden administration.

With pressure growing on carmakers to slash emissions, Toyota is also scrambling to produce EVs that can compete globally with rivals’ models.

Toyota this year settled a lengthy Justice Department civil probe into its delayed filing of emissions-related defect reports for $180 million.