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Britain finds a buyer for one Tata steel plant, saving a third of jobs at risk

Legacy Phuket Gazette

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Britain finds a buyer for one Tata steel plant, saving a third of jobs at risk | The Thaiger

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– World news selected by Gazette editors for Phuket’s international community

Britain finds a buyer for one Tata steel plant, saving a third of jobs at risk
Phuket Gazette / Reuters


LONDON: Tata Steel (TISC.NS) agreed to sell one of its main British steelworks to investment firm Greybull Capital for 1 pound on Monday, saving a third of the 15,000 jobs placed in jeopardy by the Indian conglomerate’s decision to sell up in Britain.

Prime Minister David Cameron has been under pressure to keep the plants open to save jobs after Tata, one of the world’s biggest steelmakers, said on March 30 it would sell its loss-making British business.

As Tata formally appointed advisers for the sale of its steel assets in Britain, turnaround specialist Greybull Capital LLP said it would buy the Indian company’s Long Products Europe division in Scunthorpe, northern England, which employs 4,400.

It declined to rule out further purchases of Tata’s British steel assets, including its plant at Port Talbot in Wales, while British Business Secretary Sajid Javid said the government would consider jointly investing with a buyer to secure the sale of the Indian group’s other UK assets.

“I’ve been in contact with potential buyers, making clear that the government stands ready to help,” Javid told parliament. “This includes looking at the possibility of co-investing with a buyer on commercial terms.”

The sale to Greybull – for a nominal pound or 1 euro – includes a 400 million pound ($570 mln) investment and financing package for the Scunthorpe business, as well as agreements with suppliers and unions on cutting costs.

“We’re expecting no redundancies going forward, the business plan calls for no redundancies,” Greybull co-founder Marc Meyohas told reporters on a conference call.

The Greybull deal, which is subject to a ballot by union members, includes two additional mills, an engineering workshop and a design consultancy in Britain, plus a mill in Hayange, in northeast France.

The purchase will see the business renamed ‘British Steel’, in a revival of a historic name last used almost two decades ago.

Cameron, already grappling with a divided ruling party ahead of a June 23 referendum on membership of the European Union, has been scrambling to try to find buyers for Tata’s steel operations, to save jobs.

Britain’s eurosceptic media has blamed Brussels for preventing London from taking greater steps to protect the steel industry, while the opposition Labour Party has called on Cameron to do more to save the plants.

Tata, which owns iconic brands such as Jaguar Land Rover and Tetley Tea, is offloading its British steel operations, citing a global oversupply of steel and cheap imports from China, high costs and weak domestic demand.

BRITISH STEEL?

The deal for the Scunthorpe plant, which Tata had been trying to sell since 2014 before revealing talks with Greybull were underway in December, is expected to complete in eight weeks subject to certain conditions being met.

Greybull, which is not taking on pension liabilities, said about half of the 400 million pound package would come from shareholders of Greybull and half from banks and government loans.

“We’re expecting the company to be profitable in year one and that’s very much the management plan,” said Meyohas, who co-founded Greybull in 2008 after 12 years as CEO of technology services company Cityspace.

Though the deal is positive for the Scunthorpe workers, there is deep unease in Port Talbot, Britain’s biggest steel plant, where 4,000 people could be out of a job if Tata fails to find a buyer.

Tata appointed KPMG as adviser on the sale process for its UK assets while Slaughter and May was appointed its legal adviser on the sales.

“While very welcome it does not mean that we are out of the woods yet,” said Gareth Stace, director of trade association UK Steel.

“A long-term investor is needed, in the very short term, for the remainder of the whole of the Tata Steel UK business, including Port Talbot,” said Stace.

Javid said the government had appointed Ernst and Young to act as its financial advisers on any deal for Tata’s other British assets.

However, he said that despite government support, he couldn’t guarantee there would not be further job losses across the industry.

Scunthorpe produces steel mainly used in construction and infrastructure projects, whereas Port Talbot produces slab, hot rolled, cold rolled and galvanized coil which is used in products from cars to washing machines to food cans.

Finding buyers for Port Talbot and Tata’s other assets, could take some time given the complexity of any deal, including negotiations over everything from pensions liabilities to energy subsidies.

Greybull said to date it had been wholly focused on the Scunthorpe deal, but declined to rule out future interest in the Port Talbot plant.

“Whether it’s Tata or any other assets, we’ll review it as and when is appropriate,” Meyohas said.

Another potential bidder for the Port Talbot plant is Sanjeev Gupta, the boss of metals trader Liberty House Group.

“LOSS-MAKING”

Gupta told Reuters on Friday that he was serious about making an offer and had the backing of a group with $7 billion of revenues, hitting back at critics who have questioned his capacity to take on a business dragged down by heavy debt and weak sales.

However, much will depend on how much any potential investor is willing to pay to even hope of turning around the business.

“It’s a loss-making business and a loss-making business is not worth a lot in itself to buy,” Gupta said. “It’s more of a question of what are the resources required in turning it around.”

Tata, under former Chairman Ratan Tata, bought its UK steel operations in 2007 by purchasing Anglo-Dutch steelmaker Corus for $12 billion as a way to access the European market.

But the Indian conglomerate, controlled by philanthropic trusts endowed by the Tata family, struggled to turn the steelmaker around.

Like competitors such as ArcelorMittal, the world’s top steel producer, Tata has been hit by plunging prices due to overcapacity in China, the world’s biggest market for the alloy.

China said on Monday it wants to work with the rest of the world to find an appropriate resolution to overcapacity in the steel sector, after Britain asked Beijing to hurry up and tackle the problem.

Tata Steel is the second-largest steel producer in Europe with a diversified presence across the continent. It has a crude steel production capacity of over 18 million tonnes per annum in Europe, but only 14 mtpa is operational.

— Phuket Gazette Editors



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Southeast Asia

Bangkok to Hong Kong the world’s second most popular flight, what’s the most popular?

The Thaiger

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Bangkok to Hong Kong the world’s second most popular flight, what’s the most popular? | The Thaiger

The world’s top five flying routes are all in the Asia Pacific region, according to an International Air Transport Association (IATA) report. Aviation writers say the growth can be attributed to the addition of flights operated by low-cost carriers in the region.

Passenger traffic between Bangkok (Suvarnabhumi) and Hong Kong airport is Number Two on the list of the airports with the world’s busiest air traffic. The trip between Hong Kong and Taipei Taoyuan, Taiwan, is the most popular route in the world carrying 5.4 million passengers per year.

Passenger traffic between Suvarnabhumi and Hong Kong reached 3.4 million in 2018, up 9% from 2017.

The report of IATA world airline traffic for 2018 also shows that airlines in the Asia Pacific carried the largest number of passengers in the world.

Global passenger traffic results for 2018 showed that demand rose by a healthy 6.5% compared to full-year 2017. Although this represented a slowdown compared to the 2017 annual growth of 8.0%, it was another year of above-trend growth. Full year 2018 capacity climbed 6.1%, and load factor edged up 0.3 percentage point to a record 81.9%, exceeding the previous high set in 2017.

“Airlines are connecting more people and places than ever before. The freedom to fly is more accessible than ever. And our world is a more prosperous place as a result,” said Alexandre de Juniac, IATA director-general and CEO.

In terms of pure numbers of flights for 2018, here are the results. Eight out of ten of the routes are all in the Asia-Pacific.

  1. Kuala Lumpur – Singapore: 30,187 flights
  2. Hong Kong – Taipei: 28,447 flights
  3. Jakarta – Singapore: 27,046 flights
  4. Hong Kong – Shanghai: 20,678 flights
  5. Jakarta – Kuala Lumpur: 19,741 flights
  6. Seoul Incheon – Osaka: 19,711 flights
  7. New York LaGuardia – Toronto: 17,038 flights
  8. Hong Kong – Seoul Incheon: 15,770 flights
  9. Bangkok – Singapore: 14,698 flights
  10. Dubai – Kuwait: 14,581 flights
  11. Bangkok – Hong Kong: 14,556 flights
  12. Hong Kong – Beijing: 14,537 flights
  13. New York JFK – London Heathrow: 14,195 flights
  14. Tokyo Narita – Taipei: 13,902 flights
  15. Dublin – London Heathrow: 13,855 flights
  16. Osaka – Shanghai: 13,708 flights
  17. Hong Kong – Singapore: 13,654 flights
  18. Chicago O’Hare – Toronto: 13,503 flights
  19. Seoul Incheon – Tokyo Narita: 13,517 flights
  20. Osaka – Taipei: 13,325 flights
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Tourism

Which flight route makes the most money in the world?

The Thaiger

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Which flight route makes the most money in the world? | The Thaiger

The world of aviation now has its first billion dollar route. That’s a flight route that makes more money for an airline than any other. And for the first time that route has breached the one billion dollar ceiling – British Airways’ service between London Heathrow and New York’s JFK.

OAG has come up with a list of the routes and airlines that generate the highest revenue around the world.

The Heathrow to JFK route pockets British Airways more than $1.15 billion in the 12 months up to April 2019. With 600+ flights per month, that equates to an hourly revenue of $27,159, a 10% increase on last year’s revenue. British Airways operates the venerable Boeing 747 and Boeing 777-200s on its Heathrow to JFK services.

So where is the second most profitable flight route in the world? QANTAS Airways’ domestic service between the southern cities of Melbourne and Sydney generates more than $861 million a year for Australia’s national airline.

Number 3 and 4 were also flights out of London’s Heathrow – Emirates’ service to Dubai and Singapore Airlines’ route to Singapore Changi. The Heathrow flights to Doha with Qatar Airways was number 7 and Cathay Pacific’s flights to Hong Kong were Number 8.

North American domestic routes also figured in the top 10. United Airlines’ San Francisco to Newark route delivered annual revenue of $689 million dollars and Air Canada’s Vancouver to Toronto route was Number 9 with annual revenue of $541 million dollars.

Highest-revenue flight routes: April 2018 – March 2019

1. British Airways: New York JFK – London Heathrow

(Total revenue: $1,159,126,794 / revenue per hour: $27,159)

2. Qantas Airways: Melbourne – Sydney

(Total revenue: $861,260,322 / revenue per hour: $23,773)

3. Emirates: London Heathrow – Dubai International

(Total revenue: $796,201,645 / revenue per hour: $24,926)

4. Singapore Airlines: London Heathrow – Singapore Changi

(Total revenue: $735,597,614 / revenue per hour: $18,771)

5. United Airlines: San Francisco International – Newark

(Total revenue: $689,371,368 / revenue per hour: $12,882)

6. American Airlines: Los Angeles LAX – New York JFK

(Total revenue: $661,739,788 / Revenue per hour: $13,099)

7. Qatar Airways: London Heathrow – Hamad International

(Total revenue: $639,122,609 / revenue per hour: $20,415)

8. Cathay Pacific Airways: Hong Kong International – London Heathrow

(Total revenue: $604,595,063 / revenue per hour: $13,887)

9. Singapore Airlines: Sydney – Singapore Changi

(Total revenue: $549,711,946 / revenue per hour: $20,821)

10. Air Canada: Vancouver YVR – Toronto Pearson International

(Total revenue: $541,122,509 / revenue per hour: $11,936)

SOURCE: CNN Travel

 

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Business

Asian stock markets follow Wall Street’s lead downward this morning

The Thaiger

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Asian stock markets follow Wall Street’s lead downward this morning | The Thaiger

Asian stock markets have followed Wall Street’s lead this morning falling sharply as investors made their concerns apparent about economic recessions in some of the larger economies. They also reacted to more threats of instability from the trade war between the US and China.

The Stock Exchange of Thailand (SET) Index dropped 1.6% during this morning’s trading.

US markets led the march downward yesterday, with the Dow Jones closing just over 3% down with the Nasdaq and S&P 500 posting similar falls.

In other markets the Nikkei 225 dropped nearly 2%. In China, the Shenzhen Composite and Shanghai Composite dropped more than 1%, as did the Hang Seng shedding .5%. The reverse was the case in South Korea with the Kospi rising .5%. China’s industrial output grew by only 4.8% year-on-year in July. This growth rate was the lowest in 17 years. (Many other nations would have been delighted to have had a 4.8% growth rate!)

Meanwhile, the German GDP shrank by 0.1% in Q2 2019, raising fears that Europe’s largest economy is heading for recession. On Twitter, US President Donald Trump blamed the Federal Reserve, calling it “clueless” and noting he has repeatedly called for larger interest rate cuts.

Prominent economist and Noble prize laureate Paul Krugman downplayed threats of recession saying that “objectively, the economic problems are nowhere near as serious as 2008, or even 2001.”

“But we’re being led by the gang that couldn’t think straight.”

Krugman blamed Trump and his aides for poor economic policies and said that Fed is unlikely to come and rescue the markets, according to The Nation.

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