Finance

The US aircraft manufacturer is pushing for changes to international regulations.

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The US aircraft manufacturer Boeing wants to develop passenger planes powered entirely by eco-fuels by 2030. For this purpose, Boeing had already carried out tests with so-called sustainable aircraft fuels (SAF) in recent years, the company announced on Friday.

These include, among other things, vegetable matter, recycled household waste or used kitchen oil. The international aviation association IATA supports these considerations.

Biofuel in the air

The first aircraft that could be refueled with biofuel in addition to kerosene took off in 2008. So far, however, only half of the aircraft have been allowed to be powered by sustainable fuels internationally.

Boeing is therefore urging a rapid change in international regulations. In order for the aviation sector to be able to reduce its CO2 emissions by half by 2050 compared to 2005, machines fully powered by biofuels would have to be approved much earlier, said Boeing.

According to the international aviation association IATA, alternative fuels can lower CO2 emissions by 80 percent compared to pure kerosene. In autumn, the association called for greater efforts in research and development in this area.

Low interest rates drive home sales

Home sales in the US rose surprisingly at the end of 2020 thanks to low interest rates. The sales of existing houses rose in December to the previous month by 0.7 percent to an adjusted annual rate of 6.76 million, as the real estate broker association NAR announced on Friday. Economists polled by Reuters, however, had expected a decline to 6.55 million.

Sales of existing homes, which make up the majority of total home sales, climbed a good 22 percent year-on-year in December and were at 5.64 million in 2020, the highest level since 2006.

“The real estate market continues to benefit from the low interest rate environment, regardless of the still weak situation on the US labor market,” said Helaba expert Ralf Umlauf. “Because the sales figures are still well above the pre-crisis level.”

The market is benefiting from low mortgage rates, but rising house prices could slow the pace in the coming months. In the Corona crisis, Americans are increasingly moving to the outskirts or even the countryside. Because many people are currently working from home anyway and many schools are teaching online.

In 2020 as a whole, house prices rose by nine percent, in December alone by 12.9 percent.

Compensation for up to 70 percent of the losses. Winegrowers and pig farmers particularly hard hit.

The corona crisis hit agriculture differently hard. The supermarkets were not affected by the lockdown, but the catering and hotel industries have largely ceased to be buyers of agricultural products. The amount of farm losses therefore depends on what product was made and to whom it was subsequently sold.

According to the Ministry of Agriculture, 60 million euros will be made available as “compensation for losses for those indirectly affected in agriculture”. The following key applies to the division of this sum: The loss is calculated individually on a flat-rate basis for the branches of business. In the case of particularly high losses, up to 70 percent of the deficit is compensated for by subsidies. The grants do not have to be repaid. The loss must amount to at least 30 percent of the contribution margin.

The farmers can submit their applications for loss compensation to Agrarmarkt Austria (AMA) from February 15. The calculation period begins in October 2020 and ends in March 2021. According to EU law, grants of up to 100,000 euros are possible.

Wine economy

There is a separate calculation model for wine growers. Here, too, the losses are different. Those winemakers who have mainly supplied to the catering industry have a problem.

“Pig farmers and the wine industry are very badly affected, but there are also major losses in other agricultural areas,” says Agriculture Minister Elisabeth Köstinger. “Aid should reach the affected companies as quickly, easily and directly as possible.”

Upper Austria is particularly badly affected. 40 percent of pig production comes from there.

IAV supplier affected. The Berlin company accepted the decision.

In coming to terms with the diesel affair at Volkswagen, the Braunschweig public prosecutor imposed a fine of ten million euros on the supplier IAV. The Berlin-based company accepted the decision and thereby reaffirmed its role in the diesel issue, IAV announced on Friday. The investigators had previously announced that engineers had contributed to the creation, use and further development of the inadmissible defeat device.

According to the prosecutor, the developers helped those responsible at VW with criminal offenses. The management should have prevented this through “appropriate organization and supervision”.

The fine consists of two million euros for the actual violation, eight million euros are considered to be the so-called skimming off of the economic advantage achieved. According to the judicial authorities, the decision is already final and the money is to flow into the Lower Saxony budget.

In September 2015, VW admitted tampering with exhaust gas values after inspections by authorities in the USA. The revelations kicked off the diesel scandal, which has cost the company well over 30 billion euros in legal expenses to date. Five former executives of the group, including ex-CEO Martin Winterkorn, are charged with alleged fraud. It remains to be seen whether this process can begin as planned at the end of February.

Operating profit fell from a good 200 to 160 million euros. 30 percent plus for parcels in the Corona year.

In the Corona year 2020, Austrian Post had to accept a decline in the operating result as well as in letters and advertising mail. By contrast, the parcel volume rose sharply. According to preliminary information, sales increased by 8 percent to 2.189 billion euros, the Post announced on Friday.

There was a drop of 7 percent in letter volume and 12 percent in advertising mail. The parcel volume in Austria rose by 30 percent due to the strong growth in online retail.

The Letter & Direct Mail Division recorded a 7.4 percent decline in revenue to EUR 1.222 billion, and the Parcel & Logistics Division an increase of 44.4 percent to EUR 914 million. Without the Turkish Aras Kargo, total sales increased by 3.3 percent and the Parcel / Logistics division increased by 28.4 percent.

The listed company expects the operating result (EBIT) for 2020 to be 160 million euros, after 201 million euros in the previous year. “Declining results in the Letter & Advertising Mail and Filiale & Bank divisions contrasted with a significant improvement in earnings in the Parcel & Logistics Division,” it says. Österreichische Post AG plans to present the final annual figures on March 12th.

The Austrian real estate and department store billionaire René Benko is said to have big plans, according to a report by the Bloomberg news agency. According to insiders, he wants to polish up his real estate business with a bond with a volume of around 300 million euros. Most of his tenants are department stores and hotels, and the pandemic is hard on both of them – not least Galeria Karstadt Kaufhof, its second largest tenant.

Signa Prime Selection AG, which is majority owned by Benko, is talking to several banks about the placement of the bond, according to informed sources. The discussions are at an early stage and it is not certain that a transaction will result, said those familiar with the matter.

Signa recently discussed plans with the banks to back this bond with real estate assets and to separate this collateral from other creditors, it said.

The company declined to comment on the capital-raising plans.

Operating profit adjusted for special effects slumped by almost 93 percent. But the signs point to recovery.

As expected, the Volkswagen commercial vehicle holding Traton closed the 2020 Corona year with major losses. According to preliminary figures, the operating result adjusted for special effects collapsed by almost 93 percent to 135 million euros, the group announced on Friday in Munich. With 22.6 billion euros, Traton also earned almost 16 percent less than a year earlier.

The net inflow of funds fell by a good three quarters to 650 million euros. The board emphasized the “unprecedented ongoing Covid-19 challenges” over the past year. Traton boss Matthias Gründler pointed out that plants had to close for several weeks and the company had to accept a corresponding drop in sales.

Nevertheless: “The business recovery in the second half of the year makes us optimistic for 2021.” The group plans to publish the final results for the past financial year by March 22nd at the latest. Gründler had already spoken of a significant business recovery in November after the market had collapsed in the second quarter due to the Corona crisis.

ÖHV survey: More than 60 percent of the companies can only hold out financially for three to six months.

The outlook for the tourism industry remains bleak. The current winter season 2020/21 threatens to be a total failure. The month of March is “from the current point of view probably the earliest realistic opening date” for the establishments officially closed since the beginning of November, the Austrian Hotel Association stated on Friday. Even then, the hotels only expect a low occupancy rate of 30 percent, as a current ÖHV survey shows.

“That leaves such deep marks on the balance sheets, that is a clear mandate for politicians to act”, emphasized ÖHV General Secretary Markus Gratzer. With the current low demand and the bridging aid from the government, according to the industry survey, only 37.5 percent of companies can hold out for more than six months. The vast majority (62.5 percent) only last a few months: 28.2 percent said that they would run out of breath in three months, and another 34.3 percent will make it up to six months.

In the winter season of the previous year (2019/20), the occupancy rate in commercial accommodation had already decreased by more than a fifth – from 41.7 percent to 33.3 percent – and by more than a third in the corona summer 2020 42.1 to 26.3 percent, according to the latest statistics from Statistics Austria. The companies started this winter 2020/21 already weakened.

The loss of overnight stays in the past statistical tourism year (November 2019 to and including October 2020) noted by Statistics Austria has worsened in large parts of the industry with the start of the permanent lockdown in November, according to the ÖHV. The officially ordered closings resulted in a massive drop in sales. In the year before Corona, the leading tour operators had an average of 5.2 million euros in income, “in the corona-torn business year” these fell by more than half to just 2.5 million euros.

Brake on investments

In terms of investments, the hoteliers jumped on the brakes in 2020, which subsequently led to noticeable losses for contractors in the trade. Of the planned investment volume, 41 percent was postponed or canceled in the past corona year. According to the survey, 46 percent of the volume is likely to be eliminated for the time being or entirely in 2021.

“This clearly shows that the current financial instruments are nowhere near enough to ensure the survival of the businesses,” the hotelier association sounded the alarm. According to their own information, the entrepreneurs surveyed are best served by the revenue replacement, followed by fixed cost subsidies and short-time work.

According to the survey, the most urgent wishes are first of all the extension of the subsidies beyond June, the assumption of the vacation costs in the continuation of short-time working and the increase of the subsidy limits from 1 to 3 million euros.

“When the temporary aid framework was developed and decided, nobody knew how long and how hard the economy would be hit – now that we know more, everyone, politicians and companies, have to readjust, then we can do it,” said the ÖHV- Secretary General.

There is now a tailwind from the EU Commission for the well-known demands for higher aid caps by Finance Minister Gernot Blümel (ÖVP) and the hotelier association. EU competition commissioner Margrethe Vestager recently sent a proposal to the member states for consultation in this regard, and the aid programs are to be extended until the end of the year. “That now has to be implemented quickly,” said Gratzer.

Proposal for a new ceiling: EUR 5 million

As new upper limits, the ÖHV is proposing 5 million euros instead of 800,000 euros and 10 million euros instead of the previous 3 million. In addition to Vestager's proposals, the Hoteliers Association is in favor of a model that would help particularly hard-hit industries and regions the most: in the event of lockdowns, the “disaster paragraph” 107 (2) b should be applied. Because then the upper limits would fall for aid in these particularly difficult phases. “That would really be welcomed – the people in hard-hit regions and industries need special help, they have done nothing wrong,” stressed Gratzer.

500 ÖHV member companies throughout Austria took part in the survey mentioned. The results are representative of the quality hotel industry. According to the hotelier association, around half of the answers came from Tyrol and Salzburg.

From almost 60,300 to 38,200 employees – a decrease of around 37 percent.

According to information from corporate circles, the tourism business, which collapsed over long stretches in 2020, led to a personnel drain at German market leader TUI. Last November, the entire group had 37 percent fewer employees than a year earlier, the German press agency learned on Friday. Accordingly, the workforce shrank from just under 60,300 people in November 2019 to around 38,200 before the end of 2020.

In addition to the usual seasonal effects, this time there were the effects of the pandemic. In addition, the world's largest travel company is pursuing sharp austerity measures, especially abroad.

When the official figures for the 2019/2020 financial year were presented in December, it had already been shown that the consequences of the coronavirus had a strong impact on employment. At the end of September 2020, Tui still had around 48,300 employees – after 71,500 a year earlier. Last summer, the group initially needed fewer seasonal workers in the holiday areas than in normal years. After the travel restrictions were withdrawn, there were more recruitments in the meantime, the company said. In addition, there are now closings in winter sports regions and southern destinations such as the Canary Islands or Egypt.

In winter, the tourism business is otherwise weaker – before Corona, the difference in staff compared to summer was 15,000, as a spokesman reported. Overall, however, TUI's austerity program should also play a role. CEO Fritz Joussen wants to cut 8,000 jobs, especially outside Germany. So far, he does not consider further cuts necessary because the measures introduced would bring more savings from 2023 than initially calculated.

As it was said from the group environment, the job cuts in Germany should have been around 17 percent by November compared to the previous year. In the hotels at the holiday resorts, however, the workforce was more than halved (minus 57 percent). The airline Tuifly is said to have employed 12 percent and the company Tui Germany 7 percent fewer employees.

Large trading companies feel well prepared despite high demand. There should be enough masks on Monday.

From Monday, customers must wear an FFP2 mask in stores. Since yesterday, most chains have been selling such masks for 59 cents, the Lugner City even for 50 cents. So far they cost 2 to 8 euros. The demand is correspondingly high, but the big chains assure everyone that they have enough masks. However, there should be differences in how strictly the ban will be enforced from Monday, according to an APA broadcast.

“We will politely draw customers' attention to the FFP2 mask requirement on Monday. You can get a mask from us. We can't do more,” says Spar. The staff could not check whether someone could not wear such a mask for medical reasons. One is confident that it will work, because it has worked well with the MNS masks so far.

The Rewe Group (Billa, Merkur) plans to handle this much more strictly. As of Monday, employees will point out that there is an obligation to wear an FFP2 mask in the sales rooms. “Anyone who does not comply with this despite being asked to do so cannot be granted access to our stores,” said a spokesman on APA's request. Customers who are exempt from the obligation to wear an FFP2 mask for health reasons are asked to show a doctor's confirmation upon request.

Hofer does not check himself

Hofer also points out that the wearing of an FFP2 protective mask applies to everyone over the age of 14 who cannot claim a medical exception. Customers are asked to inform employees about exceptions to the mask requirement. There is no control itself, but “in the case of control by organs of the public security service, the reasons for claiming the exception must be proven,” recalls Hofer.

On Friday there was initially no response from Lidl to deal with this question.

The large grocery chains agree that there is a very high demand for the FFP2 masks, but this can be met. If there are short-term bottlenecks in individual branches, deliveries will be made quickly. Rewe points out that 5 million masks have already been delivered and another 15 million have been ordered, Spar already has 20 million in stock. The branch assures us that all branches will be well supplied on Monday.