Heathrow has apologised for the chaos caused by delays and cancellations since pandemic travel restrictions were lifted.
In this morning’s statement to the stock market (see earlier post), the airport said it was sorry about the problems leading to a rebound in demand.
“Despite our best efforts there have been periods in recent weeks, where service levels have not been acceptable, with long queue times, delays for passengers with reduced mobility, bags not travelling with passengers or arriving late, and we want to apologise to any passengers who have been affected by this,”
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Elon Musk has responded to Twitter’s pledge to sue him, with a series of photos of himself having a good old chortle:
But will Twitter actually have the last laugh, having turned to New York-based law firm Wachtell, Lipton, Rosen & Katz to force Musk to complete the deal?
One legal expert said he expected Twitter to file a lawsuit in Delaware, the US state that has jurisdiction over the deal, as soon as Monday, to prevent Musk wriggling out.
Our global technology editor Dan Milmo reports:
“They will likely be asking for a declaratory judgment that they are not in violation of the contract. Also, they will ask for an order from the court that Musk specifically perform his obligations under the agreement,” said Brian Quinn, an associate professor at Boston College law school.
Under the terms of the agreement the company can ask a judge for “specific performance”, which would compel Musk to buy the company for the $54.20 a share he agreed to in April. Alternatively, the company can also seek a $1bn break fee from Musk for walking away from the deal in contravention of the agreement.
Quinn said Musk’s arguments would probably fail in court. In Friday’s letter, Musk put forward three broad arguments: that Twitter had breached the agreement by failing to provide enough information on spam accounts; that Twitter has misrepresented the number of spam accounts in its disclosures to the US financial watchdog; and that the company breached the agreement by failing to consult with Musk when firing senior employees recently.
Quinn said Musk’s information requests on spam accounts were not “reasonable” and would not be accepted by the court. “He can’t use unreasonable information requests to create a pretext to claim a violation,” he said.
Shares in Twitter have dropped 7% in Frankfurt this morning, after Elon Musk announced on Friday night he was terminating his $44bn bid to buy the company.
They’ve fallen from €38 (or around $38) last week to below €34.
Musk had originally agreed to pay $54.20 a share, but the stock had already fallen away from that levels as doubts grew over the transaction:
Growth worries are pushing the oil price down this morning, with Brent crude off $2 per barrel at $104.80.
Last week, Brent briefly fell below the $100 per barrel mark for the first time since the Ukraine invasion.
European stock markets have dropped sharply in early trading, as traders worry about rising Covid-19 cases in China.
In the City, the FTSE 100 index has dropped by 75 points, or 1%, to 7120, while Germany’s DAX and France’s CAC have lost around 1.4% each.
Mining companies are leading the selloff in London. Anglo American has lost 4.5% and Antofagasta are down 3.6%, on fears of lower demand for commodities such as iron ore, coal and copper.
Restrictions have been reimposed in several Chinese citues as authorities respond to rising cases of the new, more infectious, Omicron subvariant.
As well as the closures in Macau (see last post), the city of Xi’an, home to 13 million, went into a seven-day “circuit breaker” lockdown last week to battle an outbreak of Omicron BA.5.
China’s stringent zero-Covid policy has led to a cycle in which outbreaks lead to mass testing, lockdowns and eventually the easing of restrictions, weighing on growth and disrupting supply chains.
In the financial markets, shares in Macau casino operators have slumped today as the world’s largest gambling hub battles its worst-ever Covid-19 outbreak.
Macau shut all its casinos for the first time in more than two years today, along with other non-essential businesses, with people ordered to stay at home
Macau has recorded about 1,500 Covid-19 infections since mid-June. Around 19,000 people are in mandatory quarantine, according to government figures.
More than 30 zones in the city that have been deemed high risk are now under lockdown, meaning no one is allowed to enter or exit for at least five days. While the government said it was not imposing a citywide lockdown, the stringent measures mean Macau is effectively closed.
A Bloomberg gauge of the city’s six licensed casino operators fell as much as 6.3%, and is down 20% this year.
Sands China, the resorts and casinos developer, has shed 8.5%.
Soaring prices have plunged more people into financial trouble than Covid-19, according to a study tracking the fortunes of UK households since the start of the pandemic.
A total of 1.6 million more households are struggling than the last time the study of 6,000 households reported nine months ago.
It brings to 4.4 million – one in six – the number of households estimated to be in “serious financial difficulties” across the whole population.
The majority of those have cut the quality of food they eat, a third have pawned possessions and a quarter have cancelled insurance, the research shows. Single parents, renters, disabled people and families with three or more children are worst affected. Credit card debt is rising and a quarter have zero savings.
The only group in less financial strife since October 2021 are households with income of more than £100,000, according to the study by Abrdn Financial Fairness Trust and Bristol University.
Mubin Haq, the chief executive of Abrdn Financial Fairness Trust, said:
“This is the first substantial deterioration we have seen since tracking people’s finances when the pandemic started.
“Times are tough for everyone, but it’s those on the lowest incomes who are particularly feeling the effects of rising prices.”
Post Office workers have launched a 24-hour strike over pay, with more industrial action due later this week.
Members of the Communication Workers Union (CWU) are on strike on Monday at Crown Post Offices – the larger branches usually sited on high streets.
Supply chain and administrative workers will strike on Thursday, which the union said will affect sub-post offices.
The CWU which overall represents about 3,500 members involved in the dispute, said the strike was about “dignity and respect”.
The union said its members had rejected a pay offer it said was worth 3% from April this year, on top of a freeze from April 2021, and a £500 lump sum — which is well below the rate of inflation.
CWU assistant secretary Andy Furey said:
“The blame for this disruption lies entirely with the senior Post Office leadership, who have repeatedly failed – and wilfully refused – to set out a sensible and fair pay agreement.
“Everyone knows that the only solution is a fair pay rise that properly rewards members for their extraordinary efforts in serving the public and delivering a profitable Post Office, while also taking account of the extreme cost of living.
“There most certainly is money available, but management do not want to give workers their fair share.
“Our message to the employer today is: don’t waste our members’ time by misleading statements.
“Stop the spin and get serious about pay. Until you do this, the strikes will continue.”
Inaction from former chancellor Rishi Sunak and transport secretary Grant Shapps contributed to the “predictable” and “preventable” delays and cancellations that have crippled airports across the country, the boss of a leading airline services company has claimed.
Philipp Joeinig, chief executive of Menzies Aviation, says the industry asked for Government help in minimising staff shortages fuelled by Brexit and the pandemic — such as a targeted furlough scheme. But assistance was not forthcoming.
Writing in The Times, he said staffing problems that caused travel chaos was both predictable and preventable.
“Brexit had a big negative impact, reducing the available pool of employees.
“This was compounded during the pandemic, with the British aviation sector suffering huge job losses once furlough schemes ended before the easing of travel restrictions – and with many of these people lost to the industry forever.
“The aviation sector lobbied the government at the time to provide sector-specific aid to retain its skilled, security-cleared people to avoid staff shortages. This was not forthcoming for aviation services businesses.”
Heathrow has warned it will ask airlines to cancel more flights this summer if it doesn’t think they’ve taken enough action to reduce disruption.
In its latest business and traffic commentary, Heathrow says it will “carefully assess” airlines’ reviewed schedule changes, to see if they’ll minimise further disruption for passengers over the summer getaway.
Heathrow CEO John Holland-Kaye says:
“We will review the schedule changes that airlines have submitted in response to the Government’s requirement to minimise disruption for passengers this summer and will ask them to take further action if necessary.
We want everyone who is travelling through Heathrow to be confident that they will have a safe and reliable journey.”
Airlines have been allowed to temporarily give up some of their flights in a “slot amnesty”, to help them trim their schedules to manageable levels following the chaos over Easter and half-term.
Heathrow says it has taken on more staff — by the end of July it will have as many people working in security as before the pandemic.
Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.
The cost of living crisis is forcing more Britons to cut back on spending, and company bosses fear there is worse to come.
A survey of company directors has poured cold water on hopes that price pressures could ease.
The Institute of Directors has polled its members, and found that just 27% who expressed an opinion thought inflation would peak by the end of winter.
A fifth think inflation won’t peak until next spring — later than the Bank of England hopes — while nearly half see it peaking even later than that.
Inflation is already a 40-year high of 9.1%, and these expectations suggests companies could lift their own prices further — which would drive up the cost of living even higher.
Kitty Ussher, chief economist of the IoD, said the economy needs to see inflation peaking, as this would improving business and consumer confidence, spurring investment and growth.
But Ussher adds (via the Financial Times):
If business leaders expect inflation to persist for longer, they may adjust their own pricing strategies accordingly, leading to a potential for the expectation of price rises to become self-fulfilling”.
Also coming up today
Elon Musk is facing the prospect of a legal battle with Twitter after announcing on Friday he was pulling pulling the plug on the transaction.
Twitter’s chairman, Bret Taylor, swiftly responded with a tweet stating that the company intended to “pursue legal action to enforce the merger agreement”.
Legal experts say Musk could be forced to complete the deal, despite his concerns over the number of spam accounts on the social media platform.
As Carl Tobias, Williams chair in law at the University of Richmond, puts it:
“Musk’s filing does not appear to give him strong legal grounds to walk away from the deal.
His counsel has only made allegations and arguments for Musk’s position and judges would have to decide whether the evidence that Musk would present is persuasive enough to support ending the deal.”
Twitter, Bloomberg say, are forming a legal team to sue Musk over the dropped takeover, while Twitter’s shares could take a heavy tumble when Wall Street opens.
The UK train drivers’ union is expected to announce today whether it plans to strike in a pay dispute, that could cause huge disruption to rail services.
ASLEF will release the results of strike ballots by drivers at eight train companies, which could lead to walkouts over the summer, adding to the disruption on the UK’s travel network.
A strike by Aslef drivers would halt services at the affected train companies – Chiltern, GWR, LNER, London Overground, Northern, Southeastern, TransPennine and West Midlands – while action by the smaller TSSA union could deprive the rail network of contingency staff to keep services running during a wider strike at Network Rail.
MPs will quiz the Bank of England governor, Andrew Bailey, about the Bank’s Financial Stability Report, published last week, which warned the outlook for the UK economy had “deteriorated materially”.
European markets are set to open lower, amid anxiety over a pick-up in Covid-19 cases in China ahead of the latest US inflation report due on Wednesday.
- 9am BST: China’s new yuan loans in June
- 12.30pm BST: Eurozone finance ministers meet for a eurogroup meeting
- 3.15pm BST: Treasury Committee to quiz Bank of England on stability of UK economy