EasyJet to offset carbon emissions for all flights

Passengers board an easyJet plane at the Nantes Atlantique airport in France. Airlines are under increasing pressure to reduce emissions. (Reuters)
Updated 20 November 2019

EasyJet to offset carbon emissions for all flights

  • Airline works with US startup to produce electric plane for short-haul flights

LONDON: Britain’s easyJet aims to become the world’s first major airline to operate
net-zero carbon flights across its entire network, it said on Tuesday after posting full-year profit toward the top end of expectations.

In addition to the plans to offset emissions from flying, the budget carrier also announced that it would launch easyJet Holidays in Britain by the festive period, offering its own beach and city breaks after the demise of tour operator Thomas Cook.

The carbon offset programs will cost about £25 million ($32.4 million) a year, though Chief Executive Johan Lundgren acknowledged that longer-term solutions are also needed.

“We recognize that offsetting is only an interim measure, but we want to take action on our carbon emissions now,” he said.

Airlines have come under increasing pressure to reduce emissions in the face of the growing “flight shame” movement, formed in Lundgren’s native Sweden.

British Airways owner IAG has said that it will carbon-offset its domestic flights, but moves toward more sustainable fuel or even hybrid or electric planes will take years.

HIGHLIGHTS

● Need to decarbonize aviation.

● Plans to launch easyJet Holidays.

● Better pricing expected next year.

Over the past two years easyJet worked with Wright Electric, which aims to produce an all-electric commerical plane to be used for short-haul flights.

The announcements came as easyJet reported headline pretax profit of £427 million, compared with guidance last month of a figure between £420 million and £430 million. That was down 26 percent from last year because of rising fuel prices and a tough operating environment.

The airline said that forward bookings for the first half of the 2020 financial year were “reassuring” and slightly ahead of last year, reiterating that capacity growth would be toward the lower end of historic guidance between 3 percent and 8 percent.

Analysts at RBC said consensus estimates for 2020 are unlikely to change, with upgrades of 5-7 percent from a better pricing environment being “masked” by the spend on carbon offsetting.

EasyJet said that the new holidays business would break even in the year to September 2020. It is expected to fly routes from Gatwick and Bristol take-off and landing slots that were acquired after the collapse of Thomas Cook, starting as early as next February. 


German economy stagnating despite signs of industrial rebound

Updated 16 December 2019

German economy stagnating despite signs of industrial rebound

  • Indicators at the start of the fourth quarter point to subdued private consumption even though disposable incomes continue to rise
  • Bundesbank says households’ real disposable income fell due to a slowdown in employment growth

BERLIN: The German economy is more or less stagnating, the economy ministry said on Monday, adding there are initial signs that an industrial recession could be coming to an end as orders stabilize.
The ministry also said in its monthly report that indicators at the start of the fourth quarter pointed to subdued private consumption even though disposable incomes continued to rise.
Consumption has helped keep Europe’s biggest economy humming by compensating for weak exports. Trade tensions this year pushed the German manufacturing sector into a recession but the overall economy narrowly escaped the same fate.
“Industrial production has probably not reached the trough,” the ministry said. “But orders and sales have stabilized at a low level. This suggests that industry has gradually stabilized and could pick up slightly in the New Year.”
There are fears that should the manufacturing sector continue to shrink; the slowdown could spread to an otherwise resilient services sector.
IHS Markit’s flash composite Purchasing Managers’ Index (PMI) for December on Monday confirmed the diverging trends: manufacturing activity slipped and services rose.
Markit said the rate of decline in new orders and exports was stabilizing, giving hope for the manufacturing sector.
The German central bank said last week that Germany faced another sluggish year despite a likely rebound in exports as households see their spending power shrink. The Bundesbank said households’ real disposable income fell due to a slowdown in employment growth.
It trimmed its growth forecast for this year to 0.5 percent and halved its prediction for 2020 to 0.6 percent.
In another grim sign for the economy, the BGA trade association said on Monday that wholesalers planned to cut investments and their tendency to hire new staff had decreased despite expectations that their nominal revenue will rise by 2.3 percent to €1.3 billion this year.