Travel chaos: Thousands face Heathrow cancellations and easyJet slashes schedule – live updates

Here are some of the day’s top stories from the Telegraph Money team:

In its latest monthly report, German’s central bank has predicted Europe’s largest economy will grow slightly over the current quarter.

Bundesbank officials said:

Upward forces are likely to predominate slightly in the spring, and economic output could pick up slightly… The German economy is currently caught between opposing forces.

The FTSE 100 is now up about 0.9pc, having gained a bit of pace despite muted moves from the continent’s other major indicies.

Refugees fleeing the war in Ukraine could end up bolstering the eurozone’s workforce by 1.3m, according to calculation by the European Central Bank.

In an economic bulletin published by the ECB today, researcher Vasco Botelho said his “back-of-envelope” calculation pointed to a rise in the active labour force of 0.2pc to 0.8pc – equivalent to between 0.3m and 1.3m workers.

He said:

The increase in labor supply that results from the influx of Ukrainian refugees could slightly ease the tightness observed in the euro area labor market.

If they can find jobs without a lengthy integration process, Ukrainian refugees could help the market to respond to the currently buoyant demand for labor and address worsening skill shortages.

Despite the backdrop of travel chaos in Europe, airlines should return to profitability soon, according to the top industry body.

The International Air Transport Association, led by director Willie Walsh, said airlines had emerged “leaner, tougher and nimble” from the pandemic.

Speaking an event in Doha, Mr Walsh said:

Industry-wide profit should be on the horizon in 2023. We are rebounding. By next year, most markets should see traffic reach or exceed pre-pandemic levels.”

The EU’s top foreign affairs official has accused the Kremlin of a “real war crime” over Russia’s efforts to disrupt Ukrainian grain exports.

Speaking to reporters ahead of an EU foreign ministers’ meeting in Luxembourg, he said:

One cannot imagine that millions of tons of wheat remain blocked in Ukraine while in the rest of the world people are suffering from hunger.

Leaders of the bloc of 27 countries are expected to decide later this week whether to approve Ukraine’s application to join.

Road fuel prices hit new records over the weekend, with petrol reaching 188.7p per litre and diesel 196.06p, according to the RAC.

Spokesman Simon Williams says:

This is yet more bad news for drivers, particularly with this week’s rail strikes leaving many people with no choice but to use their cars. But looking at the wholesale cost of petrol, which has settled due the oil price falling, petrol pump prices really should not continue to rise, if anything they ought to begin reducing. Sadly though, diesel looks destined to head rapidly towards an average of £2 a litre which would make a full tank £110.

Heathrow has given airlines the option of consolidating their flights, which would involving moving passengers onto other flights rather than making those 10pc cuts.

A Heathrow spokesperson said: 

We apologise unreservedly for the disruption passengers have faced over the course of this weekend.

The technical issues affecting baggage systems have led to us making the decision to request airlines operating in Terminals 2 and 3 to consolidate their schedules on Monday 20th June.

This will enable us to minimise ongoing impact and we ask that all passengers check with their airlines for the latest information.

When it rains, it pours for airports: in the last few minutes, there have been two new major pieces of news:

• Heathrow has asked airlines flying from Terminals 2 and 3 to cut their schedules by 10pc today, according to the Independent – affecting 15,000 passengers across 90 flights…
• …and no flights are going to be taking off from Brussels airport all day, due to a strike by G4S security staff.

Heathrow hold-ups

Here’s the Indy on the situation at Heathrow:

The grounded departures range from a Loganair ATR72 commuter aircraft serving the Isle of Man to an Emirates Airbus A380 seating almost 500 passengers to Dubai.

Virgin Atlantic has cancelled at least three transatlantic flights, including departures to New York and Los Angeles.

British Airways, which operates some flights from Terminal 3 as well as its main hub at Terminal 5, said it had made “a small number of cancellations”

Brussels breakdown

And here’s what the Belgian capital’s airport is saying:

Brussels airport has closed to all departures due to security strike. No departing flights on Monday 20 June.

Due to the national manifestation and strike of a large part of the security staff of G4S on Monday 20 June, no passenger flights will depart from Brussels airport.

Passengers are urged not to come to the airport and to rebook their flight.

Financial news and events company Euromoney’s shares have popped nearly a quarter higher after it received a takeover approach from a private equity group.

The FTSE 250 group is in talks with Luxembourg-based Astorg Asset Management Sarl and British firm Epiris over a £14.61 per share cash bid, which follows four earlier offers.

Shares are trading at £13.50 now, suggesting investors may not be fully convinced the deal will go ahead.

Euromoney was previously owned by the Daily Mail group before being spun out in 2019.

Epiris previously bought magazine group Time Inc. in 2018, renaming it TI Media and selling it to Future a year later.

China’s imports of Russian oil surged 55pc in the year to May, displacing Saudi Arabia as the Asian superpower’s top supplier.

Refiners lapped up discounted Russian crude, which has been trading at a discount of about $30 a barrel to benchmark Brent.

Imports totalled nearly 8.42m tonnes across the month according to the Chinese General Administration of Customs, about 1.98m barrels per day.

It shows Moscow has been able to find buyers despite Western sanctions.

The pound is trading pretty flat today, with the biggest scheduled event this week likely to be Wednesday’s inflation figures.

Meanwhile, the FTSE 100 is still trading moderately higher:

Primark’s owner has said the budget fashion retailer will test out a click-and-collect service, a far moved towards online sales.

The trial, for buying children’s clothes, will run across 25 Primark locations in the north-west of England, Associated British Foods said.

It said Primark sales are still 9pc lower than pre-Covid levels, now three years ago.

Primark recently launched a website that allows customers to check the availability of items in-store, but has stubbornly resisted online sales despite an e-commerce boom.

It warned in April that some of its prices would go up amid soaring inflation.

Bitcoin – the preeminent cryptocurrency, which has become a benchmark for the entire crypto space – is caught in a tug-of-war today as it struggles to regain a price of $20,000.

The coin sank as much as 15pc on Saturday amid what is being called a ‘crypto winter’, but then surged back on Sunday. 

$20,000 is seen as a crucial tipping point for Bitcoin, as it is believed many firms have used that valuation as a benchmark for their trading strategies.

That is to say: once it falls below $20,000, a lot of companies may be getting calls from their lenders asking for proof they can make good on bitcoin-backed loans if the plunge continues.

The Bank of England has pressed ahead with scrapping rules introduced in the wake of the financial crisis that test whether borrowers could afford their mortgages in the event of rapid interest rate rises.

Threadneedle Street’s Financial Policy Committee said it would ditch the affordability test from the start of August, confirmed plans outlined earlier this year.

The Bank will maintain a cap on the number number of borrowers who are allowed to hold loans more than four and a half times their annual income (also known as the loan-to-income flow limit), it said.

In a statement, the FPC said it

…judged that the loan-to- income flow limit is likely to play a stronger role than the affordability test in guarding against an increase in aggregate household indebtedness and the number of highly indebted households in a scenario of rapidly rising house prices,” according to the statement.

Shares in Deliveroo have fallen sharply this morning after its chief financial officer stepped down.

The food delivery group said Adam Miller will leave his role on September 17th, and be replaced by Scilla Grimble, currently CFO at MoneySuperMarket.

Mr Miller said it was “the right time for change, both for me and Deliveroo”.

Goodbody analyst David Brohan said:

While disappointing to see Adam Miller leave the group, the group appears to have appointed a strong replacement in Scilla Grimble, and the succession plan announced today should ensure a smooth transition.

A few minutes after the open of trading in London, FTSE 250-listed easyJet is trading down about 2.7pc.

EasyJet’s unscheduled trading update this morning provides a concise summary of the nasty mix of issues airlines are facing in what they had hoped would be a booming summer of post-pandemic demand:

Given the unprecedented ramp up, the aviation industry across Europe is experiencing operational issues with root causes similar to the post covid supply chain issues being seen in many other parts of the economy.

The challenges include air traffic control delays and staff shortages in ground handling and at airports, resulting in increased aircraft turnaround times and delayed departures which have a knock-on effect resulting in flight cancellations.

A very tight labour market for the whole ecosystem including crew, compounded by increased ID check times, has reduced planned resilience further. This is reflected in the flight caps announced recently at two of our biggest airports, London Gatwick and Amsterdam.

Here’s more on easyJet’s problems, via my colleague Oliver Gill:

The airline was previously planning to run 90pc of 2019 capacity in the three months to June, rising to 97pc during the key months of July, August and September.

In a move that shows the depth of the aviation industry’s plight, Britain’s biggest carrier reduced these figures to 87pc and 90pc respectively – suggesting in excess of 10,000 flights will be cancelled over the six months to September.

The airline said it had taken the action following unprecedented restrictions by airports such as Gatwick and Amsterdam.

The carrier also blamed delays to a Government-overseen ID checking scheme that created a huge backlog in clearing new staff to begin work.

Good morning. EasyJet is cutting thousands of flights this summer as it grapples with severe staffing shortages that have caused misery for holidaymakers since Covid restrictions were lifted.

Initial estimates suggest that easyJet will have cut more than 4,000 flights in the three months to June and plans to cut more than double the number during July, August and September.

EasyJet chief executive Johan Lundgren said: “Coupled with airport caps, we are taking pre-emptive actions to increase resilience over the balance of summer, including a range of further flight consolidations in the affected airports, giving advance notice to customers and we expect the vast majority to be rebooked on alternative flights within 24 hours.”

Elsewhere, the FTSE 100 is set to open slightly higher after a poor performance last week.

5 things to start your day 

1) Shoppers with poor credit histories could be frozen out of ‘buy now, pay later’ schemes Lenders would be forced to carry out affordability checks and face tougher advertising rules under new Government proposals. 

2) EU plot to punish the City of London backfires Brussel’s campaign to shift lucrative business from the City to the Continent has so far produced few results.

3) Britain’s manufacturing heartland in crisis amid supply crunch West Midlands is struggling more than any other part of the country to get back to its pre-pandemic size.

4) Johnson urged to cut energy tax as Germany turns to coal The German government will pass emergency laws to reactivate the coal plants as Europe takes steps to deal with reduced energy supplies from Russia.

5) Airlines use post-Brexit loophole to bring in foreign workers The airlines are borrowing EU-registered aircraft under so-called wet leasing agreements as they grapple with some of the worst staff shortages on record.

What happened overnight 

Asian markets fell again on Monday and oil prices extended losses on growing fears that the central bank’ moves to rein in soaring inflation will induce a recession. Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Seoul, Taipei, Jakarta and Wellington were all in the red.

Coming up today

Full-year results: BMO Global Smaller Companies;  Trading statement: Associated British Foods, SThree; Economics: Interest rate decision (China), Rightmove house price index (UK), Chicago Fed National Activity Index (US), producer price index (Ger)