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UK travel-chaos row escalates as IATA chief slams minister Shapps

Airline lobbyist Willie Walsh stepped up a war of words over disruption at UK airports, lambasting a government minister who blamed the industry for hundreds of canceled flights.

While conceding that there have been some management missteps amid a faster-than-expected rebound in travel demand, Walsh said Tuesday that UK Transport Secretary Grant Shapps has been “absolutely useless in his approach to the coronavirus crisis.”

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“Since the beginning of the pandemic, as minister of transport, he’s done nothing for the industry,” said Walsh, director-general of the International Air Transport Association, at a conference in Paris.

Walsh, a former chief executive officer of British Airways parent IAG SA, said earlier in a panel debate that Shapps didn’t know what he was talking about when it came to aviation.

The Department for Transport said in comments emailed to Bloomberg that the government’s priority had been protecting public health, with travel curbs buying vital time for the rollout of vaccines, and that the sector received £8 billion of support during the pandemic.

The prospect of further disruption looms for British travelers as the RMT labor group said it plans to lead a three-day strike of 50,000 rail workers later this month after failing to reach an agreement with employers over pay. The walkout will take place on June 21, 23 and 25, the group said.

Walsh’s remarks come after staff shortages at airports and airlines disrupted journeys for thousands of Britons last week, the busiest period for travel since the COVID-19 outbreak. Criticized by the industry over barriers to recruitment, the government hit back, saying airlines had cut too many jobs during the pandemic, failed to plan for the recovery, and sold too many tickets.

Airport Issues

Walsh also downplayed the extent of problems at UK airports and other European hubs including Dublin and Amsterdam Schiphol, describing them as “isolated and sporadic and saying the issues won’t necessarily carry through to the peak of the summer season over the next few months.”

Still, European discount carrier Wizz Air Holdings Plc on Wednesday cited “continuing operational issues within the airports sector as a reason for not being able to provide financial guidance for the full year through March 2023, despite strong demand for summer.”

Some airline executives attending the conference acknowledged that current concerns need resolving so that they don’t hamper the much-needed turnaround in the sector.

Air France-KLM CEO Ben Smith said he was “concerned when asked about a staffing crunch at Schiphol, where the group’s Dutch arm recently canceled as many as 50 flights a day, restricted access to airport terminals and suspended ticket sales.”

Airport operator Royal Schiphol Group NV has said it’s recruiting more staff and optimizing passenger flows to help reduce waiting times.

Johan Lundgren, Smith’s counterpart at EasyJet Plc, called on the industry to come together to help alleviate pressure on services such as baggage handling and border controls.

London Gatwick Airport saw 52 departures and 30 arrivals scrapped on Sunday, many of them operated by EasyJet, which axed 80 flights in total across Europe. North of the capital at the carrier’s Luton base, about 3,000 passengers were diverted following a power failure, The Independent reported.

Read more: World airline body IATA calls on governments to stimulate travel to help recovery

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Ryanair cabin crew in Spain announce 12 new days of strikes in July

Spain-based cabin crew at Ryanair plan to strike for 12 days this month to demand better working conditions, the USO and SICTPLA unions said on Saturday, raising the prospect of travel chaos as the summer tourist season gets under way.

The announcement came on the final day of the crews’ current strike, which began on Thursday and forced Ryanair to cancel 10 flights in Spain on Saturday.

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Cabin crew will strike on July 12-15, July 18-21 and July 25-28 across the 10 Spanish airports where Ryanair operates, the unions said in a statement.

“The unions and crew of Ryanair … demand a change of attitude from the airline,” they said in a statement, calling for Ryanair to resume negotiations on working conditions.

The unions also urged the government “not to allow Ryanair to violate labor legislation and constitutional rights such as the right to strike.”

Airline workers across Europe have been staging walkouts as the sector adapts to a resumption of travel after pandemic lockdowns.

Spain-based cabin crew at easyJet are striking for nine days this month for higher pay. The airline cancelled five flights from Spain on Saturday.

Workers at Paris’ Charles de Gaulle airport went on strike on Friday and into Saturday, forcing the cancellation of about 10 percent of flights.

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Tesla braces for delayed delivery due to China plant shutdown

Tesla Inc. is expected to announce quarterly production and delivery figures this weekend that will likely be among the worst of the year – and break its multi-quarter streak of record-setting results – due largely to an extended shutdown of its factory in Shanghai.

The electric vehicle maker may have delivered more than 261,000 vehicles globally during the three months ended in June, according to nine analysts surveyed by Bloomberg, ending a two-year stretch of consecutive quarterly gains.

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Tesla handed over more than 310,000 vehicles in the first three months of the year, more than any previous quarter.

“We cut our second-quarter deliveries estimate by 65,000 to 245,000 units, reflecting a prolonged Covid 19-related shutdown and logistical challenges in the Shanghai factory,” wrote Emmanuel Rosner of Deutsche Bank in a research note to clients. “Recall that during the first-quarter call, CEO Elon Musk had provided directional guidance of sequentially flat deliveries for the quarter but the situation in China worsened subsequently,” only improving in early June.

Shares of Tesla rose 1.2 percent to close trading Friday at $681.79, but the stock is down about 35 percent so far this year.

Deliveries are one of the most closely watched metrics at Tesla. They underpin the Austin, Texas-based company’s financial results and are widely seen as a broad barometer of consumer demand for EVs amid a wider shift away from the internal combustion engine.

Many large automakers will announce US sales results Friday but Tesla, which reports global totals, hasn’t specified a release date.

Dan Levy, an analyst with Credit Suisse, reduced his delivery estimate for the period to 242,000 units. “In aggregate, we believe the Shanghai shutdown accounted for about 90,000 units of lost production in the second quarter,” Levy wrote in a note to clients.

Tesla makes the Model S, X, 3 and Y vehicles at its plant in Fremont, California. It also produces Models 3 and Y at a factory near Shanghai. The company has begun delivering the first Model Ys from its new plant near Berlin and held a “Cyber Rodeo” event for 15,000 people in April to celebrate a new factory in Austin.

‘Money Furnaces’

However, both Berlin and Austin have been slow to ramp up production, with Musk warning in a late May interview that both plants are “gigantic money furnaces.”

Analysts and investors are also worried that the price hikes automakers are imposing to combat soaring raw material costs will weigh on demand. Tesla had boosted its sticker prices by as much as $6,000 a car earlier this month, according to Electrek.

A stronger-than-expected delivery number could provide a boost to Tesla’s stock, which is down more than 35 percent this year amid wider market concerns about rising energy costs, inflation and a potential recession.

Musk shares many of those concerns and is in the process of laying off 10 percent of Tesla’s salaried work force while pushing others to return to the office.

Earlier this week, Tesla laid off roughly 200 people on its Autopilot team, mostly hourly employees who worked as data annotation specialists.

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Regulator urges Germans to prepare for possible gas shortage

Fearing Russia might cut off natural gas supplies, the head of Germany’s regulatory agency for energy called on residents Saturday to save energy and to prepare for winter, when use increases.
Federal Network Agency President Klaus Mueller urged house and apartment owners to have their gas boilers and radiators checked and adjusted to maximize their efficiency.
“Maintenance can reduce gas consumption by 10 percent to 15 percent,” he told Funke Mediengruppe, a German newspaper and magazine publisher.
Mueller said residents and property owners need to use the 12 weeks before cold weather sets in to get ready. He said families should start talking now about “whether every room needs to be set at its usual temperature in the winter – or whether some rooms can be a little colder.”
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The appeal came after Russia reduced gas flows to Germany, Italy, Austria, the Czech Republic and Slovakia earlier this month, as European Union countries scramble to refill storage facilities with the fuel used to generate electricity, power industry and heat homes in the winter.
Russian state-owned energy company Gazprom blamed a technical problem for the reduction in natural gas flowing through Nord Stream 1, a pipeline which runs under the Baltic Sea from Russia to Germany.
The company said equipment getting refurbished in Canada was stuck there because of Western sanctions over Russia’s invasion of Ukraine.
German leaders have rejected that explanation and called the reductions a political move in reaction to the European Union’s sanctions against Russia after it invaded Ukraine.
Vice Chancellor Robert Habeck, who is also Germany’s economy and climate minister and responsible for energy, has warned a “blockade” of the pipeline is possible starting July 11, when regular maintenance work is due to start. In previous summers, the work has entailed shutting Nord Stream 1 for about 10 days, he said.
The question is whether the upcoming regular maintenance of the Nord Stream 1 gas pipeline will turn into “a longer-lasting political maintenance,” the energy regulator’s Mueller said.
If the gas flow from Russia is “to be lowered for a longer period of time, we will have to talk more seriously about savings,” he said.
According to Mueller, in the event of a gas supply stoppage, private households would be specially protected, as would hospitals or nursing homes.
“I can promise that we will do everything we can to avoid private households being without gas,” he said, adding: “We learned from the coronavirus crisis that we shouldn’t make promises if we’re not entirely sure we can keep them.”
He said his agency “does not see a scenario in which there is no more gas coming to Germany at all.”
Also on Saturday, German chemical and consumer goods company Henkel said it was considering encouraging its employees to work from home in the winter as a response to a possible supply shortage.
“We could then greatly reduce the temperature in the offices, while our employees could heat their homes to the normal extent,” Henkel CEO Carsten Knobel told daily newspaper Rheinische Post.
Earlier this month, Habeck activated the second phase of Germany’s three-stage emergency plan for natural gas supplies, warning that Europe’s biggest economy faced a “crisis” and storage targets for the winter were at risk.
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