Business

PARIS (Reuters) – Europe’s Airbus delivered some 58 jetliners in June, bringing first-half deliveries to around 295 – fractionally below the mid-way performance last year, industry sources said.

Airbus declined to comment on any figures ahead of a monthly update due on Friday.

Airbus is targeting 720 full-year deliveries. In the first half of last year, it delivered 297 jets.

Since then, the planemaker says it has increased production in line with an announced trajectory, but analysts say its progress has been hampered by supply chain problems.

(Reporting by Tim Hepher; editing by Jason Neely and Barbara Lewis)

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HOUSTON (Reuters) – Wall Street analysts sharply increased their Exxon Mobil’s second quarter profit estimates after a securities filing showed a $5 billion gain from selling motor fuels compared with the first quarter.

Record profits of more than $4 a share, up from $1.10 a year ago, are likely, according analyst estimates, reigniting calls for windfall taxes on oil majors.

Exxon shares are down about 3.4% to $84.57 in early trading on a large drop in oil prices this morning. Brent is down about $4 per barrel and WTI is down about $3 per barrel.

(Reporting by Sabrina Valle, Editing by Franklin Paul)

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(Reuters) -Yum Brands Inc said on Tuesday it was in advanced talks to sell its KFC restaurants and franchise rights in Russia to a local buyer, after which it plans on fully exiting the country.

The company opened its first KFC restaurant in Russia in 1995 and now has about 1,000 outlets in the country, nearly all of which are operated by independent owners under license or franchise agreements.

Western companies leaving Russia over the invasion of Ukraine have sped up the pace of their exits in recent weeks as Moscow is advancing a new law that would allow it to seize assets and impose criminal penalties on foreign firms.

McDonald’s Corp, an icon of American capitalism in the dying embers of the Soviet Union, sold its business in Russia earlier this year. Its restaurants opened under new branding last month.

Yum Brands also said on Tuesday that it had completed the sale of its Pizza Hut business in Russia to a local operator who is re-branding the restaurants. The financial details of the sale were not disclosed.

Russian media reported last month the business was bought for 300 million roubles ($4.92 million) by Noi-M, which is linked to the operator of the Russian franchises of Costa Coffee and T.G.I. Friday’s.

(Reporting by Uday Sampath in Bengaluru; Editing by Aditya Soni)

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By Gwladys Fouche and Nora Buli

OSLO (Reuters) – Norwegian offshore workers on Tuesday began a strike that will reduce oil and gas output, the union leading the industrial action told Reuters.

The strike, in which workers are demanding wage hikes to compensate for rising inflation, comes amid high oil and gas prices, with supplies of natural gas to Europe especially tight after Russian export cutbacks.

“The strike has begun,” Audun Ingvartsen, the leader of the Lederne trade union said in an interview.

The Norwegian government has said it was following the conflict “closely”. It can intervene to stop a strike if there are exceptional circumstances.

On Tuesday, oil and gas output will be reduced by 89,000 barrels of oil equivalent per day (boepd), of which gas output makes up 27,500 boepd, Equinor has said.

On Wednesday, the strike will deepen the cut to the country’s gas output to a total of 292,000 barrels of oil equivalent per day, or 13% of output, NOG said on Sunday.

Oil output will from Wednesday be cut by 130,000 barrels per day, the lobby had said, corresponding to around 6.5% of Norway’s production, according to a Reuters calculation.

A further planned escalation by Saturday could see close to a quarter of Norway’s gas output shut, as well as around 15% of its oil production, according to a Reuters calculation.

It is ultimately the operator’s – Equinor’s – decision to shut output. Equinor was not immediately available to comment on the last announced escalation.

THREE-STEP ESCALATION

Industrial action began at midnight local time (2200 GMT) at three fields – Gudrun, Oseberg South and Oseberg East – and will expand to three other fields – Kristin, Heidrun and Aasta Hansteen – from midnight on Wednesday.

A seventh field, Tyrihans, will also have to shut on Wednesday because its output is processed from Kristin.

By July 9, Sleipner, Gullfaks A and Gullfaks C would likely stop producing as Lederne members are senior employers considered crucial to operations, with potential ripple effects on other fields which pump their product via those fields.

If they did, it could reduce the output of crude and other oil liquids by another 160,000 boepd and natural gas output by close to 230,000 boepd, according to a Reuters calculation.

Members of the Lederne trade union on Thursday voted down a proposed wage agreement that had been negotiated by companies and union leaders.

Norway’s other oil and gas labour unions have accepted the wage deal and will not go on strike.

(Reporting by Gwladys Fouche and Nora Buli, editing by Terje Solsvik)

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By Florence Tan

SINGAPORE (Reuters) – Brent crude futures extended gains on Tuesday as a strike in Norway is expected to disrupt oil and gas output, fanning tight supply worries.

Brent crude futures rose 82 cents, or 0.7%, to $114.32 a barrel by 0105 GMT after a 2.4% gain on Monday.

U.S. West Texas Intermediate crude climbed $2.58, or 2.4%, to $111.01 a barrel, from Friday’s close. There was no settlement for WTI on Monday because of the July 4 U.S. public holiday.

On Tuesday, Norwegian offshore workers began a strike that will reduce oil and gas output, the union leading the industrial action told Reuters.

The strike is expected to reduce oil and gas output by 89,000 barrels of oil equivalent per day (boepd), of which gas output makes up 27,500 boepd, Equinor has said.

Oil output will be cut by 130,000 barrels per day from Wednesday, the lobby had said, corresponding to around 6.5% of Norway’s production, according to a Reuters calculation.

“Crude oil gained as investor focus returned to signs of market tightness,” ANZ analysts said in a note.

Overall, the outlook for demand is also at the forefront of investor concerns amid a broad tightening in global financial conditions as the U.S. Federal Reserve fights rampant inflation with rapid rate increases.

Interest rate hikes also loom in Australia and in South Korea as authorities try to tamp down red-hot inflation. In South Korea, inflation in June hit a near 24-year high, adding to concerns of slowing economic growth and oil demand.

“Oil is still struggling to break out from its current recessionary malaise as the market pivots away from inflation to economic despair,” Stephen Innes of SPI Asset Management said in a note.

(Reporting by Florence Tan; Editing by Shri Navaratnam)

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By Cynthia Kim and Jihoon Lee

SEOUL (Reuters) -South Korea’s June inflation accelerated to the fastest pace since the Asian financial crisis, fanning expectations the central bank could deliver a 50 basis point rake hike for the first time next week to cool prices and curb capital outflows.

The consumer price index (CPI) rose 6.0% in June from a year earlier, government data showed on Tuesday, the fastest since November 1998 and exceeding the central bank’s 2% target for the 15th consecutive month.

The CPI also sped up from a 5.4% rise in the previous month and exceeded the 5.9% tipped in a Reuters poll.

Tuesday’s data comes after Bank of Korea Governor Rhee Chang-yong said he will keep the door open for a possible 50 basis point hike as he monitors key economic data before the bank’s next rate decision on July 13.

A half-percentage-point interest rate increase, if delivered, will be the first-time in the central bank’s history.

In a meeting held after inflation data release, BOK deputy governor Lee Hwan-seok said the bank “needs to be particularly vigilant against further strengthening of inflationary expectations”, adding current inflation trends will continue for the time being.

September futures on three-year treasury bonds rose 0.15 points, while those on 10-year bonds gained 0.09 points. The Kospi was up 1.77% at 2,341.08 and the won edged up.

The BOK has delivered five 25-basis-point interest rate hikes since last August to 1.75%, the highest since mid-2019, joining a global wave of policy tightening as central banks grapple with price spikes not seen in decades.

Chances of a 50 basis point hike have been growing after the U.S. Federal Reserve in June raised its rate by 75 basis points.

Many market watchers speculate the BOK would want to keep the rate spread between South Korea and the United States in check to slow any capital outflows.

“This data raises possibility of a big step hike in July,” said Ahn Jae-kyun, an analyst at Shinhan Financial Investment.

“Inflation expectations are also at a high level, so even if the headline inflation didn’t hit 6%, the BOK now has all the right reasons go for a big step.”

The BOK sees the inflation trajectory higher than projected earlier and said it would closely assess debt repayment burdens to determine whether a half-percentage point hike would be appropriate.

Even so, analysts have been warning that household debt at a record level and slowing exports growth mean the BOK shouldn’t rush rate hikes.

Overseas sales of South Korean goods logged their slowest growth in 19 months in June, fuelling concerns about the health of the economy.

“Policymaking will become all the more difficult as they have a mix of upside inflation risks and downside economic growth risks continuing for the time being,” said Park Seok-gil, an analyst at JPMorgan Chase Bank. “We expect a 50 bp rate increase in July by the BOK and three 25-bp increases for the rest of this year.”

The core CPI, which excludes volatile food and energy prices, rose 3.9% from a year ago, the fastest pace since February 2009.

The June CPI rose 0.6% on a monthly basis, also exceeding a 0.5% rise seen in the survey.

(Additional reporting by Choonsik Yoo; Editing by Kim Coghill and Lincoln Feast.)

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By Anna Ringstrom and Essi Lehto

STOCKHOLM (Reuters) -Wage talks between Scandinavian airline SAS and its pilots collapsed on Monday, triggering a strike that puts the future of the carrier at risk and adds to travel chaos across Europe as the peak summer vacation period begins.

The action is the first major airline strike to hit when the industry is seeking to capitalise on the first full rebound in leisure travel following the pandemic.

It follows months of acrimony between employees and management as the airline seeks to recover from the impact of lockdowns without taking on costs it believes would leave it unable to compete with lower-cost rivals.

At the same time, employees across Europe are demanding wage rises as they struggle with surging living costs.

A strike could cost SAS some 80 million to 90 million Danish crowns ($11.2 million-$12.6 million) per day, Sydbank analyst Jacob Pedersen calculated, and the company’s ticket sales for future flights will suffer. Shares in SAS fell 3.5% by 1247 GMT, paring earlier losses.

“A strike at this point is devastating for SAS and puts the company’s future together with the jobs of thousands of colleagues at stake,” SAS Chief Executive Anko van der Werff said in a statement.

“The decision to go on strike now demonstrates reckless behaviour from the pilots’ unions and a shockingly low understanding of the critical situation that SAS is in.”

Union leaders blamed SAS.

“We have finally realised that SAS doesn’t want an agreement,” SAS Pilot Group chairman Martin Lindgren told reporters. “SAS wants a strike.”

Lindgren said the pilots were ready to resume talks, but called on employers to change their stance. “We hope we will be able to return to the negotiating table and meet, but it requires that the employer makes a move,” he said.

The unions said nearly 1,000 pilots in Denmark, Sweden and Norway will join the strike, which is one of the biggest walkouts by airline workers since British Airways pilots in 2019 grounded most of the carrier’s flights in a dispute over pay.

Further disruption looms as British Airways staff at London’s Heathrow airport in June voted to strike over pay, threatening disruption at one of Europe’s busiest aviation hubs.

In addition, Spanish-based cabin crew at Ryanair and easyJet plan to strike this month to demand better working conditions and workers at Paris’ Charles de Gaulle airport stopped work at the weekend, forcing cancellation of about 10% of flights.

BUSIEST WEEK

Loss-making SAS is seeking to restructure its business by undertaking large cost cuts, raising cash and converting debt to equity.

“This is all about finding investors. How on earth is a strike in the busiest week of the last 2.5 years helping find and attract investors?” van der Werff told reporters.

It estimated the strike would to lead to the cancellation of around 50% of scheduled SAS flights and impact around 30,000 passengers per day.

The carrier, which is part-owned by the governments of Sweden and Denmark, last month averaged 58,000 passengers per day. It serves destinations in Asia, Europe and the United States.

Denmark has said it is willing to inject more cash and write off debt on condition the airline brings private investors on board as well, while Sweden has refused to inject more money.

Norway sold its stake in 2018, but still holds debt in the airline, and has said it might be willing to convert the debt into equity.

Sweden’s industry minister did not immediately reply to a request for comment.

Denmark’s Finance Minister Nicolai Wammen in an e-mailed comment to Reuters said he hoped the parties could reach a solution as soon as possible.

“Collective agreement issues are a matter between SAS’ management and the employees of SAS and their organisations,” he said.

The collective agreement between the airline and the SAS Pilot Group union expired on April 1. Months of negotiations, which began last November, have failed to conclude a new deal.

Pilots were angered by SAS’ decision to hire new pilots through two new subsidiaries – Connect and Link – instead of first rehiring former employees dismissed during the pandemic, when almost half of its pilots lost their jobs.

A strike would include all pilots from parent company SAS Scandinavia, but not Link and Connect, a union that organises the 260 pilots attached to the two units. Neither would it affect SAS’ external partners Xfly, Cityjet and Airbaltic, the company has said.

The company had already cancelled many flights ahead of the summer, part of a wider trend in Europe, where, in addition to the upheaval of strike action, operators have responded to staff shortages created by slow rehiring after the pandemic.

(Reporting by Anna Ringstrom and Essi Lehto; additional reporting by Stine Jacobsen in Copenhagen and Alex Cornwall in Dubai; writing by Niklas Pollard; editing by Barbara Lewis)

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By Noah Browning

LONDON (Reuters) -Oil rose on Monday as supply concerns driven by lower OPEC output, unrest in Libya and sanctions on Russia outweighed fears of demand-sapping global recession.

Euro zone inflation hit yet another record high in June, strengthening the case for rapid European Central Bank rate increases, while U.S. consumer sentiment hit a record low.

Brent crude rose $1.55, or 1.4%, to $113.18 a barrel by 1318 GMT after falling more than $1 in early trade. U.S. West Texas Intermediate (WTI) crude rose $1.34, or 1.2%, to $109.77.

The Organization of the Petroleum Exporting Countries (OPEC) missed a target to boost output in June, a Reuters survey found. [OPEC/O]

In OPEC member Libya, authorities declared force majeure at Es Sidr and Ras Lanuf ports as well as the El Feel oilfield on Thursday, saying oil output was down by 865,000 barrels per day (bpd).

Meanwhile, Ecuador’s production has been hit by more than two weeks of unrest that has caused the country to lose nearly 2 million barrels of output, state-run oil company Petroecuador said.

Adding to potential supply woes, a strike this week in Norway could cut supply from Western Europe’s largest oil producer and cut overall petroleum output by about 8%.

“This backdrop of mounting supply outages is colliding with a possible shortage in spare production capacity among Middle Eastern oil producers,” said Stephen Brennock of oil broker PVM, referring to the limited ability of producers to pump more oil.

“And without new oil production hitting markets soon, prices will be forced higher.”

Brent came close this year to the 2008 record high of $147 a barrel after Russia’s invasion of Ukraine added to supply concerns.

Soaring energy prices on the back of bans on Russian oil and reduced gas supply has driven inflation to multi-decade highs in some countries and stoked recession fears.

(Reporting by Noah BrowningAdditional reporting by Sonali Paul in Melbourne and Emily Chow in Kuala LumpurEditing by Jason Neely and David Goodman)

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By David Milliken

TELFORD, England (Reuters) – British manufacturing firm Corbetts the Galvanizers used to rely on a stream of workers from Poland and Romania to fill its shop floor, where steel is dipped into a long vat of molten zinc at temperatures of around 450°C (842°F).

But after Brexit and COVID-19, it is resorting to everything from 500-pound ($602) starting bonuses to free fish and chips to entice local workers who shy away from the often gruelling work.

Britain’s labour shortages, and the pressure they are putting on pay, are a major worry for employers and for the Bank of England as it tries to contain the biggest surge in inflation in 40 years.

However while there are losers, there are also winners from the shake-up in immigration rules following Britain’s departure from the European Union, which halted free movement of workers from the bloc after 2020.

Last year saw a record inflow of foreign medics, and more work visas were issued to people from Zimbabwe than France.

Corbetts, located in Telford in central England, close to the birthplace of the industrial revolution, is typical of firms now rethinking their recruitment practices.

Galvanising staff mostly earn less than the 25,600 pounds a year generally needed for an employer to sponsor a visa.

Before Brexit, the 162-year-old company could count on migrant workers – mostly Polish or Romanian – recruited mostly by word of mouth.

But in the last year, finding staff has become a struggle, according to managing director Sophie Williams.

“It’s boiling hot in summer and it’s freezing cold in winter, and it can get really dirty and dusty and a bit smoky. It’s not the job for everybody,” she said.

Williams employs 52 galvanisers and wants to recruit 40 more before reopening a second facility that was mothballed during the pandemic.

Its Telford plant currently galvanises 35,000 tonnes of steel a year in all shapes and sizes – from lamp posts to chassis for horse trailers. That means automation is not an option.

To attract and keep staff while Britain’s unemployment rate is at its lowest since 1974 and cost-of-living pressures are pushing up private sector pay, Corbetts has offered a range of incentives.

As well as 500 pounds for new hires who stay six months – a bonus extended to existing staff – workers received 100 pounds to mark Queen Elizabeth’s 70 years on the throne, chocolate Easter eggs, supermarket vouchers at Christmas and occasional perks such as free fish and chips.

It also recently raised its minimum starting rate of pay by 6.4% to at least 9.84 pounds an hour.

The firm is more flexible about who it hires, including workers aged under 21 who team up with an older employee, and its first female galvaniser.

A new, longer-term programme aimed at improving staff retention will sponsor workers to get skills to operate cranes, forklift trucks and delivery lorries, and ultimately external management training.

Mike Fiddler, 27, who lost his job in construction during the pandemic, now works in Corbetts delivery yard while training to become a truck driver.

“It’s a lot faster, it’s a lot dirtier, a lot more hands-on. But it’s fun,” Fiddler said.

However Williams still doesn’t know if she can find enough staff to expand the business, which is aiming for 13 million pounds of sales in 2022.

WIDESPREAD SHORTAGES

British employers had a record 1.3 million job vacancies in the three months to the end of May – equivalent to 4.3 per 100 jobs, a similar picture to Germany. Vacancy rates are even higher in the Netherlands, Belgium and the United States.

However, Britain’s vacancy rate is much higher than the overall EU average of 2.9.

With official data showing 188,000 fewer EU workers in Britain than two years ago, businesses are in no doubt that Brexit is partly to blame.

“The barriers to entry in terms of employers hiring from Europe are much higher now,” said Neil Carberry, chief executive of the Recruitment and Employment Confederation.

Sectors which once relied heavily on EU workers – such as construction, cleaning and hospitality – saw the greatest shortages and faster pay rises between 2019 and 2021, according to research from recruitment website Indeed.

Conversely, it is now easier for workers from outside the EU to move to Britain, as employers no longer have to show they had no qualified British or EU applicants. Over the past two years the number of non-EU workers in Britain has risen by 220,000.

During the year to the end of March, Britain issued 182,153 skilled work visas, almost half to Indian nationals. The top five countries for skilled work visas were all outside the EU.

Zimbabweans’ 5,549 skilled work visas – five times more than two years ago – exceeded the 5,239 work permits, skilled and otherwise, granted to French nationals.

HEALTHY DEMAND

IT and professional and financial services companies are among the commonest sponsors of work visas.

But Britain’s growing reliance on foreigners to provide health and social care is another driver of the surge in non-EU migrant workers, said Indeed economist Jack Kennedy.

More non-EU medical graduates registered to practise as doctors in Britain last year than British and EU medical graduates combined, according to figures from Britain’s General Medical Council.

Overall around 10% of interest in British health and social care roles is from overseas, up from under 2% in 2019.

“That’s higher, a lot higher, than what we saw in any of the EU countries,” Kennedy said.

($1 = 0.8307 pounds)

(Reporting by David Milliken; Editing by William Schomberg and Catherine Evans)

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NICE, France (AP) — Tourism is booming again in France — and so is COVID-19. French officials have “invited” or “recommended” people to go back to using face masks but stopped short of renewing restrictions that would scare visitors away or revive antigovernment protests.

From Paris commuters to tourists on the French Riviera, many people seem to welcome the government’s light touch, while some worry that required prevention measures may be needed.

Virus-related hospitalizations rose quickly in France over the past two weeks, with nearly 1,000 patients with COVID-19 hospitalized per day, according to government data. Infections are also rising across Europe and the United States, but France has an exceptionally high proportion of people in the hospital, according to Our World in Data estimates.

French government spokesperson Olivia Gregoire has said there are no plans to reintroduce national regulations that limit or set conditions for gathering indoors and other activities.

“The French people are sick of restrictions,” she said Wednesday on channel BFMTV. “We are confident that people will behave responsibly.”

France’s parliamentary elections last month resulted in President Emmanuel Macron losing his majority in the national legislature, while parties on the far right and the far left that had protested his government’s earlier vaccine and mask rules gained seats.

After the prime minister this week recommended that people resume wearing masks on public transportation, commuter Raphaelle Vertaldi said, “We need to deal with the virus, but we can’t stop living because of it.”

Vertaldi, who was boarding a train in Boussy-Saint-Antoine south of Paris, said she opposed mandatory mask use but would cover her mouth and nose again, if the government requires it.

Hassani Mohammed, a postal worker in Paris, didn’t wait for the government to decide. He masks up before his daily commute. With his wife recovering from surgery and two children at home, he does not want to risk contracting the coronavirus a third time.

“I realized that the pandemic does not belong to the past,” Mohammed said.

Masks have been contentious in France. Early in the pandemic, the French government suggested masks weren’t helpful. It ultimately introduced some of Europe’s toughest restrictions, including an indoors and outside mask mandate that lasted more than a year, along with strict lockdowns.

A Paris court ruled Tuesday that the French government failed to sufficiently stock up on surgical masks at the start of the pandemic and to prevent the virus from spreading. The administrative court in Paris also ruled that the government was wrong to suggest early on that that masks did not protect people from becoming infected.

The government lifted most virus rules by April, and foreign tourists have returned by land, sea and air to French Mediterranean beaches, restaurants and bars.

In the meantime, French hospitals are struggling with long-running staff and funding shortages. Local officials are contemplating new measures, including an indoor mask mandate in some cities, but nothing that would curb economic activity.

French tourism professionals expect a booming summer season despite the virus, with numbers that may even surpass pre-pandemic levels as Americans benefit from the weaker euro and others rediscover foreign travel after more than two years of a more circumscribed existence.

On the French Riviera, a slow economic recovery began last summer. But with attendance at gatherings still capped, social distancing rules and travel restrictions in place a year ago, most visitors to the area were French.

A tour guide and electric bicycle taxi driver in Nice described her joy at seeing foreign visitors again. During France’s repeated lockdowns, she transported essential workers, and took people to hospitals, to care for elderly relatives or for PCR tests.

Now, passengers on her bike from the U.S., Australia, Germany, Italy or beyond reach for the hand disinfectant taped to the barrier between the passenger and driver’s seats. She said she still diligently disinfects the bike before each ride, “like it’s 2020.”

A retired couple from the U.K. visited France this week on their first trip abroad since pandemic travel restrictions were lifted. They started with a cruise down the River Rhône – face masks were mandatory on the ship – and ended with a few days on the Mediterranean.

“It’s been delightful from start to finish,” said Ros Runcie, who was in Nice with her husband, Gordon. “Everyone is so pleased to see you, everyone is really polite and nice to visitors.”

Sue Baker, who was traveling with her husband, Phil, and the Runcies, observed: “It feels very much like pre-2020.”

Asked about the possible return of French mask rules, Phil Baker said, “Masks are a bit uncomfortable, especially in the heat.”

But his wife added, “If it means we can still go on a holiday, we’ll put them back on without hesitation.”

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Le Deley reported from Boussy-Saint-Antoine, France.

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Follow AP’s pandemic coverage at https://apnews.com/hub/coronavirus-pandemic

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