BERLIN (Reuters) – Lufthansa’s <LHAG.DE> budget carrier Eurowings expects the transfer of planes from collapsed rival Air Berlin <AB1.DE> planes into its fleet to be completed by the end of July, it said on Friday.
Eurowings has come under fire in Germany recently for delays and cancellations, partly caused by its rapid expansion as it tries to move into the gap left by Air Berlin.
“Thanks to the successive introduction of further planes, we again expect a reliable flight operation,” Eurowings CEO Thorsten Dirks wrote in a message to customers.
However, like other carriers such as Ryanair <RYA.I> and IAG <ICAG.L> group airline Vueling, Eurowings and also Lufthansa has also had to cancel flights due to air traffic control strikes and staff shortages and weather.
Lufthansa has also written to frequent flyers apologizing for the delays. The group’s core brand has canceled around 2,800 flights so far this year, more than in the whole of last year.
(Reporting by Victoria Bryan; Editing by Christoph Steitz)
By Ritvik Carvalho
LONDON (Reuters) – World shares rose on Friday but were set to end in the red for a second week running amid intensifying worries over the fallout of a trade dispute resulting from U.S. tariffs, while oil prices rose with an OPEC meeting underway.
The MSCI All-Country World index <.MIWD00000PUS>, which tracks stocks in 47 countries, was up 0.3 percent by afternoon in Europe but down 1.3 percent on the week, its worst weekly performance since the week ended March 23. Futures indicated a recovery on Wall Street after a sharp drawdown the previous day.
Investor nervousness over a possible full-blown trade war has deepened this week over increasingly sharp rhetoric between the United States and China, and growing evidence of the economic damage such a conflict could produce.
Chinese state media said on Friday that U.S. protectionism was self-defeating and a “symptom of paranoid delusions” that must not distract China from its path to modernization.
Earlier this week, German carmaker Daimler <DAIGn.DE> cut its earnings forecast, saying tariffs on cars exported from the United States to China would hurt Mercedes-Benz sales.
India joined the European Union and China in retaliating against U.S. President Trump’s tariffs on steel and aluminum, raising import duties on U.S. almonds by 20 percent.
“With no negotiations in sight at the moment, our base case (scenario) is shifting to a further escalation of the trade conflict between the two countries,” wrote analysts at Danske Bank in a note to clients.
There is a risk of a further deterioration in relations on June 30, when Washington is due to announce a plan to restrict Chinese investments into the United States and limit exports of U.S. tech products to China, they added.
Strong financial stocks and better-than-expected euro zone purchasing managers index for services helped drive a timid relief bounce in European shares. But the pan-European STOXX 600 <.STOXX> and its euro zone counterpart <.STOXXE> were set for their biggest weekly loss in three months as the consequences of rising protectionism sank in, notably for the autos sector.[.EU]
The strong PMIs also boosted the euro <EUR=D4>. It was last up 0.4 on the day and was set to end the week higher by half a percent. Against a basket of currencies, the dollar was 0.2 percent lower.
Against the yen, the greenback gained 0.2 percent. It was modestly higher at 110.16 yen <JPY=EBS>, below a one-week high of 110.76 scaled the previous day amid lingering concerns over the U.S.-China trade dispute.
“The potential for all-out trade war, European political risks and emerging market volatility remain potent factors that should contain dollar/yen within the current range, though the lack of downside over the last week or so suggests stronger underlying demand,” wrote Robert Rennie, head of market strategy at Westpac.
The European PMIs also showed manufacturing growth was the weakest in 18 months on trade worries.
Elsewhere in Europe, Greece’s borrowing costs fell to four-week lows on Friday after Athens won debt relief from the euro zone. Italian bond yields also fell after a top lawmaker said an exit from the euro was not part of the current government’s plans.
Sterling was 0.3 percent higher against the dollar <GBP=D3>, extending gains made the previous day after the Bank of England’s chief economist Andy Haldane unexpectedly joined the minority of policymakers calling for a UK interest rate hike, citing concerns about growing wage pressure.
OPEC agreed on Friday to raise oil production by around 1 million barrels per day from July for the group and its allies, an OPEC source said, although crude prices remained higher on the day.
Brent crude <LCOc1> was trading at $74.44 a barrel, up almost 2 percent. U.S. West Texas Intermediate crude <CLv1> rose 1.5 percent to $66.52 per barrel.
Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> dropped as much as 0.35 percent at one point to touch its weakest since early December, before erasing losses to be up 0.15 percent. Still it was 2.3 percent off for the week.
Hong Kong’s Hang Seng <.HSI> plumbed six-month lows, having lost 3.9 percent so far this week. South Korea’s KOSPI <.KS11> hit nine-month lows and in mainland China, the CSI300 index <.CSI300> lost almost 5 percent this week to one-year lows.
Japan’s Nikkei <.N225> gave up 0.8 percent for a weekly loss of 1.7 percent.
(Reporting by Ritvik Carvalho; additional reporting by Saikat Chatterjee; Editing by Toby Chopra)
By Ben Blanchard and David Stanway
BEIJING/SHANGHAI (Reuters) – U.S. protectionism is self-defeating and a “symptom of paranoid delusions” that must not distract China from its path to modernization, Chinese media said on Friday as Beijing kept up with its war of words with Washington while markets wilted.
President Donald Trump threatened on Monday to hit $200 billion of Chinese imports with 10 percent tariffs if China retaliates against his previous targeting of $50 billion in imports.
Investor fears of a full-blown trade war have weighed on markets, including Chinese shares, which posted their worst weekly loss since early February. Even ordinary Chinese people aired their unhappiness on social media.
China’s commerce ministry accused the United States on Thursday of being “capricious” over trade issues and warned that the interests of U.S. workers and farmers would ultimately be hurt, vowing to hit back with “quantitative” and “qualitative” measures.
The official China Daily said in an editorial the United States had failed to understand that the business it does with China supported millions of American jobs and that the U.S. approach was self-defeating.
The English-language newspaper cited research by the Rhodium Group saying Chinese investment in the United States declined 92 percent to $1.8 billion in the first five months of the year, its lowest level in seven years.
“The woes the administration is inflicting on Chinese companies do not simply translate into boons for U.S. enterprises and the U.S. economy,” it said in an editorial headlined “Protectionism symptom of paranoid delusions”.
“The fast-shrinking Chinese investment in the U.S. reflects the damage being done to China-U.S.-trade relations … by the trade crusade of Trump and his trade hawks,” it said.
The U.S. administration on Tuesday issued a report about how Chinese policies, and what it described as China’s economic aggression, were threatening the technologies and intellectual property of not just the United States but of the world.
While the White House report did not go beyond what the U.S. has said previously – that China engages in theft of technologies and intellectual property (IP) – it did not help to soothe tension. China has repeatedly denied accusations of IP theft.
The 30-stock Dow Jones Industrial Average slumped for an eighth consecutive session on Thursday as shares including Caterpillar Inc and Boeing Co wilted.
Big U.S. manufacturers and automakers were also under pressure after Germany’s Daimler cut its 2018 profit forecast and BMW said it was looking at “strategic options” due to the Sino-U.S. trade war.
Shares of Apple Inc, whose iPhones are assembled in China by Foxconn, also declined.
Foxconn Chairman Terry Gou said on Friday the U.S.-China trade war was the Taiwan company’s biggest challenge.
“What they are fighting is not really a trade war, it’s a tech war. A tech war is also a manufacturing war,” Gou said.
A Sino-U.S. trade war could disrupt supply chains for the technology and auto industries – sectors heavily reliant on outsourced components such as those supplied by Foxconn – and derail growth for the global economy, analysts say.
Uncertainty over how the tariff war would unfold in the near term is also starting to move commercial decisions in the energy sector.
Industry sources told Reuters that Chinese oil buyers will keep taking crude from the United States through September, but plan to cut future purchases to avoid a likely import tariff.
China has put U.S. energy products including crude and refined products on lists of goods that it will hit with import taxes. But no activation date has been specified for this cluster of products yet.
Shares in Shanghai dropped 4.4 percent for the week, while China’s blue-chip CSI300 index fell 3.8 percent.
Hong Kong’s Hang Seng index shed 3.2 percent for the week, its poorest weekly showing since late March.
The share losses have prompted sarcastic posts in China’s social media, while others compared the falling stocks to China’s 2015 market crash.
“The tumbling Shanghai Composite index must be China’s so-called quantitative and qualitative counter-measures,” one social media user mused.
Not helping sentiment, the yuan extended its decline against the dollar this week, falling to its lowest in more than five months on Friday.
“Chinese exports are now contained, domestic demand has long been weighed by soaring home prices, and the yuan will depreciate, so everyone, hurry up and convert to U.S. dollars,” one social media user quipped.
The Global Times, a tabloid published by the ruling Communist Party’s official People’s Daily, said in an editorial China needed to be realistic about how it could handle the United States and look at other strategies.
“The U.S. has the upper hand over China in technology, defense and international influence, and therefore the country will continue to have a strategic initiative over Beijing for the foreseeable future,” it said.
“As long as China remains clear-minded in strategy, level-headed in its U.S. policy, and avoids a full-fledged geopolitical competition or a strategic clash against the U.S., China will be able to withstand U.S. pressure. In other words, China should focus on its domestic affairs.”
China should keep promoting its own economic development and ensure its growth exceeds that of the United States in both quantity and quality, the paper said.
“As long as China can effectively utilize its successful policies and experiences accumulated since the reform and opening up, and avoid subversive mistakes, the country will see robust momentum for development,” the Global Times said.
(Reporting by David Stanway and Ben Blanchard; Additional reporting by Ryan Woo and Lusha Zhang; Editing by Paul Tait)