Today's news: Trending business stories for February 6, 2024

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Airline passengers face the prospect of years of disruption

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Research shows airline passengers face the prospect of flight delays and cancellations for years to come as staffing issues continue to plague the industry.

Some 55% of 150 airline and airport executives surveyed by travel software company Amadeus said they expected disruption to continue for years to come, but also expected a return to pre-COVID-19 levels. That was only 37%.

Massive layoffs during the pandemic have further exacerbated turnover, creating a shortage of experienced workers as travel rebounds sharply. During the peak summer season of 2022 and 2023, airlines were forced to cut schedules and airports limited flights to accommodate the surge in demand.

“We lost expertise, we lost people who knew exactly what to do because they had seen that scenario before,” said Guy Kavanagh, Amadeus' director of operations. “Demand has returned, but the lack of capacity has increased disruption and is likely to continue.”

Shortages are being seen across the aviation ecosystem, from ground handling services to flight crews. Christos Pantasis, director of ground operations at Gold Air Handling, said employee turnover has been much higher post-pandemic, making the industry less attractive to young workers starting their careers.

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Flights at Germany's main hub were suspended for a day last week after security guards left their seats due to pay and working conditions. Deutsche Lufthansa's ground staff are also planning a strike this Wednesday over similar demands.

Airlines face high bills due to service interruptions. A passenger on a flight departing or ending within the European Union is entitled, under the so-called EU261 regulation, to compensation of between €250 and €600 in case of delay, cancellation or denial of boarding.

Scandinavian airline SAS AB estimates that 8 to 10 percent of its costs are due to disruptions, according to Michael Lindborg, the company's vice president of aviation solutions.

“If you want to minimize customer disruption, you can do that, but that solution can lead to significantly higher costs and lower fleet utilization,” he said. “We need to be able to quickly understand the full impact of new plans in terms of delays, costs and compensation.”

—Charlotte Ryan, Bloomberg

8:58am

Performance Overview: TMX Group, Precision Drilling

TMX Group Co., Ltd. reported a 9% year-over-year increase in sales and fourth-quarter profit attributable to stockholders of $84.4 million.

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The operator of the Toronto Stock Exchange said its profit for the quarter ended Dec. 31 was 31 cents per diluted share, compared with profit of $102.2 million, or 37 cents per diluted share, in the year-ago period. ).

Revenue was $301.5 million, up from $275.7 million in the same period last year.

TMX Group Chief Financial Officer David Arnold said sales growth in the quarter was driven by increases in all of the company's major business lines.

TMX Group announced earnings of 37 cents per diluted share on an adjusted basis, an increase from adjusted earnings of 35 cents per share in the fourth quarter of 2022.

Last month, TMX Group announced that it had entered into an agreement to purchase the shares of VettaFi Holdings LLC that it did not already own. His US-based VettaFi provides indexing, digital distribution and analytics services to the financial services industry.

Precision Drilling Co., Ltd. The company reported revenue of $146.7 million in the most recent quarter, down slightly from profit of $3.5 million in the year-ago period.

The company said its earnings for the quarter ended Dec. 31 were $9.81 per diluted share, up from 27 cents per diluted share in the previous three months of 2022.

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The company's fourth quarter sales totaled $506.9 million, down from $510.5 million in the same period last year.

Precision Drilling reported adjusted earnings before interest, taxes, depreciation and amortization of $151.2 million for the latest quarter, up from $91.1 million in the year-ago period.

The company's drilling rig days in Canada were down 2.5% year over year in the quarter, while its U.S. operations were down 24.5%.

International drilling rig days increased by 25.5% compared to last year.

Precision Drilling said service rig operating hours increased 14.8% year-over-year in the quarter.

— Canadian Press

7:30am

Stock market before the opening bell

Global bond markets firmed up after two days of declines, the biggest in months, but stocks were searching for direction amid mixed returns.

The 10-year Treasury note was modest after yields rose about 28 basis points in the past two sessions. European stocks and S&P 500 futures were little changed. BP PLC rose about 7% after the oil giant announced plans to buy back US$3.5 billion of stock in the first half of the year. UBS Group AG withdrew after its financial results fell short of analysts' expectations.

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A number of Federal Reserve officials are scheduled to speak this week, potentially providing further insight into the central bank's thinking. Strong U.S. economic data forced traders to scale back bets on interest rate cuts, with Chairman Jerome Powell reiterating his wait-and-see attitude in an interview on Sunday.

“Caution from central bankers wary of stubborn inflation could again cap Wall Street's rally,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. . She said: “Policymakers still want to tighten their reins on demand, and high borrowing costs are likely to persist for an extended period of time.”

At one time, based on market prices, it was almost certain that the Fed would cut interest rates by a point in the first quarter in March, but the probability of that happening has now fallen to around 10%. Fed officials Loretta Mester and Patrick Harker are scheduled to speak on Tuesday, followed by Adriana Kugler and Tom Barkin the following day.

Some of the biggest market moves were in Asia, where Chinese stocks soared on speculation that authorities were planning stronger efforts to end the rout. Regulators are expected to brief President Xi Jinping on the market as early as Tuesday.

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“Today's rebound is strong and certainly welcome, but investors will probably want more concrete action from policymakers,” said Eugene Leow, fixed income strategist at DBS Bank. time. “

The Hang Seng China Enterprise Stock Index rose nearly 5%, with a broad gauge of emerging market stocks heading for its biggest gain this year.

Meanwhile, Palantir Technologies rose as much as 20% in U.S. pre-market trading after the company reported better-than-expected profit guidance on demand for artificial intelligence products.

Citigroup strategists warned that the positioning of U.S. tech stocks is now so bullish that a sell-off could trigger a broader selloff. Strategists led by Chris Montague say bets on a decline in the tech-heavy Nasdaq 100 futures market have completely disappeared, with investors overwhelmingly expecting further gains, which could “amplify the market reversal.” It is possible,” he wrote.

— Bloomberg

what will you see today

Bank of Canada Governor Tiff Macklem will speak at the Montreal Council on Foreign Relations, starting at 1 p.m. ET.

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Deputy Prime Minister Chrystia Freeland will give an update on the government's economic plans in Ottawa at 9 a.m. ET.

Financial Institutions Supervisor Peter Routledge and Insurance Bureau of Canada Chief Executive Celieste Power participate in a fireside conversation at CatIQ's Canadian Catastrophe Conference in Toronto.

On the earnings side, reports are expected from Ford Motor Co., BP PLC., Toyota Motor Corp., Spotify Technology SA, Snap Inc., Nintendo Co., Ltd., Precision Drilling Corp., Finning International Inc., and Algoma Steel Group Inc. will be done. .

Need a refresher on Friday's top headlines? Catch up here.

Additional reporting from The Canadian Press, Associated Press and Bloomberg

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