Business

PARIS — The coronavirus pandemic initially brought the global economy to a halt but business adjusted, with the more nimble taking advantage of the move online while others struggle to find a way forward.

Here are some of the economic winners and losers of the COVID era so far:

Amazon, online champion 

Lockdowns, curfews and travel restrictions all seemed to play to the strengths of Amazon, which pioneered the transition to online retail.

The company headed by Jeff Bezos, who started out selling books and losing massive amounts of money, seemed perfectly suited to the changed times as bored and anxious consumers confined to their homes stocked up.

The results were stunning — a 40 per cent increase in sales to $387 billion dollars last year.

Food delivery 

The home food delivery business also came of age as people dined-in instead of out, with restaurants and bars either restricted or closed completely.

Anglo-Dutch group Just Eat Takeaway saw its revenues soar 54 per cent to 2.4 billion euros while British competitor Deliveroo jumped 64 per cent to 4.1 billion pounds.

Entertainment 

What else is there to do if one cannot go out except slump on the sofa to watch television and play video games while munching on your latest dine-in delight?

With the cinema out of bounds, the home-based version took off big time, with Netflix building an audience of 200 million on an offer of high-class films and series typified by "The Crown", the story of Britain's Queen Elizabeth II.

Disney, not to be left behind, launched its Disney+ service late 2019 and had 95 million subscribers by early 2021.

Among the game makers, Sony and Microsoft launched new consoles and ramped up sales.

Families also played more classic games, with Danish toy brick maker Lego enjoying a new lease of life in helping keep children — and adults — amused and busy for long periods of time.

The family-owned business chalked up a 19 per cent rise in net profit to a record 1.3 billion euros last year.

Airlines, tourism ache 

Air transport was probably the worst hit sector, with thousands of aircraft mothballed worldwide.

Predictions for a return to a semblance of normality have progressively been put back, with industry groups now looking to 2023 or even 2024.

Legacy flag carriers such as Air France and Lufthansa chalked up huge losses — of 7.1 billion euros and 6.7 billion euros respectively — and required huge state bailouts to keep them going.

The low-cost operators such as EasyJet and Ryanair adapted faster than their older peers but could not escape the impact of the near total collapse of air travel.

Ryanair's Michael O'Leary lambasted governments for bailing out the older carriers he believes do not deserve to be in business and he insisted the crisis was also an opportunity to finally restructure the industry.

According to the International Air Travel Association, airlines lost some $118 billion last year and while there is great hope vaccination programmes will make a difference this year, losses are still expected at $38 billion.

Oil majors 

suffer, recover 

With the global economy stalled in the second quarter last year at the height of the first pandemic wave, oil prices fell off a cliff, even turning negative at one point.

But production cuts, supported by non-OPEC producers such as Russia, slowly helped steady the market and prices began to rise on hopes for a strong economic recovery this year.

That was not enough however to stop the five majors — BP, Chevron, ExxonMobil, Shell and Total — from chalking up combined 2020 losses of $77 billion.

Oil prices so far this year have been well supported, flirting with $70 a barrel in recent trade on the hope massive stimulus packages, especially in the US, will support demand.

LONDON — Stocks mostly drifted lower on Wednesday as global traders cautiously awaited the outcome of the US Federal Reserve's (Fed’s) policy meeting for any comment on the inflation outlook.

The dollar was mixed as the US central bank wraps up a two-day policy meeting.

Fed chair Jerome Powell may use his news conference later on Wednesday to allay market worries about a possible surge in prices as the economy recovers.

With market attention focused on the US central bank, "investors are treading water ahead of a delicately poised Federal Reserve announcement", noted Richard Hunter, head of markets at Interactive Investor.

"Its previous assertion that the current inflation effect is transitory will need to be reiterated in order to avoid further uncertainty in the bond markets while for equities, any hint of a rise in interest rates earlier than expected would be unsettling."

US benchmark 10-year Treasury yields — a guide to future interest rates — have risen to a one-year high in recent weeks, with anxiety about higher inflation further stirred by Washington's $1.9 trillion stimulus package.

On Wall Street, the Dow began trading nearly unchanged, while the S&P 500 shed 0.4 per cent and the tech-heavy gave up 1 per cent as Treasury yields climbed further.

Analysts at Charles Schwab brokerage said investors are "fence-sitting ahead of this afternoon's monetary policy decision from the Federal Reserve".

In European trading, Frankfurt was flat, while Paris dipped 0.1 per cent. London shed 0.6 per cent.

Traders said there were continuing concerns over AstraZeneca's COVID vaccine shot which many EU countries have suspended pending results of a probe into several blood clot incidents.

In a newspaper article on Wednesday, the UK's health minister said the jab was safe and there was no evidence of a health risk.

Meanwhile, oil prices dropped by around 1 per cent after recent strong gains.

Oil markets and the world economy are recovering from the massive collapse in demand caused by the coronavirus pandemic, the International Energy Agency said in a report on Wednesday.

OTTAWA — Canadian inflation rose 1.1 percent in February from a year earlier as gasoline prices increased for a third straight month, the government said on Wednesday.

The hike in gasoline prices came amid a gradual recovery in global demand, as well as crude oil supply cuts in major oil-producing countries and shutdowns in the southern United States due to bad weather.

On a monthly basis the consumer price index rose 0.1 per cent in February. Analysts had expected it to rise 0.7 per cent.

According to Statistics Canada, low interest rates and strong demand for homes with more space continued to push prices higher for new housing, marking the largest yearly gain since February 2007.

The costs of food, passenger vehicles and household appliances such as stoves and refrigerators were also up.

Costs of hotel accommodations, meanwhile, remained low as public health authorities maintained restrictions on non-essential travel to slow the spread of COVID-19.

Prices for telephone services and clothing were also up in the month.

SAN FRANCISCO — Google on Tuesday said it will halve the ‘controversial’ fee it charges developers at its online shop for digital content tailored for Android-powered mobile devices.

The commission taken at Google Play will be reduced to 15 per cent from 30 per cent starting in July, but just on the first $1 million of revenue taken in annually by a developer, according to post by product management vice president Sameer Samat.

The move comes amid pressure on Google and Apple to ease policies on their online marketplaces for the dominant mobile platforms. Apple announced a similar cut for small businesses last year.

"We believe this is a fair approach that aligns with Google's broader mission to help all developers succeed," Samat said of the smaller bite on Play store transactions.

Apple and Google require developers to use their payment systems for transactions at their online shops for mobile apps, services, and digital goods, taking a bite of 30 per cent or less of transactions as commission.

The tech giants behind rival iOS and Android mobile operating systems maintain the commission is an industry norm and fair compensation for running trustworthy online shops where developers can prosper.

The bite of transactions has been hotly criticised, though, by developers such as Fortnite maker Epic Games and streaming music service Spotify and others which have launched legal challenges around the world.

Apple and Google are also facing growing pushback from other tech giants over their control of apps on their platforms.

Facebook and Spotify have claimed Apple is acting in an uncompetitive way by placing rules on outside developers, which it does not apply to itself.

The gripes prompted the European Union's powerful competition authority to open a series of cases against Apple last June, involving both its App Store and its Apple Pay payment service.

Bills introduced in a handful of US states would bar major app stores from using a particular payment system for transactions.

While the App Store is the sole gateway for digital content onto Apple devices, users of Android smartphones or tablets can download apps from other services.

HELSINKI — Finnish telecoms equipment maker Nokia announced on Tuesday it will slash up to 11 per cent of its workforce within two years as the firm looks to cut costs and focus on a few key areas in the face of tough competition over super-fast 5G networks.

Announcing a 600 million-euro ($715-million) cost-cutting programme, it said it expects to become "an 80,000-85,000 employee organisation, over an 18-24-month period, instead of the approximately 90,000 employees Nokia has today".

The company said it is "too early to comment in detail" on where the job cuts will take place, but told AFP that "France is excluded due to previously announced planned restructuring".

The loss of over 1,000 jobs in France is still underway following Nokia's 2016 takeover of Alcatel-Lucent.

Finland, where the group is headquartered and where it last year recruited over 1,200 new 5G posts, is also expected to be largely spared, with Nokia saying that it expects the restructuring to have a "net positive" impact in the Nordic country.

Market developments in the next two years will determine the exact number of job losses, the company said, adding that the firm will also streamline its portfolio and reduce "site fragmentation" in the long-term.

Nokia has flagged in the three-way race against Ericsson and Huawei to dominate the 5G equipment market, losing out on a major Verizon contract in the US last year and failing to make inroads in China.

The firm has in the past had difficulties competing on price against its rivals and has struggled to convert its existing 4G bases into 5G contracts.

After chief executive Pekka Lundmark took the helm in August last year, he scrapped previous CEO Rajeev Suri's "end-to-end solutions" strategy, replacing it with a more focused approach and pledging to "invest whatever it takes to win in 5G". 

The company will in future be structured around four business groups aligned with customer buying behaviour — Mobile Networks, IP and Fixed Networks, Cloud and Network Services and Nokia Technologies — each with its own profit and loss sheet.

"In those areas where we choose to compete, we will play to win," Lundmark said in Tuesday's statement.

In February, the firm announced that predicted market share loss in North America in 5G and 4G along with price erosion meant the firm's 2021 outlook remained unchanged, with a 7-10 per cent operating margin target. 

Nokia's share price fell slightly after the announcement but had rallied to its previous close of 3.62 euros by 11:30am (09:30 GMT) on the Helsinki stock exchange.

The Finnish group is due to announce further details of its strategy and long-term financial forecasts on Thursday. 

LONDON — Britain's economic activity will return to its pre-coronavirus level at the end of this year following the country's vaccine rollout, Bank of England (BoE) governor Andrew Bailey forecast on Monday.

The earlier-than-expected recovery — the BoE's expectation had been for early 2022 — comes ahead of the central bank's latest interest rate decision on Thursday.

"This COVID effect on the economy is huge," Bailey said in a BBC interview.

"What we are saying with the recovery is that the economy will actually get back in terms of activity to around the end of this year, to where it was at the end of 2019.

"That's good news. But let's be realistic — it's not more than getting back to where we were pre-COVID," Bailey added.

He heaped praise on the British government's rapid vaccination drive that has injected around 24 million Britons with their first jab.

"I'm now more positive [on the outlook] but with a large dose of caution," Bailey said.

He said the vaccine programme has been a "great achievement" and that while the lockdown has been painful, "we are seeing the retreat of COVID".

The pandemic sparked a 10 per cent slump of UK economic output last year — the worst annual performance in more than three centuries.

Bailey added on Monday that the economy had displayed more resilience during the government's current third lockdown compared with the initial virus shutdown in the first half of 2020.