Business

BEIRUT — The Lebanese pound hit an all-time low against the dollar on Tuesday amid a deepening economic crisis that has thrown more than half of the population into poverty.

The Lebanese pound had been pegged to the dollar at 1,500 since 1997 but the country's worst economic crisis since the 1975-1990 civil war has seen its value plummet.

On Tuesday, it was trading at nearly 10,000 pounds to the dollar on the black market, money exchangers said.

"It's crazy what's happening," one money exchanger said on condition of anonymity.

Before the latest hit, the pound had briefly stabilised at 8,000-8,500 to the greenback in recent weeks.

In July, it had reached 9,800 to the dollar.

The dizzying depreciation came as Lebanon's central bank started reviewing the country's banks under international pressure for banking sector reform.

Lebanese banks had been given until Sunday to increase their capital by 20 per cent, among a series of demands from the central bank.

On Monday, a central bank committee "agreed on a roadmap with deadlines for the Bank of Lebanon to take appropriate measures" if these requirements were not met, it said in a statement.

Lebanon's Al Akhbar newspaper said on Tuesday that the currency plunge was partly the result of commercial banks sucking dollars out of the market to meet the capital demands of the central bank.

The slide in the value of the pound has led to soaring food prices in a country where more than half of the population now lives below the poverty line. 

Lebanon has been without a fully functioning government since outgoing premier Hassan Diab resigned in the wake of a devastating explosion in Beirut port last year.

The blast killed more than 200 people and piled new misery on a country already brought to its knees by the economic crisis.

The hashtags #dollar and #blackmarket were trending in Lebanese Twitter circles Tuesday.

"The exchange rate reached 10,000 LBP and still no government," said one Twitter user.

Mahya Yahya of Carnegie's Middle East Centre echoed the sentiment.

"Meanwhile #Lebanon's Lira collapses further — political deadlock continues and no policies to stem the collapse!" she said. 

NEW YORK — United Airlines reached an agreement to purchase 25 more Boeing 737 MAX aircraft for delivery in 2023, the carrier said on Monday, in a sign of an expected post-coronavirus travel industry recovery.

The contract brings United's total order book on the MAX to 188 and also represents a vote of confidence in the jet, which was grounded for 20 months following two fatal crashes, but cleared by regulators to resume service late last year.

United also plans to move up deliveries of 40 previously ordered MAX planes to 2022 and five others to 2023, the company said a securities filing.

The contracts come amid a prolonged industry downturn during COVID-19 restrictions.

Passenger volumes are still under 50 per cent from year-ago levels, according to government statistics. That marks a big improvement from the worst days of the pandemic, but carriers are still burning cash. 

Both United and American Airlines have notified thousands of employees of possible lay-offs at the end of March when federal payroll support funding from Congress runs out.

United is advocating in Washington for additional federal funding to sustain the jobs, said Chief Operating Officer Andrew Nocella in a note to employees announcing the MAX orders.

"We need to make aircraft orders more than a year in advance of taking delivery," Nocella said. "And as the end of the pandemic nears and vaccines continue to roll out, today's fleet announcement helps position us to meet the demand we expect to see in 2022 and 2023 and puts us on a path toward more opportunities for our employees in the future."

"Choosing the right investment opportunities at the right time helps us secure that brighter future and is a down payment on our future success," Nocella added.

Shares of United surged 5.3 per cent to $55.44 in early trading, while Boeing surged 6.9 per cent to $226.48.

By Glenn Chapman
Agence France-Presse 

SAN FRANCISCO — Twitter plans to offer a subscription service in which users would pay for special content from high-profile accounts, part of an economic model to diversify its revenue, the company said on Thursday.

The globally popular social media platform announced the potential new Super Follows service at its annual investor meeting, as it searches for new revenue streams beyond targeted advertising.

"Exploring audience funding opportunities like Super Follows will allow creators and publishers to be directly supported by their audience and will incentivize them to continue creating content that their audience loves," a Twitter spokesperson noted.

Top Twitter executives discussed Super Follows while outlining goals and plans for the near future during the streamed presentation.

"We are examining and rethinking the incentives of our service — the behaviours that our product features encourage and discourage as people participate in conversation on Twitter," the spokesperson said.

Super Follows was described during the presentation as a way for Twitter audiences to financially support creators and receive newsletters, exclusive content and even virtual badges in exchange.

Twitter, which currently makes money from ads and promoted posts, might be able to add additional revenue via the Super Follows transactions.

Creative Strategies analyst Carolina Milanesi was not convinced people will be inclined to pay for special content on Twitter.

Such a model makes sense for content on platforms like YouTube, where hours of craftsmanship might be devoted to producing entertaining videos, but it is debatable whether the same could be said for tweets on Twitter, she said.

No timeline was given for when Super Follows might become a feature, but it is expected that the tech giant will make further announcements in the coming months.

Building communities 

Twitter is also considering allowing users to join communities devoted to topics via a feature seemingly similar to Facebook's "groups".

Twitter aims to reach a milestone of 315 million "monetizable" users in 2023, a steep increase from the 192 million it had at the end of last year, according to a filing with US financial markets regulators at the Securities and Exchange Commission.

The San Francisco-based firm defined monetizable users as people who log in daily and can be shown ads.

Twitter, like Google and Facebook, makes most of its money from digital advertising.

The company said it is aiming for $7.5 billion in revenue in 2023, more than double the $3.7 billion it took in last year.

Twitter also plans to double "development velocity", meaning the number of new features it releases per employee to get people to engage more with the service.

Apple bite? 

Twitter revenue product lead Bruce Falck told analysts that the tech company was mindful of a potential crimp in revenue that could be caused by new privacy labels Apple is mandating for apps on its mobile devices.

App makers are concerned that the labels will discourage users from allowing collection of data used to more effectively target ads.

"It's still too early to tell exactly how this will impact the industry, but it will be felt by the entire industry," Falck said, adding that Twitter was innovating to soften the blow.

Twitter's plan to boost revenue also includes getting more involved in online commerce.

"Imagine easily discovering and quickly purchasing a new skincare product, or trendy sneaker from a brand new follow with only a few clicks," a Twitter executive told analysts.

An area where Twitter is additionally looking to make money is Fleets, a recently added feature where posts and conversations vanish after a day.

MILAN — The G-20 looked closer to an agreement on Friday on a global digital tax after a change of heart from the United States removed a key stumbling block in the discussions. 

Under previous president Donald Trump, the US had insisted on a so-called safe harbour clause that would have effectively allowed big tech companies to comply voluntarily with a digital tax, blocking progress on a deal.

But in a videoconference with G-20 colleagues, new US Treasury Secretary Janet Yellen said her country "will engage robustly" in the talks and "is no longer advocating for 'safe harbour'", a Treasury official said.

A global digital tax would target US Internet giants such as Amazon, Facebook and Google, which have long been accused of exploiting loopholes to minimise their tax bills. 

Negotiations on the issue, held under the auspices of the Organisation for Economic Cooperation and Development, have been deadlocked, with the United States and European Union on opposing sides of the argument.

Yellen's announcement suggests that a deal by mid-2021, as pledged by a G-20 summit in Saudi Arabia last year, is now possible, the French and German finance ministers both said.

Italian Economy Minister Daniele Franco — whose country holds the G-20 presidency — said a deal could "hopefully" be struck at a July 9-10 meeting of G-20 finance ministers and central bank chiefs in Venice.

Vaccines and debt problems 

Friday's video conference had a broader purpose of aligning G-20 countries' plans to relaunch their economies after the coronavirus pandemic and to limit the harm to the worst-off nations shut out of the race for vaccines.

Washington urged wealthy G-20 countries to launch a truly global, coordinated vaccination campaign.

"Without access to vaccines, low-income countries in particular will experience further tragic loss of life and needlessly delay their economic recoveries," Yellen wrote in an open letter to her G-20 finance counterparts.

Yellen also signalled openness to issuing new so-called Special Drawing Rights at the International Monetary Fund (IMF) to less developed countries, reversing another Trump position.

Several G-20 countries have already suggested the move, after the financial instruments — which can be exchanged for US dollars, euros, Chinese renminbi, Japanese yen or British pounds — proved their worth as crisis firefighting tools in 2009.

But Italy's Franco said there was no substantive progress on this front. He also signalled there was no decision on a further extension of a moratorium on debt interest payments for the poorest countries, currently set to expire on June 30. 

According to World Bank President David Malpass, the moratorium has so far been less effective than hoped, because the private sector and the China Development Bank have not come on board.

So far, just 46 of the 73 eligible countries have delayed debt interest payments worth a total of $5.7 billion.

Threat of 'Great Divergence' 

The debt question concerns minuscule amounts compared with the $14 trillion mobilised by G-20 countries to reboot their own pandemic-hit economies.

The recovery "from the worst recession since World War II" will be "long and uncertain", IMF chief Kristalina Georgieva warned in an interview with Italy's La Stampa newspaper.

"The prospects for recovery are diverging dangerously across countries", against the backdrop of "a slow rollout of vaccines even as new mutations are spreading", she said.

"So, my deepest concern is that the Great Lockdown of 2020 could morph into a Great Divergence in 2021 and beyond," Georgieva added. 

The IMF has forecast a 5.5 per cent rebound in worldwide gross domestic product this year, followed by 4.2 per cent growth in 2022.

The G-20 gathering also covered international finance issues, because even though markets have proved resilient through the health crisis, borrowing costs have risen sharply since early February.

The European Central Bank, however, issued a reassuring message on Friday, as its executive board member Isabel Schnabel said it could broaden its support for the economy in case of a sharp rise in interest rates. 

SYDNEY — Australian carrier Qantas reported on Thursday a $5.5 billion plunge in revenue during the second half of 2020 and said international passenger flights would not resume until October as the pandemic continued to devastate the industry.

The country's biggest airline said it suffered an underlying pre-tax loss of Aus$1.03 billion ($814 million) in the six months to December 31, with statutory losses climbing to Aus$1.47 billion.

"These figures are stark, but they won't come as a surprise," said Qantas CEO Alan Joyce.

"A year ago, none of us knew just how big an impact Covid would have on the world, or on aviation. It's clearly worse than anyone expected," he said.

"Border closures meant we lost virtually 100 per cent of our international flying and 70 per cent of our domestic flying -- three-quarters of our revenue -- around Aus$7 billion -- went with it."

Joyce noted that the company had already seen revenue fall Aus$4 billion during the first half of 2020, bringing the total impact of the pandemic to Aus$11 billion.

"That is a massive number, probably a bigger number than any other company in Australia is experiencing because of Covid," he told a news conference.

Joyce pushed back the expected resumption of international passenger flights from July to the end of October, but said the cost of keeping those planes on the ground was largely being offset by increased freight operations.

With Australia's successful containment of the pandemic, Qantas flagged a return to 60 per cent of pre-Covid domestic capacity by the end of March and 80 per cent by the end of June.

Qantas had posted a $1.9-billion loss for the year ending June 30 as the coronavirus pandemic gripped the global economy.

Joyce said a total of 8,500 staff would lose their jobs due to the crisis, and another 7,500 would remain suspended until the resumption of international flights.

Around 100 planes have also been grounded as part of a Aus$10 billion cost-cutting blitz and restructuring effort that Qantas said would save it Aus$1 billion a year from 2023.

LONDON — London's Heathrow airport dived into a pre-tax loss of £2 billion last year, a result that "underlines the devastating impact of COVID-19 on aviation", it said on Wednesday.

The loss, equivalent to $2.8 billion or 2.3 billion euros, reflected a 73 per cent plunge in passenger numbers, Heathrow said in a statement.

The airport, one of the world's busiest hubs, recorded a pre-tax profit of £546 million in 2019.

Heathrow Chief Executive John Holland-Kaye, who said passenger levels shrunk in 2020 to levels last seen in the 1970s, voiced optimism for the year ahead with Britain vaccinating millions of adults and preparing to exit its virus lockdown.

"We can be hopeful for 2021, with Britain on the cusp of becoming the first country in the world to safely resume international travel and trade at scale," he said in the earnings statement.

"Getting aviation moving again will save thousands of jobs and reinvigorate the economy."

Heathrow last year had 22 million passengers compared with 81 million in 2019.

More than half of the 22 million travelled in the first two months of last year, before the pandemic took hold and governments worldwide implemented national lockdowns.

Heathrow's revenue meanwhile tumbled 62 per cent to £1.2 billion in 2020, while cargo volumes slid 28 per cent.

Heathrow said it has £3.9 billion of liquidity, enough to see it through until 2023. 

The airport's last financial year was notable also owing to Britain's supreme court ruling that it could build a third runway. 

The court in December struck down a Court of Appeal ruling that the UK government had failed to take into account climate change commitments when in 2018 it approved the new runway.

Heathrow on Wednesday said it remains "focused on de-carbonising aviation".

The airport is owned by a consortium led by Spanish construction giant Ferrovial.

It also includes sovereign wealth funds from China, Singapore and Qatar as well as North American shareholders.

Despite remaining one of the world's largest airports, Heathrow was last year overtaken by Paris Charles de Gaulle as Europe's top hub in terms of passenger numbers — blaming its relegation on delayed coronavirus testing and travel restrictions.