Business

FRANKFURT AM MAIN — German flag carrier Lufthansa on Thursday posted a third quarter net loss of 2.0 billion euros as it prepares for a "hard and challenging" winter amid lockdowns to curb the coronavirus pandemic.

Europe's largest airline said it will fly a maximum of 25 per cent of normal capacity from October to December and expects to burn through 350 million euros ($410.9 million) in cash a month.

"We are now at the beginning of a winter that will be hard and challenging for our industry," chief executive Carsten Spohr said in a statement.

After its revenues crashed in the first wave of the coronavirus pandemic, the airline was propped up in June by the German state which pumped in nine billion euros of liquidity for a 25 per cent stake.

But the return of restrictions on movement in its home territory of Germany, alongside even stricter lockdowns in countries such as France and Britain, has "significantly worsened" the outlook for air travel, Lufthansa said. 

The company’s CEO Spohr urged the introduction of "widespread rapid tests" for the virus, in order to reduce the need for lengthy quarantines which airlines say are deterring travellers.

The company remains on track, it said, to return to positive operating cash flow in 2021 -- but only if the "situation allows for an increase in capacity to around 50 per cent of pre-crisis levels".

In the three months to September, the carrier reported a net loss of 2.0 billion euros, compared with a 416 million euro profit in the same period last year, as it carried just 20 per cent of its usual passenger numbers.

Losses were reduced due to "strict cost savings and the expansion of our flight programme" in the summer months, Spohr said.

Lufthansa succeeded in cutting the outflow of funds at the start of the pandemic from one million euros per hour to "only" one million euros every two hours, it said in October.

The airline had previously warned that 30,000 jobs were under threat as it scaled down its winter schedule to levels not seen since the 1970s and on Thursday said that 27,000 full-time positions were "surplus".

Lufthansa's board says it aims to find agreements to "limit the number of redundancies required" through short-time working and pay cuts.

Lufthansa, which includes subsidiaries Swiss, Austrian, Brussels Airlines and Eurowings, hopes to remain "the leading European airline group" after an "inevitable restructuring", Spohr said.

SAN FRANCISCO — The so-called "gig economy" survived a key test in Tuesday's election as California voters approved a referendum backed by ride-hailing giants such as Uber which preserves the use of contractor-drivers and potentially opens the door to wider adoption of that model.

The initiative known as Proposition 22 backed by Uber, Lyft and other on-demand companies appeared headed for passage as the measure was backed by some 58 per cent of state voters, according to incomplete results.

The measure effectively overturns a state law which would require the ride-hailing firms and others to reclassify their drivers and provide employee benefits.

The vote came after a contentious campaign with labour groups claiming the initiative would erode worker rights and benefits, and with backers arguing for a new, flexible economic model.

"With the passage of Prop 22, app-based rideshare and delivery drivers across the state will be able to maintain their independence, plus have access to historic new benefits, like a minimum earnings guarantee and health care," said a statement from Yes on 22, a coalition of drivers, businesses and activist groups with funding from Uber, Lyft and delivery firm DoorDash. 

It said the result represents a "massive win" for firms like Uber and Lyft, whose business model appeared threatened in their home state.

Daniel Ives of Wedbush Securities said the vote offers a clear approval of the gig economy model, noting that if it had failed "this would significantly impact the core DNA of the gig economy and ultimately the revenue model for Lyft and Uber."

Ives added that a defeat for Proposition 22 might have encouraged other states for follow suit, potentially eroding the outlook for ride-hailing firms.

Uber and Lyft have pledged that if the measure passed, they would set aside funds for health and insurance benefits for their drivers, many of whom work part-time on a flexible schedule.

"The future of independent work is more secure because so many drivers like you spoke up and made your voice heard — and voters across the state listened," Uber chief executive Dara Khosrowshahi said in an email to its drivers late Tuesday.

"We're looking forward to bringing you these new benefits — like healthcare contributions and occupational accident insurance — as soon as possible."

The proposition was also being looked at "nationally and globally" for what it might mean to the future of the labour movement, according to Sonoma University political science professor David McCuan.

"It's about how gig workers use gig jobs as a bridge, not as a career. And it's about the future of the labour movement in California," McCuan said.

Arun Sundararajan, a New York University professor who specializes in the "sharing economy," said the vote was a milestone for independent workers.

"The country now has its first framework for funding non-employment worker benefits," Sundararajan said.

"This will be increasingly important over time, as a greater fraction of the workforce has an arrangement other than full-time employment."

But Darrell West, who heads the Brookings Institution's Center for Technology Innovation, called the result "a major loss for the labour movement and advocates who want a better social contract for gig workers."

"The result shows it will be awhile before new rules for the digital economy are going to get liberalized in the United States," West said.

Erica Mighetto, an Uber driver who campaigned for the "no" vote along with labour organisations, expressed disappointment over the vote.

"We're deeply saddened that Uber and Lyft have been able to confuse voters," she said. "And this is really devastating and harmful to us."

Uber and Lyft argued that many drivers sought the flexibility of being able to work when and where they choose to pick up extra income.

More than $200 million was spent promoting Proposition 22, while only a tenth of that amount was spent by labour groups opposing the measure.

Under the proposition, drivers remain independent contractors but Uber and Lyft are to pay them a number of benefits including a minimum wage, a contribution to healthcare and other forms of insurance. Critics of the measure said it failed to take into account the full costs borne by drivers.

Lyft driver Jan Krueger of Rancho Cordova supported the proposition, saying that it struck a balance between independence and job benefits.

"This vote in one of the most progressive states in the country should send a strong signal to elected leaders all over the nation," Krueger said.

"Prop 22 should serve as a model for other states and the federal government to follow."

Uber and Lyft claimed most drivers support the contractor model. But the firms were sued by the state which argued keeping that model violated California labour law. A Proposition 22 victory renders the court case effectively moot.

RIYADH — Energy giant Saudi Aramco on Tuesday posted a 44.6 per cent slump in third-quarter profit, as the coronavirus pandemic weighs heavily on the global demand for crude oil.

Aramco, seen as Saudi Arabia's cash cow, has revealed consecutive falls in quarterly profits since it began disclosing earnings last year, piling pressure on government finances as it pursues ambitious multi-billion dollar projects to diversify the oil-reliant economy.

The world's most valuable listed company said it was committed to a bumper dividend even as third quarter net profits dropped to 44.21 billion Saudi riyals ($11.79 billion), compared to $21.3 billion in the same period last year.

Aramco's net profit for the first nine months of this year also dropped 48.6 per cent to $35.02 billion, the company said.

The latest results are in line with analysts' expectations but stand in contrast to the losses reported by Aramco's rivals, which are reeling from pandemic-driven economic shutdowns that have suppressed energy requirements.

Although the results underscore a downbeat market, Aramco's July-September results showed an improvement amid relatively steady crude prices compared to the second quarter, when it posted a profit of $6.57 billion.

"We saw early signs of a recovery in the third quarter due to improved economic activity, despite the headwinds facing global energy markets," Aramco's chief executive Amin Nasser said in the statement.

"We continue to adopt a disciplined and flexible approach to capital allocation in the face of market volatility. We are confident in Aramco's ability to manage through these challenging times and deliver on our objectives."

Double whammy 

Nasser said Aramco was committed to delivering a dividend of $18.75 billion to shareholders for the third quarter — an amount that exceeds the declared profit and the available cash flow.

The announcement is in line with the company's pledge to pay an annual dividend of $75 billion after it floated a sliver of its shares last year in the world's biggest initial pubic offering.

"Aramco's dividend payout is now much bigger than its income," said Tarek Fadlallah, chief executive officer of the Middle East unit of Nomura Asset Management.

"Not a problem if oil rebounds next year. But it will be a big problem if it doesn't," he added.

Amid weakening oil prices and flat output, Aramco may have to continue funding its bumper dividend by "borrowing in the short term", said investment research firm Bernstein.

Dividend payments from Aramco help the Saudi government — the company's biggest share holder — manage its ballooning budget deficit.

Last month, several oil giants including ExxonMobil and Chevron reported another quarter of red ink as uncertainty over oil demand forced the energy sector to rein in spending. 

By contrast, Aramco's results reflected its "resilience", Nasser said.

But the Saudi giant is bracing for a possible further wave of coronavirus infections that could undermine a tentative global economic recovery and further erode the demand for crude worldwide, analysts say.

The company has cut its capital spending this year and also slashed hundreds of jobs as it seeks to reduce costs, Bloomberg News reported in June.

Saudi Arabia, the world's biggest crude exporter, has been hit hard by the double whammy of low prices and sharp cuts in production. 

A drop in oil income is expected to hinder Saudi Crown Prince Mohammed Bin Salman's ambitious "Vision 2030" reform programme to overhaul the kingdom's energy-reliant economy.

TOKYO — Japan's new 2050 deadline for carbon neutrality has thrown a spotlight on its efforts to find new, greener fuel options, including an ambitious but controversial liquid hydrogen venture.

The Hydrogen Energy Supply Chain (HESC) is a joint Japanese-Australian project intended to produce plentiful, affordable fuel for Japan. Here are some questions and answers about the venture:

Why hydrogen?

Japan has few fossil fuel resources, and relies heavily on imported liquefied natural gas (LNG), coal and nuclear power, which has been curtailed since the Fukushima disaster.

The mountainous, natural disaster-prone country is struggling to ramp up its renewable energy production, and is therefore investigating a variety of fuel alternatives.

It has invested heavily in hydrogen, which produces only steam and no carbon dioxide when burnt, making it the focus of some interest.

Japan currently produces hydrogen domestically, in liquid and compressed gas forms, mostly from natural gas and oil.

It uses it in microfuel cells for residential buildings, experimental power plants and fuel cell vehicles, but production domestically is limited and expensive.

What is HESC?

The Hydrogen Energy Supply Chain is an experiment to see whether Japan can establish a durable supply of liquid hydrogen from Australia, to be burned to generate electricity.

The hydrogen will be produced and liquefied in the Australian state of Victoria, where it will be extracted from a type of coal known as lignite.

This so-called brown coal currently effectively lacks a market, making it a potentially attractive, cheaper alternative to domestic hydrogen production for Japan, despite the extra costs of bringing it 9,000 kilometres (5,600 miles) by sea.

The project's pilot phase, partially funded by Japanese and Australian authorities, has received around Aus$500 million ($350 million) in investment.

How will it work?

From next year, a site on an artificial island near Kobe in western Japan will become the pilot terminus for the world's first ship designed to transport liquid hydrogen, a Japan-built vessel called the Suiso Frontier.

For now, the imposing spherical tank 19 metres (60 feet) in diameter on the site is being used to store domestically produced liquid hydrogen.

If the tests are successful by 2022 or 2023, the project will be extended and will enter a commercial phase after 2030. A new terminus in Japan will then be built, along with larger ships.

But the process is complicated: to be transported by sea as a liquid, hydrogen needs to be cooled to -253 degrees Celsius (-423.4 degrees Fahrenheit) — an expensive process that uses a lot of energy.

Is hydrogen 

really green?

Hydrogen's green credentials depends largely on how it is produced.

Green hydrogen can be manufactured by electrolysis of water, using electricity obtained through renewable energy.

But every tonne of hydrogen produced from coal emits 20 tonnes of carbon dioxide, more than double the CO2 emissions created when hydrogen is produced from natural gas.

Comparing the emissions from producing hydrogen to those from burning coal is complicated, experts say, but they agree that it won't be considered environmentally friendly unless produced renewably.

HESC backers insist it can be environmentally viable — if not renewable — through carbon capture programmes. 

One Australian initiative, called CarbonNet, would see the captured CO2 buried under the seabed near Victoria.

For HESC backers like Motohiko Nishimura of Kawasaki Heavy Industries, Japan's 2050 carbon-neutral deadline "will have a great positive impact" on the project.

But not everyone in Japanese industry is convinced, including Shigeru Muraki, an executive at Tokyo Gas, who favours investment in ammonia fuel instead.

"Even with carbon capture and storage methods, it can't be considered as green hydrogen," he said, referring to the HESC project.

He sees green hydrogen produced from renewable sources as likely to become price competitive with time.

Environmentalists like Nicholas Aberle, from the campaign group Environment Victoria, are deeply sceptical.

They fear "a situation in which coal-to-hydrogen can only be made commercial without (carbon capture), and we can see greedy companies trying to push ahead despite the climate impacts," he said.

Commercial-scale hydrogen production from coal without carbon-capture would be "climate vandalism", he said.

BERLIN — The German economy grew by 8.2 per cent in the third quarter and is forecast to shrink less than expected in 2020, official data showed on Friday, even as the country faces new shutdowns to contain a second coronavirus wave.

Federal statistics agency Destatis said the rebound in July to September, coming after a historic slump in the second quarter, was driven by "higher final consumption expenditure of households, higher capital formation in machinery and equipment and a sharp increase in exports".

Analysts from financial information service Factset had predicted an increase in gross domestic product of 7.4 per cent after a plunge of almost 10 per cent during the second quarter.

Overall, the government now expects Europe's top economy to shrink by 5.5 per cent in 2020, Economy Minister Peter Altmaier said — an improvement on September's prediction of 5.8 per cent.

Its estimate of 4.4 per cent growth for 2021 remains unchanged.

The recovery is subject to the further development of the pandemic, "but I am sure that with the tough and decisive measures we have taken... we have a real chance to achieve this growth", Altmaier said.

New shutdowns 

Germany, like the rest of the continent, has in recent weeks been engulfed by a second wave of COVID-19, with European Central Bank chief Christine Lagarde noting that recovery in the single currency zone was "losing momentum more rapidly than expected".

Having been praised for its handling of the first wave in the spring, the country is now regularly reporting more than 10,000 new cases a day and saw a peak of 18,600 on Friday.

Cultural, leisure, as well as food and drink sectors have been ordered to close from Monday to the end of November, in a new round of shutdowns that industries have warned could lead to a raft of bankruptcies.

To reflect the pandemic situation, the government has revised downwards its prediction for growth in the fourth quarter from 1.1 to 0.4 per cent.

But Altmaier said he was optimistic that the impact of the shutdowns would not be as great as earlier in the year.

"The economy is much better prepared for the pandemic and for the need to control it in the autumn than it was in spring," he said.

While Europe locks down again to confront the virus flare-up, Asia remains open for business, helping German exporters and carmakers especially.

Europe's supply chains are also unaffected this time around as EU borders stay open, he added.

'We will go bankrupt' 

German restaurants, bars and cultural facilities will be closed from next week, though schools, daycare centres and shops will remain open.

The KfW public investment bank has predicted that more than a million jobs could be lost this year in small- and medium-sized enterprises.

Many blue-chip German businesses have already announced sweeping job cuts, including 30,000 at flagship airline Lufthansa, 8,000 at tour operator TUI and 6,000 at carmaker BMW.

In the hospitality sector, professional associations are warning that up to a third of hotels and restaurants could be forced to close their doors for good by the end of the year.

"Over the last eight months, our turnover has plunged between 90 and 100 per cent," said Cordula Weidenbach, whose company rents out furniture for trade fairs in Munich.

"If this continues, we will go bankrupt." 

Berlin has pledged an extra 10 billion euros ($12 billion) in aid for businesses affected by the November shutdown. 

Companies will be compensated for up to 75 per cent of their turnover during the weeks they are forced to close, whereas previous aid could only be used to cover fixed costs such as rent and utility bills.

The government has also already extended its short-time working scheme for a total of 24 months. 

But some analysts fear it will not be enough to prevent long-term damage.

"There is unfortunately still no evidence that you can simply turn on and off an economy like a light switch without causing more structural damage," said Carsten Brzeski of the ING bank, warning that "a double-dip looks unavoidable".

BERLIN — Berlin’s new international airport officially opened on Saturday with first flights operated by low-cost EasyJet and German national carrier Lufthansa. 

The flights touched down at Berlin Brandenburg Airport (BER) around 2:00pm (13:00 GMT) after flying in from nearby Tegel Airport and Munich, respectively.

Many Germans had almost given up on the airport after years of delays and spiralling costs which saw the facility finally open nine years late.

When it did, there was little fanfare given the deep crisis the aviation industry is going through amid the global coronavirus pandemic which has decimated travel demand.

As a result, “We will simply open, we will not have a party,” Engelbert Luetke Daldrup, president of the airport’s management company, had said beforehand.

Edging further away from any feeling of celebration, climate demonstrators marched on the building to show their opposition to the new facility.

Some brandished a banner reading “BER?: Take off! A crash flight into the climate crisis”.

The new airport was meant to celebrate German reunification but became mired in years of delays and false steps, as well as the added complications wrought by COVID-19.

It is designed to replace ageing Tegel, along with Schoenefeld, which is next door. 

Nonetheless, the opening is a watershed moment for the project, intended as a symbol of German unity and engineering prowess after the country came together after being divided for nearly half a century.

Economy Minister Peter Altmaier spoke Friday of his “joy and happiness” at the airport finally being able to open.

“It weighed on all of us that there were no prospects of [the airport] getting up and running for many years,” he said. “We are obviously glad that it is now possible.”

Financial black hole 

Since construction began in 2006, the project has been dogged by one failure after another that turned it into a financial black hole and a national laughing stock.

Located in the southeast corner of the capital, the airport was originally due to open in 2011. It now begins operations in the middle of the worst aviation crisis ever, thanks to COVID-19 restrictions which continue to suffocate air travel and are forecast to do so for many months to come.

There is also the climate crisis. The pressure group Extinction Rebellion organised acts of “civil disobedience” to mark their opposition to the new facility as they protest aviation’s impact on global warming. 

Wood panelling and chrome give the interior of Terminal 1 a 1990s feel, with the “Magic Carpet”, a huge, bright red artwork by American artist Pae White suspended from the ceiling, adding a touch of colour. 

The airport, Germany’s third-largest after Frankfurt and Munich, has been designed to welcome 27 million passengers a year, but in November it will likely see only 20 per cent of usual air traffic owing to the pandemic.

Terminal 2 is not to open until spring 2021. 

About 15 shops and restaurants out of just over 100 will remain shut, while the rest will keep “limited opening hours” because of low traffic, a spokesman said.

None of this is good news for BER, initially projected to cost 1.7 billion euros ($2 billion) but already beyond the 6.5 billion-euro mark. 

The airport has been granted 300 million euros in state aid to help safeguard jobs until the end of 2020. 

But the health crisis has already affected employment: In late July, Berlin’s airports announced the loss of 400 jobs from a total of 2,100. 

Luetke Daldrup hopes the situation will improve in the first half of next year. 

But the International Air Transport Association does not expect global air traffic to reach pre-crisis levels until 2024. 

The first passenger plane to take off from BER is slated to be an EasyJet flight to London Gatwick, departing at 6:45am on November 1.

Tegel, beloved by many Berliners for its unconventional hexagonal design and ease of access, is to welcome its final flight on November 8.

MEXICO CITY — Mexico said on Friday its economy, the second-biggest in Latin America, showed signs of recovery in the third quarter after it relaxed pandemic control measures that had triggered an unprecedented slump.

Gross domestic product (GDP) rebounded 12 per cent in the July-September period from the previous quarter, the most since record-keeping began several decades ago, according to an official preliminary estimate.

Compared with a year earlier, GDP was down 8.6 per cent, national statistics institute INEGI reported.

"Our economy is recovering," said President Andres Manuel Lopez Obrador.

"Our forecast is coming true that we would fall due to the pandemic, but rebound quickly, like a V," he told reporters.

The economy suffered a record 18.7 per cent plunge in the second quarter from a year earlier after the country was semi-paralysed by lockdown measures.

Mexico has registered more than 90,000 coronavirus deaths — one of the world's highest tolls.

The government imposed lockdown measures at the end of March and started gradually reopening the economy in June.

A rise in employment in September and October means the labour market could return to pre-pandemic levels by the end of the first quarter of 2021, Lopez Obrador said.

'Second wave' 

Analysts, however, struck a more cautious tone, saying that the economy still faces a difficult path ahead.

"The recovery is far from complete," said Gabriela Siller, an economist at Banco BASE, noting that Mexico was still in the grips of the pandemic.

"A second wave [of infections] is likely to slow down the recovery," she warned.

The Mexican economy has now posted six straight quarters of year-on-year declines, something not seen since 1983 during a severe financial crisis, Siller noted.

Some analysts have criticised Lopez Obrador for not spending more to boost the economy, particularly the private sector, in the face of the coronavirus outbreak.

The left-wing populist says his priority is helping ordinary Mexicans with social aid and loans while avoiding saddling the country with increased debt.

Last month, the central bank warned that the economy was in danger of shrinking by 12.8 per cent for the whole of 2020 if the pandemic worsens.

The International Monetary Fund has urged Mexico to do more to boost the economy with fiscal and monetary stimulus.

It forecasts that Mexican GDP will shrink 9 per cent in 2020 before rebounding 3.5 per cent in 2021.

The government announced a $14 billion investment plan this month in cooperation with the private sector to boost the economy through infrastructure projects.

NEW YORK — Pressured by a prolonged commercial travel downturn and the hit from 737 MAX, Boeing on Wednesday announced additional job cuts that will lower headcount by 30,000 positions over two years.

The aircraft manufacturer, which has been in belt-tightening mode throughout 2020 in the wake of the coronavirus on top of the 737 MAX crisis, plans to eliminate around 7,000 more jobs through the end of 2021. 

The latest announcements will shrink headcount down to 130,000 from 160,000 in January of this year, a drop of nearly 19 per cent in less than two years.

"The global pandemic continued to add pressure to our business this quarter, and we're aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term," said Chief Executive Dave Calhoun.

A sharp drop in commercial plane travel has prompted airlines to cancel plane orders or defer deliveries, crimping Boeing's revenues. 

On top of that, the company's finances have been under pressure due to the grounding since March 2019 of the Boeing 737 MAX, which is nearing regulatory approval to resume service after a lengthy oversight process with air travel authorities.

In the third quarter, Boeing reported a loss of $449 million, compared with profits of $1.2 billion in the year-ago period as revenues fell 29.2 per cent to $14.1 billion.

Calhoun has emphasised that while Boeing faces a difficult medium-term environment, it expects airline demand to eventually return and that the company is well positioned in the defence and space business, which is steadier than commercial travel.

Calhoun has taken steps in 2020 to bolster its cash position since the coronavirus devastated the travel market. 

Besides two voluntary layoff programmes and involuntary job cuts, these have included suspending dividend payments, trimming commercial plane production and announcing a decision to consolidate manufacturing of the 787 Dreamliner plane to one venue from two in a cost-saving move.

The company has also taken steps to raise cash in the face of the difficult market, undertaking a $25 billion bond offering in the spring that averted the need to take advantage of a US government program that had been established for the company.

Boeing did not announce additional reductions in commercial plane production. 

The company said it made "steady progress" to return the MAX to service following the lengthy grounding. 

Earlier this month, the top European air safety regulator said he expected that the planes could start flying before the end of the year. 

The head of the US Federal Aviation Administration also signaled the plane could soon be cleared, while emphasising that work still had to be completed before final approval. 

Shares in Boeing fell 0.8 per cent to $154.01 in pre-market trading.

LONDON — European and US stock markets tanked on Wednesday while oil prices plunged as investors braced for the apparently imminent introduction of tighter lockdown measures to combat soaring coronavirus infection rates, dealers said.

In afternoon deals, Frankfurt was down 4.5 per cent and Paris stocks shed 4.2 per cent, while London lost 3.1 per cent, with sentiment plagued by an alarming surge in COVID-19 cases in Europe and the United States — and a spike in deaths.

Wall Street’s main indices also slumped, with the Dow down 3.1 per cent in late morning trade.

More than 500,000 new coronavirus cases were reported worldwide on Tuesday in a new record, according to a tally compiled by AFP.

The euro dived against the dollar while oil prices tumbled on deepening demand fears, with the main US contract down more than 5 per cent.

France was expected to present tougher restrictions as doctors warned many hospitals are just days away from being overrun with patients.

Media speculation was rife that France would announce a second lockdown, one day after officials announced 523 coronavirus deaths in 24 hours — the highest daily toll since April.

‘Grim’ 

“Grim. That’s the only word that can describe the markets on Wednesday,” said Spreadex analyst Connor Campbell.

“Investors’ COVID-19 fears [are] attacking stock prices in ways not seen since the start of the Western phase of the pandemic back in March.”

“They are not wrong to be worried”. 

French President Emmanuel Macron is likely to announce a month-long national lockdown in France, he added.

German Chancellor Angela Merkel is also seeking drastic new curbs, including fresh shutdowns hitting leisure, sports and the food and drink sectors, in crisis talks with Germany’s regional leaders.

The upsurge in coronavirus fears comes as investors have essentially given up on the chances of a new stimulus package out of Washington.

With US lawmakers unlikely to agree any new rescue package before Tuesday’s presidential election, analysts said the new wave of virus infections and lingering uncertainty over the vote mean equities will face a wobbly few days.

Some experts have already warned of a double-dip recession as new restrictions choke off the recovery seen in the third quarter of the year.

‘Double whammy’ 

“The double whammy of fears of further lockdowns crimping any tentative economic recovery in the UK and Europe, and a follow through of overnight weakness from the US based partly on the lack of further stimulus, have had a negative impact on investor sentiment,” Interactive Investor analyst Richard Hunter said.

The impact of this year’s lockdowns and travel restrictions was laid bare on Tuesday as the World Tourism Organisation said the sector had seen a 70 per cent collapse in business, leading to a $730 billion loss in revenues, while the UN’s trade body said foreign direct investment was likely to slump 40 per cent.

“If global economies aren’t going to be functioning as fully as had been hoped, for any number of reasons, then the hoped-for earnings recovery just might not live up to the currently lofty expectations,” said analyst Patrick J. O’Hare at Briefing.com.

“There is an ample basis for buyers to keep to the sidelines, creating lower bids that have the potential to feed even lower prices,” he added.