Michael O’Leary reacts to Ryanair “mess”

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Ryanair CEO Michael O’Leary has responded to the airline’s mass cancellation of flights with an apology, several days after the issue first reared its head.

The Irish airline is in crisis mode, cancelling dozens of flights a day as it struggles with a backlog of annual leave. Media reports this weekend were dominated by inconvenienced passengers voicing their grievances on social media and in airports.

“While over 98% of our customers will not be affected by these cancellations over the next six weeks, we apologise unreservedly to those customers whose travel will be disrupted, and assure them that we have done our utmost to try to ensure that we can re-accommodate most of them on alternative flights on the same or next day,” said O’Leary today.

Confusion regarding the cause of the cancellations mounted over the weekend, with the Irish Airline Pilots’ Association claiming that 700 pilots have left the airline in the past financial year and that issues surrounding annual leave have been known for some time.

“Ryanair is not short of pilots – we were able to fully crew our peak summer schedule in June, July and August – but we have messed up the allocation of annual leave to pilots in September and October because we are trying to allocate a full year’s leave into a nine-month period from April to December,” O’Leary responded. “This issue will not recur in 2018 as Ryanair goes back onto a 12-month calendar leave year from January 1st to December 31st 2018.

“This is a mess of our own making,” he said. “I apologise sincerely to all our customers for any worry or concern this has caused them over the past weekend. We have only taken this decision to cancel this small proportion of our 2,500 daily flights so that we can provide extra standby cover and protect the punctuality of the 98% of flights that will be unaffected by these cancellations.”

The crisis is expected to cost the airline millions in compensation under European regulations.

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Markets Update: Steady as she goes

With the global index and commodities such as gold, silver and oil losing ground, Ian Slattery examines the markets to see where gains can be made.

It was a choppy trading week for equities, as the market struggled to gain momentum in either direction. At the June Federal Reserve meeting interest rates were increased by 25 basis points, boosting the target range to 1%-1.25%. This move had been well flagged by Fed Chair Yellen and her colleagues, and thus invoked very little market reaction.

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Ian Slattery

Data emanating from the US somewhat disappointed last week, as softer than expected inflation data led to a fall in Treasury yields (yields move inversely to price). Housing and retails sales figures also came in slightly weaker than forecast.

In Europe, French President Macron led his En Marche party to a decisive parliamentary victory.

En Marche and its centrist ally Modem secured 350 of 577 seats, which reinforces Macron’s position post the Presidential election. However, opponents will point to the record low turnout as a sign that issues remain for the French electorate.

The global index lost some ground last week, down by 0.1%. Gold and silver both slipped further this week, down by 1% and 3% respectively.

Oil continued to lose ground on the back of higher US stockpiles and increased Libyan production.

The price of the US 10-year bond rose as yields fell to 2.15% from 2.20% a week ago.

Oil continued to lose ground on the back of higher US stockpiles and increased Libyan production

The equivalent German yield rose slightly to 0.28% from 0.26%. The EUR/USD rate was broadly steady at $1.12, whilst EUR/GBP closed at 0.88.

THE WEEK AHEAD

Thursday June 22nd
Eurozone consumer confidence data goes to print where a further rise is expected. This will be a positive follow on from the May figure, which was the best in ten years.

Friday June 23rd
Eurozone manufacturing and services PMI data for June is released. Manufacturing figure is forecast to edge down slightly, whilst services are expected to continue to improve.

 

The team at Zurich Investments is a long established and highly experienced team of investment managers who manage approximately €21.6bn in investment of which pension assets amount to €9.6bn. To find out more about Zurich Life’s funds and investmentsw: zurichlife.ie/fundsTwitter: @ZurichLifeLinkedIn: linkedin.com/company/zurich-life-assurance-plc

Warning: Past performance is not a reliable guide to future performance. Benefits may be affected by changes in currency exchange rates. The value of your investment may go down as well as up. If you invest in these funds you may lose some or all of the money you invest.

 

UK yearly inflation jumps to 2.9% on latest monthly figures

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Inflation in the UK has risen to 2.9% according to figures released today by the Office of National Statistics.

May’s Consumer Prices Index (CPI) results are an increase on the 2.7% recorded for April, making the inflation rate the highest since June 2013 amid a Bank of England target of 2%. CPIH – a measurement of CPI including owner occupiers’ housing costs – is at 2.7%, up from 2.6% last month.

“The rate has been steadily increasing following a period of relatively low inflation in 2015 and is at its highest since April 2012,” announced the Office for National Statistics (ONS) today.

It identified rising prices for recreational and cultural goods and services as the main culprit, with games, toys and hobbies contributing to the rise. Electricity and food prices also played their part.

Reductions in fuel prices and air and sea fares mitigated the rise to some extent, as the timing of Easter influenced travel bookings this year.

Reaction to the news has centred around wage stagnation as inflation eats into household income, and around a slump in sterling amid Brexit and electoral turmoil – with George Osborne’s London Evening Standard leading with it this afternoon.

UK among least corrupt countries, according to global watchdog

The UK has emerged as the tenth least corrupt country in the world, according to the latest Transparency International report.

The tenth place ranking, which the UK shares with Germany and Luxembourg, comes as the three countries have been awarded a score of 81. Regular high-achiever Denmark, which heads the list again, has a score of 90.

“In too many countries, people are deprived of their most basic needs and go to bed hungry every night because of corruption, while the powerful and corrupt enjoy lavish lifestyles with impunity,” said Transparency International chair José Ugaz.

Further down the list, the US occupies 18th position, Ireland 19th, France 23rd and Russia 131st. Bottom of the table is Somalia, with a score of just 10. The global average is 43, and there is a strong link between corruption and inequality.

“The interplay of corruption and inequality also feeds populism,” Transparency International reports. “When traditional politicians fail to tackle corruption, people grow cynical. Increasingly, people are turning to populist leaders who promise to break the cycle of corruption and privilege. Yet this is likely to exacerbate – rather than resolve – the tensions that fed the populist surge in the first place.”

Mirror and Express groups in media merger talks

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The owners of the Daily Mirror and Daily Express parent companies have resumed deliberations after two-year break.

Trinity Mirror has confirmed that it is in fresh talks with Richard Desmond’s Northern & Shell group, which owns Express Newspapers.

“The board of Trinity Mirror PLC notes the recent media speculation and confirms that it is at an early stage of discussions towards taking a minority interest in a new company comprising certain of Northern & Shell’s assets,” said Trinity Mirror in a London Stock Exchange statement. “No offer has been made and there is no certainty that any agreement will be reached.”

Trinity Mirror is the UK’s biggest newspaper group, with a portfolio that includes the Daily Mirror, Sunday Mirror, the Scottish Sunday Mail and Daily Record, and a vast array of regional titles acquired from its takeover of Local World in 2015. It now employs over 6,000 people and is home to around 260 titles.

Express Newspapers, meanwhile, is a subsidiary of Richard Desmond’s Northern & Shell group. It played a key role in the Brexit referendum, taking a staunch Eurosceptic line. Northern & Shell is also home of the OK! and New! celebrity magazines, and Desmond bought the Express portfolio in 2000 having built up a proprietorship of adult media titles in the 1980s and 1990s. He sold Channel 5 to Viacom for around half a billion pounds three years ago.

The merger discussions come amid an industry-wide move towards consolidation driven by a decline in print circulation and advertising sales.

 

 

 

 

Five things you need to know about the new UK ambassador

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The appointment of Sir Tim Barrow as the UK’s ambassador to the EU comes as Theresa May’s government attempts to move on from the fallout over his predecessor’s departure.

But who is Sir Tim Barrow, and what are the implications of the furore?

  1. Sir Tim is not Sir Ivan

The resignation of Sir Ivan Rogers earlier this week saw the government scramble to limit the damage. Rogers, the UK’s senior diplomat in the EU, quit over “muddled thinking” and a need to “speak truth to power” as the UK prepared for Brexit, and he warned that “serious multilateral negotiating experience is in short supply in Whitehall”. His resignation was jumped upon by the anti-Brexit side, and Theresa May’s first priority will have been to appoint a figure her government can work with.

  1. Sir Tim Barrow is an EU-experienced diplomat

Warwick- and Oxford-educated Barrow joined the Foreign & Commonwealth Office in 1986 and has served in Kiev, Moscow and Brussels. He has also been first secretary at UKRep, effectively the UK’s Brussels embassy – his strong EU experience making him an obvious candidate for the new role.

  1. He was knighted as ambassador to Russia

Barrow served as UK ambassador to Russia from 2011-2015, and was knighted in the 2015 new year honours for services to British foreign policy and interests in Russia.

  1. His appointment came through the normal civil service route

As the anti-Brexit side saw the Rogers controversy as evidence of the government’s mismanagement, May’s supporters saw Rogers as half-hearted towards Brexit and raised questions about the non-political status of the civil service. As a career diplomat, Sir Tim Barrow has come up through the ranks as usual, in a manner that suggests that the furore over civil service impartiality will recede.

  1. His appointment has largely been welcomed

Reaction to Barrow’s elevation to ambassador has mainly been calm. Sir Simon Fraser, former head of the Foreign Office, told the BBC: “I think what we need in Brussels is somebody who has experience, who’s going to be a real professional negotiator, who will be sitting in a room with lots of other very experienced and knowledgeable negotiators, and who will be able to hold his or her own in that negotiation.” Meanwhile, UKIP figures have criticised the appointment.