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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Jaguar launches I-Pace one-make racing series

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Luxury carmaker Jaguar has announced a one-make racing series based around its electric I-Pace sports car, with the first race taking place next year.

The series, known as the I-Pace eTrophy, will use an ‘arrive and drive’ format for 20 drivers at each race with full technical support, spare parts and equipment. The modified electric I-Paces will use technology from the manufacturer’s I-Pace SUV, which will go on sale later this year.

“With 20 identical specification production based I-Pace eTrophy race cars going head to head, it comes down to the drivers and their individual driving styles to be crowned champion,” the company said. “Held over ten races and in some of the world’s most celebrated cities, the Jaguar I-Pace eTrophy promises to be the next chapter in our Race To Innovate.”

The new series will appear on the supporting bill of the all-electric Formula E world championship, which Jaguar Racing joined in 2016. The company recently announced that all its new road cars will be electric or hybrid from 2020 onwards.

“Jaguar returned to racing in 2016 with the mission ‘Race to Innovate’,” explained Gerd Mäuser, Jaguar Racing chairman. “With the launch of the Jaguar I-Pace eTrophy, we’ve strengthened our commitment to battery electric vehicles, international motorsport and Formula E. As a British team, we’re proud to announce today the launch of the world’s first production battery electric vehicle championship. We’ve always said we want to prove our electrification technologies on the track – this is the proof.

“I’m looking forward to seeing a full grid of Jaguar I-Pace race cars in late 2018, soon after the first Jaguar I-Pace hits the road in Europe. Ultimately, this innovative series will enhance the technology in our future electric vehicles and benefit our customers. Formula E has grown exponentially since we joined as the first premium manufacturer last year, with recent commitments from Audi, Mercedes-Benz and Porsche,” he said.

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Offshore wind energy now cheaper than nuclear or gas as prices tumble

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The average cost of offshore wind energy has fallen 47% since February 2015, according to the results of an auction of 3,196 megawatts of power generated by three new windfarms.

The three projects, located off the coasts of Yorkshire, Lincolnshire and north-east Scotland, can power the equivalent of 3.3m homes and the results of the auction for contracts for difference were announced by the Department for Business, Energy and Industrial Strategy.

According to trade body RenewableUK, the price comes in lower than nuclear power and gas. The windfarms are scheduled to come onstream between 2021 and 2023.

“We knew today’s results would be impressive, but these are astounding,” said RenewableUK’s CEO Hugh McNeal. “Record-breaking cost reductions like the ones achieved by offshore wind are unprecedented for large energy infrastructure. Offshore wind developers have focused relentlessly on innovation, and the sector is investing £17.5bn into the UK over the next four years whilst saving our consumers money.

“Today’s results are further proof that innovation in the offshore wind industry will bring economic growth for the UK on an industrial scale. The UK needs to establish new trading opportunities as we leave the European Union, and the UK’s offshore wind sector is a world leader in a global renewable energy market currently worth $290 billion a year.”

 

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Brexit on agenda as British Irish Chamber meets Brokenshire

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UK secretary of state for Northern Ireland James Brokenshire discussed Brexit with chambers of commerce from across Ireland at a British Irish Chamber of Commerce working lunch at KPMG in Dublin yesterday.

The UK/EU departure talks were top of the agenda, with Brokenshire reiterating the UK government’s commitment to “frictionless trade on the island of Ireland” as he explained his government’s negotiating position.

“The British Irish Chamber is delighted to be hosting secretary of state Brokenshire in Dublin today,” said director general John McGrane. “Given the number of political engagements the secretary of state has to keep while in town, I think his availability to meet with business groups shows the importance of maintaining the vital trade network that exists on the island.

“The chamber welcomed the publication of last week’s papers and especially the commitment shown by the UK government to borderless trade on the island of Ireland and the continuation of the Common Travel Area,” he said. “While we are happy to see suggestions put forward to maintain both of these, we are still cautious about the feasibility of these proposals and will continue to positively engage with governments on both sides to ensure that a solution is found that works for all concerned.”

Trade between Ireland, Northern Ireland, Scotland, Wales and England is wroth €60bn per annum and supports 400,000 jobs according to the chamber, which represents businesses and employers with interests in both islands.

Shaun Murphy, managing partner of KPMG noted that “there is an urgent need to forge both practical and realistic solutions to address the Brexit issues of relevance to Ireland – North and South – and we welcome all efforts to resolve these matters in the interests of business across the island.”

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Lidl leapfrogs Waitrose in UK supermarket league

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Lidl has beaten Waitrose into seventh place in the UK supermarket rankings, dominated as usual by Tesco.

The German discounter has achieved 5.2% of the Kantar Worldpanel market share, up from 4.5% this time last year – beating Waitrose, which remained static on 5.1%. The latest rankings are:

  1. Tesco
  2. Sainsbury’s
  3. Asda
  4. Morrisons
  5. Aldi
  6. The Co-operative
  7. Lidl
  8. Waitrose
  9. Iceland
  10. Ocado

“There is good news for the UK’s largest retailers, as the recovery which has so far defined 2017 continues apace,” explained Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel. “All four of Britain’s biggest grocers managed to grow sales for the fifth consecutive period, a run of collective success not seen since 2013.

“However, this welcome period of sustained growth hasn’t been enough to entirely offset pressure from the discounters: the big four now account for just 69.3% of the UK grocery market – down from 76.3% five years ago – and that looks set to fall further in the coming months.”

The latest data covers a 12-week period ending 13 August, with 10 million households visiting Lidl to stock up on alcohol and fresh produce in particular.

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Unemployment and zero-hour contracts down in latest jobs data

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The UK employment rate is at its highest level since comparable records began in 1971, according to the latest data released by the Office of National Statistics today.

The ONS also revealed that 20,000 fewer people are on zero-hour contracts compared to this time last year, with 883,000 depending on zero-hour employment for their main income.

“Estimates from the Labour Force Survey show that, between January to March 2017 and April to June 2017, the number of people in work increased, the number of unemployed people fell, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) also fell,” the ONS said.

The employment rate is at 75.1% and the unemployment rate is now 4.4%, down from 4.9% last year and the lowest since 1975.

“Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.1%, both including and excluding bonuses, compared with a year earlier,” the data revealed.

There are now 32.07m people at work in the UK, 125,000 more than in the first three months of the year and 338,000 more than this time last year.

 

 

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Evo Payments and AA announce new partnership and brand

Brian Cleary, managing director, Evo Ireland and UK.

Dublin-headquartered Evo Payments international has announced a deal with the AA in the UK to provide card pay technology to UK merchants under the new CardPay brand.

The deal is the first of its kind for the AA, which is moving into B2B financial services on the back of high consumer trust research rankings.

The service will be managed from Evo’s Dublin HQ where it operates under the BOI Payment Acceptance brand, a collaboration between Evo and Bank of Ireland.

“We are very excited to announce this new partnership with the AA,” said Evo Ireland and UK managing director Brian Cleary. “BOIPA only entered the payments market in early 2015, and in a very short space of time we have been hugely successful in delivering a superior payment service and value proposition for businesses across Ireland.

“From small corner shops and online traders to some of the country’s large corporates, Irish business owners have been quick to recognise the obvious benefits of our products, including the ability to process more transactions, experience reduced banking costs, and less exposure to theft and the misappropriation of cash.

“Applying these same principles to the UK market felt like a logical next step, and in partnering with the AA we are joining up with a universally trusted brand that prides itself on its market-leading financial products and first-class customer service.”

The deal follows a jobs announcement earlier this year, with 50 new roles created amid a €9.1m investment and the opening of a new Irish HQ – bringing the company’s headcount to 120 serving Ireland, North America and Europe.

AA Financial Services director David Searle also welcomed the news.

“From roadside emergencies to home insurance and savings, the AA has always been trusted to stand by the consumer’s side, whatever happens, and campaign for a better deal. With nearly a fifth of our members also running a small business, we have for some time been looking at what we can do to help, particularly given the current economic climate.

“UK small businesses are the bedrock of the country’s economic confidence. The challenges many SMEs have with payment terminals, often relating to opaque pricing tariffs and surprise add-ons, need to be put right and the status quo needs to be disrupted.

“Our partnership with EVO allows us to become a force for change in the UK card payments market, to bring greater simplicity, trust, and fairness for our members – which is at the heart of everything we do.”

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Revenue up at Paddy Power Betfair as CEO Corcoran departs

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Merged betting giant Paddy Power Betfair has announced a 9% rise in revenues and the departure of CEO Breon Corcoran.

Corcoran was instrumental in the merger of the two former rivals, and will be replaced by Worldpay CEO Peter Jackson. “Breon has been talking with me and the Board about his long-term plans and accordingly, some months ago, we intensified our focus on executive succession planning to ensure an orderly transition,” explained chairman Gary McGann.

“While we will be sorry to see Breon leave, we are delighted to have appointed a candidate of Peter’s calibre to succeed him. The board’s unanimous selection of Peter follows a thorough global search for an individual with the skills and expertise to match the ambition of the group. The combination of his executive expertise together with his understanding of the Paddy Power Betfair business as a non-executive director uniquely positions Peter to assume the role of CEO and lead the group in its next stage of development.”

The group has also announced its H1 2017 results, headlined by a 9% growth in revenues to £827m and underlyling EBITDA up by 21% to £220m.

“We continue to make substantial investments to position Paddy Power Betfair as a structural winner in a dynamic and highly competitive market,” said Corcoran.

“The focus of this investment is to use technology to improve efficiency and minimise the cost of servicing our customers and to further enhance our customer proposition. The integration of our technology platforms is on track for completion by the end of the year and will bring significant benefits including increased quantity and pace of new product development in 2018 and beyond.

“Ahead of that, our customers and shareholders are already seeing benefits from efficiencies and investments. In the first half alone, customers enjoyed approximately £30m of extra value through better odds, more generous offers and new loyalty benefits. Operating efficiency and the annualisation of merger-related cost savings resulted in strong operating leverage in the period, with operating profit up 22%.”

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Inflation at 2.6% as Bank of England leaves rates untouched

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The Bank of England has decided to leave interest rates at 0.25% in a 6-2 split decision, and announced that inflation is at 2.6% for June, up from 2.3% in March.

Governor Mark Carney also outlined an analysis of Brexit and options available to the bank’s Monetary Policy Committee (MPC). “The UK economy is beginning the process of adjusting to a new, as yet uncertain, economic relationship with the European Union,” he said today.

“Monetary policy cannot prevent the weaker real incomes likely to accompany the move to new trading arrangements with the EU, but it can influence how this hit to incomes is distributed between job losses and price rises. And it can support UK households and businesses as they adjust to such profound change.”

Carney also said that markets, households and businesses reacted in different ways to the referendum outcome, with markets expecting poorer UK economic performance, households being slow to react but eventually slowing their spending, and businesses investing “less aggressively”.

“In the MPC’s central projection, GDP growth remains sluggish in the near term as the squeeze on households’ real incomes continues to weigh on consumption,” he said. “Growth then picks up to just above its reduced – or modest – potential rate as net trade and business investment firm up and consumption growth gradually recovers in line with modestly rising household incomes.”

The MPC expects inflation to peak around 3% in October and to remain around 2.75% until early next year, Carney also predicted.

“Conditional on the current market curve, which implies that bank rate will rise by half a percentage point over the next three years, inflation is projected to remain a little above the target at the end of the forecast period – an overshoot that reflects entirely the effects of the referendum-related fall in sterling.”

 

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GDP growth and interest-rate rise predicted amid positive UK forecast

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GDP growth of almost 2%, an interest rate hike in Q1 2018 and inflation easing to 2% in 2019 are all part of the National Institute of Economic and Social Research’s latest forecast for the UK economy.

Predicting 1.7% GDP growth this year and 1.9% in 2018, the NIESR has brought forward its prediction of an interest rate increase from Q2 2019 to Q1 2018, a “modest withdrawal of some of the additional stimulus that was injected into the economy after the 2016 EU referendum,” it said. The think tank also predicted an elimination of the fiscal deficit in 2022, and a peaking of debt to ration in 2018/19.

“The economy has slowed each year since 2014 and according to our forecast, 2017 will mark the trough for GDP growth,” it said in its analysis. Thereafter, we envisage a modest recovery that takes economic growth to a level that is close to potential.”

It also described movement in the UK’s labour market as “puzzling”, with employment growing, unemployment dropping and wage growth remaining “muted”.