JPMorgan looks to cut office space in Manhattan – Bloomberg News

JPMorgan Chase & Co is looking to sublet big blocks of office space in Manhattan, Bloomberg News reported on Tuesday, citing people with knowledge of the matter.

The bank is looking to sublet just under 700,000 square feet at 4 New York Plaza in the Financial District and more than 100,000 square feet at 5 Manhattan West in the Hudson Yards area, the report said. (bit.ly/3bT02Vj)

Due to COVID-19 pandemic-led lockdowns and stay-at-home orders, fewer people have been going to office, which has prompted companies to reassess the need for real estate.

“It is too early to comment on specifics as we continue to learn and adapt to this current situation and how it impacts our commercial real estate needs. We are committed to New York and are planning for the next 50 years with our new headquarters here,” a spokesperson for the bank said.

Real estate broker Jone Lang LaSalle is marketing JPMorgan’s space, the report said.

In October, JPMorgan Chief Executive Officer Jamie Dimon said JPMorgan would press ahead with its plans to build a large headquarter in New York that is scheduled to open in 2024. (reut.rs/3uNyqcZ)

U.S. budget airlines plot pandemic breakthrough

The COVID-19 pandemic has reshaped the global travel landscape and U.S. no-frills carriers are pouncing.

As legacy airlines shrink to contain costs, budget carriers Spirit Airlines, Allegiant Travel and privately-owned Frontier Airlines are resuming pilot hiring and expanding networks to seize turf dominated by larger rivals.

The three airlines’ combined U.S. market share, which barely topped 10% before the pandemic, could grow by 10 percentage points this year alone, said René Armas Maes of UK-based consultancy MIDAS Aviation.

“Ultra low-cost carriers want to attack head-to-head; they believe they’re in a better position to rebuild travel demand,” he said.

Las Vegas-based Allegiant has told prospective pilots whose hiring was halted as the pandemic unfolded: “We have recalled all of our furloughed pilots and are now planning for exciting growth opportunities.”

Spirit and Frontier have posted pilot job ads and are taking delivery of Airbus A320neo jets that could open longer routes, including coast-to-coast flying traditionally controlled by legacy, or full-service, carriers.

By contrast, American Airlines has gone from hiring 100 pilots a month before the pandemic to threatening 1,850 furloughs without fresh government assistance on labor costs.

Allegiant also stands to benefit if Congress approves a third round of COVID-19 payroll relief for U.S. airlines, but “would be just fine without it,” Chief Financial Officer Greg Anderson told Reuters.

“The leading indicators suggest that there is a nice growth trajectory for Allegiant,” said Anderson, citing Google searches, indices that track changes in city populations and infection and vaccination trends from the Institute for Health Metrics and Evaluation.

He said customer surveys also show an increased preference for smaller airports and non-stop flights, cornerstones of budget carriers’ business models.

TRIAL AND ERROR

Ultra low-cost carriers, or ULCCs, offer a no-frills experience at rock-bottom fares and charge heavily for extras like bags. They wage fare wars and are pervasive in Europe’s fragmented market but have lagged in the United States.

ULCCs are a tier below carriers like Southwest Airlines, which pioneered the low-cost concept in the 1970s and has grown to become the leading domestic airline. It provides free beverages and checked bags but keeps costs low in part by flying a single fleet-type of Boeing 737s.

U.S. mainline legacy carriers American, Delta Air Lines and United Airlines have diverse fleets that include expensive wide-body jets geared for the kind of business and international travel that has suffered most in the pandemic.

American’s unit costs excluding fuel, a key metric of efficiency, were $0.18 per available mile in 2020, more than double that of budget rivals like Allegiant, according to data compiled by financial services firm Raymond James.

This means Allegiant, which primarily uses second-hand planes and only flies on peak travel days like weekends, can more easily profit on discount fares.

And whereas legacy carriers use a hub-and-spoke network that shuttles people through costly big-city airports, the ULCC business model is based on point-to-point travel to smaller airports where they outsource much of their infrastructure.

Allegiant’s fixed costs account for just around a quarter of its total.

That flexibility helps budget carriers open new routes on a trial-and-error basis. During the pandemic, for example, they have pivoted toward beach and mountain destinations.

“Then if the route is not performing, they won’t hesitate to shut it down,” said George Dimitroff of consultants Ascend by Cirium.

But there are risks.

American, United and Delta have also shifted flights during the pandemic to pick up leisure demand and their market power and geographical reach remain formidable.

Competing with them can lure upstart airlines into relaxing cost discipline – a move described as a “path to hell” by budget airlines entrepreneur Bill Franke, who championed the ULCC model.

Together the three large airlines control around 60% of domestic travel and could chase away rivals on smaller routes if they choose, industry critics said.

But they are more burdened by debt than the ULCCs and continue to burn through millions of dollars every day, hampering their ability to grow, the critics said.

BUDGET SHIFT

Beyond low fares, experts said the pandemic has given budget carriers a fresh argument for previously wary customers.

Traditional airline perks like catering services have lost their luster in an era of masks, and budget airplanes feature the same hospital-grade aircraft filtration systems as others.

And they could benefit from more cost-conscious small and medium sized businesses changing travel policies to favor lower-cost airlines, albeit constrained by their more limited flying through large hubs.

“More price-sensitive travel will be the new normal for the next couple of years at least,” Armas Maes said.

Even so, today’s outsiders will face a competitive cycle.

After the last downturn, low-cost carrier JetBlue Airways grabbed market share from American on the U.S. east coast. Now it is grappling with competition from ULCCs and is teaming up with its old rival.

Spanish unions cry foul as Inditex shuts stores

MADRID (Reuters) – Inditex staff in Spain say they are being forced out as the owner of fast-fashion brand Zara rolls out its plan to shut up to 1,200 stores worldwide, despite a company agreement with Spanish unions to project jobs.

The world’s biggest clothes retailer is closing smaller outlets while expanding flagship stores and the Spanish closures are the first of up to 700 expected this year in Europe, as well as 100 in the Americas and 400 elsewhere in the world.

Under a December agreement, seen by Reuters, with two Spanish unions, Inditex aims to provide all affected staff with new vacancies matching their old contracts and seniority within 25 km (16 miles) of where they used to work.

But unions and staff say it’s not going to plan.

In an internal report seen by Reuters, the UGT union analysed vacancies offered by Inditex and found 40% of the new positions were outside the province where the worker in question had worked, in some cases on the other side of the country.

The report said one in four workers offered new positions in Spain so far had quit.

“If workers who used to work 40 hours are offered 12-hour jobs, hours away, that’s not preserving employment,” said Cristina Estevez, UGT’s retail representative.

UGT, the second-biggest Spanish union within Inditex, signed the deal with the company along with the leading syndicate CCOO.

An Inditex spokesman said in an email to Reuters that it was complying with the union agreement and that relocations respected, “all its principles, wording and spirit, which is to prioritise the maintenance of jobs”.

The company was offering more than one vacancy for every job lost, the spokesman said, pointing out that 75% of workers had been successfully relocated so far.

MORE NEW JOBS

Clothing sales at Inditex and rivals such as H&M and Next recovered towards the end of last year from record lows when the COVID-19 pandemic first struck, boosted by online shopping and a quick rebound in China.

But the retail industry’s recovery in the western world has been frustrated by lockdowns extending well into 2021 and slow vaccine rollouts in some countries.Slideshow ( 3 images )

While most retail jobs lost in the first quarter of 2020 in the United States and Europe have been reinstated, the number of people employed in the sector remains well below pre-pandemic levels, according to data from Eikon Datastream and Eurostat.

In the United States, the shortfall is about 400,000 jobs while in Europe it’s nearly 350,000, the data showed.

Inditex said in June it would close 1,000 to 1,200 of its smaller, less profitable stores worldwide by the end of 2021. The pandemic tipped the company into a loss for the first time though Inditex attributed the closures to strong results from its integrated online and in-store model.

So far, Inditex has announced the closure of 114 stores in Spain affecting 986 jobs, CCOO said, with unions expecting a further 186 outlets to shut this year.

The number of vacancies offered so far is equivalent to 126% of jobs affected, the Inditex spokesman said.

‘LAUGHING AT US’

Six Spanish unions contacted by Reuters, including CCOO and UGT, said the high proportion of offers in different regions for fewer hours and more evenings and weekends was beyond the scope of what they had expected.

Some workers said the options offered to them would have meant cutting their weekly hours from 30 to 40 to below 20, with shifts moved to evenings and weekends, as shown by documents seen by Reuters listing the new vacancies.

“They’re basically inviting us to leave,” said one Zara worker in Guadalajara near the capital Madrid, who spoke on condition of anonymity for fear of repercussions in her career.

“The vacancies they offered in our store were eight or 16 hours weekly, always on weekends, or even just Sundays, when almost all the staff used to do 20, 40 hours weekly. They’re laughing at us,” she said.

The spokesman for Inditex said it had offered workers in Guadalajara the best alternatives available in the vicinity.

Under the December agreement, Inditex committed to reimburse transport costs up to 90 euros a month when relocation within 25 km was impossible, and cover relocation expenses if staff had to move house. Otherwise, workers could opt to leave, receiving compensation proportionate to their years with the firm.

Some workers in Barcelona were offered vacancies in Santander, a seven-hour drive away, the UGT union said. The CGT union in Madrid, said one worker was offered a position in Melilla, an autonomous Spanish city in North Africa.

“These are disguised layoffs,” CGT secretary for Zara in Madrid, Anibal Maestro, said. “When you propose such moves, you’re forcing the workers to quit.”

BLANK CHEQUE

The Inditex spokesman said its agreement with the unions accounted for the fact that vacancies further away may be attractive to some staff, citing examples of five people who had asked to relocate long distances.

The fashion retailer, the world’s largest by revenue, expanded its global store network by a net 1,942 stores from 2012 to hit a peak of 7,199. But only 450 stores will open between 2020 and 2022, the company has said, as it seeks to boost the proportion of its online sales to 25% from 14%.

Elsewhere in Europe, negotiations over closures are still underway, according to UNI Global Union, which is overseeing the process with national unions across the region.

In a videoconference with the company’s European Works Council (EWC) in June, Inditex assured them that staff affected by closures would all receive alternative job offers.

“Both parties agree that safeguarding work, training staff in order to tackle the new functions derived from digital transformation and labour organisation … constitute the keys in the work plan,” Inditex and the EWC said in a joint statement on Dec. 21.

The Inditex spokesman said maintaining employment for existing workers was a priority wherever there were closures.

But workers on the ground remain fearful, especially those associated with unions that did not sign the agreement.

“That agreement was a blank cheque for the firm,” said Zara worker and AST union member Jose Angel Parejo, adding that he feared his 13 years at the company would end when his store in central Madrid closes this month. “They committed to an equivalence in quantity of vacancies, but not quality.”

Twitter tackles COVID-19 vaccine misinformation with labels, strike policy

(Reuters) – Twitter said it would apply warnings to tweets that contain misleading information about COVID-19 vaccines and implement a strike system of enforcement that could see users permanently banned for repeat violations.

The social media network started promoting public health information before COVID-19 was declared a global pandemic. It also aimed to remove demonstrably false or misleading content about the virus that had the highest risk of causing harm.

Since introducing its COVID-19 guidance, it said it had removed more than 8,400 tweets and challenged 11.5 million accounts.

With more and more people now looking for authoritative public health information about vaccines as programs were rolled out across the world, it said it would expand the guidance.

Katy Minshall, Twitter’s head of UK public policy, said the company recognised the role it played in giving people credible public health information.

“We continue to work with health authorities around the world – including (Britain’s health service) the NHS – to ensure high visibility access to trusted and accurate public health information on our service, including about COVID-19 vaccines,” she told Reuters.

“Today we will begin applying labels to tweets that may contain misleading information about COVID-19 vaccines, in addition to our continued efforts to remove the most harmful COVID-19 misleading information from the service.”

She said the approach built on existing work to guard against false claims about the safety and effectiveness of inoculation.

Vaccines are at the centre of government plans to fight the pandemic that has caused more than 2.6 million deaths to date.

There have been concerns, however, that public distrust of the shots could jeopardize the success of vaccination programs.

Surveys and data show varying levels of willingness to receive a shot according to country and demographic group.

In Britain, where more than a third of adults have received at least one vaccine shot, authorities are working to overcome hesitancy among some ethnic groups.

Futures jump on J&J vaccine cheer, stimulus optimism

U.S. stock index futures jumped more than 1% on Monday as Johnson & Johnson’s newly approved COVID-19 vaccine and progress in a new $1.9 trillion coronavirus relief package fueled optimism over a swift economic recovery.

Shares of cruise liner and hotel operators, and carriers including Carnival Corp, Royal Caribbean Cruises Ltd Hilton, Delta Air Lines Inc and American Airlines gained between 1% and 5% premarket.

Johnson & Johnson began shipping its single-dose shot vaccine after it became the third authorized COVID-19 vaccine in the United States over the weekend.

President Joe Biden scored his first legislative win as the House of Representatives passed his $1.9 trillion coronavirus relief package early Saturday. The bill now moves to the Senate.

Sectors that stand to benefit more from an economic rebound outperformed, with Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co jumping between 1.3% and 2.2%, and energy firms Chevron Corp and Exxon Mobil Corp between 1.6% and 3.5%.

Wall Street’s main indexes ended lower last week, with the Nasdaq suffering its worst week in four months, as a rise in long-dormant yields signaled bonds are more serious investment competition, sparking a pullback in high-valuation tech stocks.

Apple, Microsoft Corp, Facebook Inc and Amazon.com Inc rebounded between 1.3% and 2.3% on Monday.

At 06:03 a.m. ET, Dow E-minis were up 318 points, or 1.03% and S&P 500 E-minis were up 42.25 points, or 1.11%. Nasdaq 100 E-minis were up 186.75 points, or 1.45%.

Bank of America to give U.S. staff paid time off to get vaccinated – Bloomberg News

Bank of America Corp will offer its employees in the United States paid time off when they become eligible to get the COVID-19 vaccine, Bloomberg News reported on Friday, citing a memo.

Staff will have the option to use two half days, for up to four hours each, for vaccination appointments this year, according to the report. (bloom.bg/2O8ssTi)

The policy is designed to accommodate the two-dose regimen current vaccines require, Bloomberg News said.

Bank of America did not immediately respond to a Reuters request for comment.

British Airways owner IAG calls for digital health passes

British Airways owner IAG has called for digital health passes “to reopen our skies safely” as it posted a record loss for 2020 due to Covid disruption.

British Airways plane interior

IAG posted an operating loss of €7.4bn (£6.5bn) for last year after the pandemic grounded many of its flights.

UK-focused airlines got a boost this week from government plans for travel markets to possibly reopen from mid-May, prompting a flood of bookings.

But uncertainty remains about what routes will be available.

The airline group – which also owns Iberia, Aer Lingus and Vueling – called for “a clear roadmap for unwinding current restrictions when the time is right.”

“We’re calling for international common testing standards and the introduction of digital health passes to reopen our skies safely,” said IAG’s boss Luis Gallego.

IAG said that the ongoing uncertainty and duration of the pandemic meant that it could not provide a forecast for future profits.

Laura Hoy, equity analyst at Hargreaves Lansdown, said: “There’s no getting around just how ugly IAG’s final results are.

“With the coronavirus crisis clearing the skies for over a year, it’s not unexpected to see IAG operating as just a shell of its former self.

“Management has responded in the only possible way – by securing new funding and slashing costs – but ultimately the group is at the mercy of the government’s travel restrictions.”

The government is in the process of talking to to G7 and other countries to try to build a consensus on how to allow more foreign travel.

Greek tourism minister Haris Theoharis told the BBC last week that early technical discussions were underway with UK officials about how a potential passport scheme might work.

Planes parked

The International Air Transport Association (IATA) also said this week that it expects its digital Covid Travel Pass will be ready soon.

The pass is an app that verifies a passenger has had the Covid-19 tests or vaccines required to enter a country. It also verifies they were administered by an approved authority.

Transport Secretary Grant Shapps said a review of how to return to international travel while managing risk from imported cases and virus variants would report on 12 April.

Capacity cut

IAG said that revenues last year sank by 69% from €25.5bn to €7.8bn amid the coronavirus-related restrictions on travel.

During 2020 it operated at a capacity of just 33.5% of the levels seen in 2019, and for January to March this year it expects capacity will drop to just 20% of pre-pandemic levels.

The airline group has been trying to boost its finances as it burns through cash in the pandemic.

Most recently, BA secured an extra £2.45bn through a UK government-backed loan and from deferring pension contributions.

Last October, IAG got shareholder backing for a €2.74bn rights issue, adding to savings made from 12,000 planned job cuts.

Despite the hefty losses, IAG has stuck to its plan to buy Spain’s Air Europa, announcing in January the price tag had halved to €500m, with payment deferred for six years.

Coronavirus: EU urged to adopt joint ‘vaccine certificates’

Greece and Austria are urging other EU states to adopt a common Covid vaccination certificate, which could help revive Europe’s stricken tourist industry this summer.

In a virtual meeting EU leaders are also discussing how to speed up vaccinations. The EU’s slow vaccine rollout has been widely criticised.

Greece and Israel already have digital vaccination certificates. 

But France and Germany are wary, as the data on infectiousness is incomplete

There are also concerns that enabling a vaccinated minority to enjoy foreign travel while others continue to face restrictions would be seen by many as discriminatory.

A further complication is the rapid spread of more contagious Covid variants – the English, South African and Brazilian forms. So it is more likely that people will need booster jabs to remain protected.

Greek Deputy Prime Minister Akis Skertsos told the BBC that a common digital certificate “is not discriminatory at all”. He argued that non-vaccinated tourists could also visit Greece this summer, but the procedure for them would be slower – they would have to be tested and might have to self-isolate on arrival.

Greece and Cyprus have agreed to admit Covid-negative Israeli tourists this summer – those who can prove their status with the Israeli “green” digital certificate. 

Chart showing vaccine doses per 100 people in countries with the highest total vaccinations

Greek Tourism Minister Harry Theocharis said a similar deal could be reached with the UK. However, the UK government has not yet approved any vaccination certificate, nor has it given the go-ahead for foreign holidays.

Greek tourism slumped disastrously last year because of the pandemic. Its revenues fell to €4bn (£3.5bn; $5bn), from €18bn in 2019, Reuters news agency reports. Tourism makes up about a fifth of the Greek economy, employing one in five workers. 

Austrian Chancellor Sebastian Kurz tweeted that “we’re advocating a digital Green Pass, like Israel’s”.

“That should allow you to prove, on your mobile phone, that you’ve been tested, inoculated or have recovered [from Covid]. Our goal: to avoid a lengthy lockdown and finally enable freedom to travel again in the EU, and freedom to enjoy events and cuisine.”

As some EU countries now struggle with a third wave of the virus there are tensions over unilateral border restrictions. Germany is the latest to have received a complaint from the European Commission, since it imposed new police checks on the Czech and Austrian borders.

The Commission – the EU executive – has been under fire over its vaccine procurement strategy. It got into a row with AstraZeneca, because the Anglo-Swedish drug firm fell far short of the first-quarter delivery target.

The Commission still aims to get at least 70% of adults vaccinated in the bloc by mid-September. But so far, the total vaccinated is below 5%.

The EU is desperately seeking ways to increase vaccine supplies and improve its ability to track new variants, BBC Europe correspondent Kevin Connolly reports. But it is pursuing policies that might pay off in months or years, when voters want answers in days or weeks, he says.

Johnson and Johnson vaccine: FDA finds the single-shot jab safe

A review by US regulators of the single-shot Johnson & Johnson coronavirus vaccine has found it is safe and effective.

It paves the way for it to become the third Covid-19 vaccine to be authorised in the US, possibly within days.

The vaccine would be a cost-effective alternative to the Pfizer and Moderna vaccines, and can be stored in a refrigerator instead of a freezer.

Results from trials were released by Johnson & Johnson last month.

The Belgian company Janssen, which is owned by the pharmaceutical giant, said its data showed the product was highly effective against severe disease.

It comes as Ghana became the first country to receive coronavirus vaccines through the Covax vaccine-sharing initiative.

The briefing document published by the US Food and Drug Administration (FDA) gives more detail on the data submitted by Janssen to the regulator. The FDA concludes that the Johnson & Johnson vaccine has “known benefits” in reducing both symptomatic and severe illness.

Results from vaccine trials conducted in the US, South Africa and Brazil found its efficacy against the worst outcomes of the virus was “similarly high” but overall protection was lower in South Africa and Brazil, where virus variants have become dominant.

Data showed it was more than 85% effective at preventing serious illness, but only 66% effective overall, when moderate cases were included, when considering cases at least 28 days after vaccination.

Notably, there were no deaths among participants who had received the vaccine and no hospital admissions after 28 days post-vaccine.

An external committee of experts will meet on Friday to recommend whether the FDA should authorise the vaccine, possibly adding to a coming surge in vaccine availability in the US.

A White House official said the administration anticipated distributing at least three million doses of the Johnson & Johnson vaccine next week, should it receive emergency authorisation from the FDA.

The company says it plans to deliver 20 million doses in total by late March, in line with an agreement to supply the US with 100m doses by the end of June.

Which countries have ordered the Johnson & Johnson jab?

  • UK – 30m doses
  • EU – 200m doses
  • Canada – 38m doses
  • Covax nations – 500m doses

Not only will the vaccine require fewer doses than its two-shot Pfizer and Moderna counterparts, it will also require fewer vaccine appointments and medical staff as a result.

Over 65 million Americans have already been vaccinated and about 1.3 million doses are being administered across the country each day. 

New cases, hospitalisations and deaths from Covid-19 in the US have all been on the decline over the past few weeks.

Top public health experts, however, continue to warn that mutations of the virus can still threaten progress.

Coronavirus: Republic of Ireland extends restrictions to 5 April

The Republic of Ireland is to continue at its highest level of Covid-19 lockdown restrictions until at least 5 April.

The widely expected decision to maintain Level Five was taken at a cabinet meeting on Tuesday.

But primary schools will re-open on Monday for the four young youngest ages groups, the equivalent of primaries one to four.

Final year secondary students will also return then.

Other pupils and students will resume their schooling in a phased manner over the coming weeks along with pre-school childcare.

On Tuesday, 45 further coronavirus-related deaths were reported, four of them in January, taking the country’s total to 4,181.

There have been 216,300 positive cases identified after an additional 575 were identified.

The Irish government has decided to take a cautious approach to easing its lockdown, arguing that its aim is the long-term suppression of the virus.

Its vaccination programme is several weeks behind Northern Ireland’s and has been hampered by supply issues and the relatively late authorisation of the AstraZeneca vaccine by the European Medicines Agency.

But the Republic of Ireland is near the top of the EU league in vaccinating people, once the injections arrive in the state.

While around a third of the population north of the border has had its first injection, just over 4% in the Republic have got their jab, although slightly more people south of the border have had their second dose.

Dublin vaccine centre
image captionThe Republic’s vaccination programme is several weeks behind efforts in Northern Ireland

Taoiseach (Irish Prime Minister) Micheál Martin said it was “critically important” that people do not let down their guard, but he acknowledged the country was “physically and mentally exhausted” by restrictions.

“Essentially, to open up our country safely, we need to keep the numbers of new infections low and accelerate the vaccination programme in line with improving supply,” he explained.

Addressing the nation on Tuesday, he said by the end of April more than 40% of people over 18 will have had a first vaccine dose and up to 82% by the end of June.

Mr Martin said non-Covid health and social care services would resume “over the coming weeks” and there would be a review ahead of 5 April.

By this date, the government will decide either to continue with the lockdown or ease restrictions for industries such as construction.

Last week, Mr Martin suggested in a newspaper the current restrictions could last until the beginning of May.

With more than 90% of current Covid cases linked to the highly-transmissible UK variant the government has decided on caution.

Last weekend, the first three cases of the Brazilian variant were recorded.

Eleven cases of the South African variant were reported at the start of January, but none since then.

By Shane Harrison
BBC News