Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The easing of UK pandemic restrictions is boosting business for UK airlines, aerospace manufacturers, and spurring business for builders and high street firms too.
Budget airline Ryanair has reported it carried 11.1 million passengers in August, sharply higher than the 7 million who flew with it in August 2020, and around 75% of the number it carried in August 2019 before the pandemic struck.
EU Covid certificates are stimulating a recovery in the travel industry, Ryanair says.
That’s an increase from July too, when it carried 9.3m passengers, and also beats Ryanair’s earlier target of carrying 10 million passengers during August.
The airline said its August load factor – which measures how many seats it filled on each flight – rose too, to 82% from 73% a year ago, following the relaxation of travel restrictions this summer.
Earlier this week, Ryanair lifted its passenger target for the autumn amid signs of a “very strong recovery” in European short-haul flights, putting it on track to expected passenger numbers would exceed pre-pandemic levels next summer.
UK engineering firm Melrose Industries is benefitting from the recovery too, telling shareholders that trading has been better than expected.
The group, which owns aerospace and automotive parts maker GKN, has reported a half-year adjusted operating profit of £223m, up from an £11m loss a year ago, as the recovery in its aerospace division helps it ride out supply chain shortages.
Justin Dowley, Chairman of Melrose Industries PLC, today said:
“We are continuing to see recovery in all our businesses with trading ahead of expectations. Encouragingly, our Aerospace business is now weighted towards the expected narrowbody recovery.
Our Automotive and Powder Metallurgy businesses are poised for strong growth as soon as the well publicised chip shortage abates and the progression in margins is ahead of plan with more to come.
But low-cost airline Jet2 has reported this morning that passengers have been booking closer to their departure date — reflecting uncertainty over travel rules and the ongoing pandemic. And that means prices will remain ‘consistently enticing’.
Philip Meeson, executive chairman, will tell shareholders at its AGM that it’s been flying to 32 green and amber destinations, at around 55% of its pre-Covid Summer 19 capacity.
Unsurprisingly, given the continuing short-term uncertainty resulting from the UK Government’s three weekly review of its traffic light system, customers are booking significantly closer to departure for Summer 21. Despite the limited booking visibility, pleasingly, we have generated positive financial contribution from the flying to date, supported by our quick to market, flexible operating model.
The slower momentum for Winter 21/22 bookings which we reported in our Preliminary Results in early July has remained. As a result, bookings have yet to match our on-sale seat capacity and therefore pricing for both our leisure travel products – end-to-end package holidays with Jet2holidays and flight-only seats with Jet2.com – will need to remain consistently enticing. The overall Winter 21/22 capacity remains under continuous review.
Britain’s biggest homebuilder Barratt Developments is upbeat this morning, reporting a 65% surge in pre-tax profits amid “very strong demand for houses across the country”.
Its total home completions rose by nearly 37% in the year to 30 June, to 17,243, as it recovered from the lockdown (up from 12,604 in the previous 12 months); not far below the 17,856 total completions achieved in 2019.
Consumers have also been flocking back to UK high streets and retail parks, lifting footfall to its highest level since the start of the Covid-19 pandemic.
Data from the retail tracker Springboard this morning found the number of consumers visiting bricks-and-mortar shopping outlets rose by a quarter in August, helped by people choosing to take holidays at home this summer.
Footfall was still well down on its pre-pandemic levels in the same month of 2019 but the gap was below 20% for the first time since the virus first hit the UK in early 2020.
But this pick-up in demand continues to put pressure on the UK’s supply chains, with pub chains struggling to get their hands on beer.
The pub chain Wetherspoon’s yesterday warned of shortages of some beer brands, including Carling, Coors and Heineken, amid a Brexit-induced shortage of delivery drivers and industrial action.
- 10am BST: eurozone PPI survey of producer prices
- 11.30am BST: UK Trade & Business Commission hearing on UK driver shortages and impact on supply chains
- 1.30pm BST: US weekly jobless figures
- 3pm BST: US factory orders for July