Global recession fears loom over markets; easyJet cuts more flights – business live | Business

People waiting in lines at Schiphol Airport in Amsterdam, Netherlands, last week.
People waiting in lines at Schiphol Airport in Amsterdam, Netherlands, last week.
People waiting in lines at Schiphol Airport in Amsterdam, Netherlands, last week. Photograph: Piroschka van de Wouw/Reuters

Easyjet intends to cut an unspecified number of flights at Amsterdam’s Schiphol airport this summer, Dutch news agency ANP is reporting, citing a spokesperson.

Easyjet is one of the larger customers at the airport, behind the Dutch arm of Air France-KLM.

The move follows a decision last week by Schiphol to cap the number of passengers allowed at the airport during peak season, leading to a 16% reduction in planned flights, due to a lack of security and other workers at the airport (via Reuters).

EasyJet: We’re sorry some customers didn’t get service expected

Johan Lundgren, easyJet Chief Executive, says cutting flights will ‘increase resilience’ over the summer, after the airline fell short for some passengers.

“Delivering a safe and reliable operation for our customers in this challenging environment is easyJet’s highest priority and we are sorry that for some customers we have not been able to deliver the service they have come to expect from us.

“While in recent weeks the action we have taken to build in further resilience has seen us continue to operate up to 1700 flights and carry up to a quarter of a million customers a day, the ongoing challenging operating environment has unfortunately continued to have an impact which has resulted in cancellations.

“Coupled with airport caps, we are taking pre-emptive actions to increase resilience over the balance of summer, including a range of further flight consolidations in the affected airports, giving advance notice to customers and we expect the vast majority to be rebooked on alternative flights within 24 hours.

“We believe this is the right action for us to take so we can deliver for all of our customers over the peak summer period in this challenging environment.”

EasyJet cuts flights until end of September

Budget airline easyJet is cutting more flights in an attempt to avoid a repeat of the travel chaos suffered by passengers in recent months.

EasyJet has announced it is reducing capacity until the end of September, after flight caps were announced at London Gatwick and Amsterdam.

The airline — one of the worst hit by recent disruption — is “proactively consolidating” a number of flights across affected airports. This will give customers advance notice and the potential to rebook onto alternative flights, it says.

EasyJet points to problems such as air traffic control delays and staff shortages in ground handling and at airports, shortages of staff including cabin crew, and delays getting IDs approved so new hires can start.

These problems have prompted flight caps at Gatwick and Schiphol in the last few days.

EasyJet says expects to to rebook the majority of customers on alternative flights, with “many” being on the same day as originally booked for.

The cuts mean EasyJet will run at around 90% of its pre-pandemic flights (2019) in July to September, down from a previous target of 97% of pre-Covid flights.

Capacity in April-June will be around 87% of pre-Covid levels, below the 90% previously expected.

Introduction: Markets fear global recession

Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

Fears of a possible global recession weigh over global stock markets today, as economic data sours and inflation continued to climb.

Last week, stock markets posted their biggest percentage decline in two years, as investors worry that global central banks will push economies into recession as they try to subdue rising prices.

And there’s no argument that economies are losing pace.

Joe Biden’s treasury secretary Janet Yellen says she expects “the economy to slow” but continued insisting that a full-blown recession is not “at all inevitable”.

Yellen told ABC’s This Week host George Stephanopoulous that her financial outlook results from how the economy has “been growing at a very rapid rate, as the economy, as the labor market, has recovered and we have reached full employment”.

“It’s natural now that we expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable.”

Some Asia-Pacific markets are racking up further losses today, with Japan’s Nikkei dropping another 1% and South Korea’s KOSPI tumbling 2.4%.

That takes global markets further into a bear market (more than 20% off their recent peak).

Hebe Chen, market analyst at IG, says that everyone is talking about a recession now, but the official definition of ‘two consecutive quarters of decline’ may sound pale and dry:

Chen explains:

The market last week just painted a typical recession picture that ticked almost all the boxes: inflation is flying to the roof, interest rates are non-stop rising, two major US stock indices [S&P 500 and Nasdaq] are trapped in the bear market (with the 3rd one on the way) and investors are selling shares of the best companies.

Last but not least, commodity prices start to drop.

Stocks slumped last week as the US Federal Reserve announced its biggest interest rate rise in 15 years, the Bank of England raised rates to a 15-year high, and Switzerland made a surprise rate hike.

Despite this market turbulence, central bankers continue to signal that they will squeeze price pressures out of their economies.

Federal Reserve Governor Christopher Waller on Saturday vowed to pursue a whatever-it-takes approach to fighting inflation, signalling that the Fed could repeat last week’s three-quarter-point rate hike next month.

“If the data comes in as I expect, I will support a similar-sized move at our July meeting,” Waller told a Society for Computational Economics conference in Dallas.

“The Fed is ‘all in’ on re-establishing price stability.”

The crypto crash continued over the weekend, with Bitcoin tumbling below $20,000 on Saturday before a Sunday rebound., which still left it 70% down from its record highs

Massacre in the crypto sphere continued as major cryptocurrencies crashed through several closely watched price levels not seen since 2020. #Bitcoin, the flagship of DeFi, failed to pull the handbrake at $20,000 psychological level and finished the week at $19,047.20. #trading

— accapitalmarket (@accapitalmarket) June 20, 2022

Also coming up today:

Wall Street will be closed as America celebrates Juneteenth National Independence Day.

We’ll hear from Bank of England policymaker Catherine Mann, when she gives a speech on ‘Monetary Policy in the Global Context’ to an event run by MNI Market News.

Fellow Monetary Policy Committee member Jonathan Haskel is giving the keynote speech at TechUK Policy Leadership Conference.

Mann and Haskel both wanted to raise UK interest rates from 1% to 1.5% last week, while the majority of MPC members pushed for a smaller rise to 1.25%. With other central banks also tightening policy hard, some economists think the BoE could plump for a 50bp hike in August.

The agenda

  • 7am BST: German PPI index of producer prices for May
  • 9am BST: MPC member Jonathan Haskel speech: ‘Restarting the future: how to fix the intangible economy’.
  • 10am BST: Eurozone construction output report for April
  • 11am BST: German Bundesbank’s monthly report
  • 2pm BST: MPC member Catherine Mann speech: ‘Monetary Policy in the Global Context’