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Delta Air Lines (DAL) results Q4 2020

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A Delta Air Lines plane lands at Los Angeles International Airport

Mario Tama | Getty Images

Delta Air Lines halved its cash burn and narrowed its losses in the fourth quarter as the coronavirus pandemic drove the carrier to its worst year ever, the company said Thursday.

The Atlanta-based airline posted a net loss of nearly $12.39 billion in 2020, a record, according to FactSet data.

Here’s how Delta performed compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

  • Adjusted EPS: a loss of $2.53 versus an expected loss of $2.50
  • Total revenue: $3.97 billion, adjusted to back out refinery sales $3.53 billion

Delta swung to a $755 million net loss in the fourth quarter compared with a $1.1 billion profit a year earlier. Total revenue fell 65% from $11.44 billion in the fourth-quarter of 2019 to $3.97 billion. The company’s revenue got a $441 million boost from third-party refinery sales. On an adjusted basis, Delta had a per-share loss of $2.53, compared with analyst estimates for a loss of $2.50 a share.

The carrier’s cash burn averaged $12 million a day in the quarter ended Dec. 31, down by half from its average cash burn of $24 million a day in the third quarter.

Delta shares were up more than 2% in premarket trading after Delta reported its results.

The airline will face difficult months ahead but is eyeing a recovery in 2021 as Covid-19 vaccines are administered around the country, CEO Ed Bastian said.

“While our challenges continue in 2021, I am optimistic this will be a year of recovery and a turning point that results in an even stronger Delta returning to revenue growth, profitability and free cash generation,” Bastian said.

Delta said it expects revenue to fall 60% to 65% in the first quarter of the year, from the year-earlier period, just as the pandemic was starting. That’s below analyst estimates for a 48% year-over-year drop.

The pandemic devastated travel demand as concerns over the virus, quarantines, travel restrictions and pauses on business travel kept millions of potential customers at home. The Transportation Security Administration screened just 324 million travelers last year, down from 824 million in 2019.

Airlines executives have been hopeful that the rollout of vaccines would provide some relief but have repeatedly warned it won’t be immediate.

“The early part of the year will be characterized by choppy demand recovery and a booking curve that remains compressed, followed by an inflection point, and finally a sustained demand recovery as customer confidence gains momentum, vaccinations become widespread and offices re-open,” said Delta’s president Glen Hauenstein in an earnings release.

Delta said it ended the fourth quarter with $16.7 billion in liquidity. Delta raised billions in debt last year, including a record $9 billion debt sale backed by its frequent flyer program SkyMiles.

The carrier and its rivals are also receiving additional federal funds to help weather the crisis. Congress late last year approved $15 billion in additional federal aid for airlines to pay workers, on top of another $25 billion in government payroll support they received under the March CARES Act.


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UAE on track to vaccinate half its population by end of March

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DUBAI, United Arab Emirates — The United Arab Emirates is on its way to having half of its population vaccinated against the coronavirus before a deadline it set for itself at the end of March, according to the country’s health authorities. 

The small desert sheikhdom of 10 million began deploying its vaccination campaign for the public toward the end of last year, after making China’s Sinopharm vaccine available to frontline health workers and government officials from September. And in terms of vaccination rates, the UAE’s national program is now the second highest in the world after Israel

More than 1.8 million people have already received the Sinopharm vaccine, which is available for free to all citizens and residents. That’s more than quadruple the per capita vaccination rate in the U.S. And the U.S. and German-developed Pfizer-BioNTech vaccine is being rolled out in Dubai, currently in its first phase which is reserved for people over the age of 60, those with pre-existing health conditions, and frontline workers. 

A health worker shows a dose of China’s Sinopharm Covid-19 vaccine at a vaccination center in the Jordanian capital Amman on January 13, 2021.

Khalil Mazraawi | AFP | Getty Images

Both vaccines require two jabs spaced apart by 28 days, and 28 days after receiving the second shot, patients are no longer required to quarantine, but will still have to wear masks and practice social distancing, the country’s National Emergency Crisis and Disaster Management Authority has said 

And while taking the vaccine is optional, NCEMA says, it’s strongly encouraged. Government employees in Abu Dhabi who choose not to take one of the vaccines will be required to take a PCR test every two weeks. 

“We’re very pleased with the progress we’ve made,” Omar Ghobash, the UAE’s assistant minister for culture and public diplomacy, told CNBC’s Hadley Gamble on Sunday. “Obviously there are people who are still getting sick, and unfortunately passing away, but overall we think that we’ve managed to find the balance between health and safety on the one hand and economic viability on the other hand.”

Sinopharm’s developers say its vaccine is 86% effective while the Pfizer/BioNTech vaccine has a 95% effectiveness, though some medical professionals have expressed skepticism over the Chinese-made vaccine due to the lack of published data surrounding its development and trials. In November, UAE leaders including Dubai ruler Sheikh Mohammed bin Rashid al Maktoum tweeted images of themselves getting the Sinopharm shot. 

Vaccinations push ahead amid spike in cases

Woman sunbathers sit along a beach in the Gulf emirate of Dubai on July 24, 2020, while behind is seen the Burj al-Arab hotel. After a painful four-month tourism shutdown that ended earlier in July, Dubai is billing itself as a safe destination with the resources to ward off coronavirus.

KARIM SAHIB | AFP via Getty Images

Still, it appears that for now at least, the party city and regional commercial capital of Dubai will push on with its vaccine campaign while keeping its tourism-dependent economy open. 

Neighboring oil-rich capital Abu Dhabi, meanwhile, has been much more conservative, requiring a series of negative PCR test results over the span of several days for anyone who wants to enter the emirate — even from other emirates in the country.  

As for Dubai, mask wearing remains required in all public venues, excluding activities like eating or engaging in strenuous exercise, and authorities remind residents to socially distance. The emirate’s openness, which increased gradually from the summer, had followed a period of one of the strictest lockdowns in the world in March and April. 

By New Year, Dubai’s government was allowing residents to hold gatherings inside their homes of up to 30 people. Hotels once nearly entirely empty are seeing upward of 70% occupancy rates as tourists escape their own countries for a sense of normality and warm weather.     

“They are balancing personal responsibility with an economy that needs to go forward,” Ghobash said of the country. 

“Vaccinating the largest possible percentage of society” is the country’s aim, the NCEMA tweeted earlier this month, in order to “access the acquired immunity resulting from vaccination, which will help reduce the number of cases and control the disease.”

 


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World’s ‘moral failure’ WHO says

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Healthcare workers administer the COVID-19 vaccine to residents living in the Jackson Heights neighborhood at St. Johns Missionary Baptist Church on January 10, 2021 in Tampa, Florida.

Octavio Jones | Getty Images

LONDON — The head of the World Health Organization said Monday the equitable distribution of coronavirus vaccines is at “serious risk.”

Warning of a “catastrophic moral failure,” WHO’s Director-General Tedros Adhanom Ghebreyesus said “the recent emergence of rapidly-spreading variants makes the rapid and equitable rollout of vaccines all the more important.”

But he added that this distribution could easily become “another brick in the wall for inequality between the world’s haves and have-nots.”

“As the first vaccines begin to be deployed, the promise of equitable access is at serious risk,” he said, speaking at a session of the WHO’s executive board.

While more 39 million doses of several different vaccines have now been administered in at least 49 higher-income countries, he said, just 25 doses had been given in one lowest-income country.

“I need to be blunt, the world is on the brink of a catastrophic moral failure and the price of this failure will be paid with lives and livelihoods in the world’s poorest countries.”

Beginning his speech, Tedros had emphasized that the development and approval of safe coronavirus vaccines less than a year after the virus’ emergence in China, in late 2019, was a “stunning achievement and a much needed source of hope.”

However, he added that “it’s not right that younger, healthier adults in rich countries are vaccinated before health workers and older people in poorer countries.”

“There will be enough vaccine for everybody, but right now we must work together as one global family to prioritize (those) most at risk of serious diseases and death in all countries.”

Without naming names, Tedros said some countries and companies speak the language of equitable access but continue to prioritize bilateral deals, bypassing COVAX, which is driving up prices and attempting to jump to the front of the line. “This is wrong,” he said.

COVAX is a global scheme co-led by an international vaccine alliance called Gavi, the Coalition for Epidemic Preparedness Innovations and also the WHO. It was established to ensure equitable vaccine access for every country in the world. It aims deliver 2 billion doses of safe, effective vaccines that have passed regulatory approval and/or WHO prequalification by the end of 2021.

The WHO called on wealthier countries that had pre-ordered millions of doses of coronavirus vaccines, such as the U.S., U.K. and Europe, to share a portion of those vaccines with COVAX, so it can then redistribute these to poorer countries.

Wealthier nations have been accused of “hoarding” more vaccines than they need, although the supply of vaccines is still in its early days as mass inoculation drives — which began in the West in December — are mainly still in their first distribution stage.

Tedros called on countries with bilateral deals with vaccine makers, and on controls for supply, to be “transparent with COVAX on volumes, pricing and delivery dates,” and to share their own doses with COVAX once they have vaccinated their own health workers and older populations.


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UK gambling firms accused of exaggerating scale of black market betting | Gambling

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Gambling firms have been accused of concocting a “dodgy dossier” to exaggerate the scale of black market betting, in an attempt to influence an upcoming government review expected to result in tougher regulation.

Gambling industry figures recently seized on a report claiming that 200,000 people in the UK spend £1.4bn on black market sites every year, warning that tougher regulation could drive more people into the arms of “unscrupulous” operators.

But in a letter to a cross-party group of MPs examining gambling-related harm, the Gambling Commission’s chief executive, Neil McArthur, delivered a withering assessment of the report.

The boss of the gambling regulator said the report, written by consultancy PwC, was “not consistent with the intelligence picture” and did not distinguish between real consumers using black market sites and bots or other automated systems.

He said the report should be treated cautiously, adding that it lacked any evidence to show an increase in illicit betting.

“We know that licensed operators and their trade bodies are concerned about the impact of the illegal market, but our own evidence suggests that the impact may be being exaggerated,” he said.

McArthur said black market concerns should be kept in proportion “despite … reports from consultants paid for by the industry, and should not distract from the need to continue to drive up standards and make gambling safer in the regulated market”.

Such direct criticism from the regulator will be a blow for the industry lobby group, the Betting and Gaming Council (BGC), which has repeatedly referred to the report to back its arguments against stricter regulations.

The government is considering a range of measures that could involve limiting stakes on online virtual slot machines, or forcing web-based casinos to carry out thorough affordability checks if customers deposit a certain amount per month.

McArthur dismissed the BGC’s suggestion that such measures could fuel a surge in black market operations.

“In any event, we are not convinced by the argument that suggests that raising standards in the licensed market will prompt consumers to gamble with illegal operators,” he said.

The Labour MP Carolyn Harris, who chairs the MPs’ group that receive the letter, said: “The online gambling industry talks up the threat of the black market in an attempt to resist regulation and protect its profits, but trying to hijack the debate by manufacturing dodgy dossiers of information to further their own ends is an incredibly transparent tactic and will not be any kind of excuse to hold down standards.”

The BGC and several of the UK’s major betting companies, which commissioned the report, refused a request to provide a copy.

But the Guardian has since obtained both a draft version, dated April 2019, and a final version, dated July 2019.

The two appear identical except that the final version removed a reference to the three firms that commissioned it, Ladbrokes owner GVC, William Hill and The Stars Group, which owned SkyBet and has since merged with Paddy Power owner Flutter.

Matt Zarb-Cousin, a former adviser to Jeremy Corbyn who runs the campaign group Clean Up Gambling, said: “The gambling industry has been quoting from this report as it attempts to drive a race to the bottom in regulation. Having finally seen the contents, it’s clear why it was reluctant to make this report available for public scrutiny.”

A BGC spokesperson said countries with tougher regulation than the UK had bigger black market problems.

“We have repeatedly called on the government to use the online harms bill to crack down on access to these sites, and we would support financial service providers being obliged to block black market transactions,” he said.

The industry’s use of the report has echoes of a similar tactic deployed when the government was weighing up whether to slash the maximum stake on fixed-odds betting terminals (FOBTs) from £100 to £2.

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In 2018, the Guardian revealed that a government decision to delay the cut was influenced by a “discredited” report about the potential impact of the policy on jobs.

Like the black market dossier, the FOBT report was commissioned by the industry and written by a major accounting firm, in this case KPMG.

It claimed up to 21,000 jobs could be lost if FOBT stakes were capped, a prediction that has since proved to be an overstatement.


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