7.42pm EDT 19:42 We’ve got more on the Australian share market from our business editor, Ben Butler, including news that while the Qantas boss was speaking, the airline’s shares fell 6%: A 3.7% fall in the Australian market this morning has been driven by tumbling airline, retail and financial stocks. Oil and gas producers have
It’s survival of the fittest, says Qantas boss
Australian share market falls 3.7%
That’s all from me for this evening. My colleague Martin Farrer will be taking over the blog now. Here’s a summary of the most recent events:
- More than 60 million were placed in lockdown conditions in Italy as the measures imposed on the northern “red zone” were extended to the whole country. The steps announced by the Italian prime minister Giuseppe Conte included the suspension of all public gatherings and strict travel restrictions.
- Anyone arriving in the UK from Italy should self-isolate for two weeks, Whitehall warned. Officials updated travel advice in response to Conte’s announcement and advised against all but essential travel.
- Egypt announced similar measures aimed at countering the virus’s spread. Authorities had already cancelled all upcoming cultural events.
Self-isolaton advised for anyone arriving in UK from Italy
The benchmark Australian index, the ASX200, is set to open down almost 5% after a horror day on US markets.
It is likely to be the second day running of heavy falls, following a 7.4% tumble on Monday amid growing fears the coronavirus crisis will plunge an already weak global economy into recession.
US markets plunged more than 7%, triggering a 15 minute “circuit-breaker” halt to trading in New York – a precaution put in place following the global financial crisis in an attempt to stop enormous one-day falls.
European markets were down almost 8%.
Order books indicate Qantas, which fell almost 11% on Monday, was due to fall another 1.2% as the airline grounded more flights, reducing its international capacity by about a quarter.
Qantas has reduced its international flying capacity by a quarter, grounding eight Airbus A380s, and leaving just two of the largest planes in its fleet flying.
The cuts to international routes will last for six months following a “sudden and significant drop in forward travel demand”. Smaller planes will now service a number of key international routes.
The airline’s signature Sydney-Singapore-London return service (QF1 and QF2) will be temporarily re-routed to become a Sydney-Perth-London service.
To help cut costs, Qantas’s chief executive Alan Joyce – Australia’s highest paid executive who took home nearly AUD$24m (about £12m) in 2018 – will take no salary this financial year.
The Australian prime minister, Scott Morrison, is due to reveal some of his government’s plan to protect the economy from a recession caused by the coronavirus. The stimulus package, likely to include cash payments for pensioners, welfare recipients and small business owners, could cost up to $10bn (AUD).
Morrison will argue that, while the covid-19 is a global health crisis, it will have real and significant economic impacts for Australia, potentially greater than the global financial crisis of 2008. According to preview reports of his speech, he’s due to say:
The epicentre of the crisis is much closer to home. The [global financial crisis] impacts were centred on the North Atlantic and back then China was in a position to cushion the blow.
Australia’s economy is hugely dependent on China. The country is the largest export destination for Australian resources and Australia relies heavily on imports of Chinese manufactured products. Additionally, Australia is a significant destination for Chinese students and tourists. Morrison will argue:
We now have one goal in 2020: To protect the health, wellbeing and livelihoods of Australians through this global crisis, and to ensure that when the recovery comes, and it will, we are well positioned to bounce back strongly on the other side.