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METERichael O’Leary is undoubtedly sincere in his goal to restart two out of five Ryanair flights since early July. But note how your plan came up with two big conditions: “Subject to government restrictions on flights within the EU being lifted, and the implementation of effective public health measures at airports.”
Think of the flight plan, then, as well as a lobbying exercise. Having glimpsed that the closing door is ajar, Ryanair wants to force it open. And it would prefer that the outlandish politicians did not make problematic rules like the forced blockade of the central seat, a measurement that O’Leary has called “idiot”.
Ryanair is not alone in the aviation industry in trying to speed up the pace. However, far from showing how easy it would be to observe physical distance measurements, the company’s two-minute “return to flight” video really proved otherwise. It represented a passenger passing his bag through an airport that was comically empty. Real life is not like that, at least not when Ryanair flies.
You can’t blame O’Leary for trying, but simply declaring that “it is time to get Europe to fly again” is unlikely to be enough. Government messages about physical estrangement can be woefully confusing, but ministers, not Ryanair, still set rules on public safety.
More sadness on the property, courtesy of Landsec
One would think that it would not be possible to put more sadness in the UK property sector, but the giant Landsec did it. All it took was a broadcast of “Serious but plausible negative scenario” that imagines a 75% drop in rent receipts from retailers this year plus a deficit of 20% for office tenants.
Such an outcome would definitely be considered serious, but few would have considered it plausible. Landlords and tenants are discussing the consequences of Covid-19, but Landsec was describing a rental catastrophe.
The model, the owner of Bluewater in Kent and Deutsche Bank’s bright new London office, he tried to explain, was more of a “going concern” exercise designed to show that balance can withstand most storms.
In that sense, it is almost certainly correct. Landsec has less financial clout than most of its peers. It extends to all sectors, which is just as good as the value of its retail portfolio fell by a fifth. And you can even afford to invest £ 80 million in a relief fund for small retail tenants struggling to keep them alive.
However, Landsec still managed to cut 13% of its own share price, lowering valuations across the sector in the process, and one can understand why. The real estate world is inhabited by born optimists. If one of the stronger teams believes that the recovery will take until 2022 “at the earliest,” that’s a very depressing view from the ground.
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Bored is profitable these days
It’s a bit rich for Nick Read, the CEO of Vodafone, to brag about the group’s “progressive” dividend policy. Just a year ago, it reduced distribution by 40%, having previously defended the divi as “affordable.” Another cut would now have killed credibility, regardless of Covid-19.
Shareholders are likely to feel equally secure in Read’s decision to rule out a counter offer by Virgin Media. Vodafone probably couldn’t afford to step in anyway, but letting Virgin marry 02 alone seems sensible in its own right. The UK is just 10% of Vodafone, and half of that revenue comes from the commercial end of the market, where BT’s main rival will remain.
Instead, the main corporate action will be a long-planned spin-off of Europe’s tower and flagpole infrastructure, where valuations have been maintained due to cash flows similar to those of public services.
In fact, a dull utility is a fair description of the modern Vodafone, whose go-go years have been retired with the share price, from 220p two years ago to 123p. However, the compensation for buyers at current levels is a 6% dividend yield, which can finally act as a support. Dull is fine these days.
