Thames Water customers shouldn’t pay for its mistakes, says Jeremy Hunt; Iran oil exports hit six-year high – business live | Business

Budget airline easyJet has narrowed its losses, despite losing revenue from cancelling flights to Israel and Jordon last winter.

EasyJet reported this morning that its losses for the six months to the end of March have fallen by over £50m, to between £340m and £360m.

The airline says it grew capacity where demand was strongest. It also benefitted from the early timing of Easter this year, which led to more demand for flights in March.

Shares in easyJet have jumped 4% in early trading, to the top of the FTSE 100 leaderboard.

Johan Lundgren, CEO of easyJet, argues the airline is well set up operationally for this summer season, saying:

The importance that consumers place on travel coupled with easyJet’s trusted brand has driven good demand for our flights and holidays. Our growth and focus on productivity have reduced winter losses by more than £50 million.

“We have further enhanced our network with the launch of new bases in Alicante and Birmingham providing greater choice for consumers across Europe

EasyJet also lost around £40m due to the conflict in the Middle East, after it paused flights to Israel and nearby Jordan for safety reasons after the 7th October attacks.

It faces further lost business in the months ahead, after suspending flights to Tel Aviv for the next six months earlier this week.

Sales of electric cars across the European Union tumbled by over 11% last month, new figures show, in the latest sign that demand for battery-powered vehicles is ebbing in favour of hybrid cars.

The European Automobile Manufacturers Association (ACEA) reported this morning that new car registrations fell for the first time this year in March, dropping by 5.2% to around one million units.

The timing of the Easter holidays negatively impacted sales, ACEA says, including in the EU’s four largest countries – Germany (‑6.2%), Spain (-4.7%), Italy (-3.7%), and France (-1.5%).

Battery-electric car registrations declined by 11.3% to 134,397 units, meaning its market share shrank from 13.9% a year ago to 13% today.

In contrast, hybrid–electric car registrations rose by 12.6%.

There was also a drop in sales of internal combustion engine-powered cars; petrol sales decreased by 10.2%, while diesel registrations shrank by 18.5%.

In the energy sector, Iran is exporting more oil than at any time for the past six years, new data shows.

Data company Vortexa has reported that Tehran sold an average of 1.56mn barrels a day during the first three months of the year, almost all of it to China. That’s its highest level since the third quarter of 2018.

This is giving Iran’s economy a $35bn-a-year boost, the Financial Times reports this morning, at a time when Western governments are drawing up fresh sanctions following Iran’s drone and missile attack against Israel last weekend.

Iran’s oil sector is already under sanctions, but it was still the world’s second largest source of supply growth in 2023.

Earlier this week US treasury secretary Janet Yellen said the Biden administration was poised to take “additional sanctions action against Iran in the coming days”, adding that there may be “more to do” on Tehran’s oil trade.

Vortexa’s data shows how this could be a challenge.

As Fernando Ferreira, head of geopolitical risk service at the Rapidan Energy Group in the US, put it to the FT:

“The Iranians have mastered the art of sanctions circumvention.

“If the Biden administration is really going to have an impact, it has to shift the focus to China.”

More here….

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

Thames Water must sort out its own financial problems, chancellor Jeremy Hunt has declared, as the future of the trouble water company hangs in the balance.

Speaking in Washington last night, Hunt told reporters that the government would never insure investors against poor decisions.

During a visit to Washington for the spring meetings of the IMF and World Bank, the chancellor said:

“It would be completely wrong for Thames Water customers to pick up the tab for bad decisions by Thames Water’s owners and managers.”

Hunt’s comments come as Thames Water prepares to tap the debt markets in an attempt to fund a rescue plan and repair its finances.

Its board is expected to meet today to rubber-stamp a revised five-year spending plan, which could be released tomorrow; it would then approach lenders to fund the proposals in the coming days.

The Guardian reported last weekend that Thames Water – which has debts of £14bn – has just six weeks to convince its regulator that it has a viable survival plan for its business.

Although it could have enough cash to survive for about 15 months, insiders and investors fear that it must move quickly to strike a deal with its watchdog to stave off insolvency.

Its parent company, Kemble Water Finance, missed an interest payment earlier this month, after its investors abandoned plans to provide £500m of emergency funding in a row with the water regulator. Thames has been pushing Ofwat to let it raise bills by 40%.

Hunt said the government was prepared for “all possible outcomes”, but also denied that the UK’s reputation as a destination for international investment would suffer if Thames Water fell into administration.

The chancellor argues that markets need to work properly, saying:

“Of course we want to attract investment into the UK but we do that on the basis of laws and making sure we have transparent regulation and people are able to get very good returns.”

The agenda

• 7am BST: EU car sales for March

• 10am BST: Eurozone construction output for February

• 1.30pm BST: US weekly jobless data