Flight network: Corona consequences for business travel

Friedrichshafen Airport

Companies like ZF Friedrichshafen hope that after Corona there will be again important connections like the one to the Frankfurt hub.

(Photo: dpa)

Frankfurt, Berlin The number makes one sit up and take notice: while in February of this year there were still 4,193 connections offered by airlines in Europe, this number fell to 1895 in November. The situation is similar in Germany. Here the number of routes has dropped from 649 in February to 235. The corona crisis is shredding the flight network.

The data provider OAG, which specializes in air traffic, calculated the figures. In its system, a connection is considered a fixed route if it is operated at least 20 times a month. To make a flight route really attractive for passengers, you have to be able to fly regularly. Only then will customers have the flexibility they need to plan a trip by plane individually. Vacations or appointments are often not based on the flight plan.

Now in the second wave of the corona pandemic, in which the number of infected people is increasing rapidly, the failure of many connections is hardly noticeable. Because people rarely travel – neither for private customers nor for business people. Airlines such as Lufthansa or Easyjet assume that they will only offer 20 percent of their usual capacity this winter.

But the heavily cut network in aviation could have long-term consequences – for the decentralized German economy, for example. Because the lower number of flight connections could make business travel more difficult in the future. This is especially true for those regions that are not near a major hub such as Frankfurt or Munich. The employees there need a fast connection to their intercontinental flight. The train is not always an alternative.

A good example is the Bodensee Airport in Friedrichshafen. 108,000 passengers flew there between January and September – a decrease of a good 72 percent compared to the same period last year. These days and weeks it is shockingly quiet in the terminal and on the apron. Many connections have been deleted.

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China First becomes a political trap

Mercedes booth at the Beijing auto show

Australia is not necessarily the focus of German car manufacturers. And yet Mercedes, BMW and Volkswagen form a community of fate with Down Under. The pandemic has made them even more dependent on the sales market in China: German auto icons deliver almost 40 percent of their sales to China. Australia exports just as much of its exports to the vast Chinese market.

The Australians are experiencing the hard way what political and economic consequences this dependency can have. Beijing is turning dependency into a weapon in order to make Australia politically compliant and to muzzle the critics there.

Whether it is about Beijing’s responsibility for the outbreak of the corona pandemic, the ban on Chinese 5G technology or the disapproval of China’s claims to territory in the South China Sea – the authoritarian leadership in Beijing cannot bear so much independence from an economically dependent Australia.

By return of mail, China put up trade barriers against the importation of beef, barley and wine from the country. Its undiplomatic “wolf warriors” also sent a list of 14 complaints to Canberra, with which Beijing complained about the behavior of the Australian government, the local media and think tanks.

Again and again China has shown its economic power against Germany. For example, when Beijing forced the Daimler Group to kowtow because of the use of a Dalai Lama quote or when the Chinese ambassador openly threatened German car manufacturers with retaliation, the telecommunications equipment supplier Huawei should not be involved in setting up the German 5G mobile network.

USA is building an anti-China alliance

China, which otherwise likes to forbid interfering in its internal affairs, ignores these limits when it comes to asserting its own interests. So far, people in Berlin have taken note of this with a shake of the head rather than concern. However, the Australian example shows that economic dependence on China also has a dark side to Beijing’s power.

The US noticed this long ago. The Trump administration is trying to set up an informal international defense alliance against the Chinese economic warriors in its last few meters. The participating countries should support each other with economic sanctions by compensating for export losses or jointly imposing counter-sanctions.

That would be a good springboard for a transatlantic China strategy, which Europeans and Americans will have to talk about at the latest when the new Biden administration starts.

More: “China first”: German carmakers are insidiously dependent

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The pandemic will not take the future from us – 90 percent of Germans are in favor of compulsory masks

Hesse’s Prime Minister Volker Bouffier defends the decision of the federal and state governments, despite the increased corona risk Allow the population to have more contacts at Christmas and New Years Eve. The state needs a certain degree of acceptance for its measures, said the CDU politician of the Funke media group (Sunday). “A lot of people want to see each other again around Christmas time. If we don’t go into it, we’ll have big problems.“

If things are relaxed at Christmas, then for good reasons. But the risk increases. “We are counting on people to behave sensibly despite the easing,” he said.

When asked whether the goal of having fewer than 50 infections per 100,000 inhabitants in seven days by Christmas could be achieved, he said it would not be easy. “I also cannot rule out that we will not achieve the goal.”

Bouffier reacted negatively to demands from federal politics that the states should contribute more to the follow-up costs of the crisis. “The countries pay a lot – all the time. Hessen alone has provided twelve billion euros. The call that the countries should do something is objectively completely unfounded. And I find the style unspeakable. ”As an example, he cited the fact that the municipalities’ business tax losses are being replaced, half by the federal government and half by the states. “That’s billions!” He said.

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Corona crisis: Debate about BER partial privatization

Berlin Brandenburg Willy Brandt Airport (BER)

The new capital city airport has opened, but has financial problems right from the start.

(Photo: dpa)

Berlin In view of the tense financial situation of the Berlin Brandenburg Airport Company (FBB), a debate has broken out among the owners about the involvement of private investors. The State Secretary in the Federal Ministry of Finance, Werner Gatzer, who represents the federal government on the FBB’s supervisory board, was open to partial privatization.

“As far as I know there are private investors who are willing to get involved,” said Gatzer to Rundfunk Berlin Brandenburg (RBB). Even if the new BER airport “was put into operation late, it will be a successful investment property for the next few decades”, emphasized Gatzer.

However, Berlin “definitely does not want to take the path described by Gatzer,” said Finance Senator Matthias Kollatz (SPD) to the RBB. Important infrastructure must remain in public hands, said Kollatz, also in order to prevent “a socialization of losses and privatization of profits” from taking place.

The federal government holds 26 percent of the shares in the airport company, the states of Berlin and Brandenburg each 37 percent. The financial burdens are distributed accordingly. Because of the incalculable corona crisis, forecasts are difficult. It is clear, however, that BER will need financial support from the owners for years to come due to the massive drop in passengers as a result of the crisis.

For 2020, the shareholders are already helping out with 300 million euros, through grants and loans. For the next year, the operating company FBB expects a financial requirement of up to 660 million euros, according to documents for the budget committee of the Bundestag. Flughafen Berlin Brandenburg GmbH (FBB) recently even considered suspending flight operations if the owners did not provide further financial aid at short notice.

“Permanent grant business for the taxpayer”

It is not surprising that the federal government is on the lookout for financing alternatives against this background. The possibility was kept open to sell shares in the airport company, said Gatzer. According to the partnership agreement, this is still ruled out for the next two years, but it must be clarified relatively quickly where the missing funds from the airport are to come from.

“One will also have to ask the question of whether all shareholders are giving up shares so that a private investor can get involved.” Gatzer referred, among other things, to Frankfurt am Main Airport, which has already been partially privatized.

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From the point of view of the taxpayer association, a public-private partnership at BER should have been considered much earlier. “The idea has a lot of charm, because that way capital and know-how would flow to the cluttered airport company,” said association president Reiner Holznagel recently to the Handelsblatt. “Frankfurt Airport is also not fully state-owned and has many private shareholders.”

Holznagel fears that BER will never be in the black, but rather that it will remain a “permanent subsidy business for taxpayers”. Since the committees of inquiry in Berlin and Brandenburg into the bad planning of the airport, the bad management and the partial political failure are still ongoing, “the full extent of the disaster is not yet known”.

Appeal to the BER owners

BER has already put a lot of strain on the public purse: The costs for the airport rose from originally around two billion to more than six billion euros, not only because of the construction delay, but also because of numerous rescheduling and enlargements. However, there is no improvement in sight after the airport went into operation due to Corona. From the industry’s point of view, air traffic is in the most serious crisis since the Second World War.

The airport company will have “more difficult years” ahead of them, said the chairman of the supervisory board Rainer Bretschneider on Friday after the first meeting of the control committee after the commissioning of BER. “In our own efforts, we still need the support of the shareholders in order to survive the crisis in the aviation industry.”

The meeting of airport controllers was all about the massive impact of the pandemic on flight operations in the capital region. The management around airport boss Engelbert Lütke Daldrup reported that the number of passengers has recently plummeted and is around ten percent compared to the same month last year. Against this background, FBB adjusted the number of passengers expected for 2020 from a total of ten million to nine million.

The second corona wave is already hailing the BER operators in the coming financial year. FBB assumes only 30 percent of the pre-crisis passenger volume. “2021 will be one of the most difficult years in FBB history,” said Lütke Daldrup. “Now only two things help,” he emphasized: “The willingness of our shareholders to stick with us in the crisis and the commitment of the FBB company to work as efficiently and cost-effectively as possible.”

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From the Berlin side, the message is clear. The country wants to master the BER crisis without private investors. Finance Senator Kollatz said that the company intends to profit from the BER’s profits once the crisis is over and air traffic has returned to normal. “If the federal government wants to withdraw, we cannot prevent that,” added the SPD politician. “But I don’t think that’s wise.” In any case, it must be ensured that the public sector keeps the majority of the shares.

At least on this question, Berlin and the federal government agree. “The public sector must be able to help shape and make decisions,” says Finance State Secretary Gatzer. “But it doesn’t make sense to me why what is possible in Frankfurt or Düsseldorf shouldn’t be possible at such an attractive airport as in Berlin,” he added with a view to possible investors for BER.

More: BER operators threatened to cease flight operations due to the corona crisis

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Corona brings a rain of money to Greece

Flag hoisting on the Acropolis in Athens.

The EU country is hoping for a “historically unique opportunity”.

(Foto: LightRocket/Getty Images)

Athens The corona crisis should give Greece the strongest investment and innovation surge in many decades. The country expects a total of around 32 billion euros over the next six years from the construction fund with which the European Union wants to cushion the economic consequences of the pandemic. Most of the money will flow into “green” projects and into the digitization of the economy and administration. The government speaks of a “unique historical opportunity” for the country.

The “Next Generation EU” development plan, which the heads of state and government agreed on after tough negotiations in July, comprises 750 billion euros. Of this, 390 billion will be paid out as grants and 360 billion as low-interest loans.

Hungary and Poland are blocking the EU budget and thus also the Corona billions in aid because of the dispute over violations of the rule of law. In Greek government circles, however, it is expected that the conflict can be resolved in the next few weeks and that the first funds will be made available next summer.

Greece is to receive grants of 19.4 billion and cheap loans of 12.7 billion euros from the program until 2026. The total of 32.1 billion corresponds to 17 percent of last year’s gross domestic product (GDP).

This means that the country receives more aid than any other EU country in relation to its economic output. “It’s a lot of money,” says Deputy Finance Minister Theodoros Skylakakis. “We want to promote investment and at the same time implement reforms.” The amounts available are “so large that, if used correctly, they can change the course of our country,” said Skylakakis when presenting the program.

In the past decade, Greece experienced the longest and deepest economic slump in post-war history as a result of the debt crisis and strict austerity requirements. The country lost a quarter of its economic power, incomes fell by an average of 30 percent, and household wealth even shrank by 40 percent. Only in 2017 did Greece leave the eight-year recession behind. Now the corona pandemic is causing the economy to collapse again. For 2020, the government expects GDP to decline by 10.5 percent.

The Omonia Square in the center of Athens is dead

In relation to its economic output, Greece receives more aid than any other EU country.

(Photo: dpa)

But thanks to the billions from the EU’s recovery plan, the pandemic could give the country a significant boost in growth and modernization in the coming years. Around 6.2 billion euros are to flow into “green” projects such as the promotion of renewable energies, the connection of the islands to the electricity network of mainland Greece, energy-saving measures for buildings and the development of a charging infrastructure for electric vehicles.

A second pillar of the program is digital transformation: 2.1 billion euros are earmarked for the expansion of the fiber optic network, the transition to 5G technology and the digitization of public administration.

Loans should primarily go to companies

The government wants to promote digitization in the private sector with tax incentives. The third pillar is labor market reforms such as measures for vocational and further training, employment incentives and the fight against discrimination. The government plans to spend 4.1 billion euros on this.
The fourth priority of the program, which accounts for around four billion euros, is measures to strengthen the competitiveness of the Greek economy. These include tax reform, the modernization of public administration, the fight against corruption and money laundering, judicial reform to accelerate court proceedings and the promotion of research projects as well as closer links between universities and business.

The government intends to pass on the loans from the EU development program primarily to companies in order to promote sustainable private investments. So far, this has been a major weakness in the Greek economy: gross fixed capital formation only made up 10.1 percent of GDP in 2019. In the EU average, the investment rate was more than twice as high at 22.2 percent.

The Greek government submitted the draft of its plan to the EU Commission in mid-November and is now awaiting their comments. A final version should then follow in March 2021. Approval from the Commission is expected in Athens at the end of spring and the first payments in June or July 2021.
More: The debt pandemic: How Corona is ruining public finances.

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France wants to win back industrial jobs

Closed manufacturer in Donges near Saint-Nazaire

No other EU country has relocated industrial jobs abroad on such a large scale as France.

(Photo: AFP)

Paris Thick black smoke from burning car tires and hundreds of unionists in red vests greet Emmanuel Macron. Shortly before the second presidential election, he rushed to Amiens to hold discussions with workers at a Whirlpool plant. 650 livelihoods are at stake because the group no longer wants to have clothes dryers manufactured in France, but in Poland. After heated arguments, the candidate finds it difficult to get his message across: “I don’t promise you that I can save your jobs, but I will fight to ensure that your children get a better education.”

Eleven days later, Emmanuel Macron was elected president. The vocational training reform is one of the most important changes it has achieved. That didn’t help the Whirlpool employees: 86 people are still working there after two takeovers. The prefecture announced a few days ago that there is a risk of permanent closure.

The Amiens plant would be another stop in a long ordeal for industries that have gone bankrupt or turned their backs on France over the past 40 years. But without strong industry – as the corona crisis shows in particular – a country is not resilient. They are less able to defend their health systems and often simply lack the resources to fight against external and internal shocks.

“France is among the major industrialized countries that has suffered the greatest deindustrialization in the past few decades,” France Stratégie, the prime minister’s think tank, states in an analysis of several hundred pages. Since 1980 the industrial sectors have lost half of their employees and 2.2 million jobs have been lost.

In 2018 and 2019 industrial employment rose again for the first time. “But the Covid crisis fundamentally calls this trend into question,” said the economists of the report. The share of industry in gross value added in France is 13.5 percent. In Germany it is 24.3 percent, the EU average almost 20 percent.

France has become the “European champion in delocalization” over the years, is the second important finding of France Stratégie. No other EU country has shifted industrial jobs abroad on such a large scale in order to react to disadvantageous cost structures. While Germany exported goods, France exported entire branches of industry.

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A shrinking industry has negative economic, social and political consequences. In industry, productivity is growing faster on average than in other sectors. In France, industry accounts for more than two thirds of private spending on research and development. As their weight decreases, their growth and thus their ability to generate income decrease.

A chronic trade deficit is building up. The transferred income from investments abroad only compensates for this to a limited extent. And they encourage an uneven distribution of income, because they primarily benefit the wealthy. Ultimately, entire formerly flourishing regions are deserted, whose population feels disadvantaged and votes right-wing populists in protest.

Germany exports goods, France industries

Nicolas Sarkozy, and after him François Hollande, recognized the problem. “I want to secure industrial employment in the long term,” said Sarkozy in 2010. The conservative president issued a “large national bond”, of which 6.5 billion euros should benefit industry. For many French, however, deindustrialization remained a statistical phenomenon or even an expression of modernity for a long time: the country was changing into a service economy faster than Germany, it was said.

But then Corona came. With the pandemic, the carelessness is gone. Since the spring, the French have been disturbed by the fact that one of the largest economies in the world cannot produce enough ventilators, that the most important drugs have to be imported from China and that there is not even the ability to produce sufficient quantities of the reagents for corona tests.

Macron reacted immediately: “The re-localization of production is the most important lever to secure our sovereignty,” he said in June when visiting a factory of the pharmaceutical company Sanofi. France must be able to produce strategic goods domestically or in Europe again. He promised 15 billion euros in order to achieve the return of the outsourced jobs and skills.

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Economy Minister Bruno Le Maire and State Secretary Agnès Pannier-Runacher have now honored 31 companies that they consider to be exemplary. 680 million euros in investments would be mobilized, 150 million euros of which from the state. 4000 jobs would be secured, “1800 new ones should be created”, says Pannier-Runacher. How many of them return from abroad, their spokesman did not want to say when asked.

France Industrie emphasizes two crucial weaknesses: Because of high costs, the competitiveness of the industry has been destroyed for decades. Not through excessive wage increases, but through a toxic cocktail of high, income-independent taxes and very high social security contributions.

Only medium quality level

The second weakness: Instead of switching to products that are of higher quality and contain more technology, the industry has remained on average at a medium quality level and has sought salvation in the relocation of jobs to low-wage countries. Patrick Artus, chief economist at the Natixis investment bank, likes to sum this up in the following sentence: “France produces goods at Spanish technology level, but at German prices.”

Will France remain in search of lost industry? Hollande introduced tax incentives for research and the reduction of labor costs. Macron has made other important corrections, as the upward trend in industrial employment in 2018 and 2019 shows. One can only hope that he will catch up with them after the Covid crisis.

More: Read here what the new corona restrictions mean for the economy in Germany

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Corona aid: Chancellor warns of excessive federal debt – politics

Chancellor Angela Merkel (CDU) warned for the first time in the Bundestag on Thursday of the federal government’s excessive debt due to the generous and ongoing financial aid in the pandemic. The state compensation will continue to be paid in December, she said in her government statement. But all citizens must be aware “that we cannot continue this kind of aid until the end of the day”.

Merkel and the prime ministers had fought hard on Wednesday evening in a seven-hour switching conference to extend the partial lockdown and continue the financial aid from November in December. In November and December, the federal government reimburses 75 percent of pre-Corona sales.

This support is “necessary and necessary,” said Merkel. At the same time, it left open whether the aid would continue in this form in 2021. “There will definitely be talk of doing things together,” she warned. The background to this is that contact restrictions, which are only hesitantly planned and implemented out of consideration for certain industries or political demands from the countries, ultimately lead to the number of infections remaining too high for a decision to be relaxed. This means that those sectors such as restaurants or hotels that are affected by closings continue to need help.

The federal debt had recently exploded. In September, when the number of infections was comparatively low, Federal Finance Minister Olaf Scholz (SPD) had planned additional loans of 96 billion euros for 2021. Since then, the additional financial requirement for 2021 has almost doubled to around 181 billion euros. In addition, Scholz plans to take out up to 218 billion euros in additional loans this year. This means that the federal government’s new debts that have to be borrowed because of the pandemic aid add up to a sum that corresponds to about an annual budget in pre-Corona times.

The Chancellor called on all citizens to show their solidarity with the sectors affected by closings such as gastronomy, hotel and cultural institutions, “which bear the burden of society as a whole, so that schools and daycare centers are open and we can operate”. Everyone would have to reduce contacts in such a way “that we also see effects”.

Union parliamentary group leader Ralph Brinkhaus criticized the fact that the Bundestag was not involved in the decisions on further financial aid. The budget and budget rests with the MPs, he said. He also criticized the country chiefs, saying that it was “not in order for them to always take decisions and present the bill to the federal government”.

FDP leader Christian Lindner called for the December aid to be paid out unbureaucratically, “preferably by not making a new application procedure for December, but rather that the December aid is paid out with the November aid”. Eligible companies should be paid twice the amount once.

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Companies are hiring staff despite partial lockdown

Temporarily closed

In the catering and travel industry, layoffs will hardly be avoided. In many other industries, however, companies are hiring.

(Photo: imago images / penofoto)

Berlin Employers are concerned that jobs in Germany will be lost as a result of the corona pandemic, but also because of political regulation plans.

Germany has “done a lot right” in combating the pandemic, but the economy also needs a reasonably clear future perspective, said the newly elected President of the Confederation of German Employers’ Associations (BDA), Rainer Dulger, this Thursday in Berlin: “For For us entrepreneurs, the current uncertainty is poison. “

But employers are also worried that many of the coalition’s resolutions run counter to the declared goal of keeping social contributions below 40 percent. Government plans such as the supply chain law or the right to work from home are poison for competitiveness and limit the necessary flexibility. Dulger criticized the Brussels Commission that there are also “overregulation features” and “neo-dirigism” at the EU level.

Chancellor Angela Merkel (CDU), who was connected to the hybrid BDA general meeting by video, regretted that actually healthy companies were “heavily examined” in the corona crisis.

But because there is still no trend reversal in the number of infections, one will have to live with restrictions for the foreseeable future. Everything that helps avoid overloading the health system will ultimately also serve the economy, stressed the head of government.

But it is also clear to her that the economy cannot be kept running permanently through loans and grants. So far, the lockdown that has been in place for parts of the economy since the beginning of November has not yet had a negative impact on the labor market outlook. It is true that layoffs can hardly be prevented in the hospitality and travel industries. In terms of the economy as a whole, however, the signs are more towards an increase in staff.

Ifo employment barometer rises again slightly

This is indicated by the Ifo employment barometer, which rose again slightly in November. The indicator, which is based on the employment intentions of around 9,000 companies and which is calculated exclusively for the Handelsblatt monthly, climbed from 96.4 points in October to 96.7 points.

“The second wave will not have any major negative effects on the German labor market for the time being,” says Ifo economic expert Klaus Wohlrabe. “However, the development is very heterogeneous across the industries.”

In the service sector, the positive development is mainly due to IT service providers who are looking for staff. The construction industry also needs additional staff in order to be able to process the orders. Ifo is currently seeing little movement in the retail sector, and more companies in industry want to reduce rather than increase staff.

The labor market barometer of the Institute for Employment Research (IAB), which is based on a survey of local employment agencies, also rose slightly in November. “Employment will not collapse again in the second lockdown,” says IAB expert Enzo Weber.

The Chancellor promised employers that they would continue to campaign for employment-friendly policies. With the supply chain law, for example, solutions would have to be found that would not damage the competitiveness of the German economy.

Stabilizing social security contributions at below 40 percent is “a matter that I have always shared and supported,” said Merkel. At the moment one is experiencing “dramatic expenses” especially in health insurance. But that will “level off again”.

The Chancellor did not want to get involved in setting the goal of stable social contributions in the constitution. “I have so many things that should be included in the Basic Law,” she said. One could not respond to all requests.

More: What the new corona restrictions mean for the economy

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More than a million corona infections in Germany – Berlin does not loosen up even at Christmas

In Hesse, North Rhine-Westphalia and Berlin, overnight stays in hotels should also be possible when visiting relatives over Christmas – against the will of Chancellery Minister Helge Braun (CDU). Anyone who goes on a trip to see relatives “must have the chance to stay overnight somewhere,” said Hesse’s Prime Minister Volker Bouffier (CDU) on Thursday. NRW Prime Minister Armin Laschet (CDU) and Berlin’s Governing Mayor Michael Müller (SPD) made similar statements.

Chancellor Braun said in the RTL program “Guten Morgen Deutschland” on Thursday that when the state heads of government were consulting with Chancellor Angela Merkel (CDU), consideration was given to whether one could spend the night in the hotel while visiting relatives, “so that it wouldn’t be on the couch takes place at home ”. “But then we came to the conclusion: You can’t control that. And touristic trips must definitely not take place, ”he said.

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