Prices could soar to US$160
Oil prices could soar to as high as US$160 a barrel if tension over an Iranian oil embargo persists or in the event of conflict, a top Kuwaiti oil executive said in remarks published yesterday. Kuwait Petroleum Corp board member Ali al-Hajeri told al-Seyassah daily said such a price would not last long, however, and would return to “normal levels” once the reasons for the rise disappear. Hajeri called the current price of between US$100 and US$105 “fair and acceptable to producers and consumers” and said any higher price would be counterproductive to the global economy.
Air France cancels flights
Air France SA said about 15 percent of long-haul flights and 20 percent of European and domestic flights were to be canceled yesterday amid a strike by labor unions. The strike, involving pilots, flight attendants and ground workers, has been called to run through Thursday. Unions are protesting a bill to go before the French Senate that would oblige each employee planning to strike to give 48 hours’ notice. The measure would give the airline a clearer view of how passengers would be affected by strikes.
Suzuki’s net profit falls
Japan’s Suzuki Motor Corp said yesterday its net profit fell 4.7 percent for the nine months to December and downgraded its annual sales forecast due to the impact of a strong yen and a slump in India. The Japanese motorcycle and small car specialist said its group net profit came to ￥40.6 billion (US$530 million) for the period, down from ￥42.6 billion a year earlier. Operating profit for the nine months fell 5.1 percent from a year earlier to ￥87.7 billion on sales of ￥1.8 trillion, down 6.7 percent. The profit and revenue decline was mainly due to slower sales in India and a sharp rise of the yen, Suzuki said, adding that it was also still struggling to recover from the impact of the earthquake and tsunami on March 11 last year.
Qantas says rating at risk
Qantas Airways Ltd, Australia’s biggest carrier, said it may lose its investment-grade credit rating and be forced to sell its Jetstar Airways unit if Australia changes laws affecting the company. The airline must “adapt or die” in the face of global economic weakness, Qantas chief executive Alan Joyce told the Australian Senate Standing Committees on Rural Affairs and Transport yesterday. Qantas faces an “unsustainable” situation as capital spending to renew its fleet was running ahead of operating cash flows, he said. Qantas was downgraded one level by Moody’s Investors Services to “Baa3,” the lowest investment grade, on Jan. 31, because of concerns about rising competition and fuel prices. The airline, trying to turn around its international operations, is being challenged by Dubai-based Emirates and other Middle Eastern airliners on European routes. Formerly state-owned, the company was privatized in 1993 under the Qantas Sale Act, intended to preserve the airline’s status as an Australian carrier. Joyce was testifying before members of parliament who are seeking to amend the act to stipulate the majority of the carrier’s maintenance facilities must be in Australia rather than overseas. Forcing the airline to move parts of the maintenance facilities onshore would weaken its position, Joyce said.