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Travel Horizon Between the Airbus and the Sea

Posted on May 31, 2021. by NTI

It is a natural predisposition for a Great British person to look to the horizon on a beautiful Bank Holiday weekend. But which way will you choose to travel when we finally get a the green light?

If your favoured mode of travel is by sea, you might want to keep an eye on the P&O website. In their role as the parent company's auditor, KPMG recently said that there was “a material uncertainty that may cast doubt on its ability to continue as a going concern”. In 2020 P&O laid off 1,100 employees and no-one has got on a boat (when does one of those become a 'ship'?) to go somewhere, because there is nowhere to go and the world remains a much smaller place for the foreseeable future.

P&O Ferries is a subsidiary of P&O Division Holdings and they have been forced to apply to Mum and Dad for a second bridging loan of £10 million in March of this year, on top of £30 million borrowed last November.

"You know we can't keep bailing you out;" Mum said, "at some stage you have to stay afloat on your own."

The company has suspended payments to its banks and, according to a source talking to The Times, is more than six months behind in making a promised contribution to the industry-wide pension fund, which provides retirement incomes to 25,000 former seamen. This is never a good sign, and the company is, we are told, talking to 'an restructuring advisor', although we can't find out which one - if you know, get in touch at enquiries@nti.co.uk.

There are serious issues with the company's pension scheme, another financial red flag for the shipping company, and it is seeking a 12-month deficit contribution holiday from pension funds that it sponsors, including the Merchant Navy Ratings Pension Fund. Discussions were proceeding “positively”, it claimed, and it was “confident” of getting approval in the near future. However, confidence has a consistent habit of being misplaced and there are early signs of the band starting to assemble on the deck at P&O. Other employers in the Merchant Navy Ratings Pension Fund are understood to be extremely concerned because P&O is one of the biggest members. It is a so-called “last man standing scheme”, which means that the remaining employers have to shoulder the extra burden if others fail.

If your chosen way of travelling towards the horizon is by air, the contrails are scribing a more positive outlook. Airbus, manufacturer of the aircraft that will take you to, well just Portugal and the Faroe Islands for now, has signalled confidence in the recovery of the aviation industry from the pandemic, setting out plans for a steep ramp up in the production of its A319, A320 and A321 jets. Quite where they have derived that confidence from is a bit of a mystery, but we'll take anything right now.

“The aviation sector is beginning to recover from the Covid-19 crisis”, said Guillaume Faury, chief executive of Airbus.

"What makes you say that, M Faury?"

"A blend of my brain and tongue," he said, taking the question rather too literally, but that may have just been the sense of humour of his interpreter. 

Until human beings can get their act together and vaccinate the vast majority of human beings against Covid the world will be significantly smaller than it was 18 months ago for some time to come. But we will take cheer on this Bank Holiday Monday.

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