Every week we summarize the world’s biggest travel, currency, and business stories. This week: US, UK, and eurozone Q1 growth; oil profits; HNA increases stake in Deutsche Bank; Canada’s banks downgraded; Home Trust not home and dry; a new US China trade deal; Air Canada splits from Aeroplan; and Air Canada and Westjet are among the two worst airlines in North America according to a new survey.
It’s official, for the second year in a row Air Canada has ranked as the worst traditional airline by customer satisfaction in North America according to the J.D. Power North American Airline Satisfaction Study. Air Canada’s score of 709 is below the industry average of 740, but still an improvement on last year’s score of 681. United Airlines was the second worst with a score of 716. Alaska Airlines was the best traditional carrier with a score of 765. The worst low-cost carrier was Frontier Airlines with a score of 663, followed by another Canadian carrier, Westjet, who scored just 736.
HNA Deutsche Bank
HNA is now the largest shareholder of Deutsche Bank. The Chinese Conglomerate had just a 3% share in February which has risen to 10% already.
Higher oil prices have boosted the profits of the world’s biggest oil companies. Exxon Mobil’s profits are up 120% to $4 billion and BP’s profits tripled to $1.5 billion – although it still owes $7 billion over the next two years in compensation for the Deepwater Horizon disaster.
Eurozone, US, and UK Growth
Eurozone GDP grew at about 2% (annualised) in Q1 of 2017, while America’s GDP grew by just 0.7%. The UK’s economy grew by 1.2% which represents a slowdown from the previous period.
US China Trade
The US and China have signed a major trade deal which will open the Chinese market to American beef, natural gas, credit agencies, and credit cards. In return Chinese banks will be allowed to enter the US market. The deal indicates that Trump’s tough talk on China was just that, talk.
PrivateBancorp Inc will be taken over by CIBC in a US$4.9 billion deal. The move will expand CIBC’s reach into the commercial and private banking in the US. An initial US$3.8 billion deal was rejected by the shareholders.
Air Canada splits from Aeroplan
Air Canada is waiving goodbye to Aeroplan as it plans to introduce its own loyalty program in 2020. Flights booked with an Aeroplan card will continue to earn points until June 2020, and can book flights using their points until this time as well. After that date they will have to choose from other rewards.
Moody’s, a credit rating agency, has downgraded the credit rating for six major Canadian banks citing high consumer debt levels and skyrocketing house prices in Canada. The agency noted a “more challenging operating environment for banks in Canada for the remainder of 2017 and beyond.” Canadians now have a record high debt level of 167%, but the company does note that Canadian banks remain strong relative to global levels.
Clients of Home Capital Trust have withdrawn hundreds of millions of dollars from the company in a matter of days. The company provides financial services which include uninsured mortgages to less than ideal clients (those who are self employed or have poor credit scores). The Ontario Securities Commission (OSC) alleges that executives of the company broke securities laws and mislead shareholders. In 2015 the company cut ties with 45 mortage brokers for falsifying mortgage applications. The OSC has said that the company loaned out too much money. Stock in the company fell by 65% before they received a $1 billion loan from Healthcare of Ontario Pension Plan, but at a rate of 22%.
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