tv HAR Dtalk BBC News June 15, 2021 12:30am-1:01am BST
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this is bbc news, the headlines president biden has said he will lay down red lines to his russian counterpart in their meeting on wednesday. speaking after a summit of nato leaders, mr biden acknowledged that he faced a tough opponent in vladimir putin. he insisted the us would respond if russia acted against its interests. britains prime minister borisjohnson has delayed the final lifting of covid restrictions, in england. it means the final stage of unlocking will not take place on monday — but four weeks later onjuly the 19th. business groups are demanding more support for firms hit by the delay. the belarus journalist, roman protasevich, has made a surprise appearance before journalists and diplomats who were expecting to be given more details on why his ryanair flight was forced to land last month. foreign news crews walked out, saying mr protasevich clearly had no choice but to take part. now on bbc news. hardtalk.
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welcome to hardtalk. i'm stephen sackur. no industry has been hit harder by the global covid pandemic than aviation. cross—border travel is either banned or constrained by tests and quarantines across much of the world. besides, who wants to travel for either business or pleasure in a world full of insecurity and uncertainty? that is the challenge facing my guest, johan lundgren, ceo of easyjet, europe's second—biggest budget airline. can his business model survive the double whammy of covid and climate change?
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johan lundgren, welcome to hardtalk. thank you. you and easyjet have been grappling with the covid pandemic for more than 15 months now. in your wildest nightmares, did you imagine it would be this bad for this long? no, i didn't, and nobody knew and nobody thought that this would happen to the scale of it. but we did assume, compared to some other airlines, that it was going to last for a period of time that we couldn't determine when it was going to finish. so we didn't say last year, "this will be over by easter," as an example. so the actions we took were actually there to support and manage us through the situation for what's going to be a period of a time.
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in those early months after march 2020, you simply grounded your entire fleet, didn't you? ijust wonder, for a boss of an airline, what it's like to issue that order that all planes have to stop. it is the... and it was the low point of these 15, 16 months, i mean, because of so many reasons. you have an airline, you have people who are working with you, millions of customers who actually depended on easyjet and it's a part of the way that they live their lives. and, actually, when you do no flying at all, and also the logistical challenge of getting now all the aircraft that are usually flying into a parking situation, it was definitely the low point and has been the low point throughout this pandemic for us. if you then forget about all the health consequences of this, of course. you now have the ability to fly some routes with some planes, but it's still extremely constrained. just tell me what you
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are doing right now. well, basically, we are flying, in the quarter that we're in, about 20% of what would be the capacity in 2019, as an example. and if you're looking through what that consists of, you can see that 85% of the business we're doing right now are business that is flying outside the uk, and 15% only is touching uk soil. normally, that would be about 50/50. so the flying we do here in the uk is primarily domestic, and whilst that flying is doing 0k, it, of course, can't compensate for the level of flight we should be doing into the uk. and i think i'm right in saying that, before all of this, you employed roughly 1a,000 people. so how many are actually working for easyjet today? well, a lot less, that's for sure. so, basically, we have about 12,000 full—time
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employees in the company. that constitutes about 15,000 people. we have managed, through negotiations and discussions we've had and the agreements with the unions, to keep most of them. but a lot of people have gone on to part—time. but then, of course, here in the uk, we have a lot of people who is on furlough, as an example. but whilst we're seeing now that the business is starting to recover outside the uk, so we're putting people back into operations, which is fantastic to see. but that's what we would be hoping for, that that would happen in the uk as well. how close to going bust has easyjet been in the last 15, 16 months? well, not close at all. easyjet came into this as one of the strongest airlines in europe. we were privileged from that point of view, and we've taken a lot of actions in terms of getting access to liquidity. we raised over £55 billion since the start of the pandemic. but quite a lot of that money has come from the uk government, hasn't it? well, no, it's been, you know, you know, getting to us through a wide variety of sources...
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hang on, let'sjust be very clear about where you got the money from. i know you've raised money from shareholders, but as i understand it, you had a £600 million loan from the uk government at the very beginning of this crisis, and that's a pretty big chunk of money. i mean, without state support, you would have been in real trouble. so let's get clear about the numbers here. so we had about 100 million in furlough, we've had, as you said, 600 million that has come through the support of the ccff, which wasn't something that was just available for easyjet. that was for any company who had an investment—grade balance sheet to apply for that. but, of course, we've had also... but my question is, you know, without this substantial sum of government money, would you have been solvent? yes, we would have, we would have found ways of getting access to liquidity, in any case. look, you know, there are still plenty of opportunities for us in order to get access to liquidity. and that comes back to the fact that this has been a very strong company coming into the crisis, and the actions that we have taken means that we also have the confidence in the market to get further liquidity if we choose to do so. were you caught out
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because you had, before covid, you'd signed this huge contract with airbus to buy more than 100 new planes? something that the founder of easyjet, who, of course, is still a shareholder but is not involved in the running of the company, stelios haji—ioannou, he said it was a catastrophic mistake, you should never have signed that contract to buy these new planes. well, this contract was signed many, many years ago, and it was something that was approved by all the shareholders, and the contract gives us tremendous benefits also... but was it a mistake? no, no. now that we can see what happened in 2020 with covid—19, you've had to delay receipt of the planes, but, nonetheless, it still sits there as a huge burden on easyjet. no, not at all. this was not a mistake to sign this contract. this is a contract that works very well in favour of the company. and we also have immense flexibility within the contract. we negotiated, as an
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example, no delivery of aircraft this year. this is the first time in the company's history that we're not taking on any deliveries... no, you've deferred, i know, but... and we will want to... let me finish this. we will want also to make sure that we have access to these planes going forward in the future, so it's the flexibility that is the key. well, you don't know. you don't know what the aviation market is going to be like in years to come. stelios, who knows something about your company, after all, because he founded it, he said that this deal represents the main risk to the survival of easyjet. no, it is wrong. that's what he said. well, i'm telling you that that is wrong, and i will say it has been debated also with other shareholders, you know, it went to vote, you know, earlier, before my time in the company, and it was also voted again where we were, you know, explaining the details of this contract. and just be clear, easyjet is a growth company. there's nobody, really, who doesn't think that aviation is going to pick up and recover. well, there are, mr lundgren. i mean, mckinsey,
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the consultancy group, looked very carefully at the aviation sector — they say it may not return to 2019 levels till at least 202a. �*23 is where most analysts are, and commentators on this as well, so that still means we're going to see the recovery... but that wasn't part of the model that encouraged you and others in the company to believe that putting this massive deal together with airbus was the right thing to do — things have changed. yes, but we have flexibility in order to cope with that, and even if that takes to �*24, we can cope, with the level of flexibility we have, because that's what we have negotiated in the amendments with the contract with airbus. the thing is, you live in uncertain times, you know it better than anybody, because right now, as you said, a huge chunk of your business still is derived from the uk travel market. and right now, the uk government is making life... ..not deliberately, but is making life extraordinarily difficult for an airline like yours. you tell me what you think of a government policy which has only 11 countries and territories in the entire world on a green list,
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where the message is that it's safe for uk citizens to travel. i think it's wrong, and i think the data would support that international travel could restart to a number of cases. and most of europe now would have, you know, less cases of infections that you would see in the uk. italy, germany, many places in the greek archipelago, the balearics, the canary islands. so we have always said that we've been supportive about the framework with the green and amber and the risk categorisations of countries depending on the risk, on the level of risk. but, you know, the problem is that the uk government doesn't look at the data, because if it did, it would allow a safe restart of travelling to these countries. yeah — for those who don't live in the uk and don't live under these restrictions, there's a traffic—light system. i've said there's only 11 countries and territories in green, but if you're defined as an amber—list country, or still more, a red—list country, then the british
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people are told not to travel unless it's essential. if you travel to an amber—list country, you have to quarantine when you come back and take a couple of tests. red—list countries, you're not allowed to travel at all. now, are you saying that the government is just plain wrong about this? because every time we talk to the government about this, they say, "we are simply following "the epidemiology and the science, "this is the only way "to safeguard the public health of the uk's citizens." it's not correct. the medical data doesn't support the fact that you can't travel to a place who has a proven lesser number of cases of infections than where you're travelling from, and in a number of these cases also you don't have the variants of concern. sure, but things change very quickly. i'm sure, a few months ago, people thought travel to and from india was safe, but it turned out that it wasn't, because a new variant was mutating at that very time. the data was there to say
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that india should have gone onto the red list. and this is one of the problems. i would have said this as well, that when you are introducing the type of restrictions, and remember that restrictions were there to make sure that you could travel safely to green and to amber, but if you're not following the data and you're not transparent with what constitutes safe travel, then you're going to end up in this situation where you're actually, in this case, and i don't say this lightly, but where you make this up as you go along, and india was a case where it definitely should have been onto the red list, but that didn't happen. isn't the danger that you are perceived as a businessman who is putting your interest and your profits above the public health of the nation? but that is completely wrong. nobody... you mentioned it yourself in the introduction, there hasn't been a sector who's been as badly hit as ourselves. as you said yourself, we were grounded for 11 weeks last year. we would never do anything — we would never suggest anything
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that would take us back to that type of situation. well, you say that, but then... can i also just say that the data shows — and this has been in many research and studies — yale school of public health, that's an example — to say that you could open up travel to most of the european countries and it would have a minimal impact on hospitalisation. mm. you say you would never do anything to jeopardise public health. why, then, are you encouraging people to ignore government advice not to travel? because if the government advice is wrong... so, i'll give you an example. why can't you travel to malta, who has 13 cases of the infection of 100,000, where you have an average here in the uk of 8a? why can't you travel to the balearics with 37 cases? it's still quite a thing, though, for a business leader to actually encourage the public to ignore the very strong advice of government ministers. i'm looking now at the words of the transport secretary, grant shapps, who said just the other day, "the restart of international travel could. his words — "..screw up the uk recovery from the pandemic." you, on the other hand, when asked if easyjet customers
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were flying to amber countries for leisure, you said, "yes, people are booking flights. "they are going there on holiday. "i think the view is simply to apply common sense." that's an arrogance, isn't it? absolutely not. it's following the data, it's following the evidence, it's following the medical, you know, statistical evidence that says you can travel to these countries that would be representing a lesser risk than if you were travelling in the uk, as an example. so this is a... have you... this is not something that, you know, people are making up. you are looking at the data. and also, if you're looking at a number now in european countries, they have said what they believe constitutes safe travel by saying, for instance, we believe it should be 50 cases of 100,000 of population as an example, 150 cases, and the uk government needs to come out with something similar. you should not travel to certain places in the world. that is absolutely correct. india should have been on that red list.
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but when you're looking at the data that suggests that in many of the european countries, the infection cases are much lower, you should be able to travel there. have you, as one of the leading voices in aviation in the uk, have you looked government ministers in the eye, face—to—face as we are, or maybe on zoom, and said, "minister, in the messages you are giving "to the british public about travel, you are plain wrong." yes. have you done that? yes. and what response did you get? that there are a number of things to consider and they are, you know, looking at competing priorities. and i said, "well, we got to look at the data." and i've said that, "look, this is the data that i'm seeing. "is this data wrong?" and apparently, you know, clearly it isn't wrong because these are public data. but i do understand that the government has, you know, a difficult decision. there are competing priorities in here. but the problem i have is that if there's no transparency on the decision—making, customers, nor
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companies, can plan. do you think they are... and that's what we'd like to see. do you think they are wrecking your business and your industry? well, first of all, i think that they do have a very difficult challenge and i get that... that's not the question i'm asking you. no, i'll get on to the question, but i don't think that there's anybody who's sitting and consciously trying to make troubles for this sector. everybody recognises the critical importance it has from an infrastructure point of view as well. but i do think that it is a difficult thing to recognise that we were acknowledged very early on at first as being the industry who was the hardest hit coming into this, and we are most likely going to be the one who's going to come out the last out of this whole thing. and at the same time, as we see, other european governments are moving in the other direction. and that is difficult to...to accept. and also the responsibility we have for the millions
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of customers, of families who've not been able to reunite, as an example. we're getting inundated with emails and contacts from them to say, "where and when can i travel?" well, we don't know. if you're looking at the data, you should be able to reunite. but, unfortunately, that's not where we are today. you're a low—budget airline. your message to people across europe is, "you know what? "you don't need to be wealthy to enjoy a foreign holiday, "to be able to travel somewhere different, "somewhere that you've never been before." i guess the reality of today is that, actually, you do need to be wealthy to travel if you're travelling from the uk, because when you return, you and your family have to go through a series of tests which cost, well, last time i checked, at least $100, if not more, per test. so if you've got a family of four, that's a substantial sum of money. it means that in this covid world, travel is really only for the wealthy. unfortunately, you're right. and that is even the case when you're looking at the few countries who is in the green.
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even in the green countries that represent the lowest risk, you have to do this testing. and, and... and this is something that we pointed out quite early on. and it wasn't like i think people understood how costly this was and how out of reach this would make that travel to be for millions and millions of people. do you think that, actually, post—covid, attitudes to travel might change? and we haven't talked about business because that's not the biggest part of your enterprise, but nonetheless, some businesspeople travel on easyjet, and both for business and for leisure, maybe, in the future, people will think twice about flying. you know, this might notjust be something that goes away. this might be a reassessment of how much people want to travel. and we do... for business, at least, we do have zoom, we have skype,
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we have different ways of holding meetings, for example. maybe the market isn't going to return. it will. and there's been studies done on this whole thing. let's start with business. just 20% of what we do is normally business, and we can see that if you go back to every type of downturn, there would be one or two year's lag before business travel would recuperate to where leisure travel is as well. and i think, if anything, you know, the limitation of technology has been apparent also, as we've been doing the zoom calls and the team meetings and so on. if you're looking at what comes out as the number one thing that people want to do post the pandemic... mm. ..in the uk, here, as an example, and we've got similar studies elsewhere in european countries, travel comes up as the number one thing. and this is consistent with also what we've seen in other downturns. the difference now, the difference will be that there will be a greater focus from people looking on this from a sustainability perspective. ah. where they would make... let's get to that.
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well, they will make choices, depending on product and service, on sustainability. indeed. and the problem you've got in your industry is that you currently are a form of transportation that's entirely dependent on fossilfuel. and given that every government around the world now has to be committed to a programme of decarbonisation — and that has filtered through to public opinion in many countries across the world — you have got a profound problem. it definitely is the challenge. but then again, you know, there is a solution to this challenge. you know, we have and you would know that easyjet. .. yeah, not flying is the solution. absolutely not. i mean, the whole suggestion that you would stop mobility and stop flying, that's certainly not going to solve the issue, which you need to do. there are many other ways to travel. you just don't travel to the same places. you can use the train, or... what you should be looking for is actually how you decarbonise aviation. and there are plans in order to do that and i'll come back to that a little bit later. look, there's been studies made by eurocontrol in 2018 that the demand of people who would choose to go with comparable on the rail network across europe,
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it was 0.4%. so it's not true to say that you have these alternatives, to that extent. well... and even if you... look at one government in europe — the french government is now passing a law to say that any journey which can be done by train within france of two—and—a—half hours no longer can be served by flight. it has to be a train journey... yeah. ..or, of course, a carjourney. that model, if it is copied throughout europe, again, is going to fundamentally threaten your business model. absolutely not. we fly in significant routes where there's a train comparable to a two—and—a—half—hourjourney. in france, as an example... but should you be doing that? as a citizen, as a responsible citizen... in france... ..never mind the man who makes his money out of easyjet, as a responsible citizen, should you be encouraging people to fly when they can make a journey by train, which is according to all of the statistics, going to be much less damaging to the environment? well, the alternative simply isn't there. i'll give you an example of this.
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in france, you know, we have one route that we've been operating where there's a train comparable for three—and—a—half hours. and we know also from studies that we've done that, you know, if there is a train comparable that sits below four, four—and—a—half hours, that's where people are thinking, "oh, look, ican take the train." if you go four, four—and—a—half hours or more, you know, that is not an option for many people. and in ourcase, if we had 100... i'll give you this example — if we had 100% of all people who flew with easyjet on a normal year, if they transferred onto train comparables where there were, you know, you could take a train, you know, at a five—hour length, it would be 5% of our total carbon emissions. so it wouldn't have a significant impact on that. so you tell your customers, "0h, we are unlike other airlines, "we offset and we are going to be net—zero carbon "because we're going to plant so many trees, "have other people plant the trees for us." the truth is you're not
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comparing like with like. setting up a new forest is nothing like keeping oil in the ground. you know, forests come, forests go, but in the end, that wood will burn, it will go back into the atmosphere. the best thing to do with oil is leave it in the ground, and that's the problem you've got as an airline. the second—largest contributor to climate change is deforestation. so i don't think you should say thatjust planting some trees is going to have, you know, some type of, you know, not insignificant impact. we have said through the carbon offsetting scheme that we do — that we were the first major airline in the world to launch — that basically we are flying carbon neutral in what we're doing. it is one of the technologies... yeah, and greenpeace says the biggest problem with carbon offsetting is that it doesn't really work. that's wrong. it's been proven multiple times. it is one of the technologies that is available today. 0rganisations, governments are depending on carbon offsetting in order to decarbonise, even corsia —
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that's going to be introduced, it is based on the carbon offsetting mechanism. it is not the perfect long—term solution because you want to get into... the perfect long—term solution is, let's say, an electric plane. are you, in your company, working hard in terms of r&d with others to get that into reality? yes. yeah, electric and hydrogen. electric and hydrogen, or a combination, is the most likely thing you're going to see to get on to net zero. when? well, 2030 is where you're looking at a large—scale electric plane and the hydrogen - 2035. those are the views at this moment in time. and i'll give you an example. two, three years ago, when we started talking about this, and we've been on to this quite for a long time, even before ijoined the company, there was many people who actually didn't think it was going to even be possible to happen from a technological point of view. mm. now nobody�*s arguing that. now it's a matter about talking about what timeframe. and the challenge will be not
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so much to have this to fly, but actually how do you transition the whole of your fleet into a zero emissions fleet of aircraft? we'll get you back in a few years to see how far along that track you really are. but for now, johan lundgren, we're out of time. thank you so much for joining me on hardtalk. thank you. hello. monday was a day of contrast. still hot and humid in london. the temperatures were soaring by the middle of the afternoon, we reached the highest temperatures recorded so far this year and that was 30 celsius in greater london. now, it was a different story further north and west because of the weak weather
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front that was spilling in across scotland into the north of england. behind it, the wind direction changing to a northwesterly and that brought with it some fresher air and a marked contrast. look at sunday's highs across northern ireland, 25 degrees, the warmest day of the year here. by monday, those temperatures were down quite sharply. it looks as though that fresher feel will continue to be the theme of the weather into tuesday, as well. starting off the good deal of dry weather, or week weather front just a band of cloud lingering first thing in the morning but there will be a lot of sunshine coming through in area of low pressure bringing in some rain into western reaches of scotland by the middle part of the day and the winds increasing here. so, we're looking at around ten to 18 degrees as the overall height but 25 is not out of the question. down a touch, but still that is 77 fahrenheit. that weather front is bringing the rain is going to bring some heavy bursts of rain for a time
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across scotland and overnight, so moving to wednesday, it could be fairly weak affair by then as it moves out of the scottish border into the north of england and parts of north wales. behind it we'll see some sunshine as well, drop temperatures of around 1a to 18 degrees ahead of it and starting to track more heat and humidity once again, 20 degrees not out of the question. and it is this heat and humidity which could trigger some sharp thundery downpours towards the end of the working week. why? we've got this warm humid air starting to move up from spain and into france and to trigger some sharp thunderstorms and there's a lot of uncertainty just where these thunderstorms are likely to crop up and so, it's worth keeping up with the rest of the forecast been anywhere across eastern englandcould be ta risk to real torrential thunder downpours further north
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this is bbc news: i'm david eades with the latest headlines for viewers in the uk and around the world. president biden underlines america's strong support for nato as leaders warn of the military challenge posed by china. we talked about the long—term systemic challenges that china's activities post to our collective security today. borisjohnson�*s vision of post—brexit global trading partnerships begins, with the uk and australia agreeing the broad terms of a deal. crossing mountains, deserts, the sea and even a warzone, we've a special report looking at the dangers for ethiopian migrants trying to reach saudi arabia. also, denmark pledge to achieve something special at the euros for christian eriksen,
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