Covid-19 News Updates

Flight Centre calls on government for assistance, flags "inevitable" job cuts

Global travel company Flight Centre (ASX: FLT) will accelerate a planned business review to identify further cost and cash saving initiatives.

The company, whose share price has fallen dramatically in recent weeks (down approximately 62 per cent since February 21), will be conducting meetings to manage the crisis faced by the travel industry.

The travel agency network aims to preserve as many roles as possible, but expects job losses across the industry and within the company are inevitable. 

FLT will hold further discussions with stakeholders including landlords, suppliers, vendors, insurers, and banks on ways to manage the financial impact of the flatlining travel sector.

Talks with the Federal Government have also been initiated to discuss broader industry assistance packages.

Flight Centre hopes the Australian travel industry will be extended support from the Government in a similar form to the airline industry assistance package announced this morning.

The Federal Government's $715 million aviation package includes the refunding and ongoing waiving of a range Government charges on the industry including aviation fuel excise, Airservices charges on domestic airline operations and domestic and regional aviation security charges.

"The conditions that our industry is facing are unprecedented and have clearly arisen as a result of the coronavirus and the initiatives that are being implemented to slow its spread," says FLT managing director Graham Turner.

"Management is determined to overcome the significant challenges that it currently faces and, with the support of our stakeholders, is ready to prosper when conditions eventually normalise."

Last week Flight Centre withdrew its guidance announced it would be closing 100 underperforming stores with plans to transfer transactions and staff to other shops while investing in new models.

Updated at 2:31pm AEDT on 18 March 2020.

Coles recruits 5,000 extra staff to cope with heightened demand

As Australians flock to supermarkets in droves despite calls to stop panic hoarding, Coles (ASX: COL) is taking action to bolser its capacity and cope with increased demand.

In an email to flybuys members today, Coles Group CEO said the company was recruiting 5,000 new team members.

"To help us continue to offer the best possible service to customers during this busy time, we are recruiting an additional 5,000 casual team members to join our supermarkets across Australia," Cain said.

"This will allow us to serve more customers and replenish shelves faster, while offering employment opportunities for Australians in industries impacted by COVID-19.

"We'll be fast-tracking inductions so we can boost the number of team members on the shop floor as quickly as possible."

Coles is following Woolworths' (ASX: WOW) lead in introducing an additional hour of trading exclusively for the elderly and disadvantaged, which will be known as "Community Hour" and take place between 7-8am from Monday to Friday. To be eligible customers will need to present one of the following:

• Pensioner Concession Card
• Companion Card
• Commonwealth Seniors Health Card
• Health Care Card
• Seniors Card
• Disability Card

Coles Group adds store managers will use sensible discretion and compassion to ensure vulnerable customers who require access are able to complete their shopping during Community Hour.

In order to allow everyone to purchase staple items, Coles will have a one-pack limit per person on toilet paper and enforce limits of two items per person for the following items:

• Pasta
• Flour
• Dry rice
• Paper towels
• Paper tissues
• Hand sanitisers
• Mince meat includes Beef, Pork, Lamb, Chicken & Turkey
• Eggs
• Chilled pasta
• Frozen vegetables
• Frozen desserts
• Sugar
• UHT long-life milk
• Canned tomatoes
• Liquid soap
• Chilled white milk includes all sizes of Coles Brand and branded white dairy milk, plant-based non-dairy and goats milk sold chilled in our dairy fridges in supermarkets and at Coles Express

German-owned supermarket Aldi will be changing its store opening hours to 9.30am-7pm from today as it faces an onslaught of customers.

Aldi says the revision of its trading hours will enable employees to take adequate breaks, restock shelves for customers, and get stock onto trucks and into stores.

"Please think before you buy and only buy what you and your family need," says Aldi.

"If we all do this, then we can make sure we have enough for everyone."

Updated at 1:28pm AEDT on 18 March 2020. 

KFC restaurant operator Collins Foods (ASX: CKF) closes in-restaurant dining

KFC restaurant operator Collins Foods (ASX: CKF) has announced in-restaurant dining areas will be closed in a bid to slow down the spread of the coronavirus Covid-19.

The company says it will immediately shift its focus to take-away, drive-thru and delivery - three areas that already account for around 80 per cent of sales.

Collins Foods is also putting in measures to limit the amount of cash and contact between staff and customers, including an encouragement to prepay orders via the KFC app.

"The health and wellbeing of Collins Foods' employees and customers is the company's number one priority, and never more so in these challenging and uncertain times," says CEO Graham Maxwell.

Click here for more.

Updated at 1pm AEDT on 18 March 2020.

Bubs ramps up capacity to meet baby formula demand

Infant milk formula producer Bubs (ASX:  BUB) has increased production to meet the heightened demand of its products from anxious parents.

In a statement to the ASX Bubs, which produces goat milk infant formula and organic cow milk infant formula, says it has put in place measures to sustain the continued security of its supply chain.

The company is also building an inventory to ensure steady future supply to quickly respond to future surges in demand for baby formula.

"We have greatly increased our capacity and are working to expand our inventory cover and meet the supply needs of our retail partners across both goat milk and organic grass-fed cow's milk-based formula, moving to two shifts per day, with capacity to move to three shifts if required," says Bubs founder and CEO Kristy Carr.

Carr says the company is working closely with Australian retailers to meet domestic demand which, in the most recent half year, accounts for around 70 per cent of total revenue.

"Over the last few weeks, we have worked with our retail partners including Coles, Woolworths, Big W and Chemist Warehouse to ensure distribution and continued supply of the newly integrated Bubs Organic 365 days Grass Fed Infant Formula range as well as our existing Bubs Australian Goat Milk infant formula range," says Carr.

"Meanwhile to assist any Australian family still finding it difficult to access product in their local retail outlet, we have extended our free shipping offer across all orders of baby food and infant formula for any orders made on our own website store; bubsaustralia.com."

Updated at 12:33pm AEDT on 18 March 2020.

City of Melbourne announces $10m stimulus package

A stimulus package valued at more than $10 million has been announced by the City of Melbourne designed to keep workers in jobs and support city businesses affected by Covid-19.

The package, supported by City of Melbourne councillors, includes:

• A virtual Business Support Summit at Melbourne Town Hall;
• Suspending fees for Food Act registrations and street trading permits for three months;
• Halving rent for eligible tenants in Council owned buildings for three months;
• Opportunities to deploy casual and part-time staff to enhance city cleanliness and amenity; and
• Developing a Rates Hardship Policy for consideration by the end of this month.

"We recognise that cash flow management will be a pressing issue for small businesses in the coming weeks and months," says Deputy Lord Mayor of Melbourne Arron Wood.

"This is the first package of support and will be doing more over the coming weeks to assist our local business community."

In particular, Lord Mayor Sally Capp says the City of Melbourne is dedicated to supporting traders at the Queen Victoria Market.

"Queen Victoria Market is the lifeblood of our city and we're doing everything we can support traders affected by the downturn," says the Lord Mayor.

"We will request the Board of the Queen Victoria Market to consider rent relief for affected tenants and stall-holders.

"We're doing everything we can to help businesses stay open and keep Melburnians in jobs."

Updated at Noon AEDT on 18 March 2020.

Guidance withdrawn at Ramsay Health, Aristocrat, Mirvac and REA Group

From hospitals to pokie machines, construction to online property listings, these are uncertain times for a wide range of businesses in Australia and worldwide.

The situation has led four ASX100 companies to withdraw their profit guidance this morning: Ramsay Health Care (ASX: RHC), Aristocrat Leisure (ASX: ALL), Mirvac Group (ASX: MGR) and REA Group (ASX: REA).

This adds to recent guidance withdrawals from Coca Cola Amatil (ASX: CCL), Cochlear (ASX: COH), oOh!media (ASX: OML), Qantas (ASX: QAN), Webjet (ASX: WEB), Helloworld (ASX: HLO), Flight Centre (ASX: FLT), Corporate Travel Management (ASX: CTD) and Apollo Tourism & Leisure (ASX: ATL).

Ramsay to help public health system

Ramsay Health Care, Australia's largest private hospital operator with facilities around the globe as well, faces "the unknown" in terms of the extent of Covid-19's impacts according to group managing director Craig McNally.

"The rapid spread of COVID-19 in Europe has resulted in decisions to defer surgery in some regions as governments seek extraordinary support from private operators such as Ramsay to deal with capacity requirements," says McNally.

"Specific details of the extent of this support including volume, case mix and reimbursement are still being finalised."

He notes the French government has cancelled all non-urgent surgery while Ramsay's hospitals are providing "much needed capacity and services" as required by the French Ministry of Health. In the United Kingdom, elective surgery has not been cancelled but Ramsay is in discussions with the country's National Health Service (NHS) to provide support.

McNally says in Australia it is still too early to determine the full impact of Covid-19.

"As the number of COVID-19 cases continues to escalate, we will see an impact on private volumes for the short term. However, in some cases, we are seeing decisions to fast-track elective surgery in order to minimise any future potential disruption," he says.

"As in other regions, Ramsay's Australian hospitals are also willing to assist the public health sector in each jurisdiction, to ease the surgical burden on the public health system, to undertake urgent and elective surgery, as well as provide capacity to cater for COVID-19 patients if required.

"Ramsay and our facilities right across the world are ready and willing to assist at this time of crisis. Our hospitals are well-prepared to manage the impacts of COVID-19."

The executive highlights strict infection control and prevention protocols to protect staff and healthcare workers.

"In addition to country-specific COVID-19 response teams, we have a global COVID-19 response team to keep up to date with the evolution of the outbreak and to continually monitor the impact on our business, our staff and supply chains.

"The Ramsay Wholly Owned Funding Group, which governs Ramsay's ability to borrow in its own right and which excludes Ramsay Santé's non-recourse debt, has headroom in its existing debt facilities the earliest of which is not due to expire till October 2022."

RHC also recently entered a JV for home hospital solutions.

Aristocrat falls back on digital diversity, Mirvac highlights strong balance sheet

As a producer of gaming machines, Aristocrat Leisure will likely be setback by punters avoiding public places like casinos, with the likes of Crown Resorts (ASX: CWN) and Star Entertainment (ASX: SGR) deactivating every second pokie machine to encourage distance between players.

Aristocrat believes its "outstanding fundamentals" continue to underpin its strategy and long-term confidence, while the company is also executing comprehensive risk management and mitigation plans.

The group is confident its diversity will see it through, with 40 per cent of revenue coming from digital games.

Aristocrat emphasises term loan facility is not due until October 2024 and is covenant lite, providing significant financial flexibility.

Developer Mirvac also highlights its debt position to ride out this tough period, as well as a robust balance sheet with $944 million in cash.

"As the effects of the COVID-19 outbreak impact Australia and our business, we are taking swift and prudent measures across the business, to not only protect our employees and stakeholders, but also provide transparency in what is an ever-changing environment," says CEO and managing director Susan Lloyd-Hurwitz.

"Our immediate priority remains the safety and wellbeing of our employees, customers and visitors to our Mirvac sites and the communities we serve."

REA Group to offer free re-listings

Online property listings company REA Group actually achieved new audience records on realestate.com.au in February with more than 93 million visits, as well as app launches of 38.4 million.

But given the exceptional circumstances with Covid-19 and the uncertainty of the economic environment, the company has determined it is not possible to predict the impact on residential listing volumes.

"As the spread of COVID-19 continues, we are focused on the health and safety of our people and local communities, while supporting our customers," says REA CEO Owen Wilson.

"In the spirit of true partnership we want to help our customers through these unprecedented conditions by introducing tangible measures.

"This will include the ability to re-list or re-upgrade listings for free, which will provide Australians greater confidence when selling their home."

He says the company will also delay the timing of contracted price changes in its residential business, which were previously due 1 July 2020.

"REA is well equipped to operate in this challenging environment with best practice continuity measures in place.

"We have a very healthy balance sheet, low debt levels, and the capacity to increase debt facilities as necessary. We are in a strong position to successfully overcome these unprecedented times."

Updated 11.41am AEDT on 18 March 2020.

Ardent Leisure closes all US Main Event entertainment centres

The parent company of Main Event, Ardent Leisure Group (ASX: ALG), will temporarily close all Main Event entertainment centres to help stop the spread of Covid-19.

Main Event, a bowling and entertainment business, will shut down its 43 US centres from 17 March through until the end of March 2020.

"The management team at Main Event views this as an appropriate decision in light of the current circumstances," says Ardent Leisure.

"Main Event will continue to monitor the situation to determine when the centres will re-open."

Updated at 10:37am AEDT on 18 March 2020.

Biosecurity emergency declared in Australia, travel advice at Level Four, do not travel

Speaking at a press conference in Canberra this morning, Prime Minister Scott Morrison has announced a new gathering ban and enforced the toughest travel restrictions in the country's history.

It comes as the Government declares the pandemic a biosecurity emergency under the Biosecurity Act by the Governer General.

The Federal Government has placed a ban on non-essential gatherings of persons 100 or greater in indoor areas effective today.

In outdoor areas the advice remains as it was announced on Friday at 500 people.

Essential gatherings include: airports, public transportation & public transportation facilities, medical facilities, aged care facilities, correctional facilities, courts or tribunals, grocery stores, office buildings, factories, construction sites, schools, universities, hotels, motels, mining camps, and other places where people are transiting. 

Food markets are exempt from the 500-person limit, however they must undertake additional measures,such as control of patronage level numbers or stall density reduction to decrease the risk of Covid-19 transmission.

Additionally, the Government has upgraded travel advice for Australians looking to leave the country to Level Four.

This is the first time travel advice has reached this level in Australia's history.

"The message to Australians is do not travel abroad," says the Prime Minister.

"Do not go overseas. That is an indefinite ban."

The Government recommends all Australians who are overseas to return as soon as possible by commercial means.

Regarding domestic travel the PM says flying interstate is low risk at this point in time.

"We have not seen evidence of people contracting this virus on aircraft. The issue is not people being on planes, it is on people moving around the country," says the Prime Minister.

As for schools, the PM says he has received health advice that they stay open for the time being. 

'As a father I am happy for my kids to go to school. There's only one reason they shouldn't be going to school and that is if they are unwell," says the PM.

"Whatever we do we've got to do for at least six months."

"That means the disruption that would occur from the schools closing would be severe."

The Prime Minister also lambasted those who have been panic buying groceries and hoarding essential items, dubbing the practice as 'Un-Australian'.

"Stop hoarding, I can't be more blunt about it," said the Prime Minister.

"I have got to say it is one of the most disappointing things I have seen in response to this crisis. It's ridiculous, it's Un-Australian and it must stop."

As for a rumoured second stimulus package, the Prime Minister says the Australian Governor is considering further economic measures. The details are still being worked on and will be announced once properly designed.

The PM has also announced an aviation package for the refunding and ongoing waiving of a range Government charges on the industry including aviation fuel excise, Airservices charges on domestic airline operations and domestic and regional aviation security charges.

The total cost of the measures are estimated to be $715 million, with an upfront estimated benefit of $159 million to our airlines for reimbursement of applicable charges paid by domestic airlines since 1 February 2020.

There are now 470 confirmed cases of the coronavirus in Australia. 

France in lockdown

France, which on March 6 only had slightly more recorded cases of the virus than Australia has now, enacted bans on all non-essential outings overnight with penalties of up to 135 euros (AUD$247).

French President Emmanuel Macron promised to guarantee 300 billion euros (AUD$550 billion) worth of loans to businesses, in addition to the suspension of rent and utility payments.

"No French company, whatever its size, will be exposed to the risk of collapse," Macron said.

The French Government will also help health sector workers by paying for their hotels, taxis and childcare during the outbreak.

Updated at 9:31am AEDT on 18 March 2020.

Virgin to suspend all international flights

Listed airline Virgin Australia Group (ASX: VAH) will suspend all international operations from 30 March to 14 June as travel demand flatlines.

Virgin will also cut domestic capacity by 50 per cent until 14 June.

Both updates have effectively grounded the equivalent of 53 aircraft.

While all international Virgin flights will be suspended from 30 March, a number of services will end before then including:

• Melbourne to Los Angeles services suspended from 20 March
• Brisbane to Haneda services suspended from 29 March
• Melbourne to Denpasar services suspended from 29 March

Until 29 March Virgin will operate a reduced international schedule to ensure Australians can make it home.

Virgin says it is working on a range of measures to address the impact of the cuts on its staff including the use of accrued annual leave, leave without pay, redeployment and, in some circumstances, redundancies.

"We have entered an unprecedented time in the global aviation industry, which has required us to take significant action to responsibly manage our business while balancing traveller demands and supporting the wellbeing of Australians," says Virgin Australia CEO and managing director Paul Scurrah.

"The Virgin Australia Group is focused on ensuring we manage the business through this difficult period and maintain a strong and competitive aviation industry in Australia for years to come."

Impacted guests who wish to change their travel with Virgin due to Covid-19 have a number of options:

• Guests with new or existing domestic and international bookings through 30 June 2020 have the option to change their flight to a later date, and/or a different destination, without incurring a change fee.
• Guests who no longer wish to travel can cancel their flight and retain the value of the booking as a travel credit

The Australian Competition and Consumer Commission (ACCC) has issued advice for consumers if their events, flights or travel servcies are cancelled because of the coronavirus pandemic.

"If events, flights or other travel services such as cruises are cancelled, the ACCC expects refunds or other remedy such as a credit note or voucher will be offered in most circumstances," says the ACCC.

"However, if the event, flight or travel service is cancelled due to government restrictions, consumer rights under the consumer guarantees may be impacted. In these situations consumers may be entitled to a refund under the terms and conditions of their ticket, or potentially may make a claim under a travel insurance policy."

"If a consumer chooses not to attend an event that is still going ahead or travel domestically due to coronavirus concerns, this may be treated as a 'change of mind'. The same applies to hotel room bookings. Consumers' rights to refunds in these circumstances will depend on the terms and conditions and any cancellation policy adopted by the business."

Updated at 8:58am AEDT on 18 March 2020.

Department of Foreign Affairs and Trade advises all Australians overseas to return to Australia

Australia's Minister for Foreign Affairs Marise Payne has advised that Australians who are overseas and want to come home should do so as soon as possible. 

As more countries close their borders or introduce travel restrictions, overseas travel is becoming more complex and difficult. 

Commercial options are also likely to become less available with most airlines cutting or suspending international routes.

Qantas Group (ASX: QAN) announced earlier today that international capacity will be cut by around 90 per cent until the end of May 2020.

Virgin Atlantic has taken similar measures to manage its experience with Covid-19 and will reduce its schedule by around 80 per cent by 26 March.

Australians who are overseas & want to come home are advised to do so as soon as possible by commercial means. Transport options will likely become more limited as countries respond to the #COVID19 outbreak & @dfat's capacity to provide consular help may be limited.

Marise Payne (@MarisePayne) March 17, 2020