the air and aeronautical sectors weighed down by the probable lasting restriction of flights

A United Airlines plane at Newark, New Jersey airport.
A United Airlines plane at Newark, New Jersey airport. CHRIS HELGREN / REUTERS

"This is an amazing time to explore America. " Secretary of the Treasury Steve Mnuchin invited his fellow citizens on Monday morning May 4 to visit their country and has not been able to say whether air restrictions with Europe and Asia will be lifted this year. This is "Too hard to say", said Mnuchin on Fox Business. He certainly imagined "limited" authorizations for business travel but clarified that the priority was the reopening of the internal market. In late January, Donald Trump banned travel from China and made a similar decision in early March vis-à-vis Europe.

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The declaration accentuated the pessimism in the air and aeronautical environment. Additional bad news after the statements of Warren Buffet, boss of the Berkshire Hathaway group, who announced on Saturday May 2 at its general meeting of shareholders that he had sold all his shares in the American airlines, for a total of 6 billion of dollars. "Airline – I may be wrong and I hope I am wrong – I think that has fundamentally changed", said the billionaire of Omaha, estimating that even if the traffic returned to 70% of its capacity in the next years, there would still be a huge overcapacity of planes.

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Bailed Out Companies

On Monday, stocks in Delta, United, American and SouthWest ended in declines of between 5.1 and 7.7%. The companies have been bailed out to the tune of 25 billion dollars by the American federal state, and are racing for liquidity by borrowing on the financial markets, but the remarks of Mr. Buffett made realize to investors the depth and the persistence of the crisis in the aeronautics and air sectors.

At the same time, General Electric was down 4.5%. The former first world capitalization, in collapse, announced that it would part with 13,000 employees (a quarter of the workforce) in its aircraft engine activity, which was by far the most profitable and experienced a drop in 40% of its profits in the first quarter. The company suffers from the decline in engine sales (45%) but also from the drop in maintenance and repair (down 60% in April) At the end of 2019, GE had 205,000 employees, a drop of 78,000 over a year . The company is holding up because it has $ 47 billion in cash, notably through the sale this winter of its biopharmacy division for $ 20 billion to Danaher.

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