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Airlines group warns over rising oil price

R e tail

Tesco UK chief quits following January’s profit warning The boss of Tesco’s UK operation, Richard Brasher, is stepping down. The supermarket chain’s group chief executive, Philip Clarke, will take on responsibility for the UK business. Clarke declared, “You can’t have two captains” as he took direct control of the supermarket group’s UK operations. In a statement, he added: “I have decided to assume responsibility as the CEO of our UK business at this very important time. “I completely understand why Richard has decided to leave and want to thank him for the great contribution he has made over many years.”

The global aviation industry could run up losses of more than US$5 billion this year if oil prices spike as anticipated in light of building tensions over Iran’s nuclear programme, the industry’s trade group says. The International Air Transport Association, or IATA, says it now expects earnings will likely decline to US$3 billion in 2012. Tony Tyler, IATA’s chief executive, said that the industry’s diminished profit forecast for 2012 could turn to losses of more than US$5 billion if oil prices spike to US$150 a barrel due to Western tensions with Iran. “I must emphasise that the industry is fragile,” he said, pointing to global growth forecasts of two percent for this year. “Historically, if GDP falls below two percent, the industry returns a collective loss. So it would not take much of a shock to turn our very modest profit projection to a net loss.”

B u s in e s s

Goldman Sachs employee causes global storm A Goldman Sachs employee has mounted an unprecedented and astonishing public attack on its “toxic and destructive” culture in a New York Times opinion piece, which doubled up as a resignation letter, becoming the first serving insider to openly criticise the firm. Greg Smith, an executive director at the bank, accused it of losing its “moral fibre”, putting profits ahead of customers’ interests and dismissing customers as “muppets”. “It makes me ill how callously people talk about

ripping their clients off,” he wrote. The decay of Goldman’s proud culture of teamwork, integrity and humility, he said, threatened the bank’s survival. Goldman Sachs is arguably the most storied investment bank on Wall Street and has previously been compared to a moneysucking vampire squid and called the evil empire of finance. Goldman CEO Lloyd Blankfein and president Gary Cohn told the bank’s employees in an open letter that Smith’s claims did not reflect the culture

of the bank. They cited glowing internal reviews of the service Goldman provides to clients. “It is unfortunate that all of you who worked so hard through a difficult environment over the last few years now have to respond to this,” they wrote. The New York Times said the essay had received three million page views online in just a few hours. The second-most-viewed story had 500,000, and that was a business section story about Smith’s outburst. 5

European Outlook / Issue 2  

European Outlook / Issue 2

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