Your commercial news round-up: Heathrow, Brexit, supermarket price cuts, Musk and Twitter

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Are you up to date? Elon Musk’s plans to make Twitter private have taken the world by storm this week – but what’s the latest news relating to this deal? Plus, the ongoing impact of the pandemic on the aviation industry, Brexit trade updates and supermarket price cuts all feature in this week’s commercial news round-up.

• Heathrow, the largest international airport in the UK, has revealed that it will not make a profit this year, with flights scheduled for autumn already being cancelled by airlines. The airport has lost more than £4 billion during the pandemic as the airline industry was forced to halt international travel. As coronavirus restrictions eased in March, there was a slight increase in passenger numbers, making March 2022 the busiest month for passengers since pre-pandemic. However, Heathrow has predicted that these numbers will “drop off significantly after the summer”. A spokesperson for the airport cited higher fuel costs, lower GDP growth, the war in Ukraine and coronavirus as factors that will continue to “drag on demand”.

Read our PESTLE analysis of the covid-19 impact on the airline industry in our new series, ‘Wrestle with PESTLE’.

• Businesses in the EU lost a higher percentage volume of trade than exporters from the UK in the first year of the UK’s post-Brexit trade agreement, according to a study by the Centre for Economic Performance at the London School of Economics and Political Science. The study of 1,200 products revealed that in 2021 UK imports fell by 25% – “a smaller and only temporary decline in relative UK exports to the EU (after Brexit) […].”

The impact of the Trade and Cooperation Agreement (TCA) on smaller businesses has been significant, with the changes making “the UK a harder place to do business”. While the report found that imports “were hit harder than exports during the first year of the TCA”, Rebecca Freeman, co-author of the report explained that “it would be a mistake to conclude that exporters were unaffected”.

• Amid the rise to the cost of living in the UK, Morrisons and Asda have announced plans to cut prices as customers seek out cheaper alternatives at discount supermarket chains including Aldi and Lidl. Recognising the financial pressures currently facing customers, Morrisons revealed it would apply a 13% price cut to more than 500 goods such as eggs, rice and chicken.

In the same vein, Asda vowed to cut prices on products like fresh fruit and vegetables by 12%, with its recently launched Just Essentials range set to come into force in all its stores from May. Competitors Tesco and Sainsburys have existing Aldi price-matching campaigns and are performing better than Morrisons and Asda, according to analysis by Emma Simpson, business correspondent at the BBC.

• Elon Musk and Twitter agreed to a takeover deal worth $44 billion earlier this week, following tweets from as early as 2017 in which he expressed an interest in buying the platform. The $44 billion acquisition is reportedly being funded with $21 billion of Musk’s own equity combined with a $12.5 billion loan secured against his Tesla stake. However, if Musk fails to provide the funding required for the deal to go ahead, he can forgo the agreement for just $1 billion, according to a regulatory filing by Twitter on Tuesday. Alternatively, the filing also confirmed that both Twitter and Musk could walk away from the deal after 24 October if the deal has not closed at that point. With 84 million Twitter followers, the billionaire’s past activity on the social network has seen him face backlash and legal action, including $20 million fines handed out to Musk and Tesla for his 2018 “$420” funding tweet.

Check the News every Thursday for this weekly commercial news round-up.

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