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Business

Business Briefs

SARS panic hits European airlines hard, Munich Re boss calls it quits, chemicals giant BASF announces its quarterly earnings and more.

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SARS infects European air travel

The SARS outbreak has started to affect the European air industry with nervous travelers avoiding the Asia Pacific region. Air carriers have noted a 28 percent reduction in bookings to areas of Asia such as China, Singapore and Hong Kong during April, according to the Association of European Airlines (AEA) in Brussels. Bookings to Asia were down just 7 percent in March but the recent escalation in reported cases of the deadly respiratory illness has severely unnerved travelers to the Asia Pacific region. The panic has also affected flights to Canada following the wide international reporting of an outbreak in Toronto. AEA has also noted that the Iraq war had contributed to a reduction in travel to the Middle East, with bookings down 34 percent during the height of the conflict in March, compared to a reduction of 24 percent in April.

Losses prompt Munich Re chief's exit

Hans-Jürgen Schinzler, the chief executive of Munich Re, the world's largest re-insurer, has announced that he is stepping down as boss after more than 10 years in the driving seat and 35 at the company. Schinzler, 62, will be replaced by Nikolaus von Bomhard, a member of the company's management board and executive in charge of regional divisions in parts of Europe and in Latin America. The change in personnel will be effective from Jan. 1, 2004, when Schinzler will move on to Munich Re's supervisory board. His decision to resign from his position as chief executive comes after Munich Re reported two consecutive quarters of losses, including a fourth-quarter loss of €2.2 billion ($2.4 billion) due to the value of its investments plunging by €1.5 billion.

BASF mixes optimism with caution

BASF AG, the world's largest chemicals company in terms of sales, has posted a first-quarter operating profit before exceptional items of €944 million ($1.04 billion), an increase of over 15 percent on strong volume growth. But despite the positive news, the company used a cautious tone; saying sales would rise only slightly over the coming months. BASF reported that first-quarter sales increased by 7.2 percent to €8.83 billion, and attributed the sales growth in a statement to a substantial increase in volumes, in particular in chemicals and plastics and fiber segments. Analyst predictions suggested that BASF would report a 14.7 percent rise in operating profit before exceptionals to €938 million.

A Bust for Buses

Germany's once wildly popular bus tour operators -- who offer bargain basement trips to the most-exotic locales a few tanks of gas can get you to -- are reporting a crisis in the industry this year that not even the events of Sept. 11 can explain. For years, bus trips to cities like London or Paris from the comfort of a luxury coach have been immensely popular with people who can't afford the Concorde or Eurostar. Though 76 million people took bus trips in 2002, the figure was five percent lower than the previous year, according to the German Statistical Office in Wiesbaden. In total, the combined buses traveled 767 million kilometers last year -- the equivalent of traveling around the equator 19,000 times. The sector began heading south in 2001, when business fell by an estimated 3.6 percent. Companies most hit by the crisis have been tour operators in cities and bus companies offering package tours.

Allianz Names New CEO

In a widely anticipated move, insurance giant Allianz's CEO, Henning Schulte-Noelle, tendered his resignation after a quarter-century of service on Tuesday. But not without first announcing that the company would return to a healthier state after a perilous adventure into the banking sector and a €1.2 billion ($1.3 billion) loss in 2002. At a shareholders meeting in Munich, Schulte-Noelle officially announced his successor would be Michael Diekmann, who until now led the company's U.S. insurance business. Schulte-Noelle also said he expected losses at Dresdner Bank, the red-ink gushing banking giant Allianz acquired in 2001, to shrink. Last year, staggering losses at Dresdner was the leading contributor to the first-ever annual loss in Allianz's history. Despite signs of a turnaround ahead, the company stated that first-quarter earnings at Allianz would be weighed down by $800 million in securities write-downs.

Compiled with material from wire service reports.