Good morning, it's Paul here, with Friday's SCVR.

As usual, this is initially a placeholder article, to allow subscribers to add comments from 7am, as I gradually write the main report throughout the morning. I have to stick to the official 1pm finish time today, due to travel plans.
Edit at 11:19 - today's report is now finished.

I hope you're all coping alright with the current very difficult market conditions. It's a gruelling time, so I sympathise if your portfolio is getting knocked about as much as mine.

In case you missed it, I wrote a new section late afternoon about Hostelworld (LON:HSW) in yesterday's report. The key issue with travel companies, is whether they can survive the sudden drop in passenger numbers. I focused on this in my report on HSW, and it's a good template for looking at other travel companies too.

As Flybe showed, airlines that are already in trouble, are likely to be pushed over the edge with recent developments. I'll focus on that here, and try to steer readers away from companies that could go under, as usual.

There's an interesting article here in today's Telegraph showing that half of Flybe's routes have already been taken up by competitors. With about 80% likely to be taken up within a week. This seems to confirm that the Govt made the right decision, not to prop up Flybe with taxpayer money. Capitalism can be brutal, but re-allocating resources to more efficient competitors is ultimately the best thing.

It's all very well people saying that coronavirus is just a temporary blip, but operationally geared companies (high fixed costs) may not be able to survive even a few months of disruption. I think we could see large numbers of independent cafes/bars/restaurants go under, because many are already on a knife-edge financially, due to over-capacity in the sector. Hence a sudden, and large drop-off in customer numbers, which is probably imminent if not already happening, could be the final straw for lots of small businesses. That could tip our services-based economy into recession, in my view.

The head of the IFS says that the UK could experience a technical recession (2 consecutive quarters of negative growth), triggered by coronavirus, in Q2 & Q3 of this year.

Please see the header above, for the companies I intend covering…

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