Business briefing: Compass Airlines will cease operations

Twin Cities-based Compass Airlines is ceasing operations next month in the wake of the coronavirus outbreak, and the leader of the flight attendants union warned Thursday of other carriers at risk of the same fate without swift government assistance for the industry. "Compass Airlines has made the difficult decision to cease operations, effective April 7," read a statement from the company, which has a deep history in Minnesota but has been strictly a western states carrier in recent years. "Radical capacity reductions left Compass without the ability to fly even minimally viable schedules," the statement continued. Compass' Delta-affiliated operations, scheduled to wind down later this year, will instead end March 31, the airlines said. Compass' affiliation with American Airlines will end effective April 7. "This is devastating," said Sara Nelson, president of the Association of Flight Attendants, which represents more than 200 cabin crew members at Compass among its 50,000 or so working for 20 airlines.

The number of Americans filing new claims for unemployment benefits surged last week by 70,000 to the highest level in more than two years, indicating that the effect of the coronavirus was starting to be felt in rising layoffs in the job market. The Labor Department reported Thursday that applications for benefits, a good proxy for layoffs, rose by 70,000 to a seasonally adjusted 281,000 benefit applications last week. That was the highest weekly total since Sept. 2, 2017, following Hurricane Harvey. Both the one-week rise and the total number of applications were far above the levels seen over the past year as the country's unemployment rate fell to a half-century low of 3.5%.

Ford Motor Co. is suspending its dividend to preserve cash as vehicle sales fade due to the coronavirus outbreak. The company said it's drawing on two credit lines to put another $15.4 billion in cash on its balance sheet. Like other companies, Ford also withdrew its financial guidance for the year Thursday. The cash Ford saves will be used to offset the effect on working capital due to factory shutdowns. On Wednesday Ford and other automakers announced that they will close all of their North American factories in the coming days. Factories in Europe and elsewhere have already been shut down.

The Federal Reserve has set up a program to exchange dollars for foreign currency with nine central banks to support dollar lending in global markets that are under pressure from the impact of the viral outbreak. The currency swaps established Thursday are capped at $60 billion for six central banks in Australia, Brazil, Mexico, Singapore, Korea and Sweden. The exchange lines are capped at $30 billion for central banks in Denmark, Norway and New Zealand. Under the swaps, the Fed provides dollars for an equal amount of foreign currency, which it can also use in short-term lending to banks if needed.