21/07/2014 Asia Business Report


21/07/2014

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to close its accident and emergency department. Now on BBC News all the

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latest business news live from Singapore. There is an uncertain

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future. After the latest tragedy, can Malaysia Airlines come through

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this? And family businesses: we give you an inside look into the making

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of an Australian icon that spans five generations. Welcome to Asia

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Business Report. Thank you for joining us. It is hard for an

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airline to rebound from one disaster, let alone two within a

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space of two months. Even before the disappearance of MH 370, Malaysia

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Airlines were struggling. So is there any hope that the carrier can

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rebound after such a year? Our analyst says the firm has three

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options. Firstly they can continue as is. They can put a lot of money

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after it, but I don't think that is viable. Two, they could do something

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similar to Japan Airlines. They could put it in for bankruptcy. And

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try and sort it out from there. They could privatise the airline. Let's

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look at the option of carrying on as they are. They have the backing of

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the government. And the wealth management fund. Do you think that

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the government could just continue to pour money into the company? They

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can do that on the short`term. In the mid`term to the long`term, that

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is not an option. It is just continuing to lose money, and

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something needs to be done to sort it out. Even before the second

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incident, they were already making huge losses. And this will probably

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hasten it. What about bankruptcy? That is what Japan Airlines did.

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After that they went through a IPO. It is possible. We have seen their

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share price decrease since the beginning of the year. So yes,

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bankruptcy is fine, but then you have to do things to turn the

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airline around. But basically privatisation will mean rebranding,

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and giving it a new name. That would cost hundreds of millions of

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dollars. Sure, it's going to cost money. With privatisation, we may

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look at some spin`off of the operations, and Malaysia Airlines

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keeping the carrier. So with this second incident, Malaysia Airlines,

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will it impact other regional carriers, and travel in the region?

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Without a doubt. Long`distance travel has been challenged since the

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Asian financial crisis. Lack of safety, which would be the first

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concern of all airlines, is going to create problems for consumers

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travelling at those distances. After the sharp falls on Friday, Malaysia

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airlines stock has fallen further, down about 40% for the year.

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Thailand's flagship carrier has racked up 4/4 of losses. Their

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military ruler has told one of the chiefs to fix Thai Airways, which

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has been suffering because of falling ticket sales, higher

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operating costs and fierce competition. A restructuring plan

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aims at returning the airline to profit will be considered later this

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week. One of India's largest conglomerates has reported a jump in

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profits, thanks to a turnaround in oil and gas. Net profit in April and

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June rose to $1 billion. That is 14% higher than the year earlier. It is

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controlled by India 's richest man. He has many plans in the pipeline,

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including retail. Has reported a jump in profits, thanks to a

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turnaround What happens when the World Bank

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President tells a chief business correspondent about Chinese

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leadership? Fresh from his trip to China, he told our correspondent

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about his talks on the Chinese leadership and a new macro one back.

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`` BRICS bank. My predecessor started a wonderful process. He and

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the Chinese government put forward a report called China 2030. It laid

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out all the calls for reform. They wanted to talk about moving from

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growth driven from exports to one driven by consumption and services.

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They made explicit commitments to move toward higher quality and more

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sustainable growth. They followed the plan, and they follow it today.

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Even though growth has dropped, they continue to go forward with reforms.

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The Premier and the President asked me to tackle healthcare. It is a

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huge issue for China. They have rapidly rising demand, and there is

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a huge demand on hospitals. They have to get this right. In order to

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really fuelled the next stage of their economic growth. So we are

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very happy that this trusting relationship to continue. But we

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also know that we have to up our game. We have to provide value. So I

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will follow the study closely. It is my area. And we want to provide the

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Chinese with a vision of how to go forward that will decrease their

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costs and improve their outcomes. If we can do that, we can show that we

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are relevant. It is very important for us to do so. There is a new

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development bank. It is something that you have said that you would

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look forward to working with, but what kind of formal arrangements

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would be needed to ensure that the work of that bank was co`ordinated

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with your work? I really do welcome all these efforts to increase

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funding to infrastructure. It is what we need to end poverty and

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boost prosperity. There is not a clear operating procedure that has

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been laid out in great detail. And so we look forward to working

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closely. The Chinese government has asked us to have a person to work

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with them, to help as they put their ideas together. We are happy to do

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that. That was the World Bank resident. `` president. You can

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catch more of that interview with the World Bank President on Talking

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Business. After 97 years of family ownership, a majority stake in

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Forbes Media has been sold. A Hong Kong`based group has bought it.

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Forbes magazine was sold for an undisclosed sum. The Forbes family

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says it will retain a significant share of the group, which includes

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the magazine. The current chairman and editor in chief will remain. For

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over a years, one family has been making Australia's most iconic hats,

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Akubra. Since its inception, it has been run by the same family. Now, in

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its fifth`generation, there is a lot to consider when thinking about who

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is next in line. Aside from one of these, an Akubra hat is about as

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iconically Australian as it gets. The hardware in rabbit fur hats are

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a staple for farmers. `` hard wearing. They have graced the heads

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of politicians, celebrities and religious leaders. The company has

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been run by the same family since its inception 137 years ago. The

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factory on the north coast of New South Wales produces 140,000 hats

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each year. They use custom machinery that was designed by their

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great`grandfather. We have survived through recessions and wars. GFCs.

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We are the generation now. It is a long part of Australia's history. ``

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fifth generation. It takes over a month to make the hat. 200 hands

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will touch a hat before it is done. He says his siblings grew up on the

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factory floor, where they learnt the trade from their father and

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grandfather. We would vacuum the floors and do odd jobs in the

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holidays. We all did that. It grounded us well. His sister, Nicky,

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who was a director, says things have changed. It was in sole ownership,

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and now three of us own it. There are seven children between us. We

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are working hard to see what the smoothest way forward will be. It

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has to be the best person for the job. Simple as that. If someone

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wants to be there, but if there are two that want to be here and one is

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not as well qualified, they will miss out. If that is one of my

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children, that is hard, but that is a decision we have made as a group.

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These sons say they would like to be part of the business in a future. I

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can't imagine it not been part of the family. We have all done an

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amazing job. Being part of an Australian icon, it would be great

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to continue. The family legacy is well intact. Before we go, here is a

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quick look at the markets. Asian stocks are quite volatile in

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mid`morning Monday trade. There were gains on Friday, but there are many

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questions that remain over the crash of Malaysia Airlines flight MH 17.

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You have Japan closed today due to a public holiday, but the Hang Seng

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now down by almost five points. Australia's ASX by name. `` up by

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nine. Thank you for investing your time with us. The top stories this

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hour: The UN Security Council holds an emergency session in New York, as

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diplomatic efforts to

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