28/08/2014 Asia Business Report

despite a report about child abuse. He managed children's services

between 2005 and 2010 `` accurately. Time for the business news with Rico

Hizon live from Singapore. Qantas makes its biggest loss and

the airline top boss faces pressure to quit. A big day for Malaysia

Airlines as they prepare to NL is their earnings results. Hello and

welcome to Asia Business Report on BBC World News, I am Rico Hizon.

Record losses for Australia's iconic brand, the flying kangaroo,

otherwise known as the national carrier, Qantas. It has reported its

worst ever annual earnings results. With the latest, let's cross over to

Phil Mercer in Sydney and feel, how bad were the numbers `` Phil.

Full`year losses of 2.6 5 billion US dollars. The biggest loss in

Qantas' history and the chief executive of the company, Alan

Joyce, said the results were confronting but he is trying to

reassure investors the worst was over. These results are double what

analysts expected and clearly, for Australia's national carrier, these

remain tough times. One of the world's oldest and most

recognisable airlines is in deep trouble. Soaring fuel costings and

fierce competition have resulted in mass redundancies and financial

losses. Despite it declined, Qantas remains a popular institution at

home. Australians want Qantas to survive but they aren't afraid to

fly with someone else. It is good we have a good Australian airline.

Long. Qantas is allied with Emirates and want the Australian government

to relax regulations that limit foreign ownership of the airline to

49%. Travellers continue to desert and Australia's national carrier. If

you look at the number of passengers using Qantas, they are diminishing.

Where does this shrinking stock? With Qantas being taken over or by

foreign capital coming in `` stop. The aviation market has become

saturated. Qantas is facing relentless competition on both its

international and domestic routes. Many passengers feel and overseas

takeover is inevitable. Foreign ownership, let's look at mining,

owned by the Chinese, everything else is owned overseas. We don't

have the population`based to keep it going. If it keeps it afloat, keeps

jobs in Australia, it makes no difference at. Qantas' plans for a

profitable future will come under scrutiny. There are those that

believe that for the flying kangaroo believe that for the flying kangaroo

this could be a life or death struggle. At stake are not only

thousands of jobs at Australia's aviation reputation. Trade unions

have threatened strike action over job cuts including in the

maintenance division. Pilots say that decisive action is needed to

build stronger line. It needs to go through a little pain initially like

we are going through now with redundancies and losses but it needs

to justify it to the bank and shareholders that injections of

capital can re`equip the fleet. It needs to buy a more modern, fuel

efficient aircraft. Qantas has flown for the best part of a century but

is facing unprecedented challenges. For the famous flying kangaroo, the

months ahead promise to be turbulent.

Many problems for Qantas. What is next for the carrier? Qantas plane

's weak demand and a subdued business and consumer confidence.

For this shattering loss as it has been described along with high fuel

costings. Also, the cost of this three`year restructuring which

involves thousands of redundancies. The CEO, Alan Joyce, believes the

worst is over and that the company could return to profit within the

next year. Analysts think the result is so bad that the entire board

should go and we have just looked at the numbers in the last hour or so

and investors don't seem spoked. Qantas shares are up 6% in early

trading `` spooked. They must see the silver lining. For more analysis

on Qantas, visit our website. Qantas isn't the only regional

carrier grappling with tough times, Malaysia Airlines is undergoing a

major restructure with its majority owner, the state investment fund,

taking the company private and planning to implement reforms

including job cuts. It was already in financial trouble before the

tragedies of flight MH17, shot down in Ukraine, and MH370, which

disappeared in March. Earnings for the second quarter of two out later

today and I asked earlier our correspondent from main bank how he

saw the results. Very bad, perhaps the worst it has faced in its in ``

in Thai history `` Maybank. It is exacerbated by the MH17 issue. It

will be bad. How bad will the numbers ? 600 million ringgit lost

but it could range from 600 `800 million, it is a tough call `` loss.

Indeed it is tough and a lot of money to lose. Right now, what is

reported in the media is cuts of about 6000 jobs. How painful will be

restructure the in the months ahead? Very painful. It will be the

deepest restructure that has ever occurred in the airline. Let's be

clear, the objective is to save the airline. At least we will have a

national carrier. God forbid, if nothing is done, Malaysia Airlines

will earn its place in the history books. It is really that dire. To

lose 5000 or 6000 employees, it is a necessary step. Necessary, though

what will it look like after the restructure? What do you suggest

they undergo? A new name for the carrier? What I suggest is for

Malaysia Airlines to be a domestic airline with a touch of some

regional routes. All the international flights don't have a

business case to survive. Malaysia's transport minister holds

a press conference when Australia's deputy Prime Minister shortly to

announce how they will fund the search for Malaysia's MH 378

Australia's deputy. Ali Baba profits have tripled ahead of the US

listing. Ali Barber said second`quarter profit came in at $2

billion. They will debut on the New York Stock Exchange later this year

and is expected to be the biggest offerings in Facebook in 2012 ``

Alibaba. Some good news now and there are signs that the Philippine

economy is on track for a rebound. We find out the details in about one

hour. The government will unveil growth figures for the second

quarter. 2% expansion in the three months to June is expected, the

fastest pace in over one year. A pickup in public spending is

expected to help. A spokesman from ANZ bank said government spending

has been inconsistent. `` spokeswoman. We have been worried

about numbers because of understanding in the first five

months of the year. For the first time in more than ten years, public

spending or the public deficit was actually a surplus in the first five

months of the year. It was only in June where it, in the government,

spending sped up. Nevertheless, spending won't make up a deficit if

they remain this spending. On the ground when I go to the Philippines

and I talk to the people on the streets, they tell me that they

still don't feel the gains that the Administration has forged over the

past four years. Is it really the rich getting richer and the poor

getting poorer? Not necessarily. We have seen a resurgence in

manufacturing and industrial manufacturing has accelerated also

meaning that export numbers should be quite good later on.

Unfortunately, in the past six months, inflation has been high. It

has been driven by high fuel prices, rice prices have increased

more than 10%, simply because of anti` smuggling efforts. Further,

you also have a truck ban in Manila which is increasing imports. This

should feed into second`round effects later. Will be likely see

the central bank continue to tighten interest rates which they did a few

weeks ago? Definitely. Liquidity is flush on the ground. The central

bank needs to tighten. Our call is for further tightening in the STA.

Unfortunately, the only tighten the policy rate which isn't very

effective. We will have the Philippine Finance Secretary to

speak with us about the growth numbers when they are out in the

next edition of Asia Business Report. Thank you so much for

investing your time with us. I am Rico Hizon. Bye for now.

I am Mike Embley in London with