09/02/2017 World Business Report


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09/02/2017

The latest business news with informed analysis from the world's financial centres.


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Will open skies stay open under President Trump?

:00:07.:00:18.

US airline bosses take their grievances to the White House today.

:00:19.:00:22.

Top of the list, their fast-growing rivals from the Gulf.

:00:23.:00:29.

Could the President's love of Twitter stop the rot

:00:30.:00:34.

Some of you are going, what is he doing, it isn't even Friday? I will

:00:35.:01:06.

tell you what, give me a minute and I will give you a snapshot of the

:01:07.:01:08.

world of business and money. We start in Washington,

:01:09.:01:10.

where the bosses of America's top airlines and airports are due

:01:11.:01:13.

to meet President Trump There are some major issues

:01:14.:01:15.

on the table that could affect As we know from his inauguration

:01:16.:01:20.

speech, Mr Trump said That could mean a major

:01:21.:01:25.

boost for Boeing. If he leans on US airlines

:01:26.:01:37.

to buy from them. European rival Airbus also operates

:01:38.:01:40.

factories in the US, and buys billions of dollars worth

:01:41.:01:46.

of US components, like engines. It claims to support

:01:47.:01:57.

245,000 US jobs. Then there's the issue of foreign

:01:58.:01:59.

airlines operating in the US. This one, Norwegian,

:02:00.:02:05.

was given a foreign carrier licence, allowing them to expand their routes

:02:06.:02:07.

to and from the US, as one of the last acts of

:02:08.:02:11.

the Obama administration. This caused howls of protest from US

:02:12.:02:14.

airlines and unions. Norwegian says its creating at least

:02:15.:02:22.

150 new US jobs and has ordered more than $18 billion worth

:02:23.:02:27.

of planes from Boeing. So, what about the whole

:02:28.:02:33.

question of open skies, the deals that mean countries

:02:34.:02:35.

open their routes to each other? The US currently has 120

:02:36.:02:38.

open skies agreements. US airline bosses are particularly

:02:39.:02:48.

unhappy about the expansion of Emirates, Etihad Airways,

:02:49.:02:54.

and Qatar Airways in the US. Last week they wrote

:02:55.:03:01.

to the government claiming Gulf carriers have received $50 billion

:03:02.:03:04.

in handouts from their governments over the past decade,

:03:05.:03:07.

something the Gulf airlines deny. The President of Emirates has long

:03:08.:03:14.

argued that an attack on their business by Washington

:03:15.:03:16.

would only damage the US economy. It is far too important for the US

:03:17.:03:39.

economy for multiple reasons - for the activities of the Gulf carriers

:03:40.:03:43.

to be cut back, because once you do that and you close the open skies

:03:44.:03:47.

that you have today it has enormous ramifications. The US economy would

:03:48.:03:52.

be severely affected by a closure, a shutting down of the open skies

:03:53.:03:55.

arrangement, which has manifestly produced huge amounts of wealth for

:03:56.:04:01.

Aerospace, Boeing, General Electric as well as everything else.

:04:02.:04:05.

You and I know him quite well, Tim Clark, he is a big figure in the

:04:06.:04:11.

industry. John Strickland, director of JLS

:04:12.:04:11.

Consulting, joins me now. Thank you for coming in at this

:04:12.:04:20.

horrid hour. You always do it, you need a medal. So, Tim Clark has a

:04:21.:04:24.

point, doesn't he, and it is interesting because he is the boss

:04:25.:04:28.

of the airline Emirates which is the one the US airlines are gunning for,

:04:29.:04:36.

are they? Yes, the big airlines put in a complaint about the Gulf

:04:37.:04:40.

carriers. They wanted to go to Congress. They made allegations of

:04:41.:04:44.

unfair competition, these carriers from the Gulf came into the market,

:04:45.:04:49.

and the document originally produced, which was about 50 pages,

:04:50.:04:54.

the three Gulf carriers issued rebuttals into the hundreds of

:04:55.:04:58.

pages, evidence countering the arguments, these carriers have

:04:59.:05:01.

increased their services, the boss of Kata Airways told me last year, I

:05:02.:05:08.

have at world US mayors in my office imploring me to start services to

:05:09.:05:11.

the US -- Qatar Airways. The key beyond the end services and what it

:05:12.:05:15.

means for access to major US cities which of course is all part of the

:05:16.:05:19.

economy and job creation and so on is these guys by large numbers of

:05:20.:05:22.

Boeing aircraft and a massive customers for Boeing. If there is

:05:23.:05:26.

any poster boy for jobs it is Boeing. You are right that all three

:05:27.:05:31.

are fast-growing and Emirates has been around since the 1980s but they

:05:32.:05:37.

are all fast-growing and they purchase a lot of aircraft, they

:05:38.:05:41.

seem to have the money compare to others, but is it at a point where

:05:42.:05:44.

the worry is if President Trump says, OK, you know what, I am

:05:45.:05:48.

scrubbing the open skies with the UAE and the Gulf regions, they will

:05:49.:05:59.

save goodbye to Boeing and go to Airbus. With the buyback and jobs

:06:00.:06:04.

for America, the aerospace industry, not only Boeing, sub suppliers and

:06:05.:06:08.

engine manufacturers, are a massive part of the economy and support jobs

:06:09.:06:13.

at home. We don't have a unified view in the airline community. The

:06:14.:06:16.

D3 might lobby against Gulf carriers but others like Federal Express have

:06:17.:06:21.

the reverse ID and they say the open skies agreements which allow the

:06:22.:06:27.

Allied in our positive -- idea. They are positive for job creation. The

:06:28.:06:31.

message is not even united in the industry. And the irony of it is

:06:32.:06:36.

open skies, which many countries use, is a US concept. I have to ask,

:06:37.:06:42.

if President Trump listens to airline bosses and rips up the open

:06:43.:06:46.

skies with parts of the Gulf area, that will have a huge ramifications

:06:47.:06:51.

for the global aviation industry. It could have a massive effect because

:06:52.:06:55.

the US is the origin of these open skies agreement and they have been

:06:56.:06:59.

seen as positive to global trade, positive to economic development in

:07:00.:07:03.

tourism and airlines from the US and other countries, in whichever

:07:04.:07:07.

partnership of open skies the US has formed, have developed air services

:07:08.:07:11.

in part of a 21st-century economy. Aviation is so fundamental not only

:07:12.:07:16.

directly for what it creates but how it supports and catalyses economic

:07:17.:07:19.

growth more broadly so it will be a very interesting meeting today.

:07:20.:07:22.

Indeed, we are going to be watching it closely. Thank you for coming in.

:07:23.:07:27.

We appreciate it. Let's move on quickly.

:07:28.:07:29.

It has been struggling to grow its user base and to make

:07:30.:07:36.

Those are the main reasons why Twitter shares are down by almost

:07:37.:07:40.

But could the election of avid Twitter user Donald Trump be giving

:07:41.:07:45.

Analysts have been pointing out a rise in people

:07:46.:07:49.

They say that could help Twitter finally find a buyer.

:07:50.:07:59.

James Erskine is director of the online marketing company

:08:00.:08:01.

It is good to see you and thank you for coming in. Let me ask you,

:08:02.:08:13.

Twitter, you know, we are here again, Facebook when it went public

:08:14.:08:17.

with were saying the same thing, it has to learn how to make money, it

:08:18.:08:22.

has to learn how to make money from the users and it has done that.

:08:23.:08:26.

Twitter still hasn't done that. It hasn't, no, and there are a number

:08:27.:08:31.

of reasons we see for that, social circle, it is our job to see how

:08:32.:08:35.

people engage with content across lots of different social media

:08:36.:08:39.

platforms and Twitter, we are starting to see people see authentic

:08:40.:08:45.

content from real people, and slowly they are starting to engage, so

:08:46.:08:49.

Twitter before was having a problem with people using it more like a

:08:50.:08:52.

newsfeed rather than a social network. One thing you need from a

:08:53.:08:56.

social network is engage in it. Things to engage with. I have to

:08:57.:09:03.

ask, talking of engaging, President Trump has been very engaged on

:09:04.:09:07.

Twitter. Do you think that could actually give the company a boost?

:09:08.:09:12.

You know, I think it could not necessarily because of him

:09:13.:09:16.

specifically but more what it is indicative of, so fierce political

:09:17.:09:22.

discourse and debate amplified in an online environment. We also saw it

:09:23.:09:25.

with Brexit as well, Twitter have lots and lots of opinions around the

:09:26.:09:31.

key political issues and I suppose the next step is what else people

:09:32.:09:36.

can debate, so, does it go beyond politics, to other niche communities

:09:37.:09:40.

where they can have those back and forth opinions? OK, will they find a

:09:41.:09:46.

buyer, yes or no, I have to go, will they? Eventually, yes, it is all

:09:47.:09:50.

about the content on Twitter to allow them to do that. We appreciate

:09:51.:09:55.

your time, short and sweet, thank you very much, and I will be back to

:09:56.:09:59.

look at the papers from around the world. Follow me on Twitter. I will

:10:00.:10:01.

see you shortly. A new law designed to help protect

:10:02.:10:10.

people in England from so called revenge evictions by rogue

:10:11.:10:14.

landlords isn't working. That's according to senior MPs

:10:15.:10:16.

and housing lawyers.

:10:17.:10:19.