27/02/2014 Asia Business Report


27/02/2014

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Australia's flag carrier Qantas announces 5000 job cuts and half

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yearly losses of $2 billion. The BBC is giving an update on the stalled

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transpacific trade negotiations. `` given.

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Welcome to Asia Business Report. We start off with Qantas, and it has

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announced it is laying off 5000 employees as part of cost`cutting

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measures which could save the company about $1.8 billion. Chief

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executive Alan Joyce said the carrier is facing some of the

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toughest conditions it had ever seen, and has been competing with

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other carriers with one hand tied behind its back. The firm announced

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a half yearly loss of $200 million before tax, and says it will cut its

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fleet by more than 50 aircraft. The airline is sliding today, based on

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these cuts. I asked just how bad things are for the flying kangaroo.

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Things look pretty bad, but what they have said before will set a

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platform going forward that should make them more sustainable. 5000 job

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cuts is a big proportion for them to be cutting, but from here on in it

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is setting the foundation that they will be able to go forward a leaner

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and more efficient operation. Do you think the worst is over for Qantas?

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In terms of market conditions it is tough for a lot of airlines out

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there. It is very tough for Qantas, they have a lot of competition.

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There could be further cuts, but they are really cutting it back to

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the base, and within a couple of years they may begin to go again.

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Good are also be cuts on the leadership front? Good Alan Joyce be

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replaced as CEO as a result of these poor results? That might be a

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possibility, and maybe something longer term. The board has put their

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confidence in Alan Joyce, and expressed that they think he's the

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right man to lead them through at this time. If the losses keep on

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mounting, questions will have to be asked about his. With these losses,

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will this intensify the issue of increasing foreign ownership of

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Qantas? Qantas has been asking for some to have its foreign ownership

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cap lifted, so it can get access to overseas money. They will be hoping

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and pushing harder and harder. Canberra is open to the idea, but

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the problem will be getting it through Parliament. With all of

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these problems, what will this mean for those who fly Qantas, in terms

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of airfares? They have announced they will cut one route. In terms of

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airfares, it probably means there won't be very many cheap air fares

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around on Qantas, because they will have to raise them to start making

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profits again. The boss of credit Suisse says it

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deeply regret some of its bankers violated US tax laws. `` tax laws.

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It has been alleged by the US Senate committee that the bank helped US

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clients hired the end of dollars from US tax officials. Japanese

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authorities have launched an investigation into the online

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exchange that trade bitcoin earlier this week. It went off`line earlier

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this week, virtually disappearing and sparking concerns that its use

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is stand to lose their money. A spokesperson said the police and

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finance ministry and others are gathering information on the case.

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People are worried that the company has been subpoenaed by US

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prosecutors. Portugal's government is banking on

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almost $290 million in investment coming in this year through its gold

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Visa scheme, the fast tracks residency for wealthy foreigners.

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The majority of the 542 residence permits issued so far have gone to

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Chinese citizens. You can keep up`to`date with business news from

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this region and around the world by logging onto the website.

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It is not just Qantas that puts Australia in the news recently. The

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country is one of 12 nations trying to negotiate a transpacific

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partnership trade deal. The latest round of talks ended in Singapore

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this week without an agreement, Australia's trade Minister, Andrew

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Robb, says he is confident there will be a deal by the end of the

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year. He gave the BBC his take on where negotiations are headed. I

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feel that we are probably 80% of the way there in terms of the

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decisions, and a lot of hard decisions have been taken already.

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Nothing was really done on market access, until much of the rest of it

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was agreed to. Of course, there are some significant issues, but a lot

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of the companies are dealt with, I feel there is a willingness to go a

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long way `` countries. With all the willingness in the world, how close

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are Japan and the US to any compromise on market access? I don't

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know. I have a sense of it. The thing is, you put the 12 countries

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together, they are 40% of the world's GDP. At 70% of that 40% is

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made up of the US and Japan. So they are fundamental to how much space is

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created for everyone to do some serious liberalising. Is your sense

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that they have made any progress? Yes, I think they have had some

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difficult moments but I think they are making progress. Negotiations I

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think always tend to end up like this, where you get to be very hard

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yards, the last few yards, and everybody has to take a big deep

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breath, at some stage, and we are heading towards that. UAR trade

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Minister, not Foreign Minister, and you know better than most that what

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happens in one area of government relations will affect other

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relations. How effective is the policy of turning back the asylum

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seeker boats to Indonesia and the issues on Manus Island? How much

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damage are they doing to Austrade's reputation in this region? I am

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travelling the region, talking to business people and government

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ministers, and no one is raising that issue with me. Even in

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Indonesia, my counterpart, I would have met with him, the trade

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Minister, he just resigned to run for presidency, and I would have met

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with him five times since the first met in Jakarta. We had the live

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cattle trade re`established then. In the interim, it has gone back to its

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highest level ever. Now, that is where a lot of these comments are

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being made publicly, so in a trade sense, no impact, in fact an

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improvement. Not a problem with relationships, not a problem. That

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was Andrew Robb speaking to the BBC. Visitors in Thailand have for

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sometime expressed concern that prices there will have an impact on

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the bottom line. It appears there is now solid evidence of the Malaysian

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bank has scrapped plans to list on the Thai stock exchange. Great Wall

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is pausing plans to build a facility there.

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I would expect so, given there is no sign of an end to the political

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deadlock. The immediate impact of what has been going on has been felt

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by hotels and retail businesses. Also by the depression of domestic

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demand. There has been a scaling down of projections of GDP. The

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economy has depended heavily on success of foreign investment, and

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people have been watching carefully for signs of nerves by the

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investors. Both of these pieces of news should be worrying, and the

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bank is ambitious, ambitious to be one of the biggest in the region,

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and it has looked at Thailand for some years now. The fact that they

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have postponed suggests they are very nervous about market

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conditions, describing them as not right. Perhaps the most effective of

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China's car manufacturers, which is desperately looking for markets

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outside China Southeast Asia, has big potential for them. Thailand is

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the natural base for this to be based. They have postponed a

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multibillion dollar investment in a car factory that would have produced

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thousands of cars every year. There have always been warnings from

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Toyota, one of the biggest car investors in the area, that they

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were considering looking at alternatives for future investment

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given the political uncertainty. Asian stock markets this power are

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volatile. US equities ended nearly flat overnight, with investors

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hesitant to make a big move. Comments from the Fed reserve chief,

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Janet Yellen, also affected this. Australia is in the loss column by

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27 points. Thank you for investing your time

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with us. I'm Rico Hizon, don't forget to follow us on Twitter.

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Sport Today is up next. The man who is to become Ukraine's

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new PM said the country is on the brink of disaster. He was speaking

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to the

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