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had been paid. Those are the headlines. Let's go to | :00:00. | :00:00. | |
Singapore with all the latest business news. | :00:00. | :00:16. | |
Lessons from MH17. How aviation chiefs are improving safety for | :00:17. | :00:22. | |
flights over conflict zones. And, We go to Taipei to see a key | :00:23. | :00:26. | |
part of the economy, family business. | :00:27. | :00:32. | |
Welcome to Asia Business. Top aviation industry bosses have | :00:33. | :00:44. | |
wrapped up a key meeting in Montreal about reducing risk of flights over | :00:45. | :00:58. | |
conflict zones. It comes after the death of 298 people in the downing | :00:59. | :01:02. | |
of Flight MH17 two weeks ago over eastern Ukraine. | :01:03. | :01:15. | |
. They said they wanted to seek new international laws relating to those | :01:16. | :01:18. | |
who make and deploy anti` aircraft missiles. There was a lot of talk | :01:19. | :01:25. | |
about the information coming from individual countries about how safe | :01:26. | :01:29. | |
it is to fly over their airspace. Thinking back to Ukraine, the | :01:30. | :01:33. | |
government had said their airspace was safe and of course, as we | :01:34. | :01:37. | |
tragically know, that wasn't the case. I asked the head of IKO | :01:38. | :01:44. | |
whether or not he could compel countries who don't live up to their | :01:45. | :01:47. | |
duties when it comes to reporting on airspace. What power do we have to | :01:48. | :01:58. | |
compel? Not much. But, we depend on the freewheel of the states. To | :01:59. | :02:07. | |
implement the globally agreed provisions of the IKO. At the end of | :02:08. | :02:10. | |
the meeting, should passengers feel safer? Here is the head of the | :02:11. | :02:17. | |
industry 's main trade body, IATA. This is the first time that a | :02:18. | :02:24. | |
peaceful civil aircraft has been shot down by the missile like this. | :02:25. | :02:27. | |
We have to keep this into perspective. This kind of incident | :02:28. | :02:36. | |
is extremely rare. As for any fare increases, I was told that if prices | :02:37. | :02:42. | |
did indeed go up, they would be negligible. The message coming out | :02:43. | :02:47. | |
of here today is that the system is still working and, there are gaps | :02:48. | :02:52. | |
that those here are trying to close. From that report from the shell, | :02:53. | :02:57. | |
there is no denying the airline industry is tough business to be in. | :02:58. | :03:01. | |
As well as the aviation disasters of recent times, players are affected | :03:02. | :03:05. | |
by competition and economic uncertainty. Later today, we will | :03:06. | :03:10. | |
get an indication of how the national carrier in Singapore, | :03:11. | :03:14. | |
Singapore Airlines, is faring in its first quarter results. Our | :03:15. | :03:18. | |
correspondent explains what is at the heart of the problem. What is | :03:19. | :03:25. | |
happening in the airline industry is they don't make enough money. | :03:26. | :03:31. | |
Singapore Airlines generates 14 billion worth of revenue, it doesn't | :03:32. | :03:34. | |
have great margin of safety on what it is able to generate. That isn't | :03:35. | :03:39. | |
enough. It does not give it a margin of safety. When you add on extra | :03:40. | :03:44. | |
things, talking about new flight paths, extra insurance, extra fuel | :03:45. | :03:51. | |
costs, that will damage the company completely. You talk about the | :03:52. | :03:55. | |
flight path over conflict zones. You have heard that in the report. It | :03:56. | :04:00. | |
emerged after MH17 that Singapore Airlines was flying over that part | :04:01. | :04:05. | |
of eastern Ukraine more frequently than Malaysia Airlines. Are all | :04:06. | :04:09. | |
airlines going to have to rethink their flight paths and as a result, | :04:10. | :04:14. | |
it will end up costing more. The cost is only one part of the | :04:15. | :04:18. | |
equation, the second one is whether they can pass it on to customers. | :04:19. | :04:23. | |
Customers will say to themselves, what is more important? A safer | :04:24. | :04:28. | |
flight path or a cheaper airline? This is the balance they have. As | :04:29. | :04:32. | |
far as airlines are concerned, unless they are pushed into using | :04:33. | :04:37. | |
new flight paths, they will say that this is safe enough. That is the | :04:38. | :04:42. | |
difficulty they have. They need to balance the cost. Playing a new | :04:43. | :04:49. | |
route will cost more fuel and money. Can they pass that cost on to | :04:50. | :04:55. | |
customers? I would say passengers will decide. They will ask in future | :04:56. | :05:00. | |
which flight path they will be using. If they use one that | :05:01. | :05:04. | |
uncomfortable with, they will pay a higher price. In other news, data | :05:05. | :05:11. | |
out of Japan shows industrial output fell at its fastest rate since the | :05:12. | :05:15. | |
2011 earthquake that crippled the Fukushima nuclear power plant. The | :05:16. | :05:20. | |
factory slope reduction by 3% in June from May. The latest sign | :05:21. | :05:24. | |
highlights the impact of the recent sales tax rise on consumer demand. | :05:25. | :05:36. | |
US tech giant Microsoft is under scrutiny in China. Chinese | :05:37. | :05:38. | |
authorities raided Microsoft offices. They say that Microsoft | :05:39. | :05:40. | |
breached competition rules with their new system. Our correspondent | :05:41. | :05:47. | |
has more. Things have changed for Microsoft | :05:48. | :05:52. | |
since its heyday in 2006, when the Chinese President flew to the US to | :05:53. | :05:56. | |
have dinner with Microsoft's chairman, Bill Gates, before then | :05:57. | :06:01. | |
travelling to the White House. That was the bright point for them. Since | :06:02. | :06:05. | |
then, the company has struggled in China. Especially with the battle | :06:06. | :06:12. | |
against piracy. Its prospects of selling legal software in China | :06:13. | :06:16. | |
looks best when it was negotiating with the government to purchase | :06:17. | :06:22. | |
legal software. The announcement of an investigation into the company | :06:23. | :06:25. | |
seems to have dimmed the prospect. The government has already banned | :06:26. | :06:28. | |
the purchase of Windows 8 software by government buyers. Things are not | :06:29. | :06:34. | |
looking good for the company now. Could Microsoft be lumped in with | :06:35. | :06:37. | |
the other foreign corporations right our? We are seeing the Chinese | :06:38. | :06:41. | |
authorities essentially going after many foreign companies `` right now? | :06:42. | :06:49. | |
Absolutely. We have seen Chinese regulators and state`run media | :06:50. | :06:51. | |
turning up the heat on foreign corporations. We have seen | :06:52. | :06:55. | |
pharmaceutical companies, fast food companies and now technology | :06:56. | :07:01. | |
companies that are being scrutinised very carefully by the Chinese | :07:02. | :07:05. | |
government. Of course, the government says they are doing this | :07:06. | :07:09. | |
to protect the interests of local consumers in an effort to reduce | :07:10. | :07:13. | |
pricing. It is detecting local companies, something that happened | :07:14. | :07:17. | |
all over the world. However, at some point, the government will have to | :07:18. | :07:24. | |
take a back step in its efforts to make things more palatable for | :07:25. | :07:28. | |
foreign companies working in China. Now, to Taiwan, where three sisters | :07:29. | :07:33. | |
have taken over the running of a family farm and turned it into a | :07:34. | :07:38. | |
popular weekend getaway. It has been a smooth transition from one | :07:39. | :07:40. | |
generation to the next. Not so for many other families. For the latest | :07:41. | :07:54. | |
series of Family Businesses, our correspondent reports. Preparing a | :07:55. | :08:02. | |
dish of shrimp, this mother and daughter duo make a good team. Out | :08:03. | :08:09. | |
the back, the father is roasting the family's trademark chicken. The | :08:10. | :08:12. | |
youngest daughter is in charge of the front desk and seeing guests to | :08:13. | :08:15. | |
their rooms. The eldest daughter is the head of marketing and conjures | :08:16. | :08:18. | |
up creative beverages in the cafe. TRANSLATION: It just happened. We | :08:19. | :08:26. | |
threw the youngest one behind the front desk when she was just two. | :08:27. | :08:32. | |
Now, at 22, she is in charge. We are happy the young people have taken | :08:33. | :08:37. | |
over managing the farm. They have better ideas about how to run the | :08:38. | :08:41. | |
business than we do. Family businesses make up the bulk of | :08:42. | :08:46. | |
Taiwan's economy. But, while this family has succeeded in handing down | :08:47. | :08:49. | |
the business to the younger generation, many companies in | :08:50. | :08:51. | |
Taiwan, including some of the biggest firms, do not have a | :08:52. | :08:58. | |
succession plan. They are run by the founders, who are getting on in age, | :08:59. | :09:02. | |
but do not have any apparent successors lined up. In fact, | :09:03. | :09:04. | |
analysts estimate that 70% of Taiwan's against companies are | :09:05. | :09:11. | |
family owned. Bad, only 30% have a succession plan. The companies are | :09:12. | :09:15. | |
either too big to be passed down to family members or the offspring are | :09:16. | :09:18. | |
not capable or interested in running them. `` But. Experts say the | :09:19. | :09:25. | |
succession challenges for many Taiwanese companies put a question | :09:26. | :09:28. | |
mark over their future, especially in the mind of shareholders. Most of | :09:29. | :09:33. | |
the first generation entrepreneurs do not want to give up their | :09:34. | :09:36. | |
position. They still want to make major decisions for the company. As | :09:37. | :09:40. | |
a result, the successors do not have a chance. They don't have the chance | :09:41. | :09:50. | |
to handle the entire company. I think there is a major crisis in | :09:51. | :09:57. | |
Taiwan's business. Experts say that elderly founder is not willing to | :09:58. | :10:02. | |
let go in as a reason why Taiwan's economy is staggering. Without | :10:03. | :10:05. | |
letting the young generation play a major role, companies might be slow | :10:06. | :10:08. | |
to change and ultimately, they risk their future competitiveness. But, | :10:09. | :10:19. | |
not the Thai's. It rests very firmly on the next generation. | :10:20. | :10:22. | |
A quick look at the markets. on the next generation. | :10:23. | :10:26. | |
A quick look at the We have seen gains in the region. The Nikkei is | :10:27. | :10:32. | |
continuing its six`month high due to healthy corporate results we saw | :10:33. | :10:37. | |
from Honda and Tokyo electron, despite the bad industrial | :10:38. | :10:42. | |
production as we told you about. That is it for this edition of Asia | :10:43. | :10:45. | |
Business Report. Thank you for watching. Hello. You are watching | :10:46. | :10:56. | |
BBC News. I am Adnan Nawaz with the top stories: Israel's bombardment of | :10:57. | :10:58. | |
Gaza is continuing. The | :10:59. | :11:00. |