:00:00. > :00:09.heavy rainfall and strong winds continue over the coming days. Let's
:00:10. > :00:15.go to Singapore for all the latest business news. Malaysia Airlines is
:00:16. > :00:20.set to receive a radical overhaul. Can its financial fortunes be fixed?
:00:21. > :00:22.India's new government is changing its outdated labour laws to help
:00:23. > :00:32.boost economic growth. Hello and welcome to Asia Business
:00:33. > :00:39.Report. I am Sharanjit Leyl in Singapore.
:00:40. > :00:45.Malaysia Airlines joins the unenviable list of national carriers
:00:46. > :00:48.forced into painful restructuring. The government investment fund looks
:00:49. > :00:50.to take total control. It will soon be delisted from the stock exchange.
:00:51. > :00:57.Does it change how travellers feel about the company? We took to the
:00:58. > :01:00.streets of Singapore to find out. If the government is taking over
:01:01. > :01:03.Malaysia Airlines, I will be more confident. From a consumer point of
:01:04. > :01:08.view, it makes no difference to me. As long as the service level is
:01:09. > :01:11.maintained. It doesn't make a difference for the safety of flying
:01:12. > :01:15.with Malaysia Airlines. It doesn't matter if it is privately owned or
:01:16. > :01:25.owned by the government. I told a friend of mine not to fly.
:01:26. > :01:27.Avoid the airline. I wouldn't fly. Even if the government decides to
:01:28. > :01:30.change the airline, bring change within the airline. I would wait
:01:31. > :01:36.three or four years. I don't know. It depends if they
:01:37. > :01:39.have the best price or not. What has been the fate of others who have
:01:40. > :01:52.been down this route? History is peppered with those who did not pull
:01:53. > :01:57.through. Pan Am in the 1990s, Sabena, Swiss Air after 9/11 and
:01:58. > :02:00.Indonesia 's Airlines. Malaysia might also look at the experience of
:02:01. > :02:03.Japan Airlines, which filed for bankruptcy and delisted in 2010.
:02:04. > :02:19.$3.3 billion of public money kept it operating while it restructured.
:02:20. > :02:21.And, 2.5 years later, it relisted. Earlier, I spoke with an aviation
:02:22. > :02:24.lawyer, Paul nanograms. It requires the approval of minority
:02:25. > :02:28.shareholders up to 50%. Restructuring is absolutely
:02:29. > :02:31.necessary. To distinguish them from their list of other legacy carriers,
:02:32. > :02:35.they have gone to delist because of insolvency, Malaysia Airlines isn't
:02:36. > :02:40.insolvent at the moment. They still have cash. But they are burning it
:02:41. > :02:48.at around $5 million per day, which isn't sustainable going into 2015.
:02:49. > :02:56.Are they anticipating or correcting any of those issues coming up? You
:02:57. > :03:00.described it earlier as a pre` bankruptcy move. Malaysia Airlines
:03:01. > :03:14.isn't unfamiliar with restructuring. They have tried it three times in 15
:03:15. > :03:17.years. They had one reasonably successful restructure with the move
:03:18. > :03:20.of assets from the airline, selling it to a leasing company set up by
:03:21. > :03:26.the government. There is the possibility of success, obviously.
:03:27. > :03:28.But their fortunes have been unprecedented in the aviation
:03:29. > :03:33.annuls, having lost a number of lives, equivalent to the last five
:03:34. > :03:43.years. What does it need to do in terms of restructuring? Some
:03:44. > :03:48.elements have been highlighted earlier this year. But what needs to
:03:49. > :03:51.be done specifically? It needs to be more competitive. There is a big gap
:03:52. > :04:00.between them and their competitors. Comparing with other legacy carriers
:04:01. > :04:02.like Singapore Airlines. On the short haul routes comparing with
:04:03. > :04:05.domestic carriers including Air Asia. How do you do that?
:04:06. > :04:15.Controlling cost, managing labour, finding cheaper financing. There are
:04:16. > :04:24.many things they can do and will probably have to do. A US energy
:04:25. > :04:31.giant is combining all it is publicly traded units into a company
:04:32. > :04:33.that is worth $70 billion. It follows concerns that the company
:04:34. > :04:45.was unable to grow under its current structure. Australia's wine estates
:04:46. > :04:48.have received a second takeover offer worth more than $3 billion
:04:49. > :04:51.from an unnamed private equity firm. The offer comes after KKR, another
:04:52. > :05:13.equity company, raised the bid for the winemaker that owns brands like
:05:14. > :05:15.Penfold 's and Lindemanss. I spoke to a market strategist at IAG
:05:16. > :05:19.markets. Since wine estates was established, it was part of Foster's
:05:20. > :05:22.Group. It has been under a huge amount of scrutiny from private
:05:23. > :05:25.equity for a while because of the diversification of assets. It has a
:05:26. > :05:28.huge amount of assets in Australia and New Zealand and there are three
:05:29. > :05:32.major assets in the US, all of them are very lucrative from the point of
:05:33. > :05:36.view that US equity firms on the list look at using it as a way to
:05:37. > :05:38.diversify in the US. If you can provide wine and beer, spirits
:05:39. > :05:41.particular into someone like TPG, the second takeover player, to move
:05:42. > :05:45.into their casinos and other private equity firms. The second part of the
:05:46. > :05:48.question is also interesting. The wine industry in Australia is very
:05:49. > :05:52.strong despite global downward pressure. Domestically, it generates
:05:53. > :05:55.most earnings in Australia and New Zealand, which is why you see good
:05:56. > :05:57.upside and reasonable premiums might have been a number of challenges,
:05:58. > :06:00.including China's austerity drive and competitors with other
:06:01. > :06:12.winemakers. There are challenges ahead in this industry, surely?
:06:13. > :06:15.There is an austerity drive. There is and that is why China is key. The
:06:16. > :06:19.Australian wine industry is pushing into the Asia region. They get most
:06:20. > :06:22.of their income from Asia out of Japan, South Korea and south`east
:06:23. > :06:29.Asia. That is where they see their dry. `` drive. The other thing is
:06:30. > :06:38.offering the Australian wine industry as a premium. Their
:06:39. > :06:40.products are seen like that. Most providers are independent and
:06:41. > :06:43.privately owned, rather than Treasury Wine Estates which is
:06:44. > :06:47.obviously publicly listed. The brands are higher in terms of
:06:48. > :06:50.value. That is why they tend to do OK, because the margins are slightly
:06:51. > :06:53.higher. It is a downward treasure market and spending in liquor is
:06:54. > :07:00.changing. That is why we see downward pressure. Now, last week
:07:01. > :07:02.brought news which has people wondering, could China take
:07:03. > :07:08.advantage of changes announced by its neighbour, Moscow? They have
:07:09. > :07:12.slapped import bans on items from the EU and the US and others in the
:07:13. > :07:14.sanctions battle over the crisis in Ukraine. Could China plug the
:07:15. > :07:17.trillion`dollar gap in trade? I posed the question to an economist,
:07:18. > :07:21.Tony Nash. China is Russia's largest import
:07:22. > :07:31.partner. Given that relationship, China will likely benefit. If you
:07:32. > :07:35.look at the goods that Russia sanctioned in the EU and US, it is
:07:36. > :07:40.only about $2 billion worth of goods on the food side. Even if China
:07:41. > :07:46.absorbed all of that, it isn't a massive amount that will impact
:07:47. > :07:50.China's exports. It is the first major reform of the
:07:51. > :07:52.Narendra Modi government in India, revamping the labour laws. Something
:07:53. > :07:55.foreign companies and domestic companies have demanded. It is a
:07:56. > :07:58.plan to revive the economy, boost manufacturing and create jobs. Not
:07:59. > :08:08.everyone thinks it is a great idea. Our correspondent reports from the
:08:09. > :08:11.state of Haryana. Manufacturing here only makes up
:08:12. > :08:19.about 15% of the economy. India wants this to reach 25% within a
:08:20. > :08:21.decade. And forcing companies to grow their skilled workforce by
:08:22. > :08:27.training apprentices is just one change in labour laws aimed at
:08:28. > :08:30.kickstarting the sector. India wants to encourage factories like this one
:08:31. > :08:33.to increase their contribution of manufacturing to the economy. While
:08:34. > :08:36.businesses like banks and IT companies can lay off employees
:08:37. > :08:42.pretty easily, manufacturers face different laws. Labour laws make it
:08:43. > :08:51.tough for them to hire or fire employees or even close down a
:08:52. > :08:54.factory when they want to. This car parts maker says at the moment it
:08:55. > :09:01.cannot adjust the size of its workforce to match the ebbs and
:09:02. > :09:04.flows in the business. And so it is welcoming another change in the law
:09:05. > :09:06.to make it easier to hire fewer permanent staff and more
:09:07. > :09:11.subcontractors, making it more competitive.
:09:12. > :09:20.As a businessman, I am looking for flexibility. If businesses are
:09:21. > :09:29.fluctuating at 5`10%, it is hard. `` it is easy to handle. But there are
:09:30. > :09:36.some segments where you can have a fluctuation of up to 15%.
:09:37. > :09:39.Might the prospect of having more casual workers who don't have the
:09:40. > :09:42.same legal protection, wages or job conditions cause problems? This is
:09:43. > :09:44.the aftermath of violent clashes between workers and management at
:09:45. > :09:48.this Suzuki factory in Haryana. Months of strikes cost it more than
:09:49. > :09:54.$500 million. Workers' rights were at the heart of the dispute. The
:09:55. > :10:01.types of stand`offs some expect to increase as the number of temporary
:10:02. > :10:03.workers rises. Some question if factory floors really are the
:10:04. > :10:16.long`term answer to more employment in India anyway. In a world ever
:10:17. > :10:19.more driven by technology. But in an economic climate changing fast, most
:10:20. > :10:34.expect these changes to be the beginning of an overhaul of India's
:10:35. > :10:36.industrial landscape. That is the end of this edition of Asia Business