:00:00. > :00:13.Now on BBC News, all the latest business news, live from Singapore.
:00:14. > :00:24.Soaring profits. Cathay Pacific outperforms many of its rivals but
:00:25. > :00:29.warns of challenges ahead. And the chief of one of Malaysia's biggest
:00:30. > :00:35.companies explains why they are stating family run.
:00:36. > :00:42.Welcome to Asia Business Report. I'm Rico Hizon.
:00:43. > :00:46.They are one of this region's most prestigious carriers and have turned
:00:47. > :00:51.in half`year profits 15 times greater than in the same period last
:00:52. > :00:55.year. Cathay Pacific, based in Hong Kong, made $45 million, US, and is
:00:56. > :01:03.predicting better performances for the rest of the year.
:01:04. > :01:07.Cathay Pacific flies more international passengers than any
:01:08. > :01:10.other airline in Asia. Even so it has been affected by a slump in
:01:11. > :01:18.travel, especially in business and first class. To compensate, it has
:01:19. > :01:20.been adding more flights to cities in America and heavily advertising
:01:21. > :01:26.discounts to those locations. The strategy has clearly worked. Airline
:01:27. > :01:30.passengers are starting to come back but aren't paying the sorts of fares
:01:31. > :01:34.they were before, which is really hitting airline yields. As we saw
:01:35. > :01:38.with the results today, they have added a number of flights but have
:01:39. > :01:41.had to discount fares to fill up the seats. This has worked at OK for
:01:42. > :01:45.them, they have raised their earnings, what it has meant they
:01:46. > :01:50.will have to book to raise those fares in the future. The airline
:01:51. > :01:53.says it expects business to improve even further in the second half of
:01:54. > :01:58.the year. With rising competition from Asian rivals like air China and
:01:59. > :02:06.Singapore airlines, it is difficult to make more profit. One way is by
:02:07. > :02:09.cutting cost. Fuel is the airline's number`1 expense and costs have
:02:10. > :02:15.jumped by 5% compared to last year. In response, they Pacific has
:02:16. > :02:18.purchased five, newer, more fuel`efficient planes and plans to
:02:19. > :02:25.retire at about a dozen of its ageing aircraft in three years. All
:02:26. > :02:29.in an effort to read up earnings. For more details about the
:02:30. > :02:36.competition for full`fledged carriers, we crossed to our
:02:37. > :02:38.correspondent. We have seen so many distressing airline disasters but
:02:39. > :02:43.the reality is that air travel has become a very commoditised business,
:02:44. > :02:46.where even premium airlines, known for their safety, are able to
:02:47. > :02:52.command prices they used to. Here in Hong Kong, Cathay Pacific, relative
:02:53. > :02:57.to other cities in Asia, is relatively protected from budget
:02:58. > :03:01.carriers because at the moment there is really only one other that is
:03:02. > :03:07.based in the city, Jetstar, the Australian group. It is starting to
:03:08. > :03:11.`` trying to start Jetstar Hong Kong but hasn't received approval yet. It
:03:12. > :03:15.appears Cathay Pacific is aware of the regional rivalries heating up
:03:16. > :03:20.and are looking to make their name in long haul, which is why they have
:03:21. > :03:24.been adding so many flights to US cities in the last few months. They
:03:25. > :03:28.are flying five times a day to New York, four times too late, adding
:03:29. > :03:33.another flight to Chicago `` to Adelaide. They are counting on
:03:34. > :03:43.travel booming between China and the US. `` LA. Briefly, tell us about
:03:44. > :03:48.their new plane orders. And how it will help earnings going forward.
:03:49. > :03:56.That's right. It has announced that it is purchasing, or has ordered, 90
:03:57. > :04:02.aircraft for a total of $27 billion, US, and they will be taking delivery
:04:03. > :04:06.of those planes over the next few years. It is mainly to boost their
:04:07. > :04:12.long`haul flight and improve fuel efficiency. Staying with earnings
:04:13. > :04:22.news, the world's largest PC maker saw profits jump by 23% because of
:04:23. > :04:28.higher smartphone sales. It grew to $214 million. Revenue rose by 80%,
:04:29. > :04:34.gains coming from Europe, the Middle East, Africa and the Americas.
:04:35. > :04:36.South`east Asia's largest phone company has posted a 70% fall in
:04:37. > :04:44.profit because of currency fluctuations. The Singaporean
:04:45. > :04:48.company earned about $700 million in the three months until June, which
:04:49. > :04:52.is below expectation. Revenue for the `` fell by more than 3% and
:04:53. > :04:59.overseas units like Optus in Australia faced stiffer competition.
:05:00. > :05:03.South Korea's central bank cut interest rates for the first time in
:05:04. > :05:09.15 months, a move widely expected by analysts. The bank of Korea lowered
:05:10. > :05:17.its key rate by .25% to try to stimulate more spending in the
:05:18. > :05:23.economy. In Japan, missionary orders rose in June, showing spending by
:05:24. > :05:26.businesses could be recovering. Orders rose 88% in June, below
:05:27. > :05:33.forecast, but it was still an improvement from a record 19.5% drop
:05:34. > :05:38.in the month of May. The jury is still out on China's
:05:39. > :05:42.growth prospects. Economic reports released on Wednesday paints a mixed
:05:43. > :05:47.picture, despite recent attempts by the government to stimulate the
:05:48. > :05:51.economy. Retail sales for July did rise by 12.2% from one year ago but
:05:52. > :05:55.still came in below analysts' forecasts. Our Shanghai
:05:56. > :06:01.correspondent went to the shops to tell us more.
:06:02. > :06:05.As always, with China, the economic data looks impressive but the big
:06:06. > :06:11.question of cause is whether it is impressive enough. The July figures,
:06:12. > :06:16.in particular the retail sales, increased by 12.2% year`on`year and
:06:17. > :06:20.the fixed asset investment up 70%. They look like bumper numbers but
:06:21. > :06:26.analysts suggest they are lower than expected.
:06:27. > :06:29.We would like to cross over to Korea and the arrival of Pope Francis in
:06:30. > :06:32.Seoul.