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