:00:35. > :00:42.Thank you for joining us. Welcome to Asia Business Report. I Rico Hizon
:00:43. > :00:47.in Singapore. We start off with a straight's biggest carrier, Qantas,
:00:48. > :00:53.posting a 7.5% drop in earnings. It is being blamed on increased
:00:54. > :00:56.competition, on long haul routes and falling international fares. It is
:00:57. > :01:05.not the only airline that has been hit hard. Profits at AirAsia X were
:01:06. > :01:12.plunging 80% compare two year ago levels. I spoke to Alice Taylor at
:01:13. > :01:15.like global together next permission for the Qantas results. The numbers
:01:16. > :01:21.really demonstrate what we are hearing about another weakness in
:01:22. > :01:25.the domestic Stratton market. On an underlying any basis, Qantas
:01:26. > :01:30.domestic was down. We are seeing a lot of effect on the international
:01:31. > :01:34.market. -- Australian market. But Jetstar did well, and that was
:01:35. > :01:37.committed to a strong domestic performance, as well as improvements
:01:38. > :01:45.in profitability at the operations in Asia. So what must they do in the
:01:46. > :01:50.medium to long-term to be to improve profitability and be more consistent
:01:51. > :01:54.with their earnings? They have started to work on a lot. We are
:01:55. > :01:57.about two years through a three-year translation programme that the
:01:58. > :02:01.cupboard has been through. They cut out a lot of cost. That has put them
:02:02. > :02:05.on a much more sustainable footing. I think from here on in, it will be
:02:06. > :02:10.down to just cut and goes, and it really depends on consumer
:02:11. > :02:14.sentiment. We see that Qantas is already going into laws and you long
:02:15. > :02:17.more routes, and that is tried to take them away from that competitive
:02:18. > :02:23.market. They will be challenging, but if it works, it will work well
:02:24. > :02:27.for them. Air Ajax saw its earnings plunge 80%. Should they rethink
:02:28. > :02:32.their long haul strategy? I do think any to look about. Fuel prices have
:02:33. > :02:37.risen. I think that has driven this fall in profitability. With a talk
:02:38. > :02:41.about it retains a longer routes, I think that is good to be a real
:02:42. > :02:44.challenge of fuel keeps on going up. And April need to rethink that and
:02:45. > :02:48.think more about the media more routes. Despite the drop in
:02:49. > :02:53.earnings, the share price of Qantas in Sydney trade was up by 4.8%. The
:02:54. > :02:57.US central bank has released minutes from its latest meeting at the end
:02:58. > :03:06.of January. It suggests an interest rate hike is just right around the
:03:07. > :03:11.corner. We get an escalation from Michelle Fleury. The two were so
:03:12. > :03:15.jump out were fairly soon. That does not explain what it means. After the
:03:16. > :03:23.minutes came out, you saw a slight dip. That is because some read it as
:03:24. > :03:27.a rate hike as soon as caveat March. But when people more thoroughly read
:03:28. > :03:30.the minutes, there seem to be a consistent forming amongst
:03:31. > :03:37.economists that it was probably more likely to happen in June. Michelle
:03:38. > :03:43.Fleury in New York. In other news:, the first major credit system and
:03:44. > :03:48.has taken effect for trade facilitation that will cut cost by
:03:49. > :03:53.40% and boost cross-border trade by $1 trillion. This deal was
:03:54. > :03:56.negotiated back in 2013, and a majority of countries have ratified
:03:57. > :04:03.the agreement, including the United States. Nissan motor was a boss is
:04:04. > :04:10.stepping down as chief executive of the carmaker. The man who shares the
:04:11. > :04:21.top role with him takes over on the first of April. The reshuffle comes
:04:22. > :04:24.as the head focus on Mitsubishi Motors. He bought a controlling
:04:25. > :04:30.stake in October last year. Unilever is tried to keep its investors happy
:04:31. > :04:34.after it predicted a takeover bid from Pfaff Hines. The consumer goods
:04:35. > :04:39.firm plans to take out a comprehensive review and it
:04:40. > :04:43.mainstreaming its organisation. Some think that will include selling off
:04:44. > :04:49.its businesses, including the brand Flora. Frequent Morgan is at
:04:50. > :04:55.loggerheads with Indonesia. The gunmen wants to change the current
:04:56. > :04:58.contract for the world 's largest copper mine, part of regulations on
:04:59. > :05:03.foreign ownership and revenue. The gridlock has already brought
:05:04. > :05:11.production to a standstill as Freeport refuses to X that the
:05:12. > :05:18.changes. -- accept. Indonesian law and international law provided the
:05:19. > :05:23.contract like that for Freeport being unable to be changed or
:05:24. > :05:32.changed unilaterally by either party. The miner is now threatening
:05:33. > :05:35.action to seek damages. The Indonesian government is really
:05:36. > :05:39.pushing them, as you said, to try and take a more flexible mining
:05:40. > :05:44.permit as part of this whole push to try and get more processing of
:05:45. > :05:49.minerals done and Indonesia, rather than the exporting of more raw
:05:50. > :05:53.minerals. So they really want Freeport to build smelters here.
:05:54. > :06:00.They also basically want more royalties to come back to Jakarta,
:06:01. > :06:04.and they also want to digest their shares further in the coming years.
:06:05. > :06:10.And these are things that Freeport said not in the contract they are
:06:11. > :06:15.currently under. They said the current 30 year contract is a
:06:16. > :06:20.document that cannot be broken. And production is now at a standstill.
:06:21. > :06:23.This threatens global copper supply. What is Freeport saying? What are
:06:24. > :06:28.they planning to do next? They are saying that there is a period of 120
:06:29. > :06:32.days negotiation, and that is what they are really focusing on. But at
:06:33. > :06:36.the same time, they are threatening to take this to arbitration. They
:06:37. > :06:39.have also said that they have had to lay off 10% of their foreign
:06:40. > :06:43.workforce already on Friday, and they say that they may need to let
:06:44. > :06:49.go of other contract workers, because only half of the 30,000
:06:50. > :06:52.workers that are employed by Freeport are permanent. They are
:06:53. > :06:57.saying that this is not a negotiation tactic, this is just
:06:58. > :07:01.what they need to do to keep the business afloat. At Bisley, that
:07:02. > :07:09.will put a lot of pressure on the Indonesian government to come to the
:07:10. > :07:14.negotiating table. If this goes to arbitration, Indonesia will go to
:07:15. > :07:17.arbitration, but this whole dilemma could turn foreign investors that
:07:18. > :07:22.want to put more money into the country? That is what observers are
:07:23. > :07:25.saying. They are saying this is showing that the Indonesian
:07:26. > :07:29.government is not consistent in the way they it enforces its laws in
:07:30. > :07:32.mining, and they are saying that this shows that Indonesia's
:07:33. > :07:38.contracts that its size with companies are not held to account,
:07:39. > :07:41.because as Freeport is arguing, this contract they signed his standing.
:07:42. > :07:47.The Indonesian gunmen says is about getting revenue to the Indonesian
:07:48. > :07:54.people. Survey restaurant quality meals out of the back of a lorry?
:07:55. > :07:58.Food drops are a phenomenon that started in Los Angeles and has
:07:59. > :08:04.spread across the world. -- serving restaurant quality. They are now in
:08:05. > :08:06.Hong Kong. As rates are so high, many conventional restaurants
:08:07. > :08:16.struggled to stay in business. We get this report.
:08:17. > :08:22.The arrival of two trucks here in Hong Kong has sparked plenty of
:08:23. > :08:27.interest. But this is a city where rents for regular restaurants are
:08:28. > :08:32.skyhigh. So I have come to find out if this is a viable way of starting
:08:33. > :08:37.your food business. 16th two trucks parked around Tourist attractions in
:08:38. > :08:44.Hong Kong. This dumpling truck is part of a pilot scheme launched by
:08:45. > :08:48.the government. The owner already owns a sitdown dumping house, but
:08:49. > :08:53.wanted to try this investment. TRANSLATION: When I was a child,
:08:54. > :08:59.there were a lot of streetwalkers. I like the food, and I miss the
:09:00. > :09:02.atmosphere. After getting the licence, though, he realised the
:09:03. > :09:08.upfront costs were 50% higher than expected.
:09:09. > :09:13.TRANSLATION: The total was more than 100,000 US dollars. We thought it
:09:14. > :09:17.was very expensive. The higher cost me is that he needs to sell his
:09:18. > :09:23.dumplings at $5 a bowl, a lot higher than at the restaurant. He needs to
:09:24. > :09:26.sell 250 balls just to break even. -- the high cost means.
:09:27. > :09:29.TRANSLATION: It is delicious but expensive.
:09:30. > :09:35.TRANSLATION: I think the prices to restaurants. Most of the trucks are
:09:36. > :09:38.run by people who already own a restaurant. Critics say they're just
:09:39. > :09:43.marketing gimmicks aimed at tourists. So the food truck prices
:09:44. > :09:48.do not seem competitive. So I've seen some that a higher priced than
:09:49. > :09:55.local eateries. Unless they creating suddenly very unique and different,
:09:56. > :09:57.that other places are not offering, I think it will be difficult to
:09:58. > :10:03.stand up. TRANSLATION: It is almost 6pm and we
:10:04. > :10:07.have only sold 200 balls today. Not enough to turn a profit. He hopes
:10:08. > :10:14.that business will pick up to make up for the huge initial investment.
:10:15. > :10:18.-- bowls. I am ready for breakfast. Before we go, here is a quick look
:10:19. > :10:23.at the markets, and Asian stocks are pulling back from 19 months highs in
:10:24. > :10:29.early Thursday trading on fears that interest rates in the US might rise
:10:30. > :10:31.sooner rather than later. Thank you for investing your time with us.