23/02/2017 Asia Business Report

Thank you for joining us. Welcome to Asia Business Report. I Rico Hizon

in Singapore. We start off with a straight's biggest carrier, Qantas,

posting a 7.5% drop in earnings. It is being blamed on increased

competition, on long haul routes and falling international fares. It is

not the only airline that has been hit hard. Profits at AirAsia X were

plunging 80% compare two year ago levels. I spoke to Alice Taylor at

like global together next permission for the Qantas results. The numbers

really demonstrate what we are hearing about another weakness in

the domestic Stratton market. On an underlying any basis, Qantas

domestic was down. We are seeing a lot of effect on the international

market. -- Australian market. But Jetstar did well, and that was

committed to a strong domestic performance, as well as improvements

in profitability at the operations in Asia. So what must they do in the

medium to long-term to be to improve profitability and be more consistent

with their earnings? They have started to work on a lot. We are

about two years through a three-year translation programme that the

cupboard has been through. They cut out a lot of cost. That has put them

on a much more sustainable footing. I think from here on in, it will be

down to just cut and goes, and it really depends on consumer

sentiment. We see that Qantas is already going into laws and you long

more routes, and that is tried to take them away from that competitive

market. They will be challenging, but if it works, it will work well

for them. Air Ajax saw its earnings plunge 80%. Should they rethink

their long haul strategy? I do think any to look about. Fuel prices have

risen. I think that has driven this fall in profitability. With a talk

about it retains a longer routes, I think that is good to be a real

challenge of fuel keeps on going up. And April need to rethink that and

think more about the media more routes. Despite the drop in

earnings, the share price of Qantas in Sydney trade was up by 4.8%. The

US central bank has released minutes from its latest meeting at the end

of January. It suggests an interest rate hike is just right around the

corner. We get an escalation from Michelle Fleury. The two were so

jump out were fairly soon. That does not explain what it means. After the

minutes came out, you saw a slight dip. That is because some read it as

a rate hike as soon as caveat March. But when people more thoroughly read

the minutes, there seem to be a consistent forming amongst

economists that it was probably more likely to happen in June. Michelle

Fleury in New York. In other news:, the first major credit system and

has taken effect for trade facilitation that will cut cost by

40% and boost cross-border trade by $1 trillion. This deal was

negotiated back in 2013, and a majority of countries have ratified

the agreement, including the United States. Nissan motor was a boss is

stepping down as chief executive of the carmaker. The man who shares the

top role with him takes over on the first of April. The reshuffle comes

as the head focus on Mitsubishi Motors. He bought a controlling

stake in October last year. Unilever is tried to keep its investors happy

after it predicted a takeover bid from Pfaff Hines. The consumer goods

firm plans to take out a comprehensive review and it

mainstreaming its organisation. Some think that will include selling off

its businesses, including the brand Flora. Frequent Morgan is at

loggerheads with Indonesia. The gunmen wants to change the current

contract for the world 's largest copper mine, part of regulations on

foreign ownership and revenue. The gridlock has already brought

production to a standstill as Freeport refuses to X that the

changes. -- accept. Indonesian law and international law provided the

contract like that for Freeport being unable to be changed or

changed unilaterally by either party. The miner is now threatening

action to seek damages. The Indonesian government is really

pushing them, as you said, to try and take a more flexible mining

permit as part of this whole push to try and get more processing of

minerals done and Indonesia, rather than the exporting of more raw

minerals. So they really want Freeport to build smelters here.

They also basically want more royalties to come back to Jakarta,

and they also want to digest their shares further in the coming years.

And these are things that Freeport said not in the contract they are

currently under. They said the current 30 year contract is a

document that cannot be broken. And production is now at a standstill.

This threatens global copper supply. What is Freeport saying? What are

they planning to do next? They are saying that there is a period of 120

days negotiation, and that is what they are really focusing on. But at

the same time, they are threatening to take this to arbitration. They

have also said that they have had to lay off 10% of their foreign

workforce already on Friday, and they say that they may need to let

go of other contract workers, because only half of the 30,000

workers that are employed by Freeport are permanent. They are

saying that this is not a negotiation tactic, this is just

what they need to do to keep the business afloat. At Bisley, that

will put a lot of pressure on the Indonesian government to come to the

negotiating table. If this goes to arbitration, Indonesia will go to

arbitration, but this whole dilemma could turn foreign investors that

want to put more money into the country? That is what observers are

saying. They are saying this is showing that the Indonesian

government is not consistent in the way they it enforces its laws in

mining, and they are saying that this shows that Indonesia's

contracts that its size with companies are not held to account,

because as Freeport is arguing, this contract they signed his standing.

The Indonesian gunmen says is about getting revenue to the Indonesian

people. Survey restaurant quality meals out of the back of a lorry?

Food drops are a phenomenon that started in Los Angeles and has

spread across the world. -- serving restaurant quality. They are now in

Hong Kong. As rates are so high, many conventional restaurants

struggled to stay in business. We get this report.

The arrival of two trucks here in Hong Kong has sparked plenty of

interest. But this is a city where rents for regular restaurants are

skyhigh. So I have come to find out if this is a viable way of starting

your food business. 16th two trucks parked around Tourist attractions in

Hong Kong. This dumpling truck is part of a pilot scheme launched by

the government. The owner already owns a sitdown dumping house, but

wanted to try this investment. TRANSLATION: When I was a child,

there were a lot of streetwalkers. I like the food, and I miss the

atmosphere. After getting the licence, though, he realised the

upfront costs were 50% higher than expected.

TRANSLATION: The total was more than 100,000 US dollars. We thought it

was very expensive. The higher cost me is that he needs to sell his

dumplings at $5 a bowl, a lot higher than at the restaurant. He needs to

sell 250 balls just to break even. -- the high cost means.

TRANSLATION: It is delicious but expensive.

TRANSLATION: I think the prices to restaurants. Most of the trucks are

run by people who already own a restaurant. Critics say they're just

marketing gimmicks aimed at tourists. So the food truck prices

do not seem competitive. So I've seen some that a higher priced than

local eateries. Unless they creating suddenly very unique and different,

that other places are not offering, I think it will be difficult to

stand up. TRANSLATION: It is almost 6pm and we

have only sold 200 balls today. Not enough to turn a profit. He hopes

that business will pick up to make up for the huge initial investment.

-- bowls. I am ready for breakfast. Before we go, here is a quick look

at the markets, and Asian stocks are pulling back from 19 months highs in

early Thursday trading on fears that interest rates in the US might rise

sooner rather than later. Thank you for investing your time with us.