02/11/2015 BBC Business Live


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This is Business Live from BBC News with Sally Bundock and Ben Thompson.


Ryanair's strategy to woo passengers appears to be paying off.


It's just posted a 37% rise in profits.


Live from London, that's our top story on 2nd November.


But Ryanair is operating in an increasingly crowded market


as the number of short haul airlines grow rapidly, but will they


Also in the programme the Turkish lira strengthens


after a surprise win for the country's ruling party in snap


elections, but is this good news for Turkey's struggling economy?


A new trading week has begun. We will talk you through the winners


and the losers. And where are you planning


your next holiday? What will you do,


how much will you spend? Well, while you're weighing up


the options, the travel industry is As thousands of travel industry


bosses meet in London we'll get the inside track on the multi-trillion


dollar global industry with the boss of the World Tourism


Organisation. Will you spend more


on holidays this year? Let us know with


our very unscientific poll.Just Ryanair have just released


its latest set of results, the airline's profits jumped


by 37% to $1.2 billion Famed for its off-hand treatment


of passengers, it dramatically changed its tune


after two profit warnings in 2013. But how has


the airline turned itself around from its brutal image of old


and can it continue to compete In the words of Michael O'Leary,


the airline moved to stop annoying people


and improve its customer service. Now in the second year,


Ryanair introduced its "always getting better" customer


experience programme which attracted It introduced allocated seating,


new seats with more legroom, improved in-flight meals,


extra carry-on luggage and more which date back to the late 1960s,


are now major corporate players. There are 62 low-cost airlines


in Europe Budget airlines growth and over the last 15 years they


have snatched 40% of intra-Europe But


the competition is fierce.easyJet and Ryanair together still account


for only 20% of the overall European short-haul


market and that is also being challenged by a group of airlines


such as Norwegian Air Shuttle, Vueling, which is owned by IAG,


Wizz Air and Pegasus, of Turkey. Speaking to us a little earlier Neil


Sorahan, the Chief Financial Officer for Ryanair explained why the


company was now performing so well. With a 13% increase in passenger


numbers to 58 million customers and we have increased our full year


target. We did benefit from the weather in Northern Europe this


summer which encouraged people to head to southern climes and indeed,


from the stronger sterling. Which again encouraged people from the UK


to travel to the eurozone, but the always getting better programme is


clearly winning over the minds and hearts of the travelling customers.


This is something we have worked very hard on for the last two years


through the likes of the fully allocated seating and the carry on


bag and the choice of airports, we have 119 new routes this winter so


we are greatly increasing the choice that people have. We fly to 200


different airports at the moment in 31 different countries.


That was the chief financial officer of Ryanair speaking to us earlier.


Travel Expert Alan Bowen joins me now.


Alan, good morning, welcome to the programme. We were sceptical when


Ryanair said we are going to be this caring, sharing airline and we are


going to revamp our image, but we have been proved wrong, the figures


tell the story? The figures show a huge improvement. When you asked


them a question, the answer was always no and by 2013 they began to


realise there were a lot of people who weren't prepared to accept no as


an answer and their change seems to have done them a lot of good. They


made a lot of revenues for things from charging you from printing your


boarding pass and for putting your luggage in the hold. They increased


passenger numbers by 13%. They charge for baggage in the hold, but


they don't want you to take it. But what they are seeing is a huge


reduction in fuel costs and fuel costs are helping every airline at


the moment. I wanted to talk about that because there is a huge


difference in what we saw in fuel prices last year and a lot of the


airlines still struggling because they hedged and they hedged or made


a gamble on prices being higher, not the case for Ryanair and they have


taken the gamble and won? The airlines who didn't hedge have done


very well. But at $50 a barrel, there is no reason that any airline


should be making a loss at the moment. We have heard from Ryanair


this morning, talking about whether they would expect to see a price war


next year. This is nothing new, they have always talked about price wars,


but we could we start to see, it is not just about the low-cost


airlines, there is a blurring of lines between the legacy carriers


and the low-cost carriers, they could start a price war with the


legacy carriers, but on routes that we wouldn't traditionally expect?


Well, we have seen changes in airlines such as BA who charge for


you to reserve your seat and charge for excess baggage. I'm not sure


there will be a price war. I think every year Ryanair say there is


going to be a price war and the hope is that will push people to book


before the price war begins, the reality is if you leave it to the


last minute, the likelihood is you will pay a lot more next year than


you will this year. One we will be watching closely,


Alan, thank you very much. Alan Bowen there.


Chipotle Mexican Grill has temporarily closed 43 restaurants


in Washington state and Oregon while authorities investigate


People who ate in six Chipotle restaurants are among 20 cases


The fastfood chain said it was acting with


Greece's bank bailout fund HFSF will provide state aid to recapitalise


the country's main banks after the European Central Bank said


A health check of Greece's four main banks by the


ECB over the weekend has shown that the lenders need to cover a 14.4


Let's look at the Business Live page. I want to highlight a couple


for you. We have had news from Burger King this morning, the


fast-food retailer, well, it is trying to get into the evening


market. We have seen other retailers try this, particularly Starbucks


trying to sell wine. Burger King says it will sell beer. It will sell


it it inn plastic bottles -- in plastic bottles. Beer and burger the


perfect combination, you might say. Let's talk about Nissan's figures,


because we have had an update from Nissan. Rising significantly, up by


more than 15%. Nissan following on from Peugeot and Citroen, it would


seem the European car makers had a really tough time since the 2008


financial crisis are seeing a turn around which is encouraging.


China's economy is contracting for the third month in a row according


to the Government's latest factory survey.


Let's take you to our Asia Business Hub and Mariko Oi is


Numbers coming in below 50 is considered a contraction and this is


the third month in a row. It adds to worries about China's slowing


growth, most recently the country said that the economy is expanding


by 6.9%, but the slowest pace since the financial crisis. It has been


hit by a market turmoil as well as global slowdown in demand for


Chinese products, but the authorities have been trying to


rebalance its economy by trying to rely less on exports and boosting


domestic consumption. It is part of the longer term plan, but the


markets have been hit hardest, especially the Nikkei down more than


2% closing today. Thank you very much indeed.


Let's look at the markets in the region. Japanese markets down over


2%. That's mainly in reaction to the news from China, the factory news.


That's the Dow on Friday. Let's look at Europe now to have a sense of how


things are going there. As we saw earlier, most of the main markets


starting the week lower. Again, a lot of that is to do with the news


out of China and the concern about the global economy and the impact


the world's second biggest economy slowing will have on the rest of us.


We are having the figures behind me, despite good news. We have mentioned


Ryanair. Ryanair's shares up 30% year to date. HSBC out with strong


earnings as well. Surprisingly strong actually. Some good news from


various companies in Europe. We will talk about why these are lower


shortly. Some of the reasons why, but let's hear from our


correspondent who is in the US. It is a busy week for Wall Street with


a lot of data to be released and dissected on the state of the US


economy. First up Monday is a look at manufacturing and construction.


But the big focus will be jobs, jobs, jobs with the latest monthly


report out on Friday. Ahead of the Fed's meeting in December, where


they will weigh a possible rate hike this will be an important piece of


the puzzle as the policy makers decide if the economy is ready for


lift off. Federal Reserve chair is scheduled to speak before a


Government committee on Wednesday and analysts will certainly be


listening in. We will get a look at how many cars Americans bought in


October and earnings season continues. Visa will report its


fourth quarter results on Monday and later in the week Facebook and Walt


Disney Company. Simon Derrick is with us.


Manufacturing, we heard from Singapore about the Chinese figures.


We get them all today, we get French, German, UK in about an


hour's time, US later today. They tell us the story, don't they, of


the world economy. Services clearly very dominant, but manufacturing


gives us that indication of who is making stuff? That's been the way


the market has been looking at it over the last few months. The first


day of the trading month is proved to be one of the most important. We


get the manufacturing numbers. Slightly weaker numbers from China


as we heard. Expectation is we will get something above the break even


level, the 50 level for Europe, the UK and the US. The reason it matters


is it is focussed on monetary policy. We have got the Bank of


England coming out, there is talk that one extra person will vote in


favour of a rate hike. We have the Fed coming out and we have got a


European Central Bank which may ease rates. So unsurprising Monday is a


big day for us. Also as well, all these manufacturers are having to


grapple with the currency? Absolutely. For American


manufacturers, that's a big deal at the moment, isn't it? Well, currency


has become central to Central Bank's thinking because of this and if you


look at what the US Central Bank has been doing, they have been talking


about the concerns about dollar strength and yet at the same time


they are talking about raising interest rates which would cause the


dollar to go further. We will be looking closely to see if the dollar


strength is impacting on manufacturers, it won't be that big


a story, but it has been highlighted as an issue, we will see. Simon, for


now, thank you. I know you will talk us through the business pages later.


Still to come - the battle for your tourist dollars.


As the big players of the global travel and tourism


industry meet in London, we'll meet the man who knows where you want to


go on holiday, what you'll spend and exactly how you'll spend it.


Stay with us, this is Business Live from BBC News.


More bank results this morning - and today it's the turn of HSBC.


The banking gaint says pre-tax profits came in at ?3.95 billion


That's significantly above forecasts of of ?3.4 billion.


Simon bring us up-to-date? It is known as a comfortable beat. It beat


expectations and a bit surprising because as you have been saying,


China has been slowing down. The region around China had a crisis of


confidence over the past year. It is not just surprising, it is


misleading. A lot of the increase in profits was because this time last


year, HSBC was forking out a fortune in terms of fines and compensation


for customers who had been mis-sold. If you look at the revenue picture,


the revenue is slightly down. One of the interesting things though is


despite what's going on in China, no mention that the quality of their


loan book, people are actually affording to pay their loans back.


That's a comforting feature. As I say, revenue down. This is the share


price over the last year. It has been tricky. The shares are down


this morning despite the big profit numbers because underlying revenue


is going in the wrong direction and no word yet on where they're going


to put their HQ. It has been in London since the 1990s, but the big


tax levy on banks headquartered in London made them re-think, is it


going to be New York, Asia, at the moment, it is in London and no word


on that. The debate will continue into the


New Year the management at HSBC said although we are reviewing our


location in terms of HQ, we won't reveal any decisions on that until


the New Year. A great story in the Guardian, it


says the UK is losing millions in VAT from non-EU sellers and the


result of retailers trying to use the website and the market place


side of Amazon to sell things abroad, but they said there was no


EU compliance. So many more of us do our shopping


in the run-up to Christmas online, eBay, Amazon are the beneficiaries


at this time of year. Lots more on the website. Do take a look.


Ryanair's profits for the first-half of the year soaring by 37%. The


reason behind the bumper number poor weather in Western Europe made more


of us go on holiday and a strong British pound and also, its improved


customer service. We were sceptical about the airline saying it would be


caring and sharing, but the numbers tell the story!


It's that time of year when you might be planning that next holiday.


Where will you go, what will you do and how much will you spend?


Well, while you're weighing up the options, the travel industry is


It's closely monitoring demand to make sure travel operators,


airlines and hotels are ready to rake in your tourist dollars.


Global tourism and travel contributed


an extraordinary $7.58 trillion to the world's economy in 2013.


The number of tourists was 1.1 billion in 2014 with France


and the United States among the most popular destinations.


Namibia, Montenegro, Zambia and China are


the fastest emerging tourism destinations according to analysts.


And the nation whose tourists spend the most money, unsurprisingly


its China with nearly $165 billion a year spent on travel.


We are joined by the Secretary-General of the United


Nations World Tourism Organisation. Welcome. Some staggering numbers


there. We are looking at this because the world travel market gets


underway a gathering of all tourism bosses in London. A huge number and


also a huge industry. One that's growing every year? Correct. Travel


has become and tourism as a result has become part of our way of life,


our culture. It moved from being a human need into a human right really


now. There is no way that this could retreat and the growth is showing


it. So far this year, we have issued our latest data two days ago. It is


4.3% increase over 2014 which is even 5% increase over 2013 and so on


and so forth. How much of the growth has come from low oil prices? We


have talked about Ryanair benefiting hugely. It means more people can go


overseas and it is costing less to do so frankly. Is that a direct


result of the low oil price? Well, it is one of them. The increased


travel industry and the increased movement especially air travel is a


factor, but that's not only due to the lower oil prices. Currency is a


factor. Increased economic activities, enlargement of the


middle-class you were talking about, the China growth. China will be


spending by the end of 2015 about 200 billion US inside one year


because the middle-class is growing incredibly, India, Brazil is


growing, the emerging markets are becoming very good source markets.


Also, as well, as you mentioned, this growth rate that you're


discussing, you know, billions, trillions, etcetera, you are looking


at the number of people or money that's coming in. It is so


important, isn't it, to most economies? The tourism industry


within a country is a money spinner, isn't it? So for example countries


like Greece which is facing a financial crisis, which is also


facing a migrant crisis as well, you know, on its borders, on the


islands, the tourism industry for them for example is vital that it


goes well? It is a savour. And many, many countries that have been


experiencing economic difficulties found that tourism is a way out.


Greece is an example. But it is extremely important to face the most


important challenges which is job creations. One out of 11 jobs over


the world are created by the travel and tourism industry. You may have a


slight recovery in the economic situation, but the jobs are behind


and it is really still a challenge. The other important factor in the


economic value chain is the horizontal nature of tourism. It


affects so many other factors, shopping, you were talking about


shopping, the food industry, the transport industry, it is a very,


very important in terms of the value, chain, impact of it.


You talk about the value chain. You also talk about trying to promote


tourism as environmentally sustainable, a driver of economic


growth, inclusive development and trying to make sure the communities


in which tourism takes place benefit from it. Can the two ever go


hand-in-hand? Absolutely. That's why we are part of the UN system because


we are concerned about the agenda of sustainable. What we should try to


keep in mind is never to be afraid of growth, embrace growth, but do it


the right way because if we see growth on the one hand and


sustainability on the other hand we are missing the point here and yes,


we can and it has been done. It has been done in many, many cases around


the world. Briefly, because we are almost out of time, I wanted to ask


you at this event in London, are you discussing or looking at the impact


of the migrant crisis? This movement of people that's affecting mainly


Europe, but North Africa and the impact that has on tourism, if it


has any impact? Well, we have to look at all the factors affect the


travel industry, but we have to be careful not to mix the two issues.


Mixing the two together... Some governments and agencies that


receive people, there is the whole issue of security? Right. Right.


That's the danger of it. Is that we tend to become too protective about


the travel industry and the security people take over. We need to promote


is the concept of safe and friendly travel. Safe alone is not enough,


you are killing the very industry that you're trying to protect, but


friendly alone is not enough because you need to have safe travel and


that's the balance we try to keep. Really nice to see you. Thank you


for explaining that and best of luck with the conference today. Thank


you. The secretary General of the United


Nations World Tourism Organisation. Here is a remind tore get in touch.


The Business Live web page is where you can stay ahead with the day's


breaking business news. Wep keep you up-to-date with insight and analysis


from the BBC's team of editors around the world and we want to hear


from you too. Get involved on the BBC Business Live web page.


Or on Twitter. And you can find us on Facebook.


Business Lis on TV and online whenever you need to know.


S Well, get in touch with us. Simon is back with us to look at the


papers. Simon a lot in there, let's start with Turkey. We mentioned it


at the start of the programme and yesterday, an important election


result in Turkey. What does it mean financially? What does it mean for


the markets, we know Turkey is a surging economy and one with a young


population, what does the election result mean? I suspect more than


that side of it. I think from the investment prospective it is a sign


of stability in what is otherwise this instability that's grown up in


the eastern Mediterranean from that prospective, investors will take


heart. They have done already. You can see the Turkish Labour had


making gains pulled back a little bit. For anybody that's looking for


stability and looking also for relatively healthy yield then Turkey


represents a really healthy option out there. We will probably see more


of this, but it is more the fact after the uncertainty in the last


six months, we see a way forward politically. The Wall Street Journal


has an interesting article on apps you can get to keep an eye on stock


markets, shares going up and down and all over the shop. What do you


think? A bad idea to use an app and be constantly watching or good idea?


OK. I think that you can look too much at markets. I mean, I have done


this job for a long time and there are points when actually the


smartest thing to do is to turn the screens off because there is only so


much analysis you can do, if you're getting prices all the time you are


likely to react and if you have got a long-term plan... There was a time


when we didn't have the technology or the availability, you needed to


have an ex-Spencive subscription and now it in your pocket. Even if you


look once a day, you don't have the intraday noise coming in. You make


the comparison to where the price closed the previous day. More often


than not, you will find it is up, it is down, you won't have the stuff


that's going to cause you uncertainty, me, I'd turn the


screens off. That's good advice. Screen downtime, I like that. As


long as your screen downtime is not during our programme!


Have a really good day. That's it from us for today. We will see you


tomorrow. Bye-bye.


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