03/11/2015 BBC Business Live


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This is Business Live from the BBC


with Ben Thompson and Aaron Heslehurst.


Lawmakers consider new rules in California that could limit how


Could it signal the end of $25 billion rental site AirBnB?


Live from London, that's our top story on 3rd November 2015.


AirBnB has spent $8 million to try and defeat


the possible new rules and it's all being closely watched by cities


They're also considering tightening regulations.


Also in the programme, Standard Chartered is to cut 15,000


jobs after reporting heavy third-quarter losses.


We'll be live in Singapore for the latest.


And markets are doing this. We will get construction figures for the UK


a little later. Icelandic airline Wow Air promises


flights from Europe to the US But how can


the airline afford it and are We speak to the boss live here


on the programme. And today, Amazon has announced


plans to open its first So when did you last buy a book


and was it online or in a store? The accommodation website AirBnB has


shaken up the global travel industry - but


in its home town of San Francisco Residents are due to vote later


on Tuesday on a proposal to limit short-term rentals on apartments


and homes to just 75 days per year with the websites themselves


responsible for removing listings The


company has spent 8 million dollars The ballot is being closely watched


by cities like New York and Los Angeles, which are also considering


tightening regulations. And this is what is making some


locals in San Francisco angry. Over the past five years, average


rent has risen by more than 75%,


with sites like AirBnB being blamed Of course,


AirBnB isn't the only example of a sharing economy platform


facing regulatory challenges - don't forget Uber's facing


regulatory issues in France, Brazil Raoul Lumb, Associate at


Hill Hofstetter solicitors. I want to start with the chart Ben


was showing us. Candy company be blamed for pushing rental prices?


Those on the yes campaign will see that in five years they have gone up


75%. Their campaign is that the company allows people to take houses


out of the regular rental market of long-term latent tenants and push


them into their holiday sector for short-term, quick turnover


high-priced rentals. They say it pushes up. Airbnb has been around


for seven years there has been a housing crisis for five years. They


say that they cannot be doing it because they are pushing up the


supply, and therefore they are bringing housing prices down.


I'm just trying to work out, there is a valid point of some will say


here, because many who rent their home made, or a second home, Philly


under Airbnb, it is running a business. Typically, you have to pay


something when you run a business, it is called taxation! That is what


they have been getting away with? That is what the yes campaign says.


If you're somebody who rent out your house for more than 75 days a year,


a homeless, not just a room, they say that this is a business and


something which should be regulated like a hostel or B and it should


be taxed and have the same reporting requirements that businesses have.


'S the issue at the moment is the fact that it is often more lucrative


for people to rent out their place on a short-term lead, make a lot


more money for it to visitors, rather than for the domestic


population. That has got people in San Francisco so angry. They are


being priced out of the market because all these tourists coming in


for two weeks and they cannot get anywhere to rent.


That is one of the things this proposition says. Airbnb of other


mining communities in the bullets, forcing people who would be on


long-term lets and turning it into a short-term holiday site. Very


briefly, you mentioned this in your introduction, Goober is facing


regulation in many cities around the world, Airbnb as well. Is this a


classic case of the law, regulation, trying to catch up with technology


because it is Goodwin Sands bones? Absolutely. This is the law and


public disgraced catching up with technology and marketing of the


technology. There has been a share in economy, such as Uber, would you


mentioned, and regulators in society are keeping. Is the way this company


does this desirable because it need extra oversight? This is the first


step on a long journey. Great stuff, we appreciate your time. Thank you


very much for coming in. US video games producer


Activision Blizzard will buy the company behind Candy Crush -


King Digital - for $5.9 billion. Activision which makes Call of Duty


and Guitar Hero, says the purchase will create one


of the largest global entertainment It will have over half a billion


monthly users in 196 countries. Here is a story that keeps on


giving. Volkswagen has denied claims by US


regulators that some of its luxury brands were also fitted with devices


to cheat pollution tests. The Environmental Protection Agency


said at least 10,000 vehicles with six cylinder,


three litre engines, such as Tech giant Google has announced


a date for the launch It's called Project Wing and aims to


deliver goods to consumers using the Not as far as you would think.


Others are experimenting. Does it depend on where you live?


What if you live in an apartment? You have to hang out of the window!


, thank you! BMW has a surprise profit. We are talking about the


past three months, it has had a strong field in the European


market. Offsetting that weakness in demand in China. What was the


profit? Before tax, this is, 2.2 billion euros. Thank you very much,


there you go. Revenue, 22.3 billion. Plenty of other stories there,


including more on Standard Chartered. But that is our next


story of love. -- story as well. Standard Chartered is to to cut


15,000 jobs and raise over $5bn See what I did there?


This is a really big clean-up and I should tell you how the share prices


responded to that cling to start with, because these are then slung


around 4% in trade in Hong Kong. It clawed back a bit. We have caused


just recently in Hong Kong down more than 3% and are continuing to slide


in London. But this is a clean-up that has been going for quite a


while. Ever since the new CEO took over in the middle of the year. And


this capital raising is not unexpected. Many people have been


seeing it on the card since June. He started the restructure but today's


members illustrate the scale of the problem. $139 million compared with


a profit of 1.53 billion just one year earlier. We get this big


capital raising and a lot more jobs are going to go.


Good stuff, thank you very much. A quick look at the numbers. A bit


of a mixed session in Asia, despite cautious optimism. We have seen weak


Chinese domestic demand over the weekend but we have also had good


figures from manufacturing in the UK, and the Eurozone yesterday. I


want to trade the European numbers because markets yesterday ending


pretty upbeat but in early trade, from the loss of there. Nonetheless


we will be keeping a clear, -- a close eye on construction figures,


due in the next hour, giving us an idea on how the market and economy


is performing stock it makes up just a small part of the economy,


however. What is happening on Wall Street?


On Tuesday, we will see how close US auto-maker are to breaking the


all-time Celtic are set in 2000. Analysts expect Americans love but


11% more crisis October compared to last year and are on track by 17.4


million vehicles in 2050. But for some companies it is another story.


Tesla will release numbers on orders for its model X all electric SUV and


give an update on the status of its five million dollar battery factory


in Nevada. Those men and voters at the polls in San Francisco to decide


whether or not to restrict the number of knife landlords can rent


their homes to Airbnb and similar services. They have spent $8 million


campaigning against the measure. We know that one! I am joking. We


are joined by Jessica. Manufacturing, a big day yesterday


but stop we will be watching the markets closely. Very closely. All


that about this year has been emerging markets. Disappointing and


everybody is turning to the developed markets to spearhead the


growth. We have been talking to some US companies and the message is a


bit mixed. There is definitely a benefit from lower oil price but


actually, consumers are not spending as much as we thought. How much are


we hanging onto these individual bits of data? We are wondering who


will fire the starting first raising rates, the UK or US, and every time


we get figures by construction, manufacturing, we get very excited


about whether this is the one that means rates go up. How closely


should we watch them? Rate rises, when they happen, whether first in


the US or UK, will be a seminal moment. They have been low for so


long. But I think the thing that we have learned a this recession is


that it has been what I would call a bath tub. We have been bumping along


the bottom for a long time. Rate rises have been pushed out try that.


I am not sure that pattern is necessarily going to change that


quickly. Jessica, you know how we make you guys work on our programme!


You'll come back and taken through some of the papers. You will talk to


you soon. Also coming up: Apostles and Atlantic Elaine will be


sure to tell of how he intends to crack the market for cheap flights


between the US and Europe. Many of course have tried and failed. Will


this one be a success? You're with Business Live from BBC


news. Was neither is an important battle going on in the cut-throat


world of children's toys relating to intellectual property rights and the


outcome will be watched coarsely around


have you ever heard of Trunkie? It is a cross between a toy and


luggage. I have seen them throughout


airports. But the product, designed in the UK, has become a victim of


its own success, spawning copycat manufacturers with rival designs.


The company that owns the Trunkie may spend more money fighting


patents battle than on research and development.


Astonishing. Today, here before the Court hoping to shut down the


biggest rivals, PMS of Hong Kong. We have run through...


You have not left me much to the! If you are a parent of young


children, as I am, you will be familiar with these products. Both


Trunkie, on the left, by a Bristol company, and the PMS- made on the


right-hand side. They are relatively simple. The horns, you can sit on it


and try it. But PMS is pretty open and honest and say that their design


was inspired by the Trunkie. They took the matter to the courts in the


UK, one in the High Court, lost in the Appeal Court and today, they are


in the Supreme Court in the UK and they will hopefully get a determined


ruling as to what is permitted. If Trunkie wins the case, it means that


PMS's case cannot longer be sold and the UK, and possible Europe. We


stress that it does not mean they cannot sell them elsewhere around


the world, especially Asia, where they are from. But it is a very


important case for these designs, because this is not a patents, this


is a community registered design. And a lot of people who design stuff


very best a lot of money in this, so need to know that what the designers


protected all around the world, not the UK. 'S great stuff. We will


thought to you soon. Shall we pick up this? You are


domestic by! The honour of Primark has figures


out today. You're watching Business Live.


Our top story: Lawmakers consider new rules


in California that could limit how It's one of a number


of court cases seeking to crack down on the business which lets


anyone make money renting out spare Could it signal the end


of $25 billion website Airbnb? An interesting story. It could have


implications for websites like YouTuber.


Now can you really fly to Boston from London for as little as ?99?


Well, that's the claim of today's big boss Skuli Mogensen.


He is the owner, Chief Executive and founder


After a 20 year career as an entrepreneur and investor, he


Describing itself as "the airline with the biggest smile


Wow Air launched transatlantic services from Boston and


Washington DC to European cities all via Reykjavik in early 2015 for


as little as ?99 that's just over a $150 one way.


From May next year, it launches four more north American routes.


Most notably, those ?99 prices are for one-way flights.


While Iceland is a beautiful country, it's safe to assume most


travellers will be interested in a return flight and that often


The cheapest seats are also limited in number.


The budget airline is not the first to bet


Others have tried and failed Oasis Hong Kong Airlines, which began


flights between Hong Kong and London in 2006, ceased trading in 2008,


the same year that Zoom Airlines of Canada which offered cheap flights


between London and Canada also stopped operations.


Well, let's find out because Skuli Mogensen is the big boss of Wow Air


and joins us. Hi. I'm going to show off a little


Danish language. I need to start with this. No disrespect, you look


like a smart man, you have got a great background, you are a money


man, you have come from an investment background. There is a


saying in the airline industry, "How do you make $1 million running an


airline, you start with $1 billion." Why an airline? It is so much fun.


In reality, the timing is everything. So the low-cost industry


has been extremely successful domestically in Europe and


domestically in the US and domestically in Asia. As a result


the consumer is educated and we like to say we target the smart consumer,


you go online and you do the comparison shopping and you go on


Trip Advisor, and then you buy. So the consumers are comfortable doing


this and the same logic applies when you want to fly long haul, short


haul, wherever you want to go. Zbleu spoke to you roughly a year ago,


pretty close to a year ago when you were talking about, well launching


the flights from Europe to Boston and Washington DC. Right. So you've


had a year. Bums on seats, how has it been going on board the planes?


It has been going phonomenally. We are growing aggressively. We are


more than doubling our capacity for next year. Adding Los Angeles and


San Francisco, adding three new Airbus A 330s, we are excited. The


load factor on Boston... What are the load factors? Over 90% since


launch to date. Speaking of capacity, I did a quick very


unscientific search looking on various websites about reviews and


satisfaction. A lot of the criticism is that you only have two planes at


the moment doing that route. The problem is if you get a fault with


one, that causes huge delays, you're not able to pull another one into


service. Houz do you reassure people if they are getting a cheap flight,


yes they are going to have to put up with certain problems, but if you


have only got two planes, there will be huge delays if one goes out of


service? So far we had two planes going to North America. As of next


spring, we will seven planes going to North America. So already, that


issue is becoming much, much better and over time that's only going to


continue to improve. I think the again, it's something that we all


face coming into London yesterday, or the day before, with the fog, you


know, we can't deal with the weather.


Talking of planes, let me ask you this, last week I spoke to the CEO


of Norwegian Air, a competitor. They do long haul, low-cost, they use the


787 Dreamliner, very efficient plane, etcetera, it can be used 18


to 19 hours a day, utilisation rate, they call that, so that's very good.


You're doing a 330, been around for a long time. Can you make low-cost,


long haul successful on that aircraft? Absolutely. I think the


same principle applies. High utilisation and quick turn around


and high load numbers. You achieve this which interacting with the


consumer and offering the greatest fares. They are demonstrating and


proving the model. Low-cost carriers do very well when the oil price is


low. It means your costs are much lower. What happens when they start


rising? It suddenly starts eating into your margins and you make less


per flight? A good low-cost carrier will do better in all times because


our overall structure is better than the legacy carriers. Good luck. I


know you're in London for the World Travel Market. Skuli Mogensen, thank


you. In a moment we'll take


a look through the Business Pages but first here's a quick reminder


of how to get in touch with us. The Business Live web page is where


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Business Live on TV and online wherever you need to know.


Jessica is back. Amazon famous for being an line book store. I put the


question out there, we have got a couple of tweets. Before we get your


thoughts, Ryan says "Last book online to make sure I got it on


release date." Another viewer says, "Always buy them in shops. If I


can't find them there, grudgingly, I result to online bookshops." James


says he bought a first edition online. Independent shops have


pretty much died off. All that is related to the buying power of


Amazon, if they are able to get the scale that they have through the


website and maybe put the best titles in is that the plan snrchlts


they will be at the same prices as they have online. It is toe in the


water really. One bookshop. But it is also interesting about drop that


e-book sales are peeking and so actually, you know, as your tweeters


there say that people like the physical experience of going into a


shop. You know, you will still be able to do the e-books in there, but


it is a dual track process is perhaps the way forward.


A lot of people would have blamed Amazon for the closure of bricks and


more tar bookshops. They have dominated online in terms of book


sales. Now let's go into bricks and more tar and whoever is left, we'll


get rid of them. No comment. Let's move on. The story in the Wall


Street Journal this is to do with Candy Crush. Really interesting.


This follows on the back of Microsoft buying Minecraft. Big


companies are preparing to invest in the gaming space and in particular,


in the gaming space. I think the interesting thing about the price,


it was below the floatation price of King when it floated. I think again,


that was last year. So they have struggled since Candy Crush and it


is interesting they are taking the option to be part of a bigger group.


Talking about big spending, I want to squeeze this next story in, Saudi


consumers are spending like the oil crash never happened. They have a


lot of oil wealth. We are seeing a movement with Saudi sovereign wealth


funds. They are taking money out to maintain the spending on their


population? Exactly. We see impressed about the Saudi repaytry


ating capital back. They are still giving bonuses and a lot out to the


locals. But again, I think you need to think about the social unrest in


the backdrop and it will be an important consideration in their


minds. Is it keeping the local population happy? Within Saudi and


within the wider region. I think they will be thinking perhaps, you


know, this is cheap for stability. The question, of course, always is


how long that can continue with oil prices at a new normal levels and


whether they can continue? The funds only have so much money in them.


Jessica, great stuff, we always appreciate your time.


Thank you for your company today. You're up-to-date with the business


headlines. We will see you very soon. Bye-bye.


Hello there. The fog caused a lot of problems yesterday across much of


the countriment we had sunny hotspots


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