17/11/2015 BBC Business Live


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


Russia confirms that a terrorist attack was responsible for bringing


down the airline over Egypt last month.


As world leaders look at how best to respond to the attacks on Paris, we


assess the ever growing financial impact of terrorist attacks.


Live from London, that's our top story on Tuesday 17th November.


$53 billion - that's what analysts say terrorism


cost the global economy last year. But what of 2015?


As Russian authorities confirm the a passenger jet was brought down by a


bomb only a few weeks ago. We speak to


the think tank who warns the economic consequences of Europe's


worst terror attack in a decade will Also in the programme:


Easjyet soars to new heights with The airline reported pre-tax profits


of over $1 billion So what and where next


for the no frills airline? Its shares are still going down in


London. But across-the-board, markets and back strongly after a


nervous start to the trading week on Monday following those events in


Paris on Friday. And building the arenas the great


sporting moments. The man behind some


of the worlds most iconic stadia, including the London and Sydney


Olympic sites will be here. And as always, let us know what you


think of the stories we're covering. Join the debate using


the hashtag #BBCBizLive. Russian authorities have confirmed


that a terrorist attack was responsible for a Russian plane


crash in Sharm el-Sheikh, Egypt, that claimed the lives of all of


those on board. It is the first successful terror attack on the


passenger jet for more than a decade, and has, only a matter of


weeks before the deadly attacks on the streets of Paris on Friday. The


Institute of economics and peace is now saying that the global cost of


terrorism has reached an all-time high, with deaths significantly


going up in the past few years. A report by the think tank suggests


the cost of terrorism around the world reached almost $53 billion


last year. In total, more than 32,000


people were killed - that's an 80%


rise on the year before. So where are the majority


of the attacks occurring? Well, 78% of all deaths


were in these five countries: Afghanistan, Iraq, Nigeria,


Pakistan and Syria. Steve Killelea, Executive Chairman


of the IEP is with me now. Just talk us through how you compile


these figures. The 53 billion is made up quite simply of the cost of


the injuries and lifetime earnings from people who die in terrorist


attacks, plus the cost of the damage. There are a lot of things


that are not included, so this is exceptionally conservative. Looking


at the nature of terrorism, it is quite often time-out with conflicts,


so 92% of all deaths happen in countries that all -- already have


conflict, so it is difficult to separate out the figures. We have


taken a conservative approach. And you haven't included things like the


increase of security, higher insurance premiums, the cost of


people being unable to get to work. So it could be even more significant


than the original cost. Absolutely. But if you have a consistent


methodology, you could look at the changes over time. The cost now is


ten times what it was in 2000, so you can see the impact it has on the


global economy if you think of extrapolating that out through other


things. One of the things which is quite often missed in the discussion


on terrorism is Isil and its economic base and where it derives


its revenue from. One of the expert pieces in the report we put out


covers that. If we are looking at Isil, they have a 2% VAT tax, 10%


personal tax, 12.5% company tax, and they charge $1000 for anybody who


wants to move across their borders. It is estimated they are making half


$1 billion a year in oil sales. One of the strategies is if you can cut


off the base from where they are earning their revenue, they will be


less effective. As an organisation, you look into these events, and the


costs and consequences of them. We had this confirmation literally in


the last half an hour about the Russian plane crash being a


terrorist act. The situation in Paris, and global leaders have been


gathered. We have the G20, the summit under way now, they are all


talking, altogether at this time. What are you expecting in terms of


response? I think you will start to get much more concerted effort is,


and a lot more emphasis placed on trying to get serious or to doubt,


particularly a common approach to the Assad regime. At the moment, it


is very difficult to be able to actually get an effective response


to Isil unless you can get regional response and international response,


which is coordinated. We will have to leave it there, we appreciate you


coming in. Thank you very much for talking us through your research.


Just to bring you up-to-date on the news we have been hearing, Russia's


Security agency the FSB says that traces of explosives were found in


the debris of the Russian airliner that was down over Egypt. That was


on the 31st of October. They say explosives were found, and therefore


that was terrorism. President Putin has ordered special services to


focus on finding those responsible for that terrorist act.


The head of the FSB is quoted as saying, one can say an ambiguously


that it was a terror act. That is the very latest on that situation.


We will keep you up-to-date throughout the programme and here on


the BBC. Let's just fill you in on a few other stories. BHP Billiton have


been fined a further $260 million for the mining disaster that killed


11 people in Brazil earlier this month. The mining giants have


already been to alter pay $65 billion after a dam burst on


November the 5th. 12 people are still missing following the incident


in southern Brazil that set off a deadly mudslide.


And Australian Qantas airlines have regained its investment-grade rating


after Standard Poors recognise the airline's improved balance sheet.


Qantas has implemented a massive cost cutting plan and


in August it revealed its best results in seven years.


Let's take you to the business live pages. Many of the airlines around


the world have been bringing back passengers who were stranded in


Egypt as a result of that terrorist attack that has been confirmed this


morning. EasyJet, one of the airlines in the UK that was caught


up in all of that, the chief executive Carolyn McCall husband


talking this morning about the number of people they have working


in Sharm el-Sheikh and also in Paris. She says they are keeping an


eye on the security situation, and airlines always put safety first.


I was talking to her earlier, she said they are the number two airline


to France, Paris is an enormous destination fit easyJet. They have


1000 employees in France, and so airline stocks have been impacted by


the reaction on the part of investors in terms of the fact that


travel has been affected in the short term. People's travel plans


are affected by these events. But she does feel that the travel of


those who want to go around Europe etc will return quite soon


afterwards. Interesting to speak to her earlier.


And also details about the merger in hotel industries, Marriot hotels are


buying starboard hotels. 1.1 million hotel rooms they have now.


World leaders including the US President are arriving in Manila,


the capital of the Philippines for the annual APEC summit - that's the


Proceedings officially start tomorrow and it's the first time


these leaders have met since they agreed on a major trade deal known


What we are expecting from this summit?


The first time they have met since TTP. Exactly, but in light of the


Paris attacks, I think it is fair to say that the focus now will be on


stepping up security against terrorism threats. Around 20


countries are being represented, including the US, and President


Obama is expected to discuss the situation. There is also the


sensitive topic of regional tensions over disputed territory in the South


China Sea. The US say they provide about $260 million for their allies


to decrease their maritime security, but otherwise the summit


is mostly expected to focus on the economy. This all has to do with


boosting growth, and they want to achieve this not just through trade


but through infrastructure, spending and economic operation. So we also


have the upcoming Asian economic community where we will see a single


market across Southeast Asia. Let's look at the markets now.


Strong gains across-the-board. A real strong bounce back from


markets globally. Let's look at Europe, where it would seem that


there are faded concerns about the geopolitical impact of what happened


in Paris on Friday. France is up 1.2%, and it was flat at the close


of play on Monday. So overall, the markets are bouncing higher.


Individual stocks are having a tough time. Individual stocks down again


today. First, let's look ahead to the US, it is a big day for


information that could affect the Fed reserve.


Nada Tawfik can tell us us what will making the headlines in the business


Walmart reports third-quarter earnings. The worlds largest


retailer has warned investors that sales will be less than had been


hoped this year, and that growth could be affected for a few years


due to ending on higher wages, staff training and its e-commerce


programme. The company is facing increasingly tough competition, so


investors will want to see how Walmart fares against other holiday


retailers this season. Home Depot were also boosted earnings, likely


from the recovering housing market. And after two straight months of


declines, US consumer prices are forecast to have risen in October.


Could that mean inflation is on course to eventually reach the


target of 2%? Thank you.


Joining us is Anne Richards, Chief Investment Officer, Aberdeen Asset


We have inflation figures from the US later, and it is the lack of


inflation that is the concern. It is strange that we are this late in the


cycle, and we have no evidence that inflation has built anywhere in the


world, and that is what gives policymakers a Delem. Normally it is


easy, raise interest rates because inflation is rising. That is


normally the headline, but if you take away the slump in petrol prices


in the US, some individual areas like housing prices, goods,


services, they are going up. Goods in general you are not seeing much


in terms of goods. In terms of some services, you are seeing a little


pressure build-up. Even taking all of that together, core inflation is


still running at or below the trend in every major economy. So it is


really not the place you would expect to be in this late in a


cycle. We're going to keep it brief because we have a lot of news coming


in from gritters on the Russian plane crash, but you will be back


Slater. Still to come, we will be speaking


to the man who dined -- designed London's iconic elliptic stadium.


Does it make sense to keep building new stadium?


Let's tell you more about easyJet. The actual figures, the fifth


consecutive year of record profits boosted by what the airline said


were favourable economic consumer trends. Profits for the year rose by


18% to ?686 million. Kamara Ahmed has the details. Bring us up to


date. EasyJet profits seen today as being very strong, the fifth


straight year of record profits. These figures were closed before the


events in Egypt, and the events in Paris, so no effect of those as yet.


Low oil prices and high demand from passengers because of the slightly


weaker euro have certainly helped easyJet's numbers. Carolyn McCall


spoke to the BBC earlier, and she did reveal the effects of both Paris


and Egypt on the business. They are important markets to us. Sharm is a


popular winter sun destination for Swiss and British people in


particular, but it is still a very small part of our network of the so


if you're looking at it financially and only financially, you would say


that, you know, it is below 0.5% of our network. It doesn't mean it is


not important, it is important to us, but the effect on our full-year


numbers, it won't be material. So Paris is a much different thing. I


think that's much more about enhanced security across Europe at


airports and I think as I said before passengers will understand


that. They will welcome that and I think they will feel very reassured


by that. Although passengers are up and profits are up for easyJet,


security concerns are weighing on the K let's look at the share price


this morning. You can see down 2%. If you look back over the last three


months, a big fall here which was the Sharm el-Sheikh issue.


Passengers trapped in Egypt and a fall here. Despite good numbers,


investors still concerned about the security implications of what has


been happening in Paris and in North Africa.


Thank you so much. You have spotted another interesting


story. A great story in the Times this morning. Lidl, the German


retailer is to sponsor the English Football Association and the


Scottish Football Association! So those rivalries live on, but


nonetheless, a commercial tie-up between the two!


A Russian security chief is saying a terror act brought down the plane


which killed all the people on board. Signs of a foreign-made


explosive have been found in the debris. Victims remains and personal


effects. In response President Putin promised to step up efforts to


combat Isis in sir Syria. This news coming days after the bo attacks and


gun attacks that killed 129 people in Paris.


When it comes to sporting events, the venues become places where


sporting history is made. They let the pick watch the sporting event,


whatever that maybe and the financial rewards can also be huge.


From match days alone, Arsenal's football club's revenues have almost


tripled to $150 million in a year since they built their new stadium


in 2006, but building huge stadium like that, it doesn't come cheap.


The New York Yankee's cost a massive $1.5 billion and seats around 50,000


The firm behind both of those projects is the global architects,


They also designed the athletics arenas for both


And the man at Populous who designed both


of those stadiums is architectural sporting guru Rod Sheard.


He is the only person to have designed two


Rod Sheard, Founder and principal architect at Populous is here with


Where do you start? Take it back to the beginning and you get a brief


from an association that says, "This is what we want." What do you


consider? In the past briefs were often about numbers. We want to go


from 40,000 to 60,000 and that's still an important part of it,


capacity is always important, but you guys, it is television that's


really and the internet that's changed the world. So in some ways,


it is the image that you project to the world which is as important as


the atmosphere in the bowl. If you don't get the atmosphere and in the


bowl right, the image on television and the internet won't be the same.


The focus is to create the atmosphere whatever the number is


going to be, but if you can create an amazing feeling in the bowl, it


somehow comes down the internet line and makes it real for the people at


home. We are looking at the amazing arena now at the Olympic Park in


London which was done in the nick of time for the 2012 Olympics. I would


imagine, the pressure is great. You have been through it twice in terms


of of an imlick event? I mean both of them were competitions that we


won really and at the end of the day, the Olympics is one of those


events that they always leave it to the last minute, you never have a


great amount of time to do it. So you're always having to go at break


neck speed to start on site. London was cizy. We were actually starting


doing things on site before we had finished the drawings in the office,


but you have to because of the time and the reality is world sport is


like that. Every four years there is an Olympics. Does that affect the


design itself? You have could to come up with a design that you can


erect quickly? Look, it is not so much erecting it quickly, but the


buildings get more and more complicated. There is more and more


stakeholders involved and you have got to listen to everybody. You have


got to take into account what they want and sports change in priority.


Usain Bolt running down the 100 meters was a key event and you've


got it give that priority. What was amazing about the Olympics in London


which I think changed the format for Olympics forever is the Paralympics


was so massively successful. I mean, it was wonderful to see. What are


the risks of getting it wrong? We have seen the Olympic venues were


the stadium are white elephants. They are sat there rusting as soon


as the Games have finished. Clearly, that must be worked into your plans


about reuse and being able to put the stadiums to another use after


the Olympics have gone, but making sure they can cope with smaller


capacities? The days are gone when you could build a big Olympic


Stadium for ego reasons and let it sit there and find something to do


with it afterwards. I think, again, London, was a bit of a watershed in


that sense in that they set about, Seb Coe and his team really set


about finding venues that if they didn't have a long-term use then


they got taken down and many of the ones in the Olympic Park have gone


now. We wept out of our way to use existing venues. You used London


like the Horse Guards Parade and the volleyball and that really created


an atmosphere that was special to London, but you don't need that sort


of a venue so you use it as a temporary venue and take it away. We


just finished our transformation of the Olympic Stadium which is ready.


I went and saw rugby there recently and it is ready for West Ham. That


reusability is fundamental as your introsaid, it is about money, it is


not just about getting seats, it is about how much money the staud yum


will make us? Thank you for coming in. You're


welcome. Let's go to Manila which is hosting


the latest APEC summit. Our correspondent is there. Manila is a


place with huge potential, but it has its setbacks. Even getting to


work each day here can be a chore. It is a reality every day that we


face. It takes us two-and-a-half hours to get from one point to


another. And time is money of the no one know that is more than Jerome


who runs a meat processing company. His plants churn out over 5,000 hot


dogs every minute! But profits are being squeezed. Brought about by


poor congestion and very busy roads that hampers our efficiency and


brings up our costs of distribution. We will have more tomorrow.


Let's look at what the Business Pages have been looking at. Anne


Richards joins us. This is about the megamerge near the hotel industry.


Stopl staggering figures to talk about, not least the number of hotel


rooms they will control? This will be more than one million hotel


rooms. It is over 5,000 properties right around the world and what you


can see happening here is the desire of the hotel companies to spread,


not just geographically, but different bits of the market. So it


is international, but it is going for the youth traveller and going


fob the older, more mature, better off traveller, pulling together a


bunch of different brands. They will have 30 brands across this combined


portfolio. It is marred yet buying Starward. We were talking about this


earlier, the most view points in the studio was, the most important thing


in the hotel is... The comfy bed. That's what they said. A comfy bed


number one. The mattress. The other thing is think about the overall


environment. Rooms that flash and buzz, a lot of rooms have a lot of


lights in them now and that's irritating. I had a few funny


experiences where I can't figure out how to get the electricity on. You


have to find the slot for your key! The branding issue is one that's so


important and in the hotel industry like many parts of the travel


industry, it is one of those issues which is so important when it comes


who they can put up, maybe it is a restaurant, but the issue is having


a different brand that targets different customers. When people are


exploring different countries, if you can give them something in a


different country that's familiar to them. If you know you're going to


stay in a Sheraton and you always stayed in a Sheraton, you will have


a degree of comfort about going to a new country because there is


something familiar there. Anne, thank you very much. That's


Business Live for another day. Within the last half an hour, the


head of Russia's Security Service says the crash of the passenger


plane in Egypt was the result of a terrorist attack. It is telling us


Vladimir Putin is vowing to make sure that anyone responsible is


caught for the death of 224 people at the end of October.


Hello, our first named storm of the season, Abigail. Now we are looking


at the second storm which is Barney. It will


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