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This is Business Live from BBC News with Victoria
Europe's largest discount airline - Ryanair - warns that security fears
and intense competition could hit profits.
Live from London, that's our top story on Monday 23rd May.
Despite reporting a 43% increase in profit, the Budget carrier
Ryanair has warned of tough times ahead - we'll hear from one of
Also in the programme - sowing the seeds of a mega-takeover!
German pharma giant Bayer makes a bid for US
A potential tie-up would form the world's biggest
to date with the markets - where dismal trade data for Japan
pulled down the Nikkei - in an otherwise mixed
Europe is being pulled down by commodity stocks right
across-the-board. Are you a whiz in the kitchen, always mealtime a mess?
We will get the inside on a business which is trying to make cooking
easier. It comes up with recipes and sends you the exact measurements.
But at what cost? We will meet the founder.
And as a new guide to elevator etiquette is published -
People who take the lift only one floor?
Let us know, just use the hashtag BBCBizLive.
Hello and a very warm welcome to Business Live.
When a 43% uplift in profits is just not enough.
Some people and some industries are just too hard to please.
Europe's biggest budget airline, Ryanair, announced a big
rise in net income - but it fell short of expectations.
What's more - that profit growth is going to be cut right back -
to just 13% for the coming year, according to the company.
There's a big battle going on in the skies over
A price war is raging between carriers on specific routes,
Many of the traditional airlines are now leaner,
after adapting their business models to the challenge set out
No longer are you guaranteed a free meal on a full service
The big boys have also launched their own
These include Air France's Trans-avia, IAG's Vueling
So - what does the Finance Officer of Ryanair have
As we look into next year, we are looking at about a 13% increase on
last year's results. We will have our focus on costs, which is always
the case, expecting those to be down 1%. We have a ?200 million saving on
our fuel bill. We expect to have backed lower fares to our customers
in the next financial year. -- we expect to hand back.
John Strickland, airline expert from JLS Consulting is with me.
Let's talk about the figures. 43% rise. But the warning is what has
got everybody worried. The outlook is tough. It is what about the
threat of terrorism and the volatile price of fuel figures. It could have
an impact. No doubt. This year has been challenging, particularly in
the second half because of the terror attacks in Paris and
Brussels. Both markets where Ryanair is a player. As traffic control
strikes, as well. Particularly in France, affecting the business.
Companies are always cautious at the start of a business year. They
expect profits to grow at a better rate. And that assumes no external
factors. As for how the business model works from Ryanair. It is
about load, getting bums on seats, and they will cut prices to make
sure the planes are full. But that is not how the industry works
overall. It is critical. One word underpins that. Load is important,
but cost is important. Ryanair is zealous on keeping costs down. They
benefited last year with lower fuel prices. But it is a detailed
exercise day in day out that allows them to achieve the lower unit
costs. Anybody can fill planes, but many feel planes and lose money,
they are still turning very profitable performances. What is so
interesting about the industry is so many other people have tried this
model, but few have managed it. Ryanair and EasyJet dominate the
market. What are they doing differently? The cost focus is key.
Ryanair and EasyJet are well-established. They have fleets
which go to hundreds of aircraft. They have aircraft on order.
British -- British Airways, KLM, and Air France, have tried to do it with
low subsidiaries. But Air France and Lufthansa have been littered with
strikes, as well. If anybody wants -- was to ride out the threats, it
is Ryanair. But there are other factors, including the volatile fuel
price, and the terrorism threats. It is quite a sobering warning, isn't
it? The fortunes of the airlines often go hand-in-hand with the
fortunes of the wider public. Exactly. And going back to the issue
of cost and cash. Ryanair has big cash reserves which they put aside.
Which is unusual. Many airlines are weak with cash reserves in difficult
times. They need that as a buffer to make sure they have on place to go
if they get a revenue hit. -- a place to go. Other times of the
strikes they were expecting higher revenues at that time. It is OK to
be cautious. They still forecast profits to go up and stop they still
have the cost focus. And they can cut fares more, which they can
afford to do, because the fuel price will come down again which is a big
cost area for them. -- they still forecast profits to go up. Thank you
very much. Bayer, the German chemicals
conglomerate, has made a formal offer for Monsanto -
the US seed company. The transaction would create
an industry giant whose products include antibiotics,
genetically modified It would have a combined annual
revenue of more than $67 billion. Vietnam's VietJet agreed a firm
order of 100 Boeing 737s The deal makes it one
of the region's fastest The order comes as part
of President Obama's official Exports from Japan fell
by 10% in April compared It's the seventh
consecutive month of falls. The weak trade data
is thought to be mainly due to poorer demand from China
and other emerging economies. As Victoria touched on the start,
the FTSE 100 opening low, lots of uncertainty to kick off the week.
The website is dominated by the ongoing debate about the EU
referendum. Ryanair has been talking about the risk of Brexit. We have
touched on that with our guest, but also more talk about whether it will
cost jobs to the UK economy. This time coming from Radio 4's today's
programme. 400,000 jobs is the cost, apparently. But this will more than
likely be disputed by the other side in the campaigning towards the
referendum. That is the Business Secretary
saying that today. -- Shadow Business Secretary.
Japan's central bank governor has defended his controversial negative
interest policy which he first implemented in January this year.
He'd signalled that he's willing to cut rates even
Haru-Hiko Kuroda was speaking with our Asia Business
Correspondent, Karishma Vaswani, on the sidelines of the G7
We announced in January and actually implemented this new policy in the
middle of February. We are still early May. Although the impact on
the financial market is quite clear, and already made, but impact on the
economy and prices will take more time. But I don't say that it will
take one year, two years, or something like that, it will have a
clear impact on the economy soon. If we judge it necessary to have an
inflation target we can further ease our monetary policy in
three-dimensional 's. Quantity, quality and interest rate. We have
still enough room to do so. -- in three dimensions.
Asia markets traded mixed on Monday, with Japan's shares dropping
amid renewed strength in yen and fresh data showing the country's
This is how the session has opened up in Europe -
shares are lower in early trading - weighed down by losses
While Bayer slumped after making an offer for Monsanto.
Now - let's hear from Michelle Fleury in New York about what's
The US Federal reserve has long considered its June meeting as a
possible time to raise interest rates. But until last week investors
thought the probability of that happening was quite low. Some doubt
has crept in after several speeches by officials. The release of the
minutes from April's meetings. solid economic data. As policymakers
ponder whether the US economy is ready to handle an increase, one
thing they are looking for is signs of inflation. They may not get the
answer to that this week but there answer to that this week but there
are three reports which should provide more clues as to the direct
travel in the world's largest economy. The key report
OK, James, for now, thank you. I know you will come back with us to
talk about the papers. We speak to the boss of the business
aiming to bring domesticication to a generation that's always on the
move. The collapse of BHS will be back
in the spotlight today when MPs They want to hear from those
who sold off the retailer for just ?1 last year and whether they took
enough care when selling the firm. Maureen Hinton is the Global
Research Director at Verdict Retail. Maureen, what do the committee
hope to find out today? Well, I think that they want to find
out is who knew what when and whether there was enough diligence
to find out if they had the skills to run the company, but to finance
it and turn it around so it was profitable again. Considering Sir
Philip Green hadn't been able to do that was a tall order. We saw the
deal happen. Sold off for ?1, there were lots of questions about why BHS
got into this position and how it could be sold off for ?1. Why are
people only asking questions now and not at the time? I well, I think
because it went bust a month ago. That's why it suddenly came to
prominence with the public, but when it was sold, there was lots of talk
about it in the trade about who were these people that bought it and what
was going to happen to it? We have seen a ratcheting up in terms of the
war of words between all the parties involved in this. It makes you
wonder who is telling the truth here?
Well, I think the thing is that a Parliamentary Committee have made
assumptions primarily there was a lot of talk about the dividend and
whether the dividend was taken out when the pension fund was losing
money, but the dividend was taken out when the company was profitable
and it was only when the company started to lose money that the
pension fund went into deficit. So it's really finding out exactly what
happened. I think as more and more information comes out, it becomes
more clearer. Maureen Hinton, thank you. There is more online if you
need to stay up-to-date. The MPs set to question BHS directors and add
saOusors. -- advisors. The Business Live team
will stay across that story throughout the day as we hear
evidence about why it was sold off for ?1. What deals were done? And
crucially, the future perhaps for the 11,000 staff at those stores up
and down the country and crucially too, their pensions.
Ou're watching Business Live - our top story - Europe's biggest
Budget airline Ryanair has forecast a slowdown in profit growth.
The company says that terror attacks and increased competition
And now let's get the inside track on a business aiming
Marley Spoon are a global food company who deliver exact amounts
of ingredients to people who want to cook at home.
They were launched in Germany in 2014 and have since expanded
to the UK, the Netherlands, Australia and the US.
With the expansion of the West Coast US operations, Marley Spoon will be
The group also plans to expand its coverage throughout
the east coast of Australia, which it says will bring the service
Fabian Siegel, founder and CEO of Marley Spoon joins us now.
Good morning to you and welcome to the programme. Thank you for having
me. Now, reading your background is really interesting. You're from a
tech background and you are seeing this business as a tech business and
not a food business, explain how that works. Our company has a DNA.
We love food and eating. While in the end we deliver products to
customers. There is a lot of software that people don't see when
they see the boxes coming to their home, but there is a lot of
technology that goes into getting the food to the customer's home
straight from the farm to the customer. So forgive the bluntness
of the question, but why would I use this? Why would I not order a
take-away? Why not just order a take-away? I think there is both. I
have a family. I have got three kids and sometimes we want a take-away,
do I want to feed pizza to my kids every day? I want to cook and bring
something healthy to the table and sit with everybody around the table
and have some community. Cooking is something that people just do, but
the way that supermarkets serve cooking is poor. I run into the
supermarket and I have to pick the stuff and in the end I end up
cooking the same stuff. Steak and broccoli every time, the same, you
know. I feel we want to have some change and this is something like, I
have a bamboo aloo here and I wouldn't cook that otherwise if
Marley Spoon didn't bring it to me. I'm going to open this and see if it
was something I could do. I want to talk about the cost of this.
Because, of course, this is not the cheapest way of cooking.
Particularly if you were a large family for example, buying in bulk
from a supermarket has got to be more cost effective for a family
than using one of these? Well, the interesting thing is cooking with
Marley Spoon is not more expensive than the supermarket. Why would that
be the case? Well, the thing is supermarkets, they throw away a lot
of food. There is more than 100 million tonnes of food thrown away
in the European Union. More than 30% of the fresh products thrown out by
the supermarket because it is perishable. Who pays for that? You
pay for that by the price. When you need celery and you need two sticks,
what do you do with the celery? You throw it away. It is not more
expensive to cook with Marley Spoon than the supermarket. OK, so the
idea is so eliminate food waste and therefore, reduce the costs to the
consumer. I'm chucking out less from my fridge? Right. I'm wondering
whether where this leaves the supermarket shop, is this an idea of
the past that we go to supermarkets or is so far into the future that it
is cyber? Customers that use Marley Spoon they replace the supermarket
for the cooking part which is 40% of the market is for cooking and 60%
other stuff. People that use Marley Spoon, they don't have to go to a
supermarket, they still have to buy the milk and the cereal. I think in
the end, does it make sense to have prime real estate on the high street
just to be there for perishable goods lying around and going to
waste? Yes, we replace the supermarkets for the part of cooking
and there is online retailers that do you a pantry. This looks great. I
would love to have this delivered. It is simple ingredients, how much
of them is a mark-up of the service you're offering? The trick here is,
the reason why we can offer this for the same price as the supermarket is
the supermarkets throw away 30% of their fresh products and they price
that in. You pay for that. This is our margin. We can offer this for
the same price as the supermarket which starts at ?3.75 per portion,
?3.75 per portion for a fresh home cooked meal. I think it is a more
sustainable way to cook at home without actually paying more and you
get the great recipe card. You have six simple steps. And everybody can
cook with these six simple steps a delightful meal. What people say
that use Marley Spoon, they try it out once and then specifically
customers with structured lives like families and empty nesters, people
who have a structured life, they actually really like to have a box
coming to their home once a week and the cooking has just been taken care
of. It looks very nice. And it smells amazing. We will put that to
the test. I will bring that in tomorrow.
Thank you. The world's largest insurer, AXA,
is to ditch its investments in the tobacco industry,
worth nearly $2 billion. It says investing in the sector
makes no sense, given that smoking kills some six million
people a year. Imogen Foulkes sat down
with the firm's new Chief Executive and asked him
about the new strategy. We are a large provider
of healthcare insurance and what we have seen more and more
that obviously chronic diseases We need to invest more
into prevention in order to prevent the chronic diseases
and we want to really support that and not invest in something
which creates more chronic diseases. You are a health insurance,
it is more than 50 years since Government officials first
warned about the dangers of tobacco? Yeah, but you can only see really
now that particular interbuckle that it has turned from a lethal
disease into a chronic disease and you see now the effects or now
is the right time to do it. Now is also the time
where the public awareness Let's see what other
stories are being talked James Quinn is back with us. Let's
start with this story in the Huffington Post. We have had a
couple of tweets. Ryan says his peeve is when people were too much
Cologne or perfume. By beggest bugbear at the BBC, we have eight
floors and it is people who go one floorment that's what the stairs are
for, is it not? I think so. One of the factors was small talk. People
you don't know asking you what the weather has been like today or how
busy your day is? Isn't it about everybody else listening to your
conversation? Different radio stations are playing and you can get
into the radio-free list. The danger with that, Radio 1, the lifts are
glass and everyone can see you when you're dancing! Let's turn our
attention away from lifts to Saudi which could do with a financial
lift. I see what you've done there, Ben! So cheesy! Contractors face
being paid in IOUs, that's astonishing that one of the world's
richest countries could be having to pay contract contractors with an
IOU? Saudi facing tough times. An article in the Telegraph pointing
out that IOUs are a real likelihood and workers will be paid in those
and what the impact will have on the population will be significant.
Yeah, one we'll watch closely. Jails, the time is against us today.
But that's a really interesting one and one we'll follow closely. James
There will be more business news throughout the day
on the BBC Live webpage and on World Business Report.
There. Hello there. Good morning, it was a dry and bright start