21/11/2017 BBC Business Live

This is Business Live from BBC

News with David Eades

and Susannah Streeter.

Passengers are up but profits

are down, as Easyjet

gives its latest numbers

for the last year.

Live from London, that's our

top story on Tuesday

the 21st of November.

The low-cost carrier blamed

a weaker pound for a 17%

fall in pre-tax profits,

just as the company

is saying bon voyage

to Chief Executive Carolyn McCall,

who leaves in December.

Also in the programme,

the US government has filed

a lawsuit to try to stop

the multi-billion dollar takeover

by the American telecoms giant

AT&T of the media group,

Time Warner.

A quick look at the markets and the

message coming out of Europe to

start with, it is down, bucking the

trend we've seen across Asia and the

US.

Educating the masses: we'll be

speaking to the founder

of a tutoring company that's helped

20,000 students in just four years.

In the US, a turkey will be

pardoned by the President

ahead of Thanksgiving.

Today, we want to know

about your holiday traditions.

Is it trees and lights?

Eggnog?

Carols?

Is it too early?

Let us know.

Just use the hashtag BBCBizLive.

Hello and welcome to Business Live.

Easyjet has blamed a weaker

pound for a 17% fall

in annual pre-tax profits.

The budget carrier's profits

for the year ending in September

came in at $540 million.

However, it was not all gloomy news,

with passenger numbers rising

by 9.7% to 80 million.

In recent times, the company has

been looking to expand,

having put in offers to buy parts

of the now defunct AirBerlin

and Alitalia airlines.

It's been aided by the collapse

of rival Monarch earlier

in the year, especially

on some key routes.

And of course, its main rival

Ryanair is dealing with the fallout

of a disastrous scheduling

malfunction that led

to the cancellation of around 20,000

flights and shaved millions

from its bottom line.

This will be the last time

Chief Executive Carolyn McCall

reports earnings for the airline.

She finishes the job on December 1st

before taking up a new role as CEO

of ITV television here in London.

She told the BBC about

her decision to leave.

I think we have turned the company

into a really great airline.

So, I leave with sadness,

but I also think there is always

a time to leave and I would rather

be leaving when things are starting

to look very positive

and that's why I'm leaving.

I think seven-and-a-half years

is about the right time.

Victoria Moores is European

Editor and Bureau Chief

at Air Transport World.

Good morning. We heard from Carolyn

McCall, there, a good time to leave,

revenues up by 8%, even though

profits are not doing so well.

That's a real indication of the

where think -- way things are and

the air transport market at the

moment, passenger numbers up 9.7%,

revenues up by 8.1% but at the same

time, profits are down which

reflects the fact the passengers are

paying less for their seats. Less

than they have before.

It is more

about that than the currency

fluctuations or drop?

It's a mix of

everything that is going on in the

market. We have a fiercely

competitive market. Obviously,

things like currency fluctuations,

Brexit and the uncertainty around

that does not help but the main

thing is, European aviation, we have

got a lot of airlines and a lot of

competition.

But is it clear skies

for easyJet now? It has come out

with a good set of numbers, Ryanair

is struggling with scheduling, we

have had the collapse of Moloch. Do

you think the future looks good for

Ryanair?

I don't think that any

airline ever celebrate another

airline's misfortune. But yes,

certainly if there are fewer players

in the market, fewer people fighting

for the passengers, it makes things

a bit easier if you have got

airlines that are really struggling

and desperately trying to get hold

of passengers exiting the market. We

have seen more of that busier than

we have in a long time, it has been

predicted for a long while that we

need consolidation and it's finally

happened this year.

But it feels

like a confident airline, Carolyn

McCall is obviously going to talk it

up as she goes but they are out on

the ground, looking to acquire,

looking to build for the future.

Absolutely. Willie Walsh was

speaking recently and he said the

traditional airlines were a bit

arrogant about the idea of low-cost

carriers when they first came on the

scene. Low-cost carriers have proven

they are to here stay, that the

business model works and under

Carolyn McCall's leadership, easyJet

has branched out to really attack

the primary hubs, to get business

passengers. EasyJet is a very

innovative airline as well, you see

them doing a lot of trials with

technology like using drones for

aircraft inspections, doing a lot of

automation together with Gatwick

Airport. They are really trying to

push the curve as opposed to

following it.

But possible turbulent

times ahead with the loss of the

open skies agreement with Brexit. Do

you think easyJet can weather that

storm?

They have already got some

contingencies in place. Airlines

have to be majority-owned within the

continent they operate or the market

they operate and they have set up a

new airline in Austria called

easyJet Europe to maintain the

rights to be able to fly the kind of

routes passengers are used to flying

with easyJet. They are putting

contingencies in place but there is

no doubt that doing that costs money

and ultimately when passengers are

not prepared to pay very much for

their tickets, it puts further

pressure on profits.

Thank you for

joining us.

We're going to bring

you a big story from the US.

The Department of Justice will sue

to block a proposed $85 billion

takeover of Time Warner by AT&T.

Regulatory concerns around the deal

have ramped up in recent months

and now the US Justice Department

is saying it violates rules

governing fair competition.

Samira Hussain reports

from New York.

This is a deal that has always made

sense for the two companies.

AT&T is one of America's leading

mobile telecom operators.

So owning Time Warner's news

and entertainment properties

would really give it a big

competitive advantage and based

on precedent like Comcast's

take-over of NBC which went

through in 2010, this AT&T merger

looked like it would be

accepted by regulators,

but as soon as it was announced

in 2016, then-presidential candidate

Donald Trump made it clear

that he did not like it.

Mr Trump has also been very clear

about his deep dislike for the news

coverage of CNN, which is

owned by Time Warner.

Now responding to the news that

Mr Trump's Justice Department

is going to try to block the deal,

AT&T's boss didn't hold back

from the politics of the situation.

The bottom line is that we cannot

and we will not be party to any

agreement that would even give

the perception of compromising

the first amendment

protections of the press.

So any agreement that results in us

forfeiting control of CNN

whether directly or indirectly

is a non-starter.

The Department of Justice

denies any suggestion

that the deal is being blocked

because of the president's animosity

towards CNN and says that the AT&T

and Time Warner would simply have

too much media power.

The companies are clearly determined

to challenge that view.

Let's take a look at some of

the other stories making the news.

The last big procedural hurdle

to the completion of Keystone XL

pipeline was cleared on Monday,

when five members of the Nebraska

Public Service Commission voted

to approve an amended route

through the state.

But opponents have promised to tie

the project up in court

for years and TransCanada

is still studying its

commercial viability.

Colorado regulators have

fined Uber $8.9 million,

saying the ride-hailing app allowed

57 people to work as drivers

without a valid license or had

committed other offences that

would have disqualified them.

Uber said it recently discovered

an error in its background check

process and is working to correct

the issue.

The Turkish lira has fallen

to a new record low,

after the country's central bank cut

borrowing limits for Turkish banks.

The move was made to reduce

liquidity of the currency,

which has led to high inflation over

the past 12 months.

-- which is one of the world's worst

performers over the past year.

Tencent, China's biggest social

network and gaming firm,

has become China's first

$500 billion technology giant It now

has sights on securing

success in the rest of the world.

Leisha Santorelli is in Singapore.

Do you think it has got its sights

set on becoming the next Facebook?

It is actually bigger than Facebook

by market capitalisation now and

this is really exciting news because

it is the first Asian company to

join that exclusive $500 billion

club. Its only other members being

Apple, Alphabet, Microsoft, Amazon

and Facebook. Many viewers are

probably unfamiliar with Tencent

because the bulk of its success

comes from within China. As you

mentioned, it is China's biggest

social network and online gaming

company but the crown jewel is its

messaging service, WeChat which is

WhatsApp but on steroids, both have

about 1 million users but an WeChat,

you can pay bills, order food and

hail a taxi so whether always can

duplicate its success is where

remains to be seen but its recent

investment in snatch at might be key

to that. -- in Snapchat.

Let's have

a look at the markets, easyJet 9.7

up -- Oenone Wood is set up on the

passenger numbers. Let's see if we

can get the markets. Count to three

committee we go, they are there now.

This reflects how Europe has started

this morning, not very encouraging

when you think of the Asian markets,

the Hang Seng on a 10-year high in

Hong Kong again and also the Dow

Jones last night was going along

pretty nicely. But Europe, a rather

disappointing start.

May be that reflect the increased

political risk.

Michael Hewson is chief market

analyst as CMC Markets.

Good morning. What do you think? The

collapse of German government

coalition talks has raised the

spectre again that we thought had

been put to bed with the election of

Emmanuel Macron.

Yeah, and I think

fractious European politics is

nothing new but now it appears to

have spread to Germany and we saw

the Dax rebounding yesterday after

ending last week lower, there was a

perception Germany would get past

this but the fact Angela Merkel

feels it necessary to call an

election throws a host of new

uncertainties out there and the

likelihood is this political

gridlock is likely to move into next

year. Part of the rebound of the Dax

yesterday was mastered by the fact

that VW announced a significant

infrastructure boost to German

factories which is why it rebounded

but I think political uncertainty is

going to make it very difficult, not

only for Germany to return to a

stable political climate but it is

also going to complicate the Brexit

talks as well.

You talk about VW.

What exactly... They said they would

invest in electric cars in

particular, quite a significant sum.

It's a five-year plan and they will

be investing about 30- 40 billion

euros between now and 2022 with 14

billion euros in German factories

alone so it will have a significant

impact, not only in German factories

but also the supply chain. That is

why you saw the Dax rebounding as

strongly as it did yesterday, VW

shares closed up 4%, as did

Portia's. -- Porsche was Mac.

Had

that not been announced yesterday,

it makes you wonder how much further

we might have seen the falls.

I

think that is why you are seeing a

tale of this morning. If there had

been a substantial bounce to the

lower euro, we would have seen the

Dax build on those gains but I think

it is going to be difficult for it

to significantly move higher, given

it is fairly close to all-time highs

anyway.

Michael, for now, thank you.

We will talk through the papers with

you later.

Still to come.

The price of top tutoring: we'll

meet the 22-year-old founder

of a company specialising

in education that's

now worth millions.

You're with Business

Live from BBC News.

Kingfisher, Europe's largest home

improvement retailer,

has reported a fall in sales.

The company, which runs B&Q

and Screwfix in Britain,

says weak sales in

France are to blame.

Theo Leggett joins us live

from the Business Newsroom.

The company announced a huge

restructuring plan a while back. Any

sign it is reaping rewards.

At the

moment it is causing more problems

than reaping rewards. This is the

early stages of a five-year plan an

part of what it set out to do was to

rationalise the way Kingfisher

bought products for its different

chains so B and screw fixed in the

UK, Castorama an Brico Depot in

France and so on. At one point, very

few of the products were sold across

different stores which was seen as

being wasteful, they had nine

different purchasing teams, there

was too much duplication so now they

are trying to get rid of that but

the consequence has been that the

chain has been trying to sell off a

lot of old product and has been

having a bit of trouble finding

enough of the new product lines.

There's been a bit of what they call

business disruption as a result. But

they say they are confident that in

the years to come, this major

structural change will read big

rewards.

France still clearly a

disappointing performance.

Absolutely and we don't entirely

know why that is. About half of

Kingfisher's business is done with

France through Castorama an Brico

Depot and both of them have seen

like-for-like sales fall. Across the

James Connor it is down by about 4%.

In the UK, it is more of a mixed

picture, Brico Depot down about 2.5%

but Brico Depot, this monitor

growing rapidly, saw its sales rise

10% so it is the shining light,

doing well indeed so a mix picture

across the different businesses of

what is quite a large retail group.

Thank you for joining us.

There is some breaking news about

how the drugs firm Concordia

overcharged the NHS by millions. The

Canadian drugs firm overcharged the

NHS for an essential tried royed

drug. This is from the Competition

and Markets Authority which

investigated how much the company

was charging for those certain

tablets. Much more on the BBC live

page.

You're watching Business Live.

Our top story - in the last set

of results with Carolyn McCall

as chief executive, EasyJet has

reported record passenger

numbers but a 17% fall

in annual pre-tax profits.

Now making money from education.

It's a fast-growing sector -

particularly in emerging economies.

Last year, the global

education industry was worth

$3.3 trillion with India,

China and the Middle East

all strong growth areas.

One company which has been able

to take advantage of the growing

sector is the New Zealand-based firm

Crimson Education.

Set up just four years ago

by a 18-year-old student, it's now

worth more than $140 million and has

a network of more than 2,000

tutors and mentors.

Jamie Beaton, Founder and

CEO of Crimson Education.

Now 22 I understand. Jamie, how have

you managed to set this up alongside

your own education. You have set-up

this company now worth millions of

dollars. How did you do that?

It has

been an incredible journey. I guess

it came out of my personal

experience, growing up in New

Zealand there weren't many students

heading overseas. My own experience

navigating going to Harvard. From

there it lass been a brilliant team

and amazing support. Frankly the

biggest thing has been the success

of our students. How well we do for

our students drives the growth and

it has been the incredible results.

You applied for and were accepted at

25 universities?

Yes.

So, I presume

from that one thing you learnt apart

from the fact that you can get in

wherever you like, there are

different approaches for everywhere

you want to go which is the basis of

what you are delivering?

Definitely.

I guess students are faced with a

really challenging and complicated

decision today when they are

navigating through university

choices. Every university degree is

distinct and everyone has big

implications on your future. We

really help our students navigating

what is the best programme for them

anywhere in the world. Many students

are looking at US options and

Singapore and domestic options here

in the UK.

I suppose, as well,

different schools offer varying

degrees of help for their students

depending on whether they are

private schools, state schools and

what they can offer?

High schools do

a fantastic job of working for their

students. The key thing is for the

career councillor, there is so much

complexity. It is hard for any one

person to have all that content in

mind. So our students work with the

teams and mentors, based around the

world helping navigate the difficult

choices.

Some are under graduates. I

can see the attraction for a bit of

extra cash, but others, they have

gone through the process. They are

in jobs as well. They are still

willing to be mentors?

Yes, so our

network is incredibly diverse. We

have got over 2,000, that includes

season educated experts. One of our

team, Kevin Simm got students into

Oxbridge and bridge and many have

won gold medals. So there is a huge

diversity in the age and background

of the mentors. The key thing is the

high calibre.

How does the mentoring

take place? Is it via Skype, or face

time or do the mentors meet the

students in person?

It is a blended

mix. We think that's the most

effective combination. We have built

an online classroom experience for

our students that let's them road

map their future and plan the

different years of university. They

can work with their mentors online

and share resources, but we have in

person delivery in London for our

students.

This is not something you

pick up when you start revising and

say help me get through this. This

is a long-term strategic view for

youngsters to take, maybe a couple

of years even?

Absolutely.

And

that's going to cost?

Yes. I guess

the key thing is many of our

students are signing up when they

are 13, 14, 15 with the view that

they are going to spend multiple

years in high school. The key thing

for us is to unpick their interests.

This is another example how you just

have to be wealthy to access the

best education. Surely, it's not

really fair for those people who

can't afford your fees?

I disagree

with that. One thing we are focussed

on at Crimson is access. So any

student can apply and get funding

for our programmes and we are

committed to making sure whatever

students have the potential to go

overseas do that and we have do that

through our platform Crimson hub. We

are really trying to improve the

base and level of access for anyone

in any country going through the

journey.

Give us an idea of what it

would cost? I need two years of help

to get through and to get to my

dream university. What's that going

to set me back?

£3,000 to £10,000

for an annual programme. It is

personalised so some students come

to us, they have one mentor that

helps them with a specific

application and in other cases it is

a four year intensive programme.

It

is a good little earner for the

mentors who are at university I

suppose who don't have to work in a

bar, they can work on Skype. I'm

glad you have come along after my

boys left university. That's another

bank of dad it sounds like to me.

It

is important you are investing in

education and all that money on your

degree on the best programme. Many

of our students get financial aid.

In many cases our fees are paid for

by the scholarships.

Thank you very

much.

In a moment, we'll take a look

through the Business Pages but first

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whenever you need to know.

Michael is back to

look at the papers.

We will talk about the Brexit talks

and this headline in the papers

today that apparently there is going

to be an up in the offer for the

divorce bill?

Yes, interesting.

Interesting dynamic that because I

think with the Budget tomorrow, I

think it's increasingly obvious that

the Chancellor is very

cash-strapped. So I think where to

the Budget it will be difficult for

him to do anything. Given the fact

that there is talk that the offer is

going to be upped. Contingent on

parallel trade talks by another 20

billion euros.

20 billion euros.

That's a good question, it might be

sterling.

I think that's in the

negotiation! Nothing is agreed until

everything is greed. I think this

will be a tough sell for some in the

Conservative Party. When you've got

widespread austerity that we're

going to stump up 40 billion euros.

We don't know what the end result is

going to be.

Boris Johnson has gone

from go whistle to something for

something. So there is shifting

there.

There is shifting, but you've

got to look at it from the EU's

side. Michel Barnier yesterday

suggested that ultimately they may

not get what they want with respect

to parallel trade talks in the Irish

border issue is resolved to their

satisfaction.

We have headlines

saying no matter what divorce bill

is agreed and where the trade talks

start, banks in particular,

financial services firms will start

moving staff abroad because it's too

late?

Well, from what Michel Barnier

said, UK banks are going to lose

their passporting rights. So it's

good planning to have some

contingency in place within the EU

for any business that you need to do

within the EU. So, given the

shambolic nature of this

government's Brexit negotiations and

the lack of any real opposition to

them...

I really want to bring in

this last story about the turkeys

waiting for a pardon in the United

States. They are waiting in a hotel

room. Look at this! There they are.

They have had a luxury wait for the

turkeys in Washington.

I hope

President Trump is not expecting a

thank you from them otherwise he

will spend the next 14 hours

shouting at them.

Ray Grant saying

he is not going to be eating turkey.

He will be watching football with

his family and friends.

Sounds like

a plan.

Thank you very much.

Those turkeys have come from

Minnesota this year, but which one

will get the pardon. Only one is

going back to Minnesota. We will see

what happens. That's it from

Business Live today. Thank you for

being with us.

Thank you, goodbye.