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criticism that aid is not getting to victims. Much more on the BBC | :00:00. | :00:00. | |
website. Those are the latest headlines from BBC World News. Now | :00:00. | :00:00. | |
for the latest financial news with Sally and World Business Report. | :00:00. | :00:15. | |
Struggling Italian airline Alitalia poised to announce massive job cuts | :00:16. | :00:19. | |
in a bid to trim costs and make the flag carrier more profitable. | :00:20. | :00:26. | |
Starbucks is forced to cough up nearly $3 billion to settle a | :00:27. | :00:29. | |
dispute with Kraft over the distribution of its bags of coffee. | :00:30. | :00:40. | |
Welcome to World Business Report. I'm Sally Bundock. Also in the | :00:41. | :00:46. | |
programme, we discuss the performance of China's largest | :00:47. | :00:52. | |
internet company, Tencent. First, troubled Italian airline Alitalia | :00:53. | :00:54. | |
has called a board meeting to discuss a revised industrial plan | :00:55. | :01:00. | |
that could include heavy job losses. Recently, the loss`making carrier | :01:01. | :01:01. | |
avoided bankruptcy after its shareholders agreed to raise fresh | :01:02. | :01:07. | |
funds. But in exchange for its support, the government has demanded | :01:08. | :01:11. | |
a radical new business plan. Alitalia has rarely made a profit in | :01:12. | :01:17. | |
its 67 year history. The airline needs another significant cash | :01:18. | :01:19. | |
injection from its shareholders to keep flying. So, the board agreed to | :01:20. | :01:24. | |
a 500 million euro rescue package, in which shareholders will | :01:25. | :01:26. | |
contribute 300 million euros, but the government said there would be a | :01:27. | :01:35. | |
major overhaul of the business. It's estimated several thousand jobs | :01:36. | :01:38. | |
could be cut as a result of this revised plan, but any proposal would | :01:39. | :01:45. | |
need approval from trade unions. Shareholders now have until midnight | :01:46. | :01:48. | |
on Thursday to decide whether to participate in Alitalia's cash call, | :01:49. | :01:51. | |
with all eyes on top shareholder Air France`KLM, which has yet to decide | :01:52. | :02:03. | |
whether to participate. Norman Gage from New Generation Consultancy | :02:04. | :02:15. | |
joins me now. Give us your take on this new, | :02:16. | :02:21. | |
revised plan for Alitalia. For years I have been talking about a radical | :02:22. | :02:25. | |
overhaul of this company, that never seems to be getting back on its | :02:26. | :02:28. | |
financial feet. I think you are quite right. We went through this | :02:29. | :02:33. | |
about five years ago, when there was a major cash call, it eventually got | :02:34. | :02:37. | |
stamped out by the government of the day. That's not always easy in this | :02:38. | :02:44. | |
day and age, with regulations. It does seem to be a Cinderella | :02:45. | :02:49. | |
airline. Stuck in Italy, where the major northern European airlines | :02:50. | :02:53. | |
managed to work themselves a good local market and a good | :02:54. | :02:56. | |
interconnecting market through their local hubs. Is there a reason to | :02:57. | :03:03. | |
keep Alitalia going? The company that's not really been making | :03:04. | :03:05. | |
profits for long time. Is it about national pride? Does it serve as | :03:06. | :03:10. | |
areas of Italy that no other airline service? It as you said. It's about | :03:11. | :03:20. | |
national pride. All airports in Italy could be easily serviced by | :03:21. | :03:24. | |
other airlines. Quite a lot of it is already done by other airlines. It | :03:25. | :03:35. | |
does come down to national pride. Every country gains its independence | :03:36. | :03:41. | |
or national flag and one of their first things are to invent their own | :03:42. | :03:45. | |
airline. Unemployment is very high in Italy. The economy is having a | :03:46. | :03:50. | |
tough time. You believe there are unions involved. Yes. It is a | :03:51. | :03:56. | |
difficult process, isn't it? It's a big decision for the government to | :03:57. | :04:00. | |
take. It's a country that is struggling to get itself on its | :04:01. | :04:06. | |
feet. They don't want to suddenly have a 14,000 workforce join in the | :04:07. | :04:12. | |
dole queues. The airline can make a profit. The plane you talked about | :04:13. | :04:16. | |
has been worked on now for a couple of months. This isn't just something | :04:17. | :04:21. | |
they are presenting tomorrow as a rescue plan. Have been working hard | :04:22. | :04:25. | |
behind the scenes to try to a plan that will position it for the | :04:26. | :04:29. | |
future. All right. We will keep and I on it. Thank you. Norman Gage | :04:30. | :04:35. | |
from New Generation Consultancy. We will keep you up`to`date on the news | :04:36. | :04:39. | |
for Alitalia. It's a very critical few days. Other business stories, | :04:40. | :04:43. | |
American coffee giant Starbucks has just been hit with a damages bill | :04:44. | :04:46. | |
worth nearly $3 billion. The company is being forced to compensate Kraft | :04:47. | :04:50. | |
Foods to settle a rift over a deal to distribute its coffee in grocery | :04:51. | :04:53. | |
stores. Kraft blames Starbucks for ending the distribution agreement | :04:54. | :04:58. | |
three years too early. The charge is equal to Starbucks entire net income | :04:59. | :05:05. | |
since the start of 2012. Intercontinental Exchange Inc, or | :05:06. | :05:08. | |
ICE, has completed its takeover of NYSE Euronext, and shares in the | :05:09. | :05:10. | |
combined company will begin trading today. The group now has control of | :05:11. | :05:16. | |
the New York Stock Exchange and Europe's second biggest derivatives | :05:17. | :05:18. | |
market, Liffe, after striking a $10 billion deal last December. It's | :05:19. | :05:22. | |
expected that ICE will announce over the next few days which parts of the | :05:23. | :05:26. | |
NYSE it plans to keep, and which parts it will divest. | :05:27. | :05:38. | |
First and foremost it's a humanitarian disaster. Let's turn | :05:39. | :05:42. | |
out attention to the Philippines. But Typhoon Haiyan which has ravaged | :05:43. | :05:45. | |
parts of the country will have huge economic consequences, so it's | :05:46. | :05:48. | |
important to evaluate the long`term damage the disaster will do to the | :05:49. | :05:51. | |
country's economy, in order to properly co`ordinate the aid effort | :05:52. | :05:57. | |
now. People have lost their livelihoods and the effects of that | :05:58. | :06:04. | |
will be felt for years to come. According to disaster modelling firm | :06:05. | :06:07. | |
Kinetic, the total economic impact of the Typhoon could reach as high | :06:08. | :06:11. | |
as $14 billion. But only a tiny fraction of this is expected to be | :06:12. | :06:17. | |
insured. Joining me is Charles Watson, director of research and | :06:18. | :06:21. | |
development at Kinetic Analysis. Thanks for being on the programme. | :06:22. | :06:27. | |
That figure is a big number and they always come out when these events | :06:28. | :06:31. | |
take base. How do you measure the economic impact of a disaster of | :06:32. | :06:35. | |
this magnitude? It's quite difficult and it involves computer modelling. | :06:36. | :06:39. | |
Because we don't have good estimates from the area, in terms of damage | :06:40. | :06:45. | |
surveys, there would be done for days. Humanitarian aid needs to get | :06:46. | :06:52. | |
in. That first 72 hours, 3`5 days after, it is so critical to get | :06:53. | :06:56. | |
particularly clean water and fresh food into the area. That's where the | :06:57. | :07:01. | |
focus should be. But the economics matters and it matters quite a bit, | :07:02. | :07:05. | |
Vidic Italy as we start to get into the weeks and months after the | :07:06. | :07:13. | |
event. `` particularly as wheat. We use computer models and we have a | :07:14. | :07:19. | |
world wide database of where all the infrastructure and population is | :07:20. | :07:24. | |
around the world and we run computer models of typhoons, earthquakes, | :07:25. | :07:27. | |
whatever disaster is in a particular area, to calculate the effects on | :07:28. | :07:32. | |
structures and people. That's what's used as the basis for the estimates. | :07:33. | :07:39. | |
Our correspondence in the worst hit areas are telling us that in many | :07:40. | :07:43. | |
places very little aid is even writing yet, although we hear that | :07:44. | :07:47. | |
some water systems are getting through to Tacloban, for example. | :07:48. | :07:50. | |
But the co`ordination of all of this, obviously there are many | :07:51. | :07:55. | |
non`government organisations involved, big organisations like the | :07:56. | :07:59. | |
United Nations getting involved as well, is there a co`ordination of it | :08:00. | :08:05. | |
all to make sure that what happens now benefits them in the weeks and | :08:06. | :08:09. | |
months to come as well? That there is a long`term view on aid and | :08:10. | :08:17. | |
relief? Unfortunately, most of the disasters that we have worked on | :08:18. | :08:20. | |
show there isn't a long`term view. What happens is there is a rush of | :08:21. | :08:23. | |
eight and it isn't well co`ordinated. `` aid. In the US, we | :08:24. | :08:32. | |
have a national agency but we have these non`government organisations, | :08:33. | :08:35. | |
which are often better at getting aid into areas faster than | :08:36. | :08:39. | |
government and military organisations. But in the long`term, | :08:40. | :08:45. | |
the aid tends to focus on the big projects, the big infrastructure. | :08:46. | :08:49. | |
Rebuilding roads and hospitals and things like that, just cause are | :08:50. | :08:54. | |
important. But in terms of getting aid to individuals, a lot of times | :08:55. | :09:00. | |
it's a `` there is a bad gap in the system, Gillooly for people who are | :09:01. | :09:04. | |
perhaps at the lower end of the economic spectrum, say farmers. `` | :09:05. | :09:11. | |
particularly for people. They tend not to get aid at all in these kinds | :09:12. | :09:15. | |
of events. We appreciate your perspective on the situation. | :09:16. | :09:20. | |
Internet companies in China have been in the spotlight recently ahead | :09:21. | :09:27. | |
of Ali Barber's upcoming flotation. Tencent is China's Egypt online | :09:28. | :09:35. | |
firm. It has a market cap of $100 billion. Later today, it is tipped | :09:36. | :09:45. | |
to have profit expectations. It is behind WeChat and is trying to | :09:46. | :09:48. | |
expand into international market, I getting consumers to play on their | :09:49. | :09:55. | |
mobile phones. Juliana Liu is in Hong Kong with more details. Some | :09:56. | :10:00. | |
believe it could overtake Facebook? That's right. Some are saying that. | :10:01. | :10:07. | |
Tencent is not very well`known outside China but here it is | :10:08. | :10:12. | |
household name. It burst onto the scene about ten years ago with a | :10:13. | :10:15. | |
popular instant messaging system, which replaced e`mail for many | :10:16. | :10:20. | |
people. Now it is much better known for another app. At the end of | :10:21. | :10:31. | |
August, it was estimated to have over 200 million users. That is of | :10:32. | :10:35. | |
course more than the population of many countries. Of course that a | :10:36. | :10:39. | |
free app but the company is now leveraging it to make money. It | :10:40. | :10:43. | |
introducing a number of popular online games, through this out, and | :10:44. | :10:48. | |
the way it makes money is by charging users to send gifts or | :10:49. | :10:52. | |
other virtual items, as people generally don't like to pay for the | :10:53. | :10:58. | |
software it sell. We will get a sense later today of exactly how | :10:59. | :11:01. | |
well that service is doing. And of course it's on international | :11:02. | :11:07. | |
campaigns. It has paid $200 million to the FC Barcelona player Lionel | :11:08. | :11:15. | |
Messi to make its name outside of China. We will keep an eye on it. | :11:16. | :11:20. | |
Thank you. That's World Business Report. See you for the papers soon. | :11:21. | :11:37. | |
Urgent and emergency care must be transformed in England, it is to | :11:38. | :11:42. | |
become sustainable, according to an NHS review. There will be a | :11:43. | :11:47. | |
fundamental shift to many services outside of hospitals and outside the | :11:48. | :11:53. | |
home. The AMD Department at this hospital | :11:54. | :11:58. | |
is one of the busiest in the country. `` A Many patients are | :11:59. | :12:06. | |
old and frail. Now, and it is England has acknowledged the | :12:07. | :12:08. | |
departments are under enormous stress. They were set up in his | :12:09. | :12:12. | |
current configuration | :12:13. | :12:13. |