27/02/2014 World Business Report

latest headlines from BBC World News. Now for the latest financial

news with World Business Report. Tough times for Qantas. The

Australian airline slashes jobs and cuts its fleet amid mounting losses.

Plus ` from bricks to blockbusters ` why Lego is now the toy world's

hottest property. Welcome to World Business Report.

I'm Sally Bundock. Also in the programme ` motoring expert Quentin

Willson will join us to talk about Tesla's electric dreams.

We start with the struggles of Australian airline Qantas. In the

last few hours it has announced major job cuts and mounting losses

as it battles fierce competition from rivals. Qantas says it will cut

5,000 jobs ` that's more than one in seven of its full time staff ` over

the next three years ` and it revealed its lost almost 226 million

dollars in last the six months of 2013. In a bid to stem the heavy

losses Qantas announced it will cut its fleet by 50 planes. Today it

says delivery of three new Boeing Dreamliners and eight Airbus A380

superjumbos will go on hold. Here's the BBC's Sydney correspondent Phil

Mercer. The news flying kangaroo is facing the most tempestuous times in

its recent history. Condemned by trade unions, battling record fuel

costs, and unrelenting competition from subsidised rivals, Qantas has

embarked on a ruthless make or break plan to revive its fortunes. This

performance is unacceptable. The current position is unsustainable.

It reflects a substantial change in our circumstances. Taking the $2

billion of costs by the end of the financial year 2017 requires

difficult decisions across the whole business. Today, I regret to

announce that we will be reducing our employee numbers by 5000

full`time staff of the next three years. Australia's national carrier

has been lobbying the government in Canberra. They want to ease limits

on foreign investment or provide state intervention. Ministers are

drafting new laws to allow foreigners to buy a majority stake

in the airline and to strip away restrictions. Qantas are facing a

tough and competitive market. We accept that Qantas do have to

compete with a ball and chain provided by the Qantas Sale Act. But

they do have to get their house in order. Management claims that it is

advantaged because its main domestic rival, Virgin, is largely owned by

three government backed airlines. Qantas has repeatedly stressed that

it is not want handouts but rather a debt guarantee from the government

that would allow it to borrow at more favourable interest rates.

Dealers under pressure to tame its finances as ministers consider next

move. Also on today's business agenda `

tiny bricks and big profits. Danish toymaker Lego reports its full year

results this morning. It's expected to confirm it's been another record

year for sales. Here's a figure to get your head around. Last year Lego

manufactured 45.7 billion bricks. The company itself is hard to value

as it's family`owned, but it's now estimated at somewhere over 17

billion dollars ` more than Mattel, the maker of Barbie. That makes this

man ` Kjeld Kirk Kristiansen ` the grandson of the company's founder `

a billionaire almost six times over. These days of course it's not just

about the bricks. The Lego Movie has topped box offices in the US for the

last three weeks. It's the latest move from a company that has

constantly re`invented its brand ` as Jeremy Howell reports.

In the Lego movie, an unassuming young man has to organise a group of

highly creative and argumentative friends to save the world from the

machinations of business. Surprisingly anticapitalist coming

from a company worth $20 billion. The movie idea was not the part of a

corporate business plan. Instead, the company was inspired by small

filmmakers who have been using Lego figures to make jerky animated

movies. They are streaming on platforms like you Tube. Instead of

trying to stop them, it embraced the idea itself. They have been creative

about how they have extended their brand that their have always come

back to their core attributes. The notion of creativity, play,

constructing something together in a shared endeavour. They have stayed

true to that and use that to extend into other product formats. The

movie is the latest step on its route to recovery. A decade ago the

company had debts of $800 million and feared for its future. It has

climbed back into profits chiefly through bringing out new game lines

linked to popular films and comics. Here we have an example of Lego

embracing the Star Wars licence that is very popular. Many, many adult

collectors have moved into this market. They have widened the appeal

of Lego beyond just children. Lego wants to boost its popularity with

girls. It has tried to do so in the movie with the feisty heroine. On

the shelves it has brought out its Friends range. And they are the

inevitable movie tie ins. But is Lego over extending its brand?

Shares in Tesla Motors have been surging after the electric car maker

announced plans to build a vast new battery factory in the US. The so

called "gigafactory" would be able to make more lithium ion batteries

in a year than were made in the whole world in 2013. Battery costs

are seen as a major obstacle to widespread electric car adoption in

America at the moment. Sales of Tesla's luxury Model S are set to

jump more than 50% this year ` but at $89,000 it's only for the well

off. Tesla hopes to have a cheaper mass market car on sale within three

years. Let's talk to motoring journalist Quentin Willson.

Explain why this move by Tesla is a significant shift for electric cars.

For the whole industries is massive because it will potentially lower

the price of batteries by as much as 30 or 40%. That is the major barrier

to entry because of the cost. Electric cars are more expensive

than petrol cars. If Tesla can do this, and build these components

quicker and cheaper, it will make a huge impact. In the US you can drive

and stopped to charge and you can charge for free, can't you? There

are a lot of myths about the electric car. Will I run out of

electricity? Will get stuck unable to recharge? They have created the

supercharging stations all over America. They have 71. Somebody has

just driven from one end of the US to the other totally free, driving

into these charging stations which take only 30 minutes to fully charge

the batteries. That is a incredible development. We have a big

resistance in the UK to electric cars because we do not like the

people who drive them. We think that they are a liberal left`wing piece

of tokenism. But they do work. I have a driving on for three years

and it costs me ?2 to do 100 miles of electricity. I have never run

out. And all you need is a outlet plug. BMW are joining the market as

well. Tesla has done its best quarter ever. The Tesla model S has

been voted the best emerging model. The issue of price will be key won't

it? If Tesla can fulfil that ambition to have a cheaper vehicle

within three years, that will have a big impact. It will send a message

out that you can do it and bring competition. China will be very

interested in Tesla. Elon musk has said that we will not be able to

cope with the demand from China. `` Musk. Tesla will be a game changer

which might spill down into domestic electricity production and consumer

goods. Keeping you up to date. Royal Bank of Scotland is expected to

announce heavy losses for 2013 ` possibly as much as ?8 billion. RBS

is reportedly planning to scale back investment banking and international

operations and cut thousands of jobs to focus on UK lending. It's under

pressure to turn around its fortunes from the UK government which holds a

stake of over 80 per cent following its massive state bailout at the

height of the financial crisis. Advertising giant WPP reports

preliminary full year results shortly. Analysts are expecting a

return to strong profits. They are watching for any move by WPP to buy

a smaller rival after the merger deal between Publicis and Omnicom

which is set to knock it off the number one spot as world's biggest

advertising company. A quick look at the financial

markets. Qantas shares have been the big loser today in Australia. Qantas

shares have been down pretty much over 7% since the announcement of

its losses. Oh no, it has gone. The Dow was up

by 0.12% at the end of the trading session. I will be back shortly.

Stay with us. I'm Naga Munchetty.New measures to tackle