02/04/2014 World Business Report

to visit the base from where the search for flight MH370 is based.

Misery for the guns are's passengers. 3800 flights are

cancelled as pilots strike over pay. And, called offshore gas discoveries

outside Cyprus help solve a long`running territorial dispute?

Hello, and welcome. You with World Business Report, IM bundle. The boss

of Intel is in China, hoping to get new business. As you have been

hearing from Tim, it is very bad luck for Lufthansa. A three`day

pilot strike stars today, with nearly 4000 flights being cancelled.

This is a headache Germany's biggest airline could do without. It will

hit them where it hurts, in the pocket. They stand to lose tens of

millions of euros. The union running the strike represents almost all of

the guns are's 5400 pilots. `` Lufthansa's. Lufthansa usually

operates just over 4000 flight, but only 500 short and long haul flights

will run. Last night, they seem to be some willingness to negotiate. We

are ready to talk. There was an offer and now we need to start

talking about the offer in order to understand the different decisions.

We really hope that after the strike, or even during the strike,

negotiations can begin again. TRANSLATION: This strike can be

avoided at any time. Lufthansa must present a good offer, which is good

enough for us. How has it come to this? It seems to have blown up with

startling speed and severity. I am joined by John Strickland. How did

we get to this point? Lufthansa's management has been trying to cut

costs over recent years, which has meant permanent cost changes because

of the tough operating environment. This is a time when we have the

current leader is leaving. The airline has to cut costs, because it

is facing shortfall competition from low`cost carriers around Europe, but

also other airlines from places like the Persian Gulf and Asia. Everyone

has to share the pain, but the airline is not sufficiently

profitable for the long`term. Had you think it will play out? It will

lose its flights in the next few days, but after the strikes, it will

hit them on the bottomline to the June of maybe 30 million euros. That

is not what the airline needs at a time when it is trying to improve

its financial position. This is an airline that has 300 new aircraft on

order, which is another reason why it has to have strong financial

resources. There may be further negotiation, but whether they can

avoid future strikes remains to be seen. Are there lessons to be learnt

with what Willie Walsh went through with British Airways? Or for the new

chief executive who has just got the job. They have both been former

airline pilots, and while they are known as tough negotiators, for

British Airways they encountered cabin crew strikes, and that Iberia

where they had pilot strikes, he tough it out. In the case of British

Airways, it is interesting to draw the comparison. When the airline

changed conditions for their pilot, their pilots engaged in an

accounting firm to audit their requirements, and they subsequently

given strike. There has to be a toughing out. There has to be a

method of getting across the communication, some kind of an

answer of why this is. Now that he wants to take pain, but it is about

the well`being of the future of the airline. It is a story we are

keeping a very close eye on. Let's move on, because the Cypriots energy

minister has been telling us that his country's offshore gas

discoveries may give Turkey a powerful incentive to agree a

settlement over its long`standing occupation of Northern Cyprus. The

two leaders met earlier this week and urge you to meet again later.

Gunships in the waters around Cyprus have so far discouraged potential

investors in Cypriots gas. From the capital, our reporter has this

story. A bailed out EU state that has to

bring in most of its energy, and the idea of becoming a gas hub is

beguiling. It initially promising gas field was named after Aphrodite,

the mythical goddess of beauty. Cypriots are quite fixated by

maintaining their energy supplies, ever since the huge explosion ripped

through the electricity plant serving 60% of the entire country.

Nobody is pretending that the new Aphrodite gasfield is going to solve

the country's energy problems, but it could open the door to some new

industries, maybe in petrochemicals or even manufacturing. The energy

minister seems to be downplaying recent talk of close work with

Israel, says the next steps may shake unification talks. The

strategy that the Cyprus government has select it is the onshore LNG

terminal. That might be an expensive investment, but it offers

significant flexibility in terms of shipping to the best markets

worldwide. Next summer, when the other two companies that have been

licensed to operate in Cyprus waters, are going to start their

operations as well. A man who is advising them on their gas project

says much must be resolved. The first thing that has to be overcome

is building a pipeline back to Cyprus itself. That is not easy to

do, the water is about 5000 feet, and the bottom is a series of

canyons. It is a difficult area to build pipelines. The second problem

they have is that it is not that big. The Aphrodite field is now

about 4 trillion cubic feet, which is marginal for a development, and

LNG development, so maybe they have to find some other things in the

area that they have to develop alongside it. Cyprus has a sovereign

wealth fund to travel revenue `` channel revenue, but until more

fields are proven, it really doesn't know what riches lie beneath its

waters. The chief executive of Intel is in China today, hoping to drum up

new business. Let's go to Rico Hizon in Singapore.

When you take a look at the strategy of Intel, it basically wants to

expand its footprint in China and increase market share. In terms of

setting up this $100 million fund, it wants to accelerate innovation of

smart devices by working closely with Chinese makers in the

development process and install its processes into more locally made

computers and devices. The CEO said the fund hopes to get Chinese

companies to develop two in one hybrids. Those are tablet laptops,

tablet smart phones, which it hopes will make up for slowing PC markets.

Through its regional design market, Intel wants to look at

manufacturers, resources such as software to help them get into

products. Intel has made some substantial investments in China

since 1998, putting more than $670 million in 110 mainland companies.

That is with the hope that they will be able to expand their market share

in China. GlaxoSmithKline has announced a

product recall after the food and drug administration published a

warning letter over contamination at its Irish plant. The FDA said that

last October and FDA inspector found that an antidepressant was

contaminated with material from the pharmaceutical waste tank. The

company has a limited time to respond to the level.

BP has closed a refinery in Brisbane due to more cost`effective efforts

in Asia. That is all from World Business

Report. All the Asian markets are higher, and positive news from the

US about its economy. I will see you soon, as we look through the papers.

Structural checks are to be carried out on schools in Edinburgh after a

12`year`old pupil was killed in `` when a wall collapsed on top of her.

A statement released by the city of Edinburgh Council said the incident

involved a freestanding modesty wall in a