tv BBC Business Live BBC News October 16, 2017 8:30am-9:01am BST
this is business live from bbc news with susannah streeter and sally bundock. alitalia flies again with government help but will italy's flagship carrier ever manage to land on it's own two feet? live from london, that's our top story on monday the 16th of october. the troubled carrier managed to avoid today's deadline for rescue offers but what does it tell us about the fate of europe's many troubled airlines? also in the programme: weighing up political risk in europe — austria elects the world's youngest leader, theresa may hopes for a brexit breakthrough and catalonia's leader seeks talks with spain, we'll talk you through what's at stake and is all that politial uncertainty affecting investor sentiment? this is the picture in europe. markets have opened up the ftse very
slightly. and would you pay to use an airport lounge. access is often a perk for business and first—class travellers, but with more of us looking to travel on the cheap, we are speaking to the man who wants to pamper us before we off. today we ask the question after a potato shortage hits new zealand, sparking a crisp crisis. how much would you be willing to pay for a packet of crisps? could you live without them? hello and welcome to business live. europe's airlines are struggling like never before. three have gone into administration this year alone and one of those — alitalia — is up for sale, but the big question is can anyone save italy's nationalflag carrier?
the airline currently flies to over 80 destinations around the world and its fate is being closely watched. bids for the airline were coming to an end today but thanks to yet another last ditch intervention from the government it has been given more time. in february this year, alitalia had debts of around $3.3. three months later it went into special administration after employees rejected a rescue plan that included a wage cut in return for a cash injection from shareholders. alitalia's main shareholder is uae's etihad, which owns 49 percent of the airline. but etihad was also the key shareholder in air berlin, which filed for insolvency in august after etihad withdrew its financial support. so who might be interested in snapping up alitalia? well ryanair had planned a bid for the airline, but that came to an abrupt end after ryanair was forced to focus its efforts on dealing with the fallout from cancelling thousands of flights. but maybe lufthansa could come to its rescue? germany's flagship carrier said last week it would be interested in creating a new alitalia. lufthansa is also buying up parts of air berlin
to expand its eurowings budget airline business. daniel roska, is a senior european transportation analyst at the investment firm sanford c bernstein. what do you think may happen? i feel like i have talked about alitalia nearly on the edge of bankruptcy for my entire career. it is very through and the three parties who are interested have said they will be looking to buy parts of alitalia, but not in the shape it is in today and that is what is stopping them. what do they want? the italian market is the fifth largest in europe and it has a great centre in milan, so there are valuable passengers, it is just the market structure that is not very profitable. the airline itself has only made a profit once in one year,
in1998, only made a profit once in one year, in 1998, since it was founded in the 19405. in 1998, since it was founded in the 1940s. the way it has been run over the years it has not been profitable by any means. absolutely not. but cost position for an airline is the one and only thing you need to worry about and that is what they need to change. today we are even having the last few monica passengers repatriated out of the airline colla pse repatriated out of the airline collapse and it shows what a state the airline industry is right across europe. there is simply too much capacity. there is too much capacity. there is too much capacity. there is too much capacity. the top groups control 90% of the market. in us this number is six. that shows you the amount of market concentration we do not have in europe which makes it so tough. there is far too much capacity and thatis there is far too much capacity and that is driving at alitalia and air berlin and the likes. lufthansa, air
france, rya nair berlin and the likes. lufthansa, air france, ryanair and berlin and the likes. lufthansa, air france, rya nair and easyjet berlin and the likes. lufthansa, air france, ryanair and easyjet are saving the state—owned carriers that are gradually going to die. saving the state—owned carriers that are gradually going to diem luftha nsa are gradually going to diem lufthansa was to put its oar in, but it is buying up quite a bit of air berlin, there will be quite a bit of competition news. for the majority of european travellers you still have a lot of options to connect to other hubs. if lufthansa goodbye alitalia, this could be less stressful com pa red alitalia, this could be less stressful compared to air berlin. ryanair is the largest carrier with 30% of the market. ryanair is the largest carrier with 3096 of the market. we will keep an eye on it. thank you for coming in. we will chat to you about this in the future. particularly with the repercussions for ryanairand a particularly with the repercussions for ryanair and a shortage of pilots and airdoes not for ryanair and a shortage of pilots and air does not seem to be any easy
a nswe rs. and air does not seem to be any easy answers. let's take a look at some of the other stories making the news. here in the uk the head of regulator — the financial conduct authority — is warning of a "pronounced" build up of debt among young people. andrew bailey told the bbc that young people were increasingly having to borrow to meet the basic costs of living. the regulator also said he "did not like" some high—cost lending schemes and that credit should be "affordable". shares of japan's third—biggest steel—maker, kobe steel, are now at a five year low having slid more than 3% this morning. $2 billion has been wiped off the value of the company. more than 500 companies have used their metal products around the world. this comes after the steel—maker revealed that about 500 companies had received its falsely certified products, more than double its earlier count. airbus chief executive tom enders has said he would be prepared to step down if he was "no longer part of the solution" as the firm deals with ongoing corruption probes.
the aircraft maker has been under investigation in the uk and france since 2016 when it admitted using middlemen in plane sales. mr enders said he saw no reason to resign, but added he would be ready to do so if needed. the airbus board said last week that it had full confidence in mr enders. let's check in with the financial markets now and it's another day of record breaking highs. tokyo's nikkei hit another 21 year high india's sensex also hit a record earlier, but retreated a little due to profit taking, hong kong shares also very positive up by just under 1%, tracking wall street gains. on friday the tech heavy nasdaq reached another record and strong retail sales pushed up the dow to gain for the fifth week in a row this is the situation in europe at the moment. investors weighing up political risk after a 31—year—old looks likely to become austria's next leader. sebastian kurz is projected to come first in sunday's poll to elect a new chancellor. theresa may is heading to brussels later to meet eu leaders
in a bid to end a stalemate over brexit. so yet another rise on friday. michelle fleury has the details about what's ahead on wall street today. wall street's newest darling netflix report third—quarter awnings later this monday and its success will depend on how many subscribers it addedin depend on how many subscribers it added in the quarter. investors viewed this as a gauge of its growth. goldman sachs is predicting that the firm added around 1 million new subscribers in the us in the last three months and over 4 million internationally. the home of as of cars, has been spending heavily on new shows and acquiring the rights to others as it tries to lure viewers away from traditional cable tv. to help pay for that netflix raised the price for some of its
subscription plans in the us and investors are betting that the latest strategy will not scale of customers. on friday shares in the world's biggest online video streaming service hit an all—time high. streaming service hit an all—time high. joining us is sue noffke, uk equities fund manager at schroders. it isa it is a pretty busy week. there is a lot going on. on top of that you have got these market is going up and up. lots of record highs. we are seeing investors liking this synchronised global growth and activity. that is underlined by the imf talking about raising their global growth forecast this year and next year. it is not dominated by one region and that has really helped calm investors in the face of some tightening of monetary policy compared to the very loose conditions we had. interesting in
the imf report it said the only country that was downgraded was the uk and today we had to may heading to brussels to restart the brexit negotiations. that really is key for the uk economy. for the economy, thatis the uk economy. for the economy, that is true. the stock market carries more weight than the local economy. especially the ftse 100 economy. especially the ftse100 which is very international. the other focus is mark carney, the governor of the bank of england, and a lot of central bankers have been talking over the weekend, like janet yellen, they are all focused on where inflation is headed. it is a real issue in the uk. it is because you have got a disconnect between headline and corn. it is true in the states were energy costs and exchange—rate movements have boosted the headline level of inflation here in the uk, so we will see a number around 3%, a full percentage point
ahead of what the bank of england's target is. that could incur mark carney writing a letter to the government. there is quite a lot at sta ke. government. there is quite a lot at stake. he has also outlined the fact he would quite like to put interest rates up as long as the data supports it so we will have to see what that data says this week. there are corporate earnings out as well this week. it seems as though investors are confident about the prospect of global companies and the returns they are making. there is a broad—based, sustainable economic growth that we are seeing and it is translating into corporate profitability and that is helping these market levels sustained very high valuations. sue will be returning a bit later on and we will be talking about political risks and also the crisp crisis in new zealand. it is crunch time. potato shortages
leading to a hike in prices. we will appeal that story away. we will appeal that story away. still to come: would you pay to use an airport lounge. with more of us taking cheap flights we will speak to the man tried to pamper us before we set off. tried to pamper us before we set off. you're with business live from bbc news. we've already mentioned it's a big day tomorrow for the governor of the bank of england mark carney as he will be grilled by the treasury select committee about his outlook for the uk economy and what the central bank will do with interest rates. and many economists believe he — and his team on the monetary policy committee have a pretty tough job on their hands at the moment with inflation rising and the difficult to predict impact of brexit. well, the item club hasjust published its autumn forecast —
martin beck is their senior economic advisor. the story of the economy has been sluggish growth and that will continue for the next few years. we have got a relatively high rate of inflation pushing down on the consumer side. inflation pushing down on the consumerside. overlooking inflation pushing down on the consumer side. overlooking all of this are the brexit negotiations. how do you predict with regards to brexit hanging over us? it does not make life any easier. our expectation is soon as the article 15 negotiations end and the uk and eu agree some transition arrangements which keeps things as they are for three years, in that sense we are not expecting any dramatic upheavals in the forecast from brexit. as far as the outlook is for uk interest rates, what do you think should be the policy going forward ? you think should be the policy going forward? 80% you think should be the policy going forward ? 80% of you think should be the policy going forward? 80% of investors believe
rates will go up in november. do you think it is right? given what mark carney and other members of the committee have said, we think they will go up. we think that is a mistake, but there does not seem to be the need to raise rates. inflation might be high now, but as we move into next year it will start to fall as the effects of sterling and the depreciation last year and import prices washed out the data. thank you for talking to us. did you know it is 30 years since ikea arrived in the uk. you have been building billy book shelves for 30 years. now some of those flatpack it's collecta ble now some of those flatpack it's collectable items. like it or love it, ikea has been around for 30 years and still has
expansion plans for the uk. read more detail on the business live page. you're watching business live. our top story: italy's flagship airline has avoided another airline. it comes as european airlines try to tackle problems caused by over capacity. a quick look at how markets are faring. flat. nothing to be concerned about. for many travellers, a trip abroad normally involves a long wait in the airport departure lounge, jostling for space at the duty free with business or first class lounges reserved only for those carrying a very expensive ticket. but one company is trying to change all that. number1 lounges gives travellers access to luxurious airport lounges, regardless of their airline or cabin class. it works by charging members a monthly fee
or a one—off charge at the airport. in return, travellers get access to a lounge featuring restaurants, bars, spas, showers, and even bedrooms in some locations! number 1 lounges currently operates at four of the uk's leading airports — heathrow, gatwick, edinburgh and birmingham. but the firm has big expansion plans in place. let's find out more from phil cameron, founder and chief executive of number 1 lounges. phil, welcome to business live. now, looking at your cv many would think, they wouldn't see you on this path. you were a theatre producer?” they wouldn't see you on this path. you were a theatre producer? i was a theatre producer for a number of yea rs, theatre producer for a number of years, but i kind of felt like i needed a change. i had done what i needed a change. i had done what i needed to do in theatre. you did a lot of travelling by air in that particularjob? exactly. and i spent a lot of time in airports. but not in the lounges? well, sometimes in the lounges if i was lucky. airports, however great they are,
still have one problem which is dwell time. you have got to spend a lot of time unless you are cutting it very fine which some of us do. what do you do, you shop, you eat, and what's hard to do is escape from the crowds and have your own time, spent the way you want to spend it before you fly and that's the solution we tried to provide. you are trying to fill seats in a similar way, with different tiers? hospitality and entertainment for similar. people investing in a theatre ticket or one of our lounges, they want to do because of an experience. they want to be entertained for a period of time. this is something you have been doing for ten years. starting atjfk in new york? yes. explain that journey? i was involved in a start—up airline and it didn't happen. it never flew, start—up airline and it didn't happen. it neverflew, but we start—up airline and it didn't happen. it never flew, but we got involved in the ground product at jfk and there became an opportunity
to actually just concentrate jfk and there became an opportunity to actuallyjust concentrate on that. so that's what i did. it was a little crazy, back office in london, front office atjfk, but that's where we started. are the core customers economy class? it is a mix. airlines don't have lounges, premium airlines don't have lounges everywhere. in a so—called out station they might use us. an international carrier coming to the uk, it may not be able to justify a lounge so they would use us. we would see the first and business passengers of those airlines. we are seeing a large growth in premium cabins on low—cost carriers. so, charter operators and new long haul co costs are putting in premium cabins, but otherwise you can just buy as you said in your intro, you can buy a membership with one of the lounge entry schemes or pay on entry on the door on the day. do you fund
find much ed, heathrow, gatwick, birmingham, they have a lot on offer. the ones where i would love the lounge experience is luton and places like that where it is dire? watch this space. we are expanding expanding into more airports. if you area expanding into more airports. if you are a business traveller, you want to get work done and eat and catch up to get work done and eat and catch up on e—mails. to get work done and eat and catch up on e-mails. we wanted to know whether the children are separated in your lounges? well, we have three tiers of lounge. our top tier lounge doesn't admit under 12s. our main lounge the number one lounge has library areas where we don't allow children and we have an entry level which is about social lounging, it is set in a loft—style apartment and it has a games room. we have tried to create environments where you choose what sort of departure you want. you enter into the lounge and
you know, if it's a family social type lounge there will be somewhere for the kids to play while you can have a nice glass of wine and watch the planes go by. soft play? no, soft play is taking it too far. they need to use that energy? we have got‘ great pancake machine for the kids. no sugar either. we have healthy food as well. it's all about choice. thank you very much for coming in. some of the uk's best apprentices will travel to abu dhabi this week to pit their skills against other young people in disciplines like engineering, hairdressing, cooking and jewellery design. they'll be competing for medals against the world's best young talents at the skills olympics. like many kids, these guys had big ambitions when they were growing up and less than a decade after some of these photos were taken, they are amongst the best
in the world for their trades. now they're competing for medals to prove it. i'm alfie hopkin,19—years—old and i am from south wales and i'm going for gold in web design. i'm 22. i come from the forest of dean. i'm going to abu dhabi to compete in hairdressing. i'm 21—years—old. i'm from east kilbride and i'm going for gold in mechanical engineering cad. this is team uk, a group of 3a young people who are heading to abu dhabi to take part in the skills olympics. over 1,000 under—25s from 76 countries are hoping to win medals in everything from aircraft maintenance, 3—d game design, jewellery—making, bricklaying, plumbing, cooking — the list goes on. jake is 22 and from bradford. i'm an electrical engineer. i've just completed a hnd in engineering at bradford college.
and along with that work, you have been training hard for this massive competition. what are you doing in it? we've to got to build a recovery unit that can take on three objects and drop them off at various points. this is a mock—up of it and your team—mates as well. you are part of the manufacturing team challenge. are you ok lads? who have we got here? we've got alex and jacob, my team—mates. you are competing against people all over the world, how are you feeling? pressure. a bit of pressure. i feel like we will be able to wave the british flag higher. you're going for gold. of course, we are. between them they've put in around 70,000 hours of training and that is on top of theirjobs and studies. i'm 21 and from croydon. i'm competing for network infrastructure technician. i am 21 years old. i live in south wales. i am going for gold in restaurant service. i am 23—years—old. i am from liverpool.
i am competing in aircraft maintenance. i'm going for gold. now with the send offs over, it is time to put all of that work into action. and i will give you an update in a couple of days' time. sue is back as promised. we are talking about political risk in europe which was a really big subject at the start of the year because we had the netherlands, france, germany, it was a packed calendar and we have had the outcome of the austrian elections and a 31—year—old man in charge! of the austrian elections and a 31-year-old man in charge! so again, we've got this swing back to right—wing politics, immigration front and centre and coming on the back of merkel‘s narrower election victory and putting together a coalition. i think it brings back the kind of political risk agenda which had subsided. we got past
france... everyone relaxed. with emmanuel macron coming in and everybody thought we know angela merkel is going to get the job. she has a tricky coalition to negotiate and so has sebastian kurz. this is going to put some of the pressure into the eu about immigration, probably not at a time that they wa nt to probably not at a time that they want to deal with that when they have brexit negotiations. and catalonia, that wasn't expected. and catalonia, that wasn't expected. a demand, on whether they have declared? and the ramifications of that as well which are serious. is it cessation or is it regional elections? many companies have left it the catalonia region and moving their headquarters... or have signalled that's what they would do. there are economic pressures. now, moving on to a subject which many might think is a light hearted
subject, but if you are a farmer in new zealand growing potatoes, it is a big deal. a 30% fall in the crop, potato shortage in new zealand sparking crisp crisis. indeed. there have been lots of floods, storms that have affected 20% of new zealand's potato crop. 30% in some really key areas. and half of their crops go into making chips. so that's with your fish and chips and about 15% go into making crisps, but it isa about 15% go into making crisps, but it is a real impact on those farmers. so the price will go up as well. we asked for tweets. jerome saying, "crisps are a waste of money, buy a banana?" it is more expensive often. they don't last as long. shelf life. enjoy your day. we will see you soon. bye—bye. good morning. today it's all about
ex— hurricane ophelia which is moving its way to ireland. for northern ireland, we have got an amber warning from the met office to be prepared. gusts of wind up to 80mph possible. that's going to bring some disruption. here is ophelia on the pressure charts. a really deep area of low pressure. moving its way northward the south—west of the republic of ireland, but for many western parts of england and wales, through northern ireland, we are going to see strong winds. the winds picking up see strong winds. the winds picking up in the south—west of england, around 70mph through the coast of wales and the isle of man and up to northern ireland, up to 80mph. so, as we go through, it's mainly later this afternoon that the winds really pick up strength. so lots of disruption around the areas to travel and right on the coast. certainly be aware of the fact of those strong winds. further east across england and scotland, we've
got drier weather, a bit of sunshine and that sunshine as a result of these southerly winds from ophelia, temperatures up to 23 celsius. but rain moves its way through northern ireland and into scotland. and then through tonight, the strongest of the winds will be further north. and gusting for all of northern england, but in scotland as ophelia tracks through northern areas, up to 70mph, 60mph and 70mph elsewhere. not as warm as last night. temperatures down to 11 or 12 celsius. during tuesday, ophelia will go off into the north sea and a quieter day. lighter winds for many and again sunshine. later in the day, rain spreads into southern parts. fresher compared to today. the temperatures dropping by a good few degrees, 13 to 17 celsius. and going into the middle part of the week, we will see things quiet. we have got a weather
front, but further north, light winds. should be dry for scotland and northern ireland, northern and western parts of england and wales. that rain in eastern areas will drift away and a maximum temperatures, where they should be for the time of year, about 12 or 13 celsius. up to 17 celsius in the south. it's a stormy start with celsius. up to 17 celsius in the south. it‘s a stormy start with ex— hurricane ophelia. as we go into later in the week and the weekend there will be more rain and strengthening winds as well. more details elsewhere on the website, but that's it from maosmt bye—bye. hello, it's monday, it's 9 o'clock, i'm victoria derbyshire, welcome to the programme. this morning, allegations mount against hollywood producer harvey weinstein. he said that he wanted a massage, could i give him a massage and i said, no. he returned in nothing but a robe with the front open
and he was buff naked. we'll hear claims that the treatment and sexual exploitation of women in the music industry could be worse than in hollywood. one of the women at the very top of the music business joins us to lift the lid on the industry. also on the programme: this programme has discovered that thousands of ill and disabled people are being stopped from tape recording a controversial disability assessment to use it as evidence.