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tv   World Business  WHUT  September 14, 2010 6:00pm-6:30pm EDT

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from the gulf such a success. >>rather than retract, rather than drop our fares, rather than lay off people, rather than cancel orders we went completely the other way >>a new growth strategy, how technology is boosting farming efficiency in burkina faso >>so we have to make everything we can to make some more productive >>and pedal power to the people, why two wheeled transport is the new urban trend. >>in fact last year we had a 10% increase in cycling overall >>abirached: hello and welcome. i'm raya abirached and this is world
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business, your weekly insight into the global business trends shaping our lives. according to the international air transport association, european airlines lost 4.3 billion dollars last year. at the same time one of the uae's twomajor airlines, emirates, made almost 1 billion dollars and the other, etihad, is the world's fastest growing airline. so why are they so successful and is there a danger they could be growing too fast for their own good? >>reporter: dubai's airport keeps on growing. in 2012 its third terminal will become the world's largest building, at least by floor space. it needs to be - as emirates' home base it has to keep pacewith the airline's staggering expansion. this year alone it has ordered 25 billion dollars worth ofnew
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planes. >>clark: rather than retract, rather than drop our fares, rather than lay off people, rather than cancel orders we went completely the other way. >>reporter: emirates did however cut union costs some 17%. it put pressure on its suppliers, dropped routes or changed the planes flying them and offered the employees the chance of unpaid leave. dubai's airport also operates longer than its european counterparts and it is playing during the air upto 18 hours a day. but perhaps a more fundamental reason the airline made money reason is a combination of new long range aircraft and simple geography allowing it to link any two cities, anywhere inthe world, via a stop over in dubai. >>pearce: i think the geographical location of the gcc is key both to the expansion strategy and also the success that has been seen already by many of the airlines in the middle east. it does place those hubs within reach of a single
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flight to most of the larger markets in the americas, in asia inaustralasia and in europe. >>reporter: such rapid growth has led some rivals to argue that the airline must have had help fromthe dubai government. an accusation the airline dismisses out of hand. >>clark: the day you can you show me where we are subsidized i will resign. it's as simple as that. >>reporter: the competition is picking up. after its founding in 1985 emirates enjoyed 18 years as the uae's sole carrier. then, in 2003, abu dhabi, the uae's capital and, richest emirate, decided italso needed an airline, to help fuel its growth strategy. >>al shemmari: we are going to be doubling the population within 2030 when you think about those kinds of numbers there is a lot of significance of residents, not just transiting of population, and businesses coming to abu dhabi. 11 seconds
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>>reporter: abu dhabi's etihad is, like emirates, following a strategy of rapid expansion. >>hogan: what we've seen is an eleven percent increase for the first half over the same time last year, we also took eleven aircraft in the second half of last year too. >>reporter: at present etihad is still losing money and is reticent to release figures, but its ceosays that this would soon change >>hogan: we're targeting to break even at the end of next year - and to move into profitability. >>reporter: profitability that escapes the established carriers of europe. lufthansa was down 135 million in the first half of the year, ba lost 250 million dollars last quarter alone and air france klm suffered a staggering loss of nearly 2 billion dollars in the last year. the volcanic ash cloud may have played a part, but the main reason the legacy carriers suffer is simply - legacy, while those from the gulf have been able to start efficiently from scratch. >>pearce: the performance of airlines in the middle east is certainly helped by the fact they were green field set ups, they weren't hampered by the legacy working
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practices and systems that many of the larger european airlines that are struggling to deal with. and we're seeing lots of labour disputes in europe at the moment - which are really the result of those legacy practices. >>reporter: some airline analysts also believe europe's taxation policy is playing into the uae's hands since someone flying from, say, asia to the united states can just as easily stopover in the low tax uae rather than london and avoid the extra charges. >>tarry: if we have, as we do have, taxation on the environment, people might want to avoid coming to the uk to change aeroplanes and you can avoid that by going through a carrier in the gulf. >>reporter: and there could be some more turbulence on the horizon, with the extraordinary growth of the uae's airlines raising the issue of overcapacity, a common feature of the airline business. >>pearce: well, in the airline industry there is always the problem of overcapacity, it's an issue that has really held profitability down ever since the industry started
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in its full commercial form. >>reporter: dubai is already building a second airport which will funnel 160 million passengers through the emirate. abu dhabi has plans for 40 million passengers while neighbouring qatar, with its own airline to rival both emirates and etihad, has plans for 44 million within the next five years. but this sort of expansion, albeit on a smaller scale has been seen before... >>hogan: probably asked the same question about asia in the nineteen seventies when you saw the asia hubs being created with cathay, with singapore, with malaysia next door to singapore. >>clark: there will never be a question of capacity outstripping demand for emirates. in truth withwhat we have ordered and will order we are still short of capacity even when all these airplanes are in place. 15 seconds >>reporter: when talking about the gulf there are no certainties but as the centre of economic gravity shifts further eastwards there are for example 2 billion people
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within 4 hours flying time of the uae it seems that the new breed of carrier is now cleared for takeoff. >>abirached: burkina faso is one of the world's poorest countries, with a gdp per capita of only 1200 dollars. the country is landlocked and relies heavily on agriculture which employs the vast majority of the population. but an agricultural initiative, with heavyweight backers, is using new technology to maximise efficiency and help lift people out of poverty. >>reporter: michel bougma is a farmer in the village of tiibin in burkina faso. >>life is hard here. the soil is deteriorating due to the high heat and wind. and climate change is resulting in shorter season cycles. food shortages abound.
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>>bonkoungou: challenge in my village, this village and around this village is the poverty of the soil. so yield is decreasing, so we have to make everything we can to make some more productive and this is why we research to find solutions to make more productivity for our people. >>reporter: and that's what's happening at inera, the institute for agricultural and environmental research in burkina faso. >>it has access to agora, the research 4 life programme supported by the food & agriculture organization... allowing free online access to high-quality, timely and relevant scientific journals, books and databases.
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>>traore: because of globalization, africa cannot be away from this technology knowledge sharing. so to have access to agora is a good thing for us and also to have access to technology to train the farmer, to make the technology available for them so they can use the technologies and improve theircrop yields. >>sager: over 80% of burkina faso's population is employed in the agriculture sector. three-quarters are subsistence farmers. the goal of development efforts here goes beyond food security. it's about turning produce into profits. >>reporter: millet and sorghum are the predominant cereal crops and staple foods for the rural population in west africa. considerable population growth has also put pressure on the fragile land
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system. >>baptiste: food security doesn't mean anything if they cannot improve their income. they have to improve their income and this is why we improve the yield for them, so they could sell it and have a better income, so improve their livelihood. >>reporter: and they did it with the help of agora... developing micro-doses of fertilizer... a more efficient but also more labor-intensive method, which produces a higher yield. >>compaore: in the beginning we found that the work was harder than the old method. but when we sawthe results, we realized the micro-dose is better, so we used it. now that we are familiar with it,we think it's easier to use than the old fertilizer. >>reporter: even michel, who admits initial scepticism, was won over. >>bougma: with micro-doses
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we have a much better harvest than with our traditional methods. >>reporter: agora is one of the biggest portals for agricultural journal access...searching key words, providing constant updates and new ideas. >>diouf: achieving food security for the more than one billion hungry people will depend on sustainable increases in agriculture production. these increases will be achieved through the application of new technologies. many of these are available in the vast body of literature generated by the world's agricultural science community. >>reporter: as the technology partner, microsoft provides the platform for access and authentication... able to perform at the same level as today's most heavily trafficked websites.
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>>ramusack: science research has been available for a long time, it's been you know since the beginning of time. the problem is access to leading science research has not been available and that's what the un saw as a real niche. that they could bring together the science journal publishers, get some support from universities, bring their connection to the developing countries and promote access. >>reporter: technology is helping to awake the sleeping giant, as the continent is sometimes called. and burkina faso's president hopes it will transform his country... a tall task for a nation that has the lowest literacy rate in the world according to the united nations development program... with just over 23%. >>compaore: if you take ict, which provides tremendous opportunities, africa is certainly ready to seize these. i believe that africa
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holds a bright future. look at certain factors: the population ofthe african continent is more than 1.5 billion people, consider the market that africa offers, consider its natural resources and other opportunities we can share with the rest of the world. the future is in the hands of africa. >>reporter: for the village of tiibin the transformation has begun...resulting in improved productivity and household income... providing these farmers a better life and better future. >>abirached: still to come on world business... >>could golf help greece out of its financial hole? the country may only have 6
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courses at the moment, but is looking to drive development forward. >>and the new schemes in london aiming to get the city cycling >>on your bike... and the rest in just a moment on world business... >>abirached: london has never been regarded as one of the world's great cycling cities, but today the uk capital appears to be in the grip of a trend towards two-wheeled transport. it's down to a combination of factors including a change in attitudes, public policy and even the male midlife crisis.and the sums of money being spent suggest this burgeoning bicycle boom is only just beginning to gather momentum. >>reporter: in london,
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a rolling revolution is underway...a two wheeled love-in led by coffee trading grease monkeys like this....and sophisticated cycle clothing companies like this... >>mottram: it's part gallery. part shop. part meeting place. it's a meeting place for people who are interested in road racing. so it's quite specific. it's a club but you don't have to be a member. >>reporter: just 100 metres away.... full city...operates at the other end of the spectrum... >>lumley: you've got little tours organized here. you're selling your coffee. so its more than selling bikes. yeah...absolutely. it's a hub. it's a celebration of bike culture. >>reporter: not far away...another new outfit rolls cafe, repairshop and viewing gallery into one...
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>>humpheson: people are perhaps no longer ashamed to be cyclists...its kind of permeating all aspects of london's culture. >>reporter: as for this purveyor of high end cycling paraphernalia...on a weekday afternoon...there's no shortage of clientele... >>needham: footfall thru the door is much greater than it was and then obviously it's just the demographic of the customer as well you know. the age of the customer is changing a little bit as well. >>reporter: because according to mintel the biggest growth in uk cycle sales this year came from 35- to 45-year-old family men treating themselves to premium road bikes... >>needham: now its maybe a slightly older person. might be coming back to a bike. there's an analogy of a mid life crisis to buy a really nice high end racing bike. >>reporter: whoever's behind the handlebars...they're all riding on the back of a surge in cycling's popularity...
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>>mottram: if you look at the growth in cycling numbers its stratospheric. there's now nearly 600000 journeys a day in london in the capital. >>ranger: we know over the last 10 years there's been some real organic growth in cycling. about a117% increase. but over the last couple of years we've seen a real step change and in fact last year we had a 10% increase in cycling overall. >>reporter: by 2026, the mayor of london wants to see over a million bike journeys a day in the city. the cornerstone of his plan is a series of cycle superhighways...two will open this year...the target being 12 by 2015... >>ranger: overall there's ú117m in this financial year that we're spending. over the mayors 4 year term we will probably spend upwards of 200-250m pounds on various programmes. >>reporter: there's no such
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long term thinking at rapha's cycle boutique....because this space is designed to exist for only long enough to catch the summer...the real goal here for the online retailer is brand awareness, rather than short term profit... >>mottram: if you were actually to work out the trading margin on it it wouldn't make sense at all.but if we can cover our running costs and leave a real marks impression on the customers then that's worth doing. >>reporter: rapha's brand building extends to its own high end...conceptual magazine... >>andrews: it's not got race results and race interviews as such. it's very much the insiders view of bike racing. >>reporter: meanwhile londoners have recently embraced a different kind of cycle concept...this august, as part of a ú25m sponsorship from barclays...a new hire scheme involving some 6000 bikes racked up in 400 docking stations across the city has sprung up... >>ranger: we've had almost
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300000 journeys in over 3 weeks. over 60000 people sign up as members and 93% of them have done journeys under half an hour. which once they've paid for their membership...are free. >>reporter: encouragingly, only one of the ú700 bike's has so far been stolen...not a bad result when you consider that over 20000 bikes were pinched in london last year... >>humpheson: there's a lot of bike theft in london. >>reporter: which isn't surprising, given how much some people are shelling out for their wheels... >>needham: ...its not uncommon people will spend well in excess of ú2000 on a bike and a lot more than that if they really really want to >>reporter: getting more people onto bikes and off an under strain public transport system should make sound financial sense for the city... >>ranger: a government report recently showed that in every pound spent in cycling, you can get 3 or 4 pounds in benefits back we think its well worth it. >>reporter: and ultimately, buying into the cycle lifestyle must surely be
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a good thing...whoever happens to be peddling it. >>lumley: yesterday we finished at 9:30 in the evening just because we had so many things going on. >>places like this are brilliant. you go and have a cheap cup of coffee. good conversation and you know lots of nice bikes to look at. >>mottram: it's all different tribes to do with cycling, whether it's commuters, or fixed wheel riders, or bmx or whatever. we're just enjoying it. >>abirached: tourism is vital for the greek economy, with 18 million visitors generating 15 percentof gdp. but the country can expect a 9 percent drop in revenue this year after the economic crisistriggered a series of strikes. traditionally tourists have been attracted by the beautiful islands and rich history. but now greece is taking a swing at moving up the value chain with golf. >>reporter: think greece
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and you think clear skies, blue seas and stunning buildings. but some greek investors want to get tourists to look beyond the traditional. >>criticos: tourism is one of the most if not the most competitive business in the world... all countries are fighting to attract people who have valid transport documents and some money to spend fortheir vacation. >>reporter: as foreigners watch the changing of the guard outside the greek parliament enjoying thesummer sun, inside officials feel the heat as they work to secure the survival of the economy. thecost of visiting greece has spiralled without the country offering anything new, until now.... getting out of the rough times may involve getting some visitors into the rough. >>tsanis: definitely greece needs to realise that you know it has to redefine its tourism product. sun and sea, the good old greek sun and sea, everybody offers sun and sea, anywhere you go in the world... can we redefine
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that? is golf a means of redefining that? well to our belief yes! >>reporter: it makes sense, the world's 60 million golfers represent a large and affluent market. but there are 32,000 courses out there vying for their trade. and greece has... 6... it's clear thecountry needs to raise its game. potential investors are not helped by a bureaucratic and unwieldy system. dolphin capital wants to plough 300 million dollars into golf resort development but have found it far from easy. >>kambourides: for us actually it requires on average 800 signatures for every resort we are's bureaucracy, lack of the right legal framework, the lack of land registry, the unstable tax environment. >>reporter: which is a shame because greece has a great golfing environment; the long warm season means it could capitalise on golfers from northern europe looking to play well into winter, when courses at home are covered
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with snow. >>kambourides: golf is the ideal leisure product to attract tourists throughout the year on a twelve month basis, attract high spenders and repeating clients. >>reporter: providing a crucial year round revenue stream. there are concerns that greece may not be suitable for golf development due to the lack of water, but new irrigation techniques are able to make the most of a limited resource. in fact golf greens may actually use less water than some cropsgrown on land fit for courses. >>doukas: there is not an abundance of water around. there is adequate water but for purposes of golf development desalination with very modern techniques that are now available is the key. >>reporter: to really put a resort on the map though takes a championship, which was the thinking behind the only greek international golf tournament, the aegean airlines proam. this year saw the 5th competition take place in at the costa navarino resort on the peloponnese
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coast. which some see as the heart of the new golf industry in greece. >>vassilakis: they have given the example of excellence on golf resorts. its been created by golfers! i mean all the family of konstantakopoulos, all three men are golfers, especially captain vassilis. >>reporter: costa navarino opened its gates in may 2010. with the usual luxury hotels and villas, plus a greek olive oil concept spa. but more importantly a golf course designed by bernard langer anda second due next year by robert trent jones junior. the final cost will be 1.6 billion dollars andthe resort will have 5 signature courses. nearly doubling the greek total. >>constantakopoulos: all in measure... i think measure is very important. 6 are too little for greece. 100 will maybe be too many.... so there is room for golf i think but of course i said before it has to be viable, you know environmentally wise. you know there have to be in places
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that there is water, where is land and where is no primary location but at the same time they have to be clustered.3-5 golf courses would make you know a destination. >>reporter: this resort also helped pave the way for others. napoleon tsanis investment company is developing a 70 million dollar resort designed by tony cashmore. >>tsanis: since tony came here in 2003 - 2005 when we started, he's gone to china and he's actuallybuild 34 golf courses in china... so that also gives you another perspective on how golf is growingin other countries. now you know if we had those sprouted around greece, there's your regional development, ok, there's keeping people in jobs, ok, there's attracting tourism. >>reporter: and as greece begins its climb out of the current financial hole, holes of a different kind could make a real difference to the recovery, or at the very least go a fairway to help.
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>> abirached: that's it for this week's world business. thanks for watching. we'll see you again at the same time next week.
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