May 20th, 2009
07:42 PM GMT
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Today Delta airlines along with Air France/KLM announced their global joint venture. Sharing revenues and costs – effectively making it one airline in much of the world.

The press release trumpted the benefits to consumers – I am not sure I immediately agree.

The airlines are already members of SKyteam which boasts seamless travel. So why do they need to get into bed together and operate as one airline ?

We know this is really all about maximizing revenue and minimizing costs. On some key routes from the US to Amsterdam and Paris there will be just about zero network wide competition. Can this really be good for consumers ?

I am realist and know that from the airlines point of view this makes perfect sense

We are rapidly moving to the era where individual airlines won’t matter – in future we will fly Star, Oneworld or SKyteam. This is what this deal is really all about. The sooner regulators and airlines get honest about this and level the playing field the better for all- then true competition can begin.

Here are some of your views

 

darrenmak@richardquest Star Alliance has the most airlines, most destinations, and good First Class Award Availability. Flying them thru LHR 2day!

Lauratheexpat@richardquest I've given up on the whole thing – I never can seem to use my frequent flyer miles for anything other than duty-free!

kzamri@richardquest what's important to the airlines is the bottomline. In terms of fares I don't think there will be drastic changes

FabreuJ@richardquest Specific anti-trust laws should be enacted and enforced to ensure fair competition between airlines.

 hgmartinezrichardquest Alliances can work well for the fflyer, for me I fly American(1wrld) for business and redeem on Cathay or Qantas for leisure.@

 LauraMac09richardquest Now, the consumer is the company's competitor!@

 Mighty_Mole@richardquest You assume competition is fixed. There will always be new competition. Look at JetBLue and Virgin for your fresh faces.

 RigilKentaurusrichardquest the old European carriers are terrible: KLM/Air France/ Lufthansa@

 QueenLunte23@richardquest like those hudled together antarctict penguins they are trying to survive 2getha...

 JoburgViennarichardquest And isn't the concentration of capital what Marx predicted in the late 19th century. :-)@

 hgmartinezrichardquest Service Carrier Australasia area. Star=Mass market due to having so many members. Skyteam= Somewhere between!@

 jamesfarrarRT @richardquest: NO. Alliances happen because M&A cannot. mrkt consolidation. Consumers are placated with a uniform mileage programme

 01theone@richardquest Good question -I think it will lead to a 2 class supply of services -very cheap e.g. JetBlue VS. high class like Etihad, etc.

WoodsonHawk @richardquest How can you beat a monopoly? We passengers will not win.

Malamoucha@richardquest it's a no win situation. they have to bed each other to survive. and we as the passenger pay in the end



May 20th, 2009
02:59 PM GMT
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Just read an excellent economic report from HSBC about what will happen after the recovery arrives. Fundamental point is that some governments (like the US and UK) have borrowed so much to get us out of the mess that we will be paying it back for a very long time.

Numerous scenarios are put forward – all involve times and period of either higher taxes, lower spending or both. It is an admission of what we all know in our hearts of hearts – that the payback from this crises will be long and painful.

We are covering this tonight on QMB and I am going to make this my Twitter question tonight.

It’s sad to say but if we had saved more in the good years we wouldn’t be in such a horrible state once the recession is over.



May 19th, 2009
08:22 AM GMT
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HONG KONG, China — The Chinese banner above a modest Hong Kong store reads, "Time Coupon Place."

The 'money' that buyers use at the 'Time Coupon Place' in Hong Kong.
The 'money' that buyers use at the 'Time Coupon Place' in Hong Kong.

It makes you wonder what this store sells. Does it sell clocks? Does it sell watches? No, not exactly. It literally buys and sells time through the old-fashioned art of bartering.

But there is more. I soon learn that the store is really a platform for creative buying and selling.

I walk into the store and am surrounded by a hodgepodge of items. Shelves are jammed with toys and used books. There are crates of vegetables for sale - eggplants, spinach, string beans. There is a table piled high with second-hand clothes, like denim jeans and cotton shirts.

Talk about a mixed bag. This is not your ordinary second-hand store. This is a time coupon store. It is a place that uses a combination of cash and time coupons as its currency. A time coupon looks like play money from the Monopoly board game. In this case, time coupons come in the value of minutes - from 1, 5, 10, 30 and 60 minutes.

Here is how it works:  If I agree to tutor someone in English for 30 minutes, I can earn a 30-minute time coupon. Then, for example, I can come to the store and buy a wooden toy boat with the 30-minute time coupon. The actual price tag has an hourglass symbol with the number "30" next to it.

This boat's price tag has an hourglass symbol with '30,' meaning you need a 30-minute coupon to buy it.
This boat's price tag has an hourglass symbol with '30,' meaning you need a 30-minute coupon to buy it.

Only a few time coupon stores exist in Hong Kong. Community organizers and NGOs came up with the idea in a bid to help local families save money. The first time coupon store launched here in 2001 with a few members. (It is easy to become a member. You pay a small membership fee and sit through an orientation class to learn how time coupons work. Anyone can join.)

But in the past six months, 120 new members have joined, pushing up the total membership to 1,200. It is a significant spike, which community organizers attribute to the current global recession. You can also earn time coupons by donating used items that other members might want. This explains the random assortment of stuff around the store.

On the day I visited, I noticed the most popular items were organic vegetables. A farmer had rolled in a cart of fresh vegetables straight from her organic farm in the New Territories, which is across the harbor from Hong Kong island. A few customers hovered over the different crates - pulling, picking and squeezing the greens. Each vegetable is priced with a combination of time coupons and cash. For example, a bunch of eggplants and spinach might cost a 11-minute time coupon and 7 Hong Kong dollars (about US$1). Not a bad deal!

The old-fashioned idea of bartering skills, services and personal items seems to be the new practical "trend." In Argentina, barter clubs are gaining popularity. The barter clubs started there in 2002 after Argentina's economy took a dive. Then they sort of faded away and now they are enjoying another surge in this recession.

Back at the Hong Kong time coupon store, a woman quietly works at a sewing machine in the back corner. She is creating fabric handbags that are a nice patchwork of different colors. The handbags are sold at the front of the store. The community organizer says the handbags are quite popular with the expatriates who wander into the store. The seamstress splits the proceeds with the time coupon store in yet another creative way of doing business.

As I exit the store, I appreciate the idea of a different kind of currency. Time has value. Time is money. But here is the added bonus: community involvement.



May 18th, 2009
03:53 PM GMT
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May 14th, 2009
12:31 PM GMT
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TOKYO, Japan - I’d been in Tokyo for just a couple of days when we went to visit Akihabara, Tokyo’s electronics Mecca. Coming from my most recent post in Havana, it was as it I’d landed on the moon.

Everywhere you look are neon billboards hawking the latest playstation game as if it were a Hollywood film. Giant flatscreen TVs, camcorders and digital cameras jockey for space with the latest in cellphone/TV/PDA/portable audio players.

A bit of a jolt after the anti-capitalist island, where most billboards are hand-painted government propaganda.

We were in Akihabara to guage how shoppers felt about Sony’s offerings for a story to release with Sony’s financial results for 2008.  And honestly, most people we talked to were upbeat about Sony’s products. One young Chinese woman in town to shop told us “Chinese people love Sony!”

But it was hard not to spot signs of Sony’s problems. On a street filled with shoppers listening to their iPods, the Sony Walkman seemed an out-of-step afterthought. And one young man told us he loved Sony’s designs, but added that all the company’s products seemed overpriced.

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May 14th, 2009
09:32 AM GMT
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So how do you survive a firewalk?
So how do you survive a firewalk?

HONG KONG, China - My producer Pamela Boykoff somehow convinced me that walking on fire for the cameras was a good idea.

 Companies have been firing staff and now are trying to fire up those who remain. What better way to illustrate the corporate world's troubles than to show employees - and yours truly - walking over burning coals?

 So what is the point of this exercise, you ask?

Data storage firm EMC, the company that hosted the firewalk in Hong Kong for its employees, said the aim was to build teamwork. Companies pull staffers out of their comfort zone so, ultimately they bond and think outside of the box.

The idea, Steven Leonard, Asia president for EMC, told me, is that people are going through something together. The act, he said, is a "catharsis." I guess that is more powerful than taking the team out for a group dinner.

 I have to say the EMC employees seemed to be enjoying themselves - and bonding - as they overcame what many would perceive as a potentially traumatic experience. I, too, found the walk rewarding - probably because I managed to do it without engulfing myself in flames.

 So how do you survive a firewalk? I'm no expert, but here are a couple of tips:

 1. Don't panic.

 The real danger is playing mind tricks on yourself. Firewalk organizer Ronnie Ng says to imagine you are walking on a dewy field of grass. The secret is that a layer of embers protect your feet.

 3. Proceed at a normal pace - with confidence.

 Go too fast and bits of scalding coal get stuck between your toes. Walk too slowly - more than 3 seconds per step - and prepare for some blistering. Keep your eyes looking ahead. When you get it right, it should feel as though you are walking calmly along beach sands warmed by the sun.

 3. A back-up plan ... doesn't hurt.

 Chances are you won't need medical help, but Ng had buckets of ice water and olive oil on hand to soothe burning feet. The ice water, he said, stops pain. The oil was to help prevent blisters. Hong Kong has some excellent hospitals. Luckily, no one needed to go.

Don't panic. Proceed calmly. Have a back-up plan. Sounds like the same advice given to investors these days. Hopefully, these lessons can help us all avoid getting burned in business, too.

Watch my report



May 8th, 2009
10:52 AM GMT
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May 6th, 2009
10:08 AM GMT
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May 4th, 2009
05:47 PM GMT
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LONDON, England – Before we get excited about the auto industry transforming under the Fiat flag, remember that the Italian automaker hasn't bought anything yet.

Its "alliance" with Chrysler is now before a bankruptcy judge and involves sharing technology. Fiat is not buying its proposed 20 per cent stake in Chrysler and will still have to deal with the unions, which will have the biggest stake in the U.S. automaker.

Still, one day it may mean small fuel efficient Fiat cars being sold as a re-badged Chrysler or Dodge car. Maybe.

One day, Jeeps and Dodge trucks may be sold through the Fiat supply chain to countries where it has strong links. Maybe.

Before that, Chrysler has to survive its bankruptcy protection process. Now Fiat's CEO Sergio Marchionne wants to negotiate with General Motors to potentially buy a majority stake in GM Europe - read Germany's Opel. But Fiat is billions of dollars in debt and Opel will need a cash infusion ($6 to $9 billion) probably from the German government as a short term loan. That has yet to happen.

Then there are the unions, the factories, political interference... It's all a massive task for Marchionne. On Monday he met with the German government. It's far from clear Berlin will back a deal with Fiat while there are other suitors out there. In fact, GM says it's in talks with a number of parties and it's clear GM wants to keep a foot in Europe for when things turn around.

So while Fiat may be the only automaker willing to take all this on, it is all talk for now.

Fiat has been transformed by Marchionne, that's for sure. Whether he can take all this on is certainly not a given. Some analysts believe his Plan B is to take on Chrysler or GM Europe. Until one or both of them is sewn up, a combination of the two leads to speculation that Fiat will transform the auto landscape.



May 3rd, 2009
09:37 PM GMT
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The pain is everywhere.

This report is being written from the cafeteria at Malaga Airport on Sunday night. I have spent the past few days on the Costa Del Sol having a bit of R&R. It has also given me a chance to see how the tourist parts of southern Spain are weathering the storm. The results are not good.

Admittedly the season is not in full swing, but already I can see where the recession has taken its toll. Many restaurants shut their doors last season and from what I can tell, won’t be opening them again this year. The apartment buildings along the coastline are festooned with “To Rent” signs from balconies.

British tourists are a mainstay of this part of Spain -– but this year, even with the offers and bargains, the Brits will find it expensive down here because of devaluation of the pound. Sterling has dropped more than 15 per cent against the Euro since last summer. Suddenly cheapo-Spain doesn’t look so cheap. (The pound/euro rate was even worse, around parity, but that was in January, in the depths of winter, and not too many Brits were heading to the Med then!) The effect of this is a simple meal out for two is expensive (Mum and I had one course each, soft drinks, no wine and the bill came to €30.)

So along the sea front the cafes are offering bargain breakfasts to British tourists who make up the single largest number of inbound visitors. Around €5 will buy you a full English Breakfast. “Toasties” (toasted sandwiches) can be had for around €3.

The problem resorts like Fuengirola, Mijas, Benalmadena and even Torremolinos face (and indeed for all the major resorts where the Euro is the currency ) is that they are being hit by this double whammy: Their customers are suffering from recession and their finding the money isn’t going as far.

There is a bit of hope -– all surveys show that people are very reluctant to give up their annual holiday no matter how bad the economy. Brits, Germans, Scandinavians will still travel to the European hot spots. The difference this time is they may book all-inclusive package holiday deals, to keep control of their costs, and they will cut corners wherever they can.

For Spain, and the other southern resorts , the economic clouds are still very firmly in the sky, whatever the temperature or season.

Now - tell me - Where are YOU going on vacation this year and have you changed your plans because of recession or economic woes ?

Filed under: BusinessQuest Means Business


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