tv Talking Business BBC News November 1, 2022 1:30am-2:01am GMT
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this is bbc news. we will have the headlines and all the main news stories for you at the top of the hour straight after this programme. a very warm welcome to a special edition of talking business weekly with me. let's go take a look at what is on the show. the airline industry is roaring back to life after covid and thinking about how to get us back on board so here we are at the airline passenger experience summit in long beach, california. this is where you can find everything from the next generation of in—flight tvs
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to the seats in the fit. it is where the airlines work out what we want to make our journey is even better. investing in the future, it can be a pricey affair, especially when covid has cost you billions. the big boss of air new zealand will tell me how he is reshaping things after getting through some of the words toughest lockdown restrictions and once you've got all those passengers on board, how do you feed and entertain them? well, i'm going to taste some of the latest in—flight treats and find out what is coming to a screen near you. and before you get on the plane, there's that dreaded airport run. the boss of of the words busiest, los angeles international, tells me how he's keeping tens of millions of people moving as it spends billions on a major refurb.
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wherever you arejoining me from around the world, once again a big hello and a warm welcome to the special edition from long beach california. have you return to the sky since the pandemic? we know a growing number of us have and were finding out that things have changed on board, most airlines which were hit hard by the pandemic losing billions of dollars but many have used covid is a chance to refresh their aircraft and reassess what they offer us whilst we are in the air. all the newest exciting technology and innovations are on show right here at the airline passenger experience association's big annual summit. there's everything from the latest in—flight tv screens and online connectivity to those comfortable seats in the sky and even the food to fuel us to our destination. it really is all about making sure passengers enjoy returning
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to air travel and according to the global trade body, four and half billion passengers flew in prepended 2019 and that is the yardstick many still measuring against as numbers fell 60% during the pandemic. things are recovering. the latest data shows a total global passenger numbers, there are nearly 74% of pre—covid levels in august of this year. and the world's biggest airline by passenger numbers, american airlines said recently... and that's despite a host of challenges such as the worsening economic outlook in many parts of the world, fuel costs that have scored because of the war in ukraine and ongoing problems across the industry in finding just enough staff. and that is crucial to making our journeys work smoothly and returning the airlines to profitability. so they can splash the cash on all the stuff that is here at the show.
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and that return to profit globally, iata expected to happen next year with north america leading the way and asia—pacific lagging behind thanks to ongoing covid restrictions particularly in china. and an uncertain economic outlook is not normally a good sign for airlines but that has to be balanced against future pent—up demand from passengers as much of the world puts covid in the rear view mirror, so what does that mean for air new zealand, an airline who's home country face some of the strongest restrictions on the planet. so i've been catching up with its big boss. a real pleasure having you on my thank you for your time. let me start with this. it's a really tough time in terms of the global economy at the moment, as you know.
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it's got soaring inflation, soaring fuel prices. i'm just wondering how hard does that make it to invest in the future of air new zealand and in particular to invest in the passenger experience. to use the phrase that is actually in pretty well used during this period, crisis does create some opportunity. and i've been saying for some time to my team, you are now dealing with a new abnormal. and get used to it. i would say that, in terms of customer expectations, what i tend to see is they actually have not dropped or maintained. they've actually risen and a lot of customers when i talke to them as they have not been in much of the last two and a bit years, surely these things have been fixed during this period. our level of expectations is here not here. most airlines, let's be frank about that,
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you had to let go 4,500 staff? a third of our workforce. then we saw this booming demand and i've said before to other ceos and airports, they can cope with the demand because you struggle to find the stuff, don't you? well, you have to work a bit harder but i go back to what i think is the most critical thing. that a leader in any business does. notjust airlines but any business. and that is creating a culture because i think, if you do create the right culture, you create the right engagement with your staff and you do get people wanting to come back. you know, when we let so many of our people go, about 75—80% are back with us. you mentioned expectations and how they changed because if you look at the world airline ratings, air new zealand fell ten places to number 30 on the 2022 ranking and i'm just wondering if that smarts, that hurts you because you are, from your background, you are known as so customer focused, centric. does it sting a little bit? yes, for sure. you obviously want things to go perfectly but you also have to accept that during this period, new zealand adopted
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a pretty significant approach to dealing with covid so there's a card you are dealt. what i'm confident is that we got the right culture, we building the right foundation and we've got the right momentum back in our business and the service ethic which is so critical to our business is alive and well. let's talk about one of your newest routes and i'm going to quote the air new zealand newspaper here. can the big apple help new zealand find it swagger? for the uninitiated, air new zealand has launched this mammoth ultralong haul, the fourth longest flight in the world, 17 hours, auckland to new york nonstop. what sort of demand you have for that?
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you'll make festival, the demand is strong. i can better that in a minute. it was the most important thing. right now, all of us ambition. there is no point sitting here and saying hey, could be, might be, you know, let's do the classic take the shark rather than don't take it and then regret later so i commend us as an airline for taking on a challenge like new york. most of us in the aviation industry no going from south to north actually is a lot easier than the other way. you are into a headwind unfortunately, in every single flight, and be done about 15 of them so far, with actually made it but we've had a couple that are been a bit close because when those headwinds, you stand the rest ofjust not been able to get enough you learn to make it. well, we knew we had to do that. and obviously, the more you fly, the more data you get that allows you to get it right so you're right. down to about 180 passengers on that. completely booked out in both our business and premium economy cabins so the rout works. it is ambitious, it is exactly the right thing
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for new zealand to do. it opens us up to the east coast of the united states. what a market. a market not only in terms of passengers but in terms of cargo. let's talk about the passenger experience on that ultralong flight. how do you do it? how do you enhance? you introduce the sky couch but in a couple of years you have now got the sky nest. i'm talking about in the back of economy, right? it is a long light and you're right foot, back in 2013, 14, the peter sky captain and it means you can get three seats down there. the bottoms, and it creates a and i can tell you, the moment, those are booked out on every single flight that i go on. families love them. but were taken as a step further and now are going to put in place an opportunity
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to have three on each side, vertically stacked. and you might buy them for a four hour period so you've got your economy seat and then you say, you know what, eight hours into that 16 or 17 hour flight i wouldn't mind having a decent sleep for four hours. so whether you're sitting in economy or premium economy, whether you are sitting business class, you need the ability to sleep. and that is the fundamental problem that we want to sell for customers and that is a point of differentiation. offering that sky nest, three seats where you can buy them all and lay down, does that erode? is there a worry that a voucher premium economy or even business? what you have done is you've added value to the entire offer because you know, if you're going to get one of our planes in a couple of years�* time, that has been, you know, either retrofitted or a new one, you're going to have an opportunity, right at the very front of the plane, to have slightly
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more room than what you've got even in business class so there is a business luxe product matters, why we've worked very carefully in designing the layout, i've got a little bit of extra space plus a door on that particular cabin. then you've got that and then you've got a normal economy. they may have actually been able to squeeze in slightly extra legroom for a few more rows, we're going to call that a stretch product. you've got sky couch then we've got sky nest. so what we are doing is, in a reasonably tight cylindrical tube, we're giving real customer segmentation and i think that is to be a point of differentiation. just want to briefly ask about the soaring fuel costs because i've heard you not long ago say that one of your typical trips from auckland to los angeles, roughly a 13 hour flight,
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it used to cost you 116,000 bucks to fill the tanks and that went up to $96,000, that is more than double. those levels are not sustainable and i'm wondering where do you get a point where you're going to have to pass that on or onto the passenger? we already are. interesting that not just on long harboured in our domestic business as well. the good thing is, over a period of time it is quite cyclical, sure, prices will move, but at this stage they do need to reflect that. those are the figures that it costs us to fill one of those planes. it represents the third of the price of the ticket on a long haulflight. when i'm on board up there i get a little package and i tell you what, in—flight catering is big business. worldwide some 7 million meals a day are served on planes in this industry is worth some $15 billion but it is not all a fancy fare for many of us because with airlines under pressure to cut costs, many are serving snacks.
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instead of three course meals of yesteryear. so i came to visit a us company which is considered a pioneer and i've got the founder and the presidentjoining me. good to see you. as a pioneer, you were the pioneer 50 years ago because you came up with this, snack in a box. what was the concept? american airlines came to us and said we have a challenge, we have 100 passengers booked on an aeroplane, 90 show up, 20 get thrown away because they're perishable. you come up with the recyclable nonperishable products and that was the beginning. and they can be transferred to the next fight? sealed, for safety, health reasons and so forth. 100% recycled. i can only imagine the past two years, covid, but this is in one package must have been a boon for your business?
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what happened was between between 2019 and 2021, during covid, the number of passengers cut in half and the number of boxes we sold with the same or more because they were using them in place of fresh meals on the aeroplane even with complimentary service besides on—board service. i mentioned cutting costs, this sort of stuff has got to be much cheaperfor an airline than supplying absolutely. plus the fact is it is 100% recyclable. the consumer demand for different types of food today is quite phenomenal. you've got vegans, vegetarians, gluten—free, with other dietary requirements. how do you satisfy all that up there at 35,000 feet when space is limited? we look for items that could, crossover items that would be good for both of vegan and gluten—free and other types of dietary requirements and look for those types of items. items like this.
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nuts, fresh food, dried foods. it ticks all the boxes if you offer regular consumers and those with special meals. this for example is a gluten—free and vegan box. who chooses what goes in the box? you or the airline? it is a collaboration between our design team and the airline and you give them a tonne of choices. these are ten choices of crackers, cheese etc, pick what you want what you feel most comfortable with, with our guidance. we have to ask you? do passengers really want this or do they prefer tabled meal? this is more geared to coach. which is economy, for our international viewers. for all domestic flights there is no hot meal. let me end on this. is all of this stuff, is it here to stay? the market has been here 50 years and i hope it is another 50 years. me too, harvey.
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how do you occupy yourself when you're in the air because in this world of nonstop communication and constantly evolving technologies, passengers are becoming more demanding and what they want from in—flight entertainment but it is also big business even at 35,000 feet, there is huge competition for our attention and personal data and panasonic is the biggest in that business, providing seat back tvs in 70% of the words commercial aircraft and i happened to have the big boss of panasonic avionics right here. let's start with something simple. what are the exciting few things that passengers can expect when they're sitting in their seat over the next few years. over the next few years, you are going to be able to experience 4k content in the seat back with 0led the technologies that can provide an experience that are similar to what they have in their living rooms today. it is all about the quality, the clarity. and this is your... this is the latest.
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this is called a strova and has a market leading screen clarity, quality and experience for customers. it creates engagement opportunity for them on on—board flights. i want to ask about the importance of connectivity. because everybody loves being online when they're up there and i just wonder, this next gen of connectivity wi—fi, what is that going to allow us to do? the way to think about it is if you look around today's living rooms, for people enjoying content, they are often times multitasking. they're watching a show, along with being on their phone and looking on the web and things like that. we want to create that same opportunity for customers who are flying at 35,000 feet. that is interesting because if you've got more and more people, as you've seen today, with their own devices and a lot have their own content loaded up, doesn't that erode? what we are seeing today
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is airlines move to offer more seat back. traditionally, seat back had been in wide—body aircraft only flying long distances and now what we're seeing, many of the airlines want to create an incredible digital experience for customers. they are installing these systems on all aircraft. this is got to be expensive an airline to roll that out across, you know, their vast fleets. can i ask you, what is this going to set me back? it is a few million dollars per plane. it is a significant investment that the airlines make however, they provide service for ten or 15 years and what is really neat about this later solution is its modular architecture so the airlines, when they invest in a system like this, they're able to upgrade the system over time. that had never been the case in the past. and really the benefit is for sustainability.
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for the unintiated, they are lighter so there's less weight on the plane, better fuel efficiency. less carbon dioxide emitted and this is the biggest step change with scene in the industry, 30% weight reduction in the new system. isn'tjust a chance for the airlines, there is more connectivity, to make more money from the passengers and get more of our data? perhaps, but the way that we think about these seat backs is it as a complement to the way that the airlines are interacting with their passengers today so they got their mobile device, they have got the web, they might book a flight on the web, might use a mobile device to check in and they view the seat back as the opportunity to have a consistent experience across the entire flight. customers are beginning to expect more and more, particularly after the pandemic. on that note, the future looks exciting. good luck with these and i will check in with you soon. before you can enjoy any of that in—flight food and entertainment,
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there is just one snag. it is the dreaded challenge of getting through the airport. you have got to get there, get through bag check and then through security. and for many people it can be a rather unpleasant experience so what are the world's biggest airports, the famous lax, los angeles international, $15 billion spent an hour by the lengthy upgrade to its facility so since i'm here i caught up with its big boss. a real pleasure having you on my show was that thanks for your time as i know you are a busy man. let's start with this huge unprecedented bounceback in demand, so much so that many airlines around the world so much so that many airlines around the world were caught off—guard and couldn't cope with the demand and am wondering how did lax perform and get to this period? we had very few cancellations. pretty much average, as we did before the pandemic.
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the airlines were very quick here to be able to right size their operations, to be able to handle the excessive demand but we were very fortunate. we did not have too many cancellations are too many delays here during even the peak times. one area during the pandemic that came on in leaps and bounds was the use of technology and new technology. what sort of technology are you using today and going forward to better the experience, airport experience for passengers? we are in the process of developing what we call a digital marketplace and that is giving the passenger the ability to plan and control theirjourney from their mobile device even before they get to the airport. when they get to the gate the gate opens up automatically because they recognise the car. they're guided to a space, and the same when they leave. we enhance our food and beverage offering online so that people can order food and beverage before they get to the airport at the airport and just pick it up or even have it delivered to their gate. we are going to continue to offer sorts of services. we piloted a programme you can
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actually reserve a spot at a tsa checkpoint so you reserve a 15—minute window so you know that if you come within that 50 minute you will be able to get through tsa right away. that means the security checks, basically? exactly. once they get here we are pushing biometrics, we are at the forefront of biometrics of our partners so they can go through and have a contact this journey and get to the other side really quickly. new technology aside, let's talk about this amazing stuff behind you. $15 billion construction. it has been a long time in the making so you know what i'm going to ask you, a lot of people want to know what state are you at and what is the end goal here? we have a lot of different programmes going on right now here. we have a $15 billion overall capital improvement programme that we are currently implementing. the biggest part of that is automated people mover. just behind us. then the station
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a little bit further. that is probably somewhere around between 60 or 70% completed and we are looking at having that, having cars up and running on the track, testing, by the first half of next year and then we are going to be having the full solution in the first half of 202a. at the same time, our consolidated railcar facility is pretty much finished. we are also working on all of our terminals and we have completed the first phase of terminal three, brand—new terminalfor delta. it is really beautiful. and we are working on terminal four with american as well. doing some work on six. we've already completed the renovations in the other terminals, so we are doing all kinds of projects and i would say within the next two years you will see a transformed lax. most of these projects will be in place. here's your problem because along with construction comes a lot of disruption, so much so that lax, your airport,
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consistently gets voted as one of the worst airports for passenger experience and i'm wondering, does that hurt because you have to grow, you have to develop which means construction? you are doing it but you are getting flak at the same time does that keep you awake at night? absolutely. that is one of the biggest infrastructure work for your operating which was the third largest airport in the world is of course it is a challenge and of course it is going to be not as great of a customer experience while we are doing this construction but i think people understand that you have to go through this difficult time in order to get where you want to go, but we are offering a good service even while we are doing all of this work. an exciting time for los angeles with a lot coming up. the 2026 fifa world cup, 2028 you've got the olympic games, that is a lot going on and i'm just wondering, using
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an expression from a classic movie, are you're going to need a bigger boat? we are building a bigger boat as they say. we started to do the new terminals so we have concord zero and were going to be adding a new terminal nine. and so we are going to have a little bit more room here for the additional growth that is expected to come here to this airport. let me end on this because while i've got you, the boss of certainly one of the us in one of the world's largest airports, i want to hear from you in your own words, what is the perfect picture of a great airport passenger experience? our objective, to achieve, is where the customer can plan theirjourney out before they get to the airport. they can get a seamless experience both from the transportation through the tsa security and check in process and then to whatever they want to do whether it be food and dining or experiences
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that we're going to be adding until they get on their plane so it is a complete journey that is in their control, and one that they can plan before they even get to the airport. on that note, a pleasure. good luck with everything and i'll check in with you soon. 0k, great, i appreciate it. that is it for this week's special edition from california. you can keep up with all the latest on the bbc news website, or on the smartphone app or follow me on twitter. tweet me and i will thanks for watching. i will see you soon.
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many places will brighten up with a few morning showers before the afternoon looks dry and bright. southern scotland northern ireland in northern england are driest of all. stan weddin: england are driest of all. stan wedding chapel _ england are driest of all. stan wedding chapel and _ england are driest of all. stan wedding chapel and through the afternoon with picking up here later. list three but with frequent showers in the afternoon. well the midlands in southern england some foundry and heavy. temperatures down and heavy. temperatures down and what we saw on monday but still have degree or two above normal. tuesday evening and overnight showers widely initially easing back for a time with clear skies and slightly lighter wind. a cool night with temperatures in single figures but there is somewhat owned windy weather gathering behind me and as we go through wednesday we could see widespread gales across northern and western areas. wind gust of around 50—60 miles and our and wind gust of around 50—60 miles and ourand all of wind gust of around 50—60 miles and our and all of us will seize rain at some point throughout the day. bye for now.
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welcome to bbc news — i'm lucy grey. our top stories: ukrainian rockets attack russian positions as moscow targets more of the country's infrastructure. we have a special report from the frontline. look at it, desolation. this is what months of attritional warfare does to a town. supporters of jair bolsonaro show their anger — after he was defeated in brazil's presidential election. police in india arrest nine people in connection with the collapse of a bridge in gujarat in which at least a 140 people died. and an important date in the us political calendar approaches. we'll assess the current political mood.
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