Editor’s Insight
18 October 2007

No one expected a test ride when the first Airbus A380 was handed over  to Singapore Airlines at Toulouse this week.

But the hundreds of VIPs and media on hand saw the future of air travel had gone up several notches in delivering more passenger space and comfort.

The business case is based on greater fuel efficiency and therefore much lower cost of operation. But how many would you want to fit into a double-decker jumbo?

Singapore is not a ‘bums on seats’ operation so Airbus is no doubt relieved the emphasis in the first four that go into commercial service is all about luxury.

For the first time, private cabins have appeared in commercial aircraft, some with double beds. Business travellers get extra-wide seats and widescreen TVs.

Even economy passengers have new perks, such as more leg room and power sockets for laptop computers.

Kiwis will have plenty of opportunity to be early adopters of what will be aviation’s new flag bearer, at least in size. The first A380 will be dedicated to the Singapore-Sydney run before the routes are expanded to London and Tokyo from Changi’s new third terminal.

Hypergrowth creates more Asian wealth

Flying through to Europe via Asia is a reminder how mature and developed economies can still grow at breakneck rates, rather than the sclerotic rates that affect most welfare-driven societies.

On my brief stopover, I noted Singapore’s Ministry of Trade and Industry announced GDP growth was a staggering 9.4 percent in the September quarter, driven by the buoyant construction and manufacturing sectors.

The average for the past three quarters was 8.2 percent, comfortably ahead of official forecasts of 7-8 per cent. Is anyone worried?

Not that you would notice, except that Singapore’s Monetary Authority gave a surprise backing to further appreciation of the Singapore dollar as an anti-inflationary measure.

The citizens of Singapore are in for even more wealth, if the trends continue. At compounded rates, Singapore incomes will double in a decade.

Meanwhile, up in Hong Kong, chief executive Donald Tsang confirmed his policies outlined in an interview with the NBR during his post-Apec visit.

His annual policy address outlined tax cuts of one percentage points for personal and corporates rates to 15 and 16.5 percent respectively, from the start of the 2008 fiscal year.

He also spelt out the details of a huge infrastructure programme that would create 10 mega projects over the next five years, adding an extra $HK100 billion in economic benefits and creating 250,000 jobs.

These include the long-planned bridge to casino capital Macau and a rapid rail link to Shenzhen and Guangzhou on the mainland. The total cost of the projects, which also feature a cultural centre, will be $HK250 billion.

Why the rich like London

The world’s rich are coming to live in Europe in bigger numbers than ever. But it soon could be going the other way.

Like many other countries, New Zealand prefers its rich to be out of sight, while they for understandable reasons are sometimes forced to live as “exiles” from the predations of tax authorities.

Their favoured base is London, where the wealthy can live virtually tax free.

But that could be about to change. The UK Tories have proposed changes that will take away the privileged tax status of wealthy non-residents, such as several members of the New Zealand Rich List.

According to Merrill Lynch Cap Gemini, who compile the Global Wealth Report, London is home to 17 percent of Europe’s wealthiest individuals. That’s nearly 500,000.

The top two people on the UK Rich List are both non-nationals – Indian steel tycoon Lakshimi Mittal and Russian oligarch Roman Ambramovich.

(In fact, only three in the top 10 are British born.)

The UK only taxes foreigners on the money they bring into the country. This contrasts with most other countries, excluding tax havens, where revenue authorities seek to tax all income.

This wealth-friendly tax regime has helped London become the world’s undisputable financial capital, taking that title from New York, according to Thomson.

And with wealth comes high prices, as some All Blacks found to their cost at the Heathrow Hilton last week.

Their $32,000 bar tab is nothing compared with champagne at £30,000 pounds a bottle at some flash joints and Zama restaurant’s $US2000 tasting menu.

TV means business

Efforts over the past 10 years to put serious coverage of business news on TV have come to nothing. If anything, it has gone backward, even though two commercial channels are now competing with business news in their breakfast programmes.

The NBR was involved in long-forgotten Horizon TV’s first peaktime Sunday programme, which later became TV One’s breakfast business show. This has now moved to 6am and is little changed from its format of brief commentary and soft interviews.

Extended items or in-depth panel discussions, which are the staple of business coverage overseas, are non-existent, even on the politics-meets-media Agenda, which instead has opted for putting in more arts and sport.

This may make sense to the mavens at public broadcasting and their Beehive masters, but to a serious-minded business audience.

In any case, overseas business TV coverage is suddenly on the rise, with Sky restoring the CNBC channel just ahead of Rupert Murdoch’s Fox Business launch last Monday.

Incidentally, CNBC Asia (Sky NZ  95)  is featuring New Zealand over the next couple of weeks, Squawk Box presenter Martin Soong is touring the country and he is putting together a 30-minute special for screening over the October 27-28 weekend.

Sky, which Mr Murdoch controls, has also surprised by adding Triangle’s excellent Stratos channel, which is rich in overseas news content (Deutsche Welle, Al Jazeera, Bloomberg). So it would be a surprise not to see Fox Business turning up anytime soon (probably early 2008).

Mr Murdoch’s purchase of the Wall Street Journal won’t change arrangements for its journalists to appear on CNBC for a while yet. But with CNBC founder Roger Ailes also masterminding the Fox launch, the results should be worth the wait.

Dateline Toulouse
15 October 2007

This southwestern city is France’s fourth largest metropolitan centre but it is surprisingly compact and provincial in the best sense of the term.

It is much like a larger version of Christchurch with the cosmopolitan feel of Auckland and more than a dash of Dunedin’s scarfie culture.

It is also the heartland of French rugby and therefore a great place to see the clash against England played out on a huge screen overlooking a large Renaissance-styled town square packed with thousands of fans.

Its 12,000sq m area can cater for crowds of up to 20,000.

Their support for the Bleus was strictly one-eyed Cantabrian. Jonny Wilkinson’s kicks were heartily booed and the biggest cheers were reserved for Chabal, though he lacked Lomu’s ability to cut through his tacklers on his way to a possible match-winning try.

When it was finished, just before 11pm, the Toulousianes shrugged off the loss before heading home.

But in a late autumn balmy night, the bars soon filled up again around the Capitole square, which resumed its function as the city’s historical focus point and liveliest nightspot zone.

Toulouse first rose to importance during the Roman empire and again in the Middle Ages when it was a centre of resurgent Catholicism. It is the resting place of St Thomas of Aquinas, the most notable medieval theologian.

The proselytising Dominican order and the later Jacobin tradition started here. The well-preserved city centre has an array of Romanesque and southern Gothic churches that reflect a rich history of religion.

The heretical Albigensians at the start of the 13th century were based in Toulouse. The crusade against them ended with the region’s annexation into the kingdom of France.

The Domincans left another legacy – a university founded in 1230 – and Toulouse remains France’s leading centre of learning outside Paris.

The city had a commercial flowering in the late 15th century as merchants built fortunes based on the woad plant, which produced blue dye. This continued until cheaper sources of indigo were found during Europe’s imperial expansion.

The merchants’ elegant 16th century Renaissance town houses, which the French call hotels particuliers, are among Europe’s best.

The collapse of the woad industry left Toulouse as a provincial backwater until World Wat I when its relative isolation made it a base for the armaments industry. This led to its modern importance as the centre of Europe’s aviation and space industries.

The high technology and academic tradition have combined to create France’s largest concentration of aviation, avionics and engineering research institutes.

The business end of my visitis to witness a milestone in the history of commercial aviation – the handover of the first Airbus A380 super-jumbo to Singapore Airlines.

It will have its first commercial flight from Singapore to Sydney in 10 days’ time on October 25.

Its 471 passengers have  raised $US1.3 million for charity in a booking auction on eBay. They include several dozen New Zealanders. 

The delivery has been a long time coming _ two years late, in fact – and marks an end to the aircraft’s already tumultuous history, from its origins in the 1990s as the next generation after the venerable Boeing 747 jumbo.

The A380 is finally a commercial reality and its $US20 billion investment is destined to change the nature and economics of long-haul air travel for decades to come.