Tag: Business

UNITED AIRLINES urges travellers to “Fly the Friendly Skies”. The company makes no promises about its customer service before take-off. When, on April 9th, a traveller in Chicago refused to give up his seat on an overcrowded flight to Louisville, Kentucky, police yanked him into the aisle and dragged him by his hands along the floor, bleeding after he cut his head on an armrest. Horrified fellow passengers took videos on their phones and posted them to social media.

The company’s initial response was possibly the worst bit of crisis-PR in history, noted one media commentator. As videos of the bloodied man quickly went viral, Oscar Munoz, the carrier’s boss, woodenly apologised for having to “re-accommodate” customers. In an internal letter to staff, Mr Munoz said crew had “no choice” in their action and blamed the flyer for not co-operating.

Overbooking, which is common at many carriers, was not the problem. Rather, it was late-arriving, off-duty airline employees who needed seats at the last moment. The usual way of persuading paying passengers not to fly—offering lots of cash—did not work. Such bargains are best struck before boarding the plane….Continue reading

UNITED AIRLINES urges travellers to “Fly the Friendly Skies”. The company makes no promises about its customer service before take-off. When, on April 9th, a traveller in Chicago refused to give up his seat on an overcrowded flight to Louisville, Kentucky, police yanked him into the aisle and dragged him by his hands along the floor, bleeding after he cut his head on an armrest. Horrified fellow passengers took videos on their phones and posted them to social media.

The company’s initial response was possibly the worst bit of crisis-PR in history, noted one media commentator. As videos of the bloodied man quickly went viral, Oscar Munoz, the carrier’s boss, woodenly apologised for having to “re-accommodate” customers. In an internal letter to staff, Mr Munoz said crew had “no choice” in their action and blamed the flyer for not co-operating.

Overbooking, which is common at many carriers, was not the problem. Rather, it was late-arriving, off-duty airline employees who needed seats at the last moment. The usual way of persuading paying passengers not to fly—offering lots of cash—did not work. Such bargains are best struck before boarding the…Continue reading

THERE is a hawk in Central Park that sometimes dismembers its prey on the balcony outside Jeff Bewkes’s office. Guts are splattered around in the kind of Darwinian spectacle that any self-respecting media baron should appreciate as he plots plans for future world domination. Mr Bewkes, however, only manages a laconic shrug when he mentions the feathered predator.

The boss of Time Warner is an anti-mogul in more ways than one. In an industry long-dominated by imperious tycoons intent on amassing power—think of Rupert Murdoch, or Viacom’s Sumner Redstone in his heyday—Mr Bewkes has shrunk a content empire, not expanded it. He is about to sell it to AT&T for $109bn in the fifth-biggest takeover of all time. If the deal goes through shareholders will have made a 341% return during his tenure (including spin-offs and dividends), making Time Warner one of the best-performing big firms in America during that time.

Beneath his laid-back surfer persona, Mr Bewkes has been ruthless but in the rational pursuit of his owners’ interests, not his own vanity. His tenure can be split into three parts—culling, defending and preparing to exit on a high.

Back in…Continue reading

“YOU are either part of the solution or part of the problem,” it says in painted letters on a wall. “Stay hungry, stay foolish,” says the wall opposite. An old rickshaw sits among beanbags and a vase of flowers rests on an ancient oil barrel in the corner. “We wanted the space to feel like Google,” says Eleni Gabre-Madhin, the founder of blueMoon, a new agribusiness incubator that opened in Addis Ababa in February, without a trace of irony.

Incubators and their cousins, accelerators, provide hands-on training and mentoring, and often a physical space, to help early-stage business ideas develop. In Silicon Valley they find capital for startups and take a slice of equity in return for their services. Ms Gabre-Madhin says that blueMoon draws inspiration from Y Combinator, an American accelerator founded in 2005 whose investees include Dropbox and Airbnb. The new firm’s first cohort of startups will train at the office for four months, and it will give each a small cash injection in exchange for a 10% stake.

That is a rarity in Africa’s startup scene. A simpler and more common model is for “tech hubs” to provide office space, some networking…Continue reading

THOMAS DE LA RUE set up shop more than 200 years ago, printing newspapers, then playing cards and stamps. In 1860 a contract to print banknotes for Mauritius started a transformation. Today De La Rue is the largest commercial banknote and passport printer, involved in aspects of the production of currencies for 140 countries, and passports for over 40.

The British firm’s chief executive, Martin Sutherland, is relatively relaxed about the much-heralded death of cash. Despite advances in payments technology, and a shift to cards in Europe, the total demand for cash has proven remarkably resilient. Transaction values are rising rapidly in emerging economies, where hard currency is still the norm. De La Rue expects world demand for banknotes to grow by 3-4% a year for the foreseeable future.

But there are problems nonetheless. Even at the best of times, note production, which accounts for over 70% of the company’s revenues, is a volatile business. Contracts are lumpy. State-owned printers often call in commercial printers at short notice to manage spikes in demand, which are unpredictable. On top of that, national authorities are demanding better value. They are…Continue reading

Why on Earth did you park here?

ELON MUSK, a Silicon Valley entrepreneur, has had two bits of good news recently about his various bets on new technology. SpaceX, his privately-held launch company, last month became the first successfully to reuse a rocket to put a satellite into orbit. And this week Tesla, his electric-car manufacturer, at last hit its production targets.

Some analysts doubted Tesla would meet its goals after a series of production difficulties. But the carmaker said first-quarter deliveries were just over 25,000 vehicles, a record for the firm and a 69% increase over the same period in 2016. Some 13,450 were its sleek Model S saloons and about 11,550 were the firm’s new SUV, the Model X. This puts Tesla on track to produce the 50,000 vehicles it has promised to make in the first half of this year. That is good progress. But Tesla is going to have to crank production up by an awful lot more to make the 500,000 cars a year which Mr Musk wants to see pouring off the production line by 2018, let alone the 1m intended for just two years later.

To reach those volumes, Tesla is counting on its forthcoming Model 3. Priced at…Continue reading

Off to new platforms

IT SOUNDS like a spectacular feat of engineering. Employees of Royal Dutch Shell located in Calgary, Canada, recently drilled a well 6,200 miles (10,000km) away in Vaca Muerta, Argentina. In fact, the engineers of the Anglo-Dutch oil major were using computers to perform what they call “virtual drilling”, based on their knowledge of Fox Creek, a shale bed in Alberta, which has similar geological features to Argentina’s biggest shale deposit. They used real-time data sent from a rig in Vaca Muerta to design the well and control the speed and pressure of the drilling. On their second try, they completed the well for $5.4m, down from $15m a few years ago. “It’s the cheapest well we’ve drilled in Argentina,” says Ben van Beurden, Shell’s chief executive.

Shell is not alone in deploying computer wizards alongside geologists in an attempt to lower costs in an era of moderate oil prices. The industry as a whole is waking up to the fact that digitisation and automation have transformed other industries, such as commerce and manufacturing, and that they have been left behind. Technology firms and consultancies are knocking on…Continue reading

BETWEEN 1999 and 2014 sales of prescription opioid drugs almost quadrupled in America, an increase that came not simply in response to patient suffering but because more of the population are addicted to these powerful drugs. Such is the demand for them, Americans now consume four-fifths of the global supply.

Growth on this scale has been profitable for some: OxyContin, a popular opioid made by Purdue Pharma, a drug company in Stamford, Connecticut, has made its manufacturer tens of billions of dollars (see chart). But more broadly it has spelled tragedy. Deaths from opioid use in America quadrupled over the same period. About 90 people die every day, according to the Centres for Disease Control and Prevention.

That dissonance between corporate success and private pain has become a matter of public interest. On March 28th Senator Claire McCaskill, a Democrat from Missouri, said that she would investigate the role that pharma firms played in creating the opioid…Continue reading

Lights, camera, where’s the action?

EVEN for Rupert Murdoch and Fox News, no strangers to controversy, the allegations against Bill O’Reilly present an extreme test. On April 1st the New York Times published an investigative report that described accusations of sexual harassment and other inappropriate behaviour from at least seven women against the presenter. He and the network, the paper said, have paid about $13m to five women since 2002 to settle cases where they alleged such behaviour. Mr O’Reilly denied the merits of the claims.

The news came less than nine months after Roger Ailes, the network’s founding boss, stepped down following multiple sexual-harassment claims against him. This week around 50 advertisers left Mr O’Reilly’s programme, “The O’Reilly Factor”, among them several car brands, including Mercedes-Benz and Toyota’s Lexus, as well as GlaxoSmithKline, a drugs company. The National Organisation for Women has called for him to be fired.

All eyes are on Mr Murdoch, who has been running Fox News himself since he pushed out his friend, Mr Ailes. Mr O’Reilly has probably been…Continue reading

THE promise of virgin commercial territory up for grabs, startups vying to lure investors’ money even faster than they burn through it, and Amazon trying to capture all the spoils: the recent scramble for the Indian online consumer has had more than a whiff of the late-90s dotcom boom about it. The exuberance seemed justified. India is the world’s fastest-growing large economy, its consumers increasingly clutching smartphones and fattening wallets. Online shopping, worth just $1bn five years ago, seemed to be growing so fast that it would exceed $100bn by 2020.

The boom has ended not with a pop, as in 2000, but a whimper. Online sales, after more than doubling in 2014 and nearly trebling in 2015, were nearly flat in 2016 (see chart). Analysts are scrambling to lower their forecasts. Given that total retail consumption in India grows by around 18% a year, and internet penetration went up by two-fifths last year, e-commerce if anything looks to be losing ground.

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