What record Boeing-Indonesia deal means

The largest single aviation purchase in Boeing's 94-year history was pulled off today by Lion Air.

Lion who?

If you have never heard of Lion Air, you're not alone. Unless you speak Bahasa Indonesia and have traveled around the vast array of islands that make up the world's most populous Muslim nation, there is no reason why you should have.

With U.S. President Barack Obama watching on the sidelines of the ASEAN (Association of Southeast Asian Nations) economic summit in Bali, Lion Air signed a deal for 230 Boeing planes totaling $21.7 billion, with the first delivery in 2017 -- part of the airline's plan to buy 408 new planes at $37.7 billion, Lion Air CEO Rusdy Kirana told CNN.

"From east to west, Indonesia spans 5,000 miles and we have 230 million (people) and not enough aircraft to meet the growth of the number of passengers," Kirana said.
Right now, the airline has only a few routes that take it out of Indonesia to Southeast Asian neighbors Singapore, Malaysia and Vietnam. The airline plans to use the new fleet to both expand routes among the 6,000 inhabited islands in Indonesia as well as new routes to Japan, South Korea, China and Taiwan.

While the developed world has been pummeled with recession, stagnant growth and rising debt burdens in the wake of the 2007-2008 Financial Crisis, developing powerhouses like Indonesia have continued to rise.

Indonesia's economic output was $706.6 billion in 2010, up from just $95.4 billion in 1998 when the nation was embroiled in the Asian Financial Crisis, which led to the end of the longtime dictatorship of Indonesian President Suharto. His departure led the way for economic and political reform in the world's fourth most populous nation.

The soaring fortunes of Indonesia echoes the number of Indonesians taking to the skies -- this year, the numbers traveling by air within the country is expected to rise 15%, the Indonesian Transportation Ministry said.

"As Indonesia's middle class increases in number, more and more people will be traveling throughout the archipelago," said Indonesian Foreign Minister Marty Natalegawa. "And the easiest way to travel is air transport, and so that why I think the projection ahead will be quite promising, and offer many opportunities for many."

For Obama, the record deal helped him underline a message he's echoed during his Asian trip: That strong economic ties with Asia creates jobs at home.

"For the last several days, I've been talking about how we have to make sure that we've got a presence in this region, that it can result directly in jobs at home," Obama said in a statement. "And what we see here -- a multibillion-dollar deal between Lion Air -- one of the fastest-growing airlines not just in the region, but in the world -- and Boeing is going to result in over 100,000 jobs back in the United States of America, over a long period of time."

When asked why Lion Air chose Boeing over arch rival, French-made Airbus, CEO Kirana told CNN: "There's not much difference between Airbus and Boeing. It's like a person choosing what to eat. you just prefer one dish over another."

Executives at Boeing are no doubt pleased the Indonesian airline prefers to supper in Seattle rather than dine in France. And as fortunes rise on the archipelago, many more western companies will try to find a place at Indonesia's table.

Virgin buys Northern Rock for £747M

Virgin Money, Richard Branson's banking arm, is buying Northern Rock for £747m, almost four years after the bank collapsed and was taken over by the UK government.

The Treasury said the sale was expected to complete by the end of this year, subject to regulatory clearance. It said the deal could eventually be worth more than £1bn.

Virgin has committed to maintaining Northern Rock's operational headquarters and said there would be no further compulsory redundancies, beyond those already announced by the company, for at least three years. The lender will be rebranded as Virgin Money.

Ron Sandler, executive chairman of Northern Rock, said in a statement: "The return of Northern Rock to the private sector has always been one of our key objectives. We said that this would be done at the right time and when there was a proposition in the best interests of taxpayers and other stakeholders. I am delighted that we have reached an agreement with Virgin Money which successfully delivers that."

As well as Virgin, Northern Rock had also attracted interest from NBNK, the banking venture set up by Lord Levene, and JC Flowers, the private equity firm.

Northern Rock said in August that it expected to return to profit in 2012 for the first time since the financial crisis.

Olympus urged to bring chief back

A former director of scandal-hit optical equipment maker Olympus has launched a campaign for reinstatement of its ousted British chief executive, saying Michael Woodford's return is crucial to the "painful restructuring" needed to save the group.

The call from Koji Miyata, former head of Olympus' medical systems business who served on the board from 1995 to 2006, adds to the pressure on the 92-year-old company's management amid a scandal that has shaken faith in Japanese corporate governance.

It came as Tokyo regulators struggled to decide how to handle the scandal and Singapore's sovereign wealth fund disclosed that it had sold its 2 per cent stake in Olympus.
Other large foreign Olympus shareholders have called for a return by Mr Woodford, who was fired after he raised questions about a series of acquisitions in which the company paid $1.4bn to obscure advisers and Cayman-registered funds.

After initial denials, Olympus has admitted that it used the deals to dispose of investment losses it had been hiding since the 1990s.

But the company's new president, Shuichi Takayama -- who previously defended the payments -- has continued to insist that Mr Woodford was sacked because he was a "high-handed" manager who did not understand Japanese culture.

In a statement on a campaign website set up at the weekend, Mr Miyata called for Olympus to offer an apology to Mr Woodford for "the baseless aspersions cast on his character".

Olympus should invite Mr Woodford to return as president to push reforms that would make the company a model of excellence "complying with the highest standards of corporate ethics", Mr Miyata said, asking current and former employees to sign an online petition.

By early evening in Tokyo on Sunday, the petition carried the names of almost 40 people described as former or current employees, along with others who registered anonymously.

Mr Woodford told the Financial Times last week that he was prepared to return to Olympus. However, such a return is sure to be fiercely opposed by the current management and could further strain the internal unity of the crisis-hit company. "A complete newcomer would be better," said one Olympus manager on Sunday.

The Olympus scandal has raised questions about the efficacy of Japanese regulators. On Friday, the Financial Services Agency confirmed it was examining the Olympus case, while the Tokyo Stock Exchange has put the company on watch for possible delisting and police are reportedly investigating.

It is still unclear how rigorous such examinations will be or how far they will go to make clear how Olympus suffered the losses it was trying to hide and who might have benefited in the process of concealing them.

Japanese media on Sunday quoted sources at the Securities Exchange and Surveillance Commission as saying it had already concluded that all the losses had been fully written off and that the SESC might thus recommend Olympus be subject to only an administrative levy.

Singapore's sovereign wealth fund, which manages more than $300bn of funds, said it had sold its 2 per cent shareholding in the troubled Japanese medical equipment and cameras group when indications of wrongdoing first emerged.

GIC retains an "insignificant" indirect holding, but the announcement it has sold its direct stake could further undermine confidence. GIC was Olympus' 10th biggest shareholder at the end of March, according to the company's latest annual report.

Boeing secures record the Emirates deal

Boeing on Sunday won its single largest ever commercial aircraft order when Emirates, the fast-growing Gulf carrier, announced it would buy at least 50 twin-aisle passenger airplanes from the US manufacturer.

The order for 50 Boeing 777 long-haul aircraft is worth $18bn at list prices, a record contract by value for the US company.

Unveiled at the Dubai air show, the deal provides a much-needed boost for Boeing, which has been badly trailing Airbus -- its arch rival -- in the number of orders won this year.
The contract also underlines the ambitions of Emirates, the Dubai-based carrier that is rapidly becoming a strong rival to Asian, European and US airlines.

Emirates currently has a fleet of 162 aircraft and is already the biggest operator of Boeing's 777 aircraft and Airbus' A380 superjumbos.

Jim Albaugh, head of Boeing's commercial aircraft division, said Boeing's single largest order by dollar value in its 95-year history was an "extremely proud moment", adding that the Emirates' deal would sustain several thousand jobs in the US.

Sheikh Ahmed Bin Saeed Al Maktoum, Emirates' chief executive, said the 777 order was part of the airline's strategy to expand across Africa, Asia, Europe and the US.

Emirates is buying 50 Boeing 777-300 ER planes, which seat 365 passengers, and deliveries of the aircraft will start in 2015.

Although the order is worth $18bn at list prices, Emirates is expected to pay significantly less because airlines typically secure discounts on large deals. Boeing's previous record single order was a 2006 deal with Air India for 68 planes, worth $11bn at list prices.

Emirates has taken out options on a further 20 Boeing 777-300 ER planes, which means the order's value could rise to $26bn at list prices.

Nick Cunningham, analyst at Agency Partners, said the order should represent "very profitable" business to Boeing because the US company has finished the 777's costly development phase.

He added that Airbus had effectively "missed out" on the opportunity to secure Emirates' order because of the European manufacturer's decision to delay its planned new alternative to the 777-300 ER. Airbus' A350-1000, which will seat 350 passengers, was due to enter service in 2015, but the timetable has slipped to 2017.

Airbus -- a subsidiary of the European Aeronautic Defence and Space company -- has announced 1,038 orders for new aircraft net of cancellations in the first nine months of this year, compared to Boeing's 426.

Airbus' higher tally is partly due to strong demand for its A320 NEO, the planned new single-aisle, short-haul plane that is more fuel efficient than the existing A320.

However, Mr Albaugh claimed Boeing's plane deliveries to customers could overtake Airbus' in 2013, partly because of demand for the US company's new 787 twin-aisle, long haul aircraft. Airbus' deliveries have surpassed Boeing's every year since 2003.

Could 'Earthscraper' turn architecture on its head?

A team of Mexican architects have designed a 65-story glass and steel pyramid to sit in the middle of Mexico City's most historic plaza. But, if it ever gets built, you won't see it anywhere on the skyline.

That's because it would be the world's first ever "earthscraper" -- a 300-meter deep office and living space with ambitions to turn the modern high-rise, quite literally, on its head.

"There is very little room for any more buildings in Mexico City, and the law says we cannot go above eight stories, so the only way is down" explains Esteban Suarez, co-founder of BNKR Arquitectura, the firm behind the proposals.

"This would be a practical way of conserving the built environment while creating much-needed new space for commerce and living," he added.

But would it really be that practical? The design, which would cost an estimated $800 million to build, is the shape of an inverted pyramid with a central void to allow for some much-needed natural light and ventilation.

Suarez says the first 10 stories would hold a museum dedicated to the city's history and its artifacts. "We'd almost certainly find plenty of interesting relics during the dig -- dating right back to the Aztecs who built their own pyramids here," he says.

The following 10 floors are assigned to retail and housing, with the remaining 35 intended for commercial office space, says Suarez.

Suarez concedes that getting natural light and fresh air down to the lower floors will be a problem and he is investigating a "system of fiber optics" that could deliver sunlight from the surface.
The design also includes a series of a series of "earth lobbies" that would store plants and trees with the intention of improving air-quality and, no doubt, the gloomy subterranean landscape.

Suarez says renewable energy could be generated by a turbine powered from collected groundwater. Enough to keep the lights on in an underground office block 24 hours a day? "I couldn't say at this stage" replies Suarez.

But although it has the hallmarks of a fossil-fuel guzzling Goliath -- and a name to match -- Suarez says the "Earthscraper" has great eco-credentials. "In many ways, this project is all about the environment -- not just in how we preserve our historic skyline, but how we prevent the serious problem of urban sprawl into the countryside," he says.

According to the 32-year-old architect, Mexico City's main square -- commonly known as the "Zocalo" -- is one of the biggest city plazas in the world. "It's a massive empty plot, which makes it the ideal site for our program," he said.

To conserve the numerous activities that take place on the 190,000 square-foot plaza throughout the year -- including concerts, protests, open-air exhibitions and military parades -- the void will be covered with a glass floor that Suarez believes will allow the life of the "Earthscraper" to blend with everything happening on top.

At present, Suarez and his team are in the process of presenting their idea to the local authorities. So, if you were in their shoes, what would you say? Is the "Earthscraper" a genuinely feasible innovation or a pretty but impractical pipe dream? Tell us you thoughts in the comments section below.

Study: Tablets Drive Deeper News Consumption

Tablet owners tend to consume a greater variety and volume of news on their devices, and tablets’ visual, interactive features encourage in-depth exploration, according to a joint study from Starcom MediaVest and the online division of the BBC.

Seventy-eight percent of respondents said that they read more news stories and follow a greater variety of news topics. More than three-fourths said that tablets make the overall news experience more enjoyable, and more than a third said they spend more hours per day with media because of their tablets.

The findings were derived from six informal, in-depth interviews and a 1,100-person survey of people in the U.S. ages 15 to 54, 88% of whom were already in possession of a tablet. All identified themselves as consumers of news content.

The study also found that two in three tablet owners frequently use their devices while doing other things, such as watching TV or spending time with friends, a habit that was even more frequent among those who had owned a tablet for seven months or longer. (Said behavior has already fueled the development of a variety of tablet apps designed to be used while consuming content on a second device, namely television sets.)

Additionally, respondents tended to gravitate more toward established news brands on their devices over “news aggregators” — a statistic the BBC will no doubt enjoy touting to advertisers. Significant numbers of respondents also said, amusingly enough, that they would sooner give up sports (47%), coffee (44%) or Facebook (44%) before giving up their tablet news apps.