Inflight Magazine of Brussels Airlines

Business trends

Boyd Farrow rounds up what’s happening in the business world across Europe

Climate of fear

Natural disaster figures are down, but climate change will still cost us

Munich Re, a leading global reinsurance group based in Germany, has reported that natural catastrophes took fewer lives and caused much less damage in 2009 than during any other year in the last decade. In its annual look at the cost of such events, the company said: “Losses were far lower in 2009 than in 2008 due to the absence on the whole of major catastrophes and a very benign North Atlantic hurricane season.” It put the 2009 death toll at “around 10,000,” well below the average of 75,000 in each of the preceding 10 years. In monetary terms, too, losses were much lower. The reinsurance giant estimated total economic losses this year at €35bn and insured losses at €15bn, compared with economic losses of around €140bn and insured losses of €35bn in 2008.

Nonetheless, Munich Re’s head of geo risks research, Peter Hoeppe, warned that: “The trend towards an increase in weather-related catastrophes continues.” According to Munich Re, climate change probably already accounts for a “significant share” of weather-related economic losses. While there is no reference estimate for the phenomenon’s final cost, economists agree the bill is likely to be in the trillions of dollars.

Apple vs Nokia

Smartphone makers are at each other’s throats

Apple may have just won a high-profile legal case (when a US appeals court ruled the company was not to blame if iPod owners damage their hearing by playing music too loudly), but it is likely to see the inside of another courtroom in 2010. Finland’s Nokia, the world’s top mobile phone maker, has filed a complaint with the International Trade Commission, alleging that Apple’s iPhone, iPods and computers violate its intellectual property rights. The patents at issue relate to Nokia technology being used by Apple to create features in user interface, camera, antenna and power management technologies – technology that Nokia claims helps cut manufacturing costs, reduce gadget size and prolong battery life. The ITC will decide whether to pursue the case this month.

Filing a complaint with the ITC is the latest step by Nokia to take on Apple in the US, where the company’s smartphones face tough competition from the iPhone and Research In Motion’s BlackBerry devices. Apple, which only entered the sector in mid-2007, overtook Nokia last quarter as the mobile phone maker generating the highest total operating profit. In October last year, Nokia sued Apple in the US state of Delaware over the iPhone, claiming it infringed 10 of its patents related to phone calls and Wi-fiaccess. In December, Apple countered with its own lawsuit, saying Nokia had copied aspects of the iPhone in its devices.

Taxing dilemma

Italian government reaping rewards from tax amnesty

It seems Italians are even shadier than their leaders had supposed: a total of €95bn held illegally overseas has been declared under a tax amnesty, beating the government’s original forecasts. The amnesty, which allowed citizens to declare illegally held assets and pay a one-off tax of 5%, should have ended on 15 December last year, but Silvio Berlusconi’s government now says it hopes to raise an additional €30bn by extending it until the end of April. The move has already sparked a row with Switzerland, after Italy claimed its neighbour was not cooperating; police and tax inspectors even raided dozens of Swiss banks in Italy. The rewards, however, are considered to be worth the bother: the Italian government’s tax windfall currently exceeds €5bn (well in excess of the predicted €3.7bn), which is desperately needed to finance welfare spending and fiscal incentives to help small businesses. Italy’s economy expanded 0.6% in the third quarter of 2009.

Other countries are now advocating leniency for financial indiscretions. Poland’s economics ministry says it wants to reduce the maximum fine for tax avoidance, from PLN 12.2m/ €2.97m to PLN 6.1m /€1.49m, claiming this will decrease barriers to entrepreneurship.

Teenage clicks

Survey of youngsters’ media use reveals new challenges for advertisers

Teenagers in Europe spend more time playing video games than watching television or using the web, according to new research from Forrester. The research analyst surveyed 1,400 people aged between 12 and 17 in France, Germany, Italy, the Netherlands, Spain, Sweden and the UK. It discovered that participants play video games for an average of 11.7 hours each week, compared with 10.3 hours spent viewing content on TV and 9.1 hours surfing the net. The survey also showed that some 44% of teens visit Facebook at least once every seven days, and 30% read blogs just as frequently – and that this demographic is twice as likely to comment on such material when compared with older netizens. Overall, however, streaming online video was the most popular reason for accessing the web, with YouTube the dominant portal in all countries except France, where Dailymotion was the leader. Even more challenging for advertisers is that simultaneous media use is also common among this group, with half of contributors listening to music and surfing the net at the same time, and 45% combining TV and the internet.

Electric dreams

Berlin tests innovative charging system for electric cars

Germany is trialling a new service that allows electric car owners to add the cost of charging their vehicles to their home electricity bills. In a joint venture called e-mobility Berlin, Daimler and utility giant RWE have installed 500 “intelligent charging stations” across the German capital, which “communicate” with a fleet of new Smart Fortwo electric cars. Drivers can also use the charging stations to monitor rates, battery status and interior temperature using an iPhone or computer. There’s the flexibility to charge cars during off-peak times, and even turn on the air conditioning or heat remotely. Car owners participating in the trial get 18 months’ free electricity for charging, during which time e-mobility will monitor how well the system works. RWE chief executive Jürgen Großmann said: “Our technology is already creating the basis for even more climate protection in the future, especially the more efficient use of renewable energies.” While the first participants get to drive the electric Fortwo, with a 114km range and 0-59km/h time of 6.3 seconds, Daimler will also test the technology on its new A-class E-Cell when it debuts later this year.

Not your regular Joe

Danish coffee shop goes global

Not only are coffee shop chains in Britain defying the recession by going on expansion sprees, but new players are also continuing to appear – such as London’s latest hit, Joe & The Juice, which sounds even more American than Starbucks. But while Joe is US slang for coffee and juice bars are more Californian than the Beach Boys, this high-street newbie is actually the first overseas venture by a well-known Copenhagen brand, which has franchises throughout Denmark offering sandwiches, coffee and juice in loud, beanbag-strewn premises.

Hoping that enough surly Brits will be able to bring themselves to ask for a Tunacado sandwich and smoothies with names such as Sweet Kiss, Joe & The Juice plans to open 20 outlets in the UK by the end of 2011, in a bid to take on local champ Pret A Manger. It’s also close to opening premises in Gothenburg, and the Danish outfit harbours even bigger ambitions. Keen to capitalise on India’s rapidly growing branded juice segment, it’s planning a chain of outlets over the next 12 months, beginning with the Emporio Mall in New Delhi. The company is also talking to local fashion house Kimaya about a joint alliance, which could mean Joe & The Juice outlets in Bangalore and Mumbai, too. The move would see the Danes vault over everyone else in making headway in India – including Starbucks.

Phone in your bill

New payment system has no need for cards or cash

Ever ordered a round of cocktails for newfound holiday friends, only to realise you’ve left your wallet in your hotel safe? If so, you’ll be pleased that Texan company ATX Innovation has developed a tool designed to pay for food and drink without cash or plastic. In December 2009 the company released a test version of TabbedOut, which enables users to pay restaurant and bar bills using mobile phones. Software at an establishment’s point-of-sale terminal syncs with a customer’s smartphone and tracks what has been ordered. The customer can then add a tip before closing the tab from their phone, with ATX generating revenue through a €1 convenience charge per transaction.

As a prompt to ‘forgetful’ patrons, an upcoming version will include a feature that would remind customers to settle their bill if they stray too far from the point-of-sale terminal. Of course, if you have one too many margaritas you may have a problem remembering how to use your iPhone.

Weighing up the odds

Belgium to restrict online gambling despite EC objections

The Belgian government has defied the European Commission by pressing on with legislation to restrict online gambling licences to betting agents and casino operators already active in Belgium. Under the new law, Belgium could prosecute citizens who gamble at any foreign site. The EC objected to the proposal in June 2009, claiming that it violated EU free movement of goods and services principles, while the European Gaming and Betting Association has vowed to consider all options, including legal action. Belgium isn’t the only European country causing the EC grief in this area, however. France recently introduced legislation that would make it very difficult for new operators to get a licence from the country, and Polish politicians – who recently passed several laws that greatly restrict gambling – are now targeting gambling-affiliated sports sponsors such as the online casinos that pump around €15m a year into the country’s football teams.

It seems, though, that Belgium has more to be concerned about than online temptations: a new Belgian Government Centre for Research & Information report shows that more than 22% of citizens aged 10 to 17 have participated in some form of gambling for money, with 40% regularly playing real-money poker.

Bright future

Solar power is big business in Israel

Israel’s solar technology sector is going from strength to strength as foreign investors pile into the sun-blessed country. Last autumn, German engineering giant Siemens paid €290m for Solel Solar Systems, a thermal pioneer set up 40km from Tel Aviv by a group of Belgian investors. At around the same time, start-up company SolarEdge Technologies, just outside Tel Aviv, secured €16m of financing – the largest such infusion into Israel’s fledgling solar energy industry. Among its new funders is US giant General Electric, in its first direct investment in the local sector. And with the global renewables industry booming, there is growing interest in Israel as a source of cutting-edge technology. Around 40 homegrown start-ups have joined the race to reduce the cost of producing electricity from the sun and more than €500m has been invested. Israel Cleantech Ventures, a Tel Aviv company that focuses on renewable energy and water technologies, has invested in three solar ventures and is looking at several more deals.

Israel had a head start in harnessing the sun’s energy through the widespread use of solar water heating: nearly every rooftop in the country is covered with the water-heating panels. President Shimon Peres’ pledge to decrease Israel’s greenhouse gas emissions by 20% by 2020 requires setting up a substantial solar energy infrastructure, and in the next few months a decision is expected over the creation of a network of huge 40-60 megawatt plants.

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