Flights, Tariffs and The 02

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0:37a very good morning on this thursday business life with me darren mcaffrey we're going to begin this morning because it is the day after the day before in terms of the recriminations in full swing yesterday dozens of flights were cancelled after a technical problem at nats air traffic Control Company, grounded flights in the London area. It once again asks those questions about the lack of airport capacity in the south east as Heathrow battles to build a third runway. Well, delighted to say we can speak to someone who thinks he's got a better plan for that new runway, Sarinda Arora, who runs hotels at airports, including Heathrow, fixing his camera there.

1:16A very good morning to you. Just talk us through what your plan is for that third runway. We've been working on this now for a number of years and we are greatly appreciative that the government, for the first time in our history, have come out and said, actually, let's look at all options rather than just previously, which was only Heathrow can do the expansion, no one else. So what we've been doing is actually working with the airlines, with our advisors, with our consultants, and we bought the A-team. I call it the A-team that we bought in people like Bechtel, who are world-leading when it comes to airports, They worked on nearly 200 airports around the world.

1:55And our architects, Scott Brownery, who've done work at Heathrow, Gatwick, Istanbul Airport and other airports. So we really have come up with the optimum size, what we think that the new runway should be, which is 2 ,800 metres. And the one thing I've been saying from day one, when Heathrow came up with the plan, that we should build a 3 ,500 metre runway over the M25. and I've always said that that would be a complete disaster that can you imagine having to dig up and sink the M25 and with that you'll have to have impact on the M4 as well and build a runway over the M25. So our plan does not touch the M25.

2:37Okay. That leads on to the question because the one notable thing that's missing from all this is how much it's going to cost. So we've put our numbers forward to the government with a big contingency number as well, which is that our plans will be under 25 billion. And that is the runway, all the infrastructure to go with the runway, the terminal and everything. Now, what we don't do is we don't touch any of the existing airport, because that's not owned by us or the land owned by us. That's down to Heathrow Airport. But we are far cheaper and not only far cheaper, but the one thing we've always been good at the last 25 years, delivering on time and on budget, and that's something we don't want to let anyone down.

3:20And just very briefly, though, you asked to get residents on board as well. I think the M25 has to change anyway, doesn't it? Because ultimately more people will be using the airports. There are lots of potential factors that maybe you haven't taken into account. Is that fair? No, no, no. We've taken into account everything, and I think at the end of the day what we're saying is we can actually have a transport hub on the western of the airfield, where you've got Terminal 5 and the new Terminal 6. There'll be a transport hub there. And then having the connections from Southern Rail Link and Western Rail Link, it is very efficient.

3:55And I think we'll let the authorities and the advisers and DFT and CAA work through this and decide what's good for them. OK, Sarinder, we appreciate your time this morning. Thank you very much indeed for joining us here on Sky News. Thank you. Thank you. Let's move on to the other big story today that we're talking about, And that is the O2 in south-east London, one of Europe's leading live events venues. It's been going for around 18 years, but just had its most successful first half of the year ever, with 115 performances and almost 1.6 million people attending. Well, earlier, I climbed to the top of the O2 to speak to its general manager, Steve Sayre, and I began by asking how things were going this year.

4:36We've had an incredible number of years, but this year is almost certainly on track for a record year. The last record here was in 2013. We had 225 performances. That was a year after the Olympics, a lot of pent-up demands. This year, we're well in excess of that. I think we could be at more than 230 shows this year. And what's driving that? What's, you know, because we get told there is, and there is, a cost of living. Crisis, essentially. People really struggling and have been for years. And yet, people are still willing to come and pay a lot of money sometimes to come to the O2. I mean, we've been the busiest arena in the world for the last 18 years, ever since we opened our doors.

5:18And, you know, long may that continue. But I think what we're seeing now this year and the last couple of years, you've got this kind of insatiable demand from Gen Z. Nearly half of our audience now comes from Gen Z. You know, so you've got that kind of demand side kind of piece. And you've also got all these incredible new artists from all around the world that are, you know, quickly getting to stadium level, to arena level, and festival headline level. So you've kind of got this kind of perfect storm of supply and demand. And I think fans, the consumer, wants to have experiences. That's where people are putting their money.

5:51And I think, yes, cost of living is still tight. The economy isn't quite where we all want it to be. But people are prioritizing experiences over things. And we've seen that more and more. And that's particularly coming from the younger generation. So I think that's what's really fueling the growth right now. In saying that, it's not just that people's budgets are under pressure. We know that the industry in some ways is under pressure, even though it's doing remarkably well. I mean, hospitality, that's essentially what you do, involves people. People are having to be paid more. There's more tax.

6:20I mean, that must be a bit of a strain. It is a strain on the business. I think it's a strain on big venues. It's a strain on small venues, you know, and we're all doing what we can to kind of meet those new kind of cost headwinds that are coming our way. You know, and I think, you know, it's about getting creative. And I think, you know, the fact we've got an incredible amount of talent coming through the building, a huge amount of shows means that we can sustain that here. You know, of course, we are getting hit with different taxes and, you know, national insurance and business rates are going to be going up.

6:47And that's a real concern for us because, you know, venues like the O2 are, you know, creating a lot of opportunity, not for just fans coming to the building, but for the local community, sustaining lots of businesses around Granite. So it is a concern for us, but it's something that we're working hard to mitigate. And we talked there about the O2 being kind of top of the pile for a very long time. I mean, it's clearly very successful, but it's probably got also more competition than ever before. I mean, the Corp Arena's opened in Manchester. Obviously, loads of stadiums, think of Wembley and Oasis this year, have been turned into music venues as well.

7:17I mean, there is now more competition, isn't there? Have we reached peak entertainment venues? Well, it's really interesting that you say that, because I look at London this year. London's having an incredible run. I think having its best year ever for live music and outdoor entertainment. yet the O2 is also having a record year. So I think there is enough content to go around. There's enough demand to go around. And all of the forecasts that we see, you've got more and more artists, TikTok, Instagram, the streaming services, these artists from around the world, in addition to artists here in the UK, we're getting to arena level.

7:48So we feel pretty confident. This year is an exceptional year. Whether we can repeat this year, every year time will tell. The diary does look busy next year and we expect it to be busy for a number of years. So I kind of feel like, you know, the industry's in a good place. And just very finally, and I seem to do this in every interview I do, I have to talk about technology. You know, we're in the midst of, we're on the verge of massive upheaval, particularly with AI. How does that play out in a place like O2? Does it have an impact? And what's the future like, I suppose I'm asking you? Yeah, I mean, it's a really, really kind of interesting question.

8:23I mean, I think from an AI point of view, from a company that also sells tickets, I think there is opportunity to use AI in a smart way to kind of oversee that part of the business. I think there's opportunity to use it to operate our business more efficiently. And you talked about the cost base, thinking about how we can use chatbot and AI technology to engage with fans and kind of utilize that to give the fan what they want without necessarily adding lots and lots to our cost base. as far as the artist side, I mean, who knows where that goes. I think, you know, ultimately the artists will decide the extent to which they want to use that type of technology in their performances.

8:59And, you know, I think, you know, at the end of the day, you know, fans want to see live music. You know, they want to see the artist perform. They don't want to see the machine perform. So I kind of feel like that's where it will go. And that was Steve Sayre there, who is in charge of the O2, interviewing him on top of the O2. Don't say I don't go to all lengths for this programme. Now, the message from the White House is tick-tock, tick-tock, and there's not much time left on that clock as new US tariffs kick in tomorrow. Yesterday, we heard India will face 25%, and we know the EU will face 15%.

9:32Us here in the UK is at 10%. But there's still no sign of a deal for South Korea, Taiwan or Canada. Where Donald Trump says a deal there looks tricky because Ottawa says it could recognise a Palestinian state. Well, let's look at the possible outcomes with Matthew Orsman, who is joining us now. Matthew, very good morning to you, as always. What's your sense? Will we get some trade deals over the line in the next couple of hours? Yeah, I think so. I think the administration is looking to get as many deals done by the end of today and will likely extend on the rest if there's a good faith effort by the other side to get to an agreement.

10:14Looks like several are close. I think the biggest ones that we need to watch are Canada and Mexico, obviously the biggest in terms of trading partners with the United States, but also the biggest economies that really haven't quite got there on a deal with the administration yet. And Matthew, as you said, there's some really tricky ones to be done yet, but you could say that Donald Trump's done quite well to date. that's yeah i mean he's raving loads of money through these tariffs i mean billions tens of billions of dollars and countries the eu seem willing to sign up to them well look let's not jump ahead ourselves on how much money quote unquote america has made yet uh from these tariffs yes they've collected billions but remember those are being those are costs that are being passed on to the american consumer so that's not necessarily coming out of uh the pocket of some European citizen that's most likely coming out of the pocket of an American.

11:09That being said, yes, they have collected billions of dollars that are going to close many of the budget gaps in the U.S. budget. So, you know, on that, and if they've done it in a way that hasn't totally disrupted the U.S. economy and the growth perspectives in the U.S., then they have sort of threaded the needle quite well. How long that can last is definitely an open question. And it's interesting, I heard someone earlier on in the week saying the last place you want to be is the last in the line to try and make a deal because Donald Trump will turn the thumbscrews on whoever is holding out longest.

11:44That's absolutely correct. I mean, you saw this. The UK still got the best deal by going first. Still a few things to be worked out. But the Stommer strategy of getting the UK in there first, it was the right one. The EU, by sort of dithering and debating amongst itself, ended up paying a higher rate than the UK. And not only that, has huge commitments for energy purchases and investment in the US, which frankly I don't think are likely to be achievable. And it's sort of gotten worse from there. Vietnam at 20 % plus the kind of 40 % for transshipment of Chinese goods. You're seeing that in other Southeast Asian countries.

12:24Japan and South Korea did manage to get 15 % and lower amounts of investment in the US than probably the EU did. But yes, moving first worked. Yeah, and just very finally and briefly, Matthew, if you can, Ursula von der Leyen on the weekend said this provides predictability, but my word, if there's anything we know about Donald Trump, there's no predictability. I mean, these could all be reopened at any time by the US president, couldn't they? Absolutely. And so far they're not. These aren't treaties. They're, you know, very short agreements, you know, not quite scrawled on the back of a napkin, but not much more.

13:01And, you know, they could be done at any time, especially if you look at what President Trump's now doing towards Brazil. They still will wield the tariff weapon for political issues and policy issues unrelated to trade. So, you know, watch the space to see how the tariffs get rolled out again and again. Matthew, it is always a pleasure. And I've just noticed you've got a very distinct collection, I think, of hats behind you. But thank you very much indeed.

13:32Welcome back to Business Live. Now, it is a bumper day of results today. Announcements from lots of big beasts like Shell, Rolls-Royce, Standard Charter, Unilever, British American Tobacco. And next to name just a few. And delighted to say we can speak to investment strategist and quota investors, Lindsay James, who joined us now. Lindsay, good morning as always. Let's start with next, obviously a stalwart of the high street and it's doing pretty well. Yes, that's right. Good results from them. Now, I think investors recognise that it's had a few tailwinds in its most recent quarter. You know, the company mentioned trading disruption at a major competitor.

14:12I think we all know that's M &S. And of course, M &S are now back up and running now. And there was also very good weather in the most recent period. But international sales were very strong, up 26 % on the back of a very strong marketing campaign. So the company, although they've delivered 10.5 % rise in full price sales in the quarter, well ahead of guidance, they're not actually forecasting this growth rate to continue into the second half of the year. They're flagging profits to grow just about 2 % ahead of earlier expectations, mentioning things like tougher employment trends in the UK on the back of earlier tax rises.

14:47So they're not suggesting that this hot streak that they've enjoyed is going to continue. And investors agree with that. The shares are down just around 1 % today as a result. And Lindsay, also doing pretty well, is Shell. Yes, that's right. Now, they had difficult results, actually. Their profits were down nearly a third, down 32%. That was really not unexpected. We all know that the energy market has had a difficult time. We've seen weak prices in the oil industry and gas sector as well. They also suffered from a fire in a US chemical plant. But results still managed to beat expectations that were cut earlier in July.

15:22But I think this is really underlying the fact that they have a very good sort of operational handle on the business. They've been able to do some cost cutting, for example. But the CEO has been flagging that it's been very difficult on all fronts, very volatile conditions. But they're maintaining their three and a half billion dollar share buyback, which is really supporting the share price. So number one in Europe. Yeah. Robust is the word. I think it's come up time and time again. And Rolls-Royce, I mean, on the whole, actually, it's one of the reasons the FTSE is up today, isn't it? Actually, lots of the results.

15:53Rolls-Royce also not doing too bad, doing pretty good, actually. I think Rolls-Royce is a real standout. And I think this will be a relief to investors because the shares have been performing very well. And, of course, in an environment like that, we saw this with BAE systems, sometimes good numbers are not enough. But in the case of Rolls-Royce, they have been. Now, we saw first-half results with operating profit up 50 % from the first half last year. Now, they were supported by things like more demand for engines, more time on the wing, which effectively means airlines are using their aircraft more intensively, which is good news for Rolls Royce, but also their power systems business doing very well.

16:31This is, of course, driving sort of the energy demand coming from data centers globally. They're a way to play that trend. And they've been flagging that this has been doing better than expected as well. So they raised profit guidance for the full year by around 12 percent. That's a big order of magnitude and shares are up around 9 % today as a result. And just very finally, Lindsay, we're also looking across the pond at Meta, Microsoft. We're expecting their results a little later, aren't we? Well, we had Meta and Microsoft after the close last night. Good results from them. We've got more from other names in the US, big names, Amazon, for example, later today.

17:08But this has been an important time for these stocks because, of course, the argument is US exceptionalism over. But are these AI-driven names slowing? The answer is no. Their results were phenomenal, beating expectations substantially and big share price rises after the close. So it looks like that trend has got a lot further to run. Yeah, you only have to look at their growth figures and weep when you look at ours. Lindsay, always a pleasure. Thank you very much indeed. Thank you. Now, Spa Healthcare is the second largest private health operator in the UK. It provides services to the NHS and to private patients.

17:42The FTSE 250 company has just reported its results and delighted to say that we can speak to its chief executive, Justin Cash. Justin, very good morning to you. And how are those results? Good morning, Darren. Good to see you. So we're really pleased with our results. We've had a good first half. We've also been very busy. We have transformed the way we answer patient calls. We have great clinical scores from our patients. We've made it much easier to get through so people can book that important appointment. We've done some mergers and acquisitions in our primary care space. And perhaps of most interest to your listeners, we've made a real difference to helping bring down those NHS waiting lists.

18:22Well, I was going to say that is obviously an issue that lots of people will be concerned about. Just talk about the relationship between a private healthcare company like yours and the National Health Service. Many people might be unaware that there is actually quite a lot of collaboration. Yeah, so we have a very close relationship at all levels of the NHS. So just to put it in perspective, in the last 12 months, Spire has treated 200 ,000 NHS patients. They come to us. It's free when they come to us. And if you think about weighting this going down from 7.4 to 7.2 million, well, that bit is equivalent to what Spire did.

18:59And this is a range of treatments, but a lot of it is hip replacement, knee replacements, but also diagnostics, having your x-rays done, and just seeing a healthcare professional to understand your condition. So we work very closely. We're paid at a tariff, which is the same as an NHS trust. And, you know, it's making a real difference. And the Secretary of State for Health recently announced that since the start of the administration, more than half a million patients have been seen by the independent sector. Simply put, weightless are coming down in part because of the contribution companies like ours are making.

19:35In saying that, are you a bit of a drain on the NHS too? And I say, for example, let's look at doctors pay. Some of them have been out on strike, haven't they, over the last couple of days. I assume you pay better than the NHS and maybe attracting some of the talent away from the National Health Service. Is that a fair criticism? So I think quite the reverse. So first of all, an NHS trust, the taxpayer has to pay for all that capital investment. we fund all our own capital investments. We make well-invested assets available to the public to come and see us and they're really super facilities. We train many of our own nurses and the consultants who work with us are consultants who are working outside of their NHS practice when they come to us.

20:17Nobody likes to see strikes in any sector. Whilst that was happening, we were there treating patients. Their appointments were happening as planned. so we're just carrying on with the day job of getting those waiting lists down as well as most of our business is treating private patients who've chosen to come private and are also effectively taking themselves off a waiting list. Okay, Justin, we appreciate your time this morning. That's Justin Ash there, the Chief Executive of Spa Healthcare. Thank you very much indeed for joining us. Thank you. That's all for today's show. Please remember to follow or subscribe to the podcast and you can leave a review.

20:55For more business news and analysis, check out the Sky News app. Until next time, thanks for listening.