03 THE NEXT... BIG LANDING
THE A380

IT’S BEEN a long wait, but the superjumbo has finally come home. In November, Air France became the first European carrier to fly the Toulouse-made A380 commercially, from Paris to New York, 18 months after Singapore Airlines launched the world’s biggest plane. And in January, the French flag carrier will add services to Dubai and Johannesburg, making it the first to fly the A380 to Africa.

Next up is Lufthansa, due to be Europe’s biggest A380 operator with fleet of 15. The first aircraft will come into service with the summer 2010 timetable, and will launch Lufthansa’s new first-class product — a bold move when premium revenues are falling and airlines such as Qantas are dropping first class on some routes.

So is the superjumbo worth it? Singapore Airlines seems to be struggling to fill its first-class suites — it delayed delivery of another eight aircraft until the next financial year after a €150m loss in the second quarter — while Qantas blamed part of its 87% annual fall in profits on the €22m cost of introducing the A380.

Lufthansa and Air France will be hoping the superjumbo’s added capacity can reduce flight numbers and increase load factors on long-haul routes — and that the expected economic recovery boosts business travel in the New Year. But it seems unlikely that BA, the last major European A380 customer, will have cause to regret the timing of its deliveries — the first planes aren’t due in the UK for another two years.

04 THE NEXT... VINOPOLIS
INDIA

LAST YEAR, Hong Kong slashed import duty on wine to zero, presaging a sudden boom in blue-chip red wines from the Bordeaux region of France. While horror stories abound of €14,000 bottles of Château Lafite being mixed with ginger ale and knocked back in shot glasses in Beijing, nothing is stopping the Chinese from indulging their new found love of bibulous status-flaunting.

Simon Staples, sales director of Berry Bros & Rudd, a UK wine merchant with several Asian offices including Hong Kong, says the Chinese have gone crazy for Lafite and Latour; the South Koreans for Chateau Talbot, “because it is the easiest brand to pronounce.” However, he frets that while €8,000-a-case Latour might be worth €20,000 in a few years, the Chinese are notoriously fickle and might yet swap their allegiances to some other craze. The real, long-term market, he says, is India.

Although Indian excise duty remains eyewateringly high (up to 200% of the base price of the wine), rates were made uniform across the country in 2007 in line with WTO guidelines. Meanwhile, the consensus is that, under pressure from the EU and WTO, rates will fall in 2010. When they do, “get ready for another boom in top clarets, because the rising Indian middle classes know their wines and have already fallen in love with them outside India,” says Staples – to say nothing of their own wine industry, which imported grape varieties common to Bordeaux in the 1980s.

05 THE NEXT... M&A FRENZY
IT SET

THE ONGOING recovery in the economy and credit markets and rebound in tech spending means that M&A departments are finally dusting down their BlackBerrys and getting excited about … IT services companies. Yep, several analysts believe that tech product companies are now looking at the IT services industry, emboldened by reassuringly recurring revenue streams, high margins, a strong growth outlook and impressive returns on investment.

While consulting, software services, business process outsourcing and systems integration are suddenly sexy once more, the real honeys may be interactive marketing and risk management. Over the next few months all the cash-rich technology giants plan to strengthen their portfolios, which will mean in turn that smaller firms will have no choice but to consider acquisitions just to stay in the game.

Consolidation is already under way. In September, Xerox Corp said it would buy Affiliated Computer Services Inc in a deal valued at around €3.75bn, and Dell Inc said it planned to buy Perot Systems Corp for about €1.8bn. Predators are likely to include US tech giants such as IBM, Hewlett-Packard and Cisco, European players such as BT and Deutsche Telekom, and Asian companies such as Hitachi Fujitsu and NEC. A similar strategy was embraced after the last recession. In 2002, IBM bought PwC Consulting from PricewaterhouseCoopers for about $3.5bn.