as cabin crew prepare to strike, just weeks after an it crash that stranded thousands. are cost cuts taking their toll on the airline's image? plus, from the sick man of asia to one of the region's fastest growing economies. we report from the philippines, 20 years on from the asian financial crisis. welcome to world business report. i'm rachel horne. we start with more problems for british airways. thousands of passengers are learning that their flights have been cancelled because of an unprecedented 16—day strike by some cabin crew, which begins tomorrow, july 1st. on thursday, ba said most flights will operate as normal but it has cancelled a number of long—haul departures to and from heathrow. short—haul and flights from other uk airports are unaffected. so what's it all about? the unite union says cabin crew who have taken industrial action over pay in the past have been blacklisted — losing benefits like staff travel, concessions and bonuses. ba estimates around 8% of its total cabin crew will walk out — that's about moo staff. to limit the damage, the airline is merging some heathrow operations. it is also talking to other carriers such as qatar airways, which owns one—fifth of its parent iag, about using their services. well, upsetting its customers again is the last thing ba needs after a major it crash last month stranded 75,000 passengers. the financial cost, some $100 million, but the cost to ba's reputation is possibly much greater. the bbc‘s richard westcott spoke to ba boss alex cruz at the time. he suggested that since mr cruz took overjust over a year ago, ba has had an image problem because of cost cutting — even down to charging for sandwiches on short—haul flights. there has definitely been a reaction from the buying on—board for example and certainly this event over the last two days have affected the image at we have also committed to over 400 million pounds of investment around the product and beyond and we are going to continue investing in ba, ba is a great airline and has always been a great airline and has always been a great airline and has always been a great airline and we are committed to making itan airline and we are committed to making it an absolutely fantastic airline. under quite a bit of pressure. have you considered resigning? i do think it would make much of it is for me to resign at this particular point in time. i am working closely with my team to make sure, again, that we work on the rest of the disrupted passengers to make sure that we address all of their needs. that was alex cruz, the boss of ba. john strickland is an aviation and airlines expert with jls consulting. thank you for coming in. british airways does seem to be having an image problem. it was seen as one of the traditional carriers, a step above the budget airlines. now all we seem to hear in the headlines and stories of cost—cutting and the consequences. putting in a business context, they are very profitable as pa rt context, they are very profitable as part of their parent group iag and if they didn't satisfy customer needs to attract business in a competitive market they wouldn't be that strong. they have had to take on challenges because we as customers are looking more and more for good prices in our travels, also ba has to compete against low—cost carriers and equally have to compete at the top end of the market with premium customer brands like the airways and emirates. they have to invest in the premium product if it means we get lower prices at the bottom end by competitors, and we go to the competitors if ba doesn't offer them, they have to make sure they do the same thing and they have to look at their cost efficiencies they can do that without losing money. this strike starts tomorrow, 16 day strike. what is it about? as we heard, there was a strike or a series of strikes earlier in the year about pay and ba's mixed fleet, they said that a few years ago to deal with issues to make it more efficient in terms of cost levels for cabin crew and productivity and the union in fact agreed with the airline about his art as we heard, ba said to those who went on strike we will take away your privileges, that his travel concessions or bonuses which the management could not justify those who went on strike and the vast majority of crew including those in this particular fleet did not strike said the union is now taking ba to task about the issue, looking to take legal action if they will strike over the next fortnight. how far it is supported is difficult to tell what it isn't about pay. what about alex cruz? he was speaking after the ot meltdown a few weeks ago, 75,000 passengers affected. he was saying it didn't feel it will be a benefit for him to leave. ——i t. three weeks later, another headline grabbing story. what is the industry's view? the financial community look at ba as pa rt financial community look at ba as part of the group iag and financially, if successful in that respect. the book to the management of the company to steer it in a tough and competitive market to make sure that it is continuing to deliver profit. he has the challenge of delivering the bottom line but without the bottomline of course there is no future for the airline. 0thers there is no future for the airline. others are ready to take their lunch 01’ others are ready to take their lunch or dinner or whatever, local carriers or remember at the other end of the markets are you still have to with that. he is someone who has a good reputation, having managed other low—cost airlines but other local airlines as well such as american airlines. we have to wait and see what the outcome is of a report which they had instigated into the eye teeth out there which i believe they need to show that publicly. —— it. they need to get into the black ink rather than the red ink. thank you for your time. as we have been reporting all week, it's been 20 years since the financial crisis that swept through east asia and wreaked havoc on economies around the globe. for the last in our series, we are in the philippines. when the crisis hit in 1997, in economic terms it was widely seen as the "sick man of asia." but, as rico hizon reports from his home city of manila, the philippines is now one of the fastest growing economies in asia. manila. the capital city of one of the most dynamic economies in south east asia. with the asian financial crisis devastated the region, the philippines managed to pull through better than its neighbours, so how did that happen? 0ne better than its neighbours, so how did that happen? one of the crucial factors was its economy. every day, hundreds if not thousands of people queue up here to try to get their permits to work overseas. the money they send back helps to drive consumption and keep the economy buoyant. 20 years ago, remittances made up 6— 8% of gdp. that is nearly doubled in 2005. today, it still worth 10% of the national income. what other factors helped the philippines ride out the crisis and recover quicker than everyone else? we were late in the game in the property sector is that we didn't have a property bubble just yet at that time. compare to thailand and indonesia, you know, they had a property bubble which was financed by debt. and at the same time learning... it was a tough time for many. in 1997, this man watched his empire all but collapsed. his building technology company was wiped out and he spent years painstakingly rehabilitating the luxury car dealership he began from scratch. it came as a total surprise. we didn't know where it came from, we had no idea of how it was going to affect us. and then we just realised that it was in a financial holocaust, a nightmare, every day being so fearful of what is new problems will arise. and it was like eating broken glass for brea kfast was like eating broken glass for breakfast every day. for a living yea rs. breakfast every day. for a living years. what do you think, guys? but the philippines is looking forward, not back. anna is a nurse and she is typical of the new generation. in her early 20s, she is the average age of the population. like so many filipinos, she sees herfuture abroad. she is preparing to move to london. hopefully he and the philippines, i don't get paid as much as i work for the job. philippines, i don't get paid as much as i work for thejob. i philippines, i don't get paid as much as i work for the job. i work around 48 hours per week and get only as much as 356 pesos. expanding philippine economy has its challenges. a slowdown in remittances, the need to improve infrastructure, and tackling the poverty gap. still, and is excited and optimistic about the future and so and optimistic about the future and so too is the philippines. but have a quick look at what the markets have been up to. they have been trading down following what was happening on wall street in europe, ben mckay and the hang seng are down and the story is in the currencies. a weakening of the dollar as it looks like more central banks are going to start tightening monetary policy and the dollar will be losing some of its appeal. both the euro and the stirling are up against the dollar. more on that throughout the morning. don't forget, you can get in touch with me and some of the team nurseries in england say local councils are failing to provide enough money to fund more free child care for 3— and 4—year—olds. from september, children will be eligible for 30 hours free nursery education if both parents are in work. but research by the national day nurseries association shows most nurseries will only have received a 40 pence per hour increase, which they say is inadequate. 0ur education correspondent gillian hargreaves reports. from september, all three and four—year—old in england will be eligible for up to 30 hours free childcare to help working parents. it was a flagship conservative policy in the 2015 general election and will cost the government an extra billion pounds. however, the national day nurseries association asked 128 local authorities how much they will pay nurseries subsidised hours from september and the average hourly rate will go up from £3 97 bc to £4 37 next year, an increase of 40p. despite a government proposal that no nursery should receive less than £4 per hour, seven authorities are offering less than that. the association says the rise is too low and workcover cost is like heating, lighting and a rise in the national living wage. meaning some nurseries will opt out of extended free childcare. the current funding levels are totally inadequate. and if nurseries opt out of delivering 30 hours free childcare, it will mean 50,000 children which is equal to the child population of manchester are going to miss out on this 30 hours free childcare. the government has committed an extra billion pounds to fund the extension of hours on top of £6 billion already spent on early years education. and coming up at 6am on breakfast, charlie stayt and naga munchetty will have all the day's news, business and sport. they'll also have more on the inquiry into the grenfell towerfire in london. this is bbc news. the latest headlines: parts of president trump's ban on travellers from six mainly muslim countries as well as all refugees have come into force, but legal wrangling continues. forces opposed to the islamic state group have made significant advances against strongholds in both syria and iraq. in syria, kurdish and arab troops have the city of raqqa completely surrounded. germany's parliament will vote later on a bill the chinese president, xijinping, has praised the authorities in hong kong for curbing the territory's independence movement. mr xi made his remarks during a visit to celebrate the 20th anniversary of the city's handover from the uk to china. leading our news review, president xi marking the 20th anniversary of hong kong's handover to china. not a market — there it is! the south china morning post reports that during his visit, president xi praised officials for effectively curbing independence advocacy. he talked about how they handled political issues there. the new york times has this story too. it's a feature looking at how two decades ago a modern and prosperous hong kong was a model of what china might one day become. it says that hope is now fading. the caliphate has fallen: that's the headline from the independent looking at the battle in mosul against the so—called islamic state. the us—led coalition says a victory there is now imminent. mumbai's business standard looks at the introduction of a goods and services tax in india. it reports that finance minister arunjaitley has met a handful of top business bosses, urging them against increasing prices. in the guardian, the brexodus of banks.

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