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Quest Means Business

A Nightmare Before Christmas for British Airways Passengers; Boeing's New 787 Dreamliner Takes to the Air

Aired December 15, 2009 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Holiday dreams under threat as we were talking about, a nightmare before Christmas, for British Airways and its passengers.

It flies! It flies at last! Boeing's new 787 Dreamliner takes to the air.

And a Formula One dream team, Virgin joins the grid in a multi-million dollar face lift.

We're all in the air, because I'm Richard Quest. I mean business.

Good evening, British Airways says it doesn't want to see a million Christmases ruined, so the airline is going to court to try and force cabin crew to drop their plan to strike. The threatened walk out would last 12 days. And it will blow travel plans for many thousands of people. Those plans off course this holiday season.

Tonight, on QUEST MEANS BUSINESS, what BA is doing. What passengers can do. And what the competition is doing.

By this time tomorrow we may well know if BA has won an injunction in the English high court that would force its cabin crew to abandon its strike and work over the Christmas period. The airline is seeking an injunction, saying that the ballot for strike was flawed, illegal. And therefore BA should be granted an injunction because BA says it believes the union, Unite, counted votes from people who were not entitled, ineligible voters took part.

BA, tonight, is calling the union decision to go ahead with the action "cynical." More than a million people are booked to fly with British Airways over the threatened strike period, between December 22 and January 2.

If you have already booked to fly on BA in the coming weeks, this is information that you really do need to know. If your ticket was flexible, that is unrestricted, it will have been extremely expensive. Now, BA will allow you to change it for an alternative date, up to a year in the future, with no penalty. The same applies if your flight is 48 hours before or after a potential strike date. That is if it is an unrestricted ticket.

BA says if you bought a restricted ticket, those Saturday night stays, those with cancellation charges, penalty payments and the like. You can only apply for a refund once your flight has been cancelled. And BA is refusing to cancel any flights yet. They are still working out what their emergency schedule will look like.

Some passengers are understandably annoyed, dismayed, worried, that this dispute is threatening to ruin travel plans.

Duncan and Denise Edwards, for instance, they live in the Northwest of England, in Cheshire. They book for their whole family to go to New York for the first time. Everything is now in limbo.

(BEGIN VIDEO CLIP)

DUNCAN EDWARDS, BA TICKET HOLDER: Our Christmas was going to be New York and finishing with the "Lion King" and finishing with Denise's 40th birthday. So last night, all of this was gutted, really upset.

(END VIDEO CLIP)

QUEST: Of course, if you go on strike, the object of the strike is to cause the maximum amount of damage to your employer. So therefore it makes perfect sense to get to withdraw your labor at the busiest time, when you are going to do the most damage. And that, says Simon Calder, the editor of the UK's "Independent" newspaper, in the travel section. That is what makes this strike unique.

(BEGIN VIDEO CLIP)

SIMON CALDER, AUTHOR, TRAVEL EDITOR: This is different because the cabin crew union has chosen to cause the maximum possible damage to the maximum number of people at the most critical time of year. What they could have done is said, look, everybody, we're going to give you a Christmas and New Year break, we're not going to start strike action until January, when we are really going hit the business travelers on whom BA depends.

Instead, they basically just said, you have been saving up all year. You've had a really tough time, you're looking forward to that family get- together, that vacation on some far-flung beach? Well, I'm afraid that is all cancelled.

QUEST: Isn't that what strike action is all about, though? Hitting the employer as hard as you can, to bring them to the negotiating table as a tactic.

CALDER: In a normal dispute that would be absolutely the case, but they are not doing that. Sure they are going to cost BA 200, 300, 400 million pounds, however, the airline is quite prepared to take that sort of hit, if they believe they can crush the union power and renegotiate, first of all with their cabin crew, later with their pilots, new conditions of service, which match the 21 century aviation standard.

QUEST: Let's look at it from the passenger's point of view. We'll come back to the airline in a second. Passengers on BA with non-flexible tickets, which is the vast majority, are in the most difficult position. Why is BA shooting itself in the foot, PR wise, by not allowing passengers to get automatic refunds now, so they can rebook before its too late?

CALDER: British Airways management has all sorts of contingency plans. They have been, really, for the last few months working out what they would do in the event of a strike. But everybody, including me, probably including you, was expecting two days, maybe three days, which they could cope with. They could bring in staff, maybe seasonal workers. They could use some management with cabin crew experience. They might even be able to train up a few people, although that would be a questionable thing on many grounds.

What they were absolutely not expecting is for 7,000 flights to be threatened. And I think what they are doing right now at British Airways headquarters in Waterside, is thinking what the heck can we do? Do we protect Los Angeles, New York, Hong Kong, Sydney? Or do we go for the European ones?

QUEST: But the upshot is passengers, holiday makers, can't get their money back. So they can't buy new tickets elsewhere. Only the rich can actually now, just protect themselves by buying another carrier.

CALDER: I'm in exactly the same position as about a million other people. I booked many months ago a vacation in Egypt. I spent $2,000 on tickets to get there. It says confirmed reservation. There is absolutely confirmed about it at all. I cannot go into the marketplace. I can't buy myself a new ticket, because if it is one of the flights that BA manages to reinstate, or if the strike somehow gets called off. They are not going to give me the money back. They are going to say, the plane is going anyway, if you are not on it then that is your bad luck.

QUEST: BA, Willie Walsh and -the question, this is perhaps the most interesting to students of the UK who will remember the miner's strike in the 1980s. Is this Willie Walsh's miner's strike?

CALDER: Oh, yes. He was brought in by the British Airways board to sort out the airlines appalling industrial relations issues. The cabin crew, the pilots ,who work for British Airways, still have contracts that date back to the late `70s, to the early `80s, when there wasn't Virgin Atlantic, there wasn't EasyJet, there wasn't Ryan Air and there wasn't the intense competition that we are seeing now.

QUEST: In a word, is it -and I know this is the most difficult and impossible question, and unfair, as well --is the strike going to happen?

CALDER: Oh the strike is going to happen. If the strike itself doesn't happen, if somehow British Airways sees its legal challenge succeeding, then we are going to see an awful lot of aircraft grounded, because we will find, perhaps, if the past is anything to go by, an awful lot of cabin crew will be going sick this Christmas.

(END VIDEOTAPE)

QUEST: And this is the scale and the global nature of the problem. BA headquarters, of course, up here London, Heathrow. So you may well think why should on British airline cause so much havoc? But you start to see the extremities. If the strike takes place, BA will have certain key areas it definitely wants to try and get limited service to. I will want to get number one, it will want to get a flight to New York. No question about it. That is going to be numero one for British Airways to get something to New York, during the strike. Thereafter, you are looking at Los Angeles, and perhaps, Washington, D.C.

Arguably, Paris, if there is no euro star coverage. Might just want to get one flight a day out there. Other major routes that BA definitely will want to hit. Hong Kong, Singapore and Sydney, it can rely on its Qantas, code share, the alliance partner, up to a point. But their planes are already full. So it is going to have a priority. And I would suggest over Christmas and New Year these two big ones, Johannesburg and Cape Town. That is the global structure that BA is looking at as it tries to decide which flights to run the competitors.

Are they licking their lips with glee? Other airlines are wasting no time in trying to pick up frustrated BA passengers. Take Virgin Atlantic, laying on extra planes, Paul Charles joins me now, communications director at Virgin Atlantic.

First of all, tell me anecdotally what you are seeing in your booking system today?

PAUL CHARLES, DIR. OF COMMUNCIATIONS, VIRGIN ATLANTIC: Already passengers who were due to be on BA flights are switching across. We sold 3,000 seats in the last 12 hours. It is a very clear switch that people want to grab the last seats. It a rather ferocious switch, we took a 25 percent increase in call volumes at call centers this morning. The web site is being inundated. And that is a pattern being repeated across the industry.

QUEST: And what load factors were you already running?

CHARLES: Already very high, because clearly this time of year, lots of people are already traveling. They booked a long time in advance. So they grabbed all the cheap seats which were out there. And we were already running at 96, 97 percent load factors.

QUEST: Are you going to rake it in?

CHARLES: That final 2 or 3 percent is very important. Clearly the tickets available now are very flexible tickets, they are the last tickets on the plane. But people are grabbing them fast.

QUEST: And how you help by increasing capacity? Because at the end of the day you have got A340s, 600s and you have 74700 (ph)?

CHARLES: Well, we are increasing the sizes of some our planes on some routes. So we are actually increasing from A34300.

QUEST: Which routes, particularly?

CHARLES: Boston, Washington, New York and Delhi. Also, Shanghai, we are adding extra probably 70 seats on each plane. So we are adding 1,600 seats, during the strike period.

QUEST: When you look at the issue of the strike and what it is all about, and BA says it needs to change to become more competitive. It was basically saying to be more competitive with yourselves. I mean, do you have cabin service directors that don't serve? Do you have fewer people on the planes? You supposedly the airline they need to compete against.

CHARLES: Well, on the 747400 we have 15 crew, BA are now at 14, and flight service managers do a fantastic job in serving our passengers. That is part of our service culture. We are known for delivering customer service.

QUEST: Tell me, this strike is going to take place?

CHARLES: I think it is highly likely because there is such a chasm between the BA management, it appears, and the unions. They have been negotiating on and off for something like nine or 10 months now. And there is no way they are going to do a deal in the last few days, even if a deal is reached, if it is a miracle deal. I think the rotters (ph) have already started to set in, you can tell that by passengers switching away. The other thing is, many of the cabin crew at BA may want to give the management a bloody nose, because they'll call in sick and say we still are very unhappy with the strategy you are following, even if the strike is called off.

QUEST: Thank you very much, indeed. Thank you.

Now, you are up to date with what is happening in the news, Fionnuala Sweeney is at the CNN News Desk.

(NEWS BREAK)

QUEST: What costs $150 million? It weighs 165, 000 kilograms, and is two years late? Boeing's new jet is finally up and away. The Dreamliner as Boeing test pilots put it through its paces for the first time.

(COMMERCIAL BREAK)

QUEST: Now roughly an hour ago, a little bit of aviation, in fact quite a lot of aviation history was made. Boeing's 787 Dreamliner, two years late, billions over budget, but still took to the air for the first time. The pictures of it lifting off the runway from the Everett (sic) field were pretty spectacular.

Boeing's new plane is something quite extraordinary; 80 percent carbon fiber material, it is made of a composite materials with a very distinctive look of the aircraft. Boeing says that because of all these different things it will save fuel burn of around 20 to 30 percent. Now, there are some slight problems with that at the moment. Because the initial test flights are -the plane is overweight at the moment. So they are going to have a bit of a tricky task living up to those promises, if they can't get the weight down in later models of the aircraft and certainly before it is delivered to ANA.

This is the big number, 850, the most planes that have been sold before the plane had ever even flown; $150 million a price tag. But Boeing is, by now, paying heavy compensation payments to many of those airliners, those airlines who bought the early 787-8s. And even perhaps to some of those who bought the -9s, which is due come slightly later on.

But the plane has flown. CNN's Patrick Oppmann was there when it took off.

Patrick, I'm green with jealousy that you were able to actually be there and see it. It is quite a moment.

PATRICK OPPMANN, CNN INT'L. CORRESPONDENT: It was quite a moment. One of the many things they apparently got right today was the weather, Richard, because we are in the middle of a pouring rainstorm. When the plane took off, it was damp but a drop hadn't fallen and not 10 minutes after it got in the air the rains came in, we are getting drenched now. And this would have made the takeoff extremely trickier, if not impossible.

So, weather has been a factor all along here, but as you saw in those pictures earlier, hundreds of Boeing employees came out to watch the plane take off. I was just speaking with one Boeing employee, who worked at the company for 20 years. He has never seen a first flight, so a very emotional day for him and many of these other employees as the 787 finally took to the sky.

QUEST: And what have we heard from the telemetry and from the plane about how that flight is going? Any word yet?

OPPMANN: No word yet, here, they are moving immediate down to Boeing Field, which as you know, is just south of Seattle. And we expect to get updates throughout. But Boeing so far is calling this a success. As you know, they wanted for so long now to do this first flight. They very much wanted to get it up this week. And the weather of course, the rest of the week, we're looking very bad. So, some initial happiness, and congratulations here, because they were able at least to pull off the first flight. Obviously a lot of work still to do, Richard.

QUEST: Patrick, the -let's assume, let's just assume, for the purposes of my question, that the testing goes according to plan, they manage to deliver it to ANA next year on schedule. But then they have the interesting and difficult question of industrial ramp up and that was exactly the problem that afflicted the A380. Not that they can build it and fly it but that they can build it in enough numbers. They are confident they can get ramp up?

OPPMANN: I spoke to Jim Albaugh yesterday and he is confident. But, you know, the issue is they really couldn't build it in time (ph), because they came in so late. So, just with the initial 787 they had so many problems with the supply line, with the partners in this project that there is still a lot of doubts over whether they can do that ramp up, get up to 10 planes a month, as he said they are hopeful they can do.

So, that it is still a lot of the work that they need to sort out and prove. They have a plane that flies now. They have to do that testing over the next 10 to 12 months to show they can hold up and do everything that they have advertised. But then, as well, they have to be able to show that they will be able to deliver this plane on time and that is a big question mark; a lot of their customers very, very unhappy that it has taken them so long to get to first flight today.

QUEST: Patrick, I'm still gritting my teeth that you were there and I wasn't. Patrick, many thanks, indeed, for joining us.

When I come back in just a moment, we are going to walk in the shoes of two dedicated job hunters. Our "Job Questors" today, Les Young in Atlanta. He has already lost his home. Now he's facing another severe blow. How bad can it get? Just a moment.

(COMMERCIAL BREAK)

QUEST: So, to "Job Quest" and millions of people who have lost their jobs this year. It is going to be much of an effort to find any cheer this holiday season.

On "Job Quest" we have been showing you what it is really like, the fight that you have to do to get back into work. And today we really bring it home to you, as we catch up with Les Young in Atlanta.

Les has been looking for a job in insurance sales. He is also trying to start his own business. We are going to meet Fran Hales tonight, again. Fran is looking for a sales and accountant management position. She is in digital media. For both of them the holiday season is far from festive.

(BEGIN VIDEOTAPE)

ANNOUNCER: Last week on "Job Quest".

UNIDENTIFIED FEMALE: Hi, good morning. It is Lisa Matheson.

I knew that I would be a late bloomer in college, so I spent a lot of time on organization so that I would develop leadership skills.

UNIDENTIFIED MALE: I have been involved in three processes, they all have been very interesting. One of them, I got a call couple of days ago and they told me I'm not going on that one anymore. So, I got a bit disappointed. But the other two, I'm still on.

FRAN HALES, LONDON: As well as looking for a job I try to also intersperse it with doing some social activity. Often, if I've had a bad day and I haven't really the response I've wanted from agencies, and companies, I'll take some time out. I'll go out with my camera.

LES YOUNG, ATLANTA: I've had some interviews. I've had some interviews with some insurance companies. But there, again, the problem with the insurance job search is once they look at my background, and find out that I have credit issues, I have a bankruptcy or judgments or leans, it doesn't go any further. So, I'm looking to see if I can get into something where they won't do a background check and they'll just go as far as my experience and the things that I have done in the past. But that hasn't happened as yet.

That seems to be a problem all over the place. Credit issues, the credit crunch, the problems with mortgages, people being laid off from work. You can't get the job, so you can't pay your bills, and then if you can't pay your bills, you find yourself out of a home. Then when you are out of a home, now, things get worse. And that's pretty much where I have been. I've lost my home, as you know, back in July and I've been living with my fiance since then.

And here is where I used to live.

I actually did have to declare bankruptcy about two weeks ago. I had to declare a Chapter 7. Because one of the credit unions that I have a credit card with and also my car loan, put out a judgment against me. I had to concentrate on the positive things and my fiance is very positive. She has supported me, pretty much. I don't know how long that is going to last, though.

HALES: From day to day the way that I feel about looking for a job is different.

The newspaper is useful, although, I find that there are more jobs on line and they are updated a lot quicker on line.

Some days I feel quite good. And there is a lot of interesting jobs out there for me to apply for. Other days I find it really difficult because I'm not getting any response back. And it, you know, it is difficult when you have been working for a company for a long time and you have loads of experience, why you are not getting any response back from agencies, or from companies.

Well, today I am off to a job agency and they gave me a call yesterday. And hopefully they have a couple of positions I can interview for.

UNIDENTIFIED FEMALE: Initially, did you have management responsibilities?

HALES: I used to. I would oversee the call center in the fulfillment house, so instead of managing, I was managing the processes and they did, I suppose. The company kind of reversioned (sic) itself a little bit and got rid of a load of people and well, almost everyone.

UNIDENTIFIED FEMALE: I think, yeah, we may have a role for you actually. And it is with a global above the line agency. And it will be focusing on direct response TV.

I think Fran's prospects are looking very good. In particular, her back ground was very consistent. She has some great skills. And I think there will definitely be a job out there for her. Yeah, I have high hopes.

I think the job market is certainly picking up. Without a doubt it has been a tough year. The first two quarters were particularly tough. But we have definitely seen a rise in opportunities coming through to us, in the last quarter. But there is definitely more to choose from now. I think the trend is on the up.

HALES: Oh, well, that went well. I just had an interview with a job agent and she potentially has position lined up for me, that I hopefully, can interview for. So, watch this space.

(END VIDEOTAPE)

QUEST: And next week, the last week that we will be joining our "Job Questors" on QUEST MEANS BUSINESS.

In a moment, another survivor of the financial crisis, Bill Winters, the chief exec, co-chief of JP Morgan Investment. He'll explain how he, and the bank, came through it all.

(COMMERCIAL BREAK)

QUEST: Good evening.

I'm Richard Quest, QUEST MEANS BUSINESS.

This is CNN.

The markets in New York are open and doing business. And this is how they're looking -- down 37.

You know, where I -- I suspect we're now moving into very thin trading days in terms of these movements. We've still got some time to go before the Christmas break, but overall, down just 1/3 of 1 percent.

In Europe, there was just sluggish activity. The FTSE was down by .5 percent at the close. British Airways, the banks, Barclays -- they all lost ground.

Shares in Paris and Frankfurt recovered late in the session, and they were up marginally when all was said and done. Let's not make too much of it, though, because once we get to this side of the year, there's very little actual real activity taking place.

Marcel Ospel, the former chairman of UBS, will not face any legal action in Switzerland, neither for helping Americans evade tax nor for allowing the bank to lose billions of dollars. Zurich prosecutors say there is no evidence of the bank's directors doing anything that broke Swiss law -- and that's the key to it, even though UBS has admitted defrauding the U.S. authorities by helping their clients -- U.S. clients -- hide assets.

The bank also decided there are no grounds for suing Ospel over the huge losses incurred on his watch. UBS was one of those banks the -- the fall from grace was really quite extraordinary. In fact, many banks suffered severe losses.

I wanted to know what it was like to be in the heart and to be at the head of a big bank during the financial crisis over the past couple of years.

What did it feel like when it all started to unravel?

Who knew and could one actually tell what was taking place?

Now yesterday, we met Bill Winters, the former co-chief exec of JP Morgan Investment.

Bill Winters is back with us tonight.

Why did he leave JP Morgan?

(BEGIN VIDEOTAPE)

BILL WINTERS, FORMER CO-CEO, JP MORGAN INVESTMENT: All good things come to an end. I had a -- I had a fantastic 26 years at JP Morgan. I'm very proud of what we accomplished, in particular as I ran the investment bank the last -- the last five years -- to create what -- I think certainly what we did was the best investment bank in the world.

And while I'm disappointed to be leaving right now, when I -- I feel like there's a little bit of an undone job, at the same time, I'm very happy with what we've been able to do and very happy that the firm is left on some super strong footings and I have no doubt will carry on to great strength.

QUEST: But you were disappointed to have left?

WINTERS: I was disappointed to -- to have left, yes.

QUEST: OK. JP Morgan is one of those banks that was not as badly affected. Now, obviously, you were at the helm of a large part of the bank during that period.

And what were you seeing during the run-up to the crisis which others were not?

WINTERS: I think I'd be lying if I said that we saw the -- the ultimate crisis and certainly the severity of that crisis unfolding, because we didn't.

What we saw was -- well, certainly what we expected was a more conventional credit cycle, where things get overdone and then get undone at any point at some material cost. And as a result of -- of that realization, I think...

QUEST: Boom and bust.

WINTERS: The -- the classic boom/bust cycle. And, of course, what ended up transpiring was much worse than -- than a normal boom/bust cycle.

And we did think it would be worse, because we saw that -- that some of the excesses that were creeping in, in particular in markets like the corporate lending market -- leveraged buyouts and the like -- was extraordinary.

So we did expect a -- a substantial correction and -- and some real losses. We didn't expect that to -- to follow through to a -- a full scale capital markets crisis, which, of course, transpired.

QUEST: In those years, 2005 and 2006, or 2004 to 2007, as it was building up, was there a moment when you thought, this is going to be serious?

WINTERS: I -- I don't know that I can say that -- that we recognized that it would be serious systemically. I think we did recognize that -- that we were at a point with our firm and -- and observed with other firms that extraordinary discipline was called for. So when we changed our -- our behavior.

QUEST: Do you remember that moment when you said, it's time to change behavior?

WINTERS: Yes, it was probably in -- in the early part of 2007, when a combination of the -- the terms and conditions that banks were doing business on, the associated pricing and the sheer volume of activity all said things are going a little bit too far too fast. What we actually -- we actually seemed to be in an acceleration phase rather than a -- a deceleration phase, which would be appropriate at that point.

So we chose to decelerate as a firm. And -- and the effect of that was -- was quite a large amount of avoided losses. And, of course, other people -- especially the people that came late to the business, took that as the opportunity to accelerate and capture market share. And -- and customers were very willing to do things that the customers really shouldn't have been willing to do, including buying homes that cost too much money and borrowing too much against it and taking out that extra credit card and -- and taking out that -- that corporate loan to pay a dividend rather than to invest in your -- in your plant and equipment.

So the combination of very willing borrowers and -- and very aggressive lenders contributed materially to the crash.

QUEST: And once it started to unravel, is there a moment that you can remember when you realized the whole house of cards was coming -- not a -- not at JP Morgan, but the financial system was coming down?

WINTERS: I -- I have to think that the -- the first real wake up call to all of us was -- was when Bear Stearns got into its trouble in March of 2008. So that was already a full nine months into the crisis. And there had been a number of hedge fund failures over the summer, including the Bear Stearns hedge funds, which had been handled pretty well by the financial markets and encouraging, in a way.

But as the liquidity problems hit Bear Stearns and it became clear that -- that perhaps there was also a more fundamental problem in terms of asset values, clearly, the -- the whole question of -- or the whole issue of interconnectedness and too big to fail and the kinds of terms that are used often now -- came to the fore.

(END VIDEO TAPE)

QUEST: Bill Winters, the former chief -- co-chief of JP Morgan Investment.

Interesting stuff -- a perspective -- an exclusive interview and a perspective on what took place in the crisis.

The Virgin brand hit the fast track of Formula 1 racing -- planes, trains and now automobiles -- what is Sir Richard up to with Virgin Racing?

(COMMERCIAL BREAK)

QUEST: The multi-million dollar world of Formula 1 got a facelift in the new year -- or will do. Four new teams on the grid in Bahrain come March of the first race of 2010.

Today, Sir Richard Branson officially launched his Virgin Racing team in London.

CNN's Alex Thomas was there.

(BEGIN VIDEOTAPE)

ALEX THOMAS, CNN SPORTS CORRESPONDENT (voice-over): He started his business career in the music industry. So no wonder Virgin boss, Richard Branson, used a rock band to launch his new Formula 1 team. He invested in Mana Motorsports after the team he sponsored this year, world champions Brawn GP, were bought by Mercedes.

Rebranded Virgin Racing will be one of five new teams due to compete for the 2010 F1 title.

RICHARD BRANSON, VIRGIN BOSS: Brawn, a year ago, were the -- were the underdog. They were the -- the David versus the Goliath. They not only won the -- won the Formula 1 last year, but they came in first and second. And they became the (INAUDIBLE). They became, also, very expensive.

And then what we decided to do was support another brilliant engineer and -- and -- and start the game from scratch.

THOMAS: Branson says Virgin Racing will operate on a budget of less than $65 million -- smaller than any of the other Formula 1 teams. However, they expect to be competitive, because the sport's bosses are forcing everyone to reduce costs over the next few years.

NICK WIRTH, TECHNICAL DIRECTOR, VIRGIN RACING: Formula 1 is changing and we've seen some manufacturers leave because they didn't -- they were spending too much money. I wish they could have stayed, because they -- they should have stayed for the reduction in money.

Nevertheless, it will be a completely different animal to what everybody knows now.

THOMAS: Branson is no stranger to high octane sports. Since the 1980s, he has raced a speedboat across the Atlantic, he's tried to fly a hot air balloon around the globe and hopes to send tourists into space.

Now, Branson will blast off in Formula 1.

BRANSON: If a team comes last and actually lasts in the (INAUDIBLE) for the next two or three years, actually, we may have to review it. But - - but we're going to give it our best shot and, you know, we've already got a lot of good sponsors who have come on board. So I hope we're there for the long-term.

THOMAS: Virgin Racing's new drivers include promising German Timo Glock, who turned down offers from bigger teams to join Branson and his gang.

TIMO GLOCK, VIRGIN RACING DRIVER: A lot of these current guys in the team, the team is newer. It's just a -- a great experience, as well, for me to grow up with a new team. And I had different possibilities before I met the guys here. But, you know, it's -- I do my decisions out of the stomach, normally. And when I flew back in that night, my -- my stomach feeling was made already.

THOMAS: Despite its small budget, Virgin Racing is planning to use cutting edge technology to stay competitive and be environmentally friendly. Lean and green are the watchwords for the Formula 1 newcomers.

Alex Thomas, CNN, London.

(END VIDEO TAPE)

QUEST: I hesitate to talk about cold weather in Europe, because whatever we're suffering in London, I suspect some of you are far worse -- the sort of weather that you'll need scarves, muff -- mufflers and gloves.

Guillermo is at the World Weather Center.

Am I right?

GUILLERMO ARDUINO, CNN METEOROLOGIST: You're right. And I think that you may see snow, actually, tomorrow or on Friday.

QUEST: Oh?

Oh?

ARDUINO: Yes. We see some spots -- you know where it's snow right now?

Guess something south, Richard. Throw a city in the south.

QUEST: Oh, I don't know. Let's see, in the south. In the south of England or the south of Europe?

ARDUINO: Yes. England. In the south of England.

QUEST: Oh, somewhere around Kent or somewhere around there.

ARDUINO: What about Southampton?

QUEST: Oh?

On the coast?

ARDUINO: Yes. We get snow and rain combined. So it is because it's humid and it's also cold. And this is going nowhere until next week.

Now, you are -- as you were saying, you're in better shape compared to other parts of Europe, especially in the east. Let's take Great Britain first. So, Wednesday and Friday maybe we see some snow. Also here, Northern England, Southern Scotland, we may see some snow within 48 hours.

And look at the -- look at these bands, especially there. You're going to pick up some white stuff there. That means that it may snow. And that's the one that I'm talking about for tomorrow and then on Friday we'll see some more.

Now, compare that to Moscow. The high of the day, 17; the low of the day, 18 -- negative. And it should be like this.

So it is a cold area. It's a Siberian area of cold weather that we're talking about. Look at the low clouds all over -- France, too. This is where the bad weather is, as well.

Now, the south is not getting snow. But Northern Greece is getting snow and there are alerts posted here all over the northern parts of the country. Crete is going to get rain. Then we have Friuli-Venezia Giulia here next to Slovenia in Northeast Italy. Also, a little bit father south into Emilio Romano and Abruzzo all the way to Cicilia. Here's where -- Sicilia, sorry -- is where we will see bad weather.

Northern Spain with some snow, as well. Madrid with some snow. So this is it. This jet is containing Siberian weather. So it's going to last for a week. That's why you have to be patient. And this low is bringing snow in the alps, snow in the Balkan Peninsula, also snow in northern parts of Spain right now. It's developing into Italy with bad weather. It's going to affect Turkey, too.

So a lot of patience. Look at the white stuff, that snow, and to the north we see the same. Actually, in Germany, the southern parts -- the southern parts of the country, from Tuttlingen down into Bayern is where we have alerts posted to.

France is very cold, the freezing point in Paris; Torino, next to the mountains; Milano, also, Northern Italy, in the negatives. Let's see London -- minus one.

And you know what?

It may be minus two on Thursday. So it's really cold all over. I mean you know what if you're there and this is the forecast.

With that, we go. The east and the north will be worse, though. Get ready for that.

We'll see you after the break.

Stay tuned.

(COMMERCIAL BREAK)

QUEST: Our festive World At Work -- we've reached day six of this Christmas special from the program. I'm sure you know the song, but if not, then today is the day that my true love gave to me...

(singing) six geese a laying.

A perfect excuse for me to revisit an encounter with the magician and the illusionist, David Copperfield.

It all took place in Las Vegas. It all started live on stage.

Now, remember, today's World At Work is...

(singing) six geese a laying.

Well, we've got a disappearing goose. It's a World At Work that's full of surprises.

(BEGIN VIDEOTAPE)

DAVID COPPERFIELD, MAGICIAN AND ILLUSIONIST: Are you having fun?

Here we go.

(MUSIC)

What is your name, sir?

QUEST: Richard.

COPPERFIELD: Richard.

QUEST: Richard.

COPPERFIELD: Richard (INAUDIBLE). I've got this bucket for you. It is empty -- empty, empty, empty. Richard, both hands inside the bucket. Feel, both sides are empty. Both sides are empty. Hug the bucket, arms around the bucket, hug it tight. Perfect. (INAUDIBLE) shot.

(LAUGHTER)

COPPERFIELD: Webster.

(MUSIC)

COPPERFIELD: Applause for Richard. Go back to your seat. Good job. Nicely done.

(MUSIC)

COPPERFIELD: So this is probably the coolest part. If Houdini was alive today and walked into this spot, he would see his entire life before him. Everything he's famous for is right here.

QUEST: What distinguishes a David Copperfield illusion?

COPPERFIELD: It usually will be based on a feeling or a -- an idea. It will usually have a journey. I won't just produce a car, it will be my grandfather's dream and it will fulfill a story that satisfies a -- a desire of somebody that's watching from above.

I treat the audience like they're extremely, extremely smart. So everything I do has to be true. It has to be honest.

These are the spikes that I hung 10 stories over a -- from burning ropes. Check this out. It's one of the very first things that I ever learned. If you see this, it will look like the coin has seemed to disappear. And when I was a little kid, I'd go to Macy's Department Store in New York and the man would make it appear and disappear like that. And he did it really, really 10 times better than me, because he did it 500,000 times a day.

The coin will seem to disappear like that. Then you take the -- this and you reach in.

I still love what I'm doing. I still love creating new things. I still do and it's great.

Have a seat right here, please. Relax. And...

QUEST: Ow!

COPPERFIELD: Sorry about that. Sorry to wake you up.

(END VIDEO TAPE)

QUEST: Now, you've got to admit, when it came to look -- looking at six geese a laying, that was an extremely inventive way of my producer, Matt Percival, to come up with the geese. A fascinating time with David Copperfield.

If you join our discussion and debate on Facebook, the Facebook page is questmeansbusiness. And there, of course, you can see how we are going to do seven swans a swimming, eight -- well, it's nine -- I've lost me plot here.

Anyway, all the rest of them -- 10 lords a leaping, 11 -- and we've got maids a milking. No, eight maids a milking, nine ladies dancing, 10 lords a leaping, 11 pipers piping, 12 drummers drumming.

What original ways can we find to do all of that?

The big board requires our attention at the moment in New York, where we have the Dow Jones currently is just up about -- about 30 odd points at the moment for the Dow. We are heading into that part of the -- 36.2, just a third of a point at 105000.

The next few days are going to be interesting, as we see smaller volumes, which, of course, create -- and we also see quite a bit of book squaring toward the end of the year.

There have been two major aviation stories today -- the Dreamliner 787 and British Airways and its potential 12 day strike.

When I come back, a Profitable Moment.

(COMMERCIAL BREAK)

QUEST: I spend my day covering the best and the worst that the travel industry has to offer -- the B.A. potential strike and, of course, the Dreamliner 787, flying for the first time. I've been trying to decide which of those events I want to leave you with the final thoughts about.

The BA is horrific, if that strike goes ahead.

So instead, let's talk about this little baby. It comes, of course, the Dreamliner 787. Yes, it may be two years late and it's billions over budget, but just look at it.

Why do I choose this?

Because on these sorts of planes go the dreams and the hopes of people like you and me, as we look to the future. Traveling used to be a king's ransom. But with planes like this and the XWB and the A380 and all the developments that people have worked so hard, this allows the future to take place.

And this is QUEST MEANS BUSINESS for this evening -- a busy day.

I'm Richard Quest in London.

Whatever you're up to in the hours ahead, I hope it's profitable.

Christiane is after the headlines from the I Desk.

END