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THE SITUATION ROOM

Bodies, Debris From AirAsia Plane Found; Sony Hack Debate; GOP Damage Control; FBI Stands Firm: N. Korea Behind Sony Cyberattack; GOP Leader Under Fire for Talk to White Supremacists

Aired December 30, 2014 - 18:00   ET

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


BRIANNA KEILAR, CNN HOST: Happening now: Search teams are back on the water scrambling to find more bodies and wreckage from the AirAsia crash. Investigators are getting the first physical evidence about the cause of this disaster.

Cockpit voices. For the first time, we're hearing a pilot speak just minutes before Flight 8501 vanished. Could much of the plane be intact underwater? We're also looking into a searcher's claim that he could see the shadow of the jet below the surface.

And GOP damage control. The number three House Republican now admits that speaking to a white supremacist group was a mistake. Will it cost him his leadership job?

We want to welcome our viewers in the United States and around the world. Wolf Blitzer is off today. I'm Brianna Keilar. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

KEILAR: We have breaking news this hour.

We just learned the search for bodies and plane wreckage back under way shortly after sunrise at the AirAsia crash area. The Pentagon is getting two dive teams as well as a plane ready to possibly join the operation. Crews have narrowed that search zone off the coast of Indonesia after finding wreckage at least 60 miles from the plane's last known location.

Divers are pulling bodies and plane parts out of rough waters. Searchers racing to find and recover the remains of all 162 people on board. And they're also eager to locate the plane's very important black boxes that should help reveal what went wrong.

Our correspondents and analysts are standing by. They're covering all the breaking news on this AirAsia disaster.

We begin with our aviation correspondent, Rene Marsh -- Rene.

RENE MARSH, CNN AVIATION CORRESPONDENT: Well, Brianna, today was a turning point. The investigation now begins. A wealth of information will be pulled from the wreckage, the answer to the primary question investigators are trying to figure out. What brought down this plane?

(BEGIN VIDEOTAPE)

MARSH (voice-over): For the first time, we hear voices from the cockpit of AirAsia Flight 8501 as it takes off from Indonesia bound for Singapore Sunday morning. The airline confirms debris floating in the Java Sea is wreckage from the Airbus 320.

UNIDENTIFIED MALE (through translator): The part that we found corresponds with AirAsia's part number and the serial number of the lost plane.

MARSH: Pulled from the water, luggage and what appeared to be an emergency slide and bodies, some of the remains stripped of clothing.

CAPT. WILLIAM SAVAGE, PILOT: It suggests that the airplane hit the water intact and the force of the impact tore the clothing off the bodies.

MARSH: Aircraft and ships converging on the area, including the U.S. Navy's Sampson and Fort Worth. Both ships have helicopters that can aid in recovering wreckage.

SAVAGE: The crumpling of the metal vs. shearing for tearing of the metal will tell you whether the plane broke up in flight or was in one piece as it hit the water.

MARSH: The water is 80-to-100-feet deep, making recovery more manageable, but it still could take weeks, even months before debris and bodies are recovered.

This is what divers dealt with after TWA 800 went down, a tangled debris field. Now one of the key pieces of wreckage they are looking for, the flight recorders.

SAVAGE: It will have the last 30 minutes of conversation between the crew and any transmissions to air traffic control. And the other black box will give you almost a moment-by-moment readout of what systems were operating properly.

MARSH: After the black boxes are found and recovered, they will be taken to a lab like this facility CNN visited earlier this year, where it will be disassembled and analyzed for clues.

DR. JOE KOLLY, NATIONAL TRANSPORTATION SAFETY BOARD: We have a so- called sound library in which we are able to determine the particular signature of a sound, say, like an explosion.

MARSH: The digital recordings could reveal what was said in the cockpit and if there was a mechanical failure or pilot error.

But answers won't come quickly. Often, it takes a year to arrive at a final conclusion as to what caused the fatal crash.

(END VIDEOTAPE)

MARSH: Well, Brianna, the black boxes, they are housed in the tail of the A-320. So investigators will be searching for this portion of the plane. It

is strategically placed back here because there's less of a chance that it is damaged. This is why it is so critical. These digital recorders essentially will reveal what was said in the cockpit, if there was a mechanical failure or if there was pilot error -- Brianna.

KEILAR: So important. So the search continues. Rene Marsh, thanks.

We are told that many passengers' relatives became hysterical when they learned that the bodies that, that some bodies, I should say, had been found. Some even fainted.

CNN's Andrew Stevens is at the airport in Indonesia where family members are gathered.

Just unimaginable what they're going through, Andrew.

ANDREW STEVENS, CNN CORRESPONDENT: Yes. Such pain, such grief.

And the way the news was delivered was just the worst possible way imaginable. The passengers' families have been gathered inside the building behind me, at the crisis center, Brianna. And they were listening to a live news conference from the head of the search operation who said at that conference that he was now 95 percent sure that the debris that had been spotted a few hours earlier was in fact from AirAsia 8501.

As if that wasn't bad enough, that sort of confirmation, while he was announcing this news, the local, one of the local television stations was actually showing images of bodies in the water, a helicopter hovering over what looked like a body in the water. And I was speaking to a man who was with the relatives.

He himself was a very close friend of a man whose entire family, three children, wife, plus a mother-in-law, were on that flight. He said the scenes inside there when they saw those pictures, when they heard the news, he said people were sort of becoming hysterical. They were screaming, they were crying. Two people he saw fainted.

You can only imagine just the shock and the way they found out, it must have been so, so difficult. And the pain will persist for days, because we're being told the conditions around the search area this morning, that the search is on both in the air and the water. But there is heavy, heavy rain, which is obviously going to restrict visibility there.

Brianna, and we also are being told by the director of operations at the search center that they haven't been able to relocate that shadow that they first saw, they told us they first saw yesterday. So that's obviously going to be critical. So we could have still days before these family members here will actually see the remains of their loved ones. They will have to identify them. It will be very, very difficult.

KEILAR: And just unbearable uncertainty right now. Andrew Stevens, thank you so much for that update. I want to bring in now the former NTSB Managing Director Peter Goelz.

We have CNN law enforcement analyst Tom Fuentes, CNN aviation analyst Miles O'Brien and CNN aviation correspondent Richard Quest. We also have CNN safety analyst David Soucie, a lot of experts here today. David I should tell you is the author of a new book on the disappearance of Malaysia Airlines Flight 370.

Peter, first to you. We have a limited amount of debris that has been discovered. How does that inform the search going forward?

PETER GOELZ, CNN AVIATION ANALYST: It helps you focus your attention on where you found it. But in terms of actual accident investigation advancement, it is really minuscule.

It is not enough. It simply confirms, if you have the plane in the water, it was a tragedy. It has ended. Now you have to find more of it. But it is a first step.

KEILAR: Investigators need the black boxes. This is so critical to have the voice recorder like this one here and actually the data recorder.

TOM FUENTES, CNN CONTRIBUTOR: That's right. And then by examining the bodies, examining the data recorders, examining the debris, they can start to put together the picture of this and even from the bodies, to be able to determine what was the cause of death, do they have evidence of shrapnel or an explosion that tore into their bodies, did they have air in their lungs or water, did they drown after the plane hit the ground or were they dead from blunt trauma, the striking of the concrete-like surface of the water?

There's so many things they can tell even now before finding the rest of the plane.

KEILAR: Richard, we're not talking about a lot of debris here. It seems to be what appears to be an oxygen tank, there's a maintenance kit, there's an inflatable raft slide. That's not much. Right? We can't really say a debris field has been located.

RICHARD QUEST, CNN AVIATION CORRESPONDENT: No. We can't. You're right. The debris so far is rather scant.

But the fact is, let's be grateful for what you have got and what you have got is now, firstly, proof that that is where the plane is. It may be five or 10 miles in a different direction. It may be 10 miles in any direction. But at least you now know.

Firstly, the plane came out of the sky. Secondly, this is the vicinity of where it is. And really, over a two- or three-day period in this part of the world work with the Java Sea and its various currents, it will not have moved that far.

KEILAR: David, you have some concern about this lack of debris. Why is that a red flag to you?

DAVID SOUCIE, CNN SAFETY ANALYST: Well, there's just so many missing pieces. But when we start to try to paint this picture together, I'm still not convinced that we're looking at an aircraft that hit in one place, because if it had, there would be a lot more debris than that, because we're talking about a door that came off, we're talking about pieces of the aircraft, and actual victims of the accident that are ejected from the aircraft.

Typically, in this type of scenario, you would find a lot more debris than what we see here. So, I'm still not convinced this didn't happen, a portion of this aircraft come apart in the air. If you remember MH17, there were three different locations.

But, as Richard said, I wouldn't expect it to be more than four or five miles in any direction from this point.

KEILAR: Yes, MH17, you mentioned that it was spread out over six miles because we know broke up after being hit by a missile.

Miles, you have Indonesian search-and-rescue officials saying, you know, we found a shadow of an object that looks like a plane. We certainly haven't confirmed that. They're struggling to find this again. But what do you think the chances are that this plane is largely intact underwater?

MILES O'BRIEN, CNN AVIATION ANALYST: I think there's probably a very good chance of that.

Hearkening back once again to Air France 447, which has some interesting and frightening parallels to this accident, that particular aircraft, also an Airbus, a different model, flew into a thunderstorm. The crew was met with all kinds of consequences as a result of that, including icing over some key instrumentations and some data probes that were able to ascertain the airspeed.

It put them into a stall. The plane went down essentially flat on its belly and landed more or less intact in the Atlantic Ocean. Now, so that's quite possibly that this scenario could apply in this case, some sort of aerodynamic stall caused by this tremendously bad weather scenario.

It is worth pointing out, though, that then, eventually, there were about 3,000 floating pieces of wreckage of Air France 447 found in the Atlantic. So we're just at the beginning here. It will be interesting and it is very important to know how wide a debris field it is because if it did in fact break up midair, you would expect to see something more along the lines, as you mentioned, with MH17. We would have debris scattered over a much larger area.

KEILAR: Yes. We have seen so little at this point.

Peter, he brings up Air France 447. The black boxes were so key in that flight, because they actually -- and this happens so many times when these recorders are recovered. They completely change the perception of what happened. They reveal the truth. So in this case, as we are very hopeful that the black boxes will be recovered, where do they go? What nation will take over the analysis of the data and voice recorders? GOELZ: There is only a few countries that have the computer

capabilities and the experience to download the boxes.

You only get one shot at that. You don't want to mess it up in any way, damage the material. My guess is either the French or the Australians will be the countries of choice. Australia, they have done it before. It is closer. They can get it there within hours and have the information back on scene in hours. If they go to France, who is an accredited representative to this representation, it will take some hours to get the material to Paris, to download and then to get to the interpretation done.

But I would guess either France or Australia will take the lead.

KEILAR: Until you have the black boxes, Tom, you cannot really rule out what causation may be. We think weather may be a factor. In many of these crashes, human error plays a role or mechanical failure plays a role. But what about foul play? Can that be ruled out at this point?

FUENTES: I think at this point nothing can be ruled out until, as you say, they have the flight recorders. And especially listening to the two pilots talking to each other or screaming at each other or whatever was going on while they are trying to face whatever currents they were faced with, that will tell a lot, along with the data of what the plane was doing, the engine function, the altitude, direction, speed, all of those type of things, or whether the system was coming off or coming apart.

But the voices themselves, when they find those cockpit recorder -- or the cockpit recorders and can determine what was being said by them at the time of the crisis, that will tell a lot.

KEILAR: David, TWA Flight 800, investigators painstakingly put together, they basically put back together the plane. We have pictures of it right here, collecting all of these pieces from the ocean floor, trying to reconstruct and see exactly what happened. This was somewhat helpful. Do you think that this is what we're going to see happen with 8501?

SOUCIE: Well, it is much like the opposite of taking every layer of an onion off in an accident investigation.

You're building the onion every layer from the inside out. So at the point that you find conclusively that there is evidence of the root cause of the accident, that is when you stop adding layers. So in this case, it was necessary to build the entire aircraft back. And Peter can tell us more about that. But how that happened was that there just simply were not answers until they saw the entire impact, because there was a lot of questions about whether there was a missile from the outside in or an explosion from the inside out.

Those were answered, but it took a lot of assembly work before that was truly answered conclusively.

KEILAR: Painstakingly. You can see how much work it did take to put that together.

Richard, we have heard from AirAsia CEO Tony Fernandes. He said the airline isn't making sweeping changes at this point. He said he's open to making changes in the future. What does that indicate? Should there be some sort of precautions that this airline or other airlines that use the A-320 should be taking right now?

QUEST: No, not really, because we don't know what the cause was. I mean, arguably, it looks like the weather was a major contributory factor, but we don't know why. We don't know whether it was these pilots that merely made a bad decision, or executed a poor decision.

So in that environment, Tony Fernandes was quite right what he said today. Look, we are going to wait and see. But he did also make it clear that, as the chief exec, he stands at the front. It is his airline. He is going to stand by the people, by the victims, the victims' families, and by his employees.

And this is something that has been very interesting, very different from Malaysia 370, very different from many air accidents where the chief exec is usually being buttressed by armies of lawyers and P.R. people who are basically saying don't say a word. You could end us up with legal liability. Leave it to the spokesmen. Leave it to the lawyers.

Not a bit of it from Tony. He has come out and he's basically said it's my airline, I'm the CEO and I will be here until this is over.

KEILAR: Yes. And he's been acting very much as the spokesman for his airline.

Thank you so much, gentlemen, Peter Goelz, Tom Fuentes, Richard Quest, David Soucie and Miles O'Brien. Thanks to all of you.

Still ahead, we're taking, I guess you could say a more in -depth look on the underwater search for more plane wreckage. We will talk about the best tools, we will talk about the really tough challenges here with two oceanographers including one who helped locate the ruins of Air France Flight 447.

(COMMERCIAL BREAK)

KEILAR: Divers and search equipment have been rushed to the area where recovery teams now are looking for more bodies and wreckage from AirAsia Flight 8501.

As crews map out the debris field, they have a wide variety of tools to choose from for their underwater search.

CNN's Gary Tuchman is looking into that.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): The names are intriguing, but they are potential to accomplish is amazing. The Remus 6,000, the Orion, the Triton, they are all autonomous underwater vehicles and remotely operated vehicles, AUVs and ROVs.

MARTIN STITT, ROV SUPERINTENDENT: The black box and not a problem at all for an ROV to pick it up in a basket and recover it.

TUCHMAN: This is the Triton XLS ROV based in Florida connected to a ship by an umbilical cord. There are the AUVs, which are not connected. This is the Orion owned by the U.S. Navy and run by a company called Phoenix International.

Vehicles like this sends sound signals to the sea floor, which paint a picture of what is on the bottom. Then there is the Remus 6000 also an AUV. The team from Massachusetts is already had dramatic success locating the wreckage of Air France Flight 447 two years after it crashed in the South Atlantic Ocean.

The discovery was only possible because of this AUV. This is the initial shot of the Air France debris captured by the Remus 6000.

MIKE PURCELL, WOODS HOLE OCEANOGRAPHIC INSTITUTION: They can go up and down mountains that are up to 40 degrees and slope. They are very stable so you get really good data almost all the time.

TUCHMAN: Another AUV that could be used? The Dorado, based at the Monterey Bay Aquarium Research Institute in California where CNN's Stephanie Elam visited.

The other option is manned submarines or submersibles. This vehicle that resembles a space ship is a Johnson Sea Link based in Florida. This sub located wreckage in the Atlantic Ocean after the tragic explosion of the Space Shuttle Challenger in 1986.

(on camera): This sub is 24 feet long. It is about 11 feet tall. It weighs about 28,000 pounds. That has enough oxygen and provisions aboard for the people to survive under water for up to five days.

(voice-over): This sub is retired though. Other subs that can go deeper can be brought into action along with AUVs and ROVs ready to assist if asked.

Gary Tuchman, CNN, Los Angeles.

(END VIDEOTAPE)

KEILAR: And we are joined now by two oceanographers, CNN analyst David Gallo of the Woods Hole Oceanographic Institution, and we have Erik van Sebille of the University of New South Wales.

David, these are relatively shallow waters here, average of 120 feet deep, maybe as little as 80 feet deep in the area we're talking about. What are the best instruments to use in this setting?

DAVID GALLO, CNN ANALYST: Well, it will be combinations of things in the beginning. We will see probably a pinger locator, an underwater microphone, to listen to the sounds of the pingers. You will see sonars, which are similar to the ones we just saw in the video clip. But there are probably much lighter, smaller vehicles than you see there.

Those are all designed for deep water. So you see a combination of both of those. You might even see some cameras involved. The most important thing though is not just the technology, it is the teams that go along with the technology. It is like a musical instrument. Without that musician next to it, it means nothing, and then the orchestra. So bringing it all together under one leader with a solid plan for all of these different bits of equipment is very important.

KEILAR: And how essential are divers here?

GALLO: For me or Erik?

(CROSSTALK)

KEILAR: Oh, no, for you, David.

GALLO: Oh, well, I think they can play.

They're right at the edge, maybe a little bit shallower than we have been saying. They can be very useful in this case. It depends on what the investigators decide that they want. If it is just get in there, find black boxes with an underwater diver-held listening device, maybe that's the answer. If it is to make a map of the wreck site, we took 150,000 images of Air France 447 and made an optical map, like a Google Earth map of that wreck site, so that the investigators had everything in that wreck site. If they want that, that's probably best done by robotics.

KEILAR: Sure.

And, Erik, you look a lot at currents, some of how weather really impacts this area. For this search area, what would your concerns be?

ERIK VAN SEBILLE, OCEANOGRAPHER, UNIVERSITY OF NEW SOUTH WALES: Well, it is very much tidally driven.

It means that the tides go back and forth and back and forth. There's not really a big strong current that flushes everything out. To some extent, that's good news for the search team, because it means everything kind of like spreads uniformly in a bigger and bigger area.

But this spread will be exponential. So even though now it is still a relatively small area, maybe only a few miles, the longer we wait, the larger the area where all the surface on the debris is, the bigger it will be, particularly because the buoyancy of the different pieces of debris is different.

You can imagine that pieces of debris that really sits on the surface of the ocean are much more wind-driven. Pieces of debris that have much kind of drag in the ocean are more driven by the currents. That will just make the area of all the surface, of all the debris on the surface and bigger and bigger and bigger over time.

KEILAR: When you're talking about whether it is on the surface, because I expect that just these few items that have been found, that there must be more for searchers to find -- if you're talking about on the surface, and you're talking about on the ocean floor, how wide of an area could this debris field search over, let's say, even in the next week and then what are you talking about if this gets into several weeks?

VAN SEBILLE: Yes.

On the surface, it is now probably a few miles. But as we're talking over weeks, you can actually see, start seeing things appear on beaches. The Java Sea is so small relatively compared to the open ocean, that the debris could quickly hit the boundaries of it.

Under the ocean, on the seafloor, it is a very different story. The currents are not very strong in this area. So don't really expect debris on the bottom of the sea to move a lot. But, of course, the thing is then, how do you match up everything that is on the surface to whatever is down on the seafloor?

KEILAR: Oh, yes. That's certainly a key situation they're trying to figure out at this point.

David, the rescuers or searchers have found some debris. But how long -- can you even tell how long it will take to locate this black box?

GALLO: No. That's impossible to do.

In some cases, if it's right there, if that's the shadow that was actually an airplane that was seen, it could very quickly, a day or maybe two. If they have got to search with the pingers and they're searching a relatively confined area, it might be a week's time. But I don't expect it to go much longer than a week.

It is very possible that it could. But I'm hoping against -- I'm hoping and praying that it will go much quicker than that.

KEILAR: Certainly, especially because of what Erik just spoke to with this debris field becoming larger and larger.

Erik Van Sebille, David Gallo, thank you so much to both of you.

And just ahead, will AirAsia survive this disaster? We will be looking at the possible damage to this airline that has been very successful.

And the FBI is brushing aside speculation that North Korea was not behind the Sony cyber-attack after all. We will tell what you sources are revealing to CNN.

(COMMERCIAL BREAK)

KEILAR: We have more breaking news to tell you about. We just got a statement from the White House on the discovery of bodies and wreckage from the AirAsia flight that crashed, AirAsia Flight 8501. It says, quote, "The United States offers condolences to the families and loved ones of those who perished on Indonesia's AirAsia Flight 8501, and our thoughts and prayers are with those who await news on the passengers and crew who remain missing."

It goes on to stress that the U.S. is working Indonesia to provide assistance for the recovery operation.

The CEO of AirAsia says he's staying focused on the crash recovery operation underway off of Indonesia right now. But he says the company will make changes if necessary once the investigation is complete.

This disaster, a very big blow to an airline that was considered both safe and successful. CNN Money correspondent Christina Alesci is looking into that for us.

Christina, this is really the first bad mark on AirAsia's safety record.

CHRISTINA ALESCI, CNN MONEY CORRESPONDENT: That's right. This company made a name for itself by bringing affordable air travel to a part of the world that never had it. And it won many awards doing it.

Now, AirAsia is known to the rest of the world as a company whose plane went down with 162 people on board. Take a listen.

(BEGIN VIDEOTAPE)

ALESCI: Until flight QZ-8501 made international headlines, AirAsia was a local success story. Back in 2001, a Malaysian entrepreneur bought a failing airline with two planes to its name and $11 million in debt. He paid a token price of just 25 cents.

Today, AirAsia is one of the biggest low-cost carriers on the continent. Its fleet of 158 planes fly to 83 destinations in 17 countries, and it celebrated its success with some flair. A former beauty queen turned pilot appears on the cover of its annual report.

"The New York Times" called AirAsia a pioneer in 2007 for importing the low-cost model to Asia. In its early days, some of its flights cost just a few dollars a seat.

The airline's founders -- an unlikely partnership that includes a former music executive and a (UNINTELLIGIBLE) director -- saw an opportunity in southeast Asia's rapidly growing middle class.

That growth has attracted rivals. There are now nearly 60 low-cost carriers in the region. And that competition hurt AirAsia's financial results in 2014, with the airline clocking one of its worst quarters in its 13-year history.

But now worries about revenue are giving way to worries about reputation. Flight QZ-8501 is AirAsia's first major crisis; and as investigators piece together the cause of the crash, one of Malaysia's biggest success stories could unravel.

(END VIDEOTAPE) ALESCI: Now, Brianna, if you're looking for a very broad gauge of how this crash may impact the company's financial results, the stock price is somewhat of an indication. And it's down about 7 percent over the last couple of days.

But just to put this into context, this is a company that generated $1.4 billion in revenue last year. No one is suggesting it's going away. But what most people don't realize is just how fast this revenue has grown over the last couple of years.

And what this may do is raise questions about whether that rapid expansion came too quickly and perhaps at a cost. Whether that -- the training wasn't right for the pilots or the staff. We don't know the answers to that question, but they will certainly be raised.

KEILAR: It is a big question now, if safety has been strained with this expansion. A great question to ask. Christina Alesci, thank you so much.

I want to bring in now our CNN aviation correspondent Richard Quest.

So, you know, certainly AirAsia, Richard, it's not going away. And this has really been a success story until now. But you have revenue down as competition went up. Now with this happening, what is -- what does the future of AirAsia look like?

RICHARD QUEST, CNN CORRESPONDENT: I think AirAsia is going to -- obviously, it's going to survive. There's no question about that. It is the second largest low-cost carrier in the region after Lion Air. It has hundreds, and I mean hundreds, of A-320s on order at the moment. It's opening subsidiaries in places like India, as well. Remember, in this case it was Indonesian AirAsia.

So I think what the company will do now, it's going to be a moment of introspection. Because they will obviously be looking at what caused the pilots to do what they did, what caused the aircraft. Once the final report is known, you have, as an airline, as any airline does, you say, where did we fail if we failed at all?

And for an airline that has grown so fast as AirAsia, that will be the key moment. Because the reputation will be damaged. But let me tell you, there are lots of airlines in Asia that have truly dreadful reputations.

KEILAR: Oh, sure. Some have been blacklisted as we've learned here in the last couple days. This route that you had, that this plane was taking, it's a busy route. You had six other flights that were nearby when the AirAsia flight went missing. This AirAsia flight was flying at the lowest altitude among all of them.

But are the skies too crowded? And is that dangerous?

QUEST: Ah, a very good point. I was reading a capital report, an aviation report today which said there were something like 47 low-cost carriers at the beginning of the year, but in a couple of years, there will be 60 low-cost carriers in Asia. They are -- what Southwest did in the United Nations, along with

Spirit and JetBlue and all the U.S. low-cost carriers, these airlines are doing in it Asia. They're doing it with things like Nok Air, Tiger, Jetstar, and obviously AirAsia, Lion. And they are literally taking people who've never flown in their lives. You know, one person put it crudely, they've gone from the rickshaw to the airline seat. And that's because their model has driven down the cost.

Putting all of this together, there's no doubt that AirAsia survives. There will be a moment in which it has to decide what it has to do to reflect what went wrong, if anything did. And the rest of the industry -- and this is core -- the rest of the industry has to actually analyze whether the regulatory environment has enough strength in the region.

KEILAR: And you can see how important these low-cost carriers are. The ones, certainly, that are safer than others, uniting families, really, that might not have been united before. This is very important.

But at the same time, are these low-cost carriers -- it's about the bottom line. Are they doing any of this at the risk of safety?

QUEST: They will say not. And most of the low-cost carriers, AirAsia being an exception, is affiliated in some way to a bigger carrier. Tiger Air with Singapore Airlines, for example; Nok with Thai Airways. So they're not all standing on their own.

But to get -- to put this into perspective, take a trip from Detroit to Boston; from Chicago to Nashville; Miami to Cleveland. That's the same sort of -- Orlando to New York. That's the same sort of length that these flights are now doing. Phuket to Bangkok; Bangkok to Jakarta; Jakarta to Singapore, right the way across Southeast Asia. These airlines and their larger counterparts are now creating an environment that didn't exist before.

KEILAR: Richard Quest, thank you very much. And just ahead we will have more on the AirAsia crash search.

Plus, who is behind the Sony cyberattack? We're getting some new information from inside the FBI about speculation that North Korea is not really to blame.

(COMMERCIAL BREAK)

KEILAR: Stand by for more breaking news on efforts to recover bodies and wreckage from AirAsia 8501. But, first, the FBI is holding firm tonight on its claim that North Korea was behind the Sony cyberattack despite evidence that appeared to suggest otherwise.

Our justice correspondent Pamela Brown has been working her sources. There's some discrepancy here but the FBI definitely has an opinion about this.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: That's right. Unequivocally, Brianna, they're standing by what they initially said. FBI officials that my colleague Evan Perez and I have been speaking with really are adamant that the agency's initial assessment, that the evidence points conclusively to North Korea and North Korea alone hasn't changed even after the FBI held this courtesy meeting that they call it a courtesy meeting last night with private cyber scientists who dispute that claim.

(BEGIN VIDEOTAPE)

BROWN (voice-over): Despite skepticism among some cyber experts, the FBI is standing firm by its conclusion that the North Korean government is responsible for the devastating Sony hack.

A conclusion reinforced by President Obama.

BARACK OBAMA, PRESIDENT OF THE UNITED STATEES: I think it was an act of cyber vandalism that was very costly, very expensive. We will respond proportionately as I said.

BROWN: Some private cyber scientists, though, argue the U.S. government got it all wrong, saying that the Sony hack was actually an inside job. The Silicon Valley based firm Norse presented their case to FBI agents in a three-hour meeting Monday night, evidence they say points to four suspects, including at least one former employee. A woman code named "Lena" who work for Sony for 10 years before being laid off in May.

SAM GLINES, NORSE CORPORATION: The suspects, at least one had ties to, and critical knowledge of Sony systems, IP addresses, credentials, et cetera.

BROWN: Norse says Lena and other suspects they've identified had direct ties to the hacking group the Guardians of Peace, which has claimed responsibility for the Sony breach.

RON HOSKO, FORMER FBI ASSISTANT DIRECTOR: The FBI is not going to expose to the public all the tools in their tool box.

BROWN: Former FBI assistant director, Ron Hosko, says the FBI would have evidence that it would not share with the public, and that the agency would not point the finger at North Korea without rock solid proof.

HOSKO: They are not going to be embarrassed. The FBI's stamp will be on the answer to this question.

(END VIDEOTAPE)

BROWN: And law enforcement sources we've been speaking with say Norse misinterpreted the evidence that it presented, and sources reiterated that the company doesn't have access to the mountains of classified evidence collected by agencies such as the FBI, the Department of Homeland Security, foreign partners and private sector with this particular case. But, Brianna, this investigation is ongoing and there is always a possibility that the FBI could release more information to the public backing up their case. KEILAR: But they seem so darn adamant about it -- the FBI does, that

it makes you -- they would have to do a real about-face in order to say that their conclusion is different than it is.

BROWN: Absolutely. They certainly would. And remember, they looked at all scenarios in the very beginning, including whether this was an inside job. And very early on, sources we've been speaking with say they felt like it was North Korea.

KEILAR: All right. Pamela Brown, thank you so much.

And just ahead, more breaking news coverage of the AirAsia search that resumed just a short while ago. It is morning time in Indonesia.

Plus, can the third ranking House Republican hold on to his leadership job? There is growing outrage about his past speech to a white supremacist group.

(COMMERCIAL BREAK)

KEILAR: More coverage of the AirAsia search operation ahead.

We have other breaking news right now. The number three House Republican is fighting to keep his leadership job after a revelation that he gave a 2002 speech to a white supremacist group. Some Democrats say his explanation doesn't pass the smell test but the House speaker is standing by him and standing by him pretty firmly it seems.

CNN's Athena Jones is here with more.

ATHENA JONES, CNN CORRESPONDENT: Brianna, this 2002 speech has been getting a lot of attention and not the good kind.

(BEGIN VIDEOTAPE)

JONES (voice-over): The third ranking House Republican is under fire for a 2002 speech he gave to a group founded by former Ku Klux Klan grand wizard and well-known anti-Semite David Duke. Louisiana Congressman Steve Scalise said he made a mistake, saying he didn't know the European-American Unity and Rights Organization was affiliated with white supremacy.

In a statement, he said he wholeheartedly condemns the views of the group. "It was a mistake I regret and I am emphatically oppose the divisive racial and religious views groups like these hold. I am very disappointed that anyone would try to infer otherwise for political gain and decry the group's hateful bigotry."

Scalise says that as a then-state representative, he spoke to many groups that tout his opposition to a tax increase and other issues.

Earlier in a telephone interview with CNN affiliate WWL, Scalise said --

REP. STEVE SCALISE (R), LOUISIANA (via telephone): I'm not familiar with who that group was, but, you know, from what I've seen about them, they don't represent the values that I represent and I detest hate groups of any kind. I work with people of all races and all colors and I try to help people, whether they voted for me or not, and I've got a long record of doing that that I'm proud of.

JONES: But after Scalise apologized, House Speaker John Boehner released a statement of support for the majority whip, saying Scalise had made an error in judgment, and "I know Steve to be a man of high integrity and good character. He has my full confidence as our whip."

The Democratic National Committee, the Democrats congressional campaign arm, and a spokesperson for House Minority Leader Nancy Pelosi blasted Scalise.

Meanwhile, Democratic Congressman Cedric Richmond, the only black member of the Louisiana congressional delegation, told WWL --

REP. CEDRIC RICHMOND (D), LOUISIANA: I don't view Steve as having racial challenges at all. I think that he's just a hard-working public servant that will go talk to anybody at any time, whether he agrees with their social beliefs or not.

JONES: The support of an African-American colleague like Richmond is significant.

But in a 1999 interview with "Roll Call", Scalise told the paper he embraced many of the, quote, "conservative views" as white supremacist David Duke. This controversy comes as the Republican Party is trying to expand its appeals to minorities in hopes of the improving their chances on the national stage in 2016.

(END VIDEOTAPE)

JONES: Now, there are a lot of folks with questions of how he could not have known about Duke's affiliation with this group. David Duke told "The Washington Post" that his long-time political adviser was, quote, "friendly" with Scalise back in 2002 and said that relationship was the reason Scalise accepted an invitation to speak at the event in question.

Now, Scalise's office has not responded to requests for comment on Duke's remarks -- Brianna.

KEILAR: Athena, thank you so much.

I want to bring in CNN political commentators Marc Lamont Hill and Kevin Madden to talk about this.

You heard Scalise's statement today, Marc. He said this was a mistake. He said he regrets speaking to the group. Is this enough?

MARC LAMONT HILL, CNN POLITICAL COMMENTATOR: Well, certainly I don't doubt that he thinks it is a mistake now?

Is it enough? Yes, it's enough. I mean, ultimately, we have to see whether or not this is a distraction, whether or not he can continue to do his job. I think there are more considerable question marks here. I don't believe, I don't buy the full story. I think there is more to this. But ultimately, I don't think there is much more we can do.

KEILAR: You know, Kevin, that it's possible that Scalise's camp is saying he didn't know what this group is amount. At the same time, you kind of look back on the time, 2002, and there was a lot of awareness certainly in Louisiana about David Duke. Do you think it's possible he really didn't know what this group was about?

KEVIN MADDEN, CNN POLITICAL COMMENTATOR: Well, I think we have to go by Steve Scalise's own words here. I think we have to take him at his word. It is important that the facts as we know them right now are on Steve Scalise's side. He said he didn't know about the group. He said he was talking about a tax issue. He was not in any way endorsing the organization's platform.

And I think if you look at the people who have testified to Steve Scalise's character and integrity -- most notably as Athena pointed out in her piece, Cedric Richmond who is an African-American Democrat, that he doesn't believe Steve Scalise has a racist bone in his body. I think those facts stacked against some of the accusations or insinuations or speculation, I think we have to take Steve Scalise at his word.

KEILAR: You worked for House Speaker John Boehner.

HILL: And I disagree.

KEILAR: I know you do disagree and I wonder about that as well. Yes, jump in here before I read the statement. You disagree about whether or not --

(CROSSTALK)

HILL: Well, I think all of the facts matter. And I think Kevin is right, we have to look at the full body of evidence, not one thing or the other.

I think it's the exact opposite. I don't think it's our job to take him at his word. I think it's our job to take all politicians, Democrat, Republican, white, black, and apply scrutiny to the claims that they made to see if they are true.

There was a considerable amount of evidence, a considerable amount of news buzz about this particular convention. There was a little league team from Iowa that pulled out. There was a debate about whether or not the hotel should be endorsing this event by honoring the contract. There was a lot of public conversation in this district about them being a white supremacist group.

He also said at one point that he agreed with David Duke on key issues. I'm not saying he's a white supremacist, I'm saying that he may have made a decision that tax issue is enough, was sufficiently important enough to him that he's willing to go there anyway. And just because the black guy says he's not racist doesn't mean he's not, anymore than white person saying he is, it doesn't matter.

KEILAR: OK. So, I want to read the statement from the speaker. He says, "More than a decade ago, Representative Scalise made an error in judgment. He was right to acknowledge it was wrong and inappropriate. Like many of my colleagues on both sides of the aisle, I know Steve to be a man of high integrity and good character. He has my full confidence as our whip and he will continue to do great and important work for all Americans."

That sounds, Kevin, and you work for the man, like pretty full- throated support.

MADDEN: Well, it does. And I think it goes to the fact that Steve Scalise has been as direct and honest with his colleagues about this, that it was a mistake to do it. Even in hindsight if he had known that, of course, he wouldn't have spoken to that group.

And then it goes to his core convictions. Is he somebody who believes in bigotry? Is he someone who believes in intolerance?

KEILAR: Could that change, though? And I ask you --

MADDEN: This is important. Let me finish my point. He is not somebody who believes in intolerance. He is somebody who believes in bigotry and he has a reputation amongst his from Democratic colleagues and Republicans colleagues, as somebody who's uniter. So, I think that is the reason that John Boehner is taking that stance.

KEILAR: Final 15 seconds to you, Marc?

HILL: Again, I think it's too early to say that he is a racist, a white supremacist. The evidence seems to suggest the opposite. I don't think Steve Scalise is a racist or a white supremacist. But he still made a bad choice and I think the jury is still out on what ultimate consequence of that will be.

KEILAR: And we're certainly going to wait to see if more information does come out about this.

Thank you, gentlemen.

And thank you so much for watching. I'm Brianna Keilar in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.