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Quest Means Business
Plane Debris Analysis to Begin Wednesday in Toulouse; Beijing's Controversial Olympic Win; Chinese Stock Market Slumps in July; Families Grieving Anew Over MH-370; IMF Approves Another $1.7 Billion for Ukraine. Aired 4-5p ET
Aired July 31, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00]
RICHARD QUEST, CNN HOST: At the New York Stock Exchange, the Fire Department of New York celebrating 150th anniversary as the bell rings.
And a good...
I can obviously say we've never had a gavel come apart. There you are. For the first time, New York's bravest has broken the gavel on Friday, July
the 31st.
(MUSIC PLAYING)
QUEST (voice-over): There's growing confidence with the contents of one crate -- this crate -- now on its way to Paris -- will solve one of
aviation's greatest mysteries.
Beijing takes first place to host the Winter Olympics. Almost everyone else was scared off.
And British Airways' parent company is packing in more passengers and squeezing out some more profits. I'm Richard Quest. It may be a Friday
but I still mean business.
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QUEST: Good evening. We begin tonight with a long journey that is now underway as growing confidence in the piece of debris found on the shore of
a remote island in the Indian Ocean.
That debris, of course, the flaperon from a 777 that will hold crucial clues about the disappearance of Malaysia Airlines 370 and the fate of the
239 passengers and crew on board.
I say will hold; that's the hope. The debris was discovered two days ago. It's now being loaded onto a plane. It's ready to leave Reunion. It's
bound for Paris, where it'll then transfer to another journey to Toulouse for detailed analysis. The Paris prosecutor's office says the analysis
will be begin on Wednesday.
Our senior international correspondent, Fred Pleitgen, is in Toulouse.
If the debris or the flaperon arrives tomorrow, Fred, why won't the analysis begin until Wednesday?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's a very good question, Richard, and we asked the French prosecutor's office exactly
that. And they said, listen, one of the things that people have to keep in mind is that, of course, they understand that people want to know as fast
as possible whether or not this is indeed part of a 777 or whether this indeed part of that specific 777, MH370.
But they also have to keep in mind that this is also a very complex criminal investigation that is going on now. Of course, there were French
citizens on board. There were Chinese citizens on board. And of course Malaysian citizens as well. It's a Malaysian plane and part of it has now
been found in French territory.
And so there's going to be a lot of investigators and judicial officials from a lot of countries coming in here to participate in that
investigation; just a couple of minutes ago we heard that there will be representatives both from Boeing as well as the American National
Transportation Safety Board, the NTSB, also coming here to Toulouse.
They're all going to have a big meeting here on Tuesday with French judicial officials, with French analysts and also with Malaysian officials
as well, put together a team then determine how that team is going to work. And they're going to have to unseal this evidence, that crate, together and
then move forward.
So they're saying all of this will take some time and that's the reason why they say the earliest that the analysis will start, of all of this, is
going to be Wednesday. But they also said that they believe they have the technical capabilities here to find out very, very quickly what exactly
this is and determine whether or not this is the clue that you were talking about, that piece of MH370 -- Richard.
QUEST: What you're saying and what I'm hearing is an enormous amount of jurisdictional difficulties, if you like. The Australians do the search,
put it in their flight information region; the Malaysians are doing the main investigation because they're the state of registry.
But this is another wrinkle in all of that because this piece was found in France.
PLEITGEN: Yes, absolutely. And I think not only are there jurisdictional difficulties, but this is also completely new territory that really hasn't
been there in many ways. You're absolutely right. You have the Australians who are doing their part of the investigations because many
believe there -- or that that is the main search area at this point in time.
At the same time, of course, you have Malaysia, which is still very much a part of all this as well. They've sent officials here to speak to the
French. And then the fact that this happened on a French territory, of course, is what gets the French involved in all of this.
And so therefore there really isn't a blueprint for all of these agencies, all these people to work together and they really are making a lot of it up
as they go.
But one of the things that we do have to keep in mind --
[16:05:00]
PLEITGEN: -- is that once it does get going, they believe it's going to happen very quickly. The lab here, the DJIA in France, which is part of
the French defense ministry, is known as being the premier lab for analysis like this.
One of its main things that it did in the past was, of course, be a big part of the investigation in 2009 of the crash into Air France 447. And so
this is an agency that has a lot of experience and also a lot of experience analyzing wreckage that came from sea -- Richard.
QUEST: Fred Pleitgen, who is in Southern France for us this evening.
The man who headed the BEA during the Air France 447 is Jean-Paul Troadec, the former head of the French Air Accident Investigation Bureau. He has
expert knowledge, not only of how to search at sea, but also the analysis which has to follow on after they retrieve matters and work out what
happened.
I asked him how easy it would be for the experts in Toulouse to confirm what they'd found.
(BEGIN VIDEOTAPE)
JEAN-PAUL TROADEC, PRESIDENT, BUREAU D'ENQUETES ET D'ANALYSES POUR LA S_CURIT_ DE L'AVIATION CIVILE: It will depend if they can see or not on
this part the serial number, because that it's a big part of aircraft, is the serial number. And -- but the problem is that this part has been
broken. If it could be that the serial number is on the part.
QUEST: If they can't see from the serial number, how else will they be able to decide? What other methods might they use?
TROADEC: Well, to our knowledge, there is only one 777 that crashed in the Indian Ocean. So most probably, if it is a part of a Boeing 777, it will
be certainly the part of the Malaysian aircraft.
But it will not be established as surely as if we can see the serial number. The other fact, that they will settle in their mind the shells
that are attached to this part.
QUEST: Do you think it tells them anything about what happened to the plane? I mean, or even where it might still be? I mean that's the big
question, isn't it, what actually -- what secrets this piece of equipment can reveal.
TROADEC: The lessons will be quite limited. It will be limited to the way this part has broken from the aircraft. Was it during an explosion? Was it
when the aircraft crashed into the sea? And that's it. But on the exact way the aircraft has been, has disappeared, it will not be --
(CROSSTALK)
TROADEC: -- from the exam of this part. It will be from the discovery of the black boxes are searched in the Indian Ocean.
QUEST: The search continues under the water, down off the Australian coast.
Are you optimistic? Are you confident that that plane can be found at that depth?
TROADEC: About that equipment, I'm very confident that these are the proper equipment because they have already discovered a ship and the
picture of every detail.
So I'm sure that it's either good or else they will discover the aircraft. The question is are they in the good area? But the examination of this
area is not very accurate. So it's a very big area they are exploring more than 100,000 square kilometers.
QUEST: One final question, sir. We've never seen anything like this before in aviation, MH370.
What lessons do we learn from MH370?
T69 Hillary Clinton at 8:52 am T70 Jeb Bush at 10:29
TROADEC: What we can say is that most probably it's necessary that this aircraft flying on the ocean should give her position very frequently to
the air traffic controller. It was not the case -- it is not the case in most aircraft.
(END VIDEOTAPE)
QUEST: Jean-Paul Troadec talking to me from Paris. If this is the first piece of physical evidence from 370, it doesn't provide much of an
education about the rest of the plane.
Join me at the superscreen and you'll get an idea. Bearing in mind what you heard Jean-Paul Troadec talking about.
So this is the search area, where it's believed the plane went down. But the Indian Ocean is full of complicated currents and that we don't fully
understand and when you think it went from here to over there.
David Gallo (ph) is an oceanographer who specializes in searching for these sort of things --
[16:10:00]
QUEST: -- and he joins me now from Woods Hole, Massachusetts.
David, you heard Jean-Paul Troadec, who I know you've worked with.
The -- where should they be looking now for more debris? Reunion is a small place.
Should they be looking elsewhere?
DAVID GALLO (PH), OCEANOGRAPHER: Well, I believe so, Richard. I mean, first of all, it was great to hear Jean-Paul Troadec's voice again. He --
I began not enjoying working with him. He rules with an iron fist and then I grew to understand exactly why he did this. I've got the greatest
respect for him and his team.
Well, yes, I think they need to look around Reunion. I have to -- you have to wonder what might have washed ashore in the weeks -- days or weeks
preceding this discovery that just has not been recognized as a piece of the aircraft.
But the other thing they need to do is look well to the north and south and maybe backtrack along the path of the current to see what might be floating
along. The ocean's the great disperser. So anything that started out in one spot, X marks the spot where the plane impacted the water, probably is
quite well dispersed by now.
QUEST: Right. Now what about looking at -- we look at the map of where we're talking about.
What about looking towards Madagascar, down the eastern coast of Madagascar and all the way across --
(CROSSTALK)
QUEST: -- to the eastern coast -- I mean, is it realistic to look to the northeastern part of Eastern Africa?
GALLO (PH): I think so. I do believe so. Why would you not -- it's -- of all things, Madagascar presents a very large target, if you will. And then
so does certainly the east coast of Africa.
The currents get more complicated as you move in the Straits of Madagascar and the like, but it's worth having a look because of -- I can't believe
that it's -- this is the only piece of that aircraft that floated across the Indian Ocean. There must be other pieces out there.
QUEST: I want to take you back to this area, the seventh arc. I think there's a sort of general acceptance that whatever we learn from the
flaperon, it's not going to take us much further to the actual specific point of this.
But you said something very interesting to me yesterday. You said you'd seen some of the pictures from (INAUDIBLE) and from Phoenix and from the
Discovery and all of those ships.
And you were impressed.
GALLO (PH): Absolutely. Both with two things. One was the ability -- the resolution of the images from the sonar, as I thought was spectacular. And
that of course makes me very jealous, but also their ability to -- the technology was good and the mapping they did without leaving gaps, even in
rough weather, to plow the field or the -- cut the -- mow the lawn, however you want to describe it, they did an excellent job in coverage the area.
And I think that they feel very confident -- I do, too, now -- that they would have seen the aircraft if it had been in what they've surveyed so
far.
QUEST: Using the technique, the Bayesian (ph) technique, which you went back and used in this -- I think it was the third or the fourth search --
you'll correct me -- before you went back out for Air France 447, you went back out, using a different technique.
Are they using that same technique, that Bayesian technique, or will it come into play for 370?
GALLO (PH): You know, that, I don't know what technique, what they're doing exactly. I haven't talked to them about the grand strategy with the
-- because they've got three ships at some time; maybe at one time they actually had four, doing different things.
So I don't know what they decided to do. We've didn't really use the Bayesian technique as much as some people say that we did. In our second -
- it was our second trip out. We spent two months looking where the retro drift model said the plane should be and it wasn't, which caused us quite a
bit of stress.
The second time we went out, we went right to the last known position and began west of that and moving toward it to the east. We wanted to be going
full speed by the time we got there. And within seven days, there was the aircraft.
And that's why early on I said knowing the last known position is critical. And that's one of the things we lack in this case.
QUEST: David Gallo, thank you for joining us, (INAUDIBLE), good to talk to you. Thank you.
GALLO: OK, Richard.
QUEST: Just to let you know that the plane carrying the debris has now left Reunion Island, we are told, on its way to Paris. From there it goes
to the south of France.
In a moment, Beijing takes gold in the race for the Winter Olympics. The decision is not without controversy. Nobody else really wanted it. Well,
that's not strictly true. There was one other country, We'll tell you about that after the break.
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(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Beijing.
(APPLAUSE)
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QUEST (voice-over): And with that, the 2022 Winter Olympics went to China.
(END VIDEO CLIP)
QUEST: Beijing becomes the first city in history to host both the Winter and the Summer Games. The critics say Beijing's warm climate and
(INAUDIBLE) pollution make it ill-equipped to host the games -- where have we heard that second part before?
The Chinese authorities have assured the Olympic Committee that these factors won't be a problem in 2022.
CNN's Will Ripley explains how they plan to overcome the immense challenges and, at the same time, keep a budget under control.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN CORRESPONDENT: So now we know Beijing will be hosting the 2022 Winter Olympics. But there is a big question that a lot of people are
asking: how exactly will Beijing host a Winter Games when they really don't have a lot of natural snow in Beijing and their surrendering area?
Well, China's response to that is, one, a very intricate, artificial snowmaking plan and, two, they're saying that in Beijing they're going to
be hosting the ice events but the snow events are going to be actually several hours away in Zhangjiakou, the sister city of the 2022 Winter
Olympics that nobody had really heard of until this Olympic pitch. They still have a lot of infrastructure built out there. But here in Beijing
they're going to repurpose most of the facilities that were used in the 2008 Olympic Games. That would include, of course, the national stadium,
the bird's nest, and also the water cube. And that's how China says they're going to save a considerable amount of money.
They spent $43 billion on the Summer Games in 2008. They say they're going to spend less than $4 billion for that 2022 Winter Games.
Now this isn't a huge surprise. This victory to the China people and their celebrations, at least on social media and out openly in the streets, have
been quite muted. Back in 2001, when Beijing won the bid, there was a huge celebration. People ran into the streets. There was so much national
pride.
But today, aside from some organized events, at the bird's nest that were shown on state TV, well, people didn't seem all that particularly excited
about it -- proud, certainly, that Beijing is making history by being the first city to host both the Summer and Winter Games.
But not necessarily thinking that this is the best way to spend China's money at a time that there are questions about the economy, moving forward,
and of course lingering questions as well about China's human rights record and the way that people are treated here.
Some say conditions have actually gotten worse since 2008 -- Will Ripley, CNN, Beijing.
(END VIDEOTAPE)
QUEST: So Beijing, the candidate city, except there weren't that many other candidates that wanted to be the city. And the victory ends one of
the most troubled host races in Olympic history. Join me at the snow globes, imagining we are rattling the snow globes. Ultimately it was a
choice between two for a race that started with six.
Krakow, Poland, became the first city to drop out after its locals voted to abandon it.
A month later with the escalating crisis in Ukraine -- and cue the jingle for the snow globe -- the bomb in Ukraine disappeared.
Rattling the snow globes --
[16:20:00]
QUEST: -- in Sweden and Norway, voiced concerns about that high cost of the competition. So Oslo went as indeed did the others. And after Russia
(INAUDIBLE) spend $50 billion, then they all disappeared.
Eventually, it was just two. It was Beijing and Almaty in Kazakhstan and the -- well, you can tell, Beijing, it was tight. Beijing won by just four
votes -- goodbye, Almaty. And there Beijing takes the prize.
This selection is not without controversy. The critics argued that the city suffers acute pollution, lack of fundamental features needed to host
the Winter Games, things like snow, for example.
Stefan Shimansky (ph) is professor of sports management at the University of Michigan, joins me from Ann Arbor.
I'm guessing, sir, with even with all the issues, you're not surprised it went to Beijing.
STEFAN SHIMANSKY (PH), UNIVERSITY OF MICHIGAN: No, I think it was pretty inevitable. It would have been a huge risk for the IOC to put the games in
Kazakhstan, given their limited experience of hosting major sports events. So Beijing was pretty much a certainty to win it.
QUEST: What does it tell you as an expert in these areas that so many other countries -- cities, frankly -- decided not to go ahead?
SHIMANSKY (PH): Well, the International Olympic Committee is at a crossroads now. They really face a choice between continuing as they are -
- have done and requiring host cities to invest large sums of money in creating major events and building huge facilities and really only being
attractive to developing nations and often countries with questionable political track records, or they have to change fundamentally the way they
structure this, make it affordable and open to more open, richer democracies, really bring in the kinds of cities that haven't been bidding
in recent years.
QUEST: And I was hearing from Amnesty and Human Rights Watch and others, who say that human rights issues should be on the agenda when countries --
when the IOCs, when the FIFAs of this world look to decide where they are going to place the games.
Of course, the organizers of these things, they do look at all these issues. But you'd take issue with that?
SHIMANSKY (PH): Well, I think there is a fundamental problem. If you're going to hold a global sporting event, you're going to have to include
everybody which means sometimes you're going to have to include regimes which are perhaps a little bit distasteful to many people on the human
rights front.
So I'm not sure it's a problem if this happens from time to time. I think the question is if these are going to be the only countries that will bid
because the richer developed nations have decided they want nothing to do with it, I mean, you mentioned Oslo dropping out; Munich dropped out as
well on the basis of a referendum.
We just had Boston dropping out of the Summer Games bidding this week. There really is a crisis at the IOC, who really wants, in the developed
world, to host these events anymore?
QUEST: You used that word "crisis." Is that too strong?
SHIMANSKY (PH): Well, I think we've already seen in December the IOC made announcements that it's going to change its procedures, which represents a
recognition of the need to adapt to change. I think there is a crisis when cities like Boston drop out. I think it's a real issue for them
QUEST: Sir, thank you. We'll talk more about this as we get to the next bidding and we'll talk more about FIFA, of course, in the future. Thank
you.
Investors are keeping a very wary eye on China, not just because of the Games. The -- Beijing may be celebrating the Olympic shareholders a little
bit cheer about. We'll talk about that. Shareholders in China in just a moment -- QUEST MEANS BUSINESS.
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[16:25:00]
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QUEST: The markets have closed and it is the end of July. It is the first month of the third quarter. And this is how the -- this is how we closed
the -- what a bit of a roller -- a roller coaster; what a cliche. We were up and then we were down and then we're up, then we were down and we were
up and we were down. And when we all -- when all was said and done, everybody headed home, down 55 points under the -- 17,690. It was a loss
of a third of 1 percent. The Dow ended the month just about even, it's around about 1 percent off for the month.
Look at how everybody else performed and you start to see the FTSE with its gains -- this is the way -- gains in Europe and Japan markets, one index
stands out of course. It is the Shanghai Composite, which finished the month with a whimper. But it's still well down on its mid-June peak.
July was the benchmark's worst month for the Shanghai market in some six years.
Pull the strands together of what we saw in all of these markets, it's Paul La Monica, sir, good to see you.
PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: Good to see you.
QUEST: End of July -- what do we take away from July?
LA MONICA: When you look at today, I think that's the story that we've got with the market today, is that oil stocks plunged. Chevron and Exxon, two
Dow components, that's why the Dow was down. And that's really it for July.
Oil was down 20 percent. That is a huge story now, I think, going into the rest of the year. Are oil prices going to continue to plunge? Is that
because of Chinese demand waning? And that's bad news for many emerging markets if this continues.
QUEST: Well, yes and no. We know the deal with Iran puts the prospect of a great deal more oil in the market --
LA MONICA: Which would put prices down even more --
QUEST: -- which would put prices down. But it's not as if this is coming out of nowhere. There's -- it's not like it's an (INAUDIBLE) shock. We
know what's happening and the reasons -- it doesn't have anything to do with the results, they say.
LA MONICA: Right, it's -- don't tell that to Brazil and Russia and many commodity-rich countries. They will obviously not be pleased.
But the good news is this is great for consumers, especially in America. Oil prices continuing to fall; there are people talking about gas prices
going down to $2 a gallon again. Consumer spending did tick up in the second quarter --
QUEST: Makes it difficult for non-traditional fracking, for those in North Dakota and Texas, though. That price pressure takes them out of the
business, even at lower levels.
LA MONICA: Definitely. We are going to have to keep an eye on that. You could see job cuts in the energy sector which helped lift the job market
over the past few years and that would be a negative. But I think the broader American consumer that isn't living in North Dakota or Texas or
some of these shale states, they're going to be happy about lower oil prices.
But yes, it's terrible news for all the companies and people that have jobs tied to fracking.
QUEST: China and the Shanghai, worst performance in some six years. So we've got the worst performance -- we've got oil going down 20 percent, the
worst in something like six years as well. We've got Shanghai, the worst in six years.
But the ability of the Chinese economy to react to a stock market maneuver like Shanghai is much less than it is, say, for example, in any of the
other countries.
LA MONICA: Yes. I think everyone is trying to figure out whether or not the big pullback in the Chinese stock market is literally just too many
investors speculating -- I think it is probably a case where people went out of real estate, which was the last big bubble in China. They started
putting money in the stocks. They got duped into thinking that it would go up forever because the government would pull out all the stops -- even
though the government is doing that now, you're seeing this big pullback. The hope is that this is like 2000. It was a speculative bubble; it burst.
The damage to the economy wasn't that bad. It's like 2008, and we talk financial crisis, that's a contagion, that's bad news.
But so far people are hoping it is contained to China. But China's the second largest economy in the world, hard to contain things.
QUEST: Only on a nominal base --
(CROSSTALK)
QUEST: Have a good weekend.
LA MONICA: Thank you.
QUEST: Thank you.
It's QUEST MEANS BUSINESS. It's the end of July. Make sure I've got that bit right. August is ahead -- good evening.
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[16:32:05] QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment when the head of IAG Willie Walsh tells me his
customers are happy to be packed into the plane.
And Ukraine gets cash for reforms. This isn't a typical European bailout.
Before that, this is CNN and on this network the news always comes first.
Plane debris found on a remote island in the Indian Ocean is now on its way to Paris. Investigators there will see if it belongs to the missing
Malaysia flight MH370. Tests are not due to begin though until Wednesday. A preliminary report on the debris could come as early as next week.
Zimbabwe's begun extradition proceedings against an American trophy hunter after the killing of its best-known lion Cecil. The current whereabouts of
the dentist Walter Palmer still aren't know. (CLEARS THROAT) -- excuse me.
The U.S. Fish and Wildlife Service is also investigating the lion's death and said a Palmer representative contacted them late on Thursday.
The World Health Organization says a new vaccine is highly effective in preventing Ebola. The agency's recommending it be given to everyone at
risk of the disease. More than 11,000 people died in the most recent outbreak across a number of countries in South Africa.
The head of the WHO says the vaccine would have made a huge effect on containing the virus.
(BEGIN VIDEOCLIP)
MARGARET CHAN, DIRECTOR-GENERAL, WORLD HEALTH ORGANIZATION: If proven effective, this is going to be a game changer. It will change the
management of the current Ebola outbreak and future outbreaks.
(END VIDEOCLIP)
QUEST: Beijing is to host the 2022 Winter Olympics and becomes the first city to host both summer and winter games.
The IOC went for the Chinese capital over the other finalists Almaty and Kazakhstan. China plans to build a new high-speed rail network to
transport people to some of the events which will be help up to 125 miles away from Beijing.
Donald Trump admits he's surprised at how quickly he's risen to the top of the political polls in the United States. Trump is the top choice for the
Republican presidential candidate in several early polls. He told CNN's Max Foster he can achieve spectacular results if he's elected president.
(BEGIN VIDEOCLIP)
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: I am probably surprised at how fast it's come, but my message is right. It's "make
America great again." I mean, that's -- my whole thing is make America great again.
Can't get simpler than that because we're falling behind China, we're falling behind so many other countries, even in education -- we're 25.
If you think of it, we're number 25 in education. We had third-world countries that are better than us. So we have a long way to go, this
country and we will do something I think spectacular if I win.
(END VIDEOCLIP)
[16:35:14] QUEST: There's renewed focus tonight on the pilots of MH370. U.S. intelligence says that they believe the pilot or indeed they say
somebody else in the cockpit deliberately flew the aircraft off courser before it disappeared.
If you look at the Super Screen, you'll see what I'm talking about. Remember how it all goes -- the plane takes off from Malaysia, it then
heads up into the South China Sea. And this is the point at 1:19 in the morning.
This is -- I beg your pardon -- this is the moment at 1:19 when something clearly happens in the cockpit and the plane does a U-turn, takes the hook
(ph), comes back over just after the pilot said "Good night 370."
The transponder is switched off, the plane trucks (ph) up back into -- across the country -- with nobody spotting it. It then goes up over the
Straits of Melacca-- Strait of Melacca and then most controversially 'round the top of Indonesia and off into the South Indian Ocean.
The debris which has been found of course would now be the first physical clue since the plane disappeared 17 months ago. Some families of those
onboard are hanging onto hope after months of false leads.
Particularly when you bear in mind exactly what the plane did and how the plane did it. Andrew Stevens reports from Kuala Lumpur.
(BEGIN VIDEOCLIP)
UNIDENTIFIED MALE: She's a leading flight attendant.
ANDREW STEVENS, CNN ASIA-PACIFIC EDITOR: Elaine Chu (ph) and Calvin Shim (ph) have been waiting in hope for 17 months on the fate of MH370. Their
partners were both cabin crew on that flight.
In Kuala Lumpur we spoke about the very real possibility that the debris is part of the missing jetliner and whether it's now changing their view.
UNIDENTIFIED FEMALE: Sometimes you think that it's a hope and then if it's true then -- it's like that's it. It's the end.
UNIDENTIFIED MALE: Yes, at least there is something, but for me, I think that couldn't give me 100 percent assurance that they're gone, you know.
There are just many possibilities, you know? Maybe -- you know you can't discount it 100 percent that, you know, they are gone because you don't see
anything else, you know.
So unless there are more things to be seen, there of course the possibility of surviving essentially has become, you know, lower.
STEVENS: Is there a part of you -- part of both of you -- that says, 'I don't want to know the truth.'
UNIDENTIFIED MALE: For me, yes. For me, yes sometimes, you know, I feel that maybe, you know, expected it not to have this debris, yes, then you
still have hope -- some hope -- yes. Another part is maybe I --
UNIDENTIFIED FEMALE: I want the truth. I want to know how my spouse gone through. Maybe I would like to know more.
STEVENS: How are your children? You both have children.
UNIDENTIFIED MALE: Yes.
STEVENS: How are they coping?
UNIDENTIFIED FEMALE: She coping all right these 17 months until the debris is found. I told her what I know from the news and I just told her
yesterday night -- last night -- that the authorities really found some debris and then she answer me that, "Is it my daddy plane is crashed? Or
is he not coming back anymore?" Then I looked to her face (inaudible) so I just say, "It's still not confirmed yet."
STEVENS: If this debris is part of 370, will that be enough for you? Will you be able to move on?
UNIDENTIFIED MALE: No.
UNIDENTIFIED FEMALE: I want to see more things beside the debris to get more confirmation that my husband is -- won't come back anymore.
UNIDENTIFIED MALE: At least, you know, there are more things -- at least maybe the fuselage, you know, can be recovered, you know? Yes, so, yes, I
want to see more. I want to have more evidence. Yes.
STEVENS: Andrew Stevens, CNN Kuala Lumpur.
(END VIDEOCLIP)
QUEST: Peter Coles joins me. He has years of dealing with the families after such tragedies. Peter's the former managing director of the NTSB and
joins me from Washington tonight.
I saw you there -- I could see you -- enjoying Andrew Steven's report. It took you back, that, Peter.
[16:40:00] It really did. You know, we got involved after TWA 800 where the family members of that tragedy -- and, you know, the search went on
there for what was then a long. It was -- it were weeks, almost a month before the overwhelming majority of the victims were recovered. And there
was speculation about what happened. And I saw personally how it tore at families, it ate at them and this idea of closure is really illusionary.
There is no closure. I mean, all you can do is put it into some kind of perspective and some folks do better, others don't do so well. It's very
heart-wrenching.
(COMMERCIAL BREAK)
QUEST: Now but give me both sides of this because tonight the part has left Reunion, it's on its way to France and they're really saying that
they're not going to properly assess the -- and analyze this -- until Wednesday when everybody's arrived -- the NTSB, --
UNIDENTIFIED MALE: Right.
QUEST: -- the BEA, the WLB, you know, but you can see both sides of this. You've been in the middle. You can see why it's taking so long but at the
same time you want it done fast.
PETER COLES, FORMERLY OF NATIONAL TRANSPORTATION SAFETY BOARD: Exactly. I mean, I understand the French, you know, the investigative agency. The BEA
is going to do it by the book and, you know, you're a late entrant into this investigation, they're going to do it by the book. There was a little
bit of difficulty in getting people to Toulouse on Tuesday when they wanted to start it so they're going to put it off until Wednesday.
I think we'll hear a report from them on Wednesday, but this is -- this is a wrenching time for the family members to wait an extra 24 or 36 hours.
QUEST: Peter, thank you for putting it into perspective. Good to talk to you, thank you.
Now as the mystery of MH370 remains unsolved, the inevitable questions about the safety of one of the world's most popular long-haul aircraft has
been raised.
As long as they don't know what caused MH370 to disappear, there is going to be a shadow -- albeit very small perhaps -- over the 777. And there are
1,200 of those aircraft flying around the world.
The head of International Airlines Group, IAG, is Willie Walsh. His IAG owns British Airways, Iberia, Vueling and is about to buy Aer Lingus.
He has more than 50 777s in all. He says the jet has a good track record but he still wants to know what happened.
(BEGIN VIDEOCLIP)
WILLIE WALSH, CEO, IAG: I've remained very confident in the operation of the 777 aircraft. Our experience, we're one of, you know -- the large
operators of 777s is excellent. It's a fantastic aircraft, it has a very, very good safety record. But we always want to know if there's something
unknown that we can learn about through tragic incidents like this and clearly it's in the interests of the industry to better understand what has
happened and to take measures to ensure that it doesn't happen again.
(END VIDEOCLIP)
QUEST: You'll hear more from Willie Walsh in a moment about the takeover of Aer Lingus and how he will integrate the Irish national carrier into his
family of airlines.
(COMMERCIAL BREAK)
[16:45:30] QUEST: International Airline Group's flying high on its latest earnings. The parent company of Iberia, British Airways, --
(SOUND OF FLIGHT ATTENDANT CALL BUTTON RINGING)
QUEST: -- thank you, Gate 47 please -- and Vueling saw operating profits rise 40 percent compared to the same quarter last year. Will the last
remaining passengers make their way where the aircraft's waiting to depart. The company's in the process of buying Aer Lingus as well as revamping the
Iberia fleet.
I spoke to IAG's chief Willie Walsh and I asked about the deal for Aer Lingus which looks to go unconditional and the prolonged negotiations with
Ryanair.
(BEGIN VIDEOCLIP)
WALSH: Well, it's never over until it's over and where we are at the moment is in a very strong position because the level of acceptances from
shareholders is very high. Over 62 percent -- 62.4 percent. And Ryanair has publicly stated that they intend to sell their just shy of 30 percent
stake in the business to us which would bring us to over 92 percent.
And we're confident that Ryanair will deliver on that. They have until the 18th of August which is the final date for acceptance to formally accept
our offer.
But certainly I'm sure you've heard comments from Michael O'Leary and other people at Ryanair to indicate that that's what they intend to do.
So I'm very optimistic that we will be able to finalize this deal.
QUEST: What's he waiting for? Right him a check. I mean, he said he's going to take the money -- what's he waiting for? You said you're not
going to pay him a penny more.
WALSH: But I -- you know, I've told him I'm very happy, I'll hold the money for him if he doesn't want it until September which is what he said,
you know, I'll gladly hold it for him.
But, you know, we've come this far, it's a couple of weeks, it's not going to dampen our enthusiasm and our excitement about, you know, bringing Aer
Lingus into IGI. I think it's a fantastic airline. You know, I would say that's because of my background, but I think it's really performing very
strongly with Mart (ph) at the management team.
We are very, very pleased that they want to be part IAG and we see great potentials for the airline.
QUEST: Let's look at the results. Passenger unit revenue is up 5 percent and then down 5 percent at a constant currency. Fuel unit is up 3 percent
ten down 12 percent at a constant currency. It's difficult, I mean -- your yields are -- but it really comes down to is you're filling the planes,
you're managing to make good money but you'd still like to make more.
WALSH: Oh, I suppose the real money is the -- if you could ignore the constant currency -- we use constant currency to give people a sense of
what the underlying performance is. But, you know, we don't receive the money in constant currency, we receive it in real and the real performance
of the business is very strong.
So, you know, our revenue was up over 11 percent. Now that is helped by the strengthening dollar or depending on which way you want to look at it.
The weakening euro -- so currency has a big impact on our business but we actually manage that and we can turn our traffic flows to take advantage of
the -- you know -- differences in currencies. That's something that's not new to us but it is complex.
And I think the volatility we've seen in currency in the last six months has been, you know, much greater than anybody had expected. But the bottom
line is we're performing very well, we're keeping control of our costs and we're delivering a very good revenue performance.
QUEST: I'm going to give you one question on London Heathrow. It's not going happen in your working life or mine, is it? That third runway.
(LAUGHTER)
QUEST: I mean, it's -- we're wasting time even talking about it.
WALSH: I have to agree with you, Richard. I don't know what your plans are but, you know, I'm not expecting to be the CEO of this company in 2026,
2027, so if it does happen I'll be watching it from the sidelines.
(END VIDEOCLIP)
QUEST: Seat densification. Now there's a new word to warm the cockles of your heart. What does it actually mean? Seat densification. British
Airways say part of the reason for the better revenue and load factor was seat densification on their European short haul.
Basically it means the seats have got narrower and they can pack more people in. These are an example of the sort of older seats -- they're
bulkier, they're bigger, they take up more room, they're not as sculpted at the back for the knees.
[16:50:09] And these are BA's new European seats. They are thinner, they have a sculpted back and ultimately you get more passengers onboard.
The word is seat densification and Willie Walsh me customers don't mind the extra people that they manage to get at the back because of this.
(BEGIN VIDEOCLIP)
WALSH: You might expect that there's an adverse reaction from customers. In fact, quite the opposite. So on British Airways where we put more seats
on the aircraft. The seats themselves are taking up less space so we're able to offer the customer the same experience but with more seats on the
aircraft.
And our customer satisfaction scores have increased since we've done this. You would have expected to see the opposite.
So it can be done, you know, provided you use the new technology seating that is available and clearly continue to provide the customer with a, you
know, a pleasant customer experience onboard the aircraft.
(END VIDEOCLIP)
QUEST: You learn something new and a new word every day. A major breakthrough in Europe's other debt crisis. Ukraine's struggling economy
gets a new lease of life from the IMF.
(COMMERCIAL BREAK)
QUEST: After months in the doldrums, Ukraine's been given an economic lifeline. The IMF approved another $1.7 billion bailout tranche. It will
help the country escape recession. Now in exchange, Kiev has approved a raft of new structural reforms.
The cash for reforms scenario sounds all too familiar. Where did we hear that before come happens? CNN's Claire Sebastian reports. When it comes
to Ukraine, forget Greece -- Ukraine's story is different.
(BEGIN VIDEOCLIP)
CLAIRE SEBASTIAN, CNN PRODUCER: A $70 billion debt burden, a four-year IMF bailout, an urgent need for economic reforms.
On the surface, fairly typical characteristics of a European debt crisis -- Ukraine's is anything but.
ANNA GELPERN, PROFESSOR, AMERICAN UNIVERSITY WASHINGTON COLLEGE OF LAW: You have a lot of debt restructures after wars, after conflicts, but not in
the middle.
SEBASTIAN: Anna Gelpern has advised governments all over the world on sovereign debt.
GELPERN: I think the biggest concern with the war is really just the absolute uncertainty around where the economy is going. How can you
predict a payment flow for the next 10, 20 years?
SEBASTIAN: Ukraine can't pay all its debt. In fact, it's a condition of its IMF bailout that it secure more than $15 billion in debt relief.
It's created a new battle in this crisis with private creditors.
MICHAEL HASENSTAB, TOP FUND INVESTOR, FRANKLIN TEMPLETON: This is what our shareholders have entrusted us to do is to search the globe for
opportunities.
SEBASTIAN: This is Michael Hasenstab the top fund investor at U.S. hedge fund Franklin Templeton. The Fund released this video last year to explain
why it was investing billions in Ukrainian debt.
Sixteen months later, Franklin Templeton along with three other hedge funds holding around $9 billion in Ukrainian bonds are locked in talks with the
Ukrainian government.
Kiev wants 40 percent of the debt written off. The creditors say longer repayment deadlines will be enough. Time is running out to end the
deadlock.
The next big bond repayment is due to private creditors in September -- over $500 million. After that, another bond repayment of over $700 million
is due in October. And take a look at this -- this is the wildcard. $300 billion due to Russia in December.
[16:55:14] SEBASTIAN: Russia's role, a unique and volatile twist.
GELPERN: This is really the first time in memory that you have a very big government creditor that is more or less at war with the debtor.
SEBASTIAN: Most agree the biggest fear in this tangled debt crisis is not default, it's that without long-term debt relief, Ukraine may never truly
recover. Claire Sebastian, CNN New York.
(END VIDEOCLIP)
QUEST: We'll have a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's closing bell and the gavel. Oops! (LAUGHTER). There it goes. A rare event at the New York Stock Exchange as New York's bravest
manage to break the gavel. The archivist at the New York Stock Exchange says he can only remember it happening three times in history. The last
time was this time last year.
This time it was the army staff sergeant Ryan Pitts. He just won the Medal of Honor for service in Afghanistan and he managed to break the gavel. So
we have the bravest, we have the Medal of Honor winner. Luckily, the New York Stock Exchange says they keep spare gavels in case of such breakages
and today's has already been replaced.
In other words, if you want to keep your gavel, don't have a man in uniform put the closing bell. And that's QUEST MEANS BUSINESSfor tonight. I'm
Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. We'll be back together on Monday.
END
