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First Move with Julia Chatterley

Opening In Florida, Disneyworld Is Opening Up, Letting In Visitors, As The Number Of Cases In Florida Rises To New Records; TikTok Is Having A Corporate Shakeup Designed To Protect The Company In The United States; The Future Of Flying, Delta And Emirates Ceos Talk About The Future Of Their Industry. Aired 9-10a ET

Aired July 10, 2020 - 09:00   ET

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

[09:00:27]

RICHARD QUEST, CNN BUSINESS ANCHOR: It is Friday, live from New York. I'm Richard Quest. Here's what you need to know.

Disney's decision day. Opening in Florida, Disneyworld is opening up, letting in visitors, as the number of cases in Florida rises to new

records.

TikTok is having a corporate shakeup. It's designed to protect the company in the United States.

And the future of flying, Delta and Emirates, the CEO and bosses of both talk about the future of their industry. It is Friday. This is FIRST MOVE.

A very good Friday to you. Julia is off today. I'm Richard Quest sitting in.

An interesting day of trade is ahead of us. Now, bearing in mind the undercurrents of the market that we have seen all week with some sharp

losses, coupled with sharp gains, a worsening economic number or position and a market that's deeply worried about what comes next.

So, this is the way the futures are looking as we get under way with the market opening in 28 minutes or so from now.

The futures are set for a mostly lower open. The NASDAQ futures are flat. Tech has opened at record three times so far this week. China's rally is on

pause and that's giving cause for concern. Europe, though, does power ahead. If you look at what's happening.

Now, Thursday's session was volatile. The Dow fell over one percent. Nervousness as COVID-19 hits records. Europe is higher. There are rebounds

in French and Italian industrial production.

The report says the U.S. will announce retaliatory measures against France for its digital tax. That's likely to happen today. But it will not enforce

penalties right away.

Asia and the Asia stocks, the red hot Chinese stock market actually went down two percent. The first drop in eight sessions. It's a sign that

Beijing wants to slow the pace of the rally.

Still, it's the best week for Chinese stocks in five years. The composite is up in Shanghai for some seven percent on the week.

We get straight to the drivers. The United States has broken all records in the number of coronavirus cases, 63,000 cases in one day. It happened as

Donald Trump is heading to Florida, not to find out what's going on there, but rather for a fundraiser in a form of campaign rally.

The positivity rate in Florida is over 33 percent. Now, bear in mind, the W.H.O. and most organizations would like to see a positivity rate under 10

percent. Now, it's over 33 percent in Florida. The state has the highest number of deaths in one day.

CNN's Rosa Flores is in Miami.

(BEGIN VIDEOTAPE)

ROSA FLORES, CNN CORRESPONDENT (voice-over): Long lines for testing in Miami, annual pass holder previews at Walt Disney World in Orlando, and the

debate on whether to reopen Florida schools intensifying.

(BEGIN VIDEO CLIP)

GOV. RON DESANTIS (R-FL): If you can do Home Depot, if you can do Walmart, if you can do these things, we absolutely can do the schools.

(END VIDEO CLIP)

FLORES (voice-over): This all while new coronavirus cases reached nearly 9,000 in the Sunshine State, Thursday. The nation's top infectious disease

doctor says Florida moved through the reopening process too quickly.

(BEGIN VIDEO CLIP)

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: Certainly, Florida I know, you know, I think jumped over a couple

of checkpoints.

(END VIDEO CLIP)

FLORES (voice-over): It's one of four states accounting for about 50 percent of new infections in another record setting day of new cases in the

country. Hundreds in Phoenix waited in their cars for the chance to get a free coronavirus test as temperatures reached 110 degrees.

Thirty-three percent of people are testing positive in Arizona and intensive care units are about 89 percent full, with around 180 beds

available across the entire state.

(BEGIN VIDEO CLIP)

LAUREN LEANDER, ARIZONA ICU NURSE: We're kind of at the point where we're stretched so thin, we're at the point of compromising patient safety.

Things have definitely taken a bad turn since our state reopened here.

(END VIDEO CLIP)

FLORES (voice-over): Hospitals in Texas are also in crisis mode and elective surgeries are on hold in much of the state.

California's governor announced a record high of coronavirus related deaths.

[09:05:07]

(BEGIN VIDEO CLIP)

GOV. GAVIN NEWSOM (D-CA): The mortality rates are still front and center and should be in your consciousness for those that just think that now

people are getting it, no one is dying. That is very misleading. In fact, it's fundamentally untrue.

(END VIDEO CLIP)

FLORES (voice-over): Around 100,000 people are tested for the disease in California daily, and Los Angeles County recorded nearly 1,800 new cases on

Thursday alone. More than 50 percent of people testing positive there are between the ages of 18 and 40.

(BEGIN VIDEO CLIP)

FAUCI: Well, I would hope we don't have to resort to shut down. I think that would be something that is obviously an extreme. So rather than think

in terms of reverting back down to a complete shutdown, I would think we need to get the states pausing in their reopening process.

(END VIDEO CLIP)

FLORES (voice-over): And with testing efforts ramping up nationwide, there are serious concern for keeping up with PPE, and supplies for health

workers, and a delay in results from labs.

The C.D.C. Director acknowledging there's a lot of room for improvement.

(BEGIN VIDEO CLIP)

DR. ROBERT REDFIELD, CDC DIRECTOR: We continue to have greater needs for more testing and even though we're now up over 600,000 tests a day, we

continue to need more testing in this country to confront this outbreak and I anticipate that that capability will continue to come.

(END VIDEOTAPE)

QUEST: Even as Florida grapples these very high numbers, one of the state's most important and largest tourist attractions, Disneyworld is about to

reopen. Natasha Chen is with me, which begs the question, why? Why would they wish to reopen when the state has the largest record number of cases

so far?

NATASHA CHEN, CNN NATIONAL CORRESPONDENT: Well, Richard, I can tell you what the Orange County officials said yesterday during their press

conference. They have absolute confidence in the theme parks, including Disney, because of the extensive plans these parks have given to officials

on how they plan to keep people safe.

In fact, an Orange County health officer said that he's much more concerned about the indoor spaces like gyms in their area where they've observed

people actually not following C.D.C. guidelines versus the wide open spaces in the theme parks where they are keeping numbers low, at reduced capacity.

In fact, Disney is requiring that everyone reserve their park attendance in advance so they can keep the low numbers. Everyone has to go through

temperature screenings when they enter. People have to wear facemasks with a loop around the ear, so no gator or bandana type masks.

They are wiping down high touch surfaces frequently, spacing people out on the rides, providing hand washing and hand sanitizing stations throughout

the park.

Now, two of the theme parks are opening tomorrow to the public, but annual pass holders have already gotten a preview starting yesterday. Here's one

pass holder I spoke to yesterday about her experience.

(BEGIN VIDEO CLIP)

ERICA M. WALT DISNEY WORLD ANNUAL PASSHOLDER: It does feel a bit surreal at the same time though, because the last time I was at Disney was the day

they announced they were closing all parks around the globe.

From what I saw today, everybody was definitely following the rules, no question.

(END VIDEO CLIP)

CHEN: So, she also said she did feel a little bit nervous doing these same things that she loves again, but she was taking extra precautions by

bringing her own supply of sanitizer and wipes and staying apart from other people, wearing the facemask when she was out of her car, back in the

parks.

I also want to mention that our colleague, Cristina Alesci reported that the Services Trade Union talked to her about how important it is for Disney

to get this right. The Services Trades Union said that Disney is coming up with a robust plan to protect employees, including full pay for people who

may need to quarantine for a couple of weeks at home, as well as doing the necessary contact tracing to stop any spread of the virus.

At the same time, the Actors Equity Association filed a grievance against Disney this week saying that they are being punished for demanding

coronavirus testing for their performers.

Disney has responded saying that several unions have already signed on an agreement with their safety protocols, but that the Actors Equity

Association has rejected them, refused to continue negotiating, which is unfortunate, and they say at this time they are reopening the parks without

Equity Actors -- Richard.

QUEST: Natasha, thank you. Natasha Chen joining me. China is vowing to retaliate and says it will do so in force after the U.S. has placed travel

restrictions and travel sanctions on three Chinese officials it accuses of human rights violations.

Beijing says it will set out countermeasures against U.S. individuals and institutions. Washington says those targeted by sanctions are involved in

abuses against the Muslim Uyghur community in Xinjiang.

The Chinese company behind TikTok could shake up the ownership structure. Now, the Trump administration is threatening sanctions against TikTok and

threatening to damage the way the company can operate in the United States.

Meanwhile, U.S. users are targeting the Trump campaign with online protests.

Hadas Gold is with me. This is rather strange, isn't it? Because here we have a Chinese-owned company setting itself up in a different way about to

take some corporate measures, deliberately to protect its U.S. side from its home market's government?

[09:10:35]

HADAS GOLD, CNN BUSINESS REPORTER: Well, Richard, the U.S. market for TikTok is incredibly important. They've already lost if not their biggest

market, India, in the past few days when India banned the app, and so the last thing they can really take right now is to lose the U.S. market as

well.

This announcement comes at really -- at the end of a really tumultuous week for TikTok. They've pulled out of the Hong Kong market. They've heard from

U.S. Secretary of State, Mike Pompeo and now, President Donald Trump that the U.S. is considering banning the app over security concerns.

And so now, in the last 24 hours, CNN has confirmed after a "Wall Street Journal" report that TikTok is considering moving its headquarters out of

China and/or setting up a new management board structure.

This is all part of a way to try to allay these fears we've seen from the U.S. politicians, all of the scrutiny over how this app uses people's data

and whether there is any sort of national security or security threat because of its ownership by the Chinese and because of laws in China that

say that Chinese companies have to work with the Chinese government.

Now, TikTok has always maintained, it never has and never will share data with the Chinese government. It says data from its U.S. consumers is not

stored in China and it has appointed recently an American CEO, Disney's actually former head of streaming.

And so these new measures, the new management board or the new headquarters are all seen as a part of this effort to try and allay these fears. But,

Richard, I am just not sure if that will be enough because ultimately, you go to where the ownership will end up and it's still with Bytedance, it is

still in China.

QUEST: What about this business of U.S. users targeting the Trump campaign?

GOLD: So there has been a lot of activity on TikTok recently because of these announcements of the U.S. considering banning TikTok and there's a

lot of people in the United States who love TikTok, especially young people. It's very big in the younger demographic.

There was actually even a glitch within the last few days that it wasn't connected to any of this, TikTok said, but it got a lot of teens in the

U.S. very fearful that their TikTok would be cut off from them because of the Trump administration.

And in retaliation, we've seen TikTokers in the past also try to target the Trump administration. If you remember during that Tulsa rally, there were

TikTokers who claimed that they reserved thousands of seats and then ended up not going to try to show the empty seats.

So, now TikTokers, there's a new campaign where they're trying to give the official Trump 2020 campaign app low reviews on the app store as a way to

somehow harm the app. And I went up and I actually looked at the ratings, so as of a few hours ago, the app in the U.S. App Store has more than

261,000 ratings with the average rating of 1.2.

And keep in mind, you can't go below one. Now, Apple and Google Play try to do their best to get rid of fake reviews, but there's only so much they can

do. And these TikTokers, they might be trying to get this Trump app off of these App Stores. It is very, very, very unlikely that they will ever

successfully do so just because of a bunch of bad reviews.

QUEST: All right, Hadas Gold who is with us.

Now, news -- making news around the world. Hong Kong says that it will close the schools once again, as the number of coronavirus cases in the

region rises dramatically.

CNN's Will Ripley is with me from Hong Kong. To close the schools again -- schools have become a touch stone all across the world. We see it here in

the United States about when and how schools can reopen.

To close the schools again suggests the situation in Hong Kong is now reaching very serious levels.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: That's an absolutely correct assessment, Richard, and they just don't feel that it's safe for students

to be in school and it was just a couple of weeks ago really that Hong Kong started to relax a lot of the social distancing measures.

Restaurants were getting closer to full capacity. They've now been cut down to 60 percent and only eight people to a table. Four at a bar.

That's because some of the clusters that they've detected in recent days of local transmission are tied to restaurants and bars.

Also taxis, so they're going to have to test more taxi drivers. It's hard to find out who has been in and out of the taxi if somebody has been

infected. Every taxi driver that I've seen in the last week is wearing a mask, just like pretty much everyone else walking around. So you don't have

to feel too unsafe.

But also a senior care center, in fact many of them, there have been clusters tied to that as well. And just today, they announced that there

was one apartment complex that had a number of these new cases and some of them, they can't figure out how people got it because they have no travel

history.

So Hong Kong basically now is going to tighten back up. Schools could be closed. They could even take things further. They could make a suggestion

that people work from home again or they could shut down the courts.

There's a lot of other things that they could do. They could make public gatherings small again. Right now, they allow up to 50 people, they might

make that number smaller, Richard.

So, it's certainly mission critical at this stage to try to prevent this third wave from really expanding.

[09:15:34]

QUEST: Give me a feel, if you will, Will for this -- it must be surreal that the situation is getting worse with coronavirus again, but at the same

time you have the new security law taking effect, which has created its own tensions, which leaves Hong Kongers feeling what?

RIPLEY: Not knowing what's going to happen next. I mean, we do have to keep the coronavirus in context. The number of cases just today jumped to over

1,400. Fourteen hundred people in a city of seven million and we've had seven deaths.

So people are concerned about the virus and, you know, there are people who are really concerned about the National Security Law. But I would say the

overwhelming sense amongst Hong Kongers is they were happy to see the city getting back to life again.

People who were not so invested in the protest movement might have been pleased that huge areas of the city are not shut down like they were last

year. Except now they are going to be shut down again, especially if the virus situation gets worse.

So I guess here in Hong Kong, a lot of people feel like this is a city that just can't catch a break.

QUEST: Will Ripley where it's nine o'clock at night on a Friday night. Your weekend starts now. Will, thank you.

Japan is reporting a spike in new coronavirus cases. Tokyo has reported 243 cases today alone. It's the largest one-day tally since the outbreak began.

Tokyo's governor says the rising numbers reflect an increase in testing. Japan has reported almost a thousand coronavirus deaths.

On FIRST MOVE, the search for a vaccine, and the scientific head of Johnson & Johnson is with us, where they are about to start trials. We need to

understand exactly where and when and how.

And the CEO of one of America's big three bookings says bookings haven't tumbled. They've stalled. It is Delta's CEO coming up in a moment.

(COMMERCIAL BREAK)

[09:20:22]

QUEST: Welcome back to FIRST MOVE. Julia is off today. I'm Richard Quest. We're about 10 minutes away from the start of trading at the end of the

week.

I wouldn't say it's been a difficult week. It has been a tricky week, as economic data has given pause for thought, whilst the worsening coronavirus

situation in the United States has added layer upon layer.

So as we start the last day of the week, futures are volatile. For instance, flat open, but the NASDAQ still hitting a new record. The Dow and

S&P, little change over the week so far and that nervousness in and of itself tells us what we need to know about the markets.

Look at the month overall, the S&P and Dow have fallen. The NASDAQ, interestingly, a safe haven, six percent. I'm guessing it is the maker for

NASDAQ, it is technology and technology is the one that is leading the way through the virus.

Oil on track for a losing week. Brent and WTI have been down over two percent. Flat. The IEA, International Energy Agency seeing continued

downside risk for crude on COVID uncertainties, and that's with economic growth.

The drug maker giant, Johnson & Johnson is accelerating coronavirus vaccine development, one of many, of course, several dozen who are moving forward.

Some are faster than others.

J&J is about to start Phase 1 clinical trials in Belgium and the U.S. That's earlier than expected. If successful, a billion vaccines by the end

of next year, and of course committed to making the vaccine affordable and available.

The Vice Chair and Chief Scientific Officer of J&J, Paul Stoffels is with me now. Paul, a very good morning to you. I appreciate your time, sir.

If we look at the vaccine, you're just about to go into stage one. Others are already at stage two with some going into human trials at stage three.

Do you think you're a long way behind?

PAUL STOFFELS, VICE CHAIR AND CHIEF SCIENTIFIC OFFICER, JOHNSON & JOHNSON: No, we're not a long way behind. We have a lot of experience with our

previous vaccines, HIV, Zika, Ebola, RSV. We vaccinated that with the same platform, 65,000 people. So we're very comfortable that we have a safe

vector which we are using.

And we took more time to optimize the vaccine for maximum efficacy and that's now done. We have prepared the clinical materials, and second half

of July, we start the vaccination of a thousand -- at least 500 in Europe and 500 in the U.S. And if all goes well, then by the end of September,

we'll be in full scale Phase 3 studies, with a goal of having efficacy data before the yearend or early next year depending on, can we find the places

where there is enough transmission to study the vaccine.

So in short, I think we are very well on track with a good vaccine platform which we can scale up and is safe.

QUEST: By the time you get to this stage, are you pretty sure that it works?

STOFFELS: Well, we have very good animal data and we work a lot on first validating the monument primates. We published that in science model, as

well as the prototype vaccines where we could show that we have actually good efficacy and now, we are in the last stages of the challenge models

and the learning still has to come out, but at the same time, we think we have a good chance of having a single high dose vaccine or a booster dose

with very good neutralizing antibody levels and chance of success.

So there is good hope that we will be able to get to a good vaccine.

QUEST: You've got the E.U. spending billions. You've got the U.S. with Warp Speed spending billions. I understand this is the money required to provide

to people like yourselves for the R&D and development costs at speed.

But the danger of the developed world hijacking the early production is real.

STOFFELS: I wouldn't say that. It's not about hijacking the early production. We'll make sure that we have enough capacity in the world to

make sure that we can provide all parts of the world with the vaccine.

And of course not everybody will be able to be vaccinated at the same time, but if you stratify that in risk groups where the healthcare workers should

come first, where the high-risk people should follow, then there could be a global strategy which would allow to vaccinate large parts of the

population very quickly and avoiding the catastrophe we have in many parts of the world right now.

[09:25:21]

QUEST: Paul, I see -- I was just talking to our correspondent in Hong Kong about an upsurge. You look at what's happening in the U.S., a dramatic

upsurge. One wonders if the same will happen in Europe as it reopens.

The urgency for a vaccine is obvious. When do you think realistically the first vaccine will be given?

STOFFELS: Well, there might be vaccines before the year ends. There is a good chance that with the acceleration of clinical trials, there might be a

vaccine before the yearend in reasonable quantities.

But I think most of it will come in the first quarter, January, February, March next year, with data, as well as regulatory approvals. We need to

first show that it is safe and effective. We have to do all the right work to give comfort to people that vaccines are safe and then somewhere in the

first quarter, I think it could start on a larger scale.

QUEST: All right. And finally, how are you going to sort it all out as to who has paid what? The different governments that have in invested in the

R&D for these different vaccines to help speed things along, Warp Speed, for example?

If your vaccine is successful, please, God, it is, and it goes into commercial production, what happens then? Do you charge for it? Do you then

reimburse governments for the amount they've given? Have them effectively use that money to buy? What is the mechanism?

STOFFELS: We have constructed a global model profit model which provides the possibility to incur ourselves the costs, but also account for costs

from governments and contributions. We make a big pool in the world where we make sure that we get enough profit, but from that, we can absorb or

repay certain moneys to certain governments if that would be required.

Often, governments are contributing with research in grants. Sometimes, contributing with investing in capital infrastructure for manufacturing and

others paying through a funds purchase agreement to share the risk.

So there's different models of how we do this, but I think in a very equitable way all over the world.

QUEST: Paul, good to see you. I appreciate your time, sir. Thank you. I'll let you get back to more important work of actually getting the vaccine to

work. Thank you very much.

STOFFELS: Thank you.

QUEST: In a moment on FIRST MOVE, just after the market has opened, the head of Disneyworld, the Workers Union says it is going to fight the

reopening as the virus surges in Florida. Well, how do you get an opening in a state which is pretty much almost out of control when it comes to

coronavirus? In a moment.

(COMMERCIAL BREAK)

[09:31:25]

QUEST: Hello. I'm Richard Quest in for Julia today. Welcome to FIRST MOVE. We're off to the races. The market has now opened in New York. Final

trading day of the week.

If you look at the early stage, they're searching for direction. That's what's happening there. All three are higher, barely and just. I'm not

surprised the NASDAQ is lagging just a bit after the terror it's been on.

Volatile is the way of the day as new cases of COVID-19 hit records in the U.S. and there are greater concerns of new layoffs. Reports say Wells Fargo

could cut the bank, could cut thousands of jobs this year.

Safe havens are doing well. The 10-year and 30-year bond yields near their lowest levels since April. If you look at the 10-year, down at half of a

percent. It's lost nearly 1.8. And gold is on the rise again, up half a percent, on track for the fifth straight weekly gain for the gold.

The most popular theme park in the world is due to reopen this weekend. Disneyworld is reopening, some of the parks are. As visitors get to return

to the Florida theme park on Saturday, and some of the 75,000 workers who run the show.

Joining me is the man who represents many of those workers. He is Matt Hollis, the President of the Service Trades Council Union. I understand the

concern that you have, but Matt, I do wonder is it even possible in your view to reopen safely at a time of epidemic and pandemic proportions in

Florida?

MATT HOLLIS, PRESIDENT, SERVICE TRADES COUNCIL UNION: Well, good morning, Richard. Thank you for having me and on behalf of the 43,000 members of the

Service Trades Council Union, we appreciate the opportunity to kind of highlight this event.

As far as the safety, what is possible, I think what we've really focused on is the practical points of returning people to work. Disney is a unique

place and it's a magical place for lack of a better term, and we've looked at, since Disney has begun ramping up, Disney Springs has been open since

May now. That's not a small thing. That's a few thousand cast members that are required to support that operation.

The resorts have been open to a limited capacity for a little while now. Now, the parks are gearing up for their reopening. They just had the cast

member previews. They've got annual pass holders and the reports that we're hearing from people that have been in the parks and our staff and our shop

stewards, cast members those folks that have been in the parks, it's been a largely positive experience.

QUEST: So what more would you like to see Disney do? I mean, they've put in place an entire raft, and obviously Disney is one of those companies that

one would expect will absolutely follow best practice or recommendation.

So in your view, what is lacking and what more needs to be done?

HOLLIS: Well, we have said from the beginning, one of the consistent messages that I've taken to every media interview that I have done was that

Disney has the resources to get it right and Disney has every reason to get it right.

So far, the Service Trades Council Union and our principal officers, our union leaders that have been canvassing the members and their concerns, so

far Disney has been responsive to those requests.

There's physical distance barriers. There's PPE that's being provided. Sometimes that's multiple levels of protection.

But it's not just -- you know, as guests go to Disneyworld, they're going to see a drastically different experience and that's necessary. So we

expect that Disney will continue to take the recommendations of the C.D.C. and the recommendations and the local ordinances.

[09:35:27]

HOLLIS: But to answer your question directly, to this point, Disney has consistently and timely addressed the concerns that we've brought up and we

expect that that will continue.

QUEST: Right. So just let me clarify. You're not fighting Disney in the sense of opposing the opening of the parks, but you are deeply concerned

that as this moves forward that everyone is -- I suppose that there are alarm bells ringing for the possibility of what can go wrong?

HOLLIS: Well, I think that there are certainly alarm bells, but it's not on behalf of the Service Trade Council at this time. So I would not dismiss

the alarm bell scenario that you presently. We don't dismiss that as an impossibility.

But the other side of that deserves consideration, too, and that is that this is a good opportunity to demonstrate that in workforces where

employees have a union and they have a voice in their working conditions and employers take those concerns seriously and implement them

consistently, that Disney can lead the way in demonstrating a safe way to open a theme park.

And so far we've seen that response. We've advocated on behalf of the Unionized Employees at Disneyworld, and we'll continue to do that. We're

hoping that what comes out of this is that where employees have a voice and employers respond to that voice, that it makes a drastic difference.

The union that I work for, we represent people outside of the theme park industry, and I can tell you, we haven't seen near the responsiveness from

a lot of those companies, sadly.

But on behalf of the Service Trades Council and our 43,000 members, we'll continue to advocate and we believe that the potential is there that when

companies take those concerns seriously, it will make a big difference.

QUEST: Matt, good to have you, sir. I wish the opening well, excellently. I spent many a happy hour spending too much money in Disney in Florida and

I'm looking forward to doing so again, sir. Thank you, and to your members, the cast members who make it all possible, I'm appreciative. Thank you very

much.

Now, FIRST MOVE continues. You will hear from the CEO of Delta Airlines, one of the big three, and the President of Emirates, one of the largest

global carriers. It's all next. They both are looking to the future at how quickly things can get back to normal.

(COMMERCIAL BREAK)

[09:41:07]

QUEST: The CEO of Delta Airlines says that bookings have stalled, having seen a resurgence in May and June, now, things have gone in the opposite

direction. Ed Bastian was speaking to Poppy Harlow.

(BEGIN VIDEOTAPE)

ED BASTIAN, CEO, DELTA AIRLINES: In the post July fourth period, there's no question that the spread of the virus, as well as all the quarantine

measures that have gone into place have started to pull back the demand expectations.

So I would say we're in kind of a cautious pause right now in terms of any additional growth.

POPPY HARLOW, CNN ANCHOR: Are your bookings, future bookings, tumbling the way United said just on Monday theirs are?

BASTIAN: I wouldn't say bookings are tumbling. I would say bookings have stalled. We came through in June, week after week, we're seeing some pretty

nice demand pickup as the economies were opening up, particularly in the south.

But then as you've seen the spread of the virus pick up, those same bookings have stalled.

HARLOW: We just heard United warn 45 percent of their frontline workers, that's 36,000 workers, that they could lose their job come October 1st. Is

Delta facing the same scenario in terms of potential layoffs?

BASTIAN: We are facing potential layoffs, but not nearly the level that United communicated. Close to half of our staff have taken voluntary leaves

for the month with no pay at all, just voluntary unpaid leaves.

Second thing we're doing is we've got an early retirement offer with our employees that's still up and we're expecting, and we already know, there's

thousands of employees that have signed up to take the offer.

And as a result of that, we're looking at probably a much lower impact number come October 1, and our goal is to try to eliminate and not have any

furloughs.

HARLOW: Is there a chance at this point, maybe you don't have to lay anyone off in the fall?

BASTIAN: Absolutely, absolutely. There's a real chance of that happening.

HARLOW: Delta has mandated masks for anyone who wants to get on your planes. But the Federal government isn't, right? They're just recommending

it. How hard does that make your job? Do you want the Federal government to mandate masks on all commercial airlines?

BASTIAN: It would certainly help and I do believe that would be a good action. I don't expect it to happen, though. So what the Federal government

has done has left it up to each airline to make their own decisions.

Masks are mandated on Delta and for any customer who is not wearing a mask, will not gain access to the airplane. If a customer does not choose to keep

their mask on, that customer is going to lose their right to fly Delta for a period of time.

And we warn them several times during the flight. We have had some customers who we've had to put on those lists. But generally speaking,

compliance is pretty good.

HARLOW: It sounds like a Federal mandate would help so much in terms of requiring masks. Have you called the White House? Have you called the

administration and ask them to do this?

BASTIAN: Well, it's my -- we've had those discussions with the White House. The industry collectively hasn't given a strong point of view on it.

At Delta, I feel strongly about that. But I'm not sure some of my peers at other airlines feel the same way. So as a practical matter, I'm not sure

it's going to happen.

HARLOW: Let's talk middle seats. Delta is promising fliers right now an empty seat next to you. Does that mean under no circumstance will the

middle seat be booked?

BASTIAN: That's correct. So we've announced through the end of September that we're going to cap our load factors at 60 percent. So the plane will

not carry more than 60 percent of the customers on board the plane and that we are going to block all middle seats on those planes.

HARLOW: The head of PR at United says, quote, "When it comes to blocking middle seats, that's a PR strategy, not a safety strategy." Is it a PR

strategy?

[09:45:10]

BASTIAN: I think it's a really important safety feature and all the medical experts that we have, we have the Mayo Clinic and we're working down here

in Atlanta with Emery and we've got a lot of counsel on this that indicates while you can't logistically expect airplanes to only -- or customers to

sit six feet apart, on planes, distance matters. Space matters.

(END VIDEOTAPE)

QUEST: Ed Bastian on the issue of the middle seat. The President of Emirates, Tim Clark, has his own views about the way things are going to

move forward.

Sir Tim had announced he was retiring next year. Now, the question is when and if he will go. However, in the meantime, he believes that things will

get better for the airline industry, that it will not be as bad as it is.

(BEGIN VIDEOTAPE)

TIM CLARK, CEO, EMIRATES: My view is that, yes, by the summer of '22, we'll see a restoration of normality. By that I mean pre-COVID levels. Not

expanded as we were going by seven percent or eight percent per annum, but it will be flat lined to where we were at the end of the last year in 2019.

QUEST: I mean, I've heard some airlines, some of the carriers, talk about shrinking 20 percent, 30 percent.

CLARK: We think, to be quite honest, we will be between 10 percent and 20 percent in the end. We are probably not quite the same as many airlines

because, don't forget, most of our workforce is expatriates.

Once they have left the United Arab Emirates and Dubai in particular, so it becomes far more difficult to get them back as quickly as we may need them.

QUEST: What was your worst cash burn?

CLARK: You've heard the same kind of figures, it's a million an hour, that kind of thing at one point. I think we were not dissimilar to some of the

other big legacy full-service carriers, Lufthansa, Air France KLM, you name it.

We were all in these rather difficult situations. But we've arrested that. We've attended the costs in a very big way. Obviously, we don't face the

operating costs of these aircraft, but by speaking to the debt providers in some instances and others in the mix of debt provision, we've been able to

lay off quite a lot of this. So, we're in good shape at the moment.

QUEST: People talk a lot about opportunities. You would have seen Alan Joyce when he did his capital raising, buried at the bottom of the

statement was, you know, we want to prepare ourselves for such opportunities that will arise.

I know you said something similar. What are those opportunities to which you were referring?

CLARK: Well, I think you have to roll forward, Richard, until that time where the jury is out or whether it's '22, '23, '24, '25.

For a start, we all have to get through this horrifically tough time. Not all will get through that as we're already witnessing, and in the absence

of government support and bailouts, most of the airline industry today would be in bankruptcy, let's be quite honest about it.

But going forward, if we can survive all of this, I'm not one of those people that believe that there is going to be a new norm. In other words,

that people will not travel or their incidence of travel, their frequency of travel, their capacity to pay for travel will be compromised.

I think it's a little bit of a wakeup call at the moment, but one only has got to look at what happened, for instance, in the United Kingdom last week

or the week before or during May when they started to release the lockdown, 500,000 people headed for the beaches.

When they opened the bars and restaurants last week, so there were huge numbers turning out. The pressure to return to degrees of normality,

notwithstanding the points I made about the Science and Medicine, my own belief is that people will come back. They will want to restore the way it

was as best they can because they experienced it, they savored it, they enjoyed it.

And in the case of air travel, it has become very much part of their lifestyle and it wasn't so aspirational as it might have been 20 or 30

years ago. Now, it's the way it is and that's the way they want it back. That's the way I look at it.

Secondly, without being too predatorial about it, my view is there's going to be a significant number of carriers which will have difficulty in

mounting long-haul operations because of the risk associated with that, and therefore, with the amount of debt on the balance sheet and the concerns

about cash, the risk averse nature of boards, I would suggest that there's going to be a reduction in capacity as compared to what it was a year ago.

QUEST: Anybody looking at the current situation of aviation in the region, in your region, says it makes sense for you and your neighbor, Etihad, to

consolidate, to come together.

I know that this is above your pay grade, this is being dealt with at much higher levels, which is saying something, bearing in mind how high you are

to start with, but as an aviation man, you must surely see it makes sense for you and Etihad to merge.

CLARK: I think -- look, you're right about the pay grade, you're right about the decisions that had been taken. But let's be quite honest about

this. Etihad has already contracted to a shape and size where they will be post-pandemic much more fit for purpose.

At the same time, with what's been going on in the last few months with this pandemic, Emirates is obviously adjusting what it's doing, the scale

of what it does. And I believe that in a couple of years' time, both carriers will be well positioned to re-enter the markets on the basis of

what I just said a few minutes ago and do this profitably, incisively with a high degree of focus, and at the same time keep themselves separate.

That's not to say that behind-the-scenes where we don't contravene competition law in the west and everywhere else that we do not work

together. And both Tony Douglas and I have had many, many chats about how we could share out the goods and services procurement into the business.

(END VIDEOTAPE)

QUEST: Sir Tim Clark talking to me there. And in just a moment, it's an epic investment for Sony. They are buying into the parent company of

Fortnite, because one of the things about all of us being at home, online gaming has gone through the roof. In a moment.

[09:54:13]

(COMMERCIAL BREAK)

QUEST: We need to wrap up the week as the markets in New York are open and doing business. Clare is with me for a final look at the way things are

looking.

Two down, one up. We've had a volatile day, a volatile week, I should say, and I'm not sure where the direction is now, because the level of

uncertainty that's come into the market.

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: I think we've had a noticeable volatile day and a volatile week. We've actually had sort of a volatile

month to five weeks ever since we saw that calm down at the beginning of June when markets topped out after the exuberance we saw coming off the

March lows.

I think the nervousness is clearly around the rise in virus cases that we're seeing in the U.S., the impact that is having on reopening. We're

already starting to see that reflected in the behavior of some companies and in some data, even though of course the unemployment picture is

improving.

And I think a lot of focus will look ahead now to the continuation of the data and the potential for sort of drug breakthroughs we have seen today

for example with Gilead, and then the Fed meeting at the end of this month -- Richard.

[09:55:21]

QUEST: Clare, thank you for bringing us up-to-date on the way markets are looking. Clare Sebastian for us there.

That is FIRST MOVE for this week. Julia will be back with you on Monday and I'll be in London this day, leaving for London tonight, with all the joys

and delights of traveling in the coronavirus era.

Take a look at the way the markets, I love and you and leave you. They are betwixt and between but the news never stops on CNN. There is more after

the break.

Whatever you're up to, I hope it is profitable as the market.

(COMMERCIAL BREAK)

END