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Quest Means Business
US Storm Travel Chaos; Weather Outlook; Europe's Wild Weather; Bernanke's 2014 Outlook; US in 2014; Wall Street Flat; Cold Comfort for Carmakers; European Markets Up; Boeing Union Vote
Aired January 03, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: A bunch of serious gentlemen ringing the closing bell as we come to the end of a flat-ish sort of Friday. Come on. Ha! It is Friday, it's January the 3rd, the end of the first week of trading.
Snowed in. The US and Canada, wherever you are, storm causes travel chaos on both sides of the Atlantic.
Snow means slow. Car sales get stuck in December and soaring for the year.
And a case of thank you and good-bye. Ben Bernanke sees economic opportunity in his final speech.
It may be Friday. I'm still Richard Quest, and I still mean business.
Good evening. There are dreadful travel conditions on both sides of the Atlantic. We start in New York and in the Midwest where thousands of flights have been canceled within the United States after a snowstorm slammed into the country's northeast.
Airports across America have been affected, travelers have been warned to expect severe delays. Runways are slowly opening, but the backlog could take days to clear. This is the scene at New York's LaGuardia airport, and thousands of passengers are queuing for hours, hoping to board their flights.
Our correspondent Poppy Harlow is at LaGuardia, which is New York's basically domestic and inter-regional airport. Joins me now. Poppy, no one's going anywhere fast, but are things anywhere getting back to normal?
POPPY HARLOW, CNN CORRESPONDENT: They're getting not back to normal in any way, Richard. A little bit better than they were this morning. This is the queue for all of the people who have had canceled flights who are trying desperately to get booked on anything to get them out of New York.
But let me show you how much better it is than it was. So, the queue starts here, goes all the way down this hall, which you've been here before, past the food court all the way to the right, that is where the line was this morning. It was taking three hours for people to get through.
Today it's a lot better. But let me give you this number: 2,573. That is how many flights have been canceled today alone -- and it's just 4:00 here in the East -- in and out of the United States. Couple that with all the flights canceled yesterday, 5,000-plus flights canceled in and out of the country because of this nor'easter.
It was much worse this morning, zero visibility at JFK. Now you've got two of the four runways open. A ground stop at Newark, now they're operating. Boston, Rhode Island, Connecticut, operating.
But I'm looking at the cancellation board up here, half of it is yellow, and that's cancellations. A lot of the people here that I'm talking to in line are from Brazil --
QUEST: All right.
HARLOW: -- from Argentina, coming to the US for the holidays, and they're not going to back, they say, until Monday, Richard,.
QUEST: Poppy Harlow who is at LaGuardia. Thank you, Poppy. So, this is the situation of just how bad it is across America. I want you to look. This is known as the misery map from Flight Aware, and it shows, for example, Denver has delays 876, in total there are 876 delays and 113 cancellations between 1:00 and 5:00 in the afternoon. So, that's in real time at the moment.
You'll see, of course, airports around New York City, Newark, JFK, LaGuardia, in this hour alone, 29 -- 20 flights have been canceled at Newark, Kennedy has canceled a few, and LaGuardia has canceled 5. So, you get an idea of how the numbers are moving.
One of the worst-affected airports has been Chicago's O'Hare. Let's call up Chicago in a bit more detail. Canceled, 30. Delayed, 125 this hour. It's experiencing departure delays averaging 37 minutes.
Karen Pride from Chicago's airports is on the line with me now. Karen, good to talk to you. I know you're very busy and you've got a mini crisis in the sense with this travel. But the difficulty is, isn't it, surely, you've got to get the people moving and get the system back to normal and do it all safely?
KAREN PRIDE, DIRECTOR, MEDIA RELATIONS, CHICAGO DEPARMENT OF AVIATION (via telephone): That is absolutely correct. And we work very hard and diligently with our airline partners to assist them and support them in getting the passengers rebooked --
QUEST: Right.
PRIDE: -- and helping them to make sure that the runways are cleared and the taxiways are cleared so that they can get their flights out.
QUEST: Now, in terms of a crisis or in terms of snow, Chicago's probably the epicenter in the United States at the moment of what's going on. What's your biggest challenge and problem?
PRIDE: The biggest challenge is ensuring that we have enough equipment and staff to remove snow from all of the taxiways. O'Hare sits on over 7,000 acres of land and Midway is on one square mile, so that's a lot of ground to cover.
However, we have an excellent snow operations team, and they work very hard around the clock as necessary, and they do a great job and everything in Chicago has been clear and operational throughout this snow event.
QUEST: Now, this is another interesting point, because passengers often think, why don't they buy more snow equipment? Why don't they have this? Why don't they have that? But the fact is, Chicago -- airports like Chicago, extremely well-equipped for exactly this sort of event. You plan for this for a long, long time.
PRIDE: That's correct. We train year-round so that by the summer there are -- we check the equipment, we make our salt and de-icer purchases for the roadways, and we train our drivers -- retrain them starting in the summer so they're familiar with all of the equipment, to make sure it's running, if there's any new equipment. And just make sure that we have all of the supplies ready.
We also have several weather-reporting agencies that we rely on around -- we monitor weather around the clock, around the year --
QUEST: Right. OK. Tell us --
PRIDE: -- it's not just snow. It could be rain, it could be heat, it could be any number of weather conditions.
QUEST: So, finally, because there will be people watching around the world looking to fly into Chicago, looking to hub and connect with American or United or any of the other airlines that are prevalent and quite large at O'Hare and Midway. So tell me, when do you expect to be able to have some form of normality?
PRIDE: Well, that depends on how quickly the airlines are able to rebook their passengers, particularly at this time at Midway. As far as the actual airport operations, everything has been running on time except for flights from O'Hare to the eastern part of the country, as you had mentioned before.
QUEST: Yes.
(LAUGHTER)
PRIDE: Because they've got quite a number of problems there. But right now, airlines at O'Hare are experiencing 35 minute delays to the East Coast. Midway, some of the Southwest flights running on a reduced schedule.
QUEST: Karen, good to talk to you. I'll let you get back to attending to your duties.
PRIDE: Thank you very much.
QUEST: Many thanks. Good to talk to you. And it's one thing worth remembering -- let's bring in Jenny Harrison at the World Weather Center. It's one thing worth remembering, Jenny, that when we talk about these weather delays and these traffic delays and these airports, I wouldn't like to land 300 tons of metal on something that I wasn't quite sure was firm under foot.
JENNY HARRISON, CNN METEOROLOGIST: Well, that's exactly it, isn't it, Richard? All of this, as we know, is done for safety. And of course, if you say you don't want the crew having to contend with what could be very, very worrying situation.
But the good news is, as we know, of course, in the last two hours, look at this: there's barely any snow at all now across the entire region. Certainly, these big fitters in the northeast. You will see some snow, of course, heading in towards the northern sections of the Great Lakes, so we're not done with the snow, not by any means. But we are across the northeast.
Now the warnings from there have all gone, so again, no weather warnings or winter warnings, I should probably say. But you will notice we have instead got them across the northern states, the northern plains in particular. North Dakota, look at that, every inch of that covered in a blizzard warning, because obviously the winds are going to be very strong and there is more snow to come.
I'm going to show you this. You may have seen it already. In fact, who knows, Richard, maybe you're watching it yourself, watching the flakes come down. This, of course, is Columbus Circle up there in New York, and this a time-lapse photography just showing you there. Eventually, of course, it stops at 8:30 in the morning local time, with a nice old covering of snow.
And in fact, it was a pretty good amount that came down, in total 18 centimeters to New York City itself. But not the biggest amount by any means. Look at this, Boston 37 centimeters. In fact, that was more than most of our computer models were actually showing as a forecast.
Now, we know, of course, about the number of cancellations Poppy was telling us about. That was at 2,573 she said, very precise. And of course, these are the main airports. So again, as you were saying, Richard, if you're traveling in, trying to get away from, you just need to be really aware that all of this has been happening.
And of course, there will be a ripple effect, and that knock-on effect, too, in terms of when things get back to normal. But the conditions are improving all the time. However, this snow is not going anywhere just yet because of these temperatures.
QUEST: Whoa.
HARRISON: Look at this: Green Bay, up in Wisconsin, minus 28 Celsius this Friday morning. The average is minus 12 for this time of year. But Ottawa in Canada, in Ontario, there, minus 37 Celsius. And believe it or not --
QUEST: Right.
HARRISON: -- it would have felt colder than those temperatures because of the wind. So right now, it's very cold. With the wind, it feels like minus 16 in New York, minus 11 in Washington, and it is going to get colder. Some extremely cold air plummeting down. Could be the coldest air we've had in decades, possibly. Maybe 25 degrees below the average.
So, that is going on, and at the same time, look at this all erupting, Richard. This is Sunday into Monday, another big storm across the central plains. And of course there, we're going to see rain, ice, and that snow as well. Temperatures on Saturday minus 2 is your best bet in New York, Richard, but it'll feel colder because of the wind.
QUEST: We'll talk to you later about, of course, the European picture and --
HARRISON: Yes.
QUEST: -- what we can expect over toward Central and Eastern Europe later in the program. Jenny Harrison at the World Weather Center. We will stay across the Atlantic for this moment, though, because Britain and northwestern France are also being battered by high winds and wild weather.
It's a case of tides and gale-force winds, which is causing havoc and flooding in parts of the UK. Similar conditions have left coastal towns in France inundated as well, and our senior international correspondent Matthew Chance has the details.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): As the US is gripped by winter storms, across the Atlantic, Europe is also being lashed by the first high winds and torrential rain of 2014. These dramatic images of western France being hammered by fierce gales.
In Britain, tidal surges swept inland, forcing rescue teams like this lifeboat crew in western Wales to evacuate residents stranded by the flood waters. Severe flood warnings are in place across western and southern areas.
Entire centers of some coastal towns have been inundated. Recent weeks in Western Europe have seen repeated bouts of stormy weather. Just before Christmas, high winds downed trees and knocked out power to hundreds of thousands of homes in France and Britain.
(WIND BLOWING)
CHANCE: It's raising concerns that the weather patterns this side of the Atlantic are getting worse.
ROBERT MUIR-WOOD, FLOOD RISK ANALYST: I think our memory is fairly short for how bad the weather can be here. This winter is pretty exceptional for having this succession of storms one after another coming in. I don't think you can simply say this is climate change. I think this is probably simply the normal variability of the weather.
CHANCE: And the storms are expected to worsen next week as Western Europe braces for another pounding.
Matthew Chance, CNN, London.
(END VIDEOTAPE)
QUEST: Coming up after this short break --
(RINGS BELL)
QUEST: -- US automakers spinning their wheels. A strong year ends with a lackluster December.
(BEGIN VIDEO CLIP)
QUEST: Appropriately enough, it was the cold winter snap in December which slowed the rate of car sales down to a snail's pace. But even here, not everyone was a tortoise. Some were hares.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: The outgoing Fed chairman, Ben Bernanke, says 2014 holds much promise for the US economy. In a speech in Philadelphia that some considered to be almost a farewell address, the chairman says the stars appear aligned for faster economic growth.
This is what he actually says. "The combination of financial healing, greater balance in the housing market, less fiscal restraint, and of course, continued monetary policy accommodation, bodes well for US economic growth in the coming quarters." Now, Bernanke also said the economic recovery remains, in his words, "incomplete."
On Monday, the US Senate expected to confirm Janet Yellen as the next Fed chairman. It will be Yellen, not Bernanke, who will ultimately have to decide when to finally raise rates. Although it must be said, that's not likely to happen for many years or at least some years to come.
It's the big question for the global economy. Jeffrey Sachs is the director of the Earth Institute at Columbia University. Jeffrey, I've just realized, I have answered the question I was suppose to ask you.
(LAUGHTER)
JEFFREY SACHS, DIRECTOR, THE EARTH INSTITUTE, COLUMBIA UNIVERSITY: What's that?
QUEST: Which is when the interest rates are going to go up. But it's not going to be for -- they say now until well beyond unemployment's at 6.5 -- lower than 6.5.
SACHS: Whatever it is, the Fed will keep it gradual, especially incoming Chairman Yellen will be cautious about raising interest rates. They will go up. Of course, they're at the floor right now, and the Congressional Budget Office, for example, forecasts that they'll be around 3 percent by 2016, 2017, rather than near zero, and I think that that's probably accurate and a good, moderate forecast.
QUEST: Many of us are actually -- although it's going to be painful in the short term, as we -- those of us who've got used to mortgages at zero-point-dot percent, moving towards a period of normality is better for everyone in the long run.
SACHS: Well, of course, the risk is that we're building bubbles, and we won't know how much we have of the bubbles of these soaring equity markets, for example, and the big real estate price increases that have taken place until interest rates start to go back towards normal.
QUEST: You see, there's the -- the rub, in may ways, because there's no choice. Yes, they could've used other non-monetary ways. They could have used banking liquidity, they could have used limits and things like that to take out the steam of the housing market. But you had to keep interest rates this low.
SACHS: Well, the whole recovery has come from easy liquidity and trying to get --
QUEST: But it had to.
SACHS: I think it was OK. But it means that you can't say this is a robust, self-sustaining economic growth right now. It's economic growth that has been fueled by easy liquidity.
QUEST: I want to talk about something that we were talking about on last night's program as we covered Bill De Blasio's election and inauguration as mayor. You have very strong views on the rising inequality in many of our communities and cities.
SACHS: I think what the new mayor has said is exactly right. This is a tale of two cities in New York, by far the richest part of the world in one corner of Manhattan, and a great deal of poverty. Around half of all kids in New York City growing up in either poverty or near poverty.
QUEST: How did this happen?
SACHS: Well, first, this is a country of big inequality, but over in -- historically, but over the last 30 years, the top has soared. That's been partly markets, technology, shift of income towards capital, globalization. Partly it's been policy adding on, making it easier for the rich to basically build their wealth.
And that widening of inequality has led to a condition that we've not seen in this country in a century. And it's now having its political ramification. What's fascinating about New York is the mayor has said the rich should pay a very small amount more to make sure that every child in this city --
QUEST: Right.
SACHS: -- can get access to decent education. And now we have a test of the basic decency of whether a society that has a lot of wealth --
QUEST: Well --
SACHS: -- but big inequality is going to be able to hold together.
QUEST: He's still got to get that tax through.
SACHS: He does.
QUEST: He's still got to get that tax through Albany.
SACHS: It's going to be an interesting story.
QUEST: But --
SACHS: I think he's going to make it, by the way.
QUEST: Right. Finally, do you see it -- because again, we were talking about it last night, and I must hear your views on this -- the rest of the world, the big cities, the Londons, the Parises, the Madrids, that have got similar rising inequality within them, will be watching closely what's happening here?
SACHS: No question. This is a flagship. This is the center of world diplomacy because of the UN, world leaders come here every year. They will be watching what's happening in New York, no question about it.
QUEST: And we will be talking to you with a bit of luck and a following wind at Davos.
SACHS: Wonderful. Let's do it.
QUEST: Happy New Year to you.
SACHS: And happy New Year.
QUEST: Thank you always for coming in and talking to us.
SACHS: Absolutely great. Thanks.
QUEST: Much appreciated. Now, the markets on Wall Street. There were no records as such. Well, certainly it wasn't a bumper session. It was just up 28 points, 14,469 (sic). What it does mean, it ended the holiday-shortened week higher.
As you can see -- well, it looks like a bit -- talking of the Alps with Jeffrey, it looks a bit like the Alps around Davos in the way the graph of the market movements were today. But it is the first gain that we've seen of the new year. The Dow has bounced back marginally.
The NASDAQ and the S&P fell further into the red for the year, and the S&P fell fractionally. The NASDAQ dropped more than one percent.
Now, the US auto industry has just concluded its best sales years since the Great Recession began. Car sales in 2013 hit their highest levels since 2007. Even so, sales hit the skids in December.
(CAR TIRES SCREECHING)
QUEST: Whew. A bit of indigestion. All of the major carmarkers reported weaker-than-expected results for the month, and it was the poor winter weather. So, the worst of the lot: General Motors. Just look, General Motors saw its sales in winter fall 6 percent. They were expecting to see a rise, so down news for GM, who of course gets its new first woman CEO in the year.
Toyota sales also fell 1.7 percent. That was pretty much in line. Ford sales rose. There should be a little sun there, but Ford sales rose 2 percent on the month. That was still below expectations. And Chrysler, a round of applause for Chrysler.
(APPLAUSE FROM CAMERA CREW)
QUEST: Well, it's not much of a round of applause, but Chrysler was the best of the bunch. It was up 6 percent, which will no doubt cheer Sergio Marchionne, whose company as we told you yesterday has just agreed to buy the 41 percent of Chrysler that it doesn't already own. Experts were hoping for an even higher number than that.
The European markets extended the session on a positive note. Take a look at the numbers. The FTSE was up, as was the DAX, and the Paris CAC 40, and the Zurich SMI.
After the break, it's a case of politics, corporate money, and union labor. And it has airplanes involved as well. We'll talk about Boeing's new factory after the break.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: Welcome back. Union workers at Boeing face a controversial choice: keep your jobs in Seattle in Washington state, or keep your pension and the benefits that you've currently got. Boeing is about to announce where it will produce the 777X. It's an updated, revamped version of the 777.
It has said it will -- or potentially will choose -- it will look for another state if its workers, the machinists union, don't vote for their new contract. The new contract calls for replacing a traditional pension plan with a so-called 401K plan as well.
Now, the important thing to remember about all of this is that Boeing workers have already rejected the proposal by 2 to 1. The union is putting the vote again on a slightly amended. However, almost two dozen states are interested in taking the vote if of course this goes ahead.
Now, which are the -- we're up here at the moment with Boeing up in Washington. Well, we already know that California is potentially interested. Obviously, the Carolinas, they've already got Boeing production work, going on over there. Illinois has been -- has said it's interested. Alabama has Airbus, so it probably is not so.
But what you have across vast swathes of America at the moment is a rampant bidding war to try and offer Boeing as many bonuses, tax give backs, subsidies that they can if -- if -- if -- they don't stay in Washington state.
Let's talk to Frank Larkin, the director of communications at the IAW, the machinists and aerospace workers. He joins me on the line from Washington, DC. Frank, first of all, thank you for joining us. The question: when will the vote results be known?
FRANK LARKIN, DIRECTOR OF COMMUNICATIONS, IAW (via telephone): The voting is taking place right now. The vote will conclude at 6:00 PM Pacific time, so we'll have results shortly after. They will tally them and make the announcement in Seattle.
QUEST: Frank, you know these arguments much better than I do. The core point is that you're putting this vote again on a marginally- improved contract. You're basically doing what they do in Europe. You've tinkered with the details and asking people to vote again, hoping you get the right result.
LARKIN: That's only partially true. This is an unusual negotiation and an unusual vote in a number of respects. It did not come at the end of traditional contract followed by a long period of negotiation. It was a proposal from Boeing that came very quickly based on their upcoming decision regarding the 777X.
QUEST: Right, but --
LARKIN: It could not last for months, as negotiations normally do. There was some confusion about the initial proposal. It was rejected by a 2 to 1 margin. The changes that were made were not insignificant, and that's the reason it was being brought back for a second vote.
QUEST: To those cynics who say the president of the union is more concerned about losing the dues and fees from a large number of union members if this contract goes elsewhere or if this plant goes elsewhere, how would you respond?
LARKIN: The internal rift that some articles have made a great deal of is actually just a kind of cynical way to view the very aggressive democracy that's taking place. Whenever there's a dispute within a union, especially a unit this size, you're going to see strong opinions one way or another.
QUEST: Right.
LARKIN: It does not mean at the end of the day when people vote and the majority has their say about how it's going to go down, that they don't come back together for the mutual benefit of the members in the union --
QUEST: OK --
LARKIN: -- and the company itself. We're convinced Boeing's best business choice is to make it in Seattle, and we're determined to thrive alongside the company.
QUEST: If the vote goes against the national leadership. In other words, the original vote is reaffirmed -- and I know that's a big if, voting's still -- the results are later tonight -- but there is this almost unseemly feeding frenzy, isn't there now, to shovel as much money as possible Boeing's way to win this plant, which may not go to -- stay in Seattle -- in Washington state?
LARKIN: Billions and billions in tax incentives are being offered up for the opportunity to create what will amount to a brand-new industry. Some of these cities, like Long Beach, have an established aerospace presence.
But others realize that, given the composite wing technology, the manufacturing that the 777 will require, they'll actually be sort of planting a new industry that will produce -- and the numbers sometimes get high -- but anywhere from 8,000 to 20,000 jobs over a period of ten years.
QUEST: Frank, I can see why this is such a hot potato. Thank you. I know you have a busy day, obviously, with the vote taking place. We thank you for taking time to join us on QUEST MEANS BUSINESS.
LARKIN: You're very welcome.
QUEST: Thank you. And once that result is known, of course, we'll bring it to you. And as this plays out, we will follow it closely, because if the vote is favor of the Boeing deal, then Boeing has said it will stay in Washington state with the 777X. If not, all bets --
(RINGS BELL)
QUEST: -- are off. QUEST MEANS BUSINESS, we're back in a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in just a moment. This is CNN, and on this network, the news always comes first.
At least 11 people have reportedly been killed on Friday in Egypt. The supporters of President Mohamed Morsi clashed with opponents and police in two cities. The police used tear gas and birdshot to disperse pro-Morsi demonstrations across the country.
A week of heavy fighting in central Iraq has seen a spike in the number of casualties. Interior ministry is reporting at least 80 people died on Friday in clashes in Ramadi and Falluja in the Anbar Province. Militants affiliated with Al Qaeda have overrun police and army stations in a struggle for control of the troubled region.
Hundreds of thousands of travelers are stranded after a massive snowstorm swept across the U.S. northeast. More than 2,200 flights into and out of the U.S. have been canceled on Friday, and frigid temperatures are expected across the region over the course of the weekend.
The Chinese ice breaker that played a key role in an Antarctic rescue on Thursday may itself be stuck in the ice. The Australian authorities say the Chinese ship is concerned about moving through the heavy ice in the area. That means the Australian ship that is now carrying the rescued passengers from the first ice-bound ship, is staying nearby as a precautionary measure.
A Formula One racing legend, Michael Schumacher, is spending his 45th birthday in hospital in Grenoble in France. Fans gathered outside the hospital for vigil to the German driver. He remains in a medically- induced coma after suffering head trauma following a skiing accident on Sunday.
The British mortgage lender Nationwide says U.K. house prices jumped by the biggest amount in more than four years last month. Year on year, house prices are up 8.4 percent, partly due to a government lending scheme that some say could lead to a housing bubble in Britain. A well-known global charity has come up with a way to offer low-cost accommodation to young people struggling to make ends meet. Isa Soares reports.
(BEGIN VIDEOCLIP)
ISA SOARES, REPORTER AT CNN INTERNATIONAL: This is like any other student apartment. There's an en suite shower, a (inaudible) and a sink. Here you have a kettle and the indispensable microwave as well as a single bed. But, not everything is as it seems. This is in fact a shipping container that's come all the way from China. It's what you call thinking outside of the box, or in this case, inside the box.
Because they have been designed to help young people on low income. The project is the brainchild of YMCA CEO Timothy Pain who saw the containers as a quick-fix solution to London's soaring rents which have gone up more than 9 percent in the last 12 months.
TIMOTHY PAIN, CEO, FOREST YMCA: The only thing that's affordable for anybody in this part of east London, is a shared room in a house at $150 a week, and that's normally in really poor shared accommodation, and minimum wage is about $200 a week. We wanted to come up with something that would be affordable on one-third of minimum wage.
SOARES: And at just over $100 a week, the mYPad's certainly cheap by London standards. For 26-year-old Ken who's moving in next month, this is the only accommodation he can afford.
KEN MBIRO, MYPAD RESIDENT: Saving up for deposit is expensive enough and then you still have to have first month's rent as well. So, coming from a part-time job, it's impossible for me to go out there and have my own place, and the mYPad -- this is a very good idea.
SOARES: The containers aren't cheap. They cost the charity $32,000 each. But the pilot program has been applauded by many, and the charity has been given funding and planning permission to continue stacking up.
PAIN: Land is so indescribably expensive. That's what drives up rental prices. And so we wanted to do something that we could use on temporary planning (commissions). We estimate that we need just in this little bit of London, about 150 of these, and the local authority are giving us the land to enable us to do that.
SOARES: At the moment there are only two mYPads in this parking lot. But if you look over here, this area which for the moment has a sign that says "Please Keep Off the Grass" - this will soon get a facelift because it there will be an additional eight mYPads going on here. Now, there's a waiting list of 120 people trying to get into this type of accommodation. It really does go to show demand there is for self-contained, affordable housing here in London. Isa Soares, CNN London.
(END VIDEOCLIP)
QUEST: Now if you're waiting for a delayed flight thanks to the weather, think about this - it's hard to believe it but this year marks only the 100 years since the first passenger paid to fly. We'll have the centenary of the first commercial flight after the break.
(COMMERCIAL BREAK)
QUEST: Can you believe it? It is just a hundred years since the first passenger paid to fly. We may mutter about leg room and the lack of luggage space, but people still get on board. In fact, three billion people take a flight every year, and most goes according to plan. And yet it is just 100 years since this first flight -- on January the 1st, 1914. Now, the first passenger paid $400 to fly across Tampa Bay. The flight took 23 minutes, and that was the first journey that was - of paid aviation. Not the Wright Brothers - they were at Kitty Hawk and they didn't pay anything.
But this flight - well, maybe not that flight - opened up a world of possibilities because flying has brought loved ones together, it has instilled the imagination. We've all tried to think of many different ways in which we can get up in the air and fly perhaps without an engine. It's opened and connected cultures and created markets. And although flying is something we often love to hate, the flying industry and the airline industry supports 57 million jobs, whether it's from propeller planes of the past or roaring jet engines of today. Flights carry 50 million tons of cargo, and they boost trade links. I had its director general Tony Tyler explain what aviation means to the global economy.
(BEGIN VIDEOCLIP)
TONY TYLER, IATA DIRECTOR: It is very much a sort of economic ecosystem in itself. And a country that helps its aviation system develop inevitably becomes a success for the economy because, you know, what these people are doing are enabling so much economic activity through the work that they do by cooperating with each other to make aviation happen.
(END VIDEOCLIP)
QUEST: What a difference in just 100 years. Which begs the question - how airlines will perform and what role they will have 100 years from now. The Associated Press asked airline CEOs to predict flying in 2114. Gary Kelly of Southwest - he believes there'll be fewer airlines, and the ones that are left, will be bigger, stronger - that's (inaudible) in five years' time - there'll be fewer airlines, ones left are far larger and will have fancy inflight entertainment. So, Richard Branson of the Virgin Atlantic Group - he predicts that in 25 years passengers will be able to float around onboard thanks to zero gravity. He believes in his lifetime - in his lifetime, he says London to Sydney will be possible in two hours. Of course he's talking about some sort of hypersonic flight.
Many of us - not with my bad back - will make it to 2114. But Ben Baldanza, the CEO of Spirit Airlines says airlines will no longer exist. He believes Google technology will have taken over. Google, put me there - will be the way we will fly in the future, making flying on planes a thing of the past.
Now the actor John Travolta has his own plane, and his house has fully functioning airport. He's also an ambassador for Qantas. Travolta loves flying and says he's airborne almost every day. He talked to CNN's Leone Lakhani about being able to fly 11 different types of jet.
(BEGIN VIDEOCLIP)
LEONE LAKHANI, REPORTER FOR CNN INTERNATIONAL: He's a Hollywood legend who's mesmerized audiences with his dance moves in Saturday Night Fever. Gracing the silver screen since the 1970s, John Travolta is one of Tinsel Town's most enduring stars. But his devotion for acting is mirrored by a passion for aviation.
He's an accomplished pilot with licenses to fly 11 types of jets. He owns several planes himself, including this Boeing 707. And where most people have garages for their cars, Travolta's Florida home comes with hangars for his planes and its very own landing strip.
There a few places in the world he hasn't been - Dubai was one of them until this year, and that's where we met him to talk about his passion for planes and when he first caught the flying bug at the tender age of five.
Nice to meet you.
JOHN TRAVOLTA, HOLLYWOOD ACTOR AND PILOT: How are you? I lived in the - underneath the path of LaGuardia Airport in the New York area - I lived in New Jersey, and I just got obsessed with the look of airplanes and the design. And then I started taking lessons at 15.
LAKHANI: Do you remember your first time on plane - your first flight?
TRAVOLTA: Oh, wow - it was between Newark Airport and Philadelphia. It was a 20-minute flight, and I got it as a Christmas present from my sister. And she said we're going, you know, day after Christmas. I went into a foam - I just went into shock. I couldn't believe we were actually going. And, you know, the rest is history.
LAKHANI: In those early days of travel, Travolta says one airline in particular caught his attention.
TRAVOLTA: The intriguing airline was Qantas because they had the longest routes, they had the perfect safety record and I felt, you know, what's this all about?
LAKHANI: So, in 2002, Travolta became the official Qantas ambassador-at-large.
TRAVOLTA: I've flown so many, you know - Barbra Streisand, Marlon Brando and - oh, gosh, there's a list - Muhammad Ali.
LAKHANI: There's seldom a week that Travolta isn't up in the air.
TRAVOLTA: I can't go more than two or three weeks without being - you know, going somewhere. I fly everyday almost, but I need to - I actually travel to a place in a distance in order to be happy.
LAKHANI: On this trip, however, he was flown to Dubai on one of those rare occasions as a passenger.
TRAVOLTA: It's a whole other universe here -
LAKHANI: When you fly commercial, are you a bit of a backseat driver?
TRAVOLTA: You know, I fly so much that, honestly, sometimes I'm itching to be a passenger. I fly over 300 hours a year. I'm in the air almost every day, and once in a while you just want to (LAUGHTER) luxuriate, you know. And -
LAKHANI: Flying and acting aside, of course, no meeting with Travolta would be complete without asking about one of his other passions. Do you still love to dance?
TRAVOLTA: Sure.
LAKHANI: Any demo on your seat you could do?
TRAVOLTA: Well, I can do this for you. (LAUGHTER).
LAKHANI: Perfect.
(END VIDEOCLIP)
QUEST: Jenny Harrison for us tonight at the World Weather Center for the rest of what's happening - while it's very unpleasant in Europe too.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Yes it is, Richard. Not good news at all for people in first of all the northwest of France and also across some more southern regions of the U.K. Another round of very, very windy weather and of course some very heavy amounts of rain - a very, very unsettled picture, a very messy picture on the satellite as you can see there.
And as for those wind gusts, just look at these in Plymouth 122 kilometers an hour, Dublin 101, even in London nearly 80 kilometers an hour. And we have just seen system after system heading across the northwest in particular - just taking the same trail.
And just look at this. Now this of course is on the south coast, it's in Dorset, and you can see behind those buildings there's actually a huge wall. That of course is a sea wall, but you can see it about to crash over the top of that. And that has been the concern for so many people of course, is what is going on with the flood waters because right now there's actually still over 300 flood warnings or alerts across the U.K.
And we've more systems coming through - this is what's coming through next. It is going to be, I'm afraid, more of the same. Now, so much so that December had proved to be in the U.K. the windiest month in over 20 years. But in fact, December is the stormiest month for over 40 years in the UK. And then you move to the north in Scotland, and guess what - December was quite simply the wettest month ever on record - all because of these systems coming through and taking that same pattern.
Now, the winds have died down a little bit. We haven't got many places reporting as you can see - just Dublin there - at 61 kilometers an hour. But unfortunately as I say there's more to come through, so as we go through the weekend, there's another area of low pressure coming through - not quite as strong as the last one. But then there's another system that's girding its loins out there in the Atlantic. So, unfortunately, all of this of course is going to produce these very strong winds yet again, and the rain is coming in with this system as well.
I'm just going to switch you across to this - this is the - you can see on (View) (Inaudible), these are all the flood warnings and alerts that are in place across the U.K., and there are still nine severe flood warnings. And the reason that of course is so worrying is because that is when they actually say that significant loss of life could actually be a concern from this. But the easy thing to do is go to this environment page and look at the website, put in your own post code or town wherever you are, and you'll find out instantly what you need to know when it comes to any threats from rivers or coastal areas in your region.
The rain the last 12 hours - you know, again, it's been not completely covering the whole of the country and the whole of France as you can see, but we're going to see more accumulations, again, in the next 48 hours, maybe another 30 millimeters in London. Exeter another 11-- we've had all the flooding down there as well. Of course the rivers, high tide - they're all compounding the problem. And then you can see as well it's actually (inaudible) possibly ins London Gatwick, some long delays there although the wind for the most part not really leading to the delays at the moment. They are further south in Europe - - Barcelona and Madrid, Marseilles and then of course it will be Sunday into Monday that the winds will pick up again as this next storm system heads across of course bringing with it those very heavy amounts of rain. So, these are the temperatures - 12 Celsius in Paris, 8 in London and still not particularly cold across eastern Europe where it's calm and clear but just 2 Celsius for you Saturday in Kiev. So, not particularly cold in the east, but still wet and windy in the west. Richard.
QUEST: Jenny Harrison, thank you. Jenny at the World Weather Center for us this evening. Have a lovely weekend.
HARRISON: You too, thank you.
QUEST: See you next week. Now, it's cold and it's snowing and the northern hemisphere is preoccupied as you've heard today with the weather, and some company directors are well aware of the holidays and the weather. Coming up, a look at the firms using the gloomy forecast to bury bad business news.
(COMMERCIAL BREAK)
QUEST: Ice skating in Central Park - it's a picture perfect look. In New York, traders have been dragging themselves through the snow to get to work, and corporate executives know it's a good time to bury bad news. Let's face it, a Thursday and a Friday in the week after Christmas between New Year and before everything gets started again - ah -- what could be a better time to get things out you don't want anybody to notice. When the egg nog is absolutely full throttle. But you won't get away with it if buzzfeed.com is involved.
First on the list - Sotheby's disclosed on Christmas Eve that four of its senior executives had agreed to major cuts in benefits when they leave. The hedge of the on-demand television brand Netflix has been handed a $2 million pay raise. It also wants to (inaudible) (rights) plan to prevent investors buying any more of the company.
The department store J.C. Penney has quietly shelved an exclusive deal with the pop star Justin Timberlake - well it wasn't that exclusive and it wasn't much of a deal behind it anyway. His William Rast brand will be shelved 18 months early. Matthew Zeitlin who is the business reporter of BuzzFeed joins me now.
QUEST: Why do they do it ? Is it -- do they put these securities and exchange announcements or these investor reports out deliberately to avoid attention?
MATTHEW ZEITLIN, REPORTER, BUZZFEED: You know, I can't know one way or the other. I do know this - the SEC was only closed on two days for, you know, submissions of these documents - Christmas and January 1st. However newsrooms and investment banks and analysts across the country are definitely closed on the days before and after that. So, this is the time to put out information that you might not want to see have the full exposure as if you put it out, you know, in the middle of week and you know early November.
QUEST: And yet analysts are paid money -
ZEITLIN: Yes.
QUEST: -- to spot this.
ZEITLIN: Yes.
QUEST: And journalists are paid money to report it - so I'm guessing - what tends to happen is in two weeks' time when we see it, it becomes a bit of a `so what, it doesn't really matter.'
ZEITLIN: Well, the idea here is that, you know, there's only so many reporters really -
QUEST: Right.
ZEITLIN: -- in their office going on the SEC website, trying to find these documents, and just the less there is people talking about it, you know, the less attention paid to stuff they may not want to see people talking about.
QUEST: Of the list -
ZEITLIN: Yes.
QUEST: -- that you've got - which one really got you?
ZEITLIN: OK, this is my favorite. On Monday, December 23rd, Occidental Petroleum announced that they were paying their former chairman $26 million, and the reason why is that he had been kicked out of the role in May and he claimed that he had been fired without cause.
QUEST: Now, Oxy Petroleum will claim, well, we had to announce it -
ZEITLIN: Oh, yes.
QUEST: -- you know, we told shareholders about it - what are you suggesting? Come on, right down to the brass knuckles.
ZEITLIN: I'm suggesting that when I was in the office on Monday, December 23rd, very few of my colleagues were there, and I'm sure that was the case in newsrooms across the country. That is what I'm suggesting. That's what's true, and not very many people talked about this. I mean, there were local reporters in Los Angeles that talked about it, but you know this guy, Ray Irani, had had a major controversy earlier about his pay, and you're seeing $26 million from a company that kicked him out.
QUEST: Matthew, there's a very famous case in the U.K. which was where - you may be familiar with it - where a government advisor told the minister in appalling circumstances this would be a good day to bury bad news. It's not new that this happens.
ZEITLIN: Nope. As -
QUEST: Would you do it if you could?
ZEITLIN: You know, I'm always pro-journalist getting as much information as possible as quickly as possible, and I would put anything else out there. But I definitely understand why they were doing it.
QUEST: What do you think for your point of view is going to be the priorities in 2014, do you think? As we look at business and as we look at this slow growth and as businesses are doing business via the internet - the Facebooks, the Twitters - what for you is going to be the thing you're going to be focusing on?
ZEITLIN: I think for most companies, it's what to do with the profits they're accumulating - corporate profits have been very, very high but their investment in their companies been very, very low. A lot of action going back to shareholders. And I think as those profits tend to accumulate, a lot of shareholders will be asking what they're doing with that money.
QUEST: We hope you'll come back and talk about it because we - I certainly enjoy reading your stuff -
ZEITLIN: Of course, Richard.
QUEST: Many thanks and Happy New Year to you.
ZEITLIN: You too.
QUEST: Thanks. We'll have a "Profitable Moment." We'll consider the past, present and future of flight. (RINGS BELL).
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." Let's just take a moment - hashtag #flying100. It commemorates the 100th anniversary of the first paid fight. Well we told you earlier it was across the Tampa Bay 100 years ago. But if you want to ask anybody where was your first flight - do you remember your first flight? I was just asking here in the studio - yes, everybody remembers. There was a Florida over there - everybody knows when they took or where they took their first flight.
For me, it was very simple, it was at Cambrian Airways, the AC111 from Liverpool Speke Airport to Sitges in Spain. And it must have been about 1970 dot. I can remember that noisy, cramped, small little plane with the rear engines that roared down the runway with the food that tasted like cardboard but was delicious at the time. I can still feel that seat and hear the noises of the engines and of the airport that tells you you're about to travel. You know that noise (BELL TONE) that you hear again and again.
Oh, yes, hashtag #flying100, because the best part of this is that if you look at hashtag #flying100, you'll see people today taking their first flight which shows the love of flying remains. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead (RINGS BELL), I hope it's profitable. I'm off next week. I'll see you when I get back.
END
