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Quest Means Business
Search Expands for AirAsia Flight 8501; Weather Hampers Flight Search; Criminal Investigation into Italian Ferry Disaster
Aired December 29, 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)
PAULA NEWTON, HOST: And that ends a very quiet day of trading on Wall Street as the world waits for news on the missing AirAsia jet. It's
Monday, December the 29th.
Tonight, a search along the bottom of the sea. Teams expand their hunt for AirAsia Flight 8501.
Also tonight, disaster in the Adriatic. Ten people are killed as a passenger ferry catches fire.
And the future of austerity in Athens. Now the Greek people will decide.
I'm Paula Newton, and this is QUEST MEANS BUSINESS.
Good evening. It's just after 4:00 in the morning in Surabaya, Indonesia. The sun will rise in about an hour, and as daylight resumes, so
will the search for AirAsia Flight 8501. Now, it will be the third day of searching for the missing airliner. The area is set to expand even wider
across the Java Sea on Tuesday.
Flight 8501 was bound for Singapore when it vanished early Sunday with 162 people on board. For more on the story, we now join our sister
network, CNN USA, and "The Lead" with Jake Tapper.
(SIMULCAST CNN USA)
(COMMERCIAL BREAK)
NEWTON: Countries around the world are rallying to assist in the search for AirAsia Flight 8501. The Indonesian government has now formally
asked the US, the UK, and France for help with sonar technology, and that could help assist in an underwater search. Now, France, China, Singapore,
Australia and Malaysia have contributed aircraft, vessels, and investigators.
Now, officials say the search will expand into four additional areas on Tuesday. CNN aviation analyst Peter Goelz is former managing director
of the US National Transportation Safety Board. He joins us now from Washington.
Peter, I can't imagine your insight when you're looking at these kinds of investigations. What strikes you now? We're into day three, no
wreckage. What's -- what are you taking from all this?
PETER GOELZ, CNN AVIATION ANALYST: Well, I would have hoped they would have seen something by now, as all of us would have hoped. But I
think it's two things. One is it reinforces just the enormous challenges of searching for anything in the open ocean.
They have radar data, good data that brings you to a certain area in the ocean, but then the search is very difficult. I've been involved in
them. Even when you know where the wreckage is, it's hard to find. It's going to take a little time.
NEWTON: And Peter, if we could track back, then. Maybe we're getting ahead of ourselves, but given MH370, perhaps we're not -- why not track
these planes in real time? Does that technology exist?
GOELZ: It does exist and we should do it. If only -- there are all sorts of complaints, challenges. Well, the data pipe to the satellites
would get overwhelmed. Where would we store the data? There are answers to all of these problems. You could only start streaming the data once the
plane got outside its flight envelope.
But definitely, if we are doing the amount of transoceanic flying that we're doing today, and it's only going to expand, these planes ought to be
tracked on a much closer basis.
NEWTON: Peter, given all this and the technology as it's developing, is there anything, when you look at this situation and we talk about the
weather, that could have been done in terms of really anticipating more about what that airplane would have encountered in flight?
GOELZ: Well, on the weather question, if you look at the airway that the flight was following, there were planes in front of it, there were
planes behind it, immediately behind it.
I would think by now that investigators would have questioned the flight crews of those planes extensively to find out what they saw, what
they were feeling. Was the weather unusual? Did they see things that would have lent any warning to the flight?
And the reality is, planes can -- try to avoid weather at all costs, but they're designed to fly through very tough situations.
NEWTON: Yes, so definitely still a lot of mysteries here. Peter, I know you'll be with us to help us sort all of this out. Day three, we'll
hope that they find some clues out there today. Thanks again, Peter.
GOELZ: Thank you.
NEWTON: Now, Tom Sater is at the CNN International Weather Center, and a good thing, too, because when we're talking about the weather
conditions, Tom, we were talking about the weather conditions as this plane was in flight, but what's going on there now? Because there still seems to
be a lot of active weather in that area still.
TOM SATER, AMS METEOROLOGIST: This has been a tremendous month. For the last four and a half weeks, Paula, they've seen unbelievable amounts of
rainfall. There's misery and despair in many countries because of the chest-high water.
So, again, what we're seeing, it's tropical in nature. Take a look at this. This is a tropical storm moving through the central Philippines, not
large enough in size to change the overall pattern. That's tough enough to get a handle on.
Obviously, it's tropical, so because it's so humid, because the water temperatures are well into the upper 20s, it's moist, it's unstable. So,
thunderstorms are going to start to pop up, and there's one developing to the south.
This is the forecast model right now. Heavier storms want to stay on shore. Here's our two grid areas, and this is where we're going to be
watching. In about 48 hours, some of the rain could be heavier in our northern grid, and then down to the south, they're going to be sporadic.
I'm not so much concerned about the height of the sea. The Java Sea is relatively shallow. When you have deeper oceans, the waves are much
higher. Now, thunderstorms can create a wave, but it's more about the winds, I think.
Even though these are not going to be tremendous, in 48 hours in the southern grid, we're getting up to maybe 40 or 50 kilometers per hour.
That could pose a problem for some of the aircraft flying at lower elevations.
But again, visibility. It's all about the visibility right now, and if there is any debris in this field here, these are the winds, and they're
kind of making their way from the west to east, even coming down through this little bit of a channel here.
So, if there is anything sticking out of the water, a tip of a wing, a part of a fuselage, it could get caught up in these winds. But its the sea
movement that's actually in the opposite direction. Now, that could cause the search to expand a little bit westward, as they were talking about. It
could just kind of create a differential where it doesn't move much, and that's what we're hopeful for.
Heavier rain seems to want to stay over the land masses, but at any point in time, these thunderstorms can fire up much like they did the night
of the disappearance.
We spent so much time on this thunderstorm and we kept saying to ourselves, yes, it's a monster storm, it's the biggest one in the region.
Why would a pilot with this much experience ask to go from 32,000 to 38,000 when you're looking at a 55,000-foot storm system?
Most likely, he tried to get around that little anvil, and this is where he ran into problems in the clear air, where the air drops. And that
makes more sense for him to want to call to go from 32 to 38. These thunderstorms up here created another displacement of the aircraft, and
most likely where we found our problems. But we'll have more on this as the hours roll on.
NEWTON: Yes, incredible decisions in the air, there, when you're facing that kind of weather.
SATER: Yes.
NEWTON: Tom, thanks for the update, appreciate it.
SATER: Sure.
NEWTON: Up next on QUEST MEANS BUSINESS, a criminal investigation has already been launched into the ferry disaster on the Adriatic, and we'll
have the latest coming up next.
(COMMERCIAL BREAK)
NEWTON: Ten people have died after a ferry carrying more than 400 people caught fire in the Adriatic Sea on Sunday. Italian prosecutors have
opened a criminal investigation into the incident.
Now, the country's coast guard says all passengers and the boat's commander have been removed from the vessel on Monday. Choppy seas, strong
winds, and thick smoke have interfered with rescue efforts. Our Nima Elbagir joins us now on the phone from Brindisi, Italy.
Nima, the harrowing stories that I know you have heard through the last few hours, incredible. As people recover or try to recover from this
tragedy, what are they saying about what was going on on that ferry? Because some of the pictures were just so frightening.
NIMA ELBAGIR, CNN INTERNATIONAL CORRESPONDENT: Well, already, Paula, there are huge concerns about whether the alarm system actually came into
effect. A lot of the survivors we've been speaking to say that they were woken up by other survivors. And some, more worryingly, were woken up by
the truckers whose tankards were carrying fuel, which ignited on the garage levels of this ship.
And then, when you hear them talk about the ways in which the metal warped, the heat came up through the soles of their feet, racking not just
the infrastructure of this ship, but also the survival mechanisms.
A lot of those survivors we've been speaking to, Paula, said that they watched lifeboats drift away into the sea. These lifeboats were not able
to be used in the face of the extraordinary weather conditions we've been having here.
The Italian prosecutors office says that it's looking into manslaughter and shipwreck, and that they will hold anyone responsible for
this accountable, Paula.
NEWTON: And Nima, do we seem to be at the point where it's two problems? It wasn't just how this ferry was loaded and what was on it and
how the fire started, but as well how people were warned if they were able to get away, if they were able to get to safety?
ELBAGIR: Absolutely. And you also had the issue of pilots, helicopter pilots, who have been lauded for their bravery by all of the
survivors that we've been speaking to, having to fly through that thick, black smoke, almost blind, and having to go back in again and again.
There didn't seem to be any kind of an infrastructure in place to deal with any of these kind of incidents. This is a very old ferry going
through very, very choppy waters.
But some of the survivors' stories that we've been hearing have actually been extraordinarily heartening. One woman told me that when the
maritime law was invoked of women and children first, this caused a lot of panic and a lot of aggression amongst the male passengers.
And it was actually a female crew member who stepped into the midst of this very tense situation and said this is how it's going to be, and I am
going to be one of the last people off this ship. But the women and the children have to go first.
NEWTON: Yes, extraordinary stories from there, it has to be said. As you said, the bravery to be able to actually get more than 400 people off
that burning ferry. And Nima, we know you continue to stay on top of the story, appreciate it.
Now, as we approach sunrise in Indonesia, we'll have the latest on the international effort to find AirAsia Flight 8501.
(COMMERCIAL BREAK)
NEWTON: Welcome back, I'm Paula Newton. We're continuing to follow our top story this hour. The Indonesian government will resume the search for
the missing AirAsia flight in a matter of hours. The search area has now expanded to include 11 zones in and around the Java Sea, and that's where
the plane lost contact with air traffic controllers early Sunday morning. We will now join our continuing coverage with our CNN U.S. sister network,
and "The Lead" with Jake Tapper. Before we get to that, we will continue to tell you that in fact that area had to be expanded. It's going to
include another four zones and we will continue to talk about that. We join our sister network CNN U.S. with "The Lead" already in progress.
(SIMULCAST WITH CNN)
NEWTON: And we continue our coverage of AirAsia flight 8501, and as we have been hearing, a difficult day ahead in the search. But it is also
a waking nightmare as you can imagine for the families of those onboard flight 8501. Now we're learning more about the passengers and their loved
ones. CNN's Nick Valencia has more.
NICK VALENCIA, CNN CORRESPONDENT: We want to try to give you meaning to these numbers. One hundred sixty-two souls onboard this AirAsia flight
that disappeared - 162 people all with their own unique individual stories. And we know that they were from a variety of backgrounds.
The majority of those that were on this flight - 155 passengers, 7 crew - were from Indonesia with a handful from South Korea, others from
Malaysia, Singapore and at least two people from Europe, -- one U.K. national, another French national. And we know that local media in
Indonesia has reported the name of the co-pilot - Remi Emmanuel Plesel.
Local media is also saying that French authorities are working hand in hand and collaborating with the Indonesian government to try to find the
whereabouts of this missing plane. We also know another name that has been confirmed is that of the British national who's an Indonesia-based energy
executive named Choi Chi Man. It's a heartbreaking story when you consider that Choi Chi Man was traveling with his two-year-old daughter, a
Singaporean national, who was one of the youngest on this flight.
Now earlier, one of those who had a loved one - her fiance - was on AirAsia flight 8501 and she spoke to local media and talked about how she
found out that the plane had disappeared.
(BEGIN VIDEOCLIP)
Female: I listened to the radio - the local radio and they said that his plane was missing. That's all. And, yes, he was supposed to be there
last vacation before us got married which was to be the last vacation with his family.
(END VIDEOCLIP)
VALENCIA: At day break the search did resume locally. Right now though for all of those who had loved ones on this plane, it is for all
intents and purposes wait and see. Nick Valencia, CNN Atlanta.
NEWTON: And we'll be back with more "Quest Means Business" in a moment. Stay with me.
(COMMERCIAL BREAK)
NEWTON: Greece's place in the Eurozone will once again hinge on a bitter election after the government failed to pick a new president. Now
the Greek Parliament will be dissolved and snap elections are set for the end of January. Opinion polls suggest the anti-austerity Syriza Party
could win. Now, the party's leader, Alexis Tsipra, says he will set a whole new course for economic policy in Greece.
(BEGIN VIDEOCLIP)
ALEXIS TSIPRA, LEADER, SYRIZA PARTY, VIA INTERPRETER: Today the government Prime Minister Antonis Samaras which plundered society for two
years and which has already committed to new measures is now history. With the will of the people, in a few days austerity bailouts will also be
history. The future has already begun. We should all be optimistic and glad.
(END VIDEOCLIP)
NEWTON: Now the vote in Athens had a ripple effect as you could see across markets in Southern Europe. Now the Athens composite dropped as
much as 8 and 1/2 percent before recovering with a not-too-bad loss really of around 4 percent on the day. Now the markets also fell sharply in
Italy, Spain and Portugal. As you can see here in Milan down a little bit better than a percent. In Madrid, not much better - 0.85 percent -- and
Lisbon down about three-quarters of a percent. A really tough day all around in Europe, and to talk about it joining me from London is James
Shugg, a senior economist at Westpac. James, we could say this is expected, but where does Greece go from here? I mean, we're talking about
weeks of turmoil. If we look at the euro bailout, what are the options on the table?
JAMES SHUGG, SENIOR ECONOMIST, WESTPAC: Well look, firstly I think the Greek people themselves - and thanks for having me. The Greek people
themselves have to basically make a decision - is it fear of euro exit which is going to be a possibility in some people's minds if they were to
go with the anti-austerity crowd? But you got to balance that against the anger that you've been feeling because of the austerity programs that have
been put in place.
It would be such a shame though if Greece at this stage were to go down the path of pushing against sticking with the current program. The
economy's one of the strongest or fastest-growing economies in Europe now. I mean, who'd have believed that a few years ago? And, you know, there is
light at the end of the tunnel for Greece. And Samaras two years ago, no one thought he could have achieved what he has achieved. He's not popular
because of that. But it does initially mean that the alternative is the better route to truce (ph).
NEWTON: It'd be hard though to convince Greeks of that obviously as you've seen from the opinion polls there -
SHUGG: That's right.
NEWTON: -- they are truly anti-austerity right now. What are the risks though in the next few weeks as Greece starts to decide. We talk
about contagion. Italy's already saying, look, contagion isn't going to happen. What do you think?
SHUGG: I think that this time around that the risk of contagion to the extent that we saw two or three years ago, is going to be much more
limited. We've got policymakers in Europe that actually know what they're doing and are achieving things. Look at Mario Draghi. He's delivered so
much. This will actually impact on him of course. I mean, his plan to completely replace (ph) quantitative easing involving sovereign bonds might
have a few technical difficulties if Greece isn't playing its part of the ball game. So in his mind working on this and Europe more generally on a
better policy footing on a whole range of fronts than it was three years ago when no one even knew who ran the shop. I think that the risks of
contagion are much more limited now.
NEWTON: I am surprised to hear you say that, only because we do have that risk of Russia as well out there. They've declared today that of
course they're in recession - not - sorry -
SHUGG: A whole different story.
NEWTON: -- not technically in recession, sorry -- that's two quarters. But one quarter, yes, it shrank first time in 2009. Whole
different story -- you tell me what.
SHUGG: Look, Russia is the big risk for 2015 on so many fronts. I mean, we've an inflation running ahead (ph) as consumers rush to buy white
goods, anything they can to act as a store of value because they don't trust the currency anymore. With the oil prices falling, it's down again
today -- $53 a barrel. That means the Russian oil revenues are drying up. The only source of foreign currency really that Russia's got. I mean,
Russia's basically a big oil producer that subsidizes lots of other businesses within Russia. And those businesses aren't getting funding from
outside of Russia anymore because of the sanctions. The ratings agencies are talking about downgrading Russia to below investment grade. There are
so many factors weighing down on Russia. The leadership of course is another big concern that something is going to give I'm afraid in 2015.
And I'd be looking more towards Russia than to Greece if I was worried about, you know, a particular region causing problems for the rest of
Europe.
NEWTON: Yes. Interesting but still a rocky road ahead for Europe in 2015. James, thank you so much for joining us and happy new year.
Appreciate it.
SHUGG: Thanks indeed. Same to you.
NEWTON: Now, it was as we said, a quiet day of trading here in the United States. Markets ended mostly flat. Now the Dow looked like it was
heading for a record trip (ph) most of the trading session but it ended about 15 points lower after falling in the final minutes. Just didn't eke
that out there. Now, the S&P 500 touched a new intra-day record meantime, and in the end, it did eke out a small gain - less than two points though -
nothing to write home about, but enough for a record close.
Now, Sony might have fumbled the release of "The Interview," screening it in just a few theaters. But it is bringing in millions of dollars - yes
- online. Is it a glimpse into Hollywood's future? We'll have more on that after the break.
(COMMERCIAL BREAK)
NEWTON: Now after being cancelled and then I guess we'll call it un- cancelled, Sony says it's made a massive step forward in terms of making money off the movie "The Interview." Now the release of the film depicting
an assassination attempt on Kim Jong-un was stalled when terror attacks were threatened on theaters showing it. Now Sony ended up releasing "The
Interview" to a mostly-online audience in the United States and Canada after being streamed over 2 million times - those are great numbers - in
just four days. And it has now made more than $50 million now. It was shown in about 300 theaters - not much really when you think that it was
going to be shown in about 3,000 theaters - that's what Sony had planned anyway - and it brought - this is from the theaters now - about $2.8
million. Now, compared to other box office releases in the U.S. on the same weekend, it's clear how the limited release may have hurt the film's
bottom line. Joining me now is Brent Lang. He is senior film and media reporter for "Variety." Thank so much.
BRENT LANG, SENIOR FILM AND MEDIO REPORTER, "VARIETY": Thanks for having me.
NEWTON: I'll ask you - did this surprise you and is it a bit of a game-changer if you're a studio, any studio, now looking at what happened
with this movie and how much money it made on that streaming?
LANG: Well, there have been so many surprising things about this story -
NEWTON: (LAUGHTER).
LANG: -- I'm not sure not sure the success of "The Interview" on digital platforms is surprising exactly because it's such an unprecedented
kind of film and rollout. Everyone knew about this movie. It had a kind of awareness that studios could only dream of, and so its success - it
basically became a sign of freedom of speech and people deciding that it was almost their patriotic duty to rent or buy this film. So not surprised
by these numbers, but they are indeed huge for a digital release.
NEWTON: And for a digital release and I'm interested, you know we all know it's a competitive season out there in Hollywood when you're trying to
release these movies during Christmas time, Sony only thought they'd make about $20 million had it been released to 3,000 theaters. So would you say
this movie is kind of back on track? And does that tell us something about how Hollywood might market going forward?
LANG: Well I don't think so because for the most part, films that appear on video on demand are independent films, art house productions that
would only have a sort of a limited box office appeal. So "The Interview is not really the kind of film that would do this. And the other thing is
it's wonderful that Sony has been able to make back some of the $75 million it spent to make this film and market this film. It's certainly something
we wouldn't have thought they would have been able to do just two weeks ago. But by going this route, they've also limited their future ancillary
revenues - that's their pay TV deals, their DVD sales, their other kinds of revenues. Those are tied to box office performance and because the box
office performance is relatively small, that does leave some money on the table.
NEWTON: And, Brent, tell me quickly. We've talked about how this story has had legs. Big take-away from you after a month of really delving
into this entire issue.
LANG: Well, I think it just shows how vulnerable we all are in this day and age in this digital era that a studio like Sony could be brought to
its knees by cyberterrorists would have been unthinkable a month ago.
NEWTON: OK, Brent, I'm sure we'll be talking to you in 2015. Look at what's ahead. More ahead for Sony as well.
LANG: Thank you.
NEWTON: Thanks so much, appreciate it. This is "Quest Means Business." We'll have more right after this.
(COMMERCIAL BREAK)
NEWTON: It's about 15 minutes until sunrise in Surabaya, Indonesia and the search for missing AirAsia flight 8501 is set to resume for a third
day now. The search area has been growing ever larger. Earlier, Indonesia's president ordered a total review of aviation safeties
throughout the country.
(BEGIN VIDEOCLIP)
JOKO WIDODO, PRESIDENT OF INDONESIA, VIA INTERPRETER: I have instructed the Transport Ministry to immediately check all the procedures
and processes in aviation, including the maximum requirements in airplane maintenance in accordance with the International Civil Aviation
Organization.
(END VIDEOCLIP)
NEWTON: A few facts now about the missing airplane. It's an Airbus A320-200 - that's a twin-engine single-aisle aircraft seating up to 180
passengers. Now this particular plane has been in service for just over six years. Now that's relatively young by commercial aircraft standards.
And it had accumulated approximately 23,000 flight hours. That's according to the airline. Now the Airbus A320 is a workhouse of the aviation
industry. There are more than 6,000 of these airplanes in the A320 family currently in service with hundreds of operators worldwide. No doubt many
of us have been on that type of an aircraft many times.
Now the CEO of AirAsia, Tony Fernandes has taken to Twitter throughout this whole situation which he's called his worst nightmare. Fernandes paid
tribute to those working for him in Indonesia. He tweeted, "The staff in Indonesia have been brave, strong, committed and doing 150 percent for all
our guests. My pride for them is enormous." Now he also tweeted, "Keeping positive and staying strong. My heart bleeds for all the relatives of my
crew and our passengers. Nothing is more important to us."
And that is "Quest Means Business." I'm Paula Newton. I'm in for Richard. Our coverage continues with Michael Holmes and "CNN Today."
END
