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Quest Means Business

Turkey Blocks Access to Hostage Images; Turkish Twitter Block Mocked; Turkey Cracks Down on Internet Freedom; US Market Rallies; Greece Faces Tough Debt Payment Schedule; 1500 Migrants Rescued by Italian Coast Guard; Indian Women Cash in Online. Aired 4-5pET.

Aired April 06, 2015 - 16:00   ET

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

[15:59:55] (NEW YORK STOCK EXCHANGE CLOSING BELL)

RICHARD QUEST, CNN HOST: The bell is ringing in New York. It may be Easter Monday in large parts of the world, but there was trading on Wall Street,

and it was a very interesting day. Hit the gavel. They should be able to do it brutally. Come on.

(GAVEL HITS)

QUEST: Yes, no wimpy gavels on Monday, it's the 6th of April.

Tonight, Turkey turns off Twitter once again. The country cracks down on social media.

Mr. Varoufakis goes to Washington and promises to pay his debts. Also tonight --

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Just when you didn't think it could get any better, huh?

(END VIDEO CLIP)

QUEST: Fast, Furious, and it's broken box office records around the world.

I'm Richard Quest, tonight live from CNN London, where I mean business.

Good evening. Tonight, Turkey has lifted the blockade on Twitter and Facebook after both companies agreed to take down controversial images.

YouTube is still in accessible inside Turkey.

Twitter and Facebook say they plan to appeal against the takedown order, even though they've done, as you can see. Two complied, one still blocked.

It's the second time in a year the Turkish government has pulled the plug on social media. The reason is this latest ban included 166 sites. And it

came because the companies refused to take down images from last week's hostage crisis at a Turkish courthouse.

The Turkish government says sharing those images is akin to promoting terrorism. A spokesman for Turkey's president defended the government's

action at a news conference on Monday.

(BEGIN VIDEO CLIP)

IBRAHIM KALIN, SPOKESMAN, TURKISH PRESIDENCY (through translator): Media groups that should be acting responsibly in publishing these photos are

almost doing the propaganda of a terrorist organization, and continuing to do so despite all warnings and criticisms is unacceptable.

For one moment, put yourself in the shoes of the family and children of our slain prosecutor. What would you gain by sharing that photo?

(END VIDEO CLIP)

QUEST: The Twitter ban was widely mocked as Turkish internet users simply found ways around the block. When the service was blocked last year in the

run-up to local elections, Twitter itself sent out instructions on how to access the service site via a text message.

In the last six months of 2014, the company has received -- Twitter has received 800 requests to take down content from governments around the

world. If you look at where the majority come from, just look at that map. One to ten come from those countries in the blue, 11 to 100 in the yellow.

But more than 100 requests, 60 percent of all requests came from Turkey.

Andrew Finkel is in Istanbul with the latest, joins me now. Andrew, the decision by the Turkish government to do this, bearing in mind what

happened last time, why were they so determined?

ANDREW FINKEL, JOURNALIST: Well, I think the reason they did it last time was because there was a big -- they were fighting a very important

election. And of course, this time, the same circumstances are true. There's a major election in June.

The now-president of the republic, Tayyip Erdogan, is very determined to get a very large majority in that column. But he's concerned that a lot of

his support could be eroded by social media.

So, the government is sort of flexing its muscles and warning people who are tweeting insults to the government or controversial remarks, or in this

case, things that embarrass the government, it's issuing this very powerful warning that you do this and we'll take you down.

QUEST: Andrew Finkel joining us from Istanbul. The Erdogan government's been trying to increase its hold over social media in the run-up to local

elections last year. The then-prime minister vowed to eradicate Twitter.

Europe's digital commissioner at the time called it "pointless" and "cowardly." And earlier this year, the Turkish parliament passed

legislation allowing the government to block temporarily websites without a court order.

Marietije Schaake is the member of the European parliament, and she says the blockades are bad for business, and she joins me now from the Hague.

They're bad for business, but if we take this example, the Turkish government doesn't seem to care about that point.

[16:05:06] MARIETIJE SCHAAKE, MEMBER OF EUROPEAN PARLIAMENT: Well, I think they should care. First and foremost, this is a problem, this

disproportionate political intervention in free speech and press freedom is a problem for the people in Turkey.

It sends a chilling effect when it comes to speech, but it also sends a chilling effect when it comes to business, because this is not the only

government intervention in business or not the only accusation vis-a-vis social media that we've seen.

There have been scathing accusations that the financial markets were allegedly plotting against Turkey --

QUEST: Right.

SCHAAKE: -- and its economic success, and the international media have been attacked on numerous occasions as well. And I think that such government-

led interventions in the rule of law and law enforcement are very worrying and will have a chilling effect and discourage investors from going to

Turkey.

QUEST: OK, so what would you say? Clearly, the publication of these pictures of the late prosecutor with a gun to his head or whatever, they

are distasteful in the extreme, and you want -- and the government says we don't want them online. So, what would your remedy be in that situation?

SCHAAKE: Well, any remedy has to be proportionate or necessary and has to be ruled by a judge. I think government intervention is problematic, and

there is also press freedom that can come under pressure.

Unfortunately, there are times where very distasteful, gruesome, and terrible images and news are still newsworthy. So, I think that has to be

weighed very carefully. And in the case of Turkey --

QUEST: Right.

SCHAAKE: -- we have seen many political interventions already, and it fits in a worrying trend.

QUEST: So, Turkey, of course, as it makes bid for EU membership, one has to see this situation not just as a commercial thing, and you've made your

commercial point, but also in the wider terms as Turkey seeks to get ever closer to the EU.

Do you think -- how do you take the Turkish decision and then convince -- if you do, and your strong views -- your fellow lawmakers and commissioners

that this is serious and needs to be taken onboard?

SCHAAKE: Well, restrictions to press freedom, restrictions to internet freedoms do not bring Turkey closer to the European Union. And quite

frankly, there are many people who wonder what the real ambitions of this president and the government in Turkey are.

They say that they want accession to the European Union, but in acts, these deeds really are actually taking steps away from European values and the

requirements, the Copenhagen criteria, that Turkey and any candidate state --

(CROSSTALK)

QUEST: Right, but at the end of the day -- at the end of the day, what it really comes down to is the Turkish leader doesn't like the way in which

social media is behaving, and he thinks it's distasteful and it's improper.

And to some extent, it's really surely up to his electorate to make a decision on whether or not they agree with him, vote him out, or not. And

so far, the decision seems to be that they quite like him and the quite keep voting him in.

SCHAAKE: Well, it's interesting that you bring up the elections, because of course, vivid and free public debate, free press during election campaign,

are essential for free and fair outcomes of elections. So, I think that there is a clear tension there.

And I'm personally convinced that democracy is more than one man one vote, and that just because there is public support and electoral support for

this president and his political party doesn't mean a carte blanche, a blank check to restrict fundamental freedoms and human rights, which --

QUEST: Right.

SCHAAKE: -- are universal and should apply to the people in Turkey as well.

QUEST: We're grateful, ma'am, that you came to speak to us on this subject tonight. We'll talk more about it. And you certainly, of course, always

have an invitation back on QUEST MEANS BUSINESS. Good to see you tonight, ma'am. Thank you very much for joining us. Now, the markets.

(RINGS BELL)

QUEST: They were closed, of course, in Europe for the Easter holiday, being Easter Monday, but look at that. A very sharp fall at the beginning, which

you might have thought presaged the way the day was going to go. You'd be wrong -- 117 up at the close. We'll find out why after the break. QUEST

MEANS BUSINESS, tonight from London.

(RINGS BELL)

[16:09:42] (COMMERCIAL BREAK)

[16:11:13] QUEST: When trading began, stocks in the United States, they reacted to Friday's weak job figures. Look at that, right at the beginning,

straight down the market went at the open. But they rallied. They're betting a disappointing report means the Fed could delay an interest rake -

- an interest rate hike. Not easy to say.

Alison Kosik is in New York. Alison, justify for me, if you will, this rise during the day, nearly at the best of the day's session, when all was said.

Why?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: The rise or the fall? Well, I'll tell you what the rise is all about. The rise is what you said. It's all

about the Federal Reserve. You'd think that a disappointing jobs report from Friday would really set the sellers in motion, but no, no, no.

We only saw that at the beginning of the trading day, and then things quickly turned around and stopped, because now you're seeing investors

really bank on -- they're not banking on June, they may not even bank on September. One trader told me he doesn't think the Fed's going to go ahead

and raise rates until next year.

QUEST: So, if I understand you right -- I mean, next year, that would be something quite remarkable, bearing in mind what today Janet Yellen has

said at her last press conference.

But if I understand you right, that early drop looks more technical. Just, if you like, a knee-jerk technical reaction to what may have happened

elsewhere over -- going into the weekend. And the true version of what the market's feeling is how it performs later in the session.

KOSIK: Exactly. And you have to remember, there was on Friday -- on Friday, the market was closed, so on Thursday, you saw the Dow rise as well --

QUEST: Yes.

KOSIK: -- so you'd -- that probably, yes, was a technical move based on Thursday's activity.

QUEST: Where's your gut feeling now? The numbers are all over the place, the market volatility is -- we're back to, say, two years ago, where we saw

-- or even last year where we saw this volatile volatility, and still we're not really sure when the consensus is on an interest rate hike.

KOSIK: I'd say -- at the earliest, I'd say September. Although, you still have many months between that. Although you also have to look at the rest

of the data. The Fed not just looking at the labor market.

All the other data, you're looking at GDP, you look at durable goods, you look at retail spending, none of those things are really stellar at this

point, Richard, let's face it. Sure, the US is the prettiest girl at the party at this point when you look at the global picture, but we're -- we

don't have a robust recovery going on by any stretch.

QUEST: Alison Kosik in New York. Thank you.

KOSIK: Sure.

QUEST: Yanis Varoufakis has been meeting with senior officials in Washington, where he's hoping to rally US support for the new Greek

government. Mr. Varoufakis is in the US, he's having face-to-face discussions with Christine Lagarde.

There was a two-hour meeting when he assured the IMF managing director Greece will make a $0.5 billion payment on Tuesday -- on Thursday.

Varoufakis reiterated his government is committed to reform.

(BEGIN VIDEO CLIP)

YANIS VAROUFAKIS, GREEK FINANCE MINSTER: Our government is a reformist government. We are intent upon reforming Greece deeply. This is our promise

to the Greek people. So, having an opportunity to discuss the reform program here at the IMF with the managing director is an excellent step

towards that direction.

(END VIDEO CLIP)

QUEST: Now, the minister went on to say that his country intends -- and I'm going to read their words -- "intends to meet all obligations to all its

creditors." Well, let's look and see what those obligations are at the moment.

Greece has a few big debt headlines which are looming. So, first of all, you've got $850 million to the IMF in May. There -- or that's $850. The

first one, of course, is April the 8th, which has got the $500 million.

[16:15:01] Then, you've got four payments in June. They total $1.7 billion. Some of these IMF payments go back to the 2010 bailout. The ECB is going to

come calling in late July. There'll be $3.8 billion from the 12 default. So, all-in-all, if you add in the ECB and the IMF, you're looking at around

$7 billion that are expected.

Joining me from Athens is Michael Jacobides, the Sir Donald Gordon Chair of Entrepreneurship and Innovation at the London Business School. Michael, the

$7 billion and Greece still hasn't had the last tranche of the last bailout. So, where does it get the money to start making these sort of

payments, not least the $500 million that's payable on the 8th?

MICHAEL JACOBIDES, ASSOCIATE PROFESSOR, LONDON BUSINESS SCHOOL: Well, the $7 billion is certainly not payable unless Greece does get some external

support, and that's what they are trying to do.

The big challenge was to manage to find the first tranche, which was just over $450 million to the IMF. Because if they didn't pay it on the 9th of

April, then we would have a credit event, and then, that would really be the beginning of everything blowing up. There was some --

(CROSSTALK)

QUEST: Right, but still --

JACOBIDES: -- desperate moves, but at some stage --

QUEST: -- but still --

JACOBIDES: -- there was some private --

QUEST: Sorry to interrupt you. Where's that --

JACOBIDES: Yes?

QUEST: -- coming from the $500 million to pay on Thursday? Where are they going to get it?

JACOBIDES: This apparently they've got it, and they have tried to do everything that they could. They took money from municipalities, they took

money from public sector organizations. They have maxed out the debt that the Greek government could take by asking the banks to lend. And there is a

limit that the ECB is putting on just how much they are able to lend to the Greek government.

And apparently, they're able to make it. They do have the liquidity to make it. The challenge is that in addition to paying the IMF, there's also the

salaries and the pensions. And then, there was some political discussion in Greece on which of the two do we pay? The pensions or the salaries?

QUEST: Right. This -- thank you very much, indeed, for joining us, sir. We will talk more about this in the future. Thank you very much for joining

us.

Fleeing conflict and disaster, migrants are flooding Europe in record numbers. We're going to hear from the director-general of the International

Organization for Migration. He says migrants should be saved, not counted.

(COMMERCIAL BREAK)

QUEST: Over a 24-hour period this weekend, the Italian Coast Guard says it rescued 1500 migrants who were attempting to cross the Mediterranean, and

they were trying to make their way into Europe. According to the International Organization for Migration, 500 migrants have died this year

trying to cross the sea.

William Lacy Swing is the IMO's director-general, and he says it's time for Europe to pitch in and help Italy end this crisis. CNN's Paula Newton spoke

to him and asked him what he thinks needs to be done.

(BEGIN VIDEO CLIP)

[16:20:00] WILLIAM LACY SWING, DIRECTOR-GENERAL, INTERNATIONAL ORGANIZATION FOR MIGRATION: First of all, we have to give priority to saving life,

because without that, all the other options of resettlement or return or joining a family or an economic migration, all of that is academic. So, we

have to give that priority.

Secondly, we have to try to find a way to open up more legal avenues for migrants to get to their destination. More and more people are going to

take the boats with the very rigid visa requirements we have in which we're constructing walls and closing down borders.

PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: And yet, even with all of that, there is fatigue in Europe. You see it everywhere, with politicians,

with budgets, saying we cannot afford this in terms of the kind of search and rescue operation that Italy had been basically operating until the end

of 2014.

What is to happen going forward? Because as I say, it is this fatigue that seems to be debilitating and not allowing for a solution on this.

SWING: Well, look. Mare Nostrum, the Italian naval operation, saved 200,000 lives between October of 2013 and December of this past year. And yet, Mare

Nostrum has been discontinued because the other European countries were not prepared to support Italy, which is paying about 10 million euros a month

for this operation.

And in fact, with 28 countries, it wouldn't exactly break the bank if everybody paid their part. Now, Operation Triton, which has been put in its

place, is really not a substitute. They have only 6 boats. Mare Nostrum had 32. They don't have the mandate, and they're only patrolling about 30

kilometers from the Italian coast.

So, that all needs to be reviewed. We see this as a temporary operation until the policies can be changed. But it will not be a very expensive

operation.

NEWTON: Do you think more enforcement is needed in the countries of origin, if that's even possible?

SWING: Yes, more enforcement is needed there, and we need to get serious about going after the criminal gangs of smugglers who, for example, can buy

a boat for $150,000 and then take it full of smuggled people, $4,000, $8,000 a head, and make profits up to $2 million each boat.

Now, if you take, for example, what happened of Somalia with the pirates, once it was obstructing international shipping lanes, the international

shipping groups got together and they got rid of Somalia pirates. That doesn't happen.

We need something similar to happen in the Mediterranean to ensure that these criminal smuggling gangs cannot continue their operations. Because as

you say, a lot of people are losing their lives. It's most unfortunate and most tragic.

(END VIDEOTAPE)

QUEST: India's economy is set for years of stronger growth, according to a new report from Morgan Stanley. Narendra Modi's government is now hoping to

unlock the economic potential of women in a country that struggles to include them in the workplace.

Now, one company is making it considerably easier for women to cash in on the country's appetite for online retail. CNN's Mallika Kapur is in Mumbai.

(BEGIN VIDEOTAPE)

MALLIKA KAPUR, CNN INTERNATIONAL CORRESPONDENT (voice-over): This is the daily routine at Khushei Gupta's small manufacturing unit in Delhi. While

clothes are stitched, sorted, and packed, Gupta checks her website for new orders. She says they're pouring in. She's part of a growing number of

women entrepreneurs in India selling their products online.

KHUSHEI HIMANSHU GUPTA, ONLINE MERCHANT: E-commerce is actually a revenue for all women, because it gives us the liberty to start work from home.

KAPUR: She says it's much easier and cheaper than setting up a bricks-and- mortar shop. Plus, the business potential is enormous. Research firm Forrester are expecting India's online retail to grow at an annual average

rate of 51 percent until 2019 and says India will have around 125 million online buyers by then.

Gupta's own business, now three years old, is growing at 40 percent each year. She sells through Snapdeal, one of India's largest online

marketplaces, offering everything from clothes to shoes to electronics and car parts. Its CEO says a third of its sellers are now women.

KUNAL BAHL, CEO, SNAPDEAL: Any person who wants to become an entrepreneur can start selling on Snapdeal within four hours. And just that ease of

doing business is attracting a lot of women.

KAPUR: It's not just an easy option, says Falguni Nayar, who left a decades-long career in banking to start retailing beauty online, it's a

great business option. And that's motivating women, too.

FALGUNI NAYAR, CEO, NYKKA.COM: I think there's a whole new generation of women who want to really believe that women who will have the time, they

should have equal opportunity to do what they want.

KAPUR: That's crucial for India.

[16:25:00] KAPUR (on camera): Beside the country's economic progress over the last five, six years, only a third of working-age women in India are

employed. Take a look at this market. Almost anyone selling anything is a man. But the online space, attracting so many women entrepreneurs, could be

a real game-changer.

Mallika Kapur, CNN, Mumbai.

(END VIDEOTAPE)

QUEST: "Fast and Furious." It shot to the top of the box office around the world on its opening weekend. The future of the $2.7 billion franchise.

We're going to discuss it after the break.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. We're going to find out why "The Fast and the Furious" franchise

is now Hollywood's biggest success.

I'll be speaking to the chief executive of Iberia on how he's turning Spain's flag carrier around.

But before all of that, this is CNN, and on this network, the news always comes first.

News just into CNN: jurors are set to begin deliberations in the case against the accused Boston Marathon bomber Tsarnaev on Tuesday. The defense

and the prosecution have finished their closing arguments. You'll be aware, of course, that the case has now gone to the jury, and Tsarnaev is expected

to be convicted on most of the 30 counts that he's facing.

Kenya has launched air strikes against al-Shabaab targets in Somalia after last week's attacks at a university outside Nairobi. The government has

defended its handling of the response to Thursday's massacre, which killed around 150 people.

A police source says Kenyan authorities had intelligence suggesting the University in Garissa could be attacked, alleged took a rapid response team

several hours to arrive and end the siege. Speaking exclusively to CNN's Christiane Amanpour, the country's foreign minister said criticism of the

government's response was unfair.

(AUDIO GAP)

QUEST: Aid groups are warning of a humanitarian disaster in Yemen as fighting on the ground intensifies. More than 50 people were killed in

clashes today in the southern city of Aden alone. Supporters of Yemen's deposed president are fighting to prevent a complete takeover by the Houthi

rebels.

[16:30:02] An Indonesian court has ruled it has no authority to challenge the president's clemency refusal for the ringleaders of the so-called Bali

Nine. A lawyer for Andrew Chan and Myuran Sukumaran plans to take the case to the constitutional court. The two Australians face the death penalty for

drug trafficking convictions.

Turkey has lifted its blockade on Twitter and Facebook. The sites were blocked after they refused to take down images of last week's hostage

crisis at a Turkish courthouse. The Turkish government says sharing those images is akin to promoting terrorism. YouTube is still inaccessible inside

Turkey.

"Fast and Furious 7" had a record-breaking opening weekend in the United States. And more than that, it raced to the top of the box office around

the world. Wherever it was, the movie was number one when it was released internationally and it became Hollywood's third-highest grossing opening

weekend ever. We can see why with some extraordinary stunts. Now, "Furious 7" raked in more than $240 million where - at the international box office. Only two

movies have been more successful than "Fast and Furious 7." Which are they? Quickly! Quickly! I'll tell you - the first one was "Pirates of the

Caribbean" on (inaudible). That brought in $260 million and then what's the best - the biggest opening weekend?

Quickly! Quickly! That's what it is - "Harry Potter and the Deathly Hallows Part 2" which brought in $314 million and a word of course Harry Potter was

made by Warner Brothers, Warner Brothers is part of Time Warner, Time Warner is the parent company of CNN.

Now keep in mind, "Furious 7" at $240 - it obviously can't win that one, but it's yet to open in China, Japan and Russia. So Paul Degarabedian is

the senior media analyst for Rentrak which explores the film industry's growth potential around the world. He joins me now from Los Angeles. Pau l,

my apologies, I think I completely mangled your name, so forgive me for that part.

PAUL DEGARABEDIAN, SENIOR MEDIA ANALYST, RENTRAK: That's OK.

QUEST: It's must be these high numbers are heady enough. What is it? What is this, bearing in mind the tragic nature of what happened during the

filming, what is it about this "Fast and Furious 7" and the genre, the franchise that's making it so successful?

DEGARABEDIAN: Yes, I think, Richard, it's amazing because the first "Fast and Furious" movie opened back in 2001 and here we are 14 year on and this

franchise is more relevant, more exiting, getting more enthusiasm from audiences around the world as you showed earlier -- $240 million in the

international territories, $147.1 million in North America? That's the ninth biggest opening of all time in North America and it's not even the

summer season yet!

And I think it's because these films - they're very cinematic, they're over the top. They're the epitome of what is the popcorn movie -

QUEST: Right.

DEGARABEDIAN: Why people go to the theater in the first place, adding on the Paul Walker factor which, you know, was a tragedy. But yet the fans

rallied together to come out and support this move, support that cast, support that "Fast and Furious" family if you will, and the results were

staggering.

QUEST: Now, how much - do we know - do we know how much this movie cost to make and factoring in that, as it goes longer into circulation and

distribution, what's your best -

DEGARABEDIAN: Right.

QUEST: -- guess for the sort of money that this is likely to pull in even before it goes to, well, DVD, online streaming?

DEGARABEDIAN: Right. You know that's a great question because the previous installment, "Fast and Furious 6" earned about $790 million worldwide. I

think this is the first in the franchise that has the potential to join the billion-dollar club worldwide.

And I'm just talking about on the big screen in theaters around the world. Then you have that small screen played down the road and at Rentrak we

track the movies from, you know, the domestic box office, international, worldwide and then to the small screen. This is a franchise that will keep

paying dividends and no question that it is a brand that resonates. It has a very diverse cast.

[16:35:02] So around the world everyone can find someone within that cast to relate to, and of course the Paul Walker Factor took it to another

level, but was already predestined to be a major, you know, hit for Universal and breaking April records, the biggest weekend of the year -

opening weekend of the year so far. A biggest Friday in April ever -

QUEST: All right, but -

DEGARABEDIAN: The results are amazing.

QUEST: Let me just further your bin (ph) - how does other studios compete - obviously including Time Warner's own Warner Brothers, Sony Pictures,

whatever -

DEGARABEDIAN: Right.

QUEST: -- how do you compete against that? Other than simply getting your checkbook out and throwing a vast amount of money which is exceptionally

risky -

DEGARABEDIAN: Right.

QUEST: -- for something even more spectacular?

DEGARABEDIAN: Well, every studio has a big film coming up this summer. "Fast and Furious" though is in a very enviable position of having about a

month to play before Disney and Marvel Avengers "Age of Ultron" which opens the first weekend in May. And then throughout this summer, every studio has

a huge movie on tap, and that's going to propel us I think to the first $5 billion-dollar summer ever.

And remember too this is a momentum thing. So having this many people in theaters around the world. Remember, they're being exposed to in-theater

marketing, trailers, posters in the lobby of the theater, getting excited in that group setting about seeing -

QUEST: Right.

DEGARABEDIAN: -- about all the big movies lined up, you know from May, June, July, August - the entire summer season is going to fire on all

cylinders and that's going to continue in 2016, 2017 - the future's -

QUEST: Good grief!

DEGARABEDIAN: -- very bright for the theatrical movie landscape for sure.

QUEST: Paul, we're very grateful you've brought the enthusiasm of the industry right off -

DEGARABEDIAN: Oh, yes.

QUEST: -- every door (ph).

(LAUGHTER)

QUEST: Paul, look, I'm embarrassed. I don't think I've seen any of the franchise, but that's just me. No - (inaudible).

DEGARABEDIAN: That's OK, you can catch up. You can catch up with it. (LAUGHTER).

QUEST: Thank you very much - I shall do so, Paul.

DEGARABEDIAN: All right, Richard.

QUEST: Thank you we enjoyed you. I say embarrassed to have mentioned that I've not seen it. All right, Iberia - is the Spanish airline that is

completely restructured at the cost of many jobs that have gone. But Iberia is now making money. The days of the million-dollar losses are over.

It's got a new paint job, a new strategy and we're going to meet the chief executive.

(COMMERCIAL BREAK)

QUEST: The "Business Traveller" update to bring to you. And the Spanish economy continues to show further signs of improving. The number of people

unemployed was lower in March than at any March over the past 13 years. So the turnaround has also been mirrored by the country's flag carrier - the

airline Iberia. [16:40:09] It has a new paint scheme, new logo and it's preparing to

restart for example flights to Havana. Iberia's turning a profit once again and like Spain's come back, the airline's is anything but painless..

(BEGIN VIDEOCLIP)

QUEST: It's no secret that Spain struggled more than most during the great recession.

(MUSIC PLAYING)

QUEST: Today, seven years on, Spain has more than most to celebrate. Its economy is now solidly on the rise, one of the fastest-growing in the

Eurozone, and it's a rebirth that perfectly mirrors the Spanish flight carrier Iberia which was a tired and near-bankrupt airline. Iberia began a

painful turnaround in 2012.

WILLIE WALSH, CEO, INTERNATIONAL AIRLINES GROUP: This is the beginning of a turnaround program that will lead to a sustainable and profitable airline.

And, well late (ph) one airline that can invest in new aircraft and new progress.

QUEST: Willie Walsh said to you, "Clean this up." Make it work or we will turn it - we will switch the lights off.

WALSH: Yes.

QUEST: I mean, he did. He did. He said that effectively.

LUIS GALLEGO, CEO, IBERIA: Yes. He told me that we needed to change Iberia otherwise the company saying it's a big risk. All the Latina (ph) airlines

have similar problems and so we did is to launch the transformation.

QUEST: (Inaudible) (AUDIO GAP) through massive industrial disputes and mediation. The core of this transformation - getting costs under control.

Fifty percent of management left as will 5,000 staff. Wages were renegotiated and Iberia Express was launched. Effectively a separate low-

cost carrier.

GALLEGO: In Iberia in our own local aircraft like this, 65 percent of the passengers come from the short and medium haul and the connecting

passengers. So we need to fit the hub, you know, in an efficient way. And we couldn't do it with Iberia of course attractive (ph). So launched Iberia

Express. The idea was to feed the hub efficiently and also to level up our point-to-point operation here in Madrid because we couldn't compete with

all the local carriers that we have here.

QUEST: Now the flag carrier of Spain has been reborn. Today, Willie Walsh and IAG call it their star performer. And to celebrate this phoenix - a new

face. I'm always very suspicious -

GALLEGO: About?

QUEST: When airlines start to re - to change the paintwork.

GALLEGO: (LAUGHTER).

QUEST: Because I always think you're changing the paintwork, what are you hiding?

GALLEGO: We are going to have a lean company, so we need a lean aircraft.

QUEST: Lean, clean and now profitable. Iberia's back in the black to the tune of 50 million euros a year, where three years ago, it was losing a

million euros a day.

With the financials back on solid footing, Iberia is now looking forward, and that means expansion and build on the one market where they already

dominate - Latin America.

GALLEGO: We have announced that we are going to open routes to Cali coming in (ph), we are running also two (inaudible) tourist routes that we

cancelled in the past - Havana, Santo Domingo, Pontevedra, but we see also a bigger possibility for Iberia to develop high-growth markets like Asia or

like Africa.

QUEST: It's an all-new Iberia. New markets join the new livery, a new website is joined by a new business cabin. It was really important to get a

product that people wanted.

GALLEGO: Yes.

QUEST: If you're going to fly 14, 13, 12 hours across, so how significant was this in development?

GALLEGO: OK, I think these seat and these new product for a long haul is very important for the customer, and they are telling us that they're very

happy with the new seat or the inflight entertainment. You can see that in this seat you can turn the seat in a full flat bed.

QUEST: The overwhelming feeling of all-aisle access, 1, 2, 1 configuration is space. There's breathing room in this cabin, and now thanks to these

changes, there's breathing room in the boardroom too. So now you get to enjoy it because, let's face it, the last two or three years have not been

much fun.

GALLEGO: No, and also today we are still working on it. We are in the middle of the road. We need to be profitable, sustainable and we need to

get our future for the company. It's not enough doing some money in 2014.

[16:45:08] QUEST: It's a strong start and proof that Iberia's big gamble and restructuring has paid off.

GALLEGO: I thought that it was a race but it was a very big opportunity and I like that challenge and I did it.

(END VIDEOCLIP)

QUEST: The trials and tribulations of Iberia. A lot of people queue for hours for the latest smartphone or gadget. What about the box of cookies?

Hungry customers are doing just that for the buttery treats known as (Jenny's Cooking) - Cookies even. But as Asia Pacific editor Andrew Stevens

reports, the black market may be taking a bite out of the profits.

(BEGIN VIDEOCLIP)

ANDREW STEVENS, CNN ASIA PACIFIC EDITOR: There's nothing unusual about queuing in Hong Kong. People here will happily line up for the chance of

snapping up a deal or turning a quick profit. But this queue is different.

So welcome to the new hot queue for Hong Kong. It's not a financial product, it's not a collectible, it's not a coin - it's food. In fact, it's

a butter cookie. Jenny's Butter Cookies are red hot in Hong Kong. Locals of all types and tourists from near and far are lining up.

So we've been here for about 10/15 minutes or so. Maybe another 20 minutes to wait. If you don't want to wait, there's a black market in Jenny's

Butter Cookies. Follow me.

It's just around the corner in the heart of the famous Tsim Sha Tsui shopping district. The touts are easy enough to spot, they are though a

little publicity shy. Once you make contact, it's a trek into a multi-story maze keeping close to your guide. Jenny Cookie.

Female: Jenny Cookie.

STEVENS: The search ends at this little corner shop, stocked I'm told with the real thing. Cameras definitely not welcome. The cost for a tin is

slightly less than $15 - that's a markup of about 70 percent. Meanwhile, outside the real Jenny's, the queue is moving. We're given tickets to enter

the inner sanctum - in this case yet another maze of shops.

There are plenty of warnings here from Jenny's management about the legality of reselling and of course fakes.

By the time we arrive, only small tins are left but that doesn't seem to dampen the mood. The wait is almost over. We get our allocation and make

our way out. So this is what all the fuss is about. How good are Jenny's butter cookies?

That's pretty good stuff. Buttery. But if I'm a little, well, underwhelmed, I do seem to be in a minority.

Female: Very good?

STEVENS: Very good. Andrew Stevens, CNN Hong Kong.

(END VIDEOCLIP)

QUEST: (LAUGHTER). That reminds me of the Cronuts in New York. The only question is whether Jenny's Butter Cookies will still be quite so popular

in six months' time. I could do with a butter cookie. After what Columbia Journalism School has deemed an institutional failure of reporting, the

Boston "Rolling Stones" says nobody will be fired - after the break.

(COMMERCIAL BREAK)

[17:50:12] QUEST: "Rolling Stone" magazine is official retracting a now discredited story about an alleged gang rape at the University of Virginia.

It was an article that was called "A Rape on Campus" and it featured specific and brutal details.

There's only one considerable problem - they could not be corroborated. Now the scathing report by Columbia University's journalism school has laid out

the major failings in the writing, the editing, the fact-checking of the story. In fact, pretty much every part of the journalism that went into it.

Sara Ganim has our report.

(BEGIN VIDEOCLIP)

SARA GANIM, CNN CORRESPONDENT: The "Rolling Stones" story shocked both the campus at UVA and the nation. Seven men accused of attacking a young woman

over several hours - an alleged gang rape during a fraternity party. But along with the outrage, there was suspicion. Details began to emerge about

the night the woman named Jackie says she was raped.

RYAN DUFFIN, UNIVERSITY OF VIRGINIA STUDENT: Male: I think that that was pretty clear on the "Rolling Stone" piece but, you know, -- it was almost

too perfect of a story.

GANIM: Jackie's friends Alex Stock and Ryan Duffin say they were with her the night of the alleged attack in September 2012. What they remember is

very different from what Jackie told "Rolling Stone." The article says that she was beaten, hit in the face, that she was barefoot, that she was bloodied and that her face was obviously beaten. Is

that true?

ALEX STOCK, UNIVERSITY OF VIRGINIA STUDENT: No. I didn't notice any sort of physical injuries, I didn't notice a lack of shoes, I didn't really notice

anything.

GANIM: There were other discrepancies about where she met her rapists, where they went on their date and in the most strange twist, Jackie had

asked her friends to text with her date and the pictures and text messages he purportedly sent later appeared to be fake.

Male: There's a very good chance whoever was texting was Jackie. There's a definite possibility.

GANIM: As the story began to fall apart, "Rolling Stone" admitted they never contacted the men Jackie had accused. They also admitted that Alex

and Ryan were never interviewed by the writer of the story, even though they were quoted in the article. "Rolling Stone" said it had taken Jackie's

word and failed to fact check much of her story. That's left towering questions about what's real and what's not.

Last month, Charlottesville Police said their investigation found no evidence that Jackie was raped in the way that the story portrays, but they

were clear not to accuse Jackie of lying, leaving open the possibility that something bad might have happened to her - perhaps somewhere else.

Male: Her lips were quivering.

GANIM: Her friends tell us they believe it's possible they'll never know exactly what happened to Jackie.

Male: I still think it's difficult to believe that she would have been acting.

GANIM: Sara Ganim, CNN New York.

(END VIDEOCLIP)

QUEST: The magazine's publisher Will Dana has taken partial responsibility, retracted the story, apologized. The fraternity involved is now threatening

litigation. But Dana has decided not to fire anyone on the staff saying the errors were unintentional. We need help to understand this. Brian Stelter

is the man to do it for us - CNN's senior media correspondent.

Well this has got it all, hasn't it? It's got shortcomings by the magazine, it's got a story that's weak to begin with, but something clearly was going

on and nobody takes the blame. Brian, what's your gut feeling on the reaction of "Rolling Stone" here?

BRIAN STELTER, SENIOR MEDIA CORRESPONDENT: I have been impressed up until yesterday by "Rolling Stone's" handling of these errors. You know, in

December they apologized and then they went out to Columbia University and said we want you to independently investigate what we did wrong.

That's a brave thing for a news organization to do - you don't see that happen very often. Then they went a step further -- "Rolling Stones"

publish Jann Wenner said, "We will print your review in the magazine." And they're doing that this week.

But here's where the credit stops, here's where people are rising real questions, Richard. It's in the fact that nobody's going to be disciplined

here. No one's going to be fired. Wenner says the publication of this report is punishment enough - it's embarrassing enough - nobody needs to be

fired -

QUEST: All right -

STELTER: -- or suspended.

QUEST: He's right. The magazine's right! I mean, let's face it, any further action against an individual would be maybe - it would be retribution. The

person's names are all well known.

STELTER: Well, you're erring on the side of second chances and I respect that. I mean, that's a lot about what we heard about with Brian Williams.

You know, and that NBC nightly news anchorman was suspended two months ago - six-month suspension. A lot of people said he should be given a second

chance. And in some ways that's what "Rolling Stone" is doing here. They say the writer can write for the magazine again, they say none of the

editors are going to be leaving, none of the fact-checkers are going to be leaving.

[17:55:09] The flip side of that though is - how can "Rolling Stone" really restore and regain its reputation if the same people are running it?

QUEST: Because they've - provided they've put in place different systems, provided they put in place new measures - the mere fact that of the

transparency of the issue. But I see your point, Brian. But you think somebody should've been fired?

STELTER: Oh, I'm not going that far. I'm just saying like I'm more surprised that nobody has been suspended or disciplined here and I'm not

going to rule it out in the future. There's been such an outcry in the last 24 hours, it's possible there will be some actions taken.

QUEST: Right.

STELTER: But you're right - they are going to be adopting some recommendations about policy changes. For example, the magazine'll be more

careful in the future not to use anonymous sources as the single source of a story.

QUEST: Right.

STELTER: That was the fundamental problem here - they relied way too heavily on one source instead of calling other people.

QUEST: Brian, great to have your analysis.

STELTER: Thank you.

QUEST: Thanks for joining us on "Quest Means Business" tonight. We'll have a "Profitable Moment" after the break. (RINGS BELL).

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment." The fuss over "Rolling Stone" deciding not to penalize, suspend or fire those involved makes interesting

navel-gazing in many ways for those of us in journalism. I can't help feeling as Brian Stelter was saying that maybe the second chance argument

has considerable weight. After all, all the miscreant deeds are out there for the world to see. Nobody's under any illusions about the shortcomings

of "Rolling Stone's" journalism in this case.

Providing changes are made, and those changes go to the very systemic way that it's put together, I see no purpose in gratuitously penalizing a

person.

[17:00:00] And that's "Quest Means Business" for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, (RINGS BELL) I'll hope

it's profitable. I'll see you tomorrow.

END