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Quest Means Business
On Friday, Theresa May Will Have A Crack For The Third Time Getting Her Brexit Deal Through Parliament; Boeing Makes Changes To Its 737 MAX 8 To Get It Flying Again. Aired: 3-4p ET
Aired March 28, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Ignore the sirens, we are an hour away from the closing bell on Wall Street, and as you can see the
market started very encouragingly. A bit of a wobble over lunch time when it went negative, and it is now back on a bit of a rally. Sixty minutes to
go before the closing bell.
The Nasdaq and the S&P similarly have enjoyed a better day now than at the beginning. Put everything together and let's understand the markets on
Thursday, March the 28th.
There's confusion in the building behind me, total and utter chaos, some would say, as Parliament and business leaders are telling MPs this is no
way to run a country.
A matter of confidence, Boeing is trying to get back -- others warn safety regulators have lost confidence.
And Lyft is leading a herd of unicorns thundering towards Wall Street. Why tech companies are eager for IPOs right now.
Live from outside the Houses of Parliament, I'm Richard Quest where, of course, I mean business.
Good evening, Theresa May has less than 24 hours to pull a rabbit out of her hat, if possible. On Friday, she will have a crack for the third time
getting her Brexit deal through Parliament -- at least part of it, she split it.
The government has decided to split the two sides of the deal. Parliament will only vote on the divorce agreement, the withdrawal agreement which
sets the deadline for the E.U. to allow an extension to Brexit.
Now, Brussels have said if the motion doesn't pass this week, Friday -- sorry, then April the 12th is Brexit day. It has to pass tomorrow, it has
to pass tomorrow if May 22nd is to be the leaving date, otherwise, it is April 12th with no deal.
The Conservative MP, Anne Marie Morris, she is a Member of European Research Group that includes Jacob Rees-Mogg, another hard line Brexiteer.
She says Britain wants certainty. She joins me now. Are you a hard line Brexiteer?
ANNE MARIE MORRIS, BRITISH MEMBER OF PARLIAMENT, CONSERVATIVE PARTY: I wouldn't like to use the word "hard" but I certainly want a clean Brexit.
I want to leave. I want to deliver on the manifesto that my Party and Labour actually stood on at the last election.
QUEST: Right. You can vote for the Prime Minister's deal tomorrow and leave on May the 22nd.
MORRIS: No. If I vote for the Prime Minister's deal, I will not leave on May the 22nd because her deal puts me straight back into a Customs Union,
so no deal doesn't do that.
QUEST: May put you back into a Customs Union. It's a two-year process of the implementation period that may put you into a Customs Union at the end.
MORRIS: Let me ask you this then. If we have had no ability and nothing from Europe to give us a free trade deal in two years, why do you think
we're going to get anything better? I am not going to get the Customs Union, which is in the future -- the draft future arrangement, that
political declaration, why would they it give us something they could have given two years ago?
QUEST: They couldn't give it because as you know, as you well know, Article 50, as the way it's been accepted, does not allow for that. But
let's move on. Go on.
MORRIS: Article 50 absolutely allows for that. They were absolutely able to give it to us but, yes, let's move on.
QUEST: All right, let's move on to the bolt on fact that if you don't support the Prime Minister's deal tomorrow, you know the argument better
than I do, that you risk a long extension and the longer the extension, the more the call will be for a second referendum, a general election 18 months
down the road, a long extension, Brexit will be dead.
MORRIS: No, I don't agree with you. I think the issue of Europe, as you well know because of the division that is caused in both of the main
political parties is not going away. Two years is not a long time. And the reality is, I think we're not going to get through two years without a
number of things happening.
First of all, the current Prime Minister will resign so there will inevitably be a change of leader. That will change the dynamics. I
suspect, also, if I was in your place looking on, I would say, the chances of a general election in the next 12 months are pretty high. Either,
because any new leader will take a view that they want to establish their own mandate or Jeremy Corbyn, if her deal goes down, will say, vote of no
confidence.
[15:05:01]
QUEST: But you surely cannot want to face a general election when your Party is being blamed for the Brexit crisis?
MORRIS: I do not want to face a general election, but the person, frankly, right now who is to blame is principally Europe who would not play deal and
the same is true, I'm afraid, of our Prime Minister.
She's worked very hard, but the reality is, she has not delivered anything representing a leave result.
QUEST: Finally, you have wanted to leave for some time.
MORRIS: I have.
QUEST: You are gambling it all rather than taking three-quarters of a loaf now of a Brexit that at least you're on the legal side outside the union.
You're prepared to gamble this on -- because you just won't support her deal.
MORRIS: No. I believe that in fact, the position is quite contrary to the way you put it. If I support Theresa May's deal that guarantees I'm stuck
with Europe for certainly my lifetime. If I stay firm, then I have a real chance of no deal and that's what now is the only option in terms leaving,
then we can start negotiating wonderful free trade agreements with countries like yours. In fact, the U.K. would be a great result and at
that point, we will be in a much stronger bargaining position to get a deal with Europe.
QUEST: We could go a lot longer, but we don't have enough time. Thank you.
MORRIS: My pleasure.
QUEST: Good to see you. Have a good vote, whatever way it goes, and a good weekend.
MORRIS: You, too.
QUEST: Thank you very much, indeed. There is one thing that everyone can agree upon, whichever way you look at it, the whole thing is a mess.
(BEGIN VIDEO TAPE)
QUEST: They've always said that a second referendum will drive a stake through this country.
MICHAEL HESETLINE, FORMER BRITISH DEPUTY PRIME MINISTER: It's already driven.
QUEST: Is this the worst crisis you've seen?
HESETLINE: Certainly, in peacetime. Unprecedented.
QUEST: A huge mess.
PETER RICKETS, FORMER BRITISH AMBASSADOR TO FRANCE: I heard Michael Heseltine telling you a moment ago it is the biggest peacetime crisis this
country has faced since the end of the Second World War. There is nothing like it. Suez was bad. But we got over Suez, we changed the Prime
Minister and moved on. This is a structural crisis for the U.K.
MICHAEL FABRICANT, BRITISH MEMBER OF PARLIAMENT, CONSERVATIVE PARTY: It's going to be difficult for them and, by God, people like me will be trying
to stop it and so might the House of Lords, but I think it might be possible. We're in a mess basically if you wanted something in summary.
(END VIDEO CLIP)
QUEST: We're in a mess and the big question remains whether the numbers are there for Theresa May's deal to pass -- 320 votes needed, 243 voted in
favor the last time. Now the key groups to watch out for. The ERG, of which our last guest is a member, there were 60 votes there. The DUP has
10 votes, but the Labour opposition says it's against it. Stay with the mathematics at the moment because Bianca is here with me.
Look at those mathematics if you be as kind and tell me how many of the ERG will move across?
BIANCA NOBILO, CORRESPONDENT, CNN: Optimistically, it's unlikely any more than 40 to 45 would really vote for this tomorrow and that's because the
remainder are really dependent on the DUP. They've constantly shared the same perspective on this and the Unionists and want to follow the DUP's
lead.
Now, I heard today from two architects of the leave campaign, Arron Banks and Andy Whitmore, who dined with two members of the DUP yesterday just to
reaffirm their position, their opposition to the Prime Minister's deal, how they're going to stand against this. They even referred to the ERG members
who have switched as turn coats. So that doesn't sound promising if the Prime Minister is trying to get them on side for tomorrow, but abstentions
could be key here because if some Labour MPs abstain that helps the Prime Minister and tips the arithmetic.
QUEST: So the way you're describing it sounds just like this. The flavor of the chaos in Parliament.
(BEGIN VIDEO CLIP)
JOHN BERCOW, SPEAKER, BRITISH HOUSE OF COMMONS: The ayes were 160. The no's were 400. So the no's have it. So the no's have it. So the no's
have it. So the no's have it. So the no's have it. So the no's have it. So the no's have it. So the no's have it. Order. Order. Order. Order.
(END VIDEO CLIP)
QUEST: So the no's have it.
NOBILO: Eight times.
QUEST: Yes, we heard them. So what does this mean? I mean, will she get her deal through tomorrow? And even if she doesn't get her deal through,
you've still got nothing in terms of a consensus.
NOBILO: No, it's so fluid. If they can't agree on the withdrawal agreement alone, which is just the legal necessities --
QUEST: No, it's got the backstop in it.
NOBILO: It has got the backstop in it, yes, but it's something which the Labour Party could feasibly support, obviously, if they didn't have one eye
on getting into power because it doesn't preclude a very close relationship involvement in permanent Customs Union and dynamic alignment with a single
market.
[15:10:10]
NOBILO: Which are the things that they want. So that's what the Prime Minister is hoping for. That there will be less opposition to the
withdrawal agreement aspect of her deal. But it is unlikely that that will be enough. It's very fluid.
QUEST: All right, finally, what time are they back tomorrow?
NOBILO: The vote will be done by 2:30.
QUEST: Thank you. Now, just a few meters from Parliament, the business center is an easy walk from the building behind me. Take a look at this
map. Easy to get to. But yet, I mean, look, it's only a matter of meters from the QE2 center, which is not the most exciting or wonderful of
buildings -- it must be said -- to the Houses of Parliament which is truly grand even though it's well and truly under scaffolding, Big Ben.
The businesses are starting to wonder whether MPs are on a different planet. They're angry and frustrated with Ministers and Westminster. The
British Chamber of Commerce says a disorderly Brexit would be a dereliction of duty. John Defterios spoke to the Chamber's Director General, Adam
Marshall.
(BEGIN VIDEO CLIP)
ADAM MARSHALL, DIRECTOR GENERAL, BRITISH CHAMBER OF COMMERCE: It must land on something and stick with it so that businesses have the clarity and
precision they need to get on and trade. Brexit has caused so much uncertainty in our business communities over the last three years and a lot
of companies feel like they're going around in circles.
They need to stop that holding pattern. They need to be able to get back to investing, to hiring, and to growing the economy and lifting this sort
of fog that is all around them is really, really important over the coming weeks.
(END VIDEO CLIP)
QUEST: John is with me now. Are they living in a real world any more than the MPs are behind? Because there is -- there are very wide differences of
opinion within that organization?
JOHN DEFTERIOS, EMERGING MARKETS EDITOR, CNN: Yes, in fact, this is a key point, Richard. One thing they don't want is a crashing out. That's
clear. So they said what we want is a decision. But this is a divided community because there are some remainers there, there are some Brexiteers
-- none of them wanted a Customs Union because they say it basically handcuffs Britain from moving around and they can't bring in other players.
They'd like the Canadian free trade agreement with special services built in to it as well.
QUEST: Just pause on that. I know you want me to hear you some of the people you spoke to, but they don't want -- you said they don't want a
Customs Union, but that's exactly the sort of thing that Parliament in its naivete of business thinks they want is a Customs Union.
DEFTERIOS: Yes, this is a conundrum, right, Richard because this is something they don't think they're going to be benefiting to grow off of
because of a Customs Union. They don't have a say. They're not a decision maker. They're the rules that apply from Brussels in the Norway model,
which Norway is quite happy with.
But there's a lot of lost opportunity. I was looking at Theresa May's program to get out, 39 billion pounds about $50 billion, right, that's the
lost opportunity and the costs over the last year.
The growth -- I spoke to the CEO of Legal and General said today, we're losing half a percent to 1%. So what's his answer? Just give us a
decision. Let's take a listen.
(BEGIN VIDEO CLIP)
NIGEL WILSON, CEO, LEGAL & GENERAL: It's like in business, you know, it's time to make a decision. You know, you can mix small no's and so far we've
been very successful at delivering a slow no. Actually it's a time for actually getting on and making a decision.
(END VIDEO CLIP)
QUEST: Yes, but this is the time to make a decision. I mean, they've been saying that -- the Prime Minister said that in her speech last week to the
House. It's time to make a decision when she brought about the deal from Brussels last week.
DEFTERIOS: You know what the danger is, too, I'm a fresh pair of eyes here, Richard. I think this is somewhat of a debacle here, because I
haven't been covering Brexit. I was sitting with a bunch of sober businessmen who said we can't live without a lack of clarity right now.
But, Nigel Wilson for example of Legal & General was saying to me, a soft Brexit would work for us. We'd like get out. We just don't want to be
locked in to a Customs Union.
QUEST: How so -- well, hang on. That is a soft Brexit, a Customs Union. What sort of soft Brexit --
DEFTERIOS: Temporarily, you know the drill on this. Temporarily, we are in a Customs Union for two years. We build our free trade agreements, but
those haven't been delivered. The promise was, and I was listening to this from the Middle East, we're going to have 40 lined up banging on our door
to be ready to do trade with us. Once we decide we're going to be getting out, that hasn't played out. This is why the business community is quite
frustrated at the same time. Thanks.
QUEST: Welcome to --
DEFTERIOS: Welcome to the chaos.
QUEST: Welcome to the chaos, John Defterios. Thank you, sir. All right, as we continue tonight, after the break, Boeing makes changes to its 737
MAX 8 to get it flying again, a pilot for one made the U.S. carrier seems very impressed. You'll hear an assessment as we continue.
And also, an assessment from the people of Britain with the ongoing Brexit turmoil. They're not terribly impressed with what's happening in the
Houses of Parliament -- to be specific, the the House of Commons.
(COMMERCIAL BREAK)
[15:15:00]
QUEST: Confidence in the U.S. aviation watchdog, the FAA, has been shaken following the two fatal crashes of the 737 MAX 8. The suggestion was made
by the Department of Transportation's own Inspector General in evidence presented to senators.
The FAA has said it did not have enough data to warrant grounding planes earlier and that it is a fact-driven data-based organization. The head of
the 737 fleet for American Airlines says he has confidence in the MAX, that's after Boeing held a pilots' briefing on new software updates
designed to refine the so-called MCAS system.
(BEGIN VIDEO CLIP)
RODDY GUTHRIE, AMERICAN AIRLINES FLEET CAPTAIN: It gives us great confidence with the enhancements that they have made to the software that
was explained in detail today.
UNIDENTIFIED MALE: Are you going to feel confident flying the plane again?
GUTHRIE: Yes, we will. We were confident flying the aircraft in its present state. What they've done and what was explained to us today in
detail are significant enhancements to the system.
(END VIDEO CLIP)
QUEST: Scott Brenner joins me from Washington. He is a former associate administrator at the FAA. And the changes that are made, the more I read
about them, they are not so much improvements or whatever, but they're exactly the sort of thing putting right exactly the sort of things that
should have been spotted in the testing process. This isn't just being clever with hind sight.
SCOTT BRENNER, FORMER ASSOCIATE ADMINISTRATION OF FAA: I don't know if I would agree with that, Richard. I think what we have here is,
unfortunately, here in the United States when something happens, our elected officials feel they need to act. And so right now, they're
responding to these crashes. They don't know what caused the crash. The FAA doesn't know what caused the crashes. Nobody, but probably the
Ethiopians and the Indonesians actually know what caused these crashes, and yet, here we are coming up with all different ideas on how to solve a
problem that may not be the solution to the real problem.
QUEST: I agree there may be something else, but do you accept that it was, I would say, it was the wrong decision of the FAA not to ground the planes
when everybody else was doing it? They had to be dragged kicking and screaming.
BRENNER: You know, and I think I'm probably the lone voice out here, but I still don't think there's enough evidence to ground this aircraft.
[15:20:10]
BRENNER: Yes, you had two aircraft that crashed that were of the same model, that had a similar profile, but we still don't know why they
crashed. With the Lion Air crash, which was the first one, we have an idea that it crashed because of poor maintenance.
The second one, we don't know why it crashed. All we know is that allegedly, the pilot, the main pilot in control, became nervous, turned it
over to his co-pilot who had around 200 to 300 hours of flight time and, remember, when these pilots are on these aircrafts, they are only flying
the plane about 10% of the time.
So he has got 25 to 30 hours of flight time. It's handed over to him in a very dangerous situation, and the plane crashes. So I still don't know why
-- I don't think there's enough data out there to justify the grounding of this aircraft, and if you don't have the data to justify grounding, how do
you have the data to justify putting them back up in the air?
QUEST: The phrase that strike me is that used by the Chinese authorities when they grounded the plane. They said it was out of an abundance of
caution. Now the FAA's cozy relation with Boeing, or allegedly, cozy relationship, the delegation -- all the issues that you know about now --
I'm not asking you to discuss or defend them, I'm asking you whether or not you believe the FAA's gold standard has now been tarnished?
BRENNAN: I would disagree. I think there's probably a public perception out there that it might be. But I think we also have to look at what is
the motivation of folks like the Chinese to come out so strongly and so early in grounding their aircraft? They do have the most of these
aircraft, I think they have something like 200.
But it's also a nation that's trying to get into the aviation business themselves. So for a long-term view, it doesn't really hurt the Chinese to
start taking Boeing's reputation down step-by-step.
Now for the other countries, I was really kind of surprised because normally the FAA has a very good working relationship with these other
civil aviation authorities, and yet I would be surprised if any of them could point to solid data that would justify the grounding of this
aircraft.
QUEST: Scott, good to see you, sir. Promise we will talk again when we get more details on the CVRs, we have got the preliminary report on --
we've got a final and we've also got a preliminary, of course, from Ethiopia and we'll talk after those. Thank you, sir.
BRENNAN: Great, thanks for having me on.
QUEST: Staying with Ethiopian Airlines, which gave CNN rare access inside its Boeing 737 MAX simulator. It's the only one of its kind in Ethiopia.
Robyn Kriel reports from Addis.
(BEGIN VIDEO TAPE)
ROBYN KRIEL, CORRESPONDENT, CNN (voice over): We're strapped in for a flight onboard an Ethiopian Airlines flight simulator at the airline's
aviation academy. This is the only simulator in Ethiopia for the Boeing 737 MAX 8 -- the aircraft that crashed two weeks ago killing all onboard.
The simulator, we're told, was purchased in January of this year. The Chief Pilot, Yohannes HaileMariam takes us through a brief preflight
checklist before takeoff. Within minutes our simulated flight has begun.
The flight ET 302 took off in a similar way from Bali International Airport nestled in rolling green and gold hills. It was at this point six minutes
into the flight and still climbing to cruising altitude that Ethiopian Airlines Flight 302 encountered major problems. It eventually crashed into
a field south of Addis Ababa. How and why this happened is still under investigation and it was also at this point the 13-minute mark that Lion
Air flight nearly five months before began its tragic and deadly descent as well.
Our simulated journey, however, continues safely. But on board October's Lion Air flight, the automated MCAS anti-stall system was trying to force
the nose down. The Chief Pilot HaileMariam shows us the flight manual for a 737 MAX 8. This manual contains everything a pilot needs for a flight or
at least it should.
A source with knowledge of the aircraft says there's no information inside about the new MCAS system.
[15:25:10]
KRIEL: A pilot onboard a flight encountering problems could have found all kinds of emergency procedures and system descriptions. But according to
our source, nothing on the MCAS. Inside the simulator, as safe as it is, our flight progresses smoothly. Chief Pilot HaileMariam flies the plane
manually, effortlessly even. But if an actual flight were to experience an MCAS failure, the pilot would be left wrestling the airplane.
These levers particularly, the pilot pulling up, the system pulling down in a tug of war. One that according to our source, the aircraft doesn't know
to stop fighting. Robyn Kriel, CNN, Addis Ababa, Ethiopia.
(END VIDEO TAPE)
QUEST: CNN is taking it to the people. We are going to find out what Brits really think about the Brexit deadlock in a moment.
(COMMERCIAL BREAK)
QUEST: Hello I'm Richard Quest. There's more "Quest Means Business" in just a moment. When London is in chaos, we'll get the view from the pro-
leave and pro-remain areas of Britain. And the collapse of Wow Air leaves thousands of passengers stranded. A look at whether the business model was
doomed to fail. As you and I continue, this is CNN and here on this network, the facts always come first.
In the U.K., the government has decided to split the two components of Theresa May's Brexit deal -- the withdrawal agreement and the political
declaration. On Friday, Parliament is expected to vote on the withdrawal agreement alone. Tomorrow is the deadline the E.U. has set to allow for an
extension to Brexit.
[15:30:00] The Kremlin confirms now Russian military personnel have arrived in Venezuela and it's rejecting a demand by the U.S. president that they
get out. A Kremlin spokesman says Russian military specialists will remain in Venezuela as long as the Venezuelan government needs them.
In the Southeast Asia, the kingdom of Brunei, people found guilty of adultery and having same sex could be stoned to death. The harsh
punishment is said to take effect next Wednesday. Human rights groups and western governments have condemned the change.
Venezuelan's government has banned the National Assembly President Juan Guaido from public office for 15 years. Guaido is recognized by the United
States and other countries as Venezuela's interim president. He's accused of financial irregularities. The announcement was made by a state
controller appointed by the embattled president Nicolas Maduro.
The mayor of Chicago says the city will be sending a bill to the actor Jussie Smollett. On Tuesday, the charges were dropped against Smollett who
has been accused of staging a fake hate crime in an effort to boost his profile. Chicago's mayor plans to bill the actor for the cost of the
police investigation into that incident.
To some describe it as "I am off, now back my deal" in this morning's papers. The "Daily Mail", Tory paper says will -- Theresa May wills --
"will her sacrifice be in vain?" But of course, everybody really is talking about this one. It's not often "The Guardian" has the best
headline of the day. But there it is, it is straightforward, parliament finally has its say -- no, is that.
So with the Westminster completely befuddled and bemused, it's time to hear from the people outside of London. Anna Stewart is in Hull which voted to
leave. Anna.
ANNA STEWART, CNN REPORTER: Richard, continuing my lovely tour of leave areas across the U.K., yesterday, we were in Hull, a maritime city voted
overwhelmingly to leave and two topics really have been at the center of our conversations today.
One, Prime Minister saying she'll step down if and when she gets her deal through. What's the reaction being there? Most people, a bit of a shrug,
not sure that it will make any difference, the Brexit process. Some people always a little angry, they think she should think about seeing it through
the whole way for the next couple of years.
Second question, what do they feel about the parliamentary process this week, particularly those eight votes on the ballot paper yesterday, all the
various Brexit options, what they didn't got the fact that the second referendum on a final deal got the most support. That didn't go down well,
take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The people are for it, so I think they should stick by that. I think it undermines the whole process by having enough vote,
because then, you know, we could do that forever if certain people are happy, we could just have to keep voting and voting.
UNIDENTIFIED MALE: It's a difficult one, though, isn't it? Because we find ourselves a very democratic country. That is not very democratic, isn't
it?
UNIDENTIFIED MALE: We should, you know, get what we asked for.
UNIDENTIFIED FEMALE: If it had been a year ago for a second referendum, then fair enough, but I think now it's too late. And I think people are
just sick and tired of listening and hearing and there's been no action from it.
(END VIDEO CLIP)
STEWART: That last lady you heard from, Richard, she is actually a remainer. So she bucks the trend in this area, but she does not want a
second referendum. She thinks the people did decide, they voted, she doesn't think it's democratic. And she's also -- and this is shared
everywhere we go, fed up with all the political wrangling in Westminster.
QUEST: This is fascinating. We have a minute or two more to explore this, Anna. This view that we just want to leave, it's what many MPs in certain
parts, Bob Ceiling(ph) was talking to me last night, people are tired of this debate. We just want to go. Why is that not percolating down to
London?
STEWART: It's a really good question. The MP of Boston where I was last night, said the only thing he voted on the ballot paper yesterday was a no
deal. He is actually representing his people. When you go to all these areas, you do question whether their MPs are really, truly representing
them if they vote on other options.
[15:35:00] Because there is a sense for a lot of people who voted to leave, that they would honestly rather have a no deal Brexit and soon than
any other option at this stage. I also think everyone I've spoken to here voted to leave. They've not changed their mind.
If you think about the issues, Richard, as to why they actually voted to leave, whether it was immigration, if you live in Boston, whether it was
the dying fishing industry here in Hull, the issues are the same. People are just more fed up, they don't think that changed their minds. Richard?
QUEST: Anna, I'm envious of you, getting to travel around Britain and in a nice weather and enjoying yourself. You're hoping -- have some fish and
chips in Hull, it's excellent. I know, I used to -- I grew up near there, good. As we continue tonight on QUEST MEANS BUSINESS from London, Facebook
is being accused of discrimination over the way it advertises. It could have big implications for the way targeted ads actually work. We'll have
that in a moment.
(COMMERCIAL BREAK)
QUEST: Facebook has been charged in the United States with discrimination over its advertisements for housing. The U.S. Department of Housing and
Urban Development claims advertisers can dictate who sees properties based on race, religion or other factors.
Cristina Alesci joins me from New York for more. Now, look, discrimination, the U.S. laws on this are really clear-cut. So how on
earth and why are Facebook and others being allowed to get around it?
CRISTINA ALESCI, CNN POLITICS & BUSINESS CORRESPONDENT: Well, it's the same Facebook explanation that we've heard elsewhere. You know, this is
our platform, we enable people to use it however they see fit and they're not using it according to the way that, you know, the company wants them to
use it.
So, now, we're at a point where, you know, people are doing inappropriate things on Facebook again. This is not something new. When it comes to the
specific accusations of letting companies discriminate, especially when it comes to housing and housing advertisements, Facebook has been faced with
this allegation in the past.
Journalists have been looking into it for quite some time. And just last week, Facebook settled a lawsuit, making similar allegations and actually
promised that it would take the ads when it comes to housing on to a different platform that would limit the way the advertisers could basically
target people.
[15:40:00] And that, they hoped, would be a solution. And Facebook saying that this hud -- that these hud charges now from the U.S. government took
them completely by surprise.
QUEST: Does it not raise the issue of what is reasonable for the Facebooks of this world to actually be responsible for. Bear with me while I think
about it, look, there are -- there's litigation over obviously the most serious things such as the live-streaming of the murders in New Zealand.
But then you've got the question of the European regulations on memes and what they can do about that. Now, you've got the question of what's on the
--concerning housing. Where does it end -- where's Facebook entitled to say enough?
ALESCI: Well, Richard, the problem has been that Facebook in the past has been a little slow to react to these, you know, allegations and these
criticisms. And now we've moved beyond the point of whether or not -- of asking the question of whether or not Facebook can police its platform, and
we've moved to a question about whether or not Facebook wants to police its platform.
That's the issue. Everyone from lawmakers to the U.S. government right now is now questioning Facebook's willingness to make sure that it polices its
platform and that's again, a little bit of a holdover because it had been slow in previous incidents to really respond to the criticism against it.
Part of the problem is that, it's in --
QUEST: Right --
ALESCI: Facebook's DNA not to limit this kind of activity, to let sort of the platform and the people behind the platform dictate what happens on it.
So you're asking the company to go against its DNA, essentially.
QUEST: Cristina, good to see you, we'll talk more about it when I am back in New York. Thank you --
ALESCI: Absolutely.
QUEST: There's a surge pricing and then there's Lyft's IPO range. The ride-hailing app is now eyeing $70 to $72 a share as it prepares to debut
on Nasdaq tomorrow, on Friday. Opened its market value at around $23 billion. And enormous, some considering that the company is yet to turn a
profit. Zain Asher looks at Lyft.
(BEGIN VIDEOTAPE)
ZAIN ASHER, CNN CORRESPONDENT (voice-over): The first supersized IPO to hit the road this year needs no introduction for anyone in need of a lift.
(on camera): Lyft is bumbling out with Uber to be the world's number one ride-hailing app. Uber might be firmly in the lead for now. But fasten
your seat belts, in the race to go public, Lyft is the first to hit the streets.
(voice-over): The Lyft story began more than ten years ago when co- founders Logan Green and John Zimmer connected on Facebook. Both had the same dream, to create an alternative to car ownership. The first Lyfts
began rolling in 2012.
The service now operates in hundreds of American cities and in Canada, and growth has been rapid. Lyft revenues more than doubled in 2018 to more
than $2 billion. Making a profit, however, will be a heavy lift. The firm just racked up a yearly loss of almost $1 billion.
(on camera): Some IPO analysts are cautious, they say the company has offered little detail about how it records revenue and that makes Lyft's
path to profitability difficult to forecast.
RETT WALLACE, CHIEF EXECUTIVE OFFICER, TRITON RESEARCH: This is obviously a very well known company. So from a supply and demand perspective, this
IPO will no doubt be a short-term success. But the things that you would want to know, they do the analysis to know what long-term risk they're
taking, isn't possible with the numbers provided by the company.
ASHER (voice-over): Lyft, which is hoping to raise more than $2 billion in its IPO, prides itself as a big picture company. It's branching out with
scooters and bikes and hopes to eventually add driverless cars. It's also tried to capitalize on anti-Uber sentiment after Uber's many PR disasters
over the years.
(on camera): Its choice of where it's listing its IPO is also quite telling as well. My Lyft is definitely off right here at the Nasdaq in
Times Square where it's going to be listing under the ticker symbol L-Y-F- T, no surprises there. Uber on the other hand is expected to list downtown at the New York Stock Exchange.
Car-sharing rivals may soon become cross-town rivals as well. Zain Asher, CNN, New York.
(END VIDEOTAPE)
QUEST: Lyft is leading a stampede of unicorns, headed to the public market. Companies have recently being wary of listing, now they're rushing
in. They want to beat out any economic slowdown. Off they go. There are the unicorns, making sure, yes, they're unicorns. If Lyft performs well on
Friday, these tech unicorns, all with at least a billion-dollar valuation, will be sure to spark an even larger pack of IPOs to follow slack, Airbnb,
Lyft, Uber.
[15:45:00] Uber is the biggie. To help us guide through this IPO-mania, Paul La Monica is in New York. Of all of those, which is the most
interesting?
PAUL LA MONICA, CNN BUSINESS REPORTER: Well, I'm going to say Lyft because we're going to find out in one day how it does, you know, and that will
set the tone, I think for all of those other unicorns in that little stampede that you had there.
I mean, investors are very interested in seeing what Uber does when it goes public too. But first things first, Lyft is unprofitable, but revenues are
soaring as Zain pointed out. Will that be enough to justify the valuation north of $20 billion?
QUEST: Are these companies on paths to profitability? I always remember that horrible phrase from the dot-com boom of the 1990s. I mean, do these
companies have the potential to be profitable?
LA MONICA: Yes, I think that it is a case-by-case basis, but some of those companies are closer than others to profitability. I think with Lyft and
Uber, the big concerns are that these two are obviously going to be going toe-to-toe, fighting each other for not just the attention of Wall Street
investors, but also for customers, for people that need to go from place "A" to place "B". And that is something that I think could potentially
hurt profitability chances --
QUEST: Well --
LA MONICA: For both companies.
QUEST: Right, Paul, finally, you know, the battle between the NYSE, the N- Y-S-E and the Nasdaq to get them, Lyft has gone to the Nasdaq. Would you expect Uber to go to the big board?
LA MONICA: Yes, as Zain pointed out, there are indications that Uber is considering a New York Stock Exchange listing which will be, you know, a
feather in the cap of the NYSE which, of course, is still getting a lot of companies, not just new startups but Levi Strauss; a very old company, 166
years old, in fact, the jeans giant just listed downtown, you know, last week and did quite well.
So I think the NYSE still is very competitive form with IPOs and not just for these tech startups.
QUEST: And finally, GDP numbers which do demand our attention, what are they telling us about the strength of the U.S. economy at the moment?
LA MONICA: Yes, I think it's telling us, Richard, what we kind of already knew from a lot of companies that have reported earnings and also from some
other, you know, data points like retail sales and you know, inflation numbers. The economy didn't do as well in the fourth quarter as originally
thought.
You know, they had to revive the GDP numbers down, where to about 2.2 percent. That's not awful, but it does raise some concerns about an
economy that is slowing. And there are, you know, legitimate worries that the first quarter is not going to be very good either. But the first
quarter hasn't been good for the past couple of years, so people will probably be quick to write it off as maybe just a seasonal slump and that
things could maybe rebound later in the year.
QUEST: Good to see you, Paul --
LA MONICA: Thank you.
QUEST: Talk to you tomorrow. News just in, Northern Ireland's DUP, the Democratic Unionist Party has confirmed that it will vote against the
Withdrawal Agreement on Friday. The thought that maybe they might abstain.
Well, the party props up Theresa May's minority government. This could be the fatal blow to the motion. Some hard-line Brexiteers from Theresa May's
party are now also expected to vote against it. The interesting thing here, of course, is that they made it clear last night they would vote
against it. So it's interesting that the Prime Minister still decided to bring it forward tomorrow on Friday. We'll talk more about it.
A moment ago, we were talking about Lyft, a company taking off. Next, we'll be talking about one that's calling it quit, Wow Air pulled the plug
on Thursday, they left thousands of passengers stranded.
[15:50:00] (COMMERCIAL BREAK)
QUEST: Wow is an appropriate word as thousands of passengers are stranded following Wow Air's collapse on Thursday. Wow is asking passengers to book
rescue flights on other airlines like EasyJet or Norwegian who are rising to the occasion and handing out discounts, but seats are limited.
Wow Air is known -- was known for its cheap flights, getting you from North America to Europe over the Iceland hub. I got a look at it myself in 2017.
(BEGIN VIDEOTAPE)
QUEST (voice-over): Wow calls itself the happy airline and like the classic budget carrier model, you pay for everything onboard.
(on camera): Very good. Wow does something untraditional for a low cost. It's flying Trans-Atlantic.
(END VIDEOTAPE)
QUEST: Well, it was a formula that couldn't save Wow, the latest budget airline to go under. In the last few years, these have all gone bust.
Primera, another long haul airline that shut down in October. You've got Monarch, you've got Flybmi.com. You've got a range there of them that have
gone.
We want you to join in the conversation, get out your phones and to to cnn.com-slash-join, and we're asking who should pay to get stranded
passengers home? The passengers, the government or should the airlines be made to take out insurance in advance? Simon Calder is the travel editor at
"The Independent". We'll talk about -- you know, I'll get your result on that as well. Firstly, Wow has been on the ropes for some time.
SIMON CALDER, SENIOR TRAVEL EDITOR, THE INDEPENDENT: Right, it's extraordinary. We saw back in November, talks with Iceland Air, which
would have made sense because you've got a country with a small population- base, about 300,000 people.
And two, airlines try to compete head-to-head going to both Europe and to North America. It didn't really make any sense, so, of course, it would
have made really good business sense for Iceland Air to take over Wow Air to merge the two together, maybe to slim down so there's not so much
capacity, and it would have kind of survived at least many of the 1,000- plus --
QUEST: Right --
CALDER: Jobs which were lost today.
QUEST: Right, so the merger didn't happen because they looked at the books. Only two weeks ago, there was talk about Iceland Air and Wow trying
to do some sort of sharing arrangement. That didn't happen. But shouldn't the regulators step in at some point?
CALDER: Well, that is exactly what the many thousands of passengers who were stranded on the wrong side of The Atlantic, tonight, already the tens
or hundreds of thousands of people with a vast bookings on Wow Air are demanding to know.
This airline was selling tickets up to one hour before it collapsed. But I'm afraid, that is just the way of the airline world. It might have been
that some others were waiting with a big bag of cash to rescue Wow, and they were perfectly entitled to carry on selling tickets until the very
last moment.
It sounds harsh, but, my goodness me, Richard, you've been covering the business world, you know that sometimes companies just have to go out of
business.
QUEST: And that Willie Walsh, Willie Walsh, listen to what he has to say.
(BEGIN VIDEO CLIP)
WILLIE WALSH, CHIEF EXECUTIVE OFFICER, INTERNATIONAL AIRLINES GROUP: The airline model in Europe is broken. You know, it cannot be sustained with
loss-making airlines continuing to try and expand at the rate they are because they can't justify the investments that would be required.
[15:55:00] QUEST: Would lead to what, Norwegian?
WALSH: No, just Norwegian, but Norwegian is a perfect example of --
QUEST: Alitalia --
WALSH: Yes, you know, there are lots of these airlines that have ambition. But do you think this year is the year that they go?
WALSH: I think this year is the year they won't go, but I think this year is the year that they have to change.
(END VIDEO CLIP)
CALDER: Oh, most definitely, yes, of course, we got huge amounts of capacity out there, over capacity, and it is always going to be the smaller
players who are going to suffer. That list of airlines that you put out there doesn't often, all small players up against giants of European --
QUEST: But none of the giants are likely to go.
CALDER: Well, no, I mean, I have a very simple metric. I just look at the last financial year, how much profit --
QUEST: Right --
CALDER: Or loss did they make per passenger.
QUEST: Cnn.com-slash-join, your view -- who should pay to get the stranded travelers home, the passengers, the governments, only 8 percent, airlines?
Who -- what would you do?
CALDER: Oh, I would just say it's working absolutely fine. I've been covering collapses of airlines since poor old Freddie Laker in 1982, and
every time other airlines step in, yes, it's expensive, it's inconvenient, it's distressing for passengers, but compared with the number of people who
are flying around the world and compared with the impact of a --
QUEST: Right --
CALDER: Flat fare levy, it's simply not worth against the other, they're letting the markets take its course and airlines helping out.
QUEST: Good to see you, you're too young to remember Freddie Laker --
(LAUGHTER)
You're way too young because if you remember it well, I'm not far behind. We'll take a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. Well, are we about to engage in an act of utter and total futility? The Prime Minister bringing back her deal.
When seemingly, on the arithmetic, once the DUP said it's voting against it and some of her own MPs won't support it, does it stand any chance of
getting through.
The odds are against it, but that might just be the moment when of course luck strikes and the PM gets through. Otherwise, I'll be blunt if she
doesn't get this deal through tomorrow, then I have absolutely no idea what happens next. And anybody who tells you they do is simply misleading you
or lying. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in London, whatever you're up to in the hours ahead, I hope it's
profitable.
(BELL RINGING)
END
