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Quest Means Business

New York State Reports 1,218 Coronavirus Deaths; Drugmaker Says Human Vaccine Trials To Begin By September; Italy Cases Now Top 100K, Death Toll At Least 11,591; Companies Adapting To Extended Coronavirus Disruptions; Israel Travel Industry Devastated By Pandemic. Aired 3-4p ET

Aired March 30, 2020 - 15:00   ET

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

[15:00:24]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: A relatively stable day for stocks after the losses at the end of last week. Today, the

market has bounced back into some impressive performance.

The economic fallout continues, and this is the reason why. Dr. Tony Fauci tells us easing restrictions too soon could damage the economy.

The U.K. government is calling on airlines to help them. The chief executive of IAG is on this program and he is going to tell us what he

needs from the government.

And oil prices dip beneath $20.00 a barrel.

We are live from New York on March the 20th. I'm Richard Quest, and even from my living room, of course, I mean business.

Good evening. Tonight, I have joined the rest of you and yet I'm living in the living room. The program comes tonight, but the news is just as grim as

always, as we continue to look at the ever ending -- never ending seemingly effects of coronavirus on the economy and a White House top doctor is

telling us that ending social distancing too soon, would be disastrous for hurting the economy.

It would prolong what we already know will be a bad situation. A dire warning caused by an about face by Donald Trump, which ditched the plan to

open up by Easter.

Now, the President is keeping the economy closed until May, and Dr. Anthony Fauci says the U.S. could see 100,000 deaths from coronavirus.

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: From a public health standpoint, we felt strongly that it would

have been the wrong decision to pull back. I mean, we are scientists, physicians, public health officials. We're not economists. We are sensitive

to the idea that the economy could suffer.

But it was patently obvious looking at the data that at the end of the day, if we try to push back prematurely, not only would we lose lives, but it

probably would even hurt the economy.

So you would lose on double accounts, so to us, there was no question what the right choice was.

(END VIDEO CLIP)

QUEST: Jim Acosta, our Chief White House correspondent is with me. Jim, it was the speed with which the President did a volte-face, which was so

remarkable. There's never a wrong time to do the right thing. But this was quite remarkable the way he changed tack.

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: It certainly was, Richard. I mean, remember a week ago, the President was talking about

reopening the country by Easter and was sending out a letter to the nation's governors talking about this county by county system where they

would assess counties according to their risk -- low risk to high risk for the coronavirus.

And then over the weekend, the President was confronted with reality. We understand from talking to our sources and Dr. Anthony Fauci has said as

much publicly that Dr. Fauci and Dr. Deborah Birx, the other top doctor on the Coronavirus Taskforce essentially leaned across the President's desk in

the Oval Office and showed him these dire projections that there could be 100,000 to 200,000 deaths in the United States even if people practice --

continue to practice social distancing.

That appears to have snapped the President back into reality and really led to this conclusion, this action that he has taken.

I will tell you, Richard, talking to our sources over here, these doctors on this Coronavirus Taskforce, they are not ruling out another extension of

these guidelines beyond April 30th if things continue to not go well.

And if you just look at the numbers right now, they are just heading in a very, very awful direction. Now, the President acknowledged as much during

this press conference over at the White House yesterday in the Rose Garden where he was talking about the dire situation at Elmhurst Hospital in his

old childhood community of Queens.

And so it does seem, Richard that a lot of this has sunk in.

QUEST: Jim, there is -- the President is now almost taking credit for having prevented 2.2 million deaths. Listening last night, I can see the

argument developing, look by my actions, I save this number of lives, when most people would have said he should never have raised the idea of opening

an Easter in the first place.

[15:05:10]

QUEST: The status quo is what it should always have been.

ACOSTA: That's right. And I do think, Richard, that that Easter, you know, timeline that he was talking about. I mean, that was sort of the end of a

long string of rosy predictions and rosy projections that just weren't in touch with reality coming from the President.

You'll remember, over the last couple of months, he was talking about how this virus would go away. It would be like a miracle.

He was telling the country just about a month ago that his administration was prepared for this pandemic.

All of these things turned out not to be true, and so you know, was the President relying too much on conservative media instead of his own medical

experts at the beginning of this crisis, as opposed to, you know, just going with the expertise that he has inside the administration?

You know, I do think at the end of the day, that'll be one of the conclusions drawn about this entire pandemic and the Trump administration's

response to it.

And so, yes, you did hear the President say yesterday, well, if we keep it to 100,000 to 200,000 deaths in the United States, that he'll consider that

to be a good job.

That is going to be a hard argument for the President to make across the country, you know, across the political spectrum moving forward -- Richard.

QUEST: Jim Acosta, who is at the White House for us tonight. Now, the virus is causing economic paralysis. We're aware of just how deep and how

dark that's becoming. The disruption is coming into focus.

Take a look as we go around the world, and you'll see what I'm talking about. Going west to east, the United States, the restrictions are now in

place until April the 30th. But the President is hoping for a recovery by June the first.

In the United Kingdom, the N.H.S., there is the possibility of a six-month lockdown, and if things get going too soon, there is the risk a second wave

over the summer.

Hong Kong is returning to isolation policies most worryingly because there is a crop of new cases. And the situation in Hong Kong is arguably getting

worse.

Meanwhile, in China, it's starting to open up, lifting restrictions on Wuhan on April the 8th. But there again, that is still being done very

slowly.

Now, it begs the question, why is Wall Street still rising so sharply? You saw last week the best gains since 1933, and a 20 percent move that took

the market out of a bear market technically, barely before it could have been in.

This begs the question to Mark Zandi, the Chief Economist at Moody's Analytics, who joins me from Westchester in Pennsylvania.

First of all, everybody is asking, the President deciding to extend the social guidelines -- social distancing guidelines -- until the end of

April. The effect that has on the economy, I'm guessing that in your economic projections, you already had those guidelines and distancing in

probably almost to summer.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Oh, yes, for sure. I mean, I think investors today may be cheered by the fact that the President is

being more cautious and not trying to reopen things because if he did, that's a pretty big gamble, likely lose the gamble and make more people

sick and hurt the economy even more.

So I think investors are all in on let's just make sure that we're beyond this thing before we really start to reopen, and in our projections for the

economy, we are anticipating that things really start to get going until probably July or August this year, and it could be longer obviously,

depending on the trajectory of the virus.

QUEST: Because we also don't really understand what will happen once things get going again. Yes, you can restart the U.S. and the global

economy, but different countries are at different points.

For example, Africa is far behind in terms of where it is, even some parts of Southeast Asia. So it's very hard to do a global projection over the

economic situation for the rest of the year, surely.

ZANDI: Yes, great point. And you know, even when the virus passes, and we feel comfortable enough to start restarting and reopening businesses, I

don't think people are going to feel comfortable about traveling. I don't think business people are going to be comfortable doing trading, investing,

expanding aggressively until there's some type of medical solution, until there's a vaccine or a medical treatment that we feel is going to work.

So you know, I think even after we're past the shock of all of this and all the near term economic damage, it's going to be a slog for a while until we

nail this thing down medically.

QUEST: Goldman Sachs says the market hasn't hit bottom, it might be bouncing along, but they say until there is the certainty, the risk of

falls remains high.

[15:10:02]

QUEST: There are those investors who thought that that week of March the 18th was the bottom. It always -- it's an impossible task and a fool's

errand to try and tack to the bottom. But where do you think we are?

ZANDI: I don't know, this feels like a process to me. We have got a ways to go. I mean, I am reminded of the financial crisis. There were, you know,

times during the crisis. I mean, that was a period of the year and a half to two years.

There were periods all along where we felt, oh, maybe the coast is clear, and things are going to be fine and okay. And of course, we went right back

into the soup. And this kind of sort of feels like that to me.

I mean, it's hard to make, you know, an intelligent investment here, given all of the uncertainty. So the one thing we can count on, Richard, though,

is a lot of volatility, a lot of days like this where we're up, and a lot of days when we see a lot of red on our screen.

So I think that's the one thing we can't predict with a high degree of certainty.

QUEST: Mark, let's talk either later in the week or early next week again, sir, so we can get your updated projections on views on where we are now.

Thank you for joining us today.

Now, Goldman Sachs is warning that this pandemic is a game changer for the oil industry. What do they mean? Look at the prices and it becomes clear.

Oil prices have now dipped below -- or had -- $20.00 a barrel; now, hovering around $20.08. It is the lowest levels since 2002, and the reason

is demand has collapsed and there is a supply surge because of the Russia oil price war.

Now, the drastic impact is on us production. Forty rigs stopped drilling last week, which is the biggest -- I mean, look at that graph, it tells its

own story.

Donald Trump and Vladimir Putin have talked oil in a phone call. John Defterios is joining me from Abu Dhabi.

Now, John, if there is this dramatic drop in the oil rig count in the United States that's taking U.S. shale out of production. But it's of no

comfort to the other producers because supply is destroyed -- demand is destroyed.

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: I don't -- well, I don't agree with that, Richard, because right now it's a fight over a

market share even though it's an extremely painful one.

I was thinking about this. The last time I talked about $10.00 oil was in the late 1980s when we had that price war then. This is much more painful,

but we are talking about $10.00 oil again. It's priced that way in Canada.

We hear that people in the Permian Basin in Texas are dumping their crude as well, and you talked about the demand destruction. There's some very

wide range as being bandied about here from 12 million barrels a day being destroyed by Bank of America. Goldman Sachs is saying 26 million barrels.

Richard, we're looking at three to five times more demand destruction than we saw in 2008, when prices were at $140.00 a barrel and it went down to

$30.00. It is by all measures extraordinary.

So what does this boil down to? It's the big three that we're talking about here. The Crown Prince, Mohammed bin Salman of Saudi Arabia, Vladimir Putin

of Russia, Donald Trump, of course, the U.S. President.

The latter two had a phone call today. They did talk about oil, no specifics. But what was Saudi's contribution to this debate right now? They

said they're going to boost their exports at 10.6 million barrels a day.

I just checked this in the last 10 minutes. That's three million barrels above where they were, Richard, just two years ago. So again, to the point,

they're going for market share. It is a painful one. But right now, the Saudis are not blinking despite the pressure from Mike Pompeo, U.S.

senators, all saying Saudi needs to bend.

QUEST: John, Dubai Expo, we've heard some news on that. The Olympics are postponing, but Dubai Expo was later in the year, but now, they've also

decided to postpone. Do we know further?

DEFTERIOS: We do, Richard. Postponement is the right term right now. It is not being cancelled for sure. There was a vote from the steering committee

and a recommendation going to the General Assembly of the Bureau of International Exhibitions.

They're supposed to have a General Assembly taking place in June. I'm told here, that may happen by the end of April. They have to approve that vote

of the 170 members by two thirds majority.

The Minister of International Cooperation who is also the Director General of Dubai Expo 2020 said that the world will need the expo -- the World Expo

more than ever after COVID-19. I don't disagree with that.

But Dubai, as you know, Richard, because you've heard these things. They have big expectations, a legacy of $33 billion coming out of this, nearly a

million jobs. That legacy is going to have to wait because it is likely to happen starting in October 2021 after the Summer Games in Japan.

[15:15:04]

QUEST: John Defterios in Abu Dhabi. Thank you, sir. When we continue, the U.K. Government is using British Airlines of all sorts to bring back its

citizens.

After the break, we'll talk to the head of IAG, owners of Iberia and British Airways, amongst others. Willie Walsh on the situation in the

airline industry after the break.

(COMMERCIAL BREAK)

QUEST: Welcome back. The British government has announced that it is teaming up with British airlines to bring back U.K. citizens who are

stranded overseas. A variety of flights have already taken place.

It comes at a time that EasyJet, one of the largest low cost carriers in Europe announces it is grounding its fleet once these repatriation flights

are completed.

The CEO of IAG which owns British Airways and Iberia, amongst other airlines is Willie Walsh. And he joins me on the line now.

Willie, good to talk to you even in such difficult circumstances. First of all, the repatriation flights that British Airways is taking part in, how

far is that along?

WILLIE WALSH, CEO, IAG (via phone): Well, we've already done some, Richard. We have operated a number of flights back from Lima taking U.K.

nationals back into the U.K.

We also operated one for the Irish government into Dublin and that carried both Irish and other E.U. citizens. So this has been ongoing and will

continue obviously as people try to get back home.

QUEST: Once those flights are completed or suspended, what next? I mean how long are you going to keep the various airlines flying in even a minor

capacity?

Lufthansa has already grounded Swiss -- I am sorry, Austrian and Brussels, so are you looking to virtually ground one of your airlines, too?

WALSH: Well, as you know, Richard, flying by European Airlines has significantly reduced. Euro Control which manages air traffic control

services over Europe is producing daily data and for the 29th, for Sunday, traffic through European airspace was down 88 percent versus last year.

Now, we haven't been down by that much, but we are declining, like all other airlines. So our hope is to keep flying as much as we can. We had

indicated about two weeks ago, maybe just over two weeks ago that we were planning to operate about 25 percent of our flights during April and May.

But I did say that I thought that I was likely to reduce, Richard, further. So we're keeping everything under review. But it is becoming increasingly

difficult as governments around the world impose additional restrictions on flights being operated.

[15:20:33]

QUEST: Do you imagine that you will shut? You will ground any of the carriers?

WALSH: I think it's likely that that would happen. We've already stopped all flying out of London City Airport. We're effectively stopping flying

out of Gatwick Airport. So for British Airways, they're continuing to operate out of Heathrow.

But just to give you an idea, today, we only had 47 flights depart from Heathrow, whereas normally we'd have over 300 flights a day.

So we have seen a very significant reduction, and that really does reflect the fact that more and more people have been able to repatriate.

So we're seeing the numbers of people looking to get home either back into the U.K. or from the U.K. to their country has been declining as people

have been able to get home.

QUEST: Now, in terms of government assistance, each government will give assistance to its own airline. So that means for IAG, you'll be looking at

getting help from the British government for BA, the Spanish government for Iberia and so forth, right the way through to Aer Lingus and the Irish

government.

Where are your negotiations on getting help? Where are they at the moment?

WALSH: Well, the only thing we've been talking to governments about is the schemes that various governments have set up to assist our employees.

And right across Europe, we're seeing broadly similar schemes where governments are indicating that they will pay a percentage of the salary of

the employees who have been furloughed as a result of this.

We have not had any discussions nor are we intending to have any discussions with governments other than on those issues at the moment.

And you may have seen today, we announced that we have extended our revolving credit facility for British Airways that just under $1.4 billion,

so we sit still on just over 7.2 billion euros of cash; and with other facilities, we've got about 9.2 billion euros of cash.

So our cash is relatively strong at the moment, but obviously as flying starts reducing further, we will see that decline.

QUEST: Are you expecting -- not yourself -- but are you expecting airlines to go out of business in Europe?

WALSH: Yes, unfortunately, I think it's inevitable. You're coming into this. We were in a relatively strong position, balance sheets was strong,

cash position was strong, but there are a lot of weaker airlines who were struggling prior to this significant downturn.

And I struggle to see how they will be able to thrive even with some government assistance. I think there were airlines that were chronically

unprofitable before this happened, and I can't see them being able to manage their way through it.

QUEST: Really, obviously, nobody has seen anything like this ever before. In terms of how you think -- what you think needs to be the next stage for

aviation bearing in mind IATA's awful forecast for losses over the year. What needs to happen next for the airline industry in Europe?

WALSH: Well, we're planning on an effective shut down for a couple of months with a very gradual buildup of demand. But really what the industry

needs is for the skies to open again.

I think there is some underlying demand. Certainly, the demands was stronger than we were able to fulfill because the number of countries who

were closing their airspace when we could see underlying demand there.

But the industry will only survive if we can get back moving again, and clearly, the sooner we do that, the better. But I think that's unlikely to

happen for at least a couple of months, if not a few months.

So April, May, June, I think the situation is going to be similar to what we're seeing today, which would be very little flying. And we would hope to

see a build up from June through the summer period, and that will enable the strong airlines to get back into position.

If it extends beyond that. I think more and more airlines will fail.

QUEST: All right, Willie Walsh, good to see you, sir. Good to talk to you. Thank you. I appreciate it in these difficult times. It is appreciated.

WALSH: Very well. Thanks, Richard.

[15:25:09]

QUEST: Sweden is taking a very different approach than most European countries, at least for the time being. If you look at what they're doing,

in terms of the coronavirus pandemic, it is out of sorts compared to other countries.

So for example, Sweden is basically staying open for business. It's the largest European country that has really not put in place any limit --

fewer limits, one should say -- voluntary rather than enforced or mandated and non-essential businesses are still open.

Children under 16 year old are still going to school and a teacher in Stockholm says authorities think sending students home would cause more

problems.

(BEGIN VIDEO CLIP)

MIKAEL KALMENSTAM, SCHOOL PRINCIPAL: I guess the Swedish government see other possibilities. The school is a very important function in the

society, so if a kid goes to school, this kid has to go home and can't get repercussions all over the society.

(END VIDEO CLIP)

QUEST: Carl Bildt is the former Prime Minister of Sweden. He is the co- chair of the European Council on Foreign Relations. He joins me now. Why does Sweden think it is preferable to go this route when every other

country, sir, is shutting down with lockdowns?

CARL BILDT, FORMER PRIME MINISTER OF SWEDEN: I think every country is doing it according to the national circumstances to some extent, and I

think there might be a difference in Sweden in the sense that we might have -- which is some sort of genetic disposition to social distancing in our

society anyhow.

We are not that dense society in terms of social contacts under normal circumstances. And when I go around as I was briefly biking around the

streets of Stockholm today and it was fairly deserted, not by any sort of legal measures or police, but just by people staying at home.

But in terms of the legalities, yes, there are some differences between Sweden and other countries.

QUEST: Some suggest that Sweden is attempting the herd immunity concept where if everybody's got it, then there's an inbuilt immunity within the

society.

The British tried that until they saw the forecast for the number of deaths. Is that Sweden's policy?

BILDT: I haven't heard that phrase used by any of the official spokesmen. But in the beginning of this particular development, there was no question

that sort of U.K. and Sweden were -- it sounded the same.

Then there has been a shift in the U.K. We'll see what happens in Sweden. We are in an earlier stage as all of the Nordic countries, in an earlier

stage of the development so far, and as I said, we don't in a normal -- we don't run around in pubs and things like that.

So there are some differences in social -- social patterns in our respective societies between perhaps the north and south in different

countries that should be taken into account as well.

QUEST: You've been critical of the way China handled the issuance of information about this. And indeed, the suggestion that if China had been

more upfront sooner, then a lot of his pandemic would never have happened.

BILDT: Yes, I mean, it has to be said, and it has been said, in retrospect, but it was fairly obvious that in the beginning, when they saw

something happening that was something new that was fairly obvious that they suppressed that information for some time.

And if we look at the studies that have now been done, although they're preliminary, but that they showed that had they locked down Wuhan earlier,

it would have had a very significant effect and we don't know what kind of situation we would have been in then, but that's not where we are today.

QUEST: But isn't that exactly the reason why Sweden should be taking stronger measures now because can't you see an argument that says, if we

had locked down Stockholm earlier, we might not be in the position we are or that you might be in in, say, five, six, seven, eight weeks from now?

BILDT: I know that you lock down cities in our societies the way you can do in a communist society. So I don't think that wouldn't work in London

either.

But what you see now, is that you have this social distancing setting in quite, obviously when you look at what's happening, and, well, the jury is

out on Sweden, the U.K., China and the only thing that we can see definitely so far is that perhaps the Taiwanese and South Korea have

managed to do somewhat better than we Europeans have so far.

[15:30:00]

RICHARD QUEST, CNN INTERNATIONAL HOST: Sir, thank you for joining us. I do appreciate it, much appreciate it.

BILDT: Thank you.

QUEST: As we continue, Italy's number of dead hits a devastating milestone, but there is potentially some encouraging news. The rate of people falling

ill and the rate of which people are dying appears to be slowing down. With at least the spread appears to be slowing. We'll talk about it after the

break.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. We'll be in Italy, when we'll be talking to the CEO of Pirelli

about running a major manufacturing industry at a time of crisis. And also, how easy is it to suddenly change manufacturing if you want to get involved

in ventilator production and the like. And today's voice of the crisis, an Israeli travel agent who has had to lay off most of his staff, but at the

same, time passengers and the travelers want their money back when the airlines are demanding that they take credit for future travel instead.

We'll talk all about that in just a moment. This is CNN. And on this network, the news always comes first.

New York State is reporting more than 1200 COVID-19 deaths, that's nearly half the U.S. total. Hospitals in New York City are overwhelmed and

desperately need supplies. A Navy ship has arrived in Manhattan at the port today. The U.S. Navy ship, hospital ship, will treat non-coronavirus cases.

Johnson & Johnson's to begin human trials of a vaccine by September. It could be available for emergency use early next year. Excuse me. J&J also

increasing production capacity, aims to make 1 billion doses.

[15:35:06]

The Israeli Prime Minister Benjamin Netanyahu was in self-quarantine after one of his aides tested positive for the virus. The spokesman said Mr.

Netanyahu himself was tested negative, he will remain in quarantine as a precaution.

No country has suffered more coronavirus deaths at the moment than Italy, where the -- where the total is way beyond any other country, including of

course, China. The death toll is now more than 11,000. And put that into perspective, China is 3,000 -- three and a half thousand. More than 100,000

people have been infected. Apparently, the rate of new infections is down and the number, thank God, people recovering is up. I'm joined now by the

CEO of the Italian tire maker Pirelli, Marco Tronchetti Provera. He is in Switzerland, and he joins me now. Sir, let's just get to an overview before

we get details on what you understand the situation currently is in Italy.

MARCO TRONCHETTI PROVERA, CEO, PIRELLI: First of all, I am indeed -- I am in Milan, I'm not in Switzerland. Anyhow, the situation is getting a bit

better. That means that the curve is going to the right direction. And so, we expect to decrease in the next days and weeks. And there is a

perspective that by Easter, the situation would be much better.

QUEST: In terms of the company, and what calls have been made upon you and to do things other than, say, producing tears, obviously, but for example,

have you been asked to switch production to items to help in the fight against the virus?

PROVERA: It was difficult for us to change production. What we did is, thanks to our links, to China and other countries, we were able to provide

ventilators to Lombardia and mask and other products in order to help the - - all the institutions. And so, in our factory, we gave one of the factory the availability to put machine reduce mask. So I think everybody's helping

its design, that citizens are getting very positive.

QUEST: And relate it to that, because I think the general public and maybe (INAUDIBLE) you know, we hear so much about what's happening in the U.S.

with the manufacturer of production, and that I think we all sort of think that it's relatively easy for manufacturing companies to switch from one

project to another. So, I'd be grateful, sir, if you can just reinforce. It's not that easy, is it, particularly where sophisticated tooling and

equipment is involved?

PROVERA: Yes, in our case, we don't have machinery that can be transformed. We can buy machinery to produce, but there is something others are doing,

we are providing from outside what we can, and some producers like FCA is switching to ventilators production now. It is possible in the automotive

industry as G.M. is doing in U.S. So, there are some production that can be shift, some others that cannot be.

QUEST: In terms of running a large company in terms of social distancing, working from home yourself, as well. What are you discovering? How easy is

it, right? It's not easy, but how difficult is it, I should say, to run the company remotely when all your executive team are distributed?

PROVERA: I think that being remotely, we are sometimes closer than before because we see each other without tie or with a dog around kids. And I

think that there is a sort of solidarity that is helping a lot. I have to say that all around the world the people of Pirelli are reacting in an

amazing way. So, I think that social distances became smaller thanks to this unfortunate situation.

QUEST: Sir, it's good to talk to you. Keep well, and we'll talk again. I'm grateful to you, the CEO of Pirelli. Thank you, sir, for (INAUDIBLE) and my

apologies that we had you in Switzerland when, of course, you are in Milan.

(CROSSTALK)

QUEST: In a moment, governments are warning of extend disruptions to daily life. Some in the U.K., for example, the U.K. suggest it could be six

months before things start to get back to normal. And so businesses racing to adapt, Ernst & Young, E&Y finding out how in a moment.

[15:40:14]

(COMMERCIAL BREAK)

QUEST: Welcome back. It is QUEST MEANS BUSINESS. And today, we're all working from home in one shape --excuse me, or another. Now, the U.S. and

Britain indeed many countries are digging in for what promises to be a long haul and extended disruptions. Donald Trump, for example, has now extended

social distancing guidance to April the 30th, and it's affecting business.

An EY survey, three out of four executives believe the pandemic will have severe impact on global economy. Well, that's not -- I only wonder what the

other quarter believe it's going to happen. But 52 percent of businesses are reconfiguring operations. Steve Krouskos says the global vice chair at

EY, he joins me now. Steve, this aspect of reconfiguring business operations, what do you -- what are they doing? What is business doing?

STEVE KROUSKOS, GLOBAL VICE CHAIR, EY: Well, think about it, Richard, in three stages. I think businesses are looking at what they have to do now,

what comes next and what their steps are beyond, say beyond the crisis. And in terms of looking at what you have to do now, right?

They're certainly getting their hands around liquidity, but also taking a very hard look at where your supply chain exposures are, where your

workforce management challenges are, you know, are you able to work remotely as a company or not? And then what's your speed of automation? How

equip is your I.T. infrastructure to deal with the work from home and the unusual challenges that we're facing this crisis? So, those are some of the

near-term issues.

QUEST: But Steve, isn't that a bit -- I mean, we're in the crisis now, so I guess it's a question of, you know, it's a bit late to put in an entire

I.T. structure, since everybody else is working from home. If you haven't prepared, it's too late.

KROUSKOS: Well, then that's why again, think about, sort of, what to do now, right, is to get your hands around liquidity. Get your hands around,

whatever you need to do to impact or change your supply chain in the short term, and what can you do to triage your I.T. situation today, right?

[15:45:02]

But then, they start planning for what comes next because when this all, you know, when this starts to subside, whether it's sometime in May or

sometime in June, you know, then you're left with challenges of what your long term answer and reconfiguration is for all those elements of your

business.

QUEST: In terms of what you are discovering, and what you are now learning about, I mean, the vast size of EY and running that remotely, what's the

biggest challenge you're finding on that front?

KROUSKOS: You know, it's been really, really fascinating because we've had, as of last week, we had over 300,000 people working remotely with all of

our offices shot around the world. And frankly, it's going very, very well because of the investments we've made in I.T. infrastructure, the ability

of our people to connect virtually with people -- you know, would you prefer to be face-to-face at times and there are some things that might be

easier. across the table, so to speak, but actually the business is up and running very well, and meeting the demands of our clients.

So that, you know, the question, you know, then becomes is, how do you most effectively support those clients? And that's what we're working through.

Some of them have more urgent issues to deal with as part of the crisis, some of them thinking, you know, just around what's next and next stage of

evolution on certain transformation efforts.

QUEST: Steve, one way or another, great ingenuity that everybody's having to come up with, in terms of dealing with the crisis. Thank you, sir. I

appreciate you giving me time today. Now, Japan says it's keeping its climate targets unchanged from 2015. The critics said the plan isn't

aggressive enough. One possible -- one possible tool, I'm going to look down while I read this, I want to get the wording right. More geothermal

energy. CNN's John Defterios explains in this week's Global Energy Challenge.

(BEGIN VIDEOTAPE)

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Powered by volcanoes, the hot springs of Japan known as Onsen, are renowned for their therapeutic

properties. For centuries, the Japanese have frequented the thousands of Onsens scattered across the country, seeking relaxation. But now, Japan has

redoubling its efforts to tap into that same volcanic heat as an energy source.

On paper, it makes sense, Japan is home to the world's third largest geothermal reserves, after the United States and Indonesia, and

technological know-how in geothermal largely comes from the East Asian country. Still, adoption of this energy source has been slow to gather

steam domestically. Although, Tatsuya Wakeyama, senior research fellow at the Tokyo based Renewable Energy Institute, is trying to change that.

TATSUYA WAKEYAMA, SENIOR RESEARCH FELLOW, RENEWABLE ENERGY INSITUTE (trough interpreter): Because of the limited land and weather conditions, it's

difficult to achieve a significant supply of renewable energy with just one source. The advantage of geothermal is it can generate power at a constant

output, unlike solar and wind power, whose output fluctuates depending on the weather.

DEFTERIOS: Wakeyama says Japan sits on 20 gigawatts of potential geothermal energy, but is currently using just 500 megawatts, two percent of its

capacity. Experts say the benefits of geothermal power need to be weighed against considerable challenges.

WAKEYAMA (through interpreter): While we have this geothermal potential in Japan, it still takes about 10 years to start operation after starting

survey. The cost of construction is very high. And we also have the risk of failure to extract steam from the underground.

DEFTERIOS: Despite these barriers, Wakeyama is bullish on the energy source. But he also recognizes the powerful opposition he faces from

Japan's hot spring operators.

WAKEYAMA (through interpreter): Some Onsen owners have concerns that the development of geothermal energy could influence Onsen resources. For those

people having a concrete survey before the geothermal development and explaining how Onsens and geothermal power plants can coexist, is very

important.

DEFTERIOS: An effort he says that is worth making in the name of geothermal energy. John Defterios, CNN.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

[15:50:00]

QUEST: In search for voice of the crisis, the businesses large and small and how everyone is adapting or not as the case may be. Now my next guest

is a travel agent. And like all travel agency, their business just about disappear as nobody is traveling. But people want refunds and that has

caused great problems as well. Terry Kessel is the CEO of Diesenhaus Travel. He joins me via Skype from Tel Aviv.

So, one imagines like all travel agents, Terry, your business has disappeared and you have to decide and you've had difficult decisions as

what to do with employees.

TERRY KESSEL, CEO, DIESENHAUS TRAVEL: Correct. Good evening to you and your viewers. We are in a complete lockdown situation here. We have 99 percent

of our staff are on leave without pay. The only active members of the staff at the moment are dealing with refunds. That's the only thing that we

actually are dealing with. there's zero business, zero income, but a massive refund, Richard, massive refunds.

QUEST: So let's say -- because I'm of those people. I was supposed to be away on honeymoon at the moment, and that would have mean -- that would

have meant -- you know, I'm waiting back for money from two or three different airlines. Well, imagine you're my travel agent. I'm assuming you

haven't got the money to give them back.

KESSEL: Well, I have to just take you through the procedure for one single moment. When Richard Quest calls me and books a ticket. I booked that

ticket as an IATA agent on what is called a GDS, which is the Global Distribution System. The ticket is then issued and sent to Richard Quest

for his flight.

At the end of any given month, let's say on the -- on the 29th of February, IATA then get a report from me, which says how many tickets I've sold. And

according to our billing period, we have to pay that amount on the 18th of the following month of March. Now, what has happened in this particular

case --

QUEST: Right. But let me -- let me jump in here. Is it -- is it existential for your business the way things are at the moment, is it likely bearing in

mind what you've said that they IATA regulations, and so briefly, is it likely that you will not be able to recover one thing start up again?

KESSEL: Well, it is likely because IATA have got very uptake rules which they are not prepared to change whatsoever, because it's unbelievable that

we were told to pay IATA on the 18th of March $10 million, whereby we had refunds, which were agreed to by IATA for $5 million. But according to the

regulations, we would only receive that within 60 days.

So they were in fact asking for $10 million, and they refused any compromise to let us pay only the net amount. And one other thing, Richard

--

[15:55:16]

QUEST: Terry, we will watch this one. Well, we are out of time, but I promise you we will bring you back to talk more on this because as the

voice of the crises continues, we need to understand more of exactly what is happening. Terry, thank you for joining us. We will -- I promise you,

next week, we will hear more about that. Thank you.

Now, finally, look at the markets and how things are trading. For some explicable reason, things are actually have risen quite sharply. We are at

the best of today, a gain of three and a quarter percent, 700 points on the Dow. The Dow 30 -- if you look at them, it's up across the board. And --

but of course, not all gainers are gaining in quite the same sort of level, but as you can see, Boeing is the one that's down.

I'm Richard Quest in New York, whatever you're up to, in the hours ahead, stay safe.

(COMMERCIAL BREAK)

END