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Quest Means Business
Stocks Rally as Bond Yields Settle; Johnson & Johnson Vaccine Ready for Mass Rollout after Winning U.S. Approval; BioNTech CEO Says Vaccine is Very Robust against Variants; E.U. Commission To Digitize COVID-19 Passport; Virgin Airlines: Skies Clearing For International Air Travel; Hopes For Economic Rebound In Israel As Vaccination Program Outpaces The World; How Politics Ruined Australia's Wine Exports To China. Aired 3-4p ET.
Aired March 01, 2021 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN BUSINESS ANCHOR: And now to the closing bell but we'll have a ding right at the start of today's program because the Dow is
showing its strongest day since November.
Look, up two and a third points, 712 on the Dow, whatever, 31 and a half thousand. Everything is up across the board, we will show you in a moment
exactly who is showing the best case, it is Boeing by the way, but I will give you more details in a moment.
That's the markets, and this is the day so far. No more business as usual. The new head of the W.T.O. promises action on vaccine, an exclusive
interview with Ngozi Okonjo-Iweala coming up.
Europe is making legal plans on vaccine passports as soon as this month; the CEO of Virgin Atlantic on this program.
And Israel's economy already opening up. I'll speak to their head, the Governor, of the Israeli Central Bank. Decision makers left and right.
Live from New York, on Monday, it is the 1st of March. I am Richard Quest, and of course, I mean business.
Good evening. It seems the global economy has reached a crossroads with coronavirus. As new vaccines are being improved and approved quickly, so
new travel measures are being proposed and the markets are surging.
I showed you a moment ago, look, the Dow Jones is up 714 points. All elements in the Dow in the Dow 30 are up strongly and the triple stack,
too, is showing good gains across the Dow, the NASDAQ, and the S&P 500. We'll get to them in a second.
Tonight, you're going to hear from top leaders and policy makers on what may lie ahead.
On the first day of her new job, the head of the W.T.O., the World Trade Organization, Ngozi Okonjo-Iweala has told me vaccine distribution is her
And as Europe moves closer toward vaccine passports, the Chief Executive of Virgin Atlantic, he says the scheme shouldn't discriminate against those
And we will look at what life might look like after COVID. The world leader in vaccinations, the Bank of Israel Governor joins me live tonight.
So, to begin, the new head of the World Trade Organization has told me vaccines must be priority in order to open up global trade.
I spoke exclusively to Ngozi Okonjo-Iweala. It was her first day as Director General of the W.T.O. She says vaccines must be priority and not
only that, they must be more equitable and affordable for the developing world.
Without them trade has absolutely plummeted during the pandemic. Look at the numbers for last year particularly for Q2.
The W.T.O. is suggesting the situation is improving, but its Chief tells me, it is time for concrete results.
NGOZI OKONJO-IWEALA, DIRECTOR GENERAL, WORLD TRADE ORGANIZATION: Early deliverables are really, deliverables come through the membership because
they are the ones doing the negotiations.
So the issue is: how can we support the membership so that we can get to some concrete results? And so the first thing I'm focused on is COVID.
You know, we need to be part of the solution to this problem and there, I'm talking about equitable and affordable access to therapeutics, diagnostics,
So making sure that supply chains are not disrupted, this is trade. You know, we still have large numbers of countries that have export
restrictions on medical supplies and equipment, so talking to the membership about strengthening the monitoring of those restrictions and
encouraging members to drop them, so that we can have a freer flow of goods, this will contribute mightily. So that is point one.
Particularly, vaccines. You know, what else can we also do to encourage working with manufacturers on the flow of vaccines?
Nowadays, the debate is going on, developing countries are asking for a waiver on the intellectual property. That is going on -- whilst that is
going on, we are focused on how can we help manufacturers ease the supply constraint?
QUEST: You come of course from GAVI, the Vaccine Alliance. So you're extremely -- I always say the right person in the right job at the right
time and you bring to this job a wealth of in-depth knowledge about vaccines particularly for the developing world -- developing economies.
What would you need the priority there to be?
OKONJO-IWEALA: Well, Richard, there is a strong supply -- as we are talking, there are dozens of countries that have not vaccinated a single
person. Maybe only 50 to 60 in the world are vaccinating. The other countries are not.
So the top priority is how to get vaccines to those countries that don't have them quickly and affordably. That is the top focus.
So to get there, there is a huge supply constraint in the whole world.
OKONJO-IWEALA: Normally the world manufactures 3.5 billion doses of vaccines a year. Now, we are looking for 10 billion, so three times the
number and that is why supply is so scarce.
So, my focus is, whilst we are discussing the issue of a waiver of TRIPS -- intellectual property for developing countries can we work with
manufacturers to find many more sites within emerging markets and developing countries that have the capacity to manufacture more vaccines.
QUEST: You made a point of the fact that you are a trade -- you are knowledgeable about trade, but your real advantage comes from connections
in political knows and the ability to do deals. How do you translate that now you've got the job?
OKONJO-IWEALA: Well, today in my speech to the membership, I said the same thing, it can't be business as usual because if we continue to do business
as usual, then the world will pass us by.
What I mean by that is, look, we have to produce results. The W.T.O is about people and if we can't come to agreement on key issues then we are
leaving people behind. That's what I mean.
So coming, Richard, with a fresh pair of eyes, the first thing is, COVID, how can we help with the vaccines? That result will be contributing to the
Fishery subsidies, which is about Sustainable Development Goal 14, it is about making sure our oceans and our fisheries are sustainable. That
negotiation has been going on for 20 years.
And I said today, enough. Twenty years is enough. We must support Ambassador Santiago so we will get results this year.
QUEST: Do you aspire to a large, multilateral round during your tenure, or are those days gone and it's going to be nibbling away -- I mean, things
like trade facilitation agreements, which are very important, but not exactly terribly exciting, or would you like to have the Ngozi round?
OKONJO-IWEALA: I don't think we'll have an Ngozi round. I would love after the fishery subsidies, which is a multilateral agreement, I'd like to see
another one because that is the best with everyone around the table.
So, yes, I do aspire that one of the ongoing work programs here, the new things like the digital economy, e-commerce, there are some discussions
with more than a hundred countries going on, on that.
On micro, medium and small enterprises and how to bring them into value chains, you know, so we can lift up people who are marginalized. Those
kinds of discussions -- women -- women in trade. How did we bring women more into the value chain?
I would love if we could take those to multilateral, but let's finish the fishery subsidies first and then see how we work on those.
So, I feel, Richard --
QUEST: You realized you've sort of set up a target of fisheries here, haven't you?
OKONJO-IWEALA: Absolutely, and I'm not afraid of it. I mean, we have to do it. I mean, if we don't succeed, then it will be very hard, but it is
there. We have to deliver it.
So, I am not afraid to set it up. Neither am I -- I am not afraid to set up getting a result on COVID or even the dispute settlement system, which we
need to rebuild.
You know, what I would like is to see us have a work program, I am not saying we can solve it. We obviously need to talk to the Americans, to
understand the issues that they want. We need to talk to the membership, including least developed countries who have problems about how do we
So we can get a work program. I'm not afraid to set targets. Because if you don't have these targets you're not going to get those deliverables I'm
QUEST: I can hear the foundations of the W.T.O. quaking as you get it. Thank you very much. I wish you well.
And we will be speaking hopefully regularly and we will make sure that you don't become one of the bureaucrats.
OKONJO-IWEALA: No. I can't. Because I can't survive without results. That's the bottom line. I'm not that kind of person.
If I'm not achieving things with the staff, with the members, I don't feel happy. So let's put it that way. So I'm not going to sit around.
QUEST: I don't think anybody has any doubt about that. Ngozi talking to me earlier, the new head of the W.T.O. on her first day.
QUEST: Now, the markets are rallying. Bond yields have settled a bit, and as the new vaccine hits, it is injecting fresh hopes for the speedy return
to normal. Look at the triple stack, it is very strong, three percent on the NASDAQ, give or take, two and a quarter on all -- two and a half on the
S&P, all three indices.
And investors jittery last week after the jump in U.S. Treasury yields which is bad for stocks, but it was more nuanced and complex than that.
Positive economic data over the last few hours, America's manufacturing sector has beat expectations as did construction in January.
Gillian is with me. Gillian Tett, Chair of the Editorial Board and U.S. editor-at-large of "The Financial Times" joins me via Skype here in New
So what message is the market sending as we've got vaccinations and more vaccines and the market is on a tear, what is the message?
GILLIAN TETT, CHAIR OF EDITORIAL BOARD AND U.S. EDITOR-AT-LARGE, "THE FINANCIAL TIMES": Well, on one hand, it is good news, but on the other
hand, it is really about whether investors are more scared about inflation fears or more scared about pandemic concerns and how that is being balanced
against a hoped recovery.
What everyone is looking for is what might be called the Goldilocks recovery. A recovery that's just firm enough to really get the global
system back on its -- get its mojo back, really functioning and well and yet not so strong that we're going to unleash a type of inflation that
could force Central Banks to slam on the brakes in a few months' time and derail this recovery.
And there are three reasons why I think it is kind of hard to get this Goldilocks recovery. We are in completely in unprecedented times. It is
very uneven as you just heard about from the W.T.O. trading system, and also, this recovery is happening on the back of some practical shift like a
dash to digitization and so it is very hard for policymakers and investors to read the signals and work out what's happening, hence this wild
QUEST: This idea of bond yields going up and of course -- I mean, it was the speed with which it happened last week. But this wasn't quite a taper
tantrum because the Fed hasn't even given an indication they would even think about raising rates.
So this is the bond market doing its own dirty work.
TETT: Well, the big buzz word right now is bond vigilantes. Are they back? Are we seeing investors essentially trying to signal the policymakers they
are going to have to be cautious about the inflation outlook?
Or another way to put it is like saying, we don't believe in the Goldilocks recovery that everyone is desperately looking forward to.
Jay Powell has tried to calm the markets down by signaling very strongly that he is not about to push for tightening of policy, but the problem is,
he is in a kind of Catch-22 situation right now because if he signals too strongly that he is going to keep monetary policy super loose, that is
actually more likely to create concern about the longer term and the danger of overheating.
So trying to keep the Goldilocks scenario going without being too hot or too cold is going to be fantastically difficult in the coming months.
QUEST: I do wonder, though, Gillian, the recovery is taking hold as more vaccinations are done around the world, and there is no question about
haves and have-nots between different countries.
In this scenario, can you see reason other than normal corrections when a market has been over bought, can you see reasons for market falls?
TETT: Well, I think there are two or three reasons. One would be, if all of the recovery is already priced in and is not going to be as strong as
investors are hoping. Another concern though is if the Federal Reserve is going to have to suddenly slam on the brakes unexpectedly and remember,
investors have been led by the Fed to believe that monetary policy is going to be loose not just now, but in several years and have put really
increasingly one way bets on their outcome.
If anything causes that to change, the reaction could be quite nasty. And we remember, in the 2013 taper tantrum, when Ben Bernanke dropped a very
mild hint that policy might change, he hadn't been promising before that he would keep monetary policy loose indefinitely and yet they still got very
strong market reaction.
So if we see anything like that coming from the Fed again, the reaction could be strong.
But the other key point is to get back to what we just heard talking about W.T.O. which is supply chains. What is happening right now in the chip
sector is indication of the kind of bottlenecks that can arrive not just when demand suddenly returns, but also when you have geopolitical tensions
and it could be a precursor to other types of bottlenecks developing in the coming months and that again could make investors quite nervous.
QUEST: Gillian, good to have you. I appreciate it. Thank you. Gillian Tett of "The Financial Times."
TETT: Thank you, Richard.
QUEST: That's the market. Johnson & Johnson coronavirus vaccines are being loaded up for distribution only two days after winning approval for
emergency use in the United States. We will have those.
You'll see those vaccines as they head out the door, and the CEO of BioNTech speaks exclusively to CNN about that vaccine and how it performs
against their new variants, in a moment.
QUEST: Truckloads of Johnson & Johnson's coronavirus vaccine are arriving at distribution facilities across the United States ready for a massive
rollout expected to begin on Tuesday morning.
The J&J vaccine is the third to win U.S. approval and could be the one that is the game changer, requiring only one dose and can it can be refrigerated
at normal refrigerator temperatures.
J&J's CEO has told us that millions of doses are ready.
(BEGIN VIDEO CLIP)
ALEX GORSKY, CEO AND CHAIRMAN, JOHNSON & JOHNSON: Consider that 12 months ago, we were literally getting genetic sequencing information in an e-mail
and today, this vaccine has been dosed in more than 50,000 patients. The fact that we're literally real-time getting ready to move 3.9 million doses
here in the United States and ramping up to 20.
(END VIDEO CLIP)
QUEST: Pete Muntean is at the global air hub of UPS in Louisville, Kentucky. Now, this is a lot easier in some ways for the shippers because
they don't have complex temperatures, but there is still is the issue of getting it there in the last mile.
PETE MUNTEAN, CNN CORRESPONDENT: It is still a pretty complicated dance, Richard. You know, this is the UPS facility known as World Port, its mega
hub here in Louisville, Kentucky.
The first truck carrying the Johnson & Johnson vaccine arrived here not that long ago. The first stop in getting millions of doses of this vaccine
MUNTEAN (voice over): An army of people and planes are standing by to deliver the new Johnson & Johnson vaccine. It is the newest logistical
challenge here at UPS World Port in Louisville.
Truckfuls of the vaccine will make their first stop here after leaving a McKesson warehouse a short drive away in Shepherdsville.
BRANDON FORTSON, UPS DAYSIDE RAMP DIVISION MANAGER: There's a lot of work goes behind the scenes.
MUNTEAN (voice over): Brandon Fortson helps run the key facility where the vaccine shipments are first sorted.
MUNTEAN (voice over): Workers here unload containers by hand, then machines scan and sort each package bound for delivery the next day or the
Three point nine million doses are in this first Johnson & Johnson wave. On Sunday, the majority were made available for state and local governments to
The rest available to pharmacies as well as federally qualified and community vaccine centers.
FORTSON: Everybody knows what is going through this facility and everybody understands the importance of it and what it means to everybody.
MUNTEAN (on camera): This is what UPS calls the primary matrix, the center of 150 miles of conveyor belt long enough to go from D.C. to Philadelphia.
This is where vaccine shipments are sorted automatically on their way to deliveries coast to coast.
MUNTEAN (voice over): The longest part of the journey is by air. Vaccines are loaded into UPS aircraft, each individual box broadcasts its position
in real time to the UPS Healthcare Command Center.
A critical feature when last month's massive snowstorm slowed vaccine deliveries and even shut down World Port for a day for the first time ever.
ALYSE ADKINS, UPS SDF ASSISTANT CHIEF PILOT: Every package is important.
MUNTEAN (voice over): Captain Alyse Adkins pilots some of the nearly 400 flights that operate from World Port each day.
UPS says it has already delivered tens of millions of Pfizer and Moderna doses. The 11,000 people who work here say they are ready for more.
ADKINS: Obviously, the vaccine we are all thinking about it as just a shot in the arm, right, but it's not. It should be a shot of hope for everybody.
MUNTEAN (voice over): Pete Muntean, CNN, Louisville, Kentucky.
MUNTEAN (on camera): Now, Richard, more trucks carrying the vaccine will arrive throughout the day. The race is on, the deliveries begin as soon as
tomorrow -- Richard.
QUEST: Pete Muntean who is in Louisville, thank you, sir.
Now, stay with vaccines, as the COVID-19 vaccine enters, as the new one does, the J&J enters fray are concerns remaining about how the existing
vaccines will cope with the various new variants.
The BioNTech CEO tells CNN his company's vaccine which was developed with Pfizer is in his words, very robust against the variants.
He was talking to Fred Pleitgen who is in berlin.
This is the big concern, isn't it, that the efficacy of the vaccine is dramatically reduced particularly by the South African variant. So what
have we learned?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: You are absolutely right, Richard. The South African variant is also the one where
the BioNTech CEO said that upon analyzing how their vaccine works against it, that was the one where the efficacy was actually a little bit lower.
They say in total, they looked at 25 of these variants and tested their vaccine against it, and they said by and large, as you've said it was very,
very robust, but especially with the South African ones they are going to look at that further and might even reformulate the vaccine. Here is what
he had to say.
(BEGIN VIDEO CLIP)
UGUR SAHIN, CEO, BIONTECH: The first concern is for example the concern related to the variants like the U.K. variant, which is spreading faster.
This is, of course, a relevant concern.
But there is also a second concern that the variants could escape the immune response: the second concern is a relative concern. I'm not too much
concerned about that.
We believe particularly the mRNA vaccines, BNT162b2 is designed in a way which is very robust against variants.
PLEITGEN: To what extent do you think a single dose strategy, vaccinating everyone as fast as possible is something that could be possible or at
least stretching out the amount of time between the first and second dose? Is that something that you think is feasible and how feasible do you think
SAHIN: So first of all, it is important that indeed, the vaccination campaigns go as fast as possible. And the first strategy for that would be
not to stall the second dose, but really, really ensure that everyone -- that we don't have vaccines in the freezer, but vaccines really are being
PLEITGEN: At what point do you think that it could be available to the entire population?
SAHIN: We have already vaccinated children at the age of 12 to 15 years. We are going to start clinical trials in children ages 5 to 11 years and in
children younger than give years, all of that in 2021.
So this is important, also to support school openings.
(END VIDEO CLIP)
PLEITGEN: So this is one other thing that we certainly took from that interview today, Richard, is that these vaccines like for instance the
BioNTech vaccine, but certainly other vaccines as well, they are constantly being evaluated, they are constantly being worked on to try and optimize
the effects that they have and for instance, to make them work against all of these variants.
But one of the other things that is also, of course, very important and we of course just saw Pete Muntean there in that distribution center is also
the logistics of this vaccine.
It was one of the most difficult having to be stored at minus 70 degrees Celsius, now is it freezer temperatures, but already working at another
formula for that vaccine to possibly store it over a longer period of time in refrigerator temperatures of course would make it even easier to get it
to people, to store it in more rural areas -- Richard.
QUEST: Fred, before I let you go, just briefly, is there evidence that the European -- particularly Germany where you are -- that the vaccine roll out
has now found its feet?
PLEITGEN: So far, I think it's getting a little better. But you ask a very, very tough question here for the Germans because it is still going
I actually just saw the numbers for Sunday, where about 80,000 people got their first dose of vaccine. Now, you'll know for instance from comparing
that from the numbers in the U.K. that is still not very much.
And there is certainly a wide array of issues with all of that. First of all, the Germans like most other European countries simply don't have
enough vaccine to go around especially the BioNTech vaccine is something that really wasn't ordered in large enough quantities fast enough to get it
to all the people who need it.
Here in Germany, we have that special case of the AstraZeneca vaccine where the German Commission for Vaccinations originally only approved that
vaccine for people up to the age of 65, but not people over that and that seems to have hurt some of the trust in that vaccine.
There are some people who seem to be shunning that vaccine of the doses of AstraZeneca that had been ordered by Germany, very few so far have actually
been administered to people and right now, it is going a little bit faster, but not the pace at which the German government would be happy with --
QUEST: Fred Pleitgen who is in Berlin this evening. Thank you, sir.
The summer holiday season is around the corner, nearly upon us. The E.U. is proposing a digital vaccine passport that would revive the region's
devastated travel industry. We'll talk about it past the break.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment.
The chief executive of Virgin Atlantic will join us and weigh in on the E.U.'s plan to roll out vaccine passports by the summer.
And Israel's world leading vaccination program is giving us a glimpse of life after COVID. The Central Bank governor on reopening the economy, the
questions of inflation, interest rates and, of course, the currency.
All of that is ahead, after the news headlines. This is CNN. And on this network the news always comes first.
The U.S. state department says it's urging Saudi Arabia to disband an elite force linked to the murder of the journalist, Jamal Khashoggi. It also says
future arms sales will be evaluated on U.S. interests and values.
A U.S. report released last week found the Saudi crown prince Mohammed bin Salman approved Khashoggi's killing.
The former French president Nicolas Sarkozy is looking at the likely end of his political career after being sentenced Monday for corruption and
A judge suspended two of the three-year prison sentence and said he could serve the rest of it monitored by an electronic bracelet.
New York's attorney general says she has received authorization to launch an independent investigation into claims of sexual harassment against the
governor, Andrew Cuomo. He's already acknowledged some of his workplace comments may have been "insensitive," in his words or too personal.
He denies inappropriately touching or propositioning anyone.
Britain's Prince Philip has been moved to a new hospital specializing in cardiac care. It comes two weeks after he was first admitted with an
Buckingham Palace says doctors will be observing a preexisting heart condition. The 99-year-old Duke of Edinburgh has now spent 14 days in
hospital, his longest stay to date.
The European Commission's hoping to jump-start travel in time for the busy summer holiday season. Later this month it is to propose the creation of a
E.U-wide COVID-19 digital passport.
The Commission president, Ursula von der Leyen, says the goal is to provide proof that a person's been vaccinated. Test results for those not yet
vaccinated will also be included and information on COVID-19 recovery.
The proposals lifted the shares of European airlines and stocks are rising on broad vaccine optimism.
If you look at the major ones, IAG up nearly seven percent and Ryanair -- which has had a good run anyway. But the two biggest there, IAG, and
Ryanair's the largest single carrier, and Lufthansa at three and-a-half percent.
Shai Weiss is the CEO of Virgin Atlantic and joins me now.
Good to see you, sir. Appreciate it, as always.
And the idea of a vaccination passport, I know you can see its advantages but you're worried about the down flow.
SHAI WEISS, CEO, VIRGIN ATLANTIC: Yes. Well, good to be back on the program. Indeed, we call it, first of all, digital health pass because
there are many things that it needs to capture.
In the short run, of course, vaccinations but also pre-departure testing information and all of that needs to be put in an application in order to
speed up even the border checks. So over all, we support it if the governments support it and if it indeed opens up travel at scale safely in
QUEST: Have you seen the surge in bookings that we've seen -- in the United Kingdom, for example, when the prime minister basically said they're
hoping a date in May to open up for international travel, data dependent. But did you see a mass increase in bookings?
WEISS: Yes, we did. And of course, our prime minister did something I think very thoughtful in the sense that on February the 22nd he announced
basically the flight path out of lockdown or the road path for, really, for the rest of the economy.
And he set a date which is May the 17th, which should be the resumption of international travel and gave great assurance that travel at scale can
resume safely in the summer.
And, indeed, we have seen a surge in booking since February the 22nd. We've seen certain locations up over a 100 percent vis-a-vis the same week
Destinations such as the Caribbean, New York, and other locations have seen a surge in bookings based on the increased confidence that there is a way
for travel to resume.
QUEST: In terms of the Atlantic, of course, we have to get rid of the ban on both sides. And I don't see at the moment movement in that direction.
WEISS: Well, we haven't seen it yet. And, indeed, on March the 16th it'll be a year since it was free travel from the U.K. into the United States.
But I think setting both dates and data -- so a combination of a clear framework provides not only assurances and certainty for the airline and
aviation industry but also to the wider economy and, of course, to consumers and businesses.
So I presume that the U.S., once they've handled the actual -- the vaccinations rollout which is going quite well, also in the U.S. and a
reduction, significant reduction, in the number of cases, and of course, people in hospitals -- thankfully -- there should be a bilateral discussion
between the U.K. which is at the forefront here, and the U.S. about opening up the borders.
And indeed, there's a G-7 summit coming up in June and I think the developed nations have to take the leadership position that they have now
earned, given the fact that the pandemic --
QUEST: How --
WEISS: -- is in greater control. And of course, that there is a vaccine program rolling out very rapidly.
QUEST: Shai, you're a lot more -- for good reason, a lot more optimistic and there's a sort of a bit of a pep in your tone which is understandable.
Since I'm guessing you're now -- you're moving from shutting the network, furloughing the staff, this, that and the other -- you're now actually
planning the reopening of the airline, I imagine. How quickly can you reopen?
WEISS: Yes. So indeed, when we spoke in September and in November of last year, the world was a different place, Virgin Atlantic was in a different
And given the fantastic rollout of the vaccine program especially here in the U.K. but in the UAE, Israel, the United States and, hopefully, in the
European Union very soon, we have greater confidence.
Airlines do need a bit of time to ramp up safely. Safety is really the concern here.
We need to retrain our pilots and cabin crew to ensure that they're up to speed with everything that has happened here over the past year. So we tend
to say that ramp up takes about two to three months, and we are indeed already taking some early measures to ensure that we'll be ready.
And let's not forget our cargo operation has been going on throughout this period and we are flying passengers on the back of a very successful cargo
operation. So it's not that we have stopped flying, we're just gearing up for increased capacity to serve businesses and individuals, families, over
the summer period.
QUEST: So this is how long is a piece of string question. IAG says 2023 for when they would hope to meet those numbers.
What you're now -- because particularly in the sort of popular routes that you have, the pent up demand could be very strong.
What's your guess now for when you're back to where you were?
WEISS: And, Richard, indeed, this is an interesting question but actually my concerns right now are opening up the skies safely in 2021.
I believe that we will -- if we do that safely and based on the frameworks that have been published here in the U.K. and then beyond -- and we're
already seeing bookings for the second half of this year and indeed the summer.
So 2021 is a concern. How to do this properly and safely and how to ensure that people know that there is flexibility and assurances that they can fly
with Virgin and others. And in 2022, we'll resume more normal operations.
So if that were to be the case, whether it's 2023 or 2024 for the full- scale resumption of flying to the level of 2019, I think it's significant, but less significant the next six to 12 months ahead of us.
QUEST: We'll talk more as we go through that. Thank you, sir. I appreciate you taking time tonight to update us.
WEISS: Thank you, Richard.
QUEST: As we continue on QUEST MEANS BUSINESS. So we've taken you through the various things of the vaccine.
We've looked at the countries -- those areas of the economy involved. And now a surge in bookings for domestic travel in Israel could herald a
recovery in the global tourism market.
The trend is being flagged by Bookings Holdings which owns Bookings.com and Priceline. Israel has led the world in terms of vaccinations, and momentum
is gaining for a vaccine passport for travel safely.
The CEO of Bookings Holdings told Julia Chatterley why that's good news all around.
(BEGIN VIDEO CLIP)
GLENN FOGEL, CEO & PRESIDENT, BOOKINGS HOLDINGS: Israel's leading the world in those vaccines and we absolutely saw --
-- as those vaccines have gone into people's arms and then when a government lets go some of the restrictions on travel, we see an immediate
uptick in travel. And we're seeing that in other parts of the world, too. So very good news.
(END VIDEO CLIP)
QUEST: That good news we'll discuss in just a moment. The governor of the Bank of Israel is with us.
That country, of course, is anticipating a steep economic rebound. It is the number one country worldwide in terms of vaccinations.
But the governor has issues of inflation and currencies to worry about.
After the break.
QUEST: Israel says it will start vaccinating people who have already recovered from COVID-19 with a single dose. The most eligible Israelis have
already received at least one dose of the vaccine.
The country, as you can see here, handily outpacing -- if you look at the number of doses per 100 people in the country just about everybody else
except maybe UAE and the United Kingdom and the United States, funnily enough.
A new study says Israel's efforts have already reduced severe disease at a national level. It's experienced a noticeable drop in new cases this year
and officials there have lifted the most severe lockdown measures.
Hopes for a steep economic rebound.
Governor Amir Yaron is the governor of the Bank of Israel who joins me, the governor joins me from Tel Aviv.
Good to see you, sir, thank you. I appreciate it.
Now, if things are going so well, when do you think you will need to take action to forestall what could be an inflationary recovery? That's a posh
way of saying how long before you'll have to start looking at interest rates?
AMIR YARON, GOVERNOR BANK OF ISRAEL: Well, first of all, thank you, Richard, for having me. And good afternoon.
Israel is leading the vaccination -- in vaccination rate, and we anticipate that by the middle of the second quarter we'll see the economy going back
to full swing barring any new type of mutations that are resistant to the vaccine.
Obviously, we are expecting in 2021 if we are on a rapid -- what we call the rapid vaccination which it seems like we are on such a track -- to grow
at 6.3 percent next year and also 5.8 percent in the following year. So this is a very fast rate.
Having said that, if you look at inflation expectation in Israel. Right now we have a negative inflation of minus 0.4 and inflation expectation of a
year out, they are just above the target rate of one percent.
Israel has a convenient mandate of one to three percent and therefore, we can live for quite a while in what's called low for longer, we'll be
We have two critical issues in Israel -- are the unemployment rate which is quite wide and it will take us a while to get back to the low level of
unemployment pre-crisis. And, of course, to see as many businesses come back to work as much as we can without losing them on the way.
YARON: So we are going to be patient in terms of our rates. And even longer rates when you look at capital markets, they are somewhere around
1.5 to 1.7 percent. Very close to the middle of our target range.
QUEST: So as you navigate this area, do you expect to maintain your bond purchases, essentially your QE, do you intend to maintain it at the current
And related to that, of course, is whether you intend -- your support for the currency -- which has rocketed and I wonder, your commitment to support
that currency rather than let it rise.
YARON: So, Richard, the Bank of Israel has done unprecedented steps in this unprecedented and extraordinary event of the corona crisis.
We first made sure two critical markets came back to work, the government bond market and the FX markets. We've done extensive accommodative
measures, one of them you mentioned is our QE program.
We started with a 50 billion shekels program which is about three times what was done in 2008 and we now have expected it to 85 billion. We believe
that should take us well into the late parts of the summer.
And at that point, we hope to see the economy almost in full swings and at that time we will do -- and we'll reassess our situation.
Regarding the FX. The Israeli shekel initially appreciated for a lot -- for good reasons. We had a lot of investors looking at the economy, seeing the
economy being shielded from the corona crisis through our high-tech sector.
YARON: We had large surpluses, and yet there were a lot of transitory issues like a big drop in imports. And the Bank of Israel decided to
provide certainty --
YARON: -- in a time where uncertainty is very big. And we purchased things (ph). We announced on a $30 billion purchase and are committed to doing
that even if the shekel now has depreciated.
QUEST: So I guess the -- everybody's looking at Israel. It's sort of large enough to be a real economy and small enough to be almost an incubator for
what might be -- what might happen next for the rest of us as we see what Israel has done.
I'm guessing from your tone, it's one of -- I mean, central bankers are never unduly optimistic, that's not sort of the rigueur. But I'm guessing
you are optimistic.
YARON: I think right now we are closer to what we call the rapid pace of vaccination. And if it all works through we should be on a rapid growth
and, as you said, a very steep growth coming out of this.
Having said that, one has to be cautious -- and maybe the lesson out of Israel is that it's not a straight arrow process when you do the
vaccination. You need to get to a very large portion and you need to be persistent until you see morbidity rates coming down.
You have to plan with a campaign, you have to make sure you incentivize all ages and all forms in the society to vaccinate.
And the third component is you need to put in place ahead of time, as early as you can, thinking about how to utilize the green passport, how to open
up safely and yet gradually various aspects of the markets where infection rates might be higher.
And yet utilize the green passports to open up segments such as hotels, such as theaters, etcetera, in a way that allow these sectors to come back
to the economy and yet to do it in a safe way.
And in that sense, Israel is a great laboratory for doing this.
QUEST: Governor, I appreciate your time. Just while we were talking, I see Royal Caribbean, the cruise line, has announced it's going to offer all
vaccinated cruises from Israel.
So the laboratory is up and running.
Governor, I appreciate your time, sir, tonight. And for staying up late and joining us from Israel. Thank you.
Now QUEST MEANS BUSINESS.
2020 was not a good year for Australian wine makers. First, they lost the Chinese customers now comes the economic hangover.
QUEST: Chinese investments in Australia dropped 6 percent last year. The Australian National University says it's now the lowest level in six years.
It's the fall out between Australia and its biggest trading partner. And one area, one sector, one industry, winemakers have been very poorly --
Angus Watson reports.
ANGUS WATSON, CNN BUSINESS JOURNALIST: Taste the difference. 2015 Australia and China signed a free trade agreement and Aussie winemakers are
among the big winners.
The removal of tariffs supercharged a growing industry. Then following a single statement, it dried up.
SCOTT WILSON, AUSTRALIAN PRIME MINISTER: It's important that we learn the lessons of how this pandemic started so we can move on any future pandemic
wherever it starts.
WATSON: That call for an inquiry into the origins of COVID-19 left a bad taste in the mouths of the Chinese government and soon after China hit
Australian export products with blocks and huge tariffs.
The number two diplomat in Australia, Wan Xining, said China felt like Caesar betrayed by his friend Brutus.
Temporary duties of up to 212 percent were slapped on Australian wine and a probe opened into alleged Australian dumping of cheap product on the
BRUCE TYRRELL, TYRRELL'S WINES: Margins are margins. So it could be quadrupling of our price which pretty much puts us out of the marketplace.
WATSON: In December 2019, Australia exported over $134 million worth of wine to China; in December 2020 just 3 million.
Bruce Tyrrell says the wines from his family vineyard in the Hunter Valley north of Sydney are particularly pleasing to the Chinese palate, fruity and
Just like his government in Canberra, Tyrrell believes the rising taste for Australian wine in China defies Beijing's accusation that Australia has
been dumping its cheap stuff.
TYRRELL: And if we were dumping, why did the average price of our exports to China go up by 30 percent in four years? That just makes the dumping
accusation complete rubbish. Someone's dreamed it up.
WATSON: Before the tariff hike on Australian product, only France was shipping more wine to China.
Emmanuel Bruya (ph), a small part of that. A Frenchman with a love for Australian wine. He says Chinese customers love it too, so much so he only
sells Australian at his shop in Hong Kong.
But he's had to put his business shipping wine from Melbourne to Shanghai on ice.
EMMANUEL BRUYA (phonetic): There was a lot of demand for this wine. But not anymore. Just hoping that it won't last forever and it's just for a
short period of time and things will get better.
WATSON: Until then, other companies eye out the gap in the Chinese market.
TYRRELL: With Australia kicked out of China, I would think the Europeans would be in there like a rat up a rafter.
WATSON: And in the immediate term, Australian winemakers will look to recoup some of their lost sales close to home, as bars and restaurants here
reopen after COVID-19 lockdowns.
WATSON (Voice Over): Angus Watson in Sydney, Australia.
QUEST: And we'll take a "Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment". On the program you heard from Ngozi Iweala on her first day as head of the WTO, the World Trade Organization.
Now she says there's no "Ngozi round," in other words no big doha (ph) or any round like that that is going to aim to put together some massive,
But she has got the bit between the teeth and made it quite clear that she is results led. She made it absolutely clear that she will only be judged
by that which she gets done, and she already has some key things she wants to get done.
Also on tonight's program, Shai Weiss of Virgin Atlantic getting ready, sounding more cheerful, and a Central Bank governor in Israel. And why
wouldn't he be more cheerful? The Israeli economy is supposedly going to roar ahead as the ubiquitous vaccination reaches (ph) herd immunity.
Put all this together and you have a market that is also extremely cheerful.
Now for weeks on this program you and I have been questioning whether or not the market has got ahead of itself, whether things are really as rosy
as investors would like us to believe. And they're probably not, probably nothing like it.
But I think when you take the totality of what we've heard tonight on QUEST MEANS BUSINESS ,I think then you have to say things are looking
economically better and the market rally has marginally more justification.
Which is not an excuse for complacency and certainly not an excuse for forgetting to wear one of these.
And that, as they say is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Just in case I forget.
Whatever you're up to in the hours ahead and wherever you may be, I hope it's profitable.
I'll see you tomorrow.