Return to Transcripts main page
Quest Means Business
President Biden Says U.S. Growth is Outpacing the World; Global Jobs Recovery will not Finish Before 2023; F.B.I. Director Blasts Russia for Letting Hackers Operate; E.U. Bans Belarus Planes From Its Airport and Airspace; German Archbishop Offers Resignation Over "Catastrophe"; Air Careers Add Capacity To get Britons Home From Portugal. Aired 3-4p ET
Aired June 04, 2021 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:05]
RICHARD QUEST, CNN BUSINESS HOST: We made it to Friday, another week. Last hour of trading and the Dow is on course for its strongest session of the
week. The numbers tell the full story. Opened in the green and stayed there and climbed. And we've continued to climb throughout the afternoon, a nice
gentle rise. We are up half a percent.
The numbers aren't huge, but the trend is most certainly there. Those are the markets, and the events of the day that we need to tell you about.
President Biden says the U.S. economy is growing faster than any other as the jobs recovery picks up the pace.
The F.B.I. Director is sounding the alarm on ransomware. He says there are parallels to 9/11.
In Nigeria, the country has banned Twitter after a tweet from President Buhari was deleted.
We are live in New York. It is Friday. It is the 4th of June, I'm Richard Quest. And, at the end of the week, as always, I mean business.
Good evening. We begin tonight with the United States getting back to work whilst other countries try to get their workforce out of neutral. Tonight,
we're looking at the global job crisis from all angles. We're talking to the policymakers and the workers themselves, because while the U.S. labor
market is recovering, there are warnings it may take years for the rest of the world to catch up.
Let's begin in the U.S. Joe Biden says the U.S. is creating jobs faster than any other major economy. It added 559,000 jobs in May, fewer than
expected, but you will recall twice as many from the previous month when there was consternation when that number came in so low.
Now, President Biden says the numbers are the envy of the world.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: No other major economy in the world is growing as fast as ours. No other major economy is gaining
jobs as quickly as ours and none of the success is of accident. It isn't luck.
(END VIDEO CLIP)
QUEST: No, Clare Sebastian, it isn't an accident, it isn't luck. It is $4 trillion worth of spending.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Right, Richard. And that might be causing some of the sort of disconnect that we're seeing, because while
this is a solid month of jobs after the disappointment that we saw back in April, it's a weird recovery, because while we're seeing this labor market
act as a tight labor market, we're hearing that employers are having trouble filling all their jobs.
We've got record job openings. We have got wages ticking up, a sure sign that employers are really trying to lure in workers and still having
trouble to do it. We've still got 7.6 million people who are not in work who were in February 2020, so there are still disconnects.
There's a skills gap. There might be people who don't want to go back to work. There's still a difficulty with childcare because in-person schooling
is not back yet, and the pandemic is not over.
The Labor Department today said that 2.5 million people were prevented from looking for work due to the pandemic. Now, that's less than the previous
month at 2.8 million, but it still shows that there are lingering scars here, and the stimulus is a concern to some as well. That it is
discouraging people from looking for work.
I think it is telling that about half of U.S. states, mainly red states are now going to end enhanced unemployment benefits early -- Richard.
QUEST: Okay, but, Clare, we know the U.S. economy can handle greater job growth, or at least job numbers. If we look at the 2019 level of jobs. So
we know that the economy is, if you like, capable of absorbing more. Why is it not?
SEBASTIAN: Well, Richard, I think it is a lot of those disconnects that I spoke about. It's like the supply/demand disconnects that we are seeing
sort of in the broader economy that's impacting inflation.
Here, we are seeing the same thing. There's a sort of big reassessment. The economy is not coming back the same as it was in February 2020. There are
areas that might need more jobs. There are areas that might need less jobs. And there are people who might not want to go back to the jobs that they
had before.
Add to that of course the childcare issues. Although, we did in fact see women coming back into the workforce this month, and you have the situation
in which we now find ourselves. But let's have a listen because Marty Walsh, the Labor Secretary addressed this today, Richard, in an interview
with Poppy Harlow.
(BEGIN VIDEO CLIP)
MARTY WALSH, U.S. LABOR SECRETARY: We're starting to see people traveling, people using more, going out more, doing things, and we're going to start
to see more and more people get back into the economy. We can't just flip a switch and get everyone back to work tomorrow.
Those 8.6 million jobs that allegedly are -- they are looking for people for, I mean, again, I think over the course of the next few months, we are
going to see those jobs filled.
(END VIDEO CLIP)
SEBASTIAN: And the next few months will be critical, Richard, because we have 90 days until those unemployment benefits expire. Over the course of
the summer, the Fed will be watching very closely. Jerome Powell said he wants to see a string of solid jobs reports before they can consider
tapering back those bond purchases. How long that piece of string is, we don't know, but certainly more than one month.
[15:05:16]
QUEST: Clare Sebastian with that part of the story, with the U.S. part of the story.
Now, globally speaking, the job market won't fully recover this year or next according to the ILO. That's the International Labour Organization,
part of the United Nations.
ILO is warning in a new study of growing inequality. Whilst the U.S. employers are struggling to tempt people back to work and help wanted is
ubiquitous, elsewhere, it's a case of help needed.
This is a sign outside a soup kitchen in Guatemala City. It reads, "Guatemala is hungry." The ILO says Latin America has been hit especially
hard because vaccines are in such short supply.
In Guatemala for example, the country has vaccinated just two percent of its people.
Guy Ryder is the ILO's Director General. Guy, it is always good to see you.
I have a request, Guy. Let not us not waste time in this interview discussing the fact that there is inequality at the moment, that it is
raging inequality, that it is getting worse, and it is probably the largest single problem.
Instead, let us begin, tell me what it is you want leaders to do, particularly the G-7 at the end of next week.
GUY RYDER, DIRECTOR GENERAL, INTERNATIONAL LABOUR ORGANIZATION: Well, I think the uneven recovery we're seeing is due to two, probably three
things. One as has already been mentioned, economic stimulus is really strong in some countries. You've been talking about the United States; not
in others, and it is obvious why.
Some countries have the fiscal space that they can exploit, and poorer, developing countries -- you mentioned Guatemala -- they just don't have it.
So we need to find a way of providing more resources for the developing world, the low-income world, and the G-7 has a role in this, as does the G-
20. It's about special drawing rights at the I.M.F., it's about debt relief. It is about greater international cooperation.
The second factor, it is vaccines, you've mentioned it already. Getting people vaccinated is almost a precondition of getting your economies going
again and getting jobs created. And we do have this terribly skewed distribution of vaccines. Health policy is economic policy as well.
So, these are two elements, I think that we have to get to grips with.
There is probably a third. If this pandemic has really accelerated the move towards digitalization in the world of work, countries which are well
connected, high levels of connectivity, they are in a much better place than others. So, we've got a job about connecting the world as well.
A bit of a longer-term prospect, but it matters.
QUEST: Right. Let's talk about that longer-term prospect. Listen to the Central Bankers past and present, what they told us on QUEST MEANS BUSINESS
this week on the rewiring of the global economy. Have a listen.
(BEGIN VIDEO CLIP)
NEEL KASHKARI, PRESIDENT, FEDERAL RESERVE OF MINNEAPOLIS: There was a lot of complacency in the 10 years following the great financial crisis when
millions of Americans were on the sidelines. So, it took 10 years to rebuild the labor market, and we cannot have another 10-year recovery.
MARK CARNEY, FORMER BANK OF ENGLAND GOVERNOR: If we just let this unfurl, roll out, it will be like every other Industrial Revolution which leads
initially to big spikes in inequality and large dislocation of jobs. We can't let that happen. That's why we have to be deliberate.
(END VIDEO CLIP)
QUEST: Okay, Mark Carney, we can't let that happen. So you're proposing things like broad-based economic growth, strengthen institutional
foundations. Will this be enough? At the end of the day, don't leaders just have to come up with more money?
RYDER: Well, indeed, they don't have -- listening to that sort of flashback to the financial crisis, one thing we don't have to do is repeat what we
got wrong in 2009-2010, putting the austerity brakes on. That was really what was at the heart, I think, of these slow and uncertain recovery.
So, yes, we do need to invest more, absolutely right, and think what we have to invest in. We have to invest in social protection. Anybody who
watched what really happened to people during the pandemic know we need that. And you know, we have to get people back into the job market who have
left the labor force.
Don't just look at the unemployment figures. Very large numbers of people simply stopped participating. Participation rates have gone down by 2.7
percentage points during this pandemic. That's massive. Four times more than in 2009.
So those women, those young people, they've gone and that's a problem. They are a long way away and getting them back into labor markets is going to be
a big challenge.
QUEST: Do you get the feeling there is a political will to do it? I don't mean political rhetoric, there is plenty of that. But do you get the
feeling that actually, leaders can and will do something about this?
RYDER: Richard, I do -- I'm actually optimistic about this. I think what is coming out of the Biden administration, what's coming out of Washington is
tremendously encouraging. It's different from what we heard around the financial crisis. I keep making that comparison.
[15:10:10]
RYDER: I think the question is whether Europe can also gather the similar sort of commonality of purpose, and if whether this can be put together at
the international level.
You now, the G-20 this year, Italy is in the lead of that. I think it's got more on its plate than it generally does in recent years, and what I worry
about is when the immediacy of the crisis, when we're all scared and people are scared, when that immediacy recedes, well, we tend to sort of flip back
to business as usual.
And we need something, as Mark Carney said in your clip, a bit more than business as usual right now.
QUEST: I fear it will be just that, but I hope otherwise. I trust and hope that you and the family are all well, Guy, and have come out of the
pandemic in good shape.
RYDER: Very well.
QUEST: That's the best news. Thank you, sir.
Now, as we move on tonight, we've got a mini rally in the tech sector that's underway at the moment. The NASDAQ is up more than one percent. Have
a look at the numbers. The NASDAQ is up more than one percent, one and a half percent as indeed is the Dow, up half a percent, the S&P 500.
A Goldilocks jobs number, Paul La Monica, that the market seems to like the look of.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think, Richard that, those jobs numbers this morning, you had nice gains particularly compared to what
we saw in April. But they were still a little bit below forecast as Clare pointed out, and that is reassuring investors that maybe the economy is
improving, but not at the type of level or case that's so rapid that it is going to stoke even more inflation fears.
And even though wages were up again for another strong showing, two months in a row, people are kind of dismissing that as due to some of the labor
shortages that we've had and sector kind of breakdown, a lot of people in lower-paying servicing jobs, they haven't been going back to work yet, they
are getting stimulus checks, so you don't necessarily have inflation as a persistent problem. It's cue, Jerome Powell, transitory.
QUEST: Okay. But, strip out inflation, strip out worries -- by the way, I saw that Norway, there is a view that Norway might be the first Central
Bank to start raising rates by the end of the summer, but strip out all of that, is there a fundamental feeling in the market that this market is
still priced and pressured to rise?
LA MONICA: I think that that is. There is an element of that. I mean, right now, the Fed has made it pretty clear that there is a slow process that it
is going to take place before they unwind a lot of this stimulus.
They are going to talk about tapering before they taper. Then they'll taper. Then they'll raise rates. That's not going to happen imminently. So
I think there is this sense that you still have a bit of runway for loose monetary policy to help juice earnings for the foreseeable future.
And a lot of companies are also facing easy comparisons to last year, of course.
QUEST: Yes, I suppose that's true, but I think we can see through those. Well, let's see if we can. Let's see if when the results come out we are
able to exceed that. Good to see you, Paul. Have a lovely weekend. See you next week.
As QUEST MEANS BUSINESS tonight continues, the head of the F.B.I. says ransomware poses a threat and needs to be taken as seriously as terrorism,
after the break.
(COMMERCIAL BREAK)
[15:16:09]
QUEST: The head of the F.B.I. says the United States needs to address ransomware with the same urgency that followed the September 11 terror
attacks. Christopher Wray told the "Wall Street Journal," law enforcement businesses even average Americans need to come to terms with the scale of
this problem, and he is not wrong.
In the past few weeks, hackers have managed to disrupt fuel lines, food supplies, breached I.T. systems at hospitals, a ferry company, even the New
York City subway.
President Vladimir Putin of Russia says allegations that Russia is involved in the hacks are nonsense.
Jessica Schneider is in Washington. Interesting thing about this, Jessica. I have been astonished at the lack of something must be done and panic
following the Colonial Pipeline. It's as if everybody seems to think it's a sort of -- it is not that bad.
JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: I think you're exactly right, Richard.
You know, people, though, I think, are finally seeing the enormity of this, the American public might be getting to see the scope of these attacks
firsthand, especially people waiting in line for gas, gas running out, not being able to get meat from these meat-producing plants.
And you know, cybersecurity experts are warning that the attacks could at some point pose a real danger and seriously cripple this country. So that's
why Director Wray is getting this message out that these cyberattacks are an urgent national security threat.
His comments were coming after the White House pleaded with business leaders in a letter that they should protect their systems for what are
becoming more common cyberattacks. Wray's comments, they're also coming at this time, when these hacks are increasingly impacting and thwarting
everyday American life and commerce.
(BEGIN VIDEO CLIP)
SCHNEIDER (voice-over): The Biden administration sounding the alarm about the growing threat of cyberattacks that in recent weeks have resulted in
gas shortages and the shutdown of meat production plants.
F.B.I. Director Christopher Wray comparing the effort needed to combat this rapid succession of ransomware hacks to how the F.B.I. approached the
response to terrorism after 9/11.
"There are a lot of parallels. There's a lot of importance and a lot of focus by us on disruption and prevention," Wray said. Director Wray told
the "Wall Street Journal" the F.B.I. is investigating about 100 different types of ransomwares, many that trace back to hackers in Russia.
One study shows the U.S. was hit by more than 15,000 ransomware attacks last year alone, costing businesses and organizations between at least half
a billion and $2.3 billion in 2020. Ransomware locks up computer files and hackers demand payment to release it back to the victim.
JOHN CARLIN, U.S. PRINCIPAL ASSOCIATE DEPUTY ATTORNEY GENERAL: A study of cryptocurrency payments is some of the techniques that were just described
to you. So, a 300 percent increase in ransom payments over the prior year.
SCHNEIDER (voice-over): Ransomware attacks have impacted everything from the gas pipeline operated by Colonial that led to gas shortages all along
the East Coast, to individual healthcare networks whose computer systems have been shut down sporadically across the country and the world.
JOHN HULTQUIST, DIRECTOR OF INTELLIGENCE ANALYSIS, FIREEYE: Before long, we are worried that some people will get hurt, especially when we consider all
these incidents that are affecting healthcare. Ireland's healthcare system went down.
SCHNEIDER (voice-over): The Department of Justice signaling this week it plans to coordinate its ransomware investigations in the same way it treats
terrorism cases, mandating Federal prosecutors around the country to report all investigations they are working on in a move designed to better
coordinate the government's tracking of online criminals.
Former F.B.I. cyber official Shawn Henry says it's going to take an international effort.
SHAWN HENRY, PRESIDENT, CROWDSTRIKE: They've got to work collaboratively with foreign law enforcement agencies to take these people off the field.
SCHNEIDER (voice-over): The massive threat from cyberattacks have been looming for years. Former Director of National Intelligence, Dan Coats,
warned about the threat three years ago.
DAN COATS, THEN-U.S. DIRECTOR OF NATIONAL INTELLIGENCE: The digital infrastructure that serves this country is literally under attack.
[15:20:17]
SCHNEIDER (voice-over): The White House this week sent business leaders nationwide a letter appealing for immediate action, saying, "We urge you to
take ransomware crimes seriously and ensure your corporate cyber defenses match the threat."
(END VIDEOTAPE)
SCHNEIDER (on camera): And the F.B.I. Director also called out Russia in this interview, saying that they knowingly harbor cyber attackers. But
President Vladimir Putin is pushing back on this, fighting back today calling it nonsense that Russia was ever involved in any cyberattacks
specifically on the JBS meatpacking plants earlier this month.
But President Joe Biden will get the chance to confront Putin at a Summit in Switzerland later this month, and the White House is saying President
Biden will address that JBS attack with Putin, Richard, as well as the increased threat and the cyberattacks that we know are emanating from
Russia -- Richard.
QUEST: Jessica Schneider in Washington, our justice correspondent.
Director Wray is not the only person who has drawn a link between ransomware and terrorism. On this program earlier in the week, the head of
Cybereason told me these criminals act without mercy.
(BEGIN VIDEO CLIP)
LIOR DIV, CEO, CYBEREASON: Make no mistake, we are dealing with criminals that they are in the borderline of being a terrorist. They are in for the
money, but I am pretty sure that we have no guarantees that they will give your information back to you or not going to hack you again.
We did kind of a deep research on this topic, and what we discovered that if you paid once, the probability that they come after you again, this is
like 80 percent of the time.
(END VIDEO CLIP)
QUEST: Michael Daniel is with me, the Special Assistant to President Barack Obama, now Chief Executive of Cyber Threat Alliance. Michael, we seem to --
we don't grasp the gravity of this.
I'm not saying we think it is amusing or we're taking it lightly, but we are talking about cases where the infrastructure and the strategic
infrastructure of any country is under threat.
MICHAEL DANIEL, PRESIDENT AND CHIEF EXECUTIVE OFFICER, CYBER THREAT ALLIANCE: Yes, that's true. Ransomware has become a national security,
public health and safety and economic prosperity threat.
QUEST: Why do we not take it as seriously? Is it because we see it as victimless? Is it because it doesn't actually affect me until I can't get
my information? Small sums of money, $5 million for ransomware in a corporation worth billion. Why do you think we are not all up in arms about
this?
DANIEL: Well, I think we are getting to that point, and I think many people have been sounding the alarm for a while. But if you roll the clock back
just even a few years, ransomware, was mostly -- it was mostly an annoyance, a nuisance.
You know, it was -- it affected a few individual computers here and there, and the ransoms were a couple of hundred bucks. It's only been in the last
few years that the problem has really exploded to the level that it has. And so now, you're starting to see both the government and the private
sector respond to that change in the threat landscape.
QUEST: What I find worrying is we've now known about ransomware for several years. But when something like Colonial gets hit or the Irish healthcare
system or JBS, how can large multibillion organizations and corporations not have better defenses?
DANIEL: Well, it is a really interesting question about how to get all the different companies across the board motivated to really invest in the
basics. But, you know, I do want to be careful about casting stones because what we don't know is exactly how a lot of these incidents happened, and
what kind of defenses they did have in place.
What I can say is that in general across the board, we definitely need to be investing more in our cybersecurity, both in the public and in the
private sectors.
QUEST: If there are state actors involved and, in this sense, I suspect, you know, the good guys are the bad guys in other parts of the world and
we're all at it. Everybody's at it in some shape or form.
But if, for example, the Russians are assisting or at least looking the other way, are we destined to lose this battle?
DANIEL: No, I don't think we are. I think if you look at recommendations that have come out from things like the Ransomware Task Force that released
a report at the end of April, outlining about 40-something different recommendations that could really, if they were implemented, really put a
dent in the ransomware problem.
I don't think we're actually helpless before this threat. It will take concerted, collaborative international efforts both between governments and
between governments and the private sector in order to tackle this problem, but we can do something about it.
QUEST: You said something interesting, then you said "if implemented" about the recommendations. I mean, that's the core here, isn't it? If
implemented, if there is the necessary coordination, if it isn't a beg thy neighbor problem, while we are prepared to do this, that seems to be the
problem here -- that we are not coordinated.
[15:25:19]
DANIEL: Certainly, you know, if you look at that report, if you look at other recommendations, none of it involves, you know, radical new ideas
that haven't been out there, you know, in the cybersecurity field for a long time.
What we're really talking about is mustering the political will and the organizational will to go after this problem in a new and much more
concerted way. I think we can do that, but you're right, the proof will be in actually doing it.
QUEST: Good to see you. Michael Daniel, actually, this is one interview where I catch myself saying, I hope I don't have to speak to you many more
times. But I fear -- I fear -- we are going to be talking a great deal more. Good to see you, sir. I appreciate it. Thank you.
DANIEL: Thank you.
QUEST: It is QUEST MEANS BUSINESS at the end of the week. As we return in a moment, the U.K.'s decision to remove Portugal from its travel green list
has offered a stark reminder on the fragility of the summer recovery travel.
In a moment, the CEO of the Dutch carrier, KLM, Pieter Elbers, there he is, in Schiphol, in the evening. We will be with Pieter, after the break.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. QUEST MEANS BUSINESS, more of it in just a moment. I'll be talking to the CEO of KLM, the airlines, about the
tumultuous week in the world of European travel.
And Facebook set a date when Donald Trump could be allowed to return. It will all follow after the news.
This is CNN, and here on this network, the news always comes first.
In Belarus, the opposition says a detained journalist was tortured into making his latest video confession. Roman Protasevich again appeared on
Belarusian state media, clearly emotional at times with his head in his hands and said he has pleaded guilty to organizing large-scale and
sanctioned protests.
[15:30:14]
The E.U. is taking new steps to protest against the forced landing of a Ryanair flight in Minsk that led Protasevich's arrest. It's banning all
Belarus air carriers from using E.U. airports and airspace. IATA, International Air Transport Association says politics should never
interfere with aircraft operations.
In Germany, a top cleric in the Catholic Church has offered to step down as Archbishop of Munich saying he shares responsibility for what he calls the
catastrophe of sexual abuse by church officials. Cardinal Reinhard Marx says he's guilty of staying silent and failing to act. Pope Francis has not
yet accepted Marx's resignation.
Police at Hong Kong have arrested at least six people after they took part in commemorations of the Tiananmen Square Massacre. Many demonstrators
showed up to honor the victims even though police had banned gatherings. They lit candles, carried white flowers and shined lights on their phone to
mark the massacre, which took place 32 years ago in Freiburg.
And French law enforcement sources tell CNN the Russian tennis Yana Sizikova has been arrested for sports corruption and fraud. She suspected
of match fixing in connection with a doubles match loss last year. CNN's working to reach representatives for Sizikova for comment.
European airlines are scrambling to put on new flights and use bigger planes as they help British tourists get home before Portugal is officially
off the U.K. green list. If holidaymakers missed the Tuesday July deadline, they'll be forced to isolate for 10 days upon return and have numerous
COVID tests. Airfares between Portugal and the U.K. have soared in response to the surprise decision from the British government.
Shares in European airlines are falling for the second day. KLM shares are down 1.2 percent, down five percent in Thursday's announcement. EasyJet and
Ryanair have shut around seven percent over the period.
Pieter Elbers is CEO of KLM. He joins me from Schiphol Airport in Amsterdam. Peter, I hope you can hear me and the connection is OK. The
Portugal business. I mean, it was a shock. And it has destroyed that confidence that people had that things might be getting back to something
approaching normality.
PIETER ELBERS, CEO AND PRESIDENT, KLM: Yes. Well, it clearly shows that the recovery is definitely there. But it's going to be shaky and rocky, and I
think the recent announcements, indeed by the U.K. government on Portugal are a confirmation of that. On the positive side, we showed today some good
news from France where the government has decided to allow U.S. travelers who have been vaccinated to get into the country show the trajectory is in
the right direction. But clearly, it's going to be a bumpy and shaking recovery.
QUEST: Do you think we fooled ourselves or holiday makers fooled themselves into either because we wanted to believe it was going to be better. We
really hoped it was going to be but the reality is it's very difficult.
ELBERS: Well, the reality it's very uncertain. And I think precisely what travelers need today is some certainty and some predictability when they go
if they can come back, what are the rules to come back. And I think it's really also important for the E.U. to step up here and to harmonize rules
within Europe and to make sure that these holiday makers especially after such a long and difficult period where many peoples have been locked up in
their houses and couldn't go anywhere.
It's really a need for people to fly into traveling and go with confidence on their -- on their holiday. With vaccination coming up, we -- I believe
we can have some confidence but the next couple of weeks are still going to be shaky.
QUEST: Right. And you say the E.U. now, the E.U. has got the green pass in place. And some countries are already starting to issue it. More will come
along and issue it. Do you think enough is being done? Are you calling for more coordination?
ELBERS: Yes, I think coordination has been the key factor or I should say the absence of coordination has been the key factor. The E.U. is taking
some steps now with the announcements on that that green passport to be in place as per July and thereafter. Quickest implementation by all the member
states. And I think this harmonization is really key and it has really hampered all our business and all our travel over the past -- over the past
12 months.
And with the holidays coming up and with airports becoming busy again, we really need more harmonization and coordination between the states.
[15:05:02]
QUEST: Let's talk about KLM. I noticed that you're going to be flying 80 percent of the route network obviously not at the same capacity. And you
are already adding new long distance -- long haul routes. So to a logic, I mean, when do you go cash positive do you think?
ELBERS: Well, indeed, our philosophy has been to operate as much as possible of the network. And I should say, in this quarter, we have been
operated roughly 90 percent of the destinations, 50 percent of the capacity with a quarter of the -- of the passengers. Fortunately, the passenger
numbers are increasing rather quickly and rapidly at this point in time. And that gives us confidence to add some more local destinations and even
announce some more leisure destinations, like Orlando in the U.S. as per the winter season.
So, we'll gradually bringing back our network with the expectations that over the next couple of weeks and months, traffic will gradually resume and
I think we can take confidence what we see domestic U.S. for example, that will happen in Europe as well. And with that in place, we can see
international and global travel resuming as well.
QUEST: In terms of your balance sheet and that recent decision that the aid given to Air France KLM word does not meet the state aid rules. Are you
worried you will have to pay it back? And related to that, related to that, how are your talks going with your government to keep their share of
increased ownership as low as possible?
ELBERS: Yes, Well, the -- Indeed, the ruling or the court has decided that it needs to be more and better substantiated, that's being in place, that
process of having more and better substantiation is in place now. That's to be done between the E.U or the European Commission and the -- and the --
and the -- and the court. And of course, we provide the info and we have every confidence that that will move in the -- in the right direction.
QUEST: Finally, United Airlines, buying booms, supersonic planes. I mean, it's gone. It's a huge amount of interest. I've always said I never thought
that there'd be a commercial supersonic flight in my lifetime. So, are you looking to buy boom planes too?
ELBERS: No, we're not looking. No, I thought and of course, I had the same or similar reaction Richard light like you had. I think it's an interesting
proposition to see what's happening. The condition they put to it that it should be fueled completely with biofuel. I would really try to have a good
understanding how that works out. But no, I think we focus on the recovery first before we are in the process of reviewing these type of new planes.
And if we see all the efforts we do at sustainability, will -- we seek for a maximum effort for our biofuels and I'm not sure whether that is into
supersonic planes.
QUEST: Good to see you, Peiter, you're looking well, thank you for taking time on a Friday night to talk to us from Schiphol. Thank you.
Now, falling airline stocks weighed on the sentiment in your party surprising. The boss has got a slight boost from the job numbers. Close
relatively unchanged. German and Swiss, look at the numbers, hardly anything to get terribly excited about before a spring weekend.
Some Japanese sponsors of the Tokyo Olympics reportedly want to postpone the games so more people can actually attend. The problem as Anna Stewart
explains is that organizers -- the organizers themselves can't afford to back out now.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN REPORTER (voice-over): After years of preparation Tokyo 2020 is just weeks away. A year late due to the pandemic. Organizers say
the event will now cost $15.4 billion. Some estimates suggest it'll cost much more for ourselves. Opinion polls in Japan suggests a majority of the
public want it canceled.
STEWART (on camera): Japan has already banned overseas spectators, which the Nomura Research Institute estimates will cost the country over a
billion dollars in lost revenue. Canceling the games that says would cost more than $16 billion. But the Think Tank warns that these costs actually
pale in comparison to the economic damage another wave of coronavirus could cause.
STEWART (voice-over): The IOC says its priority is to hold games that are safe and secure. And while pressure mounts for Japan to cancel the games,
contractually, it can't.
ALEXANDRE MIGUEL MESTRE, SPORTS LAW ATTORNEY, ABREU ADVOGADOS: In practice, the single entity that can cancel the games is the IOC, International
Olympic Committee, because according to the Olympic Charter, the IOC has an exclusive property of the games.
STEWART (on camera): So this means that actually Japan can't unilaterally decide to cancel the Olympic games.
[15:40:00]
MESTRE: If Japan is the organizing committee, if the -- if Tokyo decides not to go on on their obligations under the whole city contract, of course,
it will be not possible to undertake the games. And in that condition, of course, the IOC would be entitled to sue those core parties in the host
city contract.
STEWART (voice-over): The IOC has insurance for games cancellation and abandonment, which could cover part of its operational cost.
But what about its partners, the sponsors and the broadcasters?
PATRICK VAJDA, PRESIDENT, XAW SPORTS: The main one in terms of money is T.V. rights. The different contracts now are so complicated. 20 years ago,
it was very easy to answer to your question, today it's more or less impossible because the different T.V. networks, bought not only one games,
but several. Generally speaking, three online sometimes four. We have to take each contract one by one and to analyze what is written in the
contract.
Sometimes it is written something about cancellation. They have to reimburse, they have not.I it depends on the contract and it is a pure
contractual agreement between two private companies.
STEWART (voice-over): Billions of dollars, lawsuits and insurance claims are at stake if the games are canceled. If they go ahead, the IOC risks
breaching its own charter, which says it will promote safe sport and protect athletes who are already beginning to arrive in Japan. The ultimate
cost could be borne by those at risk from COVID-19 if Tokyo 2020 becomes a super spreader event. Anna Stewart, CNN, London,
(END VIDEOTAPE)
QUEST: Still ahead. Donald Trump will stay off Facebook for at least another year and a half. The companies also announced a major policy shift.
(COMMERCIAL BREAK)
QUEST: Facebook says it will uphold Donald Trump's suspension until at least 2023. And the company says it will no longer consider posts from
world leaders as automatically newsworthy. Start holding on to the same standards as everybody else. Donald Trump says Facebook's rolling as an
insult to his supporters, and he won't invite Mark Zuckerberg back to dinner. In his words, next time I'm in the White House.
Brian Stelter is with me. Our chief media correspondent. Now Brian, let's ignore the provocateur comments at the end and just focus on the decision.
[15:45:04]
QUEST: Reading Nick Clegg statement, basically they followed what -- they've put deadlines on. They've accepted that you can't have an unlimited
deadline -- unmetered suspension. So they've said write two years and a review after two years. Did that makes sense?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Yeah. So they've adopted an under the recommendations from that oversight board that they set up, where
they kind of handed off the power and said, hey, we don't want to deal with this, you all figure out what to do in these serious cases. So the
overboard -- Oversight Board said you can keep Trump banned, but you got to have clear rules. And you got to have a timeline. You can't do it forever.
So a two-year sentence now, two-year suspension. But Facebook says, if the -- if the threat posed by Trump is still serious in 2023, it could extend
the suspension. And then if we allow him back on the site, and he breaks the rules, again, we can ban him for life. So they are for the first time
setting up a pretty clear structure that would apply not just to Trump but to other elected officials as well, who could end up in the same boat.
QUEST: But I wonder who's winning this battle? And is Donald Trump winning in the public domain? Is Facebook winning, we're all losing in terms of the
public discourse. But who's got the upper hand now?
STELTER: Twitter's winning because the spotlights not on them for the moment. And in some ways Trump is using this to his advantage. As you said,
you know, they're being provocative, saying that he's going to punish Mark Zuckerberg in the future by not feeding him dinner at the White House.
Look, we're all -- we're done with crazy here. And so, it's hard to stay sane in this situation. This former president talking about trying to get
reinstated.
It's just it's all -- it's all nonsense. And yet, this is the kind of nonsense Facebook has to grapple with, because it is a nation state. And
because it has so much power all around the world. If it wasn't the U.S. it would be tested elsewhere. And I think ultimately, this is just going to be
a headache for Facebook.
QUEST: Right.
STELTER: Because now it's 2023. Then who knows what?
QUEST: So there's another headache. This time for Twitter. Nigeria has banned Twitter, after Twitter deleted one of President Buhari tweets. Now
the government says it's suspended Twitter indefinitely in their words, activities capable of undermining Nigeria's corporate existence. It was a
tweet from Buhari had threatened to deal with Nigerian agitators in a language they understand. The treat was deleted, they're now banned. Oh
boy, where does this end?
STELTER: It sounded like a threat about violence. It was a kin in some ways to what Trump was doing last year and earlier this year before he left
office. And so in this case in Nigeria, you have this action banning Twitter, shutting down, you know, that internet connection in the country,
of course, there will be people finding ways around it. And there will be various ramifications as a result. I think this is the new normal, we can
see it now from the U.S. to Nigeria.
This is how it's going to be as these platforms try to have some basic standards and norms. Let's just remember though, what Twitter and Facebook
are trying to do, they might not be good at it. They might fail all the time. But they say they are trying to protect their users. In these cases
from world leaders. They're trying to protect their users from violence.
QUEST: Oh. I'm glad you said that
STELTER: That's where we are now.
QUEST: No. I'm glad you said that. Let's be -- let's be clear what they're trying to. They may be doing a ham fisted job of it. And they may not --
there may be problems, but at least they're trying. Brian we'll talk more between '21. '22. '23. Lord help us if we're still here in '24. Have a
great weekend. Thank you.
STELTER: Thank you.
QUEST: 1920 Tavern was part of our voice of the crisis at the height of the crisis. Well, I promised. I made many promises I said I would return and
that I did.
(COMMERCIAL BREAK)
[15:51:15]
QUEST: A year ago the 1920 Tavern in Roswell, Georgia was struggling to cope with strict COVID restrictions. And that's when the owner Jenna
Aronowitz joined QUEST MEANS BUSINESS part of Our Voices of the Crisis series. For her the future was unclear. Now I'm happy to report her
restaurant not only survived, it thrived. And I made good on my promise. Remember all last year, I constantly said to all Our Voice of the Crisis, I
promise, I'll come and visit. And so, I did. Dinner with Jenna at the 1920 Tavern.
(BEGIN VIDEOTAPE)
QUEST (voice-over): The hum of (INAUDIBLE) a refreshing tone after all these months, and whether on the patio or at packed tables indoors, things
are back to normal here at the 1920 Club in Roswell, Georgia. It wasn't always this way.
JENNA ARONOWITZ, 190 TAVERN OWNER: It was tough on my staff because you know, doing new systems. And the very first day, it's like opening a brand
new restaurant, even though we've been here for five years.
QUEST: I'm looking forward to my dinner at the 1920 Tavern. I'm going to come across and have some dinner in your place and I'll pay the bill, I
expect to pay the bill.
ARONOWITZ: OK. We would love that. We are -- where the most important part about 1920 is we're about the experience. And being closed for six weeks,
we weren't able to give that experience to our guests.
QUEST: (INAUDIBLE)
ARONOWITZ: I would go with the -- the parmesan group is fantastic. It's really, really good. And I know you're liking lamb. So maybe it will make
you a little side plate of lamb to start off with. Yes?
QUEST: Yes.
ARONOWITZ: You know, it was very like if you can call it a rollercoaster, very slow, steady climb. And it's been wonderful. The -- I have an amazing
community who has supported us through this whole thing. They were -- the first day we were open. They were lined up all the way along the street.
QUEST: I know from when we spoke, you kept on your staff.
ARONOWITZ: Yes.
QUEST: You paid them. Now, did you complete them all on and paid them all right the way through?
ARONOWITZ: Yes, I did. Thank God.
QUEST: That is -- sorry?
ARONOWITZ: Thank God.
QUEST: Why?
ARONOWITZ: Because when -- in hindsight when everybody reopened, nobody had any employees. So, there's a lot of restaurants on the street that are
unable to open their restaurants full time because they don't have any employees. I never did it because of what was going to happen afterwards. I
didn't have the foresight to --and to know what was going to happen. I just did it because I didn't want my guys to hurt. I wanted them to be OK.
QUEST: In Georgia with unemployment at a particular level, it's a lower level on the federal government level. Do you think that's having an
effect?
ARONOWITZ: Very much.
QUEST: Because people are not going back to work because they can get unemployment.
ARONOWITZ: Very much. So, if you -- if you think about it logically, the unemployment with the state and the federal combined is equate -- is
equating to $19.12. The average job for most industries on the lower level is 10 to 15. So in normal sense, why would you go back to work if you could
make $19.00 as opposed to making your 10 or 15.
QUEST: You send off 50 percent of your staff are vaccinated?
ARONOWITZ: Yes
QUEST: But you're not making it a requirement?
ARONOWITZ: I can't make it requirement. It's, not you know, I'm not Gestapo. I'm a business owner. They are human beings with their own rights.
You know, they are free to choose last year.
QUEST: And what would you do with your staff who are not vaccinated? Will you do anything?
ARONOWITZ: Yes, they can continue with their PCR tests.
QUEST: So they have to continue with their PCR tests?
ARONOWITZ: Yes, yes.
QUEST: So you're taking precautions.
ARONOWITZ: Yes, yes, yes, yes, yes. No, they had to continue with that. I have to be safe.
QUEST (voice-over): Now, before long after the tasty grouper, some lamb and the nice conversation, it was that matter of the bill.
[15:55:03]
QUEST (on camera): Do you remember what I promised?
ARONOWITZ: You promised that you would come and pay the check.
QUEST: With the corporate card of course. It's all on me tonight.
(END VIDEOTAPE)
QUEST: And I did, I actually paid the bill. And we will be visiting more of Our Voices of the Crisis. It's really important that we update you on how
those brave men and women running businesses around the world and survived.
Last few minutes of trade on Wall Street. I just want to show you the Dow is having its best session of the week as, you know, where we started. I
said that a decline was there and that climb has picked up. It's not huge numbers, but it's a gentle little stroll up the hill, and it was the job
numbers that's given a little bit of confidence. So there you are. That's the way the markets are looking tonight.
And it's the tech stocks that have led after that job data. We'll take a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Just want to update you with firstly next week. QUEST MEANS BUSINESS next Thursday we will be in Dubrovnik. We do a lot of travel and tourism.
That much you know and so it's airlines for Europe week next week and we will be taking the temperature in Croatia. We will be in Dubrovnik as the
European summer travel season gets underway as best or whatever it can. That is next Thursday. QUEST MEANS BUSINESS live from Dubrovnik.
And related to that thereafter, I will be gone for two weeks. Yes, I'm going on vacation. First for two years. Why am I telling you that? Well,
obviously I'll miss being with him and having our nightly conversation. And I think it's important that this year where we can as best we can, we all
get a bit of space and I mean physical space, mental space, resting space. And so, I thought to myself, even though these are busy days, and economic
times are uncertain, I thought it was off now.
You've got two weeks coming your way and you're going to take it and you're going to relax. I might even send it a picture or too so you can. And over
the summer hopefully you'll be taking time off as well in between us. We can share pictures of our summer vacations. Let us not forget the
importance of a mental and physical break after all we've been through. Talking of that, that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest
in New York. Whatever you're up to in the couple of weeks, I hope it's profitable.
Join me in Dubrovnik next Thursday.
END
