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Quest Means Business
Taliban Capture Half of All Afghan Provincial Capitals; Partial Shutdown at Major Chinese Port over COVID Case; July Was The Hottest Month Ever Officially Recorded; CDC Advisers Recommend 3rd Vaccine Dose For Some People. Aired 3-4p ET
Aired August 13, 2021 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:07]
RICHARD QUEST, CNN BUSINESS HOST: It is going to be a bit touch and go, but the Dow could hit its fourth record close of the week. We are in the last
hour of trading. The Dow won't make it if it stays as it is, which is down 10; any gain we'll give it a record. The triple stack will show the same
for the S&P as well as any gain will give it a record, but -- so we have got a small on there, no records on the NASDAQ, and not even any likely.
So, the markets and how they are looking in the last 60 minutes, and the main events of the day.
The Pentagon in the U.S. is preparing to airlift thousands of people from Afghanistan as the Taliban is now closing in on Kabul.
China's suspending service at one of the world's busiest ports, and it was because of a single case of coronavirus.
And a fresh outbreak on board a Carnival Cruise Ship -- of the virus that is -- two dozen cases plus recorded off Belize.
We are live from New York. I made it back from London in one piece. It's Friday, the 13th of August. I'm Richard Quest and I mean business.
Good evening. Tonight, the Taliban have set their sights on Kabul. Four more Afghan major cities have fallen on Thursday night and on Friday, and
crucially, government officials were forced to surrender the country's second largest city, Kandahar. Several more are surrounded or under siege
after a stunning series of quick military victories. The Afghan capital is now quickly becoming encircled.
In other words, to put this bluntly, the Taliban are within a hundred kilometers of Kabul, and their goal is to push out the government of Ashraf
Ghani.
In Washington, The Pentagon says troops are en route to Afghanistan for a narrow mission, in their words, which is to help evacuate U.S. personnel
from the country.
(BEGIN VIDEO CLIP)
REAR ADMIRAL JOHN KIRBY (RET.) PENTAGON PRESS SECRETARY: Troop movements that we mentioned yesterday are happening as we speak. Three battalions are
preparing to move from their current locations in the Central Command area of responsibility to Kabul.
(END VIDEO CLIP)
QUEST: Our international security editor is Nick Paton Walsh, he is with me in London.
Nick, let's take the first few of these at a fair clip so that I can cover exactly what I think needs to be said, first of all, is it inevitable, in
your view, with your experience that Kabul is eventually taken by the Taliban?
NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR: I think it's inevitable that at some point, the Taliban will have a significant say over
what happens in the capital, whether they are the government, whether they are kept on the fringes and trying to exert economic pressure from outside,
unclear.
I think it is less likely that we will see a Taliban bid to move into a city of six million and engage in street battles. But a lot could happen
that might make that less of a violent entry if any diplomacy or negotiation appears to succeed.
We simply don't know. We just know they want in there.
QUEST: So de facto, will the Taliban become in your view, when you look at the map and you see what they've got control of, you know, the government
in Kabul becomes even though it has got Kabul, Potemkin government in a sense against the Taliban, which is effectively ruling the rest of the
country.
PATON WALSH: Yes, but Kabul is where the money is. I mean, yes, it is very isolated at the moment, because the Taliban essentially are in the major
cities all around it at this point, not all of them, you know, let's not to get carried away here, there are still half provincial capitals, at the
last count anyway, that are still under government control, it is changing very fast.
I think you know Kabul is still, I say where a lot of the money is. Afghanistan is not a simple binary place. There's lots of different
factions to bring into consideration here. It is a mammoth task, obviously, for any force to try and move into a city of six million, and I think we've
seen this afternoon, a lot of talking, I've heard of the possibility of diplomacy pushing for some sort of solution, it clearly hasn't yielded any
fruits at all.
In fact, maybe some might even be suggesting towards the opposite. So yes, there's a lot moving here, because of this sudden American application may
be bringing a bit of security to Kabul for two to three weeks as they begin this operation.
I have to say, the carpet keeps being pulled out from under every essential assessment you can make about this continuing series of events.
QUEST: So, were you surprised -- you've been there, you know the place and you know the people. Were you surprised at the speed with which it all fell
apart once the U.S. announced and actually began to pull out?
NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR: Obviously, yes. I mean, it is utterly shocking to see the last week. I mean, we've had for 20
years, massive campaigns launched for what are comparatively villages in the middle of nowhere. We've seen excessive amounts of attrition and slow
grinding fights over parts of this country to kick the insurgency out of them.
[15:05:13]
PATON WALSH: And suddenly in a week, well over half of its cities, provincial capitals, four, to the insurgents in such a short period of
time. There was something I wasn't that surprised about because, frankly, if you've covered the Afghan National Army, the huge sprawling hundreds of
thousands strong thing the Americans keep talking about being there and ready to look after Afghanistan, you know, that it wasn't really going to
stand up against motivated ideological insurgents moving against it.
There are a strong core of tens of thousands of Commandos that have been doing an extraordinary job, but they haven't managed to change the
direction of where this is going. So yes, totally surprised at the speed, not enormously surprised in how it revealed a lot of the American talking
points over the last decade to essentially be a strategy for their departure.
QUEST: Nick Paton Walsh in London, thank you. That takes us elegantly to talk about the 20 years that the Taliban have managed to erase a military
containment in just a matter of weeks.
Steamrolling that army that Nick is talking about, the Afghan Army funded and trained by the West with humanitarian devastation likely to follow, so
forgive us. But this is a -- we look at this in terms of what is the cost, and I don't just mean obviously treasure, but the costs in blood and
treasure.
If you're going to analyze what this means, then you have to put it in those terms. Nearly 2,500 troops and 1,100 NATO Coalition Forces have been
killed in over two decades. It is estimated that more than 60,000 Afghan soldiers and 50,000 civilians have lost their lives, pause and think of
those numbers.
The war in treasure has cost the United States alone more than $2 trillion.
Germany has threatened to cut off aid if the Taliban takeover and return the country to Sharia law. The U.K. is warning Afghanistan could become a
failed state. The Prime Minister says he loses a budget as leverage.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, BRITISH PRIME MINISTER: What we certainly can do is work with all our partners in the region and around the world who share an
interest with us in preventing Afghanistan from once again becoming a breeding ground for terror.
I think anybody in government in Kabul is going to recognize that the West, the U.K. have a permanent interest in making sure that that does not
happen, so we are going to use our diplomatic, our political, our overseas development aid budget leverage to make sure that we exert what pressure we
can.
(END VIDEO CLIP)
QUEST: Sir William Patey is the former British Ambassador to Afghanistan. He joins me now.
Ambassador, you're a former, so you can be diplomatically in delicate at best. The speed with which it's all falling apart is really something quite
appalling, bearing in mind, as we've shown you the cost of lives and treasure that's been put into it, I mean, if this was anything else, I
mean, it is disgraceful.
SIR WILLIAM PATEY, FORMER BRITISH AMBASSADOR TO AFGHANISTAN: Yes, I agree with you and completely unnecessary. There was no need for us to pull out
forces quite so precipitately. Where three and a half thousand American troops, just over 5,000 NATO troops -- total 8,000 NATO troops. They were
performing a function that was vital to the support of the Afghan government in logistics, in air support, in training, and that could have
gone on for quite some time to bolster the Afghan Forces.
By withdrawing them so quickly, we have basically tipped the balance. They gave the Taliban a sense of confidence, it withdrew confidence from the
Afghan government, and we're in a position that we have cells to create it.
QUEST: There is an argument that says we could not stay -- this is the Biden argument -- if by now, the Afghan 100,000 troops were not able to
look after the country, if after all we've done, the whole thing is dependent upon us still being there to prop it up, then maybe it's just not
feasible to keep doing it.
PATEY: How long did it take the United States to evolve into a modern Democratic state or the United Kingdom for that matter? Or Germany after
the Second World War? We maintained troops in Germany for nearly 50 years after the Second World War because there was a threat to that democracy.
Twenty years is not a long time to try and transform a country like Afghanistan which has known decades of war into a stable democratic state.
We had already transitioned from over 130,000 NATO troops when I was there as Ambassador in 2010 to 8,000 NATO troops in 2021. We probably could have
reduced by a bit more, you know, but we have just lost patience.
I think the American administration has decided that Afghanistan is not strategically important to them, and therefore, domestically, they don't
need to maintain the support.
[15:10:29]
QUEST: So, if you assume that the C.I.A. and the N.S.A. and all the Intelligence Agencies are half decent, knowing what's going on. And I am
familiar with the argument that if Taliban takes over, eventually insurgencies will go, and if they don't do it over there, eventually,
they'll bring it over here. That's the argument that has always been, so there must have been an Intelligence assessment, that it is okay to let
Afghanistan go back to the Taliban, and we will not pay the price of Western terrorism.
PATEY: Well, I don't know how they can predict that. That may be the assessment, but Intelligence is not always right as I know of my cost, I
was Ambassador in Iraq, sometimes Intelligence is wrong. If that is their assessment, I hope they're right, and we don't live to regret this day.
And it is possible to make the argument that the United States and Europe do not have great strategic interests in Afghanistan, it's more a Chinese-
Russian-Pakistan-Iranian problem, let them deal with it. That's a perfectly good argument if you ignore the moral question, we broke it, should we fix
it?
QUEST: So finally, and to those viewers, please help me and our viewers understand, look, if everything was so good and if the democracy that we
had brought, and the gender rights and all the things that we had brought to Afghanistan in the 20 years were so marvelous and so well appreciated,
why have the Taliban been able to overrun such large parts of the country so quickly?
PATEY: Well, it's a very Islamically conservative country. The women like the progress, not all the men do, and I have to say that not every Afghan
has confidence in their government. I think the issue of corruption is a huge issue, and that is where I would take a huge amount of the blame on
our shores for not dealing with corruption at a much earlier stage in our period in Afghanistan.
QUEST: Sir William, I'm grateful that you came and talked about it with us tonight. Thank you, sir.
QUEST MEANS BUSINESS, all it took was one COVID case, just one, and China shut down parts of the world, the third busiest port country is bracing for
the economic cost, in a moment.
(COMMERCIAL BREAK)
[09:15:27]
QUEST: China has partially shut down one of the world's busiest container ports and all because of a single COVID case. It's at the Ningbo-Zhoushan
Port, where service will be partly suspended until further notice, and that's because a freight worker became infected.
The port handles more than a billion tons of cargo a year. You can see in this live traffic map how many ships are there and remaining at port
waiting. A consultancy group says there's going to be a severe impact on shipping. You can see exactly why.
Luckily for us, our correspondent David Culver has sent us this report from Beijing -- David.
(BEGIN VIDEOTAPE)
DAVID CULVER, CNN CORRESPONDENT: Richard, the latest delta linked outbreak of COVID-19, bringing life for millions right here to a halt, and
threatening China's economic growth. Not only are there strict commercial travel restrictions in place, but also right now, a portion of the world's
third busiest port is shut down. That's because just one freight worker -- just one -- at that port tested positive.
Now, that shows the drastic measures underway to stop this recent spread, and local leaders are feeling the heat, too. State media reporting in his
most recent outbreak, some 70 local officials who hold leadership positions in the cities that have seen a significant jump in cases have been
punished, some of them fired.
And in one of the cities seen as a hotspot for the virus, a teacher was punished. That's because he posted online a suggestion -- just a suggestion
that the city should experiment coexisting with COVID-19 rather than implement China's strict zero case approach.
That did not go over well. It got him detained for 15 days, and he apologized for his comments.
Given for the past year or so, life right here in China had gotten back to near normal. The National Health Commission had to change on Friday the
guidelines to re-impose facemask requirements in more places. They're now required for indoor spaces like malls and supermarkets, and some outdoor
spots, too, like crowded parks.
All this as China published for the first time the number of people fully vaccinated, it's more than 777 million and that is about 55 percent of the
population according to officials.
Now, in places like Beijing, 93 percent of the residents 18 and older here are said to be fully vaccinated. Despite these vaccinations, though, this
delta variant, it's got targeted lockdowns and strict contact tracing back in place, as officials try to reduce the daily case count aiming for zero
once again.
In the meantime, this latest outbreak and the extreme measures that we're seeing back in place to try to stop it, although no doubt hit the economy
hard -- Richard.
(END VIDEOTAPE)
QUEST: David Culver. China's growth forecasts for the next quarter have now been cut in half. Goldman Sachs is expecting 2.3 in Q3, it had been almost
six percent before.
China has been the bright spot for many sectors. Goldman says travel, entertainment, and catering could all take a hit up or that might be a
statement of the obvious. David Hunt is the Chief Executive of the asset managers, PGIM. He joins me from New York.
Okay. Now, this is interesting because China's recovery has to a large extent dragged, maybe not the U.S., but has dragged large parts of the
global economy up faster again, in a way that the U.S. has as well. But if China slows even marginally because of delta, what happens?
DAVID HUNT, CHIEF EXECUTIVE, PGIM: Well, it's an excellent point, Richard. I think you're seeing economists around the world scramble now to begin to
write down some of their overly optimistic forecasts of growth over the next year.
Without a doubt, you're seeing that for China, but you're also seeing that in Europe, and to some extent here in the U.S., but I don't think we should
lose sight of the big picture. And the big picture is that, you know, we have had a remarkable economic recovery. The U.S. certainly, I think hit,
probably peak growth in the second quarter and we expect Europe to hit peak growth in the third quarter. We will have a very strong level of growth
overall for the full year.
QUEST: Okay, so let's talk what you do, asset allocation. Now, as I came into this year, we were talking a lot about -- it was going to be a strong
year for equities, which it has been in the first half, but as delta hits us in the second half, do we play defensive?
HUNT: So, Richard, the dominant theme of the investment landscape today is negative real interest rates right around the globe. And as long as that
remains true, you are going to see a dramatic hunt for yield. Anything that can outperform cash is going to do relatively well.
[15:20:14]
HUNT: So, risk assets, whether that be equities, or we see the same thing in high yield, we see the same thing in private credit, we see the same
thing in real estate, are going to be underpinned by those risks. And so, what will really change the game is much less, I think, the GDP picture and
much more a change in the Fed policy around risk, and that's why so much focus on that.
QUEST: Would you expect a minor tinkering that we all know is going to happen. For instance, the tapering that will take place. You've got -- the
first one, you've got tapering, and then you've got lack of reinvestment. And then finally, you'll get to a rate rise at the policy level. Would you
expect dislocation or just a gentle rebalancing to account?
HUNT: So, for us, our main focus is the labor market, and I think to understand the Fed or even the E.C.B., the real focus has to be on what
happens to the labor market. And we can see a couple of different scenarios.
In one scenario, actually, we continue to add jobs at a reasonable pace over the rest of this year, and actually, we get back to a position of
reasonable employment, in which case, I think the Fed does move along the path that you suggested.
I can imagine an alternative of view, and actually, we're seeing more and more evidence of this that actually a number of people decide they don't
want to go back to their old job. And by the way, a lot of the employers have decided that they don't need as many workers because productivity is
actually going up. And in that case, we actually have a labor market that doesn't cure, and if that happens, we think you'll see we're dovish stand.
QUEST: I want to finish with a slightly different area. In a balanced portfolio. Now you remember, this is what we're always taught. Balance your
portfolios. Don't take too much risk. Make sure you have something for a rainy day. Bonds versus stocks, all of the above, and if you really like
it, a bit of gold as well. Where do you think crypto comes in today's private investor portfolio?
HUNT: Well, at the risk of admitting my age, I also grew up in this industry when basically the 60/40 portfolio between stocks and bonds was
the way to think about the world. But you know, the last 15 years have really changed that. And part of that has been the dramatic crackdown that
we had after the GFC banks really stopped taking as much risk, the regulators certainly rein them in.
And so, we've seen a dramatic increase in other asset classes, whether that be the rise of private credit, whether that be a lot more allocations to
private equity, whether that's infrastructure funds. And so for us as we work with clients, we are actually seeing a dramatic expansion of the range
of types of assets that they are investing in.
Most of them are not at this point, moving into crypto, that remains largely a retail orientation. Large institutions not so much, but we are
seeing a real change in the old concept of 60/40. And you're right to point that out.
QUEST: And we must talk about that in the future, sir, as we continue our discussions on QUEST MEANS BUSINESS.
HUNT: Thank you.
QUEST: Very grateful. Thank you, sir.
Earlier this week, the U.N. reported that global temperatures are rising faster than expected. The red warning call to the alarm. Without action, we
will start seeing severe impacts on areas such as food production.
A center in Dubai's desert is using cutting edge techniques with the aim of growing food in the harshest conditions, seeing industries and how they
will adapt. Nina dos Santos reports in today's "Think Big."
(BEGIN VIDEOTAPE)
NINA DOS SANTOS, CNN CORRESPONDENT (voice over): Extreme temperatures, sandy soils, and low-quality water sources. It all makes the desert a very
tough place to grow food. That is unless you're a Salicornia, like this one, battling the brutal conditions and giving us a taste of what farming
will look like in the future.
DR. DIONYSIA ANGELIKI LYRA, AGRONOMIST, INTERNATIONAL CENTER FOR BIOSALINE AGRICULTURE: Salicornia is a desert superhero in terms of the salinity that
it can tolerate and survive under such kind of harsh conditions.
DOS SANTOS (voice over): Challenging the types of food that can grow in the desert is the meat and potatoes of the International Center for Biosaline
Agriculture in Dubai. Here, they are on a global hunt for nutritious heat resistant crops that can grow in the harshest conditions.
LYRA: Using saline water resources and sandy soils, we can grow crops in an unconventional way to boost the food production on a local level.
[15:25:11]
DOS SANTOS (voice over): There's real urgency to this work -- extreme weather events and limited freshwater sources pose a real threat to global
food supply. The center boasts a unique collection of more than 13,000 seeds from all over the world. In the case of quinoa, the team tested 1,200
variations and found five that can grow in the desert.
From research to practice, the center has programs across the Middle East and in North Africa and it has big plans for Salicornia.
LYKA: We are looking into developing Salicornia based food products. Salicornia based burgers, biscuits, crackers, hoping for these products to
be introduced in the market quite soon.
DOS SANTOS (voice over): Today, 41 million people are currently on the brink of famine. With farming lands turning into deserts, new agriculture
techniques are a real option for feeding the hungry.
JOSHUA KATZ, PARTNER, MCKINSEY & COMPANY: Countries and businesses will make choices about how they want to incorporate different growing systems.
We're going to have a role for almost every different type of cropping system and every different growing technique in different parts of the
world.
DOS SANTOS (voice over): As climate change intensifies, smart farming techniques like ICBA's prove that to achieve food security, adapting is the
only way forward.
Nina dos Santos, CNN.
(END VIDEOTAPE)
QUEST: When we return, the speed of Taliban's advance in Afghanistan appears to have caught even the Biden administration off guard. We will be
at The Pentagon, next.
(COMMERCIAL BREAK)
QUEST: I am Richard Quest, hello, there is more QUEST MEANS BUSINESS in just a moment. Carnival shares are falling after a COVID outbreak on one of
the ships, I'll speak to a travel expert. Brian Kelly will be with us.
And Disney is rebounding from its COVID slump. The theme parks have reopened and they are getting a boost in latest earnings. We will get to
all of that after I've updated you of the news, because this is CNN, and here, the news always comes first.
[15:30:20]
Last month was the hottest month ever recorded globally. According to the National Centers for Environmental information, the western U.S., Eastern
Europe and Asia all faced heat waves and wildfires of scorched parts of North America and in Europe. Advisors to the U.S. Centers for Disease
Control and Prevention, the CDC have voted to recommend a third COVID vaccine for certain people who are immunocompromised.
It comes today after the FDA extended emergency use authorization of the Pfizer, Moderna vaccine that will cover people who have compromised immune
systems.
And then a man who was shot and killed five people in Plymouth, England on Thursday was amongst the victims according to the police. The shooter also
took his own life. It's the U.K.'s worst mass shooting in 11 years. Youngest victim was three years old. Police have not yet established a
motive.
The Taliban have captured Afghanistan second largest City of Kandahar and are making rapid advances towards the capital Kabul. On the way they say
they've seized hundreds of weapons and vehicles in Kandahar and have taken (INAUDIBLE) government offices and police headquarters. The Taliban are now
less than 100 kilometers away from Kabul and closer to the goal of pushing out the western-backed government of Ashraf Ghani.
The U.S. Embassy in Kabul is instructing staff to destroy sensitive material as well as items which could be misused in propaganda efforts as
they say. A few moments ago, the U.N. Secretary General said Afghanistan is a country on the brink.
(BEGIN VIDEO CLIP)
ANTONIO GUTERRES, U.N. SECRETARY-GENERAL: Even a country that has tragically known generations of conflict, Afghanistan is in the throes of
yet another chaotic and desperate chapter. An incredible treasure the for its long suffering people. Afghanistan is spinning out of control.
(END VIDEO CLIP)
QUEST: The Taliban captured the first major city last week, now it's taken the 17th. This map shows you as you can see the advancements along with the
date. Everybody seems to have been caught off guard by the speed of the advance. Listen to what Joe Biden said earlier last month when asked
whether the Taliban's takeover was inevitable.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: No, it is not. Because you have the Afghan troops, have 300,000 well-equipped as well as equipped as any
army in the world. And an air force against something like 75,000 Taliban. It is not inevitable.
(END VIDEO CLIP)
QUEST: Oren's with me at the Pentagon. Oren, the President I'm guessing -- I mean, obviously embarrassment will be at the White House but his 300,000
Afghan troops basically were no match for the idealistically driven Taliban.
OREN LIEBERMANN, CNN JERUSALEM CORRESPONDENT: And that's a key phrase, if you choose, they're idealistically driven. The Taliban have a mission. They
have a will. And that's what we're seeing play out on the battlefield. It is true that there are at least on paper, 300,000 Afghan forces. An Air
Force, one that is far more advanced than anything the Taliban can put up. And yet they are crumbling before the Taliban as they make these advancing
advances seizing 17 provincial capitals in a week now.
And that's simply the reality of what happened on the battlefield. Yes, the Afghan military consolidated some of their forces to try to protect the
population centers, the Afghan Air Force is still carrying out missions and airstrikes, or at least part of the military is still functioning. And yet
that's done little to slow down the Taliban advance. And the speed with which the Taliban advances you see playing out in U.S. policy, which is an
acceleration of plans, essentially, to get out. Not only embassy staff but also Afghan interpreters and their families who have helped the U.S.
QUEST: And this -- the desire, the wish they go. I mean, at the moment is to avoid helicopters, lifting people off the roof of the embassy,
reminiscent of the fall of Saigon. I mean, that would be -- besides tragic for those people involved which is the most important arguably. That would
be devastating for the government administration.
LIEBERMANN: Certainly look, that's the analogy that's been made here repeatedly, especially in the press briefings when we speak to the Pentagon
press secretary, and in other places. Is this Saigon, that withdrawal of Vietnam, the evacuation of the embassy, they won't go there. They won't
Make those analogies or those references, but they're certainly aware that those references are being made especially as you see reports like what we
have now that the U.S. embassy staff has been ordered to destroy sensitive material including American flags or embassy logos that could be used as
propaganda.
[15:35:16]
LIEBERMANN: Nevertheless, even if this is damaging for the administration, their priorities are elsewhere. And they've made that clear. If it wasn't
fixable, if you couldn't make the country function with more than a trillion dollars in 20 years, an investment of American time, resources and
lives, then the priorities simply are elsewhere. The threats are elsewhere and that is what President Joe Biden has made clear he is focusing on.
QUEST: Oren is at the Pentagon. Thank you, Oren. The cruise industry has had tried again and again to resume sailing. Now there's 27 COVID cases
aboard. A Carnival ship that's off Belize in a moment.
(COMMERCIAL BREAK)
QUEST: Twenty-six crew members of the Carnival Cruise Ship Vista and one passenger onboard have tested positive for coronavirus in Belize. All of
them, all 27 were vaccinated and most are asymptomatic. Carnival says all unvaccinated guests on board will be tested before they disembark. The
share price as you'd expect that you've got your Carnival Royal Caribbean and Norwegian. Norwegian is bearing the brunt there of the most.
But they are all down roughly 2-1/2 plus percent. Brian Kelly is the founder and chief executive of The Points Guy. He is -- he is with me.
Brian, good to see you. Let's deal with this first and then we'll move on to two other issues. Brian at the cruise industry that just cannot cut or
break, can they? I mean and since we're going to be living with COVID rather than trying to eradicate it, I'm wondering, is this -- is this going
to be the new norm?
BRIAN KELLY, FOUNDER AND CEO, THE POINTS GUY: This is the new normal. In fact, Carnival already said that that ship is going to keep going. You
know, the show must go on, passengers don't seem to be too affected by it. And as you mentioned, they're mostly asymptomatic. So, you know, with Delta
breaking through, you know, with the vaccines we are going to have to live with COVID and travel. We, you know, there's simply no other way around it.
QUEST: Let's turn to the check -- the measures being taken. We saw an extremely strong point. I saw yesterday. The eastbound flight of JetBlue
was full.
[15:40:02]
QUEST: The westbound flight that I came back on was empty. Because of course the Brits can't come here, Europeans can't come to the United
States. And how long do you think it's going to be before the U.S. does relented opens up if they do?
KELLY: I think the U.S. will relent. I think we've got to wait for this COVID outbreak to kind of settle down a little bit. I think the optics of
opening up borders, as we're seeing an unprecedented spike would probably send mixed signals. But I think by October, I think the Delta variant spike
will come down as it did in the U.K. But until then, I don't expect any new changes.
QUEST: which means, what did you make of this new Jet Blue route? They've been talking about it for two years. I sort of think it's a bit of a game
changer because I'm already seeing prices have been cut, where they compete and people can travel. And do you see it in that way or is it just another
one on the route?
KELLY: No, I think it's a welcome addition, you know, transatlantic prices, as you know, are out of control. And I was sad to see Norwegian Air go
under, even though they weren't a business class airline, they did keep, you know, fare pressures low. And as throughout COVID, we saw WOW Air go
away. So I'm glad to see a lower fare competitor on the route, you know, time will tell whether it's profitable for them.
But being that it's on a smaller plane, I'm rooting for JetBlue. And I think once the U.K., you know, once a U.S. opens up to the U.K., I think
that route will be -- will become much more profitable for them.
QUEST: It's not easy to travel at the moment. I mean, I'm leaving tonight for Copenhagen, and just using VeriFLY which is fine. But it's complicated.
The number of pieces of paper that you have to have. The number of tests, even fully vaccinated. What's -- what is it -- what are your readers and
people following The Points Guy saying.
KELLY: Yes, I mean, it's a mess out there. Whether you're -- even domestically, I've been in -- I was at Charlotte Airport this week, and I
saw a line with about 400 people in it waiting to get reaccommodated by a single agent at American Airlines. It's tough, you know, that our air
traffic system is stressed out, you know, internet -- internationally, it's a different game, I highly recommend to people fly nonstop to your
destination.
Don't try to connect and save a couple bucks because you double the chances of -- as you mentioned, paperwork, long lines, different rules from
different countries. So, it's a challenge. I mean, even for the most frequent travelers, it is a hassle right now and stressful.
QUEST: And finally, I just want to talk about the future. I mean, what I -- if we look at the future, so in the U.S., I mean, things are almost back to
normal. And I'm seeing more airlines adding routes. The IHG CEO was telling us earlier in the week about how they are bringing on a new lifestyle,
luxury brand. So, the industry is moving forward and planning for the future. And we've got (INAUDIBLE) this Norwegian newbie that's going to
come along at some point next year in the low cost -- the long haul, low cost. Is there room for optimism?
KELLY: I think there is. I think, you know, as you -- as you kind of mentioned, where people are just getting used to living with COVID. The
vaccines are effective at, you know, hospitalizations and -- but, you know, it's going to take a while to get out of the woods. But, you know, I think
looking at the numbers now and the breakthrough cases, I don't think we're going to live in a post-COVID world.
So I think as the travel industry, we need to think beyond that and educating consumers on the realistic risks of traveling. I hate when the
U.S. government just says no, you shouldn't go to Turks and Caicos. Well, how do you say that, you know, a blanket statement for a country when our
own country has cases added control. So I think it's all personal risk, knowing how to minimize your risk. And certainly getting vaccinated is the
best thing you can do.
QUEST: And I'm afraid I didn't take your advice, Brian. Unfortunately, I -- well, I couldn't get to go. Well, the price wasn't right. So I am
transferring tomorrow morning on my way to Copenhagen. I shall bear your sage words as I get stuck somewhere on route. Brian Kelly, thank you for
joining us. We always appreciate you taking the time. And as I say, I'm making my second trip to London this week.
When I was there on Thursday, that's yesterday, I spoke to Emma Gilthorpe. She's Heathrow's Chief Operating Officer. And she told me Heathrow he
through is busier than it has been at any point in the pandemic, but it still has a long way to go.
(BEGIN VIDEOTAPE)
EMMA GILTHORPE, CHIEF OPERATING OFFICER, HEATHROW: We've had a much busier summer compared to last summer. Last summer we were less than 10 percent of
volumes. Now we're sort of hovering between 30 and 40 percent depending on day of week. So a significant uptick on last year but clearly well short of
the 80 million that we were in 2019.
QUEST: How are you going to get it all back together? I mean, looking over there, this is considerably busier than it was when I came through a month
ago and dramatically busier than it was at the beginning of the year or late last year. Where do you go next?
[15:45:06]
GILTHORPE: So, as I said, you know, we're still significantly under our capacity. And we were at (INAUDIBLE) million in 2019. We've got all of our
-- pretty much all of our colleagues back now. There were a few in small teams, but the majority are now out of furlough, and they're working their
shifts. And the next step really is to make sure that we're match fits for rampart. Because when that demand comes, it comes fast. When those roots
come back on, they snap back.
QUEST: We've seen that in the last few weeks. Certainly when, for example, the U.K. announced vaccinated E.U. and U.S. could visit without
quarantining. That caused the dramatic increase in inward travel.
GILTHORPE: It was huge. And, you know, not just from a business point of view, and from a U.K. economy point of view. But on a very, very human
level, seeing those families, reconnecting, who had been a part, for the best part of two years was really wonderful. And it reminds you actually,
that there's a heart in the middle of Heathrow not just being about business.
QUEST: OK. But when the government recently announced more changes on the (INAUDIBLE) and France and all of those things. It wasn't long before your
boss said, yes, thank you very much, but it's still not enough. What more do you now need from the British government for Heathrow?
GILTHORPE: So from the U.K. government, what we're asking is that they replace the current quite expensive PCR test with a lateral flow test for
people who are coming back to the country. This is absolutely critical. You know, during summer, especially families are traveling, they're having a
much needed summer holiday. And, you know, I have four kids. So, traveling becomes a very expensive endeavor when you have to do all of those PCR
tests.
So we need a lateral flow test, instead of PCR test. But also, we need the U.S. government to review its border policy. Really critical. U.K.
government has taken the ambitious step of opening our borders but we must have the U.S. government doing the same recipe and putting in the ability
for vaccinated passengers to travel to the U.S.
QUEST: Do you expect to introduce any new measures as a result of the Delta variant? The U.K. Government has, obviously, everybody has to remain mask
inside? Do you expect to have any more changes?
GILTHORPE: We put in quite a few layers of protection for our colleagues, for our passengers during that period. So, I'm not expecting anything new.
I think masks are going to be a feature of airport life for some time to come our passengers want and expect it. We want our colleagues to wear for
their own safety. But we're starting to see things like social distancing, softening now, people self-regulating rather than us having to intervene.
QUEST: What was it like the worst day here? Come on. Tell me how it -- how it was on that day.
GILTHORPE: Oh. It was heartbreaking, actually. I mean, it was -- it was very distressing when you sit here, you know, 75 plus thousand people work
at Heathrow. And when you thought about the human impact that not only COVID was having directly on people's well-being, their lives, their
families, but also that it was having through work and through the economic impact that it was having. It was -- it was really devastating.
I tell you what was most distressing. Driving around the perimeter road. I drive through it on my way home every morning and every night. And very
often not seeing one plane in the sky when we were used to a plane taking off or landing every 45 seconds at Heathrow. That was just devastating.
(END VIDEOTAPE)
QUEST: Things are getting better but not fast enough. Disney's bouncing back from a pandemic ravaged year. And they're just (INAUDIBLE) the street
by surprise. In a moment.
(COMMERCIAL BREAK)
[15:51:20]
QUEST: The coronavirus didn't hold back Disney in last quarter. The company's theme park revenues increased by more than 300 percent. Its
Disney Plus streaming service grew to 116 million subscribers. Four million more than the street was expecting and the share prices are up on the news,
as you might expect. It's 180, is up over nearly one percent. Disney's massive theme park and movie businesses remain vulnerable, of course to the
virus in their recovery.
And they could be slowed or reversed with the contagious Delta variant. Our media -- chief media correspondent Brian Stelter is with me. So Brian,
great numbers. Lovely, but the risk is there.
BRIAN STELTER, CNN ANCHOR: Yes, it's hard to look very far into the future and know for sure what it holds. And I think for Disney, for Universal, for
their theme park operators this resurgent Delta variant, especially significant in Florida, one of the states in the U.S. most impacted right
now. It is putting some pressure on the -- this current quarter. And the coming three months. But looking back at last quarter, what you see in
Disney's earnings is this pent-up demand to get back out, to go on vacation, to get to Orlando or Anaheim or other theme park destinations.
It's clearly there, Disney benefiting from it and taking full advantage of it.
QUEST: OK. That's the Wall Street. But let's get to the sector with the (INAUDIBLE) over the salary. Scarlett Johansson's salary and the amount she
gets paid for a film. The CEO has addressed it. You know, people have said that the new CEO fumbled the ball on this. Is that still your view?
STELTER: There's been speculation that Bob Iger would have handled this better, more carefully and there never would have been a lawsuit. That's
the theory. And I think that's a popular view in Hollywood. The Bob J. Beck had a hard time here and somehow fumbled the ball. And I think it's
impossible to say though, when you're looking at all these deals they've done with talent and chief x point on the earnings call was it they've done
a lot of other deals, dozens and dozens of other deals with other stars and there hasn't been any fuss.
So they're trying to portray Scarlett Johansson as this aberration as his exception as the one who's objecting. The truth is a little more
complicated. There certainly are other A-list stars that have their own concerns. They are calling up their agents trying to get better, more
financially beneficial deals out of the disease and Netflix's of the world. But what we're seeing again is this rush to compensate and satisfy talent.
Maybe Bob J. Beck did screw up on this one. He's going to learn a lesson but all these big players are trying to show they are the talent
friendliest right now.
QUEST: One point I do want -- sorry, forgive me, just jump -- dumping this on you without prior warning. But I read it -- I read it in -- no, I read
it in the in your excellent renewable sources newsletter, about the discovery who of course are aiming to merge with WarnerMedia discoveries in
real difficulties with its TVN24 in Poland, and is now going to claiming that the Polish government is against a treaty guaranteeing freedom.
This is a worrying development in Poland over what's happening and the way they want to -- the government denies this by the way sensor TVN24.
STELTER: It has all the appearances of a crackdown on a free press in Poland. The right-wing government trying to stamp out TVN News which is the
biggest Independent News Channel in the country. This appears to be the Hungary model. The urban model now being applied to Poland. And Discovery
is announcing now it is going to take legal action, trying to take legal action to stop the Polish government from trying to make this proposed
legislation actually take effect and actually become law.
This is notable, Richard, see Discovery standing up for a free press and as you mentioned WarnerMedia Discovery trying to merge, trying to bring these
two companies together in the U.S. but that will have global implications. By the way, I am going to have a top executive from Discovery on reliable
sources this weekend so people can hear from the company directly as it tries to battle the Polish government.
[15:55:15]
QUEST: Excellent. Thank you, sir. I appreciate that. And no doubt you will have to say, when you have that guest, as I'm about to say, Discovery is of
course, in the process of merging with WarnerMedia, parent company of this network. Thank you. Brian Stelter, have a good weekend. Thank you, sir.
And the last few moments on Wall Street, I need to update you. Let's look at the big board. And Disney -- well, let's start -- let's start with the -
- let's start with the Dow and how things are trading. No records on the Dow since we do look like we're down 20 -- over 20 points. So record
yesterday, but not today. And the Dow 30 shows that Disney is the second best and the banks are the lowest because of course of what's been
happening. We'll have more of this profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, Brian Kelly on this program talking about the industry like the rest of us having to learn to live with COVID.
And that's very much a travel industry that is and that's very much what I am seeing as I travel around the world. Different places, different roles,
different forms, passions are located forms of vaccination certificates, a COVID test, a PCR an antigen, but we are learning to live with it.
And that's what I'm going to experience over the next seven days, eight days. Well, of course, I'm off to Copenhagen tonight via London Heathrow.
As always, if you do see me on my travels, giveaway, come up and say hello, mask if appropriate. And we'll have a chat about what's happening in the --
in the travel world. But we do have to just get on with it. We're going there for World of Wonder.
And QUEST MEANS BUSINESS next week will come from Copenhagen on one day. You'll be able to join me as we discussed COVID travel and what's happening
on the European perspective as the summer in the height of the summer season. That's QUEST MEANS BUSINESS which of course will be in Copenhagen
next week. Otherwise, that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York.
Whatever you're up to in the hours ahead, I hope it's profitable. The bell on Wall Street starts ringing. No records. The Dow was down where it was
lastly locked. We have no records -- oh no yes, the Dow is a record. Forgive me. It's now just up a tad. Dow is a record. S&P, you'll see in a
moment.
END
