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Quest Means Business

Biden Approves Record Release From U.S. Oil Reserve; Putin Wants Payment From Unfriendly Countries In Rubles; Conflict Causing Huge Challenges Says Lufthansa CEO; U.S. Says Russian Troops "Drawing Down" From Chernobyl; Zelenskyy Slams Belgian Imports Of Russian Diamonds; Russia Bars Top E.U. Officials In Response To Sanctions; E.U. Says Hundreds Of Planes Stuck In Russia; Ryanair CEO Says Historic Disruption In Europe. Aired 3-4p ET

Aired March 31, 2022 - 15:00   ET



RICHARD QUEST, CNN BUSINESS ANCHOR: Nine o'clock at night here in Brussels, an hour to go of trading on Wall Street. We'll watch of course

the markets and how they've been reacting to the events of the day.

Stocks though are at session lows. We're getting to the last day of the quarter, and as you take a look at how things are, it is the worst quarter

by the way, since the pandemic crash. The way the markets are looking at the moment, and the main events of the day.

The U.S. has made a bold move to help take bring down oil prices. It's going to use the Strategic Petroleum Reserve and release a million barrels

a day we'll talk about that. It happens on the same day that President Putin is threatening to cut off gas supplies to Europe. We have the E.U.

Commissioner live on this program.

And we hear from Lufthansa's Chief Executive talking about higher oil prices today. Also how the pandemic showed the value of travel.

Put it all together and tonight, yes, I'm live in Brussels, last day of March. It is Thursday, March 31st, in Brussels I'm Richard Quest, and I

mean business.

Good evening from Brussels, this evening. The seat of European Union power, if you will, where there have been major developments across Europe in

terms of oil, and it is about oil that we will be talking about a great deal this evening.

On both sides of the Atlantic, there have been announcements concerning oil and the conflict in Ukraine.

Also tonight, we'll be talking to top policymakers: The European Economics Commissioner and the aviation industry on tonight's program. They've been

gathered here for the airlines -- for Europe's Summit.

On this program, you will hear from the CEO of Lufthansa, Ryanair, the E.U. Economics Commissioner and also the Director General of the E.U. transport


Let's start in the United States today. History was made as President Biden evoked and invoked war powers to tackle America's energy crisis. The

President is using the Strategic Petroleum Reserve. More than 700 million barrels are in the reserve, set up specifically for emergency use to help

the supply into the market.

The President will use his powers and release a million barrels a day for six months, and at the same time, he will pressurize U.S. oil companies to

produce more probably from fracking and nontraditional methods.

You can see the effect it had on the market. Brent fell some five percent at $105.00 a barrel. Last month, the swing has been from $100.00 to $130.00

and back again, but more oil from the SPR is considered to be obviously a major positive.

The President said the extra oil will help U.S. get through the driving season -- the summer to September.


JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Today, I'm authorizing the release of one million barrels per day for the next six months over 180

million barrels from the Strategic Petroleum Reserves. This is a war-time bridge to increase oil supply until production ramps up later this year,

and it is by far the largest release of our National Reserve in our history and provide historic amount of supply for a historic amount of time, a six-

month bridge to the fall.


QUEST: Here in Europe, Russia has gone head to head or is going head to head on the question of gas supplies to Europe, threatening to cut off gas

supplies to Europe if energy is not paid for in rubles starting basically tomorrow.

Unfriendly countries is how President Putin describes it who don't comply that would help stabilize the currency. Now, the ruble which collapsed

after the invasion up to 140 plus rubles for the dollar recovered because of the drastic measures, because it is forcing Europe to use European euros

or dollars into rubles supports the currency.

Our correspondents have great details on this and give us insight. It is Matt Egan in New York, Clare Sebastian in London.

Matt, this was a dramatic announcement from the President. It is a bridge as he said. How much realistically will a million a day from the SPR bring

down or support prices?


MATT EGAN, CNN REPORTER: Well, Richard, this amounts to a shock and awe campaign from the White House, this release of 180 million barrels of oil.

This is three times bigger than anything we've ever seen before. So, it is big. The problem is that this shock to the market is even bigger caused by

the war in Ukraine.

There are so many barrels of oil from Russia that have been knocked offline, and so the experts that I'm talking to, they are skeptical here

that this is really going to do enough to actually put a real big dent in prices. And what we saw was oil prices came down last night on the rumors

of this announcement, and in recent -- in the last hour or so, U.S. oil actually went below $100.00 a barrel after the President was speaking.

So it is having an impact, but it's not going to be enough, I don't think to, you know, suddenly make oil go dramatically lower, I don't think it's

going to dramatically lower gasoline prices. In fact, some of the experts that I'm talking to said that they still anticipate that prices at the pump

in the United States are going to go back up to record highs, hitting fresh records this summer.

But I think at the end of the day, Richard, so much depends on what actually happens in the war in Ukraine and how many barrels from Russia are

actually knocked offline.

QUEST: Clare Sebastian in London. The decision to force payments in rubles. It is a very complicated mechanism to do with opening up Special K

accounts and money being transferred here to there and back again, but substantially, that's going to be the way Germany et al will have to pay if

they want Russian gas and oil.

SEBASTIAN: Yes. Richard, Putin made that extremely clear today, if they don't pay according to this mechanism, then he will stop deliveries. It all

boils down, of course, to sanctions. He said look, we've been delivering gas. Europe has been paying in euros, and then they've been freezing those

euros. And he said that we expect those sanctions to continue and so we have to protect ourselves.

But if you really dig into the detail of this, Richard, this is where it gets interesting, because it really doesn't seem like practically anything

will change for Russia's gas customers in Europe. Essentially, the mechanism is that they pay the euros or whatever currency they're already

paying it into Gazprom Bank, which is the bank that already carries out transactions for Gazprom. Gazprom will then trade those euros, for example,

into rubles on the exchanges, and then pay them into a special account, which will then complete the transaction.

So really, this is just work for Gazprombank. It doesn't seem like on the surface, anything will actually change from Europe, but European countries

we heard from Germany, France, the U.K. today, they say they are not going to change the currency in which they're going to pay for gas.

So right now, they are saying no, even though this mechanism doesn't seem to change anything for them.

QUEST: Because it's a massive form of support for the ruble, if this goes through in the way it's envisaged.

Matt Egan, how much of what President Biden did is political, how much is economic?

EGAN: That's a good question. I think only the President can answer that. But there is no secret that high inflation, and especially high prices for

gasoline had been a huge political negative for the President. So there is a political calculation that has to go in here.

But I think there is also an economic one, because the higher that oil prices go, the greater the risk of an economic slowdown both in the United

States and overseas. And that, of course, is not good for anyone.

But I think the problem here is that you know, there is a limit to how much oil countries can release from their emergency reserves. I mean, this is

not a bottomless pit. Even before this war began, the SPR in the United States was sitting at a 20-year low. And the 180-million barrels that are

going to be released throughout the next six months will wipe out a third of what is left, bringing reserves down to the lowest level since 1984, at

a time, of course, when the United States was smaller in terms of how much oil it consumed and the size of the economy.

We should get fresh details on all of this though tomorrow. The International Energy Agency is holding an emergency meeting tomorrow to

discuss next steps. That's according to a person familiar with the matter telling CNN and the President of the United States said today that we could

expect to hear another 30 million to 50 million barrels of emergency releases from other countries in addition to what the United States has


And the President correctly said that the more oil that gets released, the bigger the impact on prices.

QUEST: Right.

EGAN: Of course, again, we don't know how long that impact is going to last.

QUEST: Clare, finally to you. Is it likely that Putin will switch off the gas?


SEBASTIAN: Richard, that is the big question. I think in a way that would be shooting himself in the foot because Russia does need the money from

selling gas at a time when its economy is really struggling under the weight of sanctions.

I think this -- you know, this is potentially something that he wanted to do that then perhaps his Central Bank r his advisers told him to sort of

dial back and create this compromise mechanism. I think, ultimately, Russia does not want to switch off the tap because of the revenue that it gets

from oil. And of course, that would be hugely detrimental to its customers.

So look, we see where this goes. But there might be a way for both sides in this situation, to sort of claim victory for Europe to say, well, this

actually doesn't change anything for us, and for Russians to say, yes, they've agreed to our mechanism.

But for that, Europe has to find a way to agree to this without looking like it is supporting Russia and President Putin.

QUEST: Clare Sebastian in London, Matt Egan in New York, to both of you, thank you.

Now with me here in Brussels is Paolo Gentiloni, the E.U. Economics Commissioner. First of all, Commissioner, thank you.

Braving this extraordinary breeze tonight.


QUEST: It is so cold.

GENTILONI: We need energy.

QUEST: You can't afford it. The problem with energy at the moment is the Russians are saying you've got to buy it in rubles. There is a complicated

way of doing it. European governments are saying they're not going to. Why not?

GENTILONI: Well, of course, this Decree was issued a few hours ago, so we are still looking into details. But two things are quite clear. First,

contracts must be respected, and in the existing contract, there is no obligation to pay in rubles. Second, we will not be blackmailed by Moscow.

QUEST: That's the real reason. The contract bit is a nice way of getting to the real reason. You don't -- you're basically saying it's blackmail.

GENTILONI: It's an attempt to circumvent sanctions and to blackmail the European Union, but it is anything that the existing contracts allow to do.

QUEST: But if this construct of paying to a K Bank in dollars, or euros, which are then converted by Gazprombank into rubles, you're still paying in

your own currency. So why is this against it?

GENTILONI: Well, I think we have contracts to be respected. I understand the maneuver which is behind this, because of course, the Russian economy

was severely hit by the sanctions. The rubles need to be reinforced by Putin.

All this is part of the game, but our reaction was a reaction justified by this war. So at the end, final point, we will not be blackmailed.

QUEST: Then, I mean, the beautiful part is that we go to extremes here, and the extremes is the gas will be turned off.

GENTILONI: Well, we -- you know that this is an issue for the European economy, but we are ready also for this issue.

QUEST: Now, clearly, the Russian economy is going to suffer far worse. But what's your latest view on how the European economies are going to suffer

as a result, firstly, of the invasion, the extraordinary refugee crisis, and now what could be an oil shock?

GENTILONI: Listen, there is a military aggression. If we want to respond for military aggression with economic means, not with military means, we

have to do this in a coherent way and ready also to pay some prices.

So of course, we will pay some prices, but this is what we have to do -- support Ukraine and have strong sanctions. Personally, I was Foreign

Minister when annexation of Crimea happened. I see in this moment, a stronger, more united reaction from Europe, impressive and affecting the

Russian economy.

QUEST: What economic support do you think you may end up having to provide to European countries? Now, of course, obviously, initially, it's a

national issue for the countries on a fiscal basis. But if they turn to require further support from the center, what can you offer?

GENTILONI: Well, I think we can immediately offer two things. First, joint procurement of gas and oil with our partners around the world. And second,

common storage with also some new things that we have to do interconnection. It is not an old part of Europe function. We need to build

our independence from Russian oil and gas.


QUEST: You say when you were a Foreign Minister in Crimea and then Prime Minister after, do you -- do you now think/realize that more should have

been done post 2014 towards energy independence or dependence from Russia? And instead Europe went the other way, full stream with Nord Stream 2?


QUEST: The reason I ask it is because you don't want to make the same mistake again after this crisis.

GENTILONI: I think this crisis was a wakeup call. Putin forced us in a month to do something that we were not able to do in 10 years, and in one

month, both in energy and in common defense, the European Union decided something for our strategic autonomy, which is, I think, extraordinary.

You are right. We should have done this before, but now we are doing it, and Putin miscalculated the European unity and reaction.

QUEST: Is the European economy, in your view, strong enough to withstand the oil shock that could be about to hit it?

GENTILONI: Well, we entered this crisis in a strong footing. So we had four percent growth, very good employments, so I think we can afford also a

decrease of this growth. We will have a decrease of this growth, but not entering in negative territory.

QUEST: Commissioner, you've got a much more sensible coat on than I have, I can tell you that.

GENTILONI: Thank you, and good luck for this evening.

QUEST: I owe you a hot drink on another occasion. Commissioner, thank you very much to you.

GENTILONI: Thank you.

QUEST: For joining us.

It is QUEST MEANS BUSINESS. It is absolutely freezing here in Brussels tonight.

When we come back, there is warm talk hot talk indeed from airline CEOs. It is the airlines for Europe and you'll hear from the chief executive of

Lufthansa on connection keys and keeping Europe open, the pandemic and after the invasion.


QUEST: Welcome back. QUEST MEANS BUSINESS tonight in Brussels. The airlines for Europe, which is if you like, the lobbying or the

representative group of European airlines have been meeting here.

Lufthansa's Chief Executive says that the war in Ukraine is causing huge challenges with airspace being closed and of course, the rising fuel price

on the back of the war.

Now you look at how closed airspace affects the airlines. Remember, they can't fly over Ukraine it's too dangerous, and Russia has banned all

European carriers from flying over there.


So look at this flight from Frankfurt to Beijing. Now, before the invasion, the flight time was eight hours, 43 minutes, on average, because it has to

go a different way. That same flight is taking 10 hours and six minutes. It's coming to avoid Russian airspace. But of course keeping communities

connected and countries in contact means the flights continue to have to go, some of them are even more egregious. Take, for example, the JAL flight

from Canada to London.

But even so, the flight from Frankfurt to Beijing makes the valid point. It is costing the airlines dear.

I spoke to Carsten Spohr earlier about the crisis.


CARSTEN SPOHR, CEO, LUFTHANSA: There's clearly huge operational challenges to reroute traffic, either southbound, or in our case going home from Tokyo

we actually are leaving eastbound from Tokyo to arrive via Greenland in Europe. So things we haven't done in decades.

But it's also fair to say all this is only possible in such a smooth way because of the limited amount of flights from Europe to and from Asia.

If we had normal volumes, I think there will be huge operational challenges. One way or another, the industry would solve it, but right now,

the airspace is sufficient to provide customers with a service we do even though flight times are endured up to two hours.

QUEST: I mean, the interesting point is in an era when everybody is so concerned about the environment, you have no choice. I mean, if you look at

the JAL flight to London, if you look at the ones coming from Australia and over the top, you've got no choice.

SPOHR: I think because we all agree, including the passengers on board, that connectivity in this case is a higher priority, we cannot allow us to

be cut off from Asia, as Europe and the same applies to the U.S.

So I think here it shows the value of our industry, even with additional burdens on the environment or financially. Connectivity is key to keep this

world as peaceful as possible. And it is our industry which is providing it.

QUEST: The return post-COVID, it has been impressive on the leisure side, and we are all still waiting to see what the direction will be on the

business side. Do you have any view or any idea yet of the way it is moving forward?

SPOHR: Well, first of all, we know that lead times for bookings in corporate travel are shorter. So by now, you'll see this thing later than

you see it on the leisure side. That's one thing. Secondly, if you look at Europe, we are now just starting to really release the restrictions. In the

offices, people are allowed to return, the mask is coming away. So I think it is becoming more and more natural to go on a business trip while we

speak, and this, I think, we will be seeing in the next weeks and months very clearly.

QUEST: Are you in favor of lifting the mask mandate on the aircraft?

SPOHR: Oh, we actually just decided a few minutes ago to start tomorrow in Swiss to allow our passengers to take the mask off in Swiss flying to and

from Switzerland from countries where it also must be allowed, so just quite a few, so I think we see this over the next days, waiting for the

U.S. obviously, this might happen soon as well, so yes.

QUEST: Why do you want ITA in Italy? The history of -- I mean, you've already had an investment in Italy of course. But the history of people

getting involved or airlines getting involved with the national carrier of Italy has not been a good one. Why would you wish to join the ranks?

SPOHR: Well, first of all, Lufthansa has a very specific view in Italy. It's our most important foreign market after the U.S. and we already are

number one to and from Italy for long range travel. So that's the market.

ITA, let's not forget Lufthansa has lots of experience with lease structured national carriers. We didn't buy Swiss Air, but we bought Swiss.

We didn't buy Sabina but we bought the restructured Brussels Airlines.

We wouldn't have invested into Alitalia, but we are keeping our options open to potentially invest into ITA, so there is a market specifics for the

Lufthansa Group and there is experience in buying restructured national carriers and that might come together in the case of ITA and Lufthansa.

QUEST: But the one thing we've learned from the Italian market from the previous one is if you're going to go into this, you've got to be able to

get your hands around the neck of the beast and run it your way.

SPOHR: Well, I don't think I like that way of describing it. I think we found a nice balance of allowing national brands to have certain autonomy

to make them continuously part of the local economy and the local society.

If you call somebody in Switzerland or in Austria or in Belgium, I hope they would agree that they are still proud of their national carrier, of

course, being aware it belongs to the Lufthansa Group. So I think when the Italians are making a choice, I'm sure they will call Switzerland or call

in Vienna, will call in Brussels to learn how we did it there and then hopefully they take the right decision.


QUEST: If we look at the industry now in Europe, what for you is the number one priority?

SPOHR: Well, first of all, and you know me long enough, number one, priority is always safety. And I know you are asking for that, but let me

repeat that regardless whether practically the question is directed for, but coming out to probably your thinking.

For me, running the largest European carrier, with my team, competing globally, it is a level playing field around the world. So it is one thing

to have a level playing field in Europe, which more or less exists, but it is not a level playing field with other players who we are competing with

around the world who are outside of Europe, Middle East, but even the U.S., there has been significant support for airlines over the COVID period, in a

different way than we've seen in Europe.

It's great for my partner, United, and also, along with all of these guys running the other airlines say, tomorrow is the first day of Robert in

American, so we all are kind of friends in this industry, and we do what we do. But when you look at this in a neutral way, we want a level playing

field also for European carriers, and we don't think it is there.

QUEST: How un-level if you will, do you think the playing field is? Because without getting into the minutiae, the Gulf says that you got X

billion, you tell them you've got -- you paid it back, the U.S. carriers say this. So they all -- everybody says that nobody comes to the table with

clean hands, how unlevel?

SPOHR: But I think, to enable us to speak as an industry and have an open dialogue on this, the time is good to look away from whatever is water

under the bridge the history. We will all national carriers at some time. So what? Let's look forward. Now, how are we changing the level playing

field to either become better or become worse, this is the thing where we should focus on and Fit for 55 here in Europe has a huge potential to not

be fit for purpose and not help environment, but help those carriers who care less for the environment outside of Europe, have a negative impact on

the environment and make the level playing field even less leveled.


QUEST: Carsten Spohr, the Chief Executive of the Lufthansa Group talking to me here and when we come back, we will be visiting the frontlines in

Kyiv where Ukrainian soldiers show us how they stopped the Russian advance.

And the Chief Executive of Ryanair, he wants the likes of us to stop blaming the likes of him for climate change.


MICHAEL O'LEARY, CEO, RYANAIR: I blame the media.

QUEST: Oh come on.

O'LEARY: Because you want to show global warming, it is always a picture of an aircraft taking off out of an airport.





QUEST: Hello, I'm Richard Quest here in Brussels. There's a lot more QUEST MEANS BUSINESS for you this evening.

President Putin is lashing out not only with his oil threat but also barring top E.U. officials from visiting or entering Russia.

And the chief executive of Ryanair this evening, Michael O'Leary, European aviation facing the perfect storm: higher costs, more disruption. Get to

all of that in just a moment, only after I've updated you with the news headlines. This is CNN and, of course, here, the news always comes first.


QUEST (voice-over): President Biden says there's some indication Vladimir Putin is self-isolated and punishing his advisers but he adds the U.S.

doesn't have much hard evidence. U.S. officials said earlier they were confident in assessments that Putin is being led astray by the Russian

military about the war's success.

Shanghai's expanding its COVID lockdown as cases there rise. Most of the city's 25 million residents now have to stay home. Residents in the eastern

part of Shanghai have been locked down since Monday.

Republican senator Lindsey Graham says he will vote against President Biden's Supreme Court nominee. He voted last year to confirm Judge Ketanji

Brown Jackson to a federal appeals court. However, she does appear on track to be confirmed by the full Senate as early as next week.


QUEST: Now senior U.S. Defense officials say that Russian forces do appear to be drawing down from parts of northern Ukraine. Signs of the drawdown

appear to be taking place particularly from Chernobyl, north and northwest of Kyiv, and likely to have abandoned the Hostomel airport.

So what exactly is going on?

Christiane Amanpour visited the front lines northeast of Kyiv, where she witnessed firsthand the humanitarian crisis. And the Ukrainian soldiers

showed how they stopped the Russian advance.


CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT (voice-over): The first thing you notice approaching the front northeast of Kyiv are the

lines of villagers, waiting for humanitarian handouts. They receive a bag of bread and basics to get them through these difficult days.

"The first week of the war, a shell hit us near the greenhouse. We barely survived," says this woman.

"We had help from strangers around us. They gave us bread and canned food. We wouldn't have managed otherwise."

No one here knows when this war will end or whether Russia still has designs on Kyiv. The front line is about a mile away. For now, an uneasy

calm prevails, ever since the Ukrainian defenders stopped the Russian advance here. It was February 28th, they say, day four of the war.

They want to show us how they did it. But first we have to clamber over the bridge they downed to see the armored column they managed to take out. The

riverbank is littered with their skeletons.

This was a turkey shoot; Russian armored vehicles and tanks had come off the road to avoid the anti-tank mines, only to find themselves unable to

cross the bridge and unable to reverse in time. Ukrainian forces tell us, none of the soldiers inside survived.

A little further up the road, two tanks have been virtually smelted, blasted almost to smithereens. Forty-year-old Yevgeny (ph), a veteran

fighter, proudly tells us this was his handiwork.

"We all here have one role, to keep the enemy off our land," he says.

"First thing they did after seeing the village, they started to shell houses, just like that. They didn't see us. They didn't know we were here.

So they just started to work on houses.

"So I took the tank in my sights and I fired a rocket and goodbye to him."

The destroyed vehicles are stamped with an O.


The Ukrainian officers here tell us this identifies them as Russian units that entered from Belarus to the north.

Oleg (ph) is the officer who commanded this operation.

"As for now, looking at previous fighting we've had, I can tell you that we are trained better," he tells me.

"We have stronger morale and spirit, because we're at home. They are afraid. But they go because they're made to."

He's been battle hardened ever since the first Russian invasion from 2014, saying his side has enough weapons, ammunition and determination to win.

"I can tell you, I'm almost sure the Russians are regrouping and not retreating," he says.

"Besides, we are preparing ourselves to go forward. We're not preparing just to defend here."

U.S. and British intelligence say Putin seems to have, quote, "massively misjudged this situation," and clearly overestimated the abilities of his

military to secure a rapid victory.

This old lady tells us, "I have seen one war and here we go again. I wish Putin would go away."

The people of this land remain stalwart and the soldiers remain dug in, hoping they can continue to withstand whatever Putin has in store for them



QUEST: Christiane Amanpour reporting.

Now here in Brussels, President Zelenskyy delivered another speech to the Belgium parliament. It's his 17th such speech to a international

parliament. It was tailor-made, as has been the way. He lambasted Belgians over diamond imports from Russia.

He then went on to accuse some Belgians of valuing Russian diamonds over peace and he appealed for more support.


VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): But the world is so used to freedom that they don't want to notice how much the

fight for freedom costs.

For example, Russian diamonds in Antwerp are more important than the war in the east of Europe or those who think that accessibility of European ports

to Russian ships is more important than standing against the Russian war machine.


QUEST: Now President Putin has lashed out at Europe, we've been talking about this earlier, borrowing top European officials from Russia and this

list is in response to sanctions. Of course, with me, Nic Robertson.

No individuals were named in this list and I'm not sure too many of them are going to Russia anyway.

What was the purpose?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The purpose is to show the European Union that Russia is now finally taking action against

the sanctions they've put against it.

The Russians going to target those European parliamentarians who they believe are most responsible. They're going to target the vast majority of

actually those who sit within the E.U. parliament but also --


QUEST: To what purpose?

To what purpose?

ROBERTSON: In a way, today was the day that Russia declared its war on Europe, on European Union leaders. The sanctions have been placed on

Russia; Russia taking action, as you've spoken in the program already, about on oil and making countries pay in rubles.

That's not going to work. Blackmail is what you heard, standing here a short while ago. And this is, in essence, the same. This is Russia trying

to hit back. There aren't many ways they can actually do it.

It's, if you will, it's theatrical but it shows where President Putin's mindset is. He's feeling that, after the four rounds now of sanctions

placed on Russia, he appears to be feeling confident. This is how the Polish prime minister described it earlier today.

QUEST: We'll have a listen.


MATEUSZ MORAWIECKI, POLISH PRIME MINISTER: For the time being, Putin and his people, they were able to change the fiscal policy, monetary policy,

financial policy in such a way that they are immune to the sanctions to some extent, at least for the foreseeable future, for the next several



QUEST: But the interesting thing about the sanctions, as President Biden retorted when he was in Europe last week, he basically said sanctions

aren't meant to work. They're not meant to deter, they work over a long period of time.

QUEST: Yes, and that's true and we hear, if you give them a year, they could knock 10 percent off Russia's economy, which would be sizeable and


But it is significant that we've been hearing today, which we weren't hearing last week, from European Union leaders, the energy commissioner

here, the German economy minister, both saying, actually, we're going to have to suffer some pain here in Europe.

QUEST: Do you think that that realization was always available, they've just come to it now?


ROBERTSON: I think that they can't move ahead of their populations. Think back to last week, Chancellor Scholz saying we can't put pain on our

population. I interviewed the Greek prime minister sitting outside here. We can't put people into pain, he said.


Because there will be a potential backlash from populations, who support what they're doing --


QUEST: They're not going to have any choice now.

ROBERTSON: They don't and so they've got to move on it. They've got to bring their populations with them. And I think it was articulated very

clearly in this war that democracy doesn't come for free. And although you won't get your hands dirty fighting the war, because it could lead to World

War II (sic), this is NATO's position, there is still a price to pay for the values of democracy, which are being upheld in Ukraine and supported


And this is it. This will be the knock-on economic effect in Europe and it is going to be hard for politicians here to sell it to their populations.

But it's going to be necessary.

QUEST: You know, I hope it doesn't seem inappropriate, first of all, to say it's good to be here with you, in person, face-to-face. And also, I

assure you, we did not coordinate before.

ROBERTSON: We didn't. No. We're matching today.

QUEST: Next time. Nic Robertson, next time, thank you.

When we come back, there are hundreds of planes that are in the international fleet in Russia. Now some of them have been seized by the

Europeans; many more remain.

What's going to happen to them?

The man responsible for seizing the planes -- in a moment.




QUEST: We're in Brussels for the Airlines for Europe, where we've been talking to the CEOs in Russia. President Putin announced 100 billion rubles

in support of the Russian airline industry with its representatives. And he criticized the Western sanctions against him.

Now Russia has seized those foreign planes that are owned by the leasing companies and leased to Russian airlines. They've done so in retaliation

for Western sanctions. The planes were supposed to be returned to the Western leasing companies.

Now those Western companies are trying to repossess the planes whenever they can. There's more than 500 of them. So far, only about 80 have been

repossessed. You can see on this screen, planes owned by the Irish leasing companies. Now they were recently tracked flying in Russia, by



Every time one of those planes -- and it's not happening at the moment -- but every time one of them in the past flew out of Russia to an

international destination, they were seized and impounded. And the man responsible for helping put it all together is Henrik Hololei. He is the

E.U. Commission director of ability and transport and he explained to me the scale of the problem.


HENRIK HOLOLEI, DIRECTOR GENERAL FOR MOBILITY AND TRANSPORT, EUROPEAN COMMISSION: There were about 515 aircraft in Russia. And we have been able

to get back about 80 aircraft and 40 of them during the war. So we can say there are about 435 aircraft have been stolen by Russia.

QUEST: When they get back, these are -- the sanctions I mean, these planes have to be returned to their leasing companies, have to be impounded, if

you like?

HOLOLEI: Yes, absolutely, because they are owned by the European leasing companies. And all of them, actually, are domiciled in Ireland. And of

course, if there is a plane which is belonging to the leasing company and if Russian airlines are flying it outside, then we obviously have to ask

the third country to ground the plane because those planes do not have airworthy (ph) certificates anymore.

And they are obliged to ground these planes, according to the Chicago convention, international air law and basically, then, the onus would be

repossessing these aircraft.

QUEST: What do you believe, that 400 and whatever --


QUEST: -- 435 planes, what's going to happen to them?

Because even if the war was to end today, those planes are what?

HOLOLEI: These planes, when they are flying, they also have to be maintained constantly. There are spare parts and all sorts of special

arrangements that you have to do with these planes.

This is not going to happen and that would also mean that the value of these planes obviously diminishes over time. And it is also very unlikely

that they would be possible to use these planes anywhere else.

QUEST: Really?

Even if the Russians said, right, come and get your planes.

HOLOLEI: Well, if that miracle happens, then I think we would be -- and we will be able to get them now, then it is still OK, because it hasn't been

so much time. And these planes have been well maintained until now. But I'm very much afraid that the fate of these 435 aircraft seems very


QUEST: Right, it's going to end up in the courts.

HOLOLEI: I'm sure it's going to end up in the courts. It's also the issue between the lessors and the insurance and you might have seen as well that

the world's largest lessor aircraft has already asked the insurance claim for about $3.5 billion. So yes, I think that these issues are going to be

discussed for a long time.

QUEST: And you still have people watching, just in case one of those planes come over?

HOLOLEI: We're monitoring the movement in the airspace all the time. And we have been able, together with the lessors and together with the third

country authorities to get a number of planes back. And I think that every plane we get back is a good thing.


QUEST: That's Henrik Hololei of the mobility directorate talking to me.

As we continue live in Brussels tonight, by the way, just for those of you who are wondering, it's 3 degrees Celsius, which I'm told is 37 degrees

Fahrenheit. And there's a strong, very strong wind. And you know where that's going.

As we continue, tonight, Ryanair, the chief executive says the Ukraine crisis really reinforces the importance and need for a strong aviation

sector. You'll hear from Michael O'Leary, coming next.





QUEST: The chief executive of Ryanair says European aviation is facing unprecedented problems -- COVID, rising energy costs and it's the biggest

mess he's ever seen. Michael O'Leary was speaking to me here in Brussels.


MICHAEL O'LEARY, CEO, RYANAIR: I think it's the biggest mess the aviation industry has ever faced. Certainly in Europe, we've had two years now of

COVID, travel restrictions, flight bans that we've never had before.

And then it's been followed by the tragic Russian invasion of Ukraine. We have never seen disruption like this to air travel.

But I remain optimistic. I think one of the things emerging out of this is a newfound appreciation for the need for free movement of people across

Europe and the need for keeping air travel affordable and maybe postponing some of the more penal environmental measures, because European consumers

can't afford them.

QUEST: Why has aviation failed to get the message across that it is doing great things toward it -- maybe not as much for some but it is making --

why are -- you, the industry, failed?

O'LEARY: I blame the media.

QUEST: Oh, come on.

O'LEARY: Because you want to show global warming, it's always a picture of an aircraft taking off out of an airport. Shipping accounts for double

aviation's CO2 emissions in Europe, 5 percent is against 2 percent. But nobody's ever going to show a ferry chugging out of the port. It's always,

there's the aircraft, look at the contrails.

And we need to be much more aggressive to explain to people, we account for about 2 percent of Europe's CO2 emissions. Shipping accounts for about 5

percent; road transport, 26 percent. Stop blaming aviation.

As the tragic events in Ukraine demonstrate, you need aviation and we need to prioritize and encourage the free movement of people across the

continent of Europe.

QUEST: The difficulties, the demand is huge at the moment. You've brought nearly all your aircraft back, your percentage versus 2019 is up there


O'LEARY: Yes and we expect to grow by about 10 percent this year, we did 150 million passengers pre-COVID and if there are no more COVID-19

disruptions this year, we think that will grow to 165 million passengers.

But remember, along that growth is us filling in gaps of airlines, like Norwegian, who significantly cut the fleet; Alitalia divisions reduced by

50 percent in Italy. We're taking up slack that's been left by others. I don't think it's overall market growth.

QUEST: And in terms of what you now need from regulators or from authorities, I mean, you continue to bash airports and costs. I mean that,

it wouldn't be aviation if you weren't doing that.

O'LEARY: I think what we need from Europe is a more coherent response to pandemics. We can, Europe has, for 40 years, operated on free movement of

people. Yet during COVID-19, you have national governments shutting down access or trying to limit travel.

QUEST: If we look at the way -- where you're going to grow, Ryanair, where is it going to be?

O'LEARY: I mean, it's broadly spread across Europe this year. Italy is a big area of growth. We're putting 25 to 65 new aircraft into Italy. We're

growing strongly in Poland, Slovakia, Romania.


QUEST: So before that, so Italy, you're taking on ITA and Lufthansa effectively now if that deal goes ahead. You're taking on Joseph in

Eastern, Central and Eastern Europe.



O'LEARY: Never heard of them.

QUEST: You're moving into Wizz Air territory.

O'LEARY: It's our territory. We're already the biggest airline in Poland. He's not to compete with Ryanair. But I think because the demand is

everywhere, we're also growing in Portugal. We've opened a base yesterday in Funchal in Madeira, two aircraft.

So there are growth opportunities all over Europe. And we need to kind of, we're fortunate in that we've taken delivery of 65 aircraft from Boeing

this winter. We have a lot of new aircraft, very fuel efficient. And we have an opportunity now to return to growth.


QUEST: You tried to get more planes from Boeing and you were unsuccessful in the deal.

O'LEARY: Just that we didn't make a deal, we couldn't agree on pricing.

QUEST: Right, but the last time you did a big deal with Boeing, you absolutely took them to the cleaners.

O'LEARY: That's not true. We're paying a lot of money for these aircraft.

QUEST: No, no, I mean, the famous deal, at the height of -- when you went in there and wiped the floor with them.

O'LEARY: No, that's not true. You look at Boeing's profitability at the moment, most of it's being driven by the success of the 737 program. And

we're the largest customers in the 737 program.

QUEST: What about Airbus.

Would you?

O'LEARY: We would if the price was right but we've never been able to get into a serious discussion with Airbus. Airbus don't trust that we will ever

order Airbus from them. I keep testing and say, why don't you give me a 10 percent discount and see what happens.

But Airbus have had a much more successful sales program for the last two or three years. Their order book, they were forced out with the neo (ph).

Their order book is much more full than Boeing's. Boeing need the -- need more orders and they keep losing customers to Airbus, which is


QUEST: But good for you because --

O'LEARY: I think it's fundamentally good for you us because we're now Boeing's last remaining large customer in Europe. They lost Jet2 recently

to Airbus and it looks like the IAG 200 MOU that Willie signed a couple of years ago has now been reopened and it looks like that's going to go back

to Airbus. Boeing needs more aircraft here in Europe.

QUEST: Finally, what does Ryanair need?

O'LEARY: I think what Ryanair needs is a reform of European air traffic control. We can't continue to have those delays. We need a much more

coherent response to COVID or pandemics.

And I think we need a much greater appreciation, certainly among European regulators, that the free movement of people is fundamentally dependent on

air travel. We're not going to move freely around Europe on bicycles. We're not going to go down ferries or on trains, either.

We need aviation and aviation has been the whipping boy in Europe for the last five years and I think we need to be much more appreciation that,

without low-fare air travel and the airlines, the free movement of people around Europe will not exist.


QUEST: Michael O'Leary from Ryanair. In the last few moments, the market's taken a nasty turn, we're down more than 450-odd points, you can see on the

screen. It is the worst quarter, last day of the quarter as well. It's the worst day of the quarter on the worst quarter since the height of the

pandemic back in the early 2020.

We will take a "Profitable Moment," such as it is, bearing the market, after the break. QUEST MEANS BUSINESS.




QUEST: Tonight's "Profitable Moment," so the gloves are off when it comes to oil. And the price is not going to be higher unless, of course, the

Strategic Petroleum Reserve, well, more has to be released. And you got the question of the gas tap being turned off for Europe as Putin gets tough.

How will it all end?

We simply don't know. But once again, oil is the fighting ground.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest, in a very cold Brussels. Whatever you're up to in the hours ahead, I hope it's

profitable. I'll see you tomorrow.