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Quest Means Business
Warning Signs About Slowing Economic Growth Emerge; Understanding Stagflation: Warning Signs Emerge; One Dead, 17 Injured After Car Driven Into Crowd; EasyJet And British Airways Cancel 180 Flights; Hyatt CEO Says Strong Travel Will Continue; Call To Earth: OceanX; Gaming Company Joins U.K. Trial Of Four-Day Work Week. Aired 3-4p ET
Aired June 08, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:30]
RICHARD QUEST, CNN BUSINESS ANCHOR: Middle of the week and recession fears are sending shocks and shivers to the U.S. markets. We have an hour to
trade. We are off the lows of the day, but not by much, down 300 points, one percent, give or take and let's see how we hold on to those and see
whether or not -- over the next course of the hour.
The markets and the events, they are intertwined today. The OECD joins the chorus of voices warning about the future of the global economy. You'll
hear from the OECD Secretary-General.
Russia is using food as a weapon of terror. A dire warning from the President of the European Commission.
And summer season travel chaos. Could it get worse? Well, it perhaps could go from bad to worse.
On tonight's program, the CEO of Wizz Air.
We are live in New York on Wednesday, June the 8th. I'm Richard Quest. I mean business.
Good evening.
The number of economic warnings just keeps growing. Today, it was the OECD which announced it is slashing growth forecasts for the year. That added
fuel to the recession fire, which was already stoked on Tuesday by the World Bank.
And alongside slowing growth, inflation is also being forecast to get worse, Goldman Sachs warning oil could hit $140.00 a barrel. If that seems
unrealistic, look at today, up two percent on Brent and the WTI crude, so we are only just what -- $19.00 or $18.00 off that $140.00 target, which
all seemed like a bit of a pie in the sky when first suggested.
Not surprisingly, the U.S. Treasury Secretary Janet Yellen says the rising costs are having a global impact.
(BEGIN VIDEO CLIP)
JANET YELLEN, U.S. TREASURY SECRETARY: Putin's war in Ukraine is having impacts on energy and food prices globally. We're not the only country that
is experiencing inflation, you can see that in virtually every developed country around the world.
(END VIDEO CLIP)
QUEST: Now, if you want to see how the situation seems to be deteriorating, the OECD has downgraded its global growth forecast by a
third from what it said in December.
Now, three percent growth for the year. Remember, that's global. So there is a huge difference between the advanced, the developed, the emerging, and
the highly indebted.
The Secretary-General Mathias Cormann told Julia that Russia's war in Ukraine is a major factor.
(BEGIN VIDEO CLIP)
MATHIAS CORMANN, SECRETARY-GENERAL, OECD: Well, Russia's war of aggression is certainly imposing a very heavy price on the global economy. I mean,
earlier this year, the economy was recovering. Earlier this year, economic growth was returning to normal, and then the recovery from COVID had been
relatively strong and rapid.
Yes, it was uneven and there were also still some downside risks remaining with the pandemic. But you know, the Russian war of aggression against
Ukraine is causing a significant supply shock. It is having a significant negative effect on growth, and it is pushing up inflation, higher end for
longer.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: On the forefront of the war in Ukraine, of course, beyond what Ukraine is suffering itself, those
most leveraged to Russian oil, and we've seen astronomical price rises around the world, but you particularly pinpoint the challenges that Europe
is facing too as they struggle to diversify away.
You've even warned about possible energy shortages, too. It's clearly a problem for Europe. How high is recession risk in your mind there and the
risk is that weakening growth in Europe obviously poses a huge problem for the rest of the world, too?
CORMANN: We are not projecting a recession, we are projecting a significant downward revision to growth including in Europe. Indeed, the
cost of the oil embargo on its own comes -- I mean, reduces economic growth by about a half a percent in 2023, and indeed pushes up inflation in
itself, but that is assuming that there is no supply response from other oil producing countries.
[15:05:00]
I mean, OPEC countries and others could substitute the supply of Russian oil if they so chose, and certainly, we would very much urge them to do so.
(END VIDEO CLIP)
QUEST: When you look at all these warnings and the outlook, you come to one outcome, stagflation, a simple concept. It is what it says. Stagnation
plus inflation equals stagflation. It is when growth slows to such a level as to be meaningless, even recessionary, and inflation remains high.
As a result, unemployment is likely to increase. It's one of the conditions that so far hasn't happened in many countries, but it will, as rates go
higher, and demand decreases, it further cripples the economy. These are, on the screen, the various manifestations, if you will.
And so the last major period of stagflation was in the 1970s when inflation hit 12.2 percent in 1974. GDP was a de facto negative, and it was an oil
supply shock that fueled the downturn.
There are uncomfortable parallels to the energy crisis we are in now. Rahel is with me. Rahel Solomon.
Stagflation, you know, I was listening to just then to the OECD Sec-Gen, who says they don't foresee recession, but at the same time, you know, if
you're talking globally, that might be true, but stagflation doesn't necessarily mean recession, but it's still pretty nasty.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: It's still pretty nasty. And, Richard, let's talk about 1974, the beginning of stagflation, as you just
pointed out. You know what else happened that year? The Rubik's cube was invented and much like trying to lower inflation, trying to solve one of
these things is really quite difficult. Some might even say frustrating.
But yes, to your point, unemployment is still historically low here in the U.S. It is 3.6 percent. Federal Reserve Chairman Jay Powell has said that
he believes that the Federal Reserve can pull from the imbalance of the labor and supply -- the labor market and the supply and demand that he can
pull from the imbalance of that without sort of increasing unemployment.
If not, we may see stagflation, as you pointed out, Richard, but at this point, history is not a good indication, if they can pull it off.
QUEST: Right. Why is stagflation much worse, in a sense? I mean, we know how to get rid of inflation. But stagflation requires like your Rubik's
cube, all the pieces that you put together, and you just can't get them right.
SOLOMON: Yes, I mean, look. I'm terrible at these things. Hopefully, Jay Powell is better at solving for stagflation than I am at this Rubik's cube.
I mean, essentially, what they're trying to do, right is sort of cool the economy. And how they have done that in the past is raise unemployment, the
unemployment rate. And so that is the challenge, right? Can you cool the economy without provoking joblessness? Again, we're at 3.6 percent, which
has created some confidence and some optimism among the Federal Reserve that they can do it, but it will be challenging.
QUEST: Right, and also back to the OECD. If you look at the range of growth, you see, one of the interesting numbers I saw on the World Bank
report yesterday was that China, which has forecast, say, four percent, arguably four and a half percent, but that's dramatically down from the
eight percent that was originally thought, so wherever we look, there is no engine of growth.
SOLOMON: There is no engine of growth, and I think also, we have these X factors, right? There are still overhangs, the war being a huge X factor,
and also lockdowns in China.
Who is to say with the next variant, what we may see in China in terms of their Zero COVID Policy. So there are these huge overhangs globally that
really haven't solved themselves. So yes, I think to your point, not a ton of optimism right now until we start to get some clarity on those factors.
QUEST: Rahel -- Rahel Solomon with stagflation, and we'll watch it closely. Grateful.
As we continue, Ukraine may replace Russian gas with U.S. imports says the head of the energy company. The CEO of Naftogaz is with me, after the
break.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[15:11:40]
QUEST: German Police are trying to determine if a deadly car crash in Berlin was an accident or a deliberate attack and if so, terrorism. A car
plowed into a crowd of people in a busy shopping area of the German capital. It eventually crashed into a shop window.
The police say one person was killed, a teacher who was with a group of high school students. Several others were hurt and that includes six people
whose injuries are said to be life threatening.
CNN's Nadia Bashir is in Berlin where the crash happened. So what are the police saying? Is it -- was it an accident?
NADA BASHIR, CNN PRODUCER: Well, look, Richard, the investigation is still very much ongoing and the police have been careful to stress that the cause
behind the incident and the motive still isn't clear. They are still investigating whether or not this was an accident or perhaps whether this
was deliberate.
What we do know is that a 29-year-old German-Armenian man has been identified as the driver of that vehicle. He was actually apprehended by
passersby immediately after the incident, then a local police officer stepped in, he was in the area and of course, we then understand that he
was arrested, taken for a medical examination, and will face police questioning.
Now just in the last half an hour or so, the police here in this busy high street in Western Berlin have lifted the police cordon. That tape has been
removed. The road has reopened. We are seeing cars driving by again.
But if I'll just show you just behind me here, this is the spot, at this store Douglas where the car actually crashing after a plowing into those
pedestrians. It's a cosmetics store.
They have removed the vehicle from the storefront and it is undergoing a forensic examination as we understand it. Of course, that examination, that
investigation overall still ongoing. Berlin Police have urged anyone who was in the area at the time of the incident, who may have footage or photos
on their phones of the incident to upload those to the Berlin Police website to help with the investigation -- Richard.
QUEST: And those who are still in the hospital, it sounds as if some of them are in a very bad way indeed.
BASHIR: Yes. That is the tragic news that we're hearing developing. We know that more than a dozen people were injured in this incident. Among
them, 14 school children who were on a school trip here to the city with their school teacher who was and has been confirmed to have been killed in
the incident.
And as we understand it, at least six people are facing serious life- threatening injuries. That is of course, the tragic news. We are expecting more information from Berlin Police as it comes. But this is obviously
difficult news. This has just taken place just across the street from the location where the terror attack back in 2016 took place, a truck plowing
into a Christmas market killing several passersby and locals in the area at that time.
So there is a very serious sense of concern in the city, and just in fact on this high street, there are borders up along the road to prevent such
incidents from happening, to prevent cars and vehicles from mounting up onto the sidewalk and hitting pedestrians. Of course, that wasn't the case
today. And unfortunately, we are hearing that tragic news of several people seriously injured in this incident and one person killed -- Richard.
QUEST: Indeed. I remember the Christmas market very well. Thank you, Nadia.
In Washington, D.C., there was distressing testimony and urgent pleas from gun violence survivors and the loved ones of victims.
[15:15:08]
Witness after witness told a congressional House members of the anguish they felt as they learned that children were slaughtered and their
community shattered by mass shootings.
The mother of 10-year-old, Lexi Rubio, who was murdered in Uvalde, Texas describe the last moment she spoke to her daughter. She promised her ice
cream that evening.
(BEGIN VIDEO CLIP)
KIMBERLY RUBIO, MOTHER OF UVALDE VICTIM, LEXI RUBIO: In the reel that keeps scrolling across my memories, she turns her head and smiles back at
us to acknowledge my promise, and then we left.
I left my daughter at that school, and that decision will haunt me for the rest of my life.
(END VIDEO CLIP)
QUEST: The mother of 20-year-old Zaire Goodman wounded in the racist mass shooting in Buffalo challenge lawmakers who refuse to enact new gun
controls to come help treat his wounds.
(BEGIN VIDEO CLIP)
ZENETA EVERHART, MOTHER OF BUFFALO SURVIVOR, ZAIRE GOODMAN: To the lawmakers who feel that we do not need stricter gun laws let me paint a
picture for you. My son, Zaire, has a hole in the right side of his neck, two on his back and another on his left leg caused by an exploding bullet
from an AR-15.
As I cleaned his wounds, I can feel pieces of that bullet in his back. Shrapnel will be left inside of his body for the rest of his life.
Now, I want you to picture that exact scenario for one of your children. This should not be your story -- or mine.
(END VIDEO CLIP)
QUEST: The Committee watched a video from an 11-year-old Miah Cerillo who described her harrowing experience at Uvalde, fooling the gunman into
thinking she was dead.
(BEGIN VIDEO CLIP)
MIAH CERILLO, SURVIVOR OF UVALDE SHOOTING: He shot my friend that was next to me. And I thought he was going to come back to the room, so I grabbed
her blood and I put it all over me.
QUESTION: Do you feel safe at school?
(CERILLO nods her head "no.")
QUESTION: Why not?
CERILLO: Cause I don't want it to happen again.
QUESTION: Do you think it's going to happen again?
(END VIDEO CLIP)
QUEST: Some witnesses arguing today against new laws saying they're not the solution. The hearing comes as a bipartisan group of senators are
negotiating new measures to combat gun violence. Sources say strong gun controls such as a ban on military style weapons or raising the age to buy
them are unlikely.
Ukrainian forces are insisting they will not surrender the key city of Severodonetsk. The area has been under constant shelling by Russian forces.
Regional leaders say its forces may need to fall back to more fortified positions. They're expecting Russia's offensive to intensify on the city.
Russia has weaponized energy the moment the war began. Now, it's doing the same with food, this warning from Europe's top Commissioner.
She says Russia's blockade of exports from the Black Sea ports only attack the world's most vulnerable.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: This is a cold, callous, and calculated siege by Putin on some of the most vulnerable
countries and people in the world, and therefore, Honorable Members, food has become now part of the Kremlin's arsenal of terror.
(END VIDEO CLIP)
QUEST: Turkey's government is trying to use its regional clout and close ties with Ukraine and Russia to break the blockade that the Ukrainian
President is calling a threat of global magnitude. You can see it on the map here where it has become.
The blockade was front and center as Turkey's Foreign Minister hosted his Russian counterpart in Ankara. Now, Turkey's top diplomat calls a U.N. plan
to end the blockade reasonable.
Jomanah Karadsheh has the story from Ankara.
(BEGIN VIDEOTAPE)
JOMANA KARADSHEH, CNN CORRESPONDENT: No deal came out of the talks between the Russian Foreign Minister and his Turkish counterpart here in Ankara on
Wednesday to try and end the blockade of Ukrainian ports, but the expectation all along was that these were going to be talked to lay the
groundwork for more negotiations and talks to try and establish a sea corridor for the export of Ukrainian grains and agricultural products as so
many countries are reliant on.
The Turkish Foreign Minister saying that they are hoping in the coming days to bring together the Russians, the Ukrainians and the United Nations for
talks and negotiations here in Turkey to try and agree on what this sea corridor looks like.
They're going to try and push forward with this plan to create the sea corridor, but at this point, it doesn't seem like both Russia and Ukraine
are on board fully.
We've heard both countries saying that they want to see the resumption of Ukrainian grain exports, but they're both blaming each other for the
blockade of the Ukrainian ports.
[15:20:09]
We've heard Foreign Minister Lavrov during a press conference on Wednesday again, blaming Ukraine saying if they wanted these exports to resume, they
need to remove the mines from the Black Sea from around the ports and the exports would resume.
Now for the Ukrainians, they say they want security guarantees. Their biggest concern is that Russia would try to use this to carry out attacks,
to escalate its attacks on the southern coast of Ukraine and on their ports, so they want any guarantees before moving ahead.
And then there's the issue of what Russia is going to get in exchange for agreeing to the steel and indications are that they're trying to get some
sort of sanctions relief, something that is really going to be problematic, unlikely to be accepted by Western powers and countries that have just
imposed sanctions on Russia recently.
The Turkish Foreign Minister is still sounding optimistic that they are going to be able to work on some sort of a plan saying that Turkey is open
to getting Ukrainian and Russian exports out to the world where they're really needed to, quote, "combat" what he described as a true global
crisis.
Jomanah Karadsheh, CNN, Ankara.
(END VIDEOTAPE)
QUEST: Earlier in the program, I showed you the price of oil and how it was up two percent, and the warning that according to Goldman Sachs, we
could see $140.00 a barrel. Well, natural gas prices are hovering near a 13-year high. Ukraine and the war is squeezing supply and Ukraine is trying
to replace Russian gas with U.S. imports, according to the CEO of the state energy company, Naftogaz.
Obviously Ukraine doesn't buy direct from Russia, it goes through countries in Europe that buy it, and then onward pass, currently working to bolster
its gas reserves ahead of the winter.
Yuriy Vitrenko is the CEO of Naftogaz. He joins me from Washington.
Sir, so the plan is to try and get as best position as you can ahead of winter. Now, I know it's sort of we are barely in the summer, but I guess
winter is around the corner in the way you plan.
YURIY VITRENKO, CEO, NAFTOGAZ: Yes, we need to secure the next winter season. Winters in Ukraine can be strong, cold, and long. That's why
Ukraine needs to import, unfortunately, still, natural gas. Also, we are working on our complete energy independence and I am here in Washington,
D.C., to secure supplies of U.S. LNG to Ukraine.
QUEST: And what will be the route in which you would get it? How would it get to you?
VITRENKO: There are terminals all over Europe, in Greece and the Netherlands, in Poland, in Turkey that can be used to then transport
natural gas to Ukraine. So, it will be reclassified in these terminals, and then it will be transported to Ukraine via pipelines from these countries
to Ukraine.
Inside the European Union, there is a good interconnection and a very developed pipeline system. So it's not a problem, in many cases, at least
in most cases to bring gas from LNG terminals in Europe to Ukraine.
QUEST: And indeed, I remember recently covering I think we may have spoken to you about this idea of integrating Ukraine into the E.U. distribution
pipeline pathways and channels, which makes it easier, but you've still got to pay for this gas and that's going to require money and that's also what
you're seeking.
VITRENKO: Yes, exactly. By the way, again, we promised and delivered, we have already integrated the Ukraine into the European gas market, again in
the European gas grid. So it's not the problem at the moment.
European companies can go through Ukraine to some other European countries, they can store gas in Ukraine. That's exactly what they're doing even
during the war. But in terms of financing, yes, it's a challenge. We're talking about a substantial amount of money for Ukraine, it's about $8
billion that is what is needed to finance this gas purchases ahead of the winter season and that is something that I'm discussing here in Washington,
D.C. as well.
Luckily, the U.S. government is very supportive. They understand that it's in the interest of the U.S. citizens to stop this war that Putin started
against the whole free world, because it will result in economic benefits for the people throughout the world.
QUEST: When you talk about this, the financing of it. I mean, I and I'll preface my comments, of course, that nothing compares to the loss of life
and the misery and the ruination of people's lives at the moment in your country, I mean, nothing compares to that.
[15:25:04]
But Ukraine's financing requirement, both for ongoing salaries, pensions, and the like, medical care and the like, and now gas is going to be
considerable for the foreseeable future. Are you finding any fatigue from countries?
VITRENKO: No, we're not finding any fatigue. It's the opposite. We are finding that more and more governments demonstrate their very strong
support to Ukraine, because their societies demand it. There is a very strong public support for Ukraine. That's what we see at the moment.
They also realize that again, it just from a rational point of view, it's in the interest of the Western governments to make Ukraine stronger, more
resilient to win against this Putin barbaric aggression, not just against Ukraine, against the whole world, Ukraine just happens to be on the
frontline of this war.
QUEST: I've got to ask you the same question sort of many other European countries have been asking. Shouldn't you have become more independent of
Russian gas post Crimea in 2014?
VITRENKO: Yes, of course, nobody is perfect. But if, for example, if we look at the reality, we decreased the consumption of gas dramatically,
because of the reforms that we had starting from 2014. And Naftogaz, the company I lead was a driver of this reforms.
So we decreased our imports of gas in general three times over the last eight years. We're not buying directly, as we have mentioned. We are buying
from the European market. Again, it's also an important step forward, because it means less corruption, it means transparency that Ukraine was
playing according to the European rules, because corruption was a problem in Ukraine and Russian gas was just a mean for the Putin's regime to
corrupt Ukraine.
So, it's not any longer the case.
QUEST: Final question. I mean, let's look to the future. One of the -- as Ukraine looks to join the E.U. and all the other things that are now very
much possibilities and realistic. Do we not also have to remember there were very strong reasons why you were never allowed? And there were the
issues of corruption, and there were the issues of governance and transparency.
Do you see that changing in a sense that makes Ukraine more acceptable on traditional grounds, rather than just let's get Ukraine in because there's
a war going on, and we need to protect Ukraine?
VITRENKO: Yes, again, I talked to some world leaders and to some world -- the global CEOs and they all recognize that Ukraine currently is much, I
would say, like a better candidate for the E.U. because Ukraine is serious about fighting oligarchs, fighting corruption, doing all the necessary and
sometimes very painful market reforms.
But they also recognize, they just could not tell it in public that one of the reasons Ukraine was not allowed to join the E.U. and to join NATO was
that many European leaders wanted to appease Putin. They were afraid of some kind of retaliation from the Putin side, or they were -- some of them
at least, diplomatically speaking too close to Putin, they benefited from some commercial relationship with some Russian entities.
It's no longer the case, they realized that it was a mistake, or naive, reckless behavior from their side to appease Putin in such a way.
Ukraine should be a part of the E.U. Ukraine belongs to the European family, Europe will be stronger with Ukraine. And of course, Ukraine will
be stronger with Europe.
QUEST: Yuriy, it's good to have you on the program, sir. We will talk more as the year moves on and we find out how you're faring, we will talk more.
I'm grateful for your time tonight, sir. Thank you.
VITRENKO: Thank you.
QUEST: As we continue on QUEST MEANS BUSINESS, long lines continue across European airports. It's a shambles. Well, the government says it is the
airlines and the airlines say, "Hang on a second, not so fast. Your infrastructure can't cope."
It doesn't matter. Travelers are angry and we are going to talk to the CEO of one of Europe's top airlines after the break.
(COMMERCIAL BREAK)
[15:30:00]
(MUSIC PLAYING)
QUEST: Hello, I'm Richard Quest. This is QUEST MEANS BUSINESS. The CEO of Wizz Air will give us his thoughts on the travel chaos and what he can do
to make it better.
The world's largest ever trial of a four day week began on Monday. The CEO of one of the companies taking place on four day working week. It's only
after the news headlines because, as you know, this is CNN and, here, the news always comes first.
(MUSIC PLAYING)
QUEST: A California man has been charged after allegedly making threats against the U.S. Supreme Court justice Brett Kavanaugh. Police say the man
was armed and arrested outside Mr. Kavanaugh's home.
The justices were scheduled to issue more rulings in the final weeks of their annual session.
The British prime minister Boris Johnson says nothing and no one will stop him from carrying on as British prime minister. He delivered that defiant
message to lawmakers after surviving a confidence vote this week.
He also pledged his political career is just getting started, despite growing criticism for breaching COVID rules.
A car drove into a crowd in Berlin today, killing a teacher and injuring 14 of her students as well as three pedestrians. Then the vehicle crashed into
a store front. Police say a 29 year-old German Armenian national was driving and has now been detained. They're determining whether the crash
was intentional.
(MUSIC PLAYING)
There is no end in sight to the travel chaos in Europe. EasyJet and British Airways canceled 180 flights on Wednesday, mainly because of staff
shortages. Flights were canceled in Italy, where air traffic controllers are on strike.
The industry and the government cannot agree on how to fix the problem. Meanwhile Wizz Air is warning the issue is affecting its bottom line,
forecasting an operating loss in its April-June quarter because of the chaos.
Wizz's CEO is Jozsef Varadi. He is with me now from London.
It's good to see you Joe, as always. When you read the news of the U.K. transport secretary, who said airlines have to get their act together.
Airlines can't inflict this upon passengers.
[15:35:00]
Airlines need to staff properly.
Did your blood pressure go through the roof?
JOZSEF VARADI, CEO, WIZZ AIR: Absolutely. I think he's completely wrong. If you look at the systemic issues, especially in the United Kingdom, the
supply chains simply does not function appropriately, according to the air requirements of the market.
We have been warning the markets all over the place for nine months that the market will come back. The demand will get lay in and state it very
quickly because people want to travel post pandemic.
The supply chain didn't ramp up capacity accordingly. And also because of the post Brexit immigration laws, simply the U.K. cannot turn to the
(INAUDIBLE) market to restaff its labor shortages.
And as a result of that, they are suffering from the lack of proper services, from air traffic management, from airport security and gold
handling. And that caused the issues.
QUEST: The industry had months to get its act together. I know Omicron, I know all the different ones but you had months to get your act together.
And I don't know of anyone traveling over the holiday, and the Platinum Jubilee, that did not have some sort of misery at an airport.
Do you agree that this is unacceptable?
VARADI: Totally unacceptable. Totally, totally unacceptable. I think these people deserve a lot better treatment than what they were ending up
getting. People couldn't travel for two years and then finally now, off they go, they buy expensive, tickets they buy their hotel rooms, et cetera.
And in the end they get canceled. This is totally unacceptable. And I agree with you, the industry needs to act together to fix the situation.
The industry is suffering from the shortage of labor and we need to get labor back into the industry. And overseas resell (ph) have been incredibly
busy. That including people to make sure that we get food staff for summer.
And we have been just hitting the U.K. 30-40 variously food meant events. It requires some extra item to be taken. But everyone needs to act
together. This is an issue for the industry. I think this is an issue for the government. Everybody needs to pay in.
QUEST: And you said today it is going to cost the bottom line. But I gather you are obviously increased cost, more staffing, et cetera et
cetera, but you're also going to be hit with a very heavy E.U. or U.K. 261 bill for compensation, aren't you?
VARADI: Oh, absolutely. I think the best intervention is putting in the front line here and rightly so. I think people have to be protected. So
either you operate properly and fly the flights or you have to play a pretty severe amount of money for compensation purposes. So there is a lot
of financial interest in the situation to make sure that the industry starts operating properly.
QUEST: So as you look at your schedule for the summer, what are you telling your people?
Because obviously, you don't want to leave passengers, you don't want to leave business on the table. But at the same time, you want to grow the
airline. You are in a fierce competition with Ryanair, some legacy carriers, easyJet.
So what is your strategy for the summer for Wizz?
VARADI: Yes. Well, we are creating our own contingencies. We are creating a lot more reserves in the system. We are creating more spare capacity,
more spare aircraft to be used if needed. And also we are overstaffing to have a buffer in the system.
So should we be long delayed, we are still able to staff the next flight. The issue is, the day is still 24 hours. So you have to resolve all these
issues within that timeframe. But we cannot fix ourselves completely. We are dependent on the supply chain. The supply chain needs to act on this as
well.
QUEST: Finally, the number of planes you have got on order is just staggering.
Do you still expect that you'll take them all?
VARADI: Oh, absolutely. We are serving the interest of the customer. The customers want to travel. People want to fly. We are just putting on extra
capacity to meet that demand, that's our job. That's our role in the industry.
And actually we are very positive, very upbeat about the prospect of the business, of the industry. A lot of people are back and they want to fly.
The industry got reinstated a lot quicker than expected. The demand is back. And we as airlines have to fulfill demand.
QUEST: I've got to ask you.
Consolidation, do you see any of it?
Are you interested in it?
Are you looking?
Are you smelling around?
VARADI: I think consolidation is going to happen. It's inevitable. Probably not in the summer, because that's a period where airlines are
doing well. But post summer we should be expecting some developments, I'm pretty sure.
QUEST: I'll take that. Thank you. Good to see you, Joe.
Joe Varadi of Wizz Air.
The hotel industry is also seeing demand roaring back despite pricing pressures and growth concerns. According to the chief executive of Hyatt,
who said they're seeing very strong bookings for the summer.
[15:40:00]
Revenue is currently doubled and the current being in Latin America compared to pre pandemic. The company's got new challenges as, recent
flight cancellations are fueling anxiety as well as the industry. Mark Hoplamazian told Julia, recovery will continue.
(BEGIN VIDEO CLIP)
MARK HOPLAMAZIAN, PRESIDENT AND CEO, HYATT HOTELS: I do believe it's sustainable. For Hyatt at least, we serve a high-end customer base. We
don't participate in the midscale or economy segments of the industry. We're really in primarily in select service but also luxury. Leisure and
lifestyle represent 40 percent of our total portfolio around the globe.
And that customer base has the means to continue to travel. And they will. There's -- they're prioritized getting on the road and getting back
together with family and friends and taking a holiday for their own well- being. There are a lot of self-care trips that are being planned.
We have a brand behind -- a well-being brand called "Mirror Ball," which is if I look at their performance, year-to-date, it's enormous level of demand
because people really are seeking out a way to take care of themselves and to reconnect with them, with either a loved one or just be by themselves.
So I see that sustaining.
The second thing I would say is that the same urges that we see, the pent- up demand that has a human and emotional dimension in personal travel is true in business as well. There's a tremendous level of fulfillment that
people feel when they get back together.
I'm here in New York City, attending a large hospitality conference. And there are over 1,500 in person attendees. And that, and the sense of
regaining that sense of community, has been really meaningful to a lot of people.
(END VIDEO CLIP)
QUEST: The chief of Hyatt.
As you and I continue tonight, the founder of the world's biggest hedge fund, Ray Dalio, is adding a new title to his resume: ocean
conservationist. My interview with Ray after the break.
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[15:45:00]
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QUEST: The founder of the world's biggest hedge fund, Ray Dalio, is putting his efforts into what he's calling the planet's most important
asset: the ocean. Inspired by the legendary ocean explorer and filmmaker, Jacques Cousteau.
Dalio and his son, Mark, founded OceanX in 2018. Its mission was to access unknown corners of the deep and bring their wonders back to an audience
using equipment desire with help from the film director James Cameron, the ocean explorer ship is a floating laboratory like no other.
Today is World Oceans Day. So to celebrate, enjoy my conversation with Ray Dalio about why exploring the ocean is better than going into space.
(BEGIN VIDEOTAPE)
RAY DALIO, FOUNDER, OCEANX: The oceans is this totally unexplored world. I mean, think of it: 72 percent of the world's surface is the ocean. And I
have been a diver since for a long time.
But then it's exciting when you go down there and you see it and it's going to another world. So there's so much to be discovered. Imagine if all the
continents in the world were never discovered.
Wouldn't you want to go there?
It's very exciting. And it's very, very important. It's our most important asset.
QUEST: Why has this fascinated you more than space?
DALIO: Well, you're not going to see any aliens in space. You want to go down and see life and see the excitement and the color.. And all of that is
here. If you want to take care of the planet, you're here. And it's much more cost-effective.
QUEST: Tell me about the ship.
DALIO: It's a research expedition ship. And I have a team of scientists who help me do that. Or do that really; they take the lead. And so we put
that together. Then I went to Jim Cameron, because we've known each other, because he's passionate about ocean exploration.
And he said, why don't you take that ship and do it with the best media possible so that you can show it to everybody like Jacques Cousteau?
You know, like he's laid it out with the lighting and so on. So it's a little bit like a Starship Enterprise on the ocean, with these people doing
real research. We can take a remote operated vehicle, that goes down 6,000 meters, we have manned submersibles that go down to 1,000 meters.
We have a 3D, 360 degree camera. We can go to any spot in the ocean or we could bring you there. There are DNA type of samplings. There's discovering
of species. There's amazing technology that can bring you anywhere and also vividly show it to you.
QUEST: The concept that the world's oceans are in trouble, we've known about for a long time. But there seems to be a "we don't care" view in
large parts of the world or we wouldn't keep polluting.
DALIO: Well, it's not just the oceans that are in trouble, it's the oceans' contribution to the rest of man. Scientists vary between 50 percent
and 80 percent of the oxygen comes from the ocean; 25 percent of all carbon sequestration comes from the ocean.
So if we don't take care of the oceans, that's like losing your lungs practically.
So you asked the question, why am I doing this or why am I excited about it?
That is because I think if people get excited, like I did with Jacques Cousteau or many in my generation did, then they will care about it. The
exciting them is great. The bringing them beyond excitement to caring about it would be great.
(END VIDEOTAPE)
QUEST: Ray Dalio talking to me.
Let me know what you're doing to answer the call to protect our planet. The #CalltoEarth.
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[15:50:00]
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QUEST: It's not a new idea but it's had a resurgence, a four day work week but a five workday pay, full pay. The statistics look very appealing.
Everybody knows it can be done. More than 3,000 workers in Britain and 70 firms are putting it to the test.
The world's biggest ever trial of the shorter week began on Monday. This is what they agreed: 100 percent of pay for 80 percent of the hours and 100
percent productivity.
Iceland did a similar study with overwhelming success. Joining me is Shaun Rutland, CEO of Hutch, the games developer who participated in the pilot.
We sort of know the results here. We sort of know, because it's been done in numerous trials and it always shows that, properly done, that's the key,
sir, properly done, productivity does not suffer.
SHAUN RUTLAND, CEO, HUTCH: Yes, well, (INAUDIBLE) increase. Productivity will go, up creativity will go up and our staff can have full or better
lives.
QUEST: I guess the issue is to make sure that you are not just doing hidden work by taking it off the table but people are actually working
later into the evenings and working on those off days. It's got to be monitored properly.
How are you going to do that?
RUTLAND: I think ultimately, we are in a business that puts full trust into our teams. We really ask our team to feed back to us how it's working,
what's going on for them. We have that in our five-day work week, where staff sometime need to work on weekends and we certainly don't like it. We
like to stop it.
Sometimes they do it, because they absolutely love what they're doing but ultimately it's about trust in our team to give us feedback on if it's not
working, we need to understand what are the problems, how can we do it better?
It's really about trusting your team and listening to your team.
QUEST: From what I've seen, this done before, this four day work week, it has to be planned, it has to be monitored, it has to be carefully
constructed.
How much work are you putting into that construction?
RUTLAND: Well, we originally wanted to start in December and I was quite on pace to do. It and my head of people asked to slow it down. And we spent
the last six months planning to do this.
We worked with the team to understand how we can measure it, if it's being successful, what are the stresses, the concerns of the team. Not all the
team were excited about it. So a small minority were concerned it would stress them, they'd have less social time with the team members. The
workplace would be less friendly.
So there's a lot of work. We often joke that we needed a six-day work week in order to plan for a four-day working week.
QUEST: How will you judge success, because there are numerous barometers, productivity but the intangibles of satisfaction, happiness, feeling it's
good?
RUTLAND: Yes. So success has many measures for. Us firstly, it's retaining our staff. And you know, the games industries is probably one of the most
competitive workplaces at the moment in terms of trying to get people into the business. It's been very difficult. So retaining our staff, recruiting
new staff. We measure on a monthly basis the happiness levels. We see certain things that we, do whether they go up or down.
So there's all sorts of measures that we do in order to listen to what's going on. And ultimately, is the business more profitable?
Are we making better games?
And are our customers happy?
[15:55:00]
So you know we are very data driven in terms of the things we look at. We can really see what's going on with our games as well.
QUEST: And how do you feel about in the office, out of the office, three days, in two days off, whatever, whatever?
RUTLAND: Whatever, whatever?
Well, as we go to a four day work week, 10 years ago we were pretty radical and having a hybrid workforce, working two days from home, three days in
the office. We were pretty shy about that. We hid it from investors. The pandemic kids has become (INAUDIBLE).
And I feel (INAUDIBLE) embarrassed that was such a secret. We believe working in the office together because we can collaborate. We really work
(INAUDIBLE) and we can do deep tasks and you can really knuckle down and do the things you really want to do.
So we don't believe in full remote working, although we know it works for a number of game developers. We want to create an attractive place to work.
We know that young staff need to be supported. And in order to grow our stuff, they need to work with senior people.
I need social contact with my staff. I'm a people person. I like to be around people. So, yes, I really believe in two days in the, office two
days at, home. I hope we can get. Yes, this is a trial.
(CROSSTALK)
QUEST: Good grief. Good grief. Two days in the office, two days home, a four day work week. A five-day pay packet.
Where do I sign up?
RUTLAND: I was going to suggest, Richard, maybe you should come work for us.
(LAUGHTER)
QUEST: Shaun Rutland, thank you sir. I appreciate it. We'll monitor it as the experiment continues. Good to have you, sir.
We'll take off for a "Profitable Moment" after the break. QUEST MEANS BUSINESS.
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QUEST: Tonight's "Profitable Moment": Jozsef Varadi, CEO of Wizz Air, said it was unacceptable the way passengers were being treated in Europe
over the last few weeks. And he's right.
Now they've got several weeks to try and improve things so when summer gets really going, which is any day now, at least people can go away and have a
stress-free, wonderful holiday, instead of worrying about how many hours they have got to get to before the airport, whether the flight will be,
delayed whether they'll have to get compensation, taxi home costing only to bounce, you know what I'm saying.
We've earned the right to have a decent holiday. And it's up to the aviation industry, the airlines and the governments to make sure we get. It
and that's QUEST MEANS BUSINESS tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.
END
