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Quest Means Business
Europe Ekes Out GDP Growth Of 0.1 Percent In Q4 Of 2022; IMF Raises 2023 Global Growth Forecast From 2.7 Percent To 2.9 Percent; Mass Protests Against Pension Reforms; Last Boeing 747 To Be Delivered; Quest's World Of Wonder: Seattle; Dash To The Bell. Aired 3-4p ET
Aired January 31, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: So there is an hour before they end of trading on Wall Street and we have had the earnings from GM and Spotify,
and as a result, the market is doing rather well today, much better than when I left you yesterday when I was in London.
But those are all the markets. It is a strong session. We'll put in some analysis as to why and the events of the day help us understand it.
Europe is skirting a recession, barely making growth in Q4.
In Paris, protests over pension reform bring the French capital to a standstill.
And a fond farewell to the Queen of the Skies. Boeing has delivered its last 747 at the same time airlines are having, that's not it, by the way,
that is the first one -- airlines are having second thoughts about the value of large jumbo jets.
Live from New York, Tuesday, January 31st. Last day of January, gosh, where did it go? I am Richard Quest, and as we head towards February, I mean
Europe has narrowly avoided a recession. The Eurozone economy grew one- tenth of one percent, the smallest amount possible to avoid negative growth -- I suppose you can get zero -- in Q4 last year. There were expectations
of negative growth. You can say mild weather and government support, cheaper fuel helped offset the effects of Russia's war in Ukraine.
The conflict has led to fears of energy shortages and record inflation, and uncertain is best for how we can describe 2023, particularly as the ECB
continues to raise rates.
Anna Stewart is with me.
Anna, I have always said there is very little -- I mean, people don't agree with me -- but there's very little difference between plus 0.1 point one
and minus 0.1, other than the fact one is technically negative into a recession. It still feels horrible.
ANNA STEWART, CNN REPORTER: I mean, you've stolen my thunder because I was going to tell you I don't see a huge amount to celebrate here. I mean, this
isn't stellar growth, is it? Plus 0.1 percent for the last quarter, but good news it is and I suppose you can look to the ECB raising rates faster
than many expected. You can look to that milder winter, energy prices coming down. There is a lot playing into it, I suppose.
But interestingly, and there's a great JPMorgan note on this. One of the key factors for this growth is in fact Ireland's whose GDP last year
according to some stats that came out yesterday, grew 12.2 percent in 2022. Why? Apparently, its manufacturing industry went gangbusters, which plays a
very outsized role in the economy, utterly extraordinary. I'm sure people in Ireland who are feeling the cost of living crisis, like much of Europe
probably aren't feeling that there -- Richard.
QUEST: Yes. Well, my producer, Ronan has shoved this statistic at us, morning, noon and night, to remind us that it is Ireland, but I mean, you
can't grow the continent on the back of Ireland, or maybe you can?
STEWART: You obviously can't, but I think there are some sort of green shoots. I suppose. If we look at the IMF outlook that we got today, there
were some green shoots there as well, in terms of looking at the economy for this year, definitely better growth than was expected, particularly for
It does look like inflation may have peaked last year in the third quarter. Less good news for the UK, though, Richard, as I'm sure you saw the only
economy, the outlier that will experience a contraction, according to the IMF this year. Not a big surprise to me, I have to say.
QUEST: Right. Why do they say this is the case in the UK? What are they blaming?
STEWART: Well, it is tricky. There are lots of things to blame, we can get into that, but I think what's really surprising is that they've changed
their projection by almost a whole percentage point from just three months ago.
So, what's happened in the last three months? I think it's quite extraordinary. Listen, big cost of living crisis, as you know, interest
rates going higher, inflation over 10 percent, but also, I think with the UK, energy is a bigger issue here, in many ways less reliant, maybe on
Russian gas than Europe, but more reliant on gas as an overall part of that energy mix.
Brexit also exacerbated all of the supply chain issues, the labor shortages, the problems that the rest of Europe felt, and strikes and that
is a product of the cost of living crisis and we got lots more tomorrow, Richard, so lots of days where there is less output in the UK.
QUEST: Anna Stewart in London. Thank you.
We're going to stay with the IMF report as the fund has upgraded its forecast for global growth. Let me give you the details.
QUEST: Let me give you the details. World economy will grow by 2.9 percent this year. That is a slowdown from last year, and many downside risks are
easing, which is why there is a better position.
China's reopening is one good point, it will lead to faster than expected recovery. And as Anna was outlining, in Europe, it's the mild winter,
that's eased the fears of an energy crisis that has taken the heat -- pardon the pun -- out of fuel prices.
In the US, inflation is falling as the labor market remains resilient and that in itself is a conundrum worthy of explanation.
And so I spoke to the Chief Economist of the IMF, Pierre-Olivier Gourinchas, and he told me, serious risks remain, and yet they're not as
bad as they were.
PIERRE-OLIVIER GOURINCHAS, CHIEF ECONOMIST, INTERNATIONAL MONETARY FUND: This year, 2023 and next year, we're going to have relatively low growth
numbers to start with. So this year, in particular, 2.9 percent, this is not a super high number. But you're right that this has been revised
upwards and this is the first time in quite a while that we've had sort of good news in that sense.
QUEST: Are you surprised that after so many interest rate hikes with such ferocity and speed, that the economies are withstanding the shock of the
monetary tightening? I mean, to have this level of tightening, and still be registering this sort of growth is remarkable.
GOURINCHAS: The economy has been very resilient, not just in the US, also in other parts of the world, including the European economies, many of them
have been quite resilient, and you're right. So there has been this massive tightening.
Now why has it been so resilient? Well one point is, well, I've already mentioned the labor market. We're coming out of the pandemic and the crisis
of the last two years, and there is an enormous demand for labor. And that some of that demand is not yet met in the US, so we still have very
elevated levels of vacancies.
And then on top of that households have accumulated a lot of savings through this last two years, thanks to policy and also thanks to the
precautionary behavior, and they're looking to spend some of that, so that is supporting the economy.
QUEST: Inflation, is off the boil, I think you have the number in here, 84 percent of countries are expected to have lower headline inflation this
year than last. So inflation has peaked, but are the current policies sufficient to bring inflation down, in most cases to the target two
GOURINCHAS: Well, that's the second bit of good news in the sense that we are seeing inflation starting to sort of move in the right direction. So
growth is expected to bottom out, inflation is coming down. This year, it could be the year of the turning point and we are sort of holding our
breath for this. Now, is it enough?
Headline inflation is coming down, in large part because energy prices have been coming down in the last few months. Core inflation, which excludes
energy and food prices has been more sticky. It has been coming down in the US, but certainly not in other parts of the world, and it is still very
elevated. We're far from levels that would be consistent with Central Bank targets.
So here, there is a need to sort of stay the course for Central Banks. It is not yet time to declare a victory and go home. There is a need to sort
of maintain tight monetary policy conditions to make sure we get on a path towards a sustained reduction in inflation rate throughout the year and
into next year.
QUEST: It is not hitting us yet, but it will hit us probably Q3, maybe Q4 into next year, and that is once we got inflation down to three-and-a-half,
four percent, even three percent, do Central Bank say, I think we're done here. We don't need to worry too much about getting down to the last two
GOURINCHAS: Well, I think what you're asking is whether they should adjust the Central Bank targets, and I think that's not a discussion that any
Central Bank wants to have right now.
I mean, they're engaged in this fight. It's very important. They have a lot of their reputation at stake here. It is their job to keep price stable,
and I think it would be a little bit odd to sort of declare victory by just moving the goalposts.
So, I think what we're going to see is we're going to see Central Banks that really aim to bring it back down to two percent, where it should be.
QUEST: China reopened, seems to now take the hit in terms of COVID. I would expect and correct me that by mid to late this year, China, assuming COVID
doesn't really knock it over, will start to make a decent contribution to global growth.
GOURINCHAS: Yes. We absolutely agree on this. I mean, 2022 was a tough year for the Chinese economy in part because of the Zero-COVID Policies, and the
episodes of confinements and lockdowns, and also the troubles in the property sector.
Their sudden reopening towards the end of last year, it is opening, it is paving the way for a very rapid rebound in Chinese growth, which we
anticipate, in the course of this year. We are projecting China's growth at 5.2 percent for 2023, and just to give you a sense of that number, China
and India, India is expected to also do quite well in 2023. Both of them together, that accounts for about half of the global growth.
QUEST: There has been more protests in France against pension reforms, huge crowds, marched through cities across the country, there was a disruption
to schools and to the transportation network. The second major demonstration this month over President Macron's plans to raise the
retirement age for most workers.
Melissa Bell is in Paris.
These protests, we have seen you before standing with the protesters, but is there any indication they are making any headway?
MELISSA BELL, CNN CORRESPONDENT: The big question is what they can actually do at this stage, Richard. They have planned more protests, we've just
heard they're going to be holding another general strike on February 7th, and on February 11th, with the protests that we saw again today.
I think their big measure of success is that they managed to get more people on the streets of France, even by the French government's official
figures, than they did on January 19th, and of course, this matters.
What the French government says is that it will not back down. It points out that already the French pension system is in deficit to the tune of 1.8
billion euros this year, as things stand, and things are only likely to get worse if it is allowed to remain as it was.
Have a listen to the woman who is in charge of pushing through this piece of controversial legislation had to tell us.
(BEGIN VIDEO CLIP)
STEPHANIE RIST, FRENCH LAWMAKER (through translator): The reform is necessary because the accounts are in deficit from this year. Our pension
system is no longer balanced, and by 2027, we are looking at a deficit of roughly 12 billion euros.
(END VIDEO CLIP)
BELL: And the real surprising thing is how quickly this all goes. We were hearing from the Labor Minister today speaking to the French Parliament
saying look, by 2045, it will be 150 billion euros if things stand as they have been, Richard.
Now what we saw on the streets of France again today were people saying pension -- people working for the private sector and the public sector, we
had signed up to work until we were 62. We're not prepared to work until 64. The question is how much pressure they can keep up from the streets
here -- Richard.
QUEST: Okay. So that pressure that they keep up on the streets, I mean, the striking workers have a history of success in France, but Macron's
credibility and arguably, his future ability to govern on this issue is crucial. I can't see this ending well, one way or the other.
BELL: Precisely, Richard. He came into office vowing to be this reforming President who is going to manage to reform France where it hadn't been
managed before, and you're quite right on the question of pension reform. Other governments, Jacques Chirac going back to 1995 did have to back down
under pressure from the streets.
And you can almost sense in the streets of Paris today that that sense of "Come on, then, you've picked a fight with us, we're ready to be here to
prove you wrong," and of course, there is so much anger that is focalized on the person of Emmanuel Macron, because he came in as the reforming
President, because he is pushing through this reform along this tight Parliamentary agenda trying to get through, Richard, by this summer in
order that it becomes law.
And the unions, you can sense, it is the first time they've been this unified since 2010, really determined to see him down, a sort of battle of
wills that have been set up by the choice of Emmanuel Macron.
He has picked this particular fight and you can sense that they are willing -- all too willing to fight it. He has until the summer to push it through.
Technically, he will push it through Parliament. There is no question about that.
The real question is just how many people they can get on the streets, and how they can grind France to a halt whilst keeping public opinion on their
side -- Richard.
QUEST: Melissa, thank you.
A massive search is underway in Western Australia for a missing radioactive capsule. It is a tiny device. It was lost by Rio Tinto and it hasn't been
seen since it was on the back of a truck and driven across the Outback to Perth.
QUEST: The last day of the month and stocks are ending January on a high note. The triple stack will show the story. Having lost over a percent
yesterday, the NASDAQ has now clawed it back. All the major markets are in the green with the Dow up more than half a percent. S&P slightly higher the
NASDAQ the rest of the day.
If those gains can stick after tomorrow's Fed meeting on Wednesday, when earnings are pushing markets, Spotify and McDonald's have outperformed.
Spotify is doing extremely well as you can see, but higher costs has taken the thrill, if you will, out of McDonald's better numbers.
Overall, it's good news for GM, General Motors, in the fourth quarter. It smashed Wall Street estimates and is telegraphing strong growth. The stock
is now up nearly eight percent and the CFO told Eleni, strong demand was the key.
(BEGIN VIDEO CLIP)
PAUL JACOBSON, EVP AND CFO, GENERAL MOTORS: When we first gave our guidance back at the beginning of the year, we talked about over $2 billion of
inflationary headwinds and cost increases. As the year progressed, that kept getting higher. We ended up overcoming over $5 billion in pressure to
deliver the results that we've seen.
So while we've seen a little bit of pressure on the cost side through inflationary moves, the sales of the vehicles, the demand for our vehicles,
and the strength of the consumer remained strong throughout all of 2022, and we've gotten off to a good start in 2023.
ELENI GIOKOS, CNN INTERNATIONAL HOST: I want to talk about the $2 billion cost cutting strategy that you'll be taking on in the next few years. Where
are those savings going to come from?
JACOBSON: Well, they're really going to come from all over. So as we looked at the year, and we looked at some of the risks that are out on the
horizon, again, the consumer for us has remained strong and you see that in our forward guidance.
We thought it was prudent to you know, reduce our costs and to change the trajectory that our expenses have been on. So the $2 billion program, which
will be completed in 2023 and 2024, we expect to get about 30 to 50 percent of that this year, and it is really going to come from all sources. A lot
of complexity reduction in our products, reductions in corporate overhead, administration, other discretionary spend across the board.
But I want to be crystal clear, we are not contemplating any layoffs and we believe that we can get this accomplished without any.
(END VIDEO CLIP)
QUEST: Matt Egan is with me. So we have interesting, the market -- Mohamed El-Erian was reminding me yesterday that the market has been on a tear so
far this year with some impressive gains. Although, he cautioned about what might come next.
MATT EGAN, CNN REPORTER: Yes, Richard, you know, it is pretty amazing where the market is right now. There's a lot of optimism heading into this Fed
EGAN: I think that, you know, in some ways the narrative has shifted a bit. I mean six to nine months ago, there was a fear of an ongoing or an
imminent recession, right, it sort of felt like inflation just kept getting worse and worse. The Fed kept getting tougher and tougher.
But now, it looks as though inflation has peaked, and the Fed hawkishness appears to have peaked, right? I mean, they are expected tomorrow to do
another downshift, right?
They are going to raise interest rates most likely by a quarter of a percentage point, and maybe Jerome Powell is going to drop some hints about
when the Fed will actually be able to pause these rate hikes altogether.
But Richard, one thing to remember is Jerome Powell probably is not thrilled to see the fact that the market is up by as much as it is in
recent weeks, because remember, Fed policy works by tightening financial conditions. They don't want the market to boom, because that actually makes
the Fed's job harder. So that may play in as a factor when we hear from Powell tomorrow during that big press conference.
QUEST: You're a secret dove, aren't you?
EGAN: I am not a secret dove. I think that, you know, in a lot of ways, people have been under estimating how hawkish this Fed has been and will
continue to be, because, you know, Richard, you and I were talking about this off camera earlier, inflation has cooled off, and it does look like at
least in the United States peak inflation is in.
But that doesn't mean that the job is over here, right? I mean, inflation remains nowhere near that two percent goal.
QUEST: So Mohamad said yesterday on this program, he thought the Fed -- they won't -- but he thought they should go half a percent, half a point
because he says, do it now and don't have to go back and do it again.
EGAN: Right. And you know, that's what the lesson is from history, because in the past, the Fed has, you know, failed to do enough to put out an
inflation fire, only to have to go back and do more, and that is where the real trouble came in, in terms of runaway inflation in the 70s and early
80s, and, you know, in terms of really painful recessions, or even double dip recessions.
And so the Fed does not want to have to go back. They want to be able to say that they did enough. But listen, they've already done more than many
of us thought they would be. They've already raised interest rates dramatically.
And the truth is that no one really knows how much damage that is done to the economy because Fed policy works with a lag. We don't yet know how much
pain has been felt in the real economy and we won't know for the next few months.
QUEST: Matt Egan. Matt, thank you, sir.
Now, I have with me, just a penny? And you know how I never like to lose one of these.
Right now in Australia, authorities are stepping up the massive search for something that's half the size of this and not only that, it is
radioactive. It is a tiny radioactive capsule that was lost by the mining giant, Rio Tinto as it was being transported on the back of a truck.
They are searching for it along a 1,400 kilometer highway through the Outback of Western Australia.
Now to give that in perspective, it's that same distance as John O'Groats to Land's End in Britain.
Now the device can cause serious illness if it is handled for too long.
CNN's Marc Stewart is reporting from Hong Kong.
MARC STEWART, CNN CORRESPONDENT: Authorities feel the chance of finding this radioactive capsule is slim. First, it's no bigger than a coin and
then they believe it fell off a truck on a section of Australia's Great Northern Highway, that's a distance longer than the California coastline.
We're told the capsule was placed inside a package on a truck and was later discovered missing during an inspection. Nonetheless, a search is underway
using vehicles equipped with specialized radiation detection equipment, traveling at a speed of 31 miles per hour, so the equipment has time to
detect the radiation.
The capsule contains a substance that can lead to serious health problems if humans come in contact with it. Skin burns, radiation sickness, and
potentially deadly cancer risk, especially for those exposed unknowingly for long periods of time.
There is also concern by authorities that the capsule may have been stuck in another truck's tire taking it further away. Even wild animals could
have moved it including birds.
Marc Stewart, CNN, Hong Kong.
QUEST: If you see it, give it a wide berth.
Dust storms causing billions of dollars' worth of damage to economies across the Middle East and beyond and disrupt crucial solar power supplies.
In our new series, "Transformers," Allison Chinchar looks at how we can predict dust storms before they happen.
ALLISON CHINCHAR, CNN METEOROLOGIST (voice over): Diana Francis is an atmospheric scientists at Khalifa University in Abu Dhabi, and an expert on
a natural phenomenon, dust storms.
DR. DIANA FRANCIS, ATMOSPHERIC SCIENTISTS, KHALIFA UNIVERSITY IN ABU DHABI: Dust storms are weather phenomena that are caused by high wind speed that
are occurring near the surface over the desert regions.
They will lift small particles of sand and these particles will be able to travel thousands of kilometers around the globe.
CHINCHAR (voice over): In June 2020, a colossal dust storm nicknamed Godzilla crossed the Atlantic from the Sahara Desert, darkening skies
across the Caribbean, it was the biggest dust storm worldwide in 20 years, according to NASA, and one of a number recently wreaking havoc across the
In 2022, thousands of people were hospitalized across the Middle East with respiratory problems due to a wave of deadly dust storms.
FRANCIS: In some cases, we have visibility that drops to 10 meters. And then people will feel difficulty to breathe. And we can't do for example,
outside activities whenever a dust storm occur.
CHINCHAR (voice over): In 2016, the UN estimated this extreme weather cost the Middle East and North Africa region's economy $13 billion a year in
damage to the environment, agriculture, transport, and infrastructure.
It is a problem made worse by increasing heat waves and droughts due to climate change, and alterations in land use, which create more sources of
FRANCIS: I really wanted to know what's special about the Empty Quarter Desert, what's happening in the atmosphere on the sand and the land.
CHINCHAR (voice over): The Empty Quarter Desert, 250,000 square miles stretching across the Arabian Peninsula, it is the world's largest sand
Francis and Khalifa University are conducting what she says is first of its kind research in the region to measure dust storms coming from the Empty
FRANCIS: So here we have a meteorological tower of which we have several sensors at different levels, so it allows us to have the vertical structure
of the atmosphere.
CHINCHAR (voice over): That data helps predict dust storms in the region and further afield.
Her work on dust is even more important in a region where solar power is emerging as a green energy source.
FRANCIS: We know that solar energy efficiency is impacted by dust storm, and if we want to understand how much we can rely on these energy sources,
we need to be able to predict dust storms and their activity.
The story about studying the weather is a new story because there is always something new something novel to discover.
QUEST: Now today, we pay a final farewell to an aviation icon.
I have lots of little props here. This one's a Qantas one, but this one is a neutral colors Q-Air air as they say. The Boeing 747, the last one is due
to be delivered later today. And yet, airlines may regret grounding their 74s and their 380s.
QUEST: I make no apology, #avgeeks all around the world join in. In half an hour, very last Boeing 747 will be rolled out and delivered to Atlas
Airlines. It's a freighter. The plane's expected to be delivered after a ceremony. Past and present workers, executives and, for the geeks, it is
the 1574th, 1574th 747, the real Boeing, the jumbo jet, to be delivered.
Now it was a double decker plane that revolutionized air travel. It became known as the Queen of the Skies. There was only one, the 747.
QUEST (voice-over): From the moment the 747 rolled out in 1968, fliers have been in love with the jumbo jet. It was a plane that nearly bankrupted
Boeing and Pan Am. Both companies bet the lot to be a success.
And what a success. Its first flight from New York to London ushered in a new golden era of travel, when passengers still dressed up to fly and the
747 was the (INAUDIBLE). The spiral staircase, leading to that famous upper deck, with lounges in first class.
You weren't a global airline if you didn't have the 747 in your fleet. So it was for more than four decades.
Boeing tried to breathe new life into the plane with the 747-8 Intercontinental. But only a few airlines bought it. The plane's days were
numbered as more fuel efficient twinjets, 777's, A350s took over.
Boeing announced the end of production and airlines like Singapore and United, with great ceremony, remove the jumbos from their fleet. My first
747 flight was Peoples Express in 1983 from Gatwick to New York. I now know that my last is in December 2019.
British Airways, Heathrow to JFK. I've always loved that 747. I still take pictures of them when I see them at airports. It is been a three-decade
love affair with the Queen of the Skies.
QUEST: Now the death of the great planes, the jumbos, may be greatly exaggerated. Some airlines are bringing them back into service. Etihad is
reviving its A380s this summer, two years after grounding them indefinitely. We don't think the residents will still be on them.
It is not the only one; 10 carriers, including British Airways, Qantas, Lufthansa are going to fly them because they need the extra premium seats.
They need the lift, they need the capacity. Brian Sumers is the editor of "The Airline Observer," he joins me from California.
QUEST: First of all, before we get to the 380s, the 747, there's nothing like it.
BRIAN SUMERS, EDITOR, "THE AIRLINE OBSERVER": It is the end of an era, Richard; 50 plus years, it is sad to see this today. But as you say, to a
lot of us aviation geeks, the real 747 was the -400. We haven't seen those in a while.
The ones that are flying now, about 10 years old, the 747-800 or -8, as they say, we will see them for a while longer but its not as exciting to
get on them anyways.
QUEST: Are you old enough to remember the classic with the spiral staircase?
SUMERS: Richard, I have to say that I am not. The first ones I remember were the 400.
QUEST: The classic one with the stairs. Back to the newer, the 380s. They need them. The airlines are bringing them back. BA's flying the full load,
almost; Qatar obviously needs them because of its 350 problems. But airlines need these planes.
SUMERS: Well, three years ago a lot of airlines panicked. There was absolutely no business coming in, they were hemorrhaging cash and they
said, we can't do this anymore. We have to park these airplanes.
And I think they got a little bit ahead of themselves as some airlines said, we will never fly them again. The economics weren't great, even
before 2020. But now fast forward three years, everyone wants to fly. It is going to be a huge summer in Europe and the United States.
And as you say, airlines need the lift. So the economics aren't great on the airplanes but if you fill them and if you use them in big airports,
like London Heathrow and Frankfurt, they work. They work for an airline. So I'm not surprised to see them back.
QUEST: Do you think airlines are regretting losing the 400s?
BA parked them all off -- and they all send the 400s off.
SUMERS: I'm not sure that they regret the 400s. One thing that you hear about in this business is that, as these airplanes get retired, there are
fewer parts available. There are fewer maintenance people in areas of the world that can work on them.
So you send a 747-400 maybe to Johannesburg and it breaks, and there's nobody around to fix it or there's no parts available. We saw this with the
MD-80 in the United States. Sometimes it is just time for all these airplanes to get retired. The A380 is a different story; it is only 10-15
year old technology.
QUEST: And the idea, so Tim at Emirates has said -- of course, he is got over 100 of them so he would say that -- he said basically what really
needs to happen with the 380 is that it needs to be re-engined in the same way that the neos on the 20 and the 30 have been done. But I can't see
anyone ever agreeing to do that, either.
SUMERS: It seems like there is absolutely no appetite to re-engine the A380. Emirates is the only big customer for that airplane. It is going to
sunset at some point in the next 10 to 20 years. You can have me back on in old age and we can say how sad we are.
QUEST: I look forward to that day, if I'm still here. You will still be going strong.
On this question of big planes, the 777 10 (ph) (INAUDIBLE) is delayed. So Boeing really only has the 300s and the 200s in terms of big lift capacity.
Airbus has its 350 for big lift, 350 and 900. But nobody really has the very large lift anymore.
SUMERS: No, nobody does. The U.S. airlines decided that they didn't want the big lift several years ago. They are big in terms of frequency. You
know, Richard, when you go to London, you don't want to wait for the big 500-seat airplane. You want the option to fly every single hour.
The best way to do that is with smaller, more efficient airplanes. Then when I fly, if I don't want frequency, I want to fly nonstop. I don't want
to switch planes, fly from L.A. to Tokyo and switch planes and go to Singapore, I want to fly from L.A. to Singapore, what they call a more thin
route. That requires a smaller airplane.
So big airplanes have fallen out of favor. But as you know, Richard, there are cycles in the industry. Things fall out of favor and then, one day,
people wake up and they say, we need big again.
QUEST: So this morning I flew back from London, I was in London yesterday, flew back this morning. I was on a United 76, they were very clever, the
way they kept their 76s for the post pandemic flight.
But interestingly, we are in that low part of the -- I think there was only about 40 of us on the aircraft in total, which is unusual but it is just
that sweet spot of the month in a sense for passengers, when Christmas is over and before Easter.
SUMERS: Exactly, airlines in Europe and in the States are saying that there are very few trough periods between Europe and the United States now; there
used to be a lot of periods during the year, when very few people were traveling.
Now the tourist season has expanded into the spring, into the fall. But you are right, late January, early February, you don't see a lot of tourists.
There just isn't the business travel anymore to make up for that.
QUEST: Good to see you, Brian, we'll talk more. Certainly we will talk more until we retire in 20-odd years' time. Good to see you, you're looking
And that is QUEST MEANS BUSINESS, I will fly back at the top of the hour as we make a dash for the closing bell. Now I return to "World of Wonder."
QUEST (voice-over): There is an obsession in Seattle. Look for the lines and they will lead you to coffee.
And as a coffee lover myself, this is one obsession I shall freely indulge.
Starbucks, the global coffee behemoth, started here. And whilst its presence is ubiquitous, it hasn't prevented dozens of smaller hole-in-the-
wall rivals from opening and thriving.
This is a real cappuccino. I love it.
UNIDENTIFIED FEMALE (voice-over): OK, so we are going to make a 12-ounce latte --
QUEST (voice-over): You will remember espresso brewing and latte art were my pandemic projects. I am good at the first and crap at the second.
DANI CONE (PH), GENERAL STORE OWNER (voice-over): Our first step in preparation is you want to prepare the milk.
QUEST (voice-over): Dani Cone (ph) owns this general store and is about to become my mentor.
CONE (PH) (voice-over): Right away, at first, introduce a little air.
QUEST (voice-over): Can she get me finally to draw properly on the crema?
Point out my mistakes as I'm going through it.
CONE (PH) (voice-over): OK, ready for one.
QUEST (voice-over): Go on.
CONE (PH) (voice-over): First you want to prep the milk.
QUEST (voice-over): Oh, yes.
That didn't take long, did it?
Previously, you know, I would brew my --
CONE (PH) (voice-over): This is hard to hear, yes. Yes. I know. And it would sit there and sit there.
OK, you ready?
I mean, you can do this.
QUEST (voice-over): Just hit that?
CONE (PH) (voice-over): Yes.
QUEST (voice-over): I fully understand Dani's (ph) fascination with coffee.
CONE (PH) (voice-over): There we go, great, you got this, you got this. No, keep going, keep going, keep pouring, keep pouring, you did, it looks
That is how I fell in love with the coffee industry when I was 15 and got my first barista job. It is because it was that place that I found, too,
the place to come into, where someone is happy to see you.
QUEST (voice-over): Right.
Permission to go?
CONE (PH) (voice-over): Off and running.
QUEST (voice-over): Here, we have a love of coffee and a sense of place turned into a career.
CONE (PH) (voice-over): So I would start it at this angle.
QUEST (voice-over): When Dani (ph) opened her coffeehouses, now her modern take on the general store, it has a coffee bar, of course.
QUEST (voice-over): It is in the blood?
CONE (PH) (voice-over): It is in the blood. Yes. I can't not do it. I have always loved general stores, even before I knew it was in our family.
QUEST (voice-over): She is talking about her great-grandfather, who made his way to Seattle in the early 1900s. Also opened a general store, Cone
and Steiner. And it is that that she has revisited by naming her new general store C&S.
CONE (PH) (voice-over): So is it nostalgic or is it also about walking into a place that you have never been but it feels familiar?
Keep pouring, keep pouring, yes, get that nose down. Get in there. Yes, yes.
QUEST (voice-over): I didn't, I did not, I did not stop it.
BEAU, CAMERA MAN: He spent a year doing latte art.
CONE (PH) (voice-over): Two years. Two years.
QUEST (voice-over): In this world, everyone is a critic.
But why did the coffee culture take off here?
Was it because Starbucks started; therefore, put coffee on the agenda?
CONE (PH) (voice-over): I do think that is part of it, yes. But also I think that this area in particular is a fertile ground for ideas, for
innovation and for considering what is possible. We have a bounty of natural resources here. I think there has been just something in the DNA of
this place for things to grow.
Let's do this.
Yes. There it is there it is, back, back, back, that way. Don't, come over here, here, here, keep pouring. Oh, my god! Look at this! Yeah! This is
QUEST (voice-over): Dani is not through with me yet. There is another lesson she wants to impart.
CONE (PH) (voice-over): So we wanted to take you to the original location of my great-grandfather's Cone and Steiner in the early 1900s. And this is
an address a lot of people know, because you might have heard of this local company. And this is their headquarters.
QUEST (voice-over): You are telling me that your great grandfather's original store, from which your coffee shop is the lineage.
CONE (PH) (voice-over): Yes, right here.
QUEST (voice-over): I am not sure whether that is an irony or poetic justice.
CONE (PH) (voice-over): I know, I know, it is unbelievable.
QUEST (voice-over): I expected certain things in Seattle, a counterculture vibe, a city, where to nonconform is conforming. So perhaps I shouldn't be
surprised that, here, there is a secret gem, the video rental store.
Oh, wow, it just keeps going.
Aisles and aisles, shelf after shelf, VHSs and DVDs to rent.
MATT LYNCH, MARKETING COORDINATOR, SCARECROW VIDEO (voice-over): Scarecrow Video is the biggest video store in the entire world. We have about 145,000
QUEST (voice-over): More than Netflix, Amazon and Hulu combined.
LYNCH (voice-over): You will see the foreign films.
QUEST (voice-over): Wait for me.
Documentary special interests.
"The Grassy Knoll: The Shocking Truth."
LYNCH (voice-over): I would imagine there are like 15,000 to 20,000 titles just in this room alone.
These are laser discs.
QUEST (voice-over): You can find new releases in drama but it is the less familiar that intrigues.
LYNCH (voice-over): Here is the most popular room in the store.
That is the Pierce Brosnan one.
QUEST (voice-over): Oh, no. No.
LYNCH (voice-over): You want the --
LYNCH (voice-over): -- yes, there you go. You want the Mike Todd one.
QUEST (voice-over): "Around the World in 80 Days," I am immediately swept away. Matt Lynch wastes no time in bringing me back to Earth.
LYNCH (voice-over): We have also got a section over here called little bastards.
QUEST (voice-over): I am sorry.
LYNCH (voice-over): For anything tiny that wants to kill you, like Chucky or the Leprechaun.
QUEST (voice-over): You have a seriously worrying knowledge of all this.
Matt has been at Scarecrow for 20 years. If it is here, he knows about it.
When you look out here, what do you see?
LYNCH (voice-over): I see my church. I see, you know, a representation of cultural history that you are not going to find anywhere else.
QUEST (voice-over): You were a movie freak before you got a job here?
LYNCH (voice-over): Oh, yes. I don't think I would've been a hired here if I wasn't one.
QUEST (voice-over): It is eccentric.
LYNCH (voice-over): You could say, that for sure.
QUEST (voice-over): A maze of movies.
I am sort of stunned, it is just so much.
LYNCH (voice-over): It is a bit overwhelming.
QUEST (voice-over): That's exactly the word.
Why have you got so many titles, many of which will never see the light of day, let alone a DVD machine?
LYNCH (voice-over): That is a terrible question. You wouldn't walk into The Louvre and ask them why you have so many paintings.
Somebody has got to keep this stuff available to people who want to see it.
QUEST (voice-over): You can't rush this process. It is before smartphones and streaming. It requires thought.
What about the dambusters?
LYNCH (voice-over): That is probably upstairs.
QUEST (voice-over): One would spend hours perusing the video store for the right pick on a Friday night.
Oh, this looks good, doesn't it?
Are you a dinosaur?
LYNCH (voice-over): Some might say. I don't think Scarecrow is a dinosaur, though. It's not nostalgia; it is history. It is cultural history. We all
have communal experiences, we all see the same movies, experience the same art. These movies collect all of those experiences for us.
QUEST (voice-over): Time to put Matt to the test.
LYNCH (voice-over): Bingo. Let's go here.
QUEST (voice-over): "The Yellow Rolls-Royce," good cast as well, Rex Harrison, Ingrid Bergman, George C. Scott, Omar Sharif.
(BEGIN VIDEO CLIP, "THE YELLOW ROLLS-ROYCE")
QUEST (voice-over): Wasn't a very good film to me. But it wasn't a bad film.
I can spend hours on streaming services, looking through one after the other after the other and not finding anything I really want to watch. But
then put me here and all of a sudden I am saying, oh, I would like to watch that.
Again, oh, I will have that one as well. Then I say, maybe I will go for this. I don't understand.
LYNCH (voice-over): I think it is being able to put your finger on it literally. Now there is something important about being able to touch the
movie, to have the copy of it in your hand.
QUEST (voice-over): Visiting Seattle off-season gives a new and enjoyable perspective on this Pacific Northwest city, which leads me to the word that
best describes it. I think it is possibility because this is the place that thrives on innovation, with a true can-do spirit.
And you'll want to come here and experience these possibilities for yourself, Seattle and the Puget Sound, part of our "World of Wonder."
QUEST: Markets are higher as more companies are posting earnings. The Dow stumbled over the, gate you can see in red. It is now up 358 points. Strong
gains and indeed this is the best of the session.
The other two averages are outpacing it, with the S&P and the Nasdaq up over 1.5 percent. On the Dow components, Home Depot is up over 2 percent,
best of the day. Goldman's outperforming JPMorgan once again. And Boeing is near the top as it ships its last 747. I'll show you that in a second.
Morgan Stanley thinks the stock has room to grow and McDonald's beat earnings expectations and is down 2 percent after saying inflation
pressures will continue.
Caterpillar is at the bottom, it is off 3 percent. The last Boeing 747 will be rolled out on its way to Atlas Airlines as a freighter. These are live
pictures coming to us from Boeing's facility as they await the reveal and the rollout of the plane. The 1,500th and some plane to be delivered at the
ceremony, attended by thousands of workers, past and present, and Boeing executives.
Back to the Dow 30, to wrap up as you can see exactly how the markets have been moving with Home Depot at the top. Caterpillar at the bottom. That is
not a day you usually see.
But it is an indication of the strange times with Verizon in the middle. That is the dash to the closing bell with the market at its best so far
today. Whatever you're up to in the hours ahead, I hope it is profitable. On Wall Street, the closing bell is ringing. "The Lead" with Jake Tapper