Return to Transcripts main page

Quest Means Business

Yellen Warns Of Constitutional Crisis If Limit Not Raised; PacWest, Western Alliance Shares Rise; Russia Evacuating Civilians In Occupied Zaporizhzhia Region; Biden Proposes Airlines Pay Passengers For Length Delays; King Charles Sends Thanks After Celebratory Weekend; Stars Celebrate U.K.'s New Monarch With Castle Concert. Aired 3-4p ET

Aired May 08, 2023 - 15:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:25]

ELENI GIOKOS, CNN INTERNATIONAL HOST: Stocks are sitting close to flat across Wall Street this Monday. There is big hesitation for big moves as we

wait for the inflation data to be released later this week. As you can see the Dow Jones sitting just down 0.1 percent.

Those are the markets and these are the main events: The US Treasury Secretary warns of catastrophe if Congress fails to raise the debt ceiling

by the end of the month.

The EU proposes an 11th round of sanctions against Russia.

And US proposes new rules requiring compensation for flight delays and cancellations.

Live from Dubai. It is Monday, the 8th of May, I'm Eleni Giokos. I am in for Richard Quest, and this QUEST MEANS BUSINESS.

A very good evening.

And tonight, the U.S. Treasury secretary says Congress could trigger a constitutional crisis if it fails to raise the debt limit. Janet Yellen

says the US government could run out of money as early as June 1st. It is also running out of time to fix the problem.

President Biden is set to meet Tuesday with congressional leaders from both parties, 43 Senate Republicans have vowed to block any deal without

spending cuts.

In an interview on ABC's "This Week," Yellen said there are no good options if Congress can't reach an agreement.

(BEGIN VIDEO CLIP)

JANET YELLEN, U.S. TREASURY SECRETARY: There is no way to protect our financial system and our economy, other than Congress doing its job and

raising the debt ceiling and enabling us to pay our bills and we should not get to the point where we need to consider whether the president can go on

issuing debt. This would be a constitutional crisis.

(END VIDEO CLIP)

GIOKOS: Well, Priscilla Alvarez is at the White House for us.

Look, Janet Yellen there saying the US is facing this constitutional crisis and frankly, also saying economic chaos unless we see the raising of the

debt ceiling. She is sounding the alarm, but is Congress able to listen and act quickly enough, before the deadline?

PRISCILLA ALVAREZ, CNN WHITE HOUSE REPORTER: And she has been sounding the alarm for weeks, if not months now. And both parties, the Democrats and

Republicans have stood firm in their positions and just weeks away from that June 1st date, they are still digging in.

Just a couple of weeks ago, we saw President Biden issue a veto threat for the House Republican proposed debt ceiling legislation. So, that already

gave us an indicator that the administration was not budging on this.

In fact, the White House position has been that there should not be any caveats or adds to this debt ceiling, they should pass a clean debt ceiling

bill. But as you noted earlier, just ahead of this meeting, we saw now that 43 Republican senators have vowed to oppose raising the debt ceiling with

without "substantive spending and budget reform."

So that is sort of the mood going into this meeting tomorrow with these four congressional leaders as both sides who look at this differently;

Republicans saying that they need to make changes and Democrats saying we need to pass a clean debt ceiling bill.

Now as to what is on the line, well, that includes seven million jobs, recession and economic contraction and a spike in interest rates impacting

credit cards, among other consequences.

So this is top of mind for the White House here this week and going into tomorrow, just as it is on the Hill. But this is really reaching a fever

pitch as we're just weeks away from a date where the Treasury may need to consider what bills it can even pay.

GIOKOS: Yes. Really good points there.

Look, the reality is that it has been floated, or at least people have discussed the idea that President Biden could opt to invoke the 14th

Amendment. Is that even a possibility that is on the cards right now?

ALVAREZ: Well, right now, all options are being floated by all factions of each party as they get nervous about what could happen if there was a

default.

And so right now the focus is going to be on that meeting tomorrow and what if anything comes out of it, and then conversations about what to do next.

GIOKOS: All right, Priscilla Alvarez, thank you so much.

Well, a default would be catastrophic. This kind of brinkmanship can have serious economic costs on its own. Now, the US lost its AAA credit rating

during a debt ceiling standoff.

[15:05:01]

You'll remember, this was in 2011, the uncertainty that year raised the government's borrowing cost by more than $1 billion and led to significant

stress in financial markets.

Stephen Stanley is the chief US economist at Santander, and he joins me now.

A lot of people have PTSD of what happened in 2011 and many people are saying, look, this is a bit like deja vu. Are we going to even have enough

time without the sort of scuffles that we're seeing already playing out to be able to meet that June 1st deadline? What is your outlook right now on

the probabilities that we could face in the next few weeks?

STEPHEN STANLEY, CHIEF US ECONOMIST, SANTANDER: Yes. I think the chances of the US actually defaulting on its debt are very low. It's going to probably

go down to the last minute (AUDIO GAP). But it seems to me that neither side really is eager to see a default.

So you know, they obviously have tough negotiations ahead, but I think in the end, if we're coming to the deadline, and they are still in an impasse,

my guess is that they'll find a way to extend the time limit and give themselves more time to talk.

GIOKOS: Yes. I mean, what do you make of the fact that President Biden says, look, we need to raise the debt ceiling without conditions attached.

Republicans are saying we need to look at spending cuts.

There seems to be a big divergence in terms of what people are thinking on either side of the aisle. What is the best option here?

STANLEY: Well, it feels like to me the obvious solution, you're right, those are two very mutually exclusive positions. But the one thing that

gets them into alignment is if the Republicans were to agree to extend the debt ceiling to the end of the fiscal year, which is September 30th, and

then we could wrap the debt ceiling talks in with the budget. And in that sense, the administration gets what it wants, any budget discussion is in

the context of the annual budget process, rather than the debt ceiling, and the Republicans still haven't had the ability, at least to try to get some

sort of fiscal reform in place.

GIOKOS: You know, look, the reality is, and as you've just said, the possibility of a default, very minimal, but we've seen 11th hour deals

occurring. In the interim, there is collateral damage, we saw what happened with the credit rating in 2011.

Do you believe we're sitting in that kind of fragile situation, if we get too close to it, and we don't see an extension at the very least?

STANLEY: Certainly, if we get right down to the last minute, and it doesn't look like there's going to be a deal, I think that people -- and you know,

certainly in the financial markets are going to get very nervous.

I mean, right now, most of the response that we're seeing is kind of technical in nature, you know, people are trying to avoid the bills that

mature in that hot zone, if you will. But it's kind of a zero sum game, right? Some bills are less desired, and others are more desired. It's not

really, at this point rising to the effect of having an impact on the economy.

But if we get right to the last minute, and it looks like we're still far from a deal that I think people are going to get a little bit nervous.

GIOKOS: Just on the interest rate front. Look, we've had an interest rate increase last week, you're of the view that this could possibly be the last

of the rate hikes. Take me through what you believe, to be the inflationary outlook. We've got numbers coming out this week. And then, you know,

whether the Fed has done enough?

STANLEY: Yes. So I think we're close to the end. I wouldn't be surprised to see one more move, perhaps in June. But certainly, you know, we're quite

close.

But unfortunately, I think inflation is going to be slow to recede. I think we'll get a reminder of that this week, we'll get another pretty firm set

of inflation data again. And right now, the financial markets are pricing easing very soon, you know, within the next three or four months and

significant easing, but between now and the end of the year.

I just don't see that happening. You know, in the absence of a really bad economic scenario, perhaps, you know, something related to the debt

ceiling, or more likely, if we were to see some really serious fallout from the tightening in credit conditions that has followed the banking turmoil

over the last couple of months, you know, perhaps worst case economic scenario would bring the Fed to swing in the other direction.

But I think, you know, most likely the Fed is going to be on hold well into next year once they reach their peak.

GIOKOS: All right, Stephen Stanley, thank you so much for joining us.

And regional bank stocks are recovering after a volatile week last week. PacWest is up six percent and Western Alliance is up three percent.

[15:10:10]

They have given back some of the gains from earlier today. It comes after a volatile week last week for PacWest. The stock lost more than half of its

value from Monday, before recovering at the end of the week.

Rahel Solomon is with me.

I tell you, you know, this is one hell of a roller coaster ride. You know, we've seen aggressive moves and losses from last week, then we saw it

bounce back. I saw PacWest dropped its dividend as well. That news came through today.

Then I was looking at PacWest, it was up 28 percent at one point, and now it is only up around three percent. What is behind these moves -- Rahel.

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Yes, Eleni. You'd have to have a really tough stomach to be an investor in some of these shares because as

you pointed out, it has been a very wild roller coaster ride.

So for PacWest for example, as you pointed out, it's the dividend, right? The bank announced that it was cutting its dividend.

Typically investors don't like to hear that from a company, but in this example, it seemed more so as an example of financial responsibility as the

bank sort of tries to shore up and hold on to capital.

But take a look, not all of the regionals are taking part in what appears to be a rally. PacWest is up, Western Alliance is up. Comerica is up. New

York Community Bank, not up.

But if you look at the larger banks, the big, big banks, those are all up as well. Part of the reason why is perhaps the selloff was overdone. I

mean, JP Morgan is up about half a percent, let's call it. Wells Fargo, almost two percent, and Citigroup let's call it one-third of a percent.

So part of the concern here was that maybe it was overdone. Maybe the selloff was overdone, and things weren't actually as bad as expected. We've

also gotten some analyst notes, including the one that I'm holding here from JPMorgan, which actually upgraded its outlook on the sector from

neutral to -- from negative rather, a more bearish to neutral saying that, look, for some of these regional banks, deposit balances have stabilized

and that for some, they actually had a pretty decent quarter. So maybe it wasn't as bad as many were expecting.

That said Eleni, as you pointed out, it has been a rollercoaster ride and though today thinks to be seeming like they are maybe settled, who is to

say what tomorrow will bring?

GIOKOS: I feel like we're in a theme park with these regional banks to be completely honest.

But Rahel, look, we're worried about how the tight credit market scenario is going to impact banks for the long term, whether there is more

contagion, whether there is more pain, and if there's anything we've seen and learned over the last few months, it is that we don't really know

what's under the hood.

SOLOMON: I think that's fair, right? I mean, I think at one point, you certainly heard a lot of consensus that things seemed to be settled, and

then First Republic happened, right?

And so I think there is a certain level of humility in the market now in terms of further contagion, but I think you make an excellent point, which

is the concerns in terms of lending, right. I mean, we've already seen some of the banks start to raise their lending standards as they hold on to more

capital as they perhaps not lend so freely.

It was already restricted to begin with, but as they start to pull back, and that certainly has implications in terms of profitability, but it has

enormous implications, Eleni, in terms of the consumer, right? You have to imagine, for example, if a small business wants to take out a loan to

expand its business, to increase its hiring, to expand, right, sort of the American Dream. Well, suddenly if that becomes harder, if they can't get a

loan, all the sort of ripple effects that has on economic growth.

And so there are certainly considerations to keep in mind in terms of the banks and their bottom lines and profitability, but it also has enormous

implications for the US economy and consumers at large.

GIOKOS: That is what happens when you hike rates, right? Tighter credit market, a lot more expensive to get money into the system.

Rahel Solomon, thank you so much. Good to see you.

SOLOMON: Likewise.

GIOKOS: Well, the EU is weighing new sanctions to cut off third party trade with Russia. It comes as Moscow launched a punishing wave of drone attacks

across Ukraine.

We're heading to Kyiv, up next.

(COMMERCIAL BREAK)

[15:16:32]

GIOKOS: Welcome back.

Now the European Union is proposing new measures to punish countries seem to be helping Russia evade its sanctions. The bloc also plans to blacklist

several Chinese companies over their alleged involvement in supporting the Kremlin's war machine.

China says it firmly opposes any illegal sanctions. Now, it comes as Russia attacked Ukraine with a swarm of drones overnight. Kyiv says, it shot down

all 35 drones targeting the capital.

We have CNN's Sam Kiley in Kyiv for us.

Sam, great to have you on. We also know that Russia has called for the evacuations of civilians around the Zaporizhzhia nuclear power plant. Take

us through the latest.

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Eleni in the context of these continuing mass raids by particularly this cheap and

cheerful or cheerless Shahed Iranian-made made drones that are intended to soak up air defenses, that has been a steady state of this war

periodically.

But what we are also seeing is increasing concerns on the Russian side of the frontline that the Ukrainians are on the verge of prosecuting what

their long and much wanted, long trailed offensive in the South.

Now, if that goes ahead, clearly the amount of violence is going to shoot up and in that context, the Russians are asking some of their people

particularly close to the frontlines to get out.

This is what it looked like there on the ground.

(BEGIN VIDEOTAPE)

KILEY (voice over): This is Bakhmut, the center of war in Ukraine after months of fighting Russian invaders.

(UNIDENTIFIED MALE speaking in foreign language.)

KILEY (voice over): Now, in territory under the Kremlin's control, roads are jammed with evacuation convoys heading towards Crimea. Some residents

in Russian-held towns have been ordered from their homes.

(CONVERSATION in foreign language.)

TRANSLATION

UNIDENTIFIED MALE: Who is there?

UNIDENTIFIED MALE: It's military commandant's office. Open up.

General evacuation has been announced. Pack your things.

UNIDENTIFIED MALE: I am not going anywhere from my house.

UNIDENTIFIED MALE: Open the door and pack your things. You're leaving.

(UNIDENTIFIED MALE speaking in foreign language.)

KILEY (voice over): Ukraine is expected to launch a widespread offensive any day. More violence is coming on a vast scale.

(UNIDENTIFIED MALE speaking in foreign language.)

KILEY (voice over): Russia lost ground in the last Ukrainian counterattacks. And here, Russia's defense minister inspects tanks. They

are being sent into the coming storm.

(UNIDENTIFIED MALE speaking in foreign language.)

KILEY (voice over): Zaporizhzhia's Russian-backed governor use social media to publicize evacuations from frontline towns. Sixteen hundred people have

left from 18 settlements.

The evacuation roads following the route of a possible Ukrainian military thrust from Zaporizhzhia to Berdiansk, and ultimately Crimea.

And still, Russian missiles and drones continue to pound Ukrainian civilians. This was a warehouse for the local Red Cross in Odessa. Five

civilians were injured here in Kyiv by Russian drone.

Buses had been turned into ambulances scaling up ahead of more widespread fighting, and more of this.

(END VIDEOTAPE)

KILEY (on camera): Now Eleni, clearly in anticipation of this fighting, now, we are seeing these evacuations being ordered, or at least encouraged

by the Russians. It is unclear the extent to which they're being made compulsory.

[15:20:03]

The Zaporizhzhia Russian-appointed governor there is saying that it is not compulsory, that people can stay behind if they want, but the International

Energy Atomic Agency is deeply concerned now that there may be an evacuation of personnel from the Zaporizhzhia region nuclear power station

that is the largest one in Europe. And if that were to transpire, of course, that would make that very important strategic installation that

much more vulnerable and it sits as it does already, essentially, on the frontlines -- Eleni.

GIOKOS: Yes, and it is a really good point. You know, I've been seeing that there's major concern about what this messaging means when Russia is

evacuating people -- calling for the evacuations of people.

Is there a sense that we could see more intense fighting, frankly, you know, we've seen a barrage of attacks into Ukraine over the last few weeks,

we saw what happened at the Kremlin and the finger pointing, as well. And of course, the messaging that there's going to be big consequences.

If you tie all of these loose ends together, there seems to be a major concern about what this could mean going forward.

KILEY: Well, Eleni, I think that the response, alleged response in terms of the drone attack, such as it was against the Kremlin, I don't think

anybody, not even a Russian general would prosecute a war based on this idea of kind of retaliation.

The Russians are already here, they're already fighting as hard and as viciously as they possibly could and they would not tie any of their

military campaigns to kind of gestures. But tomorrow, marks May the 9th, Victory in Europe Day effectively, the victory over Nazis, which is in the

Soviet era, was a celebration right across the Soviet sphere.

That is no longer going to be a celebration, it is not here in Ukraine, according to President Zelenskyy. He is actually going to rename it Europe

Day and make today, a day upon which all veterans are remembered.

But there are big parades scheduled for Russia tomorrow and I think that would be intended to try to boost Russian morale, that is not great. It's

not good on the frontlines. There are a lot of fractious activity on the internet, on social media, a lot of criticism coming from the likes of

Prigozhin, the leader of the Wagner mercenary group, of the Ministry of Defense in the Kremlin, the Russian Ministry of Defense and their

prosecution of this whole war.

So in that context there, I think the Russians have been digging in though they have been preparing defenses, they know or they think they know that

this much vaunted Ukrainian offensive may come anytime in the summer as soon as the ground dries out, for example, as soon as the weather makes it

easier for heavy armor to move.

And so in that context, I think there is an anticipation of more violence, but probably generated by Ukraine -- Eleni.

GIOKOS: All right, Sam Kiley, thank you so very much.

And Ukrainian president, Zelenskyy as Sam was alluding to compared Russia to Nazi Germany while marking the end of World War Two today. He wants to

permanently move Ukraine's anniversary of the Nazi surrender forward by one day, and that's to align it with the West and move away from Russia, which

celebrates Victory Day on May 9th.

Moscow typically uses the day to show off its military might, but on the frontline in Ukraine, Russia's army is turning to relics of its past to re-

equip its beleaguered forces in Ukraine.

CNN's Clare Sebastian reports for us.

(BEGIN VIDEOTAPE)

JOHN DELANEY, SENIOR CURATOR, IMPERIAL WAR MUSEUM: What a missile will do is it will fly over the tank, then down and in 90 degrees straight into the

top of the turret, which is less well defended.

CLARE SEBASTIAN, CNN CORRESPONDENT (voice over): This scenario has played out hundreds of times over the past 14 months, Ukraine using Western

weapons to devastating effect.

Russia, according to one recent estimate has lost up to half its operational tank fleet in this war. Now, Western officials say Russia is

dusting off much older models to replace them.

DELANEY: This gun was used on the SU-100 tank destroyer in 1944, so it is a Second World War gun.

SEBASTIAN (voice over): Including the T-55, first built in the 1940s. This one now housed at the Imperial War Museum outside Cambridge.

Satellite imagery for a storage facility in Russia's far east showing dozens of tanks have been removed in the last year. This image showing the

T-55 at that same facility.

Video that first surfaced in March also showing a train load on the move reportedly somewhere in Russia. The Russian Ministry of Defense hasn't

confirmed their deployment, but in recent weeks, well-connected Russian bloggers have begun showing T-55s in Russian occupied territory in Ukraine.

DELANEY: There are so many of these were manufactured, over 100,000 altogether and the parts -- the basic mechanical parts are all

interchangeable, so there will be vast stockpiles of these.

[15:25:07]

SEBASTIAN (voice over): The T-55 was a central piece of the Soviet Union's Cold War arsenal, helping crush democratic uprisings in Eastern Europe,

Hungary in 1956, the Prague Spring 12 years later, but by the time Iraq used them in the Gulf War in the early 90s --

UNIDENTIFIED MALE: We took out, all told 14, T-55 tanks.

SEBASTIAN (voice over): They were already outclassed by US M1-Abrams and British Challengers. Earlier versions of the tanks NATO countries are now

supplying to Ukraine.

TREVOR TAYLOR, PROFESSIONAL FELLOW IN DEFENSE, RUSI: I think faced with Western weapons, the Russians must expect very heavy casualties if they

expect to move forward using that type of system.

SEBASTIAN: (voice over): Experts say behind the official propaganda, Russia cannot build new weapons quick enough.

SEBASTIAN (on camera): The Western sanctions primarily targeting Russia's access to higher tech parts for weapons have made it much harder for them

to manufacture more modern equipment. Older, simpler tanks like this, thousands of them just sitting in storage provide an alternative.

But this against say a Leopard 2 or a Challenger, what happens?

DELANEY: If it is a one-on-one tank engagement over a reasonable distance, this will lose every time. But in wooded or closer-built environments, this

is adequate.

SEBASTIAN (voice over): It's also simpler to maintain and train on than newer systems, an advantage for Russia's mobilized troops.

DELANEY: Dig a pit, sit the tank in the pit so you can only see the turret and then that can be used to defend the frontline against the

counterattack.

SEBASTIAN (voice over): Russia is now digging in with everything it has, as Ukraine gets ready for what may be its biggest counteroffensive yet.

Clare Sebastian, in Duxford, England.

(END VIDEOTAPE)

GIOKOS: Well, the Arab League is officially welcoming a longtime international pariah back into the fold. It has readmitted Syria as a full

member despite the government's alleged war crimes in an ongoing civil war.

As Nada Bashir reports, President Bashar al Assad himself could return to the spotlight on the regional stage as early as next week.

(BEGIN VIDEOTAPE)

NADA BASHIR, CNN REPORTER (voice over): And unthinkable prospect, now a reality. The Arab League has reinstated Syria more than a decade after

Damascus was suspended over President Bashar al Assad's deadly crackdown on anti-government protests.

Now, talk of an Arab-led political process to end the bloody Syrian civil war that has haunted the region for years.

AYMAN SAFADI, JORDANIAN FOREIGN MINISTER: What we're talking now is a political process in which the Arabs will have a leading role in efforts to

try and bring about a solution to the crisis, and in order for us to succeed, we will all need to work together.

BASHIR (voice over): Syria says it welcomed the announcement and that it will participate in strengthening joint Arab action.

The decision to welcome Syria back into the fold hasn't come as a total surprise, following a series of diplomatic victories for Assad.

Last week, Iran's President, Ebrahim Raisi met with Assad in Damascus, a first for an Iranian head of state in 13 years. And in April, a similar

visit to the Syrian capital by Saudi Arabia's foreign minister.

But not all Arab states are supporting Syria's return, including some that have actively supported Syria's rebel groups. Qatar's minister of Foreign

Affairs, Majed bin Mohammed Al-Ansari, said his country continues to stand against the normalization of ties with the Assad regime.

And among those most wary of Syria's ascent, Israel. The IDF suspected of hitting targets inside Syria to prevent Iran from gaining a foothold as

part of their proxy war, and for the millions of Syrian refugees brutalized by Assad's war, it may be hard to accept this decision as anything but a

betrayal.

RASHAD AL-DEEK, DISPLACED SYRIAN (through translator): This means nothing to us because we are displaced and forced to leave our towns. They are just

like him. This is why they took him back. They are all useless.

ABDUL SALAM YOUSEF, DISPLACED SYRIAN (through translator): Instead of Arab leaders helping us and getting us out of those camps where we suffer and

live in pain, they whitewash the criminal and killers hands from our blood.

BASHIR (voice over): President Assad could now participate in the upcoming Arab League Summit in Saudi Arabia, though the League Secretary-General has

been clear, this does not mean an end to the Syrian crisis.

AHMED ABOUL GHEIT, SECRETARY-GENERAL, ARAB LEAGUE (through translator): The return of Syria is the beginning of a movement, not an end. The direction

of the resolution to this crisis in Syria will take time for procedures to be implemented and it will be gradual.

BASHIR (voice over): Shifting politics, changing the landscape of the Middle East, but caught in the middle, Syrian refugees and citizens still

facing an uncertain future with no clear indication of how or when President Assad will be held to account.

Nada Bashir, CNN, London.

(END VIDEOTAPE)

GIOKOS: Flight delays could get a little less expensive for US airline passengers. The Biden administration wants airlines to cover the cost of

things like hotels, cabs, and rebooking.

We'll bring you an update right after this.

(COMMERCIAL BREAK)

[15:30:37]

GIOKOS: In the U.S. the Biden administration wants to make it harder for airline delays to fly under the radar. Its proposal would have airlines

compensate stranded passengers for things like meals, hotels and rebooking. The Transportation Department unveiled a Web site where travelers can see

current airline policies, places outside of the U.S. already have compensation rules and the E.U. passengers can receive up to $663 for

significant delays.

President Biden acknowledged that the U.S. is lagging behind.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Airline passengers in Canada, for example, the European Union and other places already get these

compensations. And guess what, it works. One study found that the European Union required airlines to compensate passengers for flight delays, the

number of flight delays went down. I appreciate Secretary Buttigieg's leadership on this issue.

And I hope and expect the Department of Transportation to move as quickly as it can to put this new rule in place.

(END VIDEO CLIP)

GIOKOS: All right. Brian Sumers is the founder and editor of The Airline Observer. He joins me now from Los Angeles. Great to have you with us. I

guess this is a long time coming, right? What did you make of the statement and the general rules that we know to be sort of the platform that the

airlines will be facing in the U.S.?

[15:35:04]

BRIAN SUMERS, FOUNDER AND EDITOR, THE AIRLINE OBSERVER: You know, to be honest, I follow this all the time and I thought it was a little bit weak.

As you mentioned in the European Union, you could get up to 600 euros if your flight is delayed or canceled by a certain number of hours. Here in

the United States, Joe Biden had a press conference this morning, and he didn't say exactly how much compensation people would get.

But the thinking is, it might not be much. And also, if you listen to what he said, he didn't necessarily say you get a cash payment as you do in the

European Union. You could get a travel credit, or even frequent flyer miles. So, this is kind of a U.S. copy of what's happening in Europe, but

doesn't appear to be as strong.

GIOKOS: Do you feel that they should be a monetary value attached like we seeing in the E.U.? Because we know in the E.U., airlines are saying the

rules are too strict and it's actually a huge financial burden. So, I guess it's about finding a balance here.

SUMERS: I think it is about finding a balance. The U.S. airlines say the same thing. We just finished the first quarter. The first quarter earnings

came out and among major U.S. airlines only American Airlines had a profit and it was a tiny profit. You know, a lot of people think airlines are out

there making billions of dollars. They're not. U.S. airlines tell me they can't really afford to pay compensation on the one hand.

And on the other, you know, they will say, look, a lot of these delays and cancellations. They're not our fault. The United States doesn't have enough

air traffic controllers, you have a lot of issues with bad weather. And sometimes it's just not even clear. Is it the airline's fault or is it air

traffic controller's fault?

GIOKOS: Yes. I mean, you know, we know that they were talking about controllable cancellations, right? So, that's two things that come up. Will

airlines find a loophole to sort of decipher and define what a controllable cancellation is? That comes to question as well. And generally, you know,

the definitions, the rules around this are going to be fascinating. And I'm also assuming that they would probably pass on the cost if it becomes a lot

more expensive.

SUMER: You're absolutely right. And the interesting thing is the Department of Transportation actually had a press release this morning in which they

said for the first time, they will define what a controllable cancellation is. And just for the viewers, this is kind of what it sounds like. It's

something in the airlines control. So, weather or air traffic control, not in the airline's control and not controllable.

But sometimes, you know, it'd be 9:00 at night and maybe a plane was delayed because of weather at 6:00 that morning. And the question becomes,

you know, whose fault does it become 13 hours later if the plane has been late all day? These are very difficult things to answer.

GIOKOS: Yes. I know. And right, when you travel into the U.S., my sister was just there. And she had three flight issues. And it was just sort of

tough deal with it. And I just couldn't believe the way the airlines responded. What does this mean for consumers down the line? I mean, this --

I guess it is a step in the right direction. And as Biden said, there's a correlation between, you know, compensation, and airlines taking

accountability for delays versus the amount of delays that you see.

SUMER: It absolutely is. And, you know, I don't know what's going to happen with these travel credits or people are going to get cash, whatever. But

the Biden administration also said something else interesting this morning. They said when they took over in Washington, none of the major U.S.

airlines guarantee travelers that they would provide them a hotel when there was a controllable cancellation.

So sometimes, if there was a mechanical delay, you'd get a hotel, sometimes you wouldn't. There was no official policy. But now, the Biden

administration has leaned on airlines and said you should do this. It's still voluntary. But the Biden administration said this morning, that of

the major U.S. airlines only one, Frontier Airlines won't provide a hotel for a controllable cancellation. So, it is a step in the right direction,

even here in the United States.

GIOKOS: All right. Brian Sumers, great to have you on the show. Thank you so much.

King Charles is offering his heartfelt thanks to everyone who celebrated his coronation this weekend. The festivities wrapped up today with a

charity event called The Big Help Out. The Prince and Princess of Wales and their three children seen here volunteering. Buckingham Palace has released

official coronation photographs featuring the king and the queen in full regalia.

CNN's Christina Macfarlane looks back at the historic weekend.

(BEGIN VIDEOTAPE)

CHRISTINA MACFARLANE, CNN CORRESPONDENT (voice-over): Sunday Night Fever descended on Windsor Castle. King Charles III coronation concert was the

climax of a nationwide celebration.

[15:40:03]

Gone was the solemnity of Saturday instead A-list celebrities sang chart topping hits (INAUDIBLE) hymns. Their Majesties in attendance are mean

robes and crowds dispensed altogether a more relaxed look in the Royal box. The Prince of Wales kind of relaxed figure on stage too joking with the

crowd between speaking about his pride and his dear pa.

PRINCE WILLIAM, PRINCE OF WALES: I would say a few words about my father, and why I believe this weekend is so important. But don't worry, unlike

Lionel, I won't go on all night long.

MACFARLANE: And just for confirmation, the king asked Lionel Richie the same question in a surprise appearance on American Idol.

CHARLES III, KING OF THE UNITED KINGDOM: Because I just wanted to check, how much -- how long you'll be using this room for?

LIONEL RICHIE, AMERICAN SINGER-SONGWRITER: We have to give the room up right away.

CHARLES III: I just wanted to check.

RICHIE: Thank you so much for coming.

CHARLES III: No. But thank you so much. You're brilliant performance.

MACFARLANE: And come Monday, a Wales's family day out and at first ever Royal Engagement for Prince Louis painting, drilling, shoveling, even

arrived in the digger with dad. There's a first for everything. As if juxtaposed against the pomp and ceremony of the weekend, a day marking in

marks the end of the beginning of the Carolean era. The message is back to work for the royal family.

Christina Macfarlane, CNN, London.

(END VIDEOTAPE)

GIOKOS: Well, that is it for QUEST MEANS BUSINESS. I will be back at the top of the hour as we make a dash for the closing bell. Up next, Connecting

Africa.

(COMMERCIAL BREAK)

[15:59:15]

GIOKOS: Hello. I'm Eleni Giokos. It is the dash to the closing bell and we're just two minutes away. All eyes on Washington this week as Joe Biden

meets with congressional leaders about raising the debt limit. The Dow is off around 60 points. It turned negative this morning and it has stayed

there all day. The other U.S. averages are up just slightly the NASDAQ is over a 10th of a percent higher and the S&P is basically as you can see,

flat.

Looking at the dark components Disney is up more than two percent. It reports earnings on Wednesday. Got Walmart around nought point-seven

percent higher. AmEx and Visa up not by much. Modest losses on most of the board. Walgreens Boots Alliance right at the bottom. Well, that's your dash

to the closing bell.

I'm Eleni Giokos. I will be in for Richard Quest this entire week. Now the closing bell is ringing on Wall Street. And "THE LEAD" with Jake Tapper

starts now.

[16:00:09]

I will see you tomorrow.

END