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Quest Means Business

Ontario's Premier To Withdraw Ad That Infuriated Trump; Year-Over- Year Inflation Rises To Three Percent In September; Reagan Library: Ontario Ad Misrepresented Speech; U.S. Hits Colombian President With Sanctions; WestJet To Offer "Fixed Recline" Only For Standard Seats; Viking Offers Identical Configuration Across All Ships. Aired 4-5p ET

Aired October 24, 2025 - 16:00   ET

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

[16:00:15]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street over there. It is members of Citi who are ringing

the bell and it is a solid, solid sea of green. It has not budged all session, which is fascinating bearing in mind the underlying things that

you and I will be talking about.

Let's hit the end trading -- there we go. Okay, a firm gavel. Trading is now over the week of trading has finished. Those are the markets and these

are the main events we will be talking about tonight.

Donald Trump cuts off tariff negotiations with Canada and it is all over an ad that features the late Ronald Reagan. He is also escalating his spat

with Colombia. That's Donald Trump. The U.S. sanctions the Colombian president, Gustavo Petro, and you either love him or you hate them, the

economy seat that reclines or doesn't. Tonight, WestJet's chief exec joins me live to discuss the airlines decision to move to fixed seats.

End of the week live from London, Friday, October the 24th. I am Richard Quest and on a Friday, like all else, I mean business.

Good evening.

The premiere of Ontario Province in Canada has announced he will pull the ad that provoked Donald Trump to end trade talks with Canada. Now, the ad

featured the 1987 radio address by the Late President Ronald Reagan, which criticized tariffs even though he was introducing them on Japan. Mr. Trump

called using that ad egregious and fake, and called off all further negotiations.

The Ontario Premier Doug Ford now says the ad will disappear from U.S. airwave from Monday, and the decision was reached after speaking to the

Prime Minister, Mark Carney. Premier Ford said the ad was meant to be a conversation starter.

(BEGIN VIDEO CLIP)

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES OF AMERICA: Throughout the world, there is a growing realization that the way to prosperity for

all nations is rejecting protectionist legislation and promoting fair and free competition.

Americas jobs and growth are at stake.

(END VIDEO CLIP)

QUEST: Paula Newton is in Ottawa, joins me now. Many, many, many people have used the Ronald Reagan address of 1987, which is, by the way, it is

brilliant on free trade and why tariffs don't work. But it has been used in multiple of times. So what was it about this that irked President Trump?

PAULA NEWTON, CNN INTERNATIONAL HOST: Inquiring minds want to know, Richard, because the thing is, the President saw it on Monday during Game 7

of the World Series in the United States, at least he said he saw it because he said that on Tuesday.

Clearly having this icon, this conservative icon who seems to be at odds with what is the MAGA policy, the Trumpian policy of having all of these

tariffs and initiating these trade wars, it irked the president. But I think there is a lot more here behind the scenes, Richard.

I mean, look, even if these ads are pulled after the World Series games this weekend, I wouldn't expect that trade negotiations with Canada and the

United States are going to be back on the rails very quickly. Things weren't going well.

All Canada had really was deals on two sectors, and that was likely steel and aluminum that hadn't even been finalized yet, was maybe going to be

signed in Asia in these upcoming summits, but we didn't know.

At issue here is that there is still a lot of uncertainty in what is one of the largest trading relationships in the world, and the United States does

not like Canada's policy right now.

They want to win on trade, and they feel that Canada is playing hardball.

QUEST: You know, and also, I looked at what Prime Minister Mark Carney said after Trump's announcement, and he basically says we have to keep in mind -

- focus on what we can control and then a sideswipe we can't control what President Trump is going to do.

But this plan that heh as got to double non-U.S. foreign trade by, I think 2030 or whatever it is, that is going to be very difficult to achieve, and

he admits that.

NEWTON: He admits that, and in fact, he said until 2035, either way, a very tall order especially -- but especially when Canadian business is oriented

towards the United States, there are a lot of similarities. The language, the business culture, the supply chains are all intertwined.

All Canada can hope for is that they can diversify trade, perhaps within the window that you describe about five years, because ten years just isn't

going to do it.

[16:05:10]

And the other thing that isn't going to do it is the uncertainty that's on the table with the united states right now. It would be lunacy to think

that this relationship is going away in any measure. The problem is the trade friction right now is really making Canada's economy much more

vulnerable than it is in the United States.

The United States, some states will hurt, some sectors will hurt, but Donald Trump will continue to ride this trade war out.

QUEST: Paula is in Ottawa, and I am grateful.

Candace Laing is the President and Chief Executive of the Canadian Chamber of Commerce. Candace joins me now.

I will ascribe to you, forgive the assumption, but your heart must have sunk last night when Donald Trump broke off trade talks because it is the

capricious nature, based on an ad that, frankly, everybody has been using for the last -- goodness knows how many months.

CANDACE LAING, PRESIDENT AND CHIEF EXECUTIVE, CANADIAN CHAMBER OF COMMERCE: Yes, well any breakdown in the talks and potentially relationship is

concerning. But I think from the business community's perspective, Richard, you know, we are not sounding alarm bells. You know, staying pretty calm,

knowing there are going to be lots of ebbs and flows and no easy path to a quick agreement when it comes to the Canada-U.S. relationship, and I think

that's really interesting because some people might think, you know, because we are so close, why doesn't Canada already have an agreement?

Right? I mean, that's a very fair question.

But our relationship is so complex because of the work done over decades and decades to deeply integrate our economies, to intertwine our supply

chains. So our negotiations are like 3-D chess, everything is super complex and very dynamic.

QUEST: So the reality is, as the Prime Minister said, the need to find new markets and expand non-U.S. trade and exports. Your members, is that now

their priority because, yes, you can hope for the best and you can hope to wait out the Trump administration. But you've learned a brutal lesson here.

LAING: Yes. So the ultimate wake up call, as we call it and to just be very transparent that's what it is for Canada because, Richard, Canada should

have been diversifying its markets all along because I will say it this way, right now, and we don't want to confuse people, but it is a yes-and

scenario.

Absolutely. We are going to fight as hard as we can to maintain the beneficial relationship we have in trade with the U.S. They are our

biggest, best customer. But in business, you don't just want to have one customer. You should have other customers.

And so we should have been doing more of this along the way. And while we can maintain and hopefully still grow our trade relationship with the U.S.,

we should be focusing on growing and diversifying with other markets as well. But I will add one thing. Right now, today, you know, given the

uncertainty, that means we do have some businesses especially, you know, smaller and midsize businesses that can't sustain the uncertainty, so they

are looking at diversifying just out of the U.S. market because of the costs and uncertainty.

QUEST: This is a generalized question, maybe too generalized. Do you think the business community on the whole is still supporting the Prime Minister

in the way he is managing this negotiation. Agreed. He comes in. He seems to be able to do it extremely well. There have been two or three very nasty

spats in the middle, but arguably nothing that Mark Carney could have controlled.

LAING: Yes, I mean, it is a good question and it is the question, I think, from the business community's perspective. You know, we are working in

partnership and giving our negotiators and especially our chief negotiator, the space they need to have these complex discussions.

So at this point, I think, you know, the business community would agree, our Prime Minister is being tough and firm while doing what is really

important, and we know this is maintaining a good relationship and that is important. And we are in the situation we are now because you know, trying

to be -- communicating with Americans, and I think that was the intent behind the commercial is just trying to communicate. The intention is good.

At the end of the day, we are going to fight as hard as we can to maintain the relationship, which we know and would agree with Reagan that tariffs

are just going to hurt us both, and they hurt American consumers and businesses.

[16:10:06]

QUEST: All right, thank you for joining us. We will talk more as -- I think you and I will be having regular conversations in the days and weeks ahead,

as indeed we have up until now and we are always very grateful, ma'am when you come and talk to us and give us the Canadian perspective. Thank you

very much indeed.

LAING: Indeed, Richard. Thanks for having me.

QUEST: Now in just a moment, we will talk about U.S. inflation, which rose to the highest level since January. We will also consider exactly what this

battle is over trade and tariffs. We will have Paul Krugman, who will discuss inflation, tariffs and Jay Powell after the break.

(COMMERCIAL BREAK)

QUEST: It was delayed, but it was still an inflation report and it still showed that prices rose last month at the fastest pace since January. The

headline CPI came in at three percent. It is lighter than economists had expected, which The White House then trumpeted. Yet, it is still up from

2.9 and it is, you know, 30 percent more than the two percent target.

Even so, even with this higher number, the Fed is expected to lower rates by 25 basis points next week. Chair Powell has a lot to consider going

forward. Inflation is up. The President tariffs could push it even higher. The labor market however is softening.

So with that, the Nobel Prize winning economist, Paul Krugman is with me.

Paul, it is good to see you, sir. I am grateful.

I suppose the technical question is whether a rate cut is warranted when you have inflation at this level, but unemployment being so difficult.

PAUL KRUGMAN, ECONOMIST AND COLUMNIST, "THE NEW YORK TIMES": Yes, it is -- I mean, the economy, I think the technical term for it is it is weird. The

headline unemployment rate is not particularly high. It would be very interesting to know what the latest jobs report would have been if we were

getting it, but we are kind of in the dark. Inflation is elevated. It is -- ordinarily you would say, well, you know, probably maybe not cut rates, but

on the other hand, there is a lot of reasons to think that the job market is worse than the numbers suggest.

Not a lot of people have been laid off, but jobs are apparently, according to all indications, very hard to find. So what you do and, I mean, I think

at this point, the Fed is going to cut by a quarter point just because if it didn't, people would totally panic. So they are kind of locked in

psychologically to deliver what people expect.

[16:15:10]

But it is by no means a slam dunk case.

QUEST: Right. But do you think that the idea of a two percent inflation target, even over the long term is now just a fiction since clearly the

Fed, you know, de facto is accepting, a target inflation of three percent.

KRUGMAN: I am not sure that they really are. I think that they are trying to get a bit ahead of the curve. I mean, lots of people think that they

should have raised rates in 2021, even though inflation wasn't very high yet, but, they should have seen it coming.

So, you know, you don't want to wait until you exactly hit your target and then hit the gas. That's -- you know, you don't want to react too suddenly,

and you do want to try and get ahead of the curve. But of course, it is very hard to get ahead of the curve when you can't see the curve, because

they are not getting any data.

So, I am really glad not to have Jay Powell's job right now.

QUEST: He can't win, whatever he has got to do, he is going to be attacked by one side or the other, and probably both. But this -- this failure to

have data. I mean, yes, there is a certain amount of private economist data which can fill the gap to a certain extent.

Can you recall a time when we've had such a lack of visibility across what is happening at the economy, at such a crucial time?

KRUGMAN: No, I don't think there has ever been -- I don't think there has ever been an interruption in the flow of data from the Bureau of Labor

Statistics. I mean, this is -- who would want to cut that? And yet, there we are. And yes, we are learning very much the limitations of, you know,

private surveys, you know, they are invaluable. We always want the private surveys, if nothing else, to keep the public ones honest.

But they don't have the resources. No private firm is going to go out there, and you know, look at a sample of 60,000 companies, right? It is

just not -- so this is -- we never and -- you know, and it is not a time of calm either. If nothing much was happening in the economy, then, you know,

all right, we could probably assume that things haven't changed very much.

But when we have, you know, just this morning suddenly threats of we are canceling trade negotiations with Canada because they dared to quote Ronald

Reagan, you know, in this kind of environment you really, really want some data so that you know what is happening.

QUEST: I am glad you talked about that. Stay with me for one second, Paul. We are coming back to you in a minute, because I want to pick up the strand

of what you've just said. The Reagan Library on that point says the Ontario ad misrepresents the speech by Ronald Reagan.

Both he and President Trump used tariffs, but the approaches were very different. In Donald Trump's case unilaterally blanket tariffs on trading

partners, every one of them -- China, Canada, the E.U. and others, and he is using it as geopolitical geo-economic sense, whether its Brazil or

India, to put pressure.

But Ronald Reagan's were very targeted, Japan on semiconductors, for example. And overall he was absolutely free trade, which he said was an

obligation of the United States. It was 1987, and this was his weekly radio address.

(BEGIN VIDEO CLIP)

REAGAN: Imposing such tariffs or trade barriers and restrictions of any kind are steps that I am loath to take, and in a moment I will mention the

sound economic reasons for this, that over the long run, such trade barriers hurt every American worker and consumer.

But the Japanese semiconductors were a special case. We had clear evidence that Japanese companies were engaging in unfair trade practices that

violated an agreement between Japan and the United States.

(END VIDEO CLIP)

QUEST: Paul, the allegation is that for Donald Trump that the way they used it was fake. The Reagan Library says they have misrepresented. I've got the

transcript of the 1987 address. It seems exactly on point. Ronald Reagan was using tariffs in a specific sense and specifically says if we don't do

it, if we do general tariffs, things will get much worse.

KRUGMAN: That's right. No, I mean, the Reagan Library, I think is a profile in cowardice here. They don't want to be accused of being anti-Trump or

whatever Hamas terrorists or something like that. But now clearly, Reagan - - now Reagan was in fact, you know, a free trader, except when he wasn't. He did impose some tariffs. He did some, but let me tell you -- I can give

you an -- I was actually in the Reagan administration, you know, I was a sub-political level, but I actually served on the Council of Economic

Advisers' staff in 1982-1983.

And one thing that happened there was whenever somebody floated a proposal, if the guy from the U.S. Trade Representative's Office said that would be

illegal under our international agreements and the Reagan administration did not tear up international agreements. It did not violate promises that

it had made to the rest of the world.

[16:20:21]

Everything trump has done on tariffs is a violation of our international agreements. So to claim that there is any similarity between Reagan and

Trump on this is just totally wrong.

QUEST: Paul, I need you to help me, because during the course of the week, we've had the arguments on both sides of the tariffs on QUEST MEANS

BUSINESS.

Earlier in the week, we had one -- an eminent economist saying, look, they are going to hurt. They are going to be bad, they're going to be awful and

yesterday we had Oren Cass on saying, no, they are the right way to rebalance trade. It is happening a little bit longer than it happens, but

manufacturing is coming back to the United States.

It has left me this Friday, puzzled. I don't know which is right now.

KRUGMAN: Oh, I mean, you can always find an economist or, you know, to say whatever he wants. But look, this is among economists that other economists

take seriously. I don't think I can think of a single one who supports what is happening here. I mean -- and these are just -- there is no strategy

here.

I mean, in terms of manufacturing, you know, it takes with one hand or gives with one hand, you know, we are going to protect autos. On the other

hand, we are going to put tariffs on steel and aluminum.

And so, it looks as if we've actually made actually made the auto industry less competitive with these tariffs. And the sheer chaos, the fact that

nobody knows what the tariff rates will be, you know, even like next week, let alone over five years is enormously destructive.

QUEST: I am grateful, Paul. Thank you so much. Have a good weekend, sir.

You can find Paul's Substack at PaulKrugman.com.

KRUGMAN: Thank you.

QUEST: That's PaulKrugman.substack.com and he updates it regularly with his latest thoughts on the U.S. economy. It is essential reading, frankly.

There you are. Essential reading for exactly what's happening.

Look at that. Trump's golden gilded ballroom and the fall of the American Republic.

Now when in doubt, turn to chocolate. Well, with Halloween fast approaching, people are stocking up on their favorite treats. And this

year, cocoa, it is so expensive that some chocolatiers are reducing the amount used in their products.

Prices have skyrocketed because from a few years ago, because of poor harvests in West Africa, and they've remained elevated ever since.

So when is chocolate not chocolate? I will tell you when it is. It is when it is called chocolate-flavor coating. Can this be legitimate? Can this be

accurate?

Anna Cooban is with me. What is all this business of Halloween is around the corner. Trick or treat me. What is this? This thing? Chocolate? Fake?

Can you tell me?

ANNA COOBAN, CNN BUSINESS AND ECONOMICS REPORTER: Look, well, you've hit the nail on the head there. Consumers want real chocolate. They want the

real deal. You don't want chocolate-flavored coatings. But this is what some companies have been pushed to do because of these rising, skyrocketing

cocoa prices over the past few years. What they've had to do is essentially substitute cocoa solids, which is this material you get from the processing

of the bean. It is all very complicated, but what you get at the end are these cocoa solids.

Now in the U.K., where we are, you need to have to call yourself a chocolate bar, you need to have 20 percent, at least 20 percent of these

cocoa solids. And now in this Penguin bar, which is a U.K. staple, it contains less than that 20 percent.

QUEST: Okay, but why didn't they just stay at 20 percent bearing in mind the cocoa is more expensive and charge more for the biscuit?

COOBAN: Well, if you charge more for the biscuits, Richard, then people are probably less willing to buy them. And so what some companies will do is

substitute cocoa solids for things like palm oil or shea butter. But, you know, I mean, you tell me, is that something you would be enticed by?

QUEST: Right. So we have chocolate flavored coating from McVitie's Penguin. Shame on you. And what about Cadbury's Freddo?

COOBAN: Well, this is the treat, not the trick. This is real chocolate. This has at least the 20 percent cocoa solids that allow it to call itself

milk chocolate. But the Freddo is interesting as well, so anyone from the U.K. will know that this is a very good symbol. It is used as a sort of

barometer of the state of inflation.

It was 10 pence back in the 90s. It is now around 30 pence.

QUEST: Thirty pence for this?

COOBAN: I know. It is astronomical, but --

QUEST: That's what? Six shillings.

COOBAN: That gives you a sense of how much inflation the industry has dealt with.

QUEST: But the answer is, you know, this backwards and then forwarding of whether or not you dilute the core to providing its taste the same and that

really is what it is all about. Is it going to taste the same?

[16:25:10]

COOBAN: Well, that's what these manufacturers think they're doing. But you know, it is all in the taste and it is all about individual preference. So

we will have to see. Let me -- let me try. I haven't had one of these in about ten years. I remember it tasting very similar. Yes. Yes. So you know

personally I think it seems quite similar, but people may think differently.

QUEST: Very good.

COOBAN: But if you knew that it wasn't real chocolate, what would you think about it?

QUEST: Would I suddenly say, do you know, Doris, this is chocolate flavoring. It is not real chocolate. No.

COOBAN: Exactly. And with Valentine's Day around the corner, do you want a box of chocolate flavored hearts, or do you want a box of chocolate hearts?

It is all about whether or not it is the real deal.

QUEST: Thank you very much indeed. I shouldn't have eaten the chocolate. I mean, all right, the Trump -- when we come back, let's talk more. We will

talk about sanctions. We will talk about sanctions against the Colombian President and the reaction. It is QUEST MEANS BUSINESS. Good evening to

you. Very good.

(COMMERCIAL BREAK)

QUEST: Hello, I am Richard Quest.

Together, we will have a lot more QUEST MEANS BUSINESS.

The chief executive of Viking Cruises, tells me how he grew the largest cruise fleet in the world and loved by travelers and loathed by others,

some and others. The Canadian carrier, WestJet, some passengers now have to pay extra for a reclining seats. The chief executive on that.

But before that, this is CNN and here the news, comes first, always.

A White House official says Kirill Dmitriev, the Kremlin's top economic envoy, will meet the U.S. Envoy, Steve Witkoff on Saturday in Miami. The

talks will follow the meeting between the European leaders and the Ukrainian President Zelenskyy which took place in London on Friday. Now,

they vowed to turn up the pressure on the Russian President to come to the negotiating table.

The New York Attorney General, Letitia James has pleaded not guilty today to charges of mortgage fraud. She is a fierce critic of President Trump and

is one of three perceived political rivals now facing criminal charges in the past few weeks. Attorney General James says the U.S. Justice Department

is being weaponized as a tool of revenge.

Tropical Storm Melissa is threatening Jamaica and other parts of the Caribbean with heavy rain and flooding. Melissa's rain has already been

hitting the Dominican Republic and Haiti, at least three deaths have been reported. It is a slow moving storm, and that means it could deliver more

than 30 centimeters of rain to the Greater Antilles.

[16:30:56]

The United States has imposed sanctions on Colombia's President Gustavo Petro. The administration has accused President Petro allowing drug cartels

to flourish in his country. Mr. Trump has threatened to put tariffs on Colombian goods after Petro criticized the U.S. strikes in the Caribbean.

In response to the sanctions, President Petro says he's fought drug traffickers for decades.

Juan Carlos Lopez of CNN en Espanol joins me from Washington.

The core accusation that Petro allows drug cartels to flourish in Colombia. I suppose if this were an exam question, true or false?

JUAN CARLOS LOPEZ, CNN EN ESPANOL U.S. POLITICAL DIRECTOR AND ANCHOR: I would say it's questionable. When you read through the statement published

by the Treasury Department, you see that, yes, it's true. Colombia has grown in the cultivation of coca and the production of cocaine, but it

hasn't been only during Gustavo Petros' government, it's been during the last decade or more.

So, that is true, but it's not a result of Petros' government. He had a different strategy from previous governments. But it's interesting that

they mentioned him, his wife, because she was designated as a special envoy, and that was later reversed by a court.

His son, Nicolas Petro is mentioned and his political heir. And this is really interesting, because Nicolas Petro is -- Petro's first son from

previous marriage, he was accused of siphoning campaign funds for personal use without his father's knowledge, and Petro's response to his son being

indicted was that he hadn't raised him.

So, to qualify him as the heir to the president, that's a little bit, I think, a little bit exaggerated. So, when you look at this, obviously the

political tensions are behind the inclusion of Petro, his wife, his son, and his minister of the interior in this list.

QUEST: Does putting sanctions on him make him a political martyr, in a sense, in Colombia, and therefore more popular or not, or the opposite?

LOPEZ: Probably with his base, it probably will. But Petro is a very polarized country, so you have people who support him, but people who are

completely against him, and they're going to both interpret it in the same way.

Petro today had a rally, and he had called for protests against the monster. He called Trump a monster, and he's been fighting Trump over the

airwaves, and this gives him ammunition. He said he's hiring an attorney. He named the attorney. He's going to defend himself in U.S. court, but

obviously it's a very low point in the relationship.

QUEST: So, if we look at neighboring countries, and if we look at Central America, are other leaders wanting to distance themselves.

I mean, these days, nobody wants to be seen to be criticizing President Trump, or at least putting their head above the parapet. So, what are

Colombia's friends and neighbors saying?

LOPEZ: It's interesting because he's now joined the ranks of Nicolas Maduro in this type of designation, but just a few days ago, he said he hadn't

recognized Maduro.

So, probably people -- the other governments will want to stay away from this fight, they know the consequences. President Trump had warned even

yesterday that there would be consequences for Petro and for Colombia, and we see them now.

So, obviously, the question is, how much will this escalate? Where will this go? But Colombia was, until recently, one of the United States' main

allies in the war against drugs, and now they're sanctioning the president as a specially designated person related to narcotics. So, this is an

interesting -- an interesting moment.

QUEST: I'm grateful for your time tonight. Have a good weekend. Thank you.

So, you know the old line, well, just recline your seat. If you want to do it on a WestJet jet, you have to pay for it in the future. The chief

executive will tell me about their fleet configuration -- reconfiguration in a moment or three.

(COMMERCIAL BREAK)

[16:37:55]

QUEST: "CALL TO EARTH" and grizzly bears have lost roughly half their global range since the 1800s. Canada is one of their last strongholds, and

even there, the Grizzlies are at risk.

So, today, on "CALL TO EARTH," deep we go into bear country to. See the innovative ways the researchers are keeping tabs on these giants.

(CALL TO EARTH)

[16:42:09]

QUEST: They are magnificent. Gosh. Well, I'd like to know what you're doing to answer the call, and you do so with the #CallToEarth.

(COMMERCIAL BREAK)

[16:44:51]

QUEST: To recline or not to recline. Is it your right to recline? Every passenger has faced a dilemma at some point now. Canadian carrier WestJet

is saying no to recline in economy, and if you really must recline, then you've got to recline -- go somewhere for the front of the aircraft.

So, this is what we've got here. You have an aircraft as they're reconfiguring their brand-new Max planes, you've got some seats that have

got 28 inches, you've got other seats that have got 29 and some of them have got 30.

And the reality is, across the aircraft, because of the way it's configured, you end up with different seats. But none of these seats

recline. They are fixed shell, slim seats RECAROs.

Then they have planes, of course, which have those nice, expensive seats at the front, the premium seats, and for the plebs like you and me at the

back, same thing again, no recline.

So, if you want to take a look at it, this is what the recline looks like. It's not exactly going to have you into a flat bed, but the rest of the

aircraft has no recline.

And you'll be aware, of course, the standard economy makes room for more seats, and then you end up with a premium 38 seat pitch overall.

So, let's put it all together, if you take -- put these planes together. Joining me now is the CEO of WestJet, Alexis von Hoensbroech, he joins me.

Look, the non-reclining seat is pretty standard on many low cost carriers. But what doesn't happen is you tend not to mix them with premium seats

where people can actually see other people reclining while they can't.

ALEXIS VON HOENSBROECH, CEO, WESTJET: Yes, indeed. So, thank you for having me and setting the record straight here.

So, first of all, there has been this spin in the market that we take a fee for recline, which is obviously not true. We retain many seats across our

entire fleet that do recline, also in economy, where you don't have to pay up for, so that's not a concept.

But it created a lot of momentum in the media, and frankly, gave us a lot of free and priceless publicity. But job society is what we are doing. We

are in Canada where, which is a huge geography with a sparsely population - - sparse population, which means you can't really operate a low cost carrier and a premium carrier. You have to mix it in the plane, and

therefore we decided to give choice to people.

We put in the front of the plane, we put nice premium seats, like a two-by- two wide seats, and we have a large extended comfort section. And then the back of the plane, we have a lot of economy class seats for those people

that actually want the lowest price.

And when it comes to recline, it's actually a very interesting discussion. There are lots of airlines that don't have recline. And the -- what we see

in our own research is that people went -- when tighter seating, people actually don't like the recline, because they hate it when the person in

front of them reclines into their face.

So, what we therefore do, just like many other airlines, is we put a pre- recline in, so they are reclined, but you can't move it and with this, we serve the company, but we also protect the privacy.

QUEST: Alexis, good -- just admit it, you're never going to win this one, one way or the other, because you're right, there is that debate between to

recline or not to recline. There's no answer to it. It's like babies in business class. There's no answer to it.

HOENSBROECH: Yes, but still, you know, we, we do offer an upscale product. So, you get -- you get free drinks and snacks, you got a NC power.

And we have, by the way, we have Starlink Wi-Fi and all of these planes, which is free, so every passenger can live stream Netflix or the current --

their favorite sports program, which is really, really cool. It's free.

And just as a fun fact, right now, we operate Starlink on more than a hundred airplanes, which is the largest fleet in the world of starting an

equipped mainline airplanes, which is great for our guests. It is upscale and that's good, and it's choice for our guests.

QUEST: Our lead story tonight is on Canada and U.S., and tariffs and trade not directly affecting you, but the environment in which you are flying,

where the U.S. is a large market, it must becoming very difficult now. Are you seeing what -- how much of a downturn, if at all are you seeing in the

cross border traffic?

HOENSBROECH: Now, we have seen a downturn for sure, which basically started in February, when all the noise started.

So, Canadians, many Canadians, are trying to avoid traveling to the U.S. We see a lot of this travel showing up again in Mexico and the Caribbean or

towards Europe or even Canada domestic. But there is clearly an emotional reaction by Canadians.

I personally think this, this will go away over time, because it doesn't serve these two countries well, they are so closely interlinked, both in

the economies and their societies, that it doesn't serve anyone if they're adversarial.

So, on the long run, I'm very convinced that that the emotions will improve and people will travel again. But it's not that it's gone. It's just

somewhat less than it was last year.

[16:50:01]

QUEST: So interestingly, this week, of course, the minority investment from Delta France, KLM and Korean, they're all taking -- they've taken a stake,

25 percent. Why? Did you need the money? Why does it benefit you?

And I think the second part is more as just crucial, is this a SkyTeam lurch? Are you going SkyTeam?

HOENSBROECH: OK, so, a few things about this. First of all, we didn't take any money, because they didn't invest, they put money into us, but they

bought shares.

And the backstory to this is WestJet used to be a private company, and almost like five minutes before the pandemic, WestJet was acquired by a

private equity firm from Canada called Onex.

So, they took WestJet private then we went through the pandemic. By the way, we were probably one of the very few islands that didn't accept any

sector specific state ignore issued any debt or equity, which speaks to the strength of our business model.

And as we came out of the pandemic, we sought back into profit territory. And now five years in, it was time for Onex to start to monetize their

investment.

So, they put 25 percent for sale, and to our huge delight, our existing long-standing partners, Delta Airlines, Korean Air and France-KLM, picked

up these 25 percent.

Now, first of all, this is a great voter confidence into our business model but it does not automatically come with the SkyTeam membership. We

cooperate with many airlines, some in -- many in SkyTeam, but also others, like airlines or Qantas in oneworld, or Copa in Star Alliance. And that's -

- this model has soft as well.

So, at this point in time, there are no plans to change it. However, if new facts arise, we will always reconsider.

QUEST: I'm good to see you tonight, sir Alexis. I'm grateful for your time tonight. Thank you.

From planes to boats, Viking Cruises celebrated a major milestone, the 100th ship, the Viking Honir. It is one of the nine new ships that gives

Viking the largest cruise line fleet, very popular with its no kids, no casino policy. And the chief executive told me this was part of this vision

since the very beginning.

(BEGIN VIDEOTAPE)

TOR HAGEN, CEO, VIKING: In my early life, I had some involvement in the cruise line industry, and I had a chance of restarting this company some 28

years ago. And with two guys, of us, two mobile phones and four old Russian cruise ships. That's 28 years ago.

And from that, we had a vision that we should try to establish a serious cruise line for serious people, for thinking people.

QUEST: What made you think that large numbers of people would actually want to go on river cruises?

HAGEN: It started by some of us having a river cruise in Russia, I might say that's really a fantastic experience, and it depends on who you are.

I mean, if you're going to take your children to an entertainment park, then you can do that at Disneyland, or you can take them on one of the new

huge ships.

But that's not what our product is all about. We are very clear that we are appealing to grown-ups, adults, 55-year-old plus, who are cultured,

interested in history and geography. And we probably have time then most of my probably by this time retired.

So, I think we were very, very clear as to who we are appealing to, most our guests are Americans. 82 percent are and I think we know pretty much

what they want.

QUEST: One of the beautiful things that I've been reading about is this idea that within the genre of the ships, they're all the same.

Now, you know, many of the of the other lines to make a great virtue of the fact they're different, you make a virtue of the fact that if you board

your river cruise, you'll know exactly where the bathrooms are, and you'll know exactly where everything is in the cabin, because they're all the

same. And that is something people appreciate.

HAGEN: Well, I've lived most my life in hotels, so I know whether it is to come into a new hotel and then try to figure out the light system and how

to operate the remote controls and all that stuff.

So, I think -- I think we've been very, very consistent about this, and I think our cruise is about the destination. People go with us, not so much

for what they would experience on board, which have a great experience on board too.

But the main idea is to come to the interesting destinations, you know, to be on the rivers, to sail into Budapest, see the part of on your left hand

side, it's really a fantastic experience.

QUEST: When we look at the demographic. I mean, I suppose it's easy to sort of talk about older people, and by the way, I'm one of them myself. You

know who go on the Viking River cruises. But the truth is that now you're getting very popular with younger people as well, because there is

something nourishing about the experience.

[16:55:12]

HAGEN: I was not talking about age at this stage. I'm, I used to be the youngest guy in the cruise line industry, but I think I'm probably the

oldest one. But it means that I have the whole experience. You're right.

You know, my (PH) daughter is 55 and she says, now this is for us young people too. And I think that's where it starts. She's now entering our

bracket.

QUEST: Finally, can cruise lines be sustainable? Yes, you can have all the new fuels. Yes, you can all the necessary restrictions. But the industry as

a whole, sir, has a reputation of being less than environmentally friendly.

HAGEN: If I shall be entirely honest, I think the industry could have done better as such in the past. And I think we have been leading. We have been

on the forefront of this.

By background, I'm a scientist, so we have studied fuels, emissions, of what happens to global warming, and so we studied very, very carefully.

And where we are now landed, is that for ships that will be introduced towards the end of next year, we will be having hydrogen fuel cells to be

covering about a third of the energy on the ships, and that means true zero emissions.

QUEST: And sir, I thank you for your time. And next time we speak, let's make it on board one of your vessels.

HAGEN: Indeed, I came from London today. And who else can have a ship that docks in Greenwich in the center of London? We are very proud.

(END VIDEOTAPE)

QUEST: Nothing like inviting yourself on board somebody else's ship. I'll have a Profitable Moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's a Profitable Moment. So, they say that using Ronald Reagan was fake, that it was misleading. I don't agree. When you read the Ronald

Reagan radio address in 1987 it's quite clear. He says quite clearly, with high tariffs, more tariffs lead to higher trade barriers, less competition,

and eventually you're going to end up with trade wars.

[17:00:02]

The only difference this time, of course, is after the negotiations have taken place, the tariffs have remained, and that was something that Ronald

Reagan never intended. He always intended that after the tariffs, you went back to free trade, which is not what's happening now.

There, I've got that off my chest, and that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Yes, whatever you're up to in the

hours ahead, I hope it's profitable. We're in Saudi Arabia next week.

END