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Quest Means Business
U.S. Officials Trying To Avert Long Closure Of Strait Of Hormuz; IEA: Iran War Greatest Threat To Global Energy; Staffing Shortages Throw U.S. Airports Into Chaos; Hungarian Foreign Minister: Vance To Visit Hungary Ahead Of April Election; Cagni: We Have Defensive Frigates For Protecting Allies; Morocco Investing Heavily In Rail Infrastructure Expansion; Airlines Face Pricing Dilemma As Jet Fuel Soars. Aired 4-5p ET
Aired March 20, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:16]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street. Gentlemen push to bell, bringing misery to an end.
Just look right the way down. The low points off -- we are off the lows, but it is pretty unpleasant what happened on this final day. It is almost
bear territory, by the way, if you think about it, we did get to 50,000 and were now at 45,000.
Close -- did I miss the gavel? Oh there we go. Sorry, we've had a bit of gaveling, missed it all. The reason I am a bit befuddled today, because not
only are we a very heavily down here. Take a look at the triple stack and you'll see exactly that the NASDAQ is off two percent, so the techs has
really borne the brunt today.
Those are the markets, and these are the main events.
Oil prices is the main issue as a U.S. assessment Iran could keep the Strait shut for up to six months.
The IEA -- International Energy Agency advising cut your fuel consumption and it calls it the greatest threat to global energy in history.
And at U.S. airports staff shortages at critical levels, three hours in some cases. I will speak to the TSA agents about the disruption. It is
Friday, we are live in London on March the 20th. I am Richard Quest, last day that we are in London and I mean business.
Good evening.
The tired markets are a reflection that oil price is on the rise once again and investors are clearly worried the crisis could drag on much longer than
initially feared. U.S. officials are said to be working furiously to avoid a worst case scenario. This is where the Strait of Hormuz, the shipping
channel, could be down for, up to, or shut to traffic for up to six months.
Brent topped $112.00. The U.S. benchmark, West Texas $98.00.
It is interesting that we are getting a bit of a larger divergence between the two benchmarks, and that is a reflection of the fact that it is Brent
that is the difficult one, whereas West Texas doesn't have the problems in the United States.
Goldman Sachs is saying, get used to these high prices. Oil could remain triple digits through next year. President Trump is doing what he can to
talk things down.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: Oh, I think we've won. We've knocked out their Navy, their Air Force. Weve knocked out
their anti-aircraft. We've knocked out everything. We are roaming free -- from a military standpoint.
All they are doing is clogging up the Strait. But from a military standpoint, they are finished.
(END VIDEO CLIP)
QUEST: Nic Robertson is in Riyadh, all they are doing is clogging up the Strait. But we've won. Square that circle for me.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, I think Wall Street is catching up to where the Gulf states here believe the situation
was going. President Trump has been very ambitious in his goals, and he has also been a president who likes to talk up his successes with the economy
and they have -- he has had successes with the economy figures, as his said, that have not been seen before people didn't think that they would
achieve.
But of course, now when the numbers go down on his watch and it becomes the more settled opinion of the sort of the bumpiness in the early days in the
first couple of weeks where President Trump was able to sort of interject and put confidence back in the markets and then that release of global
reserves puts some confidence back in the markets, I think reality on the ground and the talk about a longer war and conflict is beginning to knock a
bit of the stuffing out the markets here.
And, you can't square the circle because there is a hard reality here. Kuwait hit us this morning, took some of its refining capacity offline. You
know, we've seen that every day here in the Gulf and that without as he -- the President tries to frame the Strait of Hormuz as a small thing, if it
was small, it would be fixed. It isn't fixed, there isn't a plan to fix it, it is a problem. It is a long term problem.
Square, circle, can't get them to marry up.
QUEST: Nic Robertson, I am grateful. Thank you.
The IEA says the war is the greatest global energy security challenge of all time and it could take six months or more to restore oil and gas flows
to the region as Nic was just pointing out, the difficulties involved.
And so the IEA is urging people to cut back and help cope. Among its recommendations, work from home, avoid air travel where possible, use
public transport and alternative cooking methods like electric stoves.
[16:05:06]
This is wartime stuff, Anna Cooban. This is the sort of -- I mean, we are not rationing per se, but when you -- when something like the IEA says turn
down the gas and don't drive --
ANNA COOBAN, CNN BUSINESS AND ECONOMICS REPORTER: Yes, I mean, I think -- just think about when Russia invaded Ukraine four years ago, some of the
energy saving measures were being directed at Europe. But this time around, Richard, they are being directed at the entire world. This is a global
problem.
And when, Fatih Birol, the head of the IEA is talking about this, the biggest global energy shock in history, he is talking about volumes. He was
saying to "The F.T." earlier today that double the amount of gas is being lost now compared with what Europe lost with Russia four years ago.
And so these measures -- reducing speed, working from home --
QUEST: What does the -- what do these measures do? On an individual basis, I assume they reduce consumption and therefore, collectively, I guess -- is
it meaningful?
COOBAN: Yes. So if everybody in the world or a big portion of the world was to turn down their thermostat, drive more slowly, use less oil, this would
have an impact, Richard. But the problem is, is that people don't really do that. It is always somebody else will do this.
It is really a top down measure that kind of have the most impact in reducing demand and we have seen some of that. So in Pakistan, for example,
they are closing schools for a couple of weeks. The Philippines is telling people to turn down thermostats or air conditioning in offices. In India at
least one city has actually put a pause on gas fired cremations.
So these are -- these measures are popping up around the world. But will they be enough? That's the big question.
QUEST: I guess, we will find out when we start running out. I mean, this is what hasn't happened yet and we are talking more eastbound from the Gulf
rather than westbound. But, I was taken yesterday when we were at IATA, one of the airlines CEOs, they were saying there could be a situation where
there is a shortage of jet fuel. It is in the wrong places and they can't actually get jet fuel to planes.
This, I imagine, is the similar sort of thing. Countries will run out of oil or gas.
COOBAN: Yes. And I think something that's particularly interesting is that we have the U.S. even considering lifting sanctions temporarily on Iranian
oil at sea. To me, that's, you know, quite baffling that the U.S. is even considering lifting sanctions on the country that it is at war with, but
that gives you a sense of the scale of this problem -- Richard.
QUEST: I am grateful to you. Thank you. Have a good weekend as best we all can.
The Middle East war is having a major impact on the global shipping industry. The price of fuel used to power container ships and other large
vessels has almost doubled, and if you add it to everything else, well, the Port of Los Angeles says supply chains serving the U.S. are stable. But as
fuel prices rise, it is likely to be passed along.
The Port of Los Angeles is the largest in America. Gene Seroka is with me.
Gene, it is always -- you and I, we need to talk when it is not a crisis. Let's agree that at the beginning, because we are always talking when it is
a crisis, but this is a real one, isn't it?
Do you fear -- you see, you're not going to have a fuel shortage because there is enough fuel in the United States. But you are seeing the effects
of the supply chain issues because of it.
GENE SEROKA, EXECUTIVE DIRECTOR, PORT OF LOS ANGELES: Good evening, Richard, and you're right. What we are seeing right now from the shipping
industry is that they are taking alternate routes, trying to fill up their vessels with that all important ship fuel, which has more than doubled in
price over the last three weeks. And from our standpoint here, while fuel is available and we are catering to all the ships that come in, we are
going to start to see some knock on effects in the supply chain as well, where ports will start to get filled up with that cargo that normally goes
out to the Middle East, because all services have ceased.
QUEST: Now, Maersk, the CEO of Maersk said to me on this program, as you see, we -- that we may get to a situation where they have to tanker fuel
between ports, as you were suggesting because some ports simply will not have enough, others will have some. Can you see that happening? Is it going
to be as bad as that, do you think?
SEROKA: Well, Vincent knows his business very well. Vincent Clarc from Maersk, our friend and CEO. What we are seeing right now is that there are
so many options on the table that companies are evaluating. How much longer will this war go on? And if so, what are we going to do about our routes,
our shipping lanes, and where we fuel our vessels?
But front of mind compared to everything else right now, Richard, is the health and safety of the ship crews that are stopped because of this war in
Iran right now.
You've got a number of ships inside the Arabian Gulf and many more outside that haven't transited yet. These ships are in a holding pattern. Food,
medicine, and the safety of those crews are what the companies are focused on today.
[16:10:06 ]
QUEST: We had the IMF on the show earlier this week.
Let me ask you, the Jones Act. There is a sort of suspending of the Jones Act. It is one of those very -- it is almost a trivial pursuit question
about what the Jones Act is, but it is still on the books.
Do you believe suspending it temporarily will make much of a difference for West Coast or East Coast travel?
SEROKA: No, I don't, Richard.
The Jones Act is U.S. impelled trade on American flagged vessels with American crews that can go between states trying to simply move fuel around
where we are in good shape right now and allow foreign flagged tankers and company ships to come in to alleviate this pressure point on price, I think
is a stretch at this juncture.
QUEST: So as you look at the situation and supply chains, what worries you the most? Bearing in mind the complexity and of course, obviously Pacific
facing, what now is your biggest concern?
SEROKA: Well, my concern is for our troops on the ground, the people in our supply chain that are stuck on these ships in and around the Middle East.
But again, it is these next few days which will tell a real story here, I think, Richard. And that is what are the impacts that maybe we just don't
see yet -- congestion at other ports, manufacturing floor space taken up because our Middle East colleagues are not buying, that consuming public
looks a lot like America.
They buy shoes and furniture, apparel and electronics similar to what we do. That has all stopped. And from there, with about 10 percent of world
trade going in and out of the Middle East, Arabian Gulf, Red Sea and East Africa, it is taking 99 percent of the attention from supply chain experts
and company leadership to try to figure out what avenues will be available to them and how they can reroute all this cargo ship and crew talent during
this unfortunate time in our history.
QUEST: The IEA has basically said everybody should do their own little bits, turn down thermostats, drive slower. It has all got overtones of sort
of wartime measures, which of course it is in a -- it is actually in a sense, but you sum it up beautifully, Gene, when you say it just depends
how long this lasts and that is -- where Jerome Powell uses the word "uncertain" seven times in his news conference, that sums up the situation,
doesn't it?
SEROKA: It really does, Richard and here is the added layer now. There has been so much to worry about -- unique trade policy tariffs, Supreme Court
decisions, an economy that has been relatively soft with lower hiring of new jobs. Open jobs are only at about six million and lack of capital
investment due to the uncertainty on the policy side.
Now, we have this with additional rising prices and a market that's really important to so many of us for various reasons, from energy to consumers to
exports of aluminum and fertilizer, leadership in companies today have a very short planning horizon that has gotten even shorter over the last
three weeks in trying to make decisions.
Everyone at the family level is watching their budget closely. Here in California, I saw $7.00 per gallon gasoline on the west side of Los Angeles
last night, just unbelievable circumstances now that are putting pressure on American families and families around the world.
QUEST: I am so grateful for you for taking time in your busy day. And as I say, I do promise you, we need to come and visit you and talk when it is
not a crisis.
Gene, have a good weekend. Thank you, sir, for your time tonight. Thank you.
Now, travelers are facing massive lines at airports in the U.S. Tens of thousands of TSA workers are not getting paid and there is staffing
shortage as a result, in a moment.
(COMMERCIAL BREAK)
[16:16:48]
QUEST: The crisis at U.S. airports now reaching critical. Just look, this is the line. It is at Houston's George Bush Airport, the main one. The IAH
nearly three hours long, according to some travelers, the TSA, Transport Security Administration, is facing huge staffing shortages.
The employees are not being paid, haven't been paid for a month. It is because of a partial government shutdown that began in February. Congress
is racing to fix it by the end of this month, 27th of march, when lawmakers go on two weeks holiday.
The line in Houston is well over two hours. JFK, more than 30 minutes. Atlanta Hartsfield, around an hour.
CNN's Ryan Young spoke to travelers at Hartsfield.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: I've been in this wheelchair. They are going to tell me to go stand up in line. I have M.S., how are you going to expect me to
stand up and push my own self in a wheelchair?
UNIDENTIFIED MALE: Our flight was at 6:00 A.M. We've been here since 2:45. We were in line at 2:50, still missed our flight.
(END VIDEO CLIP)
QUEST: TSA is warning that some airports may have to close completely. According to the government numbers, 366 officers have left the force, 50
percent in Houston, and over 30 percent didn't show up for work. Why would you if you're being paid.
And the highest single day absence was 55 percent in Houston.
Johnny Jones is with me, Secretary Treasurer of the American Federation of Government Employees, TSA Council 100, long way of saying you represent the
workers in that respect. You know good on those that are showing up, but why are some airports much worse than others, do you think?
JOHNNY JONES, SECRETARY TREASURER, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, TSA COUNCIL 100: Oh, well, it has to do with the logistics. You
know, it could be the part of the country that is impacted by higher costs. It could be the people that are still recovering from the shutdown from the
previous government shutdown that we had back in October, there could be some people who are just fed up in coming to work without being paid,
because about half of the year, the TSA officers have worked in a situation where the government was shut down.
QUEST: To give context, by law, they will get paid once things start going again, but that doesn't address the real issue, which is you've got bills
to pay now, you've got to put food on the table and you really don't want to be spending hours on call lines to the bank or the credit card company
or anybody explaining -- no matter how understanding they are, and I am sure there are lots of resources in place, it is just stress they don't
need.
JONES: Well, first of all, the letter, most of the places where your landlords or the places that if you have a mortgage, they look at that
letter and they start laughing, okay? Because they're like, hey, it doesn't matter, we still need to pay -- you still need to pay us.
Well, if you can't pay us, then we are going to slap you with late fees. You would be surprised at lack of empathy. you know, of course they feel
bad for you, but at the end of the day, they are running a business and they are trying to make -- you know, to pay their bills as well, so it
becomes the kick the can down the road, if I can't pay you, then they can't pay them.
[16:20:08]
So they are going to get a fee because they are going to be like, well, my tenant is not getting paid, so at the end of the day, the TSA officer may
get back pay, but they are still losing lots of money because they still have to pay for all these fees. And when they open the government back up,
not only do the officers need to be paid, but they also need -- all officers need some additional financial compensation because we don't have
recourse like the general public.
QUEST: Can I just ask why do you think there isn't the political pressure sufficient to get the politicians to open it up? What is it?
And look, we don't need to get into the -- you know, the Democrats on wanting this with Homeland Security X, Y, Z, the Republicans, blah, blah,
blah. But in either case, why are they not susceptible to the pressure of what is happening now? Because it is so bad. What do you think?
JONES: Well, I can tell you exactly what it is, in reality, both parties involved, you know, we have the Democrat and Republican Party in America
that, you know, represents, you know, the majority of the House and the Senate. There are a couple of Independents, but when you get down to it,
the representatives of our government are representing parties, not the people that elect them.
There is a large contingent, over 90 percent of Americans support, hey, we need to pay the TSA officers and they haven't figured it out. So that tells
me that they are not serving the people, the populace, they are serving the small constituents or their parties not the people.
QUEST: Right. So in that case, what do you think it will take to get one side or the other to say, this is ridiculous, we have to do a deal. We both
-- neither of us are going to get exactly what we want, all we want, but we have to do a deal. What do you think it will take?
JONES: When all the congressional leadership is stuck at the airport and they all missed their flights because they couldn't get through a security
line on time.
QUEST: I think you summed it up perfectly, sir, if I may say so, for a Friday evening. I think that's it. Thank you for taking the time. And, you
know, I travel through more airports than most. And I came to Kennedy just last week and good spirits by the officers there considering they are not
getting paid, please pass on our best.
Thank you, sir. I am grateful for you joining me tonight.
JONES: Thank you, Mr. Quest, thank you.
QUEST: Thank you. Now, adding to the woes, the soaring price of airfares in the face of the Iran War.
EasyJet's new chief executive told me the budget airline won't be adding a fuel surcharge despite rising fuel costs. Of course, prices will go up
Last week, the global average price of jet fuel rose 11 percent and has nearly doubled since the start of the war.
Kenton Jarvis said EasyJet will be looking at various factors in determining what the final price should be.
(BEGIN VIDEOTAPE)
KENTON JARVIS, CEO, EASYJET: So, it is incredible because it is not just the price of a barrel of oil, it is also the refining costs that have that
have gone up to convert it into jet fuel.
So, you know, that is something we are all exposed to. It is good that we are hedged. It is good that in Europe, we take proactive hedges. So, it
means that we can manage that situation for longer.
But you know, we won't be putting a fuel surcharge on, that's not the low cost model. We will continue to dynamically price our seats, which means we
will be looking at demand and supply and reacting to the market.
QUEST: You've got all the air traffic control problems. What are you expecting this summer? Are you expecting a difficult summer?
JARVIS: Well, I think the most important thing to do is always expect underperformance from the air traffic controllers and then you probably
won't be disappointed. I mean, some will even exceed your low expectations in terms of poor performance.
So, you know, we've invested a lot in the operations. That was one of the first things I really wanted to do when I took over the reins and we have
become much more kind of data driven in the way we look at our operations.
So base by base, week by week, we look at our operational reliability, we look at our on-time performance, we look at completion of flights, we look
at every detail, all the KPIs that help drive those.
We've sharpened up our turn times. So we are turning much quicker than we were this time last year and all of that allows us to improve our
operational reliability and what is really pleasing is despite air traffic control remaining incredibly poor in Europe and even more poor in, say,
somewhere like France, we've improved our reliability, and the great thing is the customers are noticed, so our customer satisfaction scores have
increased.
QUEST: You come in, you have a vision of what you want the airline to be, how you wish it to grow. How would you define it?
JARVIS: Well, the first thing is, look after the customer. Really look after the customer experience. We started with operations. We've become
much more data driven. We are now looking at how we extend the warm welcome we give in the skies, which we are famous for right throughout the ground
experience.
[16:25:10]
We are looking at airport experience, but taking the same data approach. We know from our customers what the experience is like at the backdrop. We
know by airport, by week, and therefore what we can do about it.
We know what the experience is like boarding. We know what the experience is like on board and with the range, so all of these touch points, we can
really understand in each of our airports what that experience is and we are putting some kind of feet on the ground and making our ground handlers
more visible. We are giving them devices, ground crew apps, which allows them to untether themselves from the desk. They no longer have to stay
behind the desk as you're coming through the gate, you can come out and do everything with their device, which makes them able to go and solve
problems in real time rather than allow that to come through.
(END VIDEOTAPE)
QUEST: That's the CEO of EasyJet. The new CEO of EasyJet, I should say.
The Prime Minister of Hungary, Viktor Orban is fighting his political career next month. It could reshape European politics. In a moment.
(COMMERCIAL BREAK)
QUEST: Good evening to you. I am Richard Quest. Together, we will have QUEST MEANS BUSINESS.
Going to Hungary, where Vice President J.D. Vance is reportedly preparing a visit to help Prime Minister Viktor Orban win re-election.
One of Europe's biggest airlines, Lufthansa, celebrates 100 years in the sky. Carsten will be talking to us about that, the CEO.
Only after the headlines because this is CNN, and here, you better believe it, the news will always come first.
U.S. officials are telling us that the United States is furiously trying to avert worst case scenario, which is seen to be a six-month closure of the
Strait of Hormuz. One official privately admits there is no obvious fix to reopen the key waterway.
[16:30:05]
A Pentagon spokesman is downplaying the Defense Intelligence report that lays out the potential six-month closure, calling it an impossibility.
The KPop group BTS is reuniting for a highly anticipated comeback concert in Seoul. It could be up at a quarter of a million fans. The show marks the
release of the band's first album in three years, and the start of a world tour next month, Netflix will livestream the event to 190 countries.
The Hollywood action star, Chuck Norris has died at the age of 86. According to reports, he had an unidentified medical emergency while in
Hawaii. Norris was best known as the star of the hit T.V. show, "Walker: Texas Ranger." He first gained fame as Bruce Lee's opponent in the 1972
movie, "The Way of the Dragon." Norris later went on to make a name for himself as an action hero. He was surrounded by his family at the time of
his death.
Hungary's Foreign Minister says that the U.S. Vice President J.D. Vance will visit Hungary ahead of the country's pivotal general election next
month. The Prime Minister Viktor Orban is one of Donald Trump's closest European allies. Orban has been in power since 2010 and this is his
toughest electoral battle yet.
Under Orban, the Hungarian economy struggled to recover from high- inflation, corruption and poor public services of frustrated voters and help lift center right opposition leader, Peter Magyar. He has pledged to
restore democratic institutions and reset Budapest relations with the European Union.
Jill Dougherty is with us. She is in Budapest, adjunct professor at Georgetown University, former colleague, former Moscow bureau chief. Jill,
now look, here is the problem. In the last election, the opposition united against a candidate -- around a candidate, and he did terribly, didn't win.
Orban strode home. Why is this time different?
JILL DOUGHERTY, CNN CONTRIBUTOR: I think, Richard, is really the economy. I have been talking with a lot of experts and people here, and essentially,
you know, it's shocking to think, but Hungary actually, we think of it as a, you know, relatively rich country. It's actually one of the poorest
comparatively, in Europe.
And that is something that's happened in the last few years. And some people would say that it is the policy of the Orban government that has
brought that about. There are problems, you would have to say, with health care, with education, there is inflation, et cetera. And there are people
here now who say that is enough and they want something else. So, that's where we are.
QUEST: Right. But it's always the electoral mathematics in Hungary. The difference between the rural, the urban, the industrialized, and who votes
for whom, and Orban has done a very good job of keeping the non- metropolitan voters on his side.
DOUGHERTY: Yes, he has. In fact, he is very good -- you would have to say it identity politics, because he really doesn't get into let's say I am
going to improve x, y, z. But he does say I am the person who can protect you from threats, and the threat that he is using, especially in I'd say
government propaganda, is the threat of Ukraine.
In other words, the war can come to Ukraine -- to Hungary, or Hungary could be pulled into the war, your sons will die.
And now, he has even changed that to -- that Ukraine is a threat, a threat of attacking Hungary. So, that's where he is using, you know, that threat -
-
(CROSSTALK)
QUEST: Sure.
DOUGHERTY: -- as opposed to dealing with the politics -- with the policies.
QUEST: Now, ultimately, what he is also saying is, don't believe the polls. In the end, more people vote for us. And it was certainly true last time
that the polls showed one way. But actually, the result was something quite different.
If the polls are to be believed now, what will be the result?
DOUGHERTY: Well, it's possible that the opposition could win. I mean, the latest poll that I looked at, a reliable poll coming from Equilibrium
Institute shows a 10-point spread, 49 percent for the opposition party, which is Tisza, and 41 percent -- sorry, 39. So, 49-39 for Fidesz, which is
Orban's party.
But problem is you were talking about the mathematics. It's how the votes are apportioned, and it's really a majoritarian system.
[16:35:08]
So, the government doesn't have to get as many, I should say, Orban's party does not have to get as many votes as the opposition. So, that's where it
comes down to.
QUEST: Fascinating. And, of course, Budapest is where you are. I envy you tonight. What a wonderful city to be in. Food is magnificent, and the
prices are reasonable, and well, it used to be. But at least the welcome is warm.
Jill, thank you. Have a Good Friday night in Budapest. I'm grateful.
As you and I continue our nightly digest of business and economics, France's dependence on oil imports is putting the economy at risk.
The French ambassador for International Investment is Pascal Cagni, and these, we'll hear him after the break.
(COMMERCIAL BREAK)
QUEST: Well, leaders are calling for Iran to stop blocking the Strait of Hormuz to commercial shipping. The U.K., France, Germany, Italy,
Netherlands, Japan, Canada, and so on, released a joint statement on the importance of free navigation in international law.
I spoke to the French ambassador for international investment to talk about the current state of the transatlantic relationship.
(BEGIN VIDEOTAPE)
PASCAL CAGNI, FRENCH AMBASSADOR FOR INTERNATIONAL INVESTMENT: Over the last year, the number investment have been growing time after time. Despite the
tariff, despite the statement, despite the fact that while we put aircraft carriers on sea quicker than anyone else, while we have a frigate to
basically be in a defensive positions protecting our allies and supporting the American war in Iran, we continue to have criticism. But that's
basically the state of our relationship, you may say.
QUEST: Right. But, you know, the interesting part about that is, you have got the history, you have got the investment, you have got all of this. So,
you have got the tariffs. And I think most of us would accept that the U.S. had a partial valid point that had been taken advantage of over many years
on trade relations, and there needed to be a rebalancing.
But to offend allies, as it did, to make French companies less competitive in the United States, that must have hurt.
CAGNI: I may actually don't agree with you. The truth of the matter is, when you look at both the products, trade balance, and the services, the
truth of the matter is, we are having accredits when we export of products.
[16:40:08]
But we buy tons of services from American companies. And all in all, the two balance out. It just happens that people always focus on the product.
The truth of the matter is, when very balanced relationships once, while you said that. What we don't have is the access to capital to really
embrace the next revolutions.
And that's why, at the A.I. summit back in February, France has been able to display $109 billion investment. All in all, we continue to be very
attractive for the six cultivated years in a row.
So, I don't think that we should say it's totally unbalanced. The truth is that service and product are bringing back an equilibrium, and we attract
capital.
QUEST: Does President Macron -- and I know you are an ambassador for him, but is his political problems hurting France?
CAGNI: For -- in excess of 60-70, years, France has a very stable political environment. We are again close to the instability of Italy.
And despite that, the face of President Macron on the international seat, the reforms which brought us to have a unique growth higher than we ever
had over the years, reducing unemployment, I've been keeping intact.
QUEST: Right.
CAGNI: So, there is no questions that after eight years in power, right, as a president, and who will not be in the situations, you may be seek -- see
weaker when you don't have a clear majority.
But all in all, France, we made extremely attractive investors, which are with their checkbook, continuing to invest on the territory, which is
certainly a good answers to many of the criticism we have got here and there.
(END VIDEOTAPE)
QUEST: The French ambassador.
Morocco is upgrading and expanding its rail capacity, investing around $10 billion almost to build new high-speed lines that will connect the economic
hubs and the tourist destinations.
CNN's Victoria Rubadiri shows us how the country is reshaping day-to-day travel as it hopes to inspire a continent to embrace high speed trains.
(BEGIN VIDEOTAPE)
VICTORIA RUBADIRI, CNN INTERNATIONAL CORRESPONDENT (voice over): With each departing train, Morocco is moving one step closer to realizing its rail
revolution.
NACERA BECHARI, MARKETING AND STRATEGIC MANAGER, ONCF (through translator): Investment in rail is strategically important on several levels. From an
economic perspective, it supports urban development, creates jobs, and establishes an economic corridor from Tangier to Marrakesh. From a
territorial perspective, it will better connect cities and ease congestion.
RUBADIRI (voice over): The nation's rail operator, ONCF, says in 2023, 53 million people and 17 million tons of goods travelled by rail. And they are
bracing for that number to continue to increase rapidly.
BECHARI (through translator): If we consider the entire network, including other regional trains and intercity trains, today, we have about 56 million
passengers. We will go to more than 120 million passengers by 2030.
RUBADIRI (voice over): With its eyes also set on co-hosting the World Cup in 2030, the country has announced a nearly $10 billion rail expansion
project. It includes adding more than 600 kilometers of high-speed rail to connect Kenitra, a city in the northwest of the country, with the tourist
hotspot of Marrakesh.
It's buying 168 new trains, 18 of which will be high-speed. Once complete, ONCF says its network will connect 43 major cities, linking 15
international airports and 12 ports.
BECHARI (through translator): We consider rail to be the backbone of sustainable mobility that facilitates connectivity, connection and
transport between different cities. At the African level, the potential is even greater because it will make it possible to further develop economic
relations between African cities and create intra- African corridors, all while promoting environmental sustainability.
RUBADIRI (voice over): With an ambitious goal of completing the project by 2029, the ONCF is hopeful that their vision for high-speed rail can be
replicated across the continent.
(END VIDEOTAPE)
[16:44:50]
QUEST: Lufthansa, a German airline is celebrating its 100th anniversary, with a special livery on one of its planes with executive Carsten Spohr
gave his verdict on the fleet's facelift.
(COMMERCIAL BREAK)
QUEST: The third week of the war in Iran is coming to a close, and there is no solution to the disastrous impact it appears to be having in the energy
market.
I spoke to airline chief execs from around the world this week about how their conflict is going to change the bottom line and what was likely to
happen.
Peter Campbell is the global transport correspondent for The Financial Times. He joins me now.
Peter, the -- we heard of -- there is a consensus that this might be a moment. They are all putting prices up, yes. But this might actually be a
moment where change for aviation industry in Europe could happen. Do you think they are just fooling themselves?
PETER CAMPBELL, GLOBAL TRANSPORT CORRESPONDENT, FINANCIAL TIMES: Well, what the chief execs was saying this week in Brussels was that this was a really
big moment for the whole industry. It wasn't quite as bad as COVID with everything was grounded, but certainly, at least Willie Walsh said this was
one of the most dramatic shocks to the industry since 9/11, for instance, when people stopped flying across the Atlantic.
What the chief execs were hoping to do this week is to use the opportunity of crisis with, as you said, jet fuel prices through the roof, tickets
going people warning about fuel shortages, to really push home a message. They have been banging on for a long time to the E.U. about, which is to
try and level some of the aspects of the playing field that they currently think are putting too much regulation on them, putting too much prices on
them, and try and even out the things with global competition.
QUEST: No one is listening at the commission. Those appear to be anyway, because for as long as you and I have been covering this, single European
skies, ETS, mandates on the south mandate, they all know it's not realistic on the E.U. SAF (PH), not -- nothing changing there.
It's as if that they continually raise these issues, but they don't have political muscle.
CAMPBELL: This is always the problem that these guys have faced. They call for these things. It's ultimately not in their gift to give them. And the
politicians who are making the rules fundamentally seem to think that it is better to press ahead, particularly with things like the environmental
charges.
(CROSSTALK)
QUEST: Right.
CAMPBELL: The SAF mandate and the ETS scheme than it is to give any ground to the airlines, who they see, by the way, at the moment, making very, very
large profits.
QUEST: Now, you talk, you are the global transport goes one, and so, let's turn and look at the Gulf three.
[16:50:00]
They are doing the best they can, and it's a poor best in many cases, but they are trying to get flying again.
The significance of the Gulf Three and our reliance upon them has become into sharp focus. What do you make of how they are going to get going
again?
CAMPBELL: Well, it's really interesting that they are completely dominant in global air travel because of where they are geographically. You know, a
third of all the trips between Europe and Asia go through the Gulf and between Europe and Australasia, it's half.
When they come out after reopening fully, assuming people are going to be happy to travel through the Gulf again, you are going to expect to see
massive, massive price cuts from these guys. And they have huge financial firepower behind them.
I mean, they are all state owned, which is why they have such great aircraft and such great services. So, what everyone in the industry is
expecting when they come back out, you are going to see very, very competitive rates to get people to travel back to the Gulf, particularly
back to Dubai, and to go and start transferring flights again through Doha and through Abu Dhabi.
And what you have seen from previous crises, even when people say it's not safe to fly, actually, give it a few months, give it sufficiently
attractive prices on the tickets, and people will start to go back. And that definitely is what a lot of the European carriers are worried about.
That even while they can try and get some of the Asian traffic back at the moment, once the Gulf comes back on stream properly, people will go back
there again.
QUEST: Right. But let's just delve a bit deeper onto that, Peter. Do you think there'll be a hardening of attitudes in terms of agreements? Sure,
the existing open skies are there, although, Qatar could be in a bit of trouble with its own. But do you think that in future, they are going to be
a lot more robust in demanding the level playing field?
Let's face it. By default, when it comes vis a vis Europe, the Gulf succeeded, because Europe didn't put its foot down in many cases. Is that
likely to -- say, with Australia, arguably, except against Qatar. Is that likely to change?
CAMPBELL: I think the airlines would like it to change. They would like this to be a moment where, you know, this big gorilla in the cage is taken
seriously. But as we see, you know, historical precedent, this is not likely to happen. You are likely to keep seeing these open skies agreements
and flights globally, ultimately continuing.
QUEST: Let's talk shipping, if we may, and just put it all into big perspective. That's a real mess. I mean, you've got thousands of seamen and
women stuck on boats. You have got dangerous transshipment through the Strait. You've got supply chains.
We had the CEO of the Port of Los Angeles on the program earlier, even though they're not directly affected, of course, they are affected, because
the supply chains of transportation are just breaking, if not screaming.
CAMPBELL: Global supply chains are an absolute modern phenomenon, and I think we never realize quite how fragile they are until they go wrong.
Everyone remembers shortages in COVID, shortages when the Red Sea closed, and that's exactly what we are seeing now. You have seen huge issues with
the oil supply and transport, getting anything out the Strait of Hormuz. People very reluctant to go around the other routes. It's a huge, huge
issue for global shipping, which is having knock on impacts, not just for supply chains around the world, but you are seeing a lot of cargo shifting
to air freight, for instance, which is very expensive, even going over land on some routes.
So, the whole kind of web that under supports the modern global economy is reliant on shipping, and as you've seen, that's been hugely thrown into
disarray by the Gulf.
QUEST: Peter, have you seen -- five minutes, I'm going to show some pics a minute.
Have you seen the Lufthansa 100 livery on its 747s and its 78s to celebrate a hundred -- I don't know that you have seen the pictures of it. It's very
glamorous.
CAMPBELL: Is -- it is very glamorous. It's, you know, kind of touch of nostalgia from those guys. Yes.
QUEST: Thank you. Well, thank you, Peter for joining us. We talked about -- Thanks, to Peter from the F.T., we joined about on this. The European giant
Lufthansa is celebrating a hundred years. It all began in April 1926, when the company first took aircraft from Berlin to Zurich, new era for
tourists.
And then, of course, a relaunch in 1950s after the Second World War to become a global giant. Lufthansa is celebrating its birthday with these
special liveries. That's on the 787. I think, it the glamorous one, I think the gorgeous one is the -- is the 747. I spoke to Carsten Spohr.
(BEGIN VIDEO CLIP)
CARSTEN SPOHR, CHIEF EXECUTIVE OFFICER, LUFTHANSA: Well, actually started with the 787, when Boeing offered us to give us a special present to our
birthday. And we decided on a special livery for that. And the 787 came, and the world was just in awe.
And we received social media posts, and then the staff was happy.
[16:55:00]
So, then, we decided, let's brought that to more than one airplane, and the designers came to me with a 787-livery image. And I said, oh my God, this
is just amazing. So, indeed, it turned out that this is the most beautiful plane you have --
(CROSSTALK)
QUEST: And now, everywhere you look, this is (INAUDIBLE).
SPOHR: Yes.
QUEST: This plane is taking off --
SPOHR: Let's be honest, the 747-8 is a beautiful plane, per se.
QUEST: Yes.
In this special Lufthansa livery, it probably is unique in the world, and we are very proud. Our staff loves it.
(END VIDEO CLIP)
QUEST: It's absolutely beautiful. If you just go into your TikTok feeds, wherever you see, you can just see that plane, stunning job they made of
it.
The markets ended the week sharky, lower. Fourth week straight of losses. The NASDAQ down two percent today. S&P is down 1-1/2 percent. The Dow is
down -- that was down. We'll take a "PROFITABLE MOMENT" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "PROFITABLE MOMENT", it is worth, I think, taking a little bit longer tonight just to review the landscape of where we stand. And I
think it was beautifully summed up by Gene Seroka, the CEO of the Port of Los Angeles, who we had on the program.
Forgive me if I just look down and read from my notes. He said, if you take a look at what's happening, Richard, it's the impacts that we don't see
yet. The congestion at other ports, the manufacturing floor space taken up because colleagues are not buying. The consuming public, the shoes, the
furniture, the apparel, it's all stopped.
10 percent of the world trade, Red Sea, East Africa, Arabian. 99 percent of attention on supply chains. You get the idea.
Because it's very tempting for night after night, as to look at the Dow going this, the NASDAQ doing that, or the price of oil. Oh, look, it didn't
do this. Let's -- you know, knee jerk reaction. But it's the tentacles and the ripples, if you will, that last so much longer, and that's what we are
really keen that we keep bashing on about here on QUEST MEANS BUSINESS.
The easiest thing in the world is for us to tell you where the bomb landed and what happened and what the price is now. How much more difficult for us
to understand, where will we be in six-months' time? As inflation goes up, do central banks tighten to bring it down, or do they risk the see through
that nothing's going to change?
I promise you, we are in unprecedented times, but I've said that so -- that's unprecedented in its own right.
[17:00:04]
But the reality is we will not see the full effects of this, and know what they are. Which is why you and I will get together every night, as we have
for the last 17 years, to make sense of it all. Because that's QUEST MEANS BUSINESS for this Friday night. I'm Richard Quest in London.
Whenever you are up to in the hours ahead, I hope its profitable. Have a lovely weekend and please join me in New York in Monday.
END
