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Quest Means Business
Israel And Iran Agree To Pause Attacks On Each Other; IATA Cuts Aviation Industry's 2026 Profit Outlook In Half; Willie Walsh Takes Over As Indigo CEO In August; Kirby: Failed American Deal Aimed To Create Best Airline Ever; Kirby: Airfare Has Become Inexpensive Part Of The Journey; Al-Khater Was Appointed CEO In December 2025; Apple Unveils New Version Of Siri At WWDC. Aired 4-5p ET
Aired June 08, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:20]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street. It is a bifurcated day. We have the Dow down. The
NASDAQ and S&P 500 are up, or is it the other way around? We will see in a second when you see the numbers.
There you are. The Dow is down for the moment. The other two are up, and hit the gavel. Trading is over. A one and a two and a one, two, three,
four.
The day is over. Those are the markets and these are the main events of the day. After Iran and Israel trade strikes in the Gulf. The chief executive
of Qatar Airways tonight tells me the conflict is the worst crisis his airline has faced except COVID.
Soaring jet fuel costs are expected to cut airline profits in half. On this program, you'll hear live, the director general of IATA on that dire
warning.
And what about a bunk bed in the sky? We told you about the Sky Nest. Now, the CEO of Air New Zealand talks about his latest plan for a lie flat in
economy.
Tonight, live from the IATA AGM in Rio de Janeiro. It is Monday. It is June the 8th. I am Richard Quest and yes, in Rio, I mean business.
Good evening. Tonight from Rio. It is just after 5:00 in the evening. The sun is setting and it gives us an opportunity to show you the magnificent
beach. We are about 10 miles or so from Copacabana. We are further down the coast. But just look, as the sun comes down and it has been a glorious day
as Rio goes into its autumn.
Yes, Southern Hemisphere. So we are going into autumn and then into winter. We will have more from this place, of course, and show you some glorious
pictures a little later on.
Israel and Iran appear to be stepping back from their most serious escalation since reaching a ceasefire in April. The two sides exchanged
strikes overnight into Monday as the U.S. pushed for negotiations.
Iran now says it will suspend operations if Israel stops targeting Lebanon.
The Israeli Prime Minister, Benjamin Netanyahu, says Israeli strikes on Iran have ceased, although he has stopped short of calling an acknowledging
a ceasefire.
Oil prices jumped as much as five percent, not surprisingly, on the renewed fighting. It has since fallen back to around $94.00 a barrel, still
escalating, though.
The conflict has also sent jet fuel prices soaring. They have gone up 28 percent since the war started. Partially why the International Air
Transport Association expects global airline profits to be cut in half this year.
Over this program, I will speak to IATA director general, Willie Walsh, who is going to be here later on in the program.
Meanwhile, there were so many CEOs here that we could not resist finding out the aviation executives and the number one crisis, how they are coping
with the energy crisis.
(BEGIN VIDEO CLIP)
ROBERTO ALVO, CEO, LATAM Airlines Group: Of course, we have the issue of fuel that everybody is suffering in a way, but the Daman has been very
resilient.
NIKHIL RAVISHANKAR, CEO, AIR NEW ZEALAND: We've been able to recover about 40 percent of that incremental spend. So, the 60 percent that we can't
recover does burn a hole in the balance sheet.
BEN SMITH, CEO, AIR FRANCE-KLM: Based on the fuel price today, we are going to be paying over $2 billion in incremental costs. What makes me
comfortable is that we are hedged at the same level as our main competitors.
MESFIN TASEW BEKELE, CEO, ETHIOPIAN AIRLINES GROUP: Within a few weeks, we faced a supply of fuel problem. Suddenly, we started importing our own
fuel. So now, supply of fuel is not a problem for us.
MURAT SEKER, EXECUTIVE CHAIRMAN, TURKISH AIRLINES: Our belief is that this escalated level of jet price is not going to last too long, but still, it
is going to have an impact on our margins.
(END VIDEO CLIP)
QUEST: A wide range of airline CEOs from across the globe. You'll also hear from United Airlines, Scott Kirby, the exclusive interview with the CEO of
Qatar Airways and Willie Walsh, the director general of IATA at least for the moment.
We start, though, with President Trump saying this weekend that he calls the shots when it comes to dealing with Iran. That claim was immediately
put to the test by Israel.
Prime Minister Netanyahu retaliated against Iran, even though U.S. officials says Donald Trump told him to hold off.
The two leaders held a second phone call today, and the Prime Minister still vowed to keep striking Iran if necessary.
[16:05:07]
(BEGIN VIDEO CLIP)
BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (through translator): I instructed the IDF to destroy targets in Iran, and we did that. And once
the terror regime realized it, they stopped attacking us. If they attack us again, we will act and operate in full force.
Israel has the full right for self-defense, and we are acting upon it as required.
(END VIDEO CLIP)
QUEST: Kristen Holmes is at The White House, joins me now.
Is there a disagreement between the two? This idea -- I mean, it is a bit thumbing the nose, I call the shots and next moment, Israel fires the
missiles. So it begs the question, what is the state of the relationship?
KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, I mean, look, they still have a relationship, but it is clear that the two men have
different objectives when it comes to this war and that gap in between their objectives is getting wider and wider by the moment.
President Trump has made it incredibly clear that he does not want to reengage in a war with Iran. He wants some kind of diplomatic resolution;
Netanyahu, not so much.
Now, in addition to the idea that President Trump asked him not to retaliate, and he retaliated anyway, we did learn that apparently,
according to a U.S. official, as well as a source familiar with the matter, that Israel, that Netanyahu had been planning a more significant attack on
Tehran when the United States' President Trump called and asked them directly not to retaliate.
Now, this information coming after they did, in fact, retaliate, but the idea or the premise here is that it could have been worse and Netanyahu did
decide to back down after talking to President Trump.
It is clear that these two men, while they are still in sync in many ways, they are still working together, we would have heard from President Trump
in a much angrier fashion had Netanyahu been going completely against his will, but it is clear again that they have different objectives when it
comes to this war and the future in the Middle East.
QUEST: Kristen Holmes at The White House, I am grateful. Thank you.
The reality, of course, of what Kristen is talking about and the way in which oil prices are affected. Few airlines have been as badly hit by the
Iran War as Qatar Airways.
In an exclusive interview, the new chief executive, been in the post barely seven months, told me it is the most significant crisis in its history.
Qatar was first hit by Iranian strikes on February the 28th and immediately closed its airspace. All Qatar Airways flights were cancelled until early
March.
Even now, capacity is being built back up again, but it remains below pre- war levels. Nonetheless, the new chief executive, Hamad Ali Al-Khater tells me demand has bounced way back in a major way.
(BEGIN VIDEOTAPE)
HAMAD ALI AL-KHATER, CEO, QATAR AIRWAYS: So I got a call on that -- on February 28th, airspace was shut over the Iraq border. We said, all right,
we are going to have to contend with about 24 aircrafts coming into HIA, and we will move accordingly. We've been there before, that felt familiar.
Suddenly, the whole region's airspace was shut. You know, one of the biggest lessons of this is to remain calm in the face of all this pressure,
and we moved from there. If you look at our performance right now, you know, thankfully, everything was done in a safe manner. There was no harm
to infrastructure. We took safety as a paramount factor and moved accordingly -- for the safety of our passengers and our crew.
Of course, our teams were under immense pressure to deliver, and they have done immensely, immensely well in the crisis.
QUEST: So now you're building it back up again.
AL-KHATER: Yes.
QUEST: There is still a level of uncertainty and there is still very high fuel prices. How are you going to manage that?
AL-KHATER: We are not out of the woods just yet.
QUEST: Far from it. I mean, the woods are as far as I can see.
AL-KHATER: Let me put things into perspective. The skies are open for Qatar Airways, but the Strait remains closed for now. So we are provisioning --
you know, we fly to about -- we have about 166 destinations. We've mapped out all of our outstations and airports where we believe there is high
risk. We believe there is sufficient headway from a proper critical fuel supply shortages.
Having said that, we are looking after the health of the business. So we are provisioning accordingly, and resilience and emergency and planning was
just a core paramount factor in how we operate in the months to come.
QUEST: Do you think you're going to have any fuel issues? And the second related point, of course, is the cost of putting up ticket prices to pay
for the extra fuel. Everybody is doing it. That will hit demand.
AL-KHATER: We've seen demand. We've seen demand bounce back at a pretty surprising level. What we expected was a U-shaped recovery, it is coming
closer to a V-shape right now.
[16:10:07]
Loads, just five days ago, crossed north of 80 percent. Australia to Europe, the kangaroo route is bouncing back. India-U.S. flows are bouncing
back. China, Africa -- we are ere seeing some pretty robust and resilient demand in the outset.
Yes, fuel price is a risk. Yes, we have to pivot and steer accordingly from a price perspective to see what is appropriate for our passengers, but the
loads speak for themselves.
QUEST: One of the decisions -- you just had -- you had results recently. Profits were quite good, $1.9 billion, I think it was.
AL-KHATER: $1.94 billion.
QUEST: $1.94 billion.
AL-KHATER: Net profit.
QUEST: The decision in your statement -- in your statement of the results, you talk about the 57,800 people that work there. You talk about the
standard of professionalism that defines this organization, and it deserves to be recognized.
And then the Board takes the decision not to put -- not to give a bonus this year. That sends a contradictory message. On the one hand, you're
saying to your staff, well done, you all did very well. You deserve to be recognized, and then you don't pay a bonus.
With hindsight, was that the right decision?
AL-KHATER: Putting things into perspective, this is the most significant crisis that this country and airline has faced in its modern history. We
have done it in the good years. Last year, the year before that, and for the first time even the year before that, where we've paid a bonus.
My focus here is on the preservation of the of jobs and on the health and continuity of jobs.
QUEST: But you just made $2 billion and bonuses are paid on the basis of previous years. Your competitors paid a bonus. And if I am not mistaken,
there has been an unofficial sickout, where some of your employees have gone.
It seems like you're saying -- you're almost saying we don't care.
AL-KHATER: This crisis has affected us in significant ways. However, however, we have demonstrated that we can effectively reward our employees
in the good times, and my focus is to make sure we get out of the woods and make sure that we can do that again in the future.
QUEST: If there is a staffing crisis or if the staff do continue with their displeasure at management, what would you do? Health of the business
remains paramount, and preservation of jobs, and that is what I am focusing on.
If I bring that back to what is important to us, it is our people. What that means, it is culture, it is empowerment, and it is upskilling, but it
is also a focus on growth, which is still set to continue, by the way, we've got about 210 wide-body orders as a result of our deal that we inked
with Boeing last year that is set to come, and a renewed focus on consistency, putting the passenger up front.
These factors are going to make sure that we are in a much healthier position once we are out of this crisis.
(END VIDEOTAPE)
QUEST: And you'll hear more from the group CEO of Qatar Airways later in the program, when we will discuss what he intends to do now he has got the
top job.
What a year it has been for aviation. Old challenges, new challenges, and the resilient demand that simply doesn't go away. A year in review along
with the director general of IATA, next.
(COMMERCIAL BREAK)
[16:16:13]
QUEST: We have to party in Rio, and both dawn and dusk, the beach is simply glorious. A place I went for a run this morning. I am not going for a run
this evening. But there you are, the South Atlantic waters lapping along the beach.
QUEST MEANS BUSINESS at the International Air Transport Association Summit in Brazil. The industry expects annual airline profits to be cut in half
this year because of the disruptions in the Middle East and the consequent high fuel prices, which is eating into margins left and right.
IATA estimates, overall, about $23 billion total in net profit. That's peanuts for an industry this size. It is a downgrade from $41 billion,
which wasn't that tremendous to start with.
Airline executives are navigating the impacts of the Iran War, but there have been so many other challenges during the last 12 months.
(BEGIN VIDEOTAPE)
QUEST (voice over): It was all going so well. Things were looking up and the aviation industry was making better money. And then 2026 happened, a
cacophony of events that has kept the industry highly uncertain, led of course, by the war in Iran. Just look at the way traffic patterns changed.
The donut forming, proving the centrality of the Gulf 3.
TIM CLARK, PRESIDENT, EMIRATES AIRLINES: It was something that we hadn't been subjected to before. Of course, there was a degree of concern,
anxiety, of course, because there were things going on here that we hadn't been used to in the past.
QUEST (voice over): It is a sharp focus of how the centers of aviation gravity have shifted.
BEN SMITH, CEO, AIR-FRANCE KLM: It shows that Europe is dependent on the Gulf for a lot of eastbound travel, which is, I think a lot of people
didn't realize how dependent Europe was.
QUEST (voice over): Not surprisingly, European carriers wasted little time reminding policy makers.
CARSTEN SPOHR, CEO, LUFTHANSA GROUP: It is not just a big company complaining about competitiveness to increase its margins or to increase
its profit, blah-blah-blah, or not even to add jobs, which isn't a good argument in itself, but it really is about Europe and our sovereign ability
to connect.
QUEST: The war did more than just close airspace. Jet fuel doubled in price, being a third of an airline's costs. That's something no airline
could withstand.
WILLIE WALSH, DIRECTOR GENERAL, IATA: It is inevitable that prices will increase. Net margins for the industry around four percent. There is no way
the industry can absorb this, so pricing will have -- ticket pricing will have to go up.
PAUL SCURRAH, CEO, FIJI AIRWAYS: Like everyone, we have to make changes. We have to monitor it on a daily basis. Fuel is certainly impacting the
industry in a very negative way at the moment.
QUEST (voice over): In the background of all this, new alliances were taking place. The Blue Sky partnership between JetBlue and United, it
started, but how far will it go?
ITA completed its transition into the Lufthansa Group, and SAS will soon be part of Air-France KLM.
ANKO VAN DER WERFF, CEO, SAS: We are well on our way with the transformation of the company, we are in a growth phase again.
QUEST (voice over): We also said goodbye to some carriers.
VICTOR BLACKWELL, CNN ANCHOR: Breaking news this morning, Spirit Airlines is going out of business.
QUEST (voice over): The yellow planes that changed aviation in the United States are now parked in the desert.
Aviation's perennial battle against regulation and over taxation continued apace.
ROBERTO ALVO, CEO, LATAM AIRLINES GROUP: It has built infrastructure and lets have low minimum government intervention.
QUEST (voice over): Unfortunately, the last 12 months had some notable accidents.
[16:20:00]
Air India suffered its worst crash in decades, and the first crash of a 787 Dreamliner. Air Canada lost two pilots in a runway collision in New York.
It meant whether in the air or on the ground, the emphasis on safety remains something no one can take for granted.
In the world of change, almost unthinkable things happened like Southwest finally moving to assigned seating as more passengers opt for a luxury
experience.
ED BASTIAN, CEO, DELTA AIR LINES: We live in the experience world -- the experience economy and people are willing to invest far more in themselves.
QUEST (voice over): The last 12 months will be remembered for many things, like reshaping the world and fuel costs. It will also be remembered that
the aviation industry, again and again showed its resilience to remain profitable.
(END VIDEOTAPE)
QUEST (on camera): Now, this year's general meeting will be the last, with Willie Walsh at the helm. He has been IATA's director general for the last
five years, and come August, he will take over as the chief executive of Indigo.
Willie Walsh is with me now.
Good to see you, sir.
WALSH: Thank you.
QUEST: The industry, the sort of the mood of the industry was fascinating at different moments. It was a sort of a resignation of the way things are
going.
WALSH: Well, actually, I thought it was quite positive. It was more positive than I had expected, given the challenges that the industry faces
at the moment, and I think the message from some of the CEOs that they have seen pricing stick, while demand continues to be pretty robust was very
positive.
QUEST: That demand issue seemed to be crucial to the thing, didn't it? It is withstanding it.
WALSH: Yes, and we are forecasting 2.1 percent growth this year, but if you take out the disruption in the Middle East, it is actually underlying 3.5
percent for the rest of the industry with the Gulf carriers down 11 percent.
So, you know, 3.5 percent in an environment like this, I think is actually quite healthy.
QUEST: Is the industry now basically saying that fuel prices will remain at these high levels for the foreseeable future?
WALSH: I think the industry believes that there will be a higher oil price, higher jet fuel price for some considerable time. It is not going to
collapse. We are forecasting $152.00 for the average price this year, which would suggest a price of about $140.00 for the rest of this year.
So we think it is going to moderate a bit, but that is still going to be very much elevated from where it was.
QUEST: And how much realistically can they pass on?
WALSH: Well, in some cases, I think they will be able to pass on quite a lot of that. You know, across the industry, we reckon it will be about six
to seven percent in terms of the increase in the average fare. So not all of them.
QUEST: Right. Let's talk about the other issues. There is not enough fuel. What sort of a summer do you think is going to be in the Northern
Hemisphere in Europe? I mean, the passport delays, you've got issues of air traffic controls, so --
WALSH: So, it is summer.
QUEST: It is a normal summer.
WALSH: It is a normal summer.
QUEST: How about it?
WALSH: I think the thing that people are relieved about is the concern about supply of jet fuel, I think that's gone away. You know, there was if
you go back four or five weeks ago, concern that the industry wouldn't be able to get sufficient fuel to manage through the summer period, but I
think that's either gone or significantly abated.
So, you know, there will be other challenges, air traffic control delays, the border problems. You know, we've seen these before. We prefer not to
have them, but we are able to adapt.
So I think it will just be a normal summer.
QUEST: And air traffic control, I mean strikes, well, you always get very hot under the collar about that.
WALSH: Yes, well, it is such a -- you know it could be avoided. You know, particularly we have talked about this before.
QUEST: Yes.
WALSH: If France wants to go on strike, great. But let everybody fly over France to avoid being impacted and that can be done.
The technology exists. It is just political will to address it.
QUEST: You're coming to the end of your time. In fact, just about the end of your time. What does the next director general -- we don't know who it
is going to be. We will know the name in time -- what is it that he or she have to do?
WALSH: I think it is keep building on it. Like, you know, I think I've done a good job to strengthen IATA coming out of the COVID crisis. You know,
focus on repairing the balance sheet that was damaged, making sure we are growing the membership. So we are at record levels now, 377 airlines. We
have considerably increased the representation of low-cost carriers. So there is more work to be done. The job will never be finished.
QUEST: Right. And you, you're off to Indigo?
WALSH: Yes.
QUEST: Why? I mean, why not retire?
WALSH: Why not?
QUEST: Look, you've run airlines. Aer Lingus, BA, IAG. Youve been director general of IATA. What have you got to prove?
WALSH: I don't have anything to prove, Richard, it is just too big an opportunity to turn down. Like it is a fantastic airline. It is in a great
market. They have great opportunities. They want to expand.
[16:25:05]
They want to get into long haul. You know, when you get an offer like that, it was a very simple decision. You know, within one hour, I was able to
shake hands and say, "Yes, this is for me. I'd love to do it."
QUEST: Next year, when we talk to you here, it won't be director general. It will be chief executive.
WALSH: And I'd look 10 years younger.
QUEST: Willie Walsh, I am very grateful. Thank you very much indeed.
The best airline in history, says Scott Kirby of United. He is always pushing for that distinction, including when he tried and failed to merge
with American.
My interview with Scott Kirby coming up next.
(BEGIN VIDEO CLIP)
SCOTT KIRBY, CEO, UNITED AIRLINES: You know, I certainly wasn't trying to poke an anthill. I was trying to do something great for customers and for
our employees, really, for everyone.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: I am Richard Quest. There is a lot more QUEST MEANS BUSINESS tonight when the chief executive of United, Scott Kirby, discusses his wish, his
dream, not realized to take over American Airlines.
And the chief executive of Air New Zealand discusses his plan to put bunk beds in the economy cabin, the Sky Nest.
Before that, this is CNN, and here on this network, the news always comes first.
Under intense U.S. pressure, Israel and Iran have halted attacks on each other after an escalation of violence. It has threatened to shred what is
left of the tenuous ceasefire.
The back and forth attacks began when Iran fired missiles at Israel in retaliation for Israeli attacks on Beirut. Israel struck back with two
waves of attacks on Iran.
At least 35 people are feared dead after a 7.8 magnitude earthquake hit in the Southern Philippines. Terrified students ran for cover when the shaking
started on Monday morning; in other areas, buildings collapsed and there was a landslide.
As many as 138 aftershocks occurred after the initial quake. More aftershocks are expected near the epicenter.
President Trump is expected to attend game three of the NBA Finals in New York. Security obviously very tight outside Madison Square Garden where the
raucous Knicks fans usually gather to cheer the team. Police have installed anti-scale fencing, vehicle and crowd control barriers. The Knicks lead the
San Antonio Spurs, two-nil in the best of seven series.
[16:30:45]
The chief executive of United Airlines, by some measure the largest in the world, says the post-pandemic travel boom is still in full swing.
All right. To joined by Scott Kirby here at the IRTA annual meeting, Scott says he is surprised that higher ticket prices have not yet hurt demand
more.
I also asked about United's failed attempt, or at least offer, to merge with American Airlines. Never really got off the ground. Mr. Kirby told me
that consolidation is no longer on the table, although, he tried to say he -- you heard Joe, he wanted to do it for good reason.
(BEGIN VIDEOTAPE)
KIRBY: This would be a great opportunity to build a bigger airline that has wonderful customer service, that people fly because they love the
technology, the service, the reliability, the product on board the airplane, instead of treating air travel like a commodity.
So, it would be great for customers in building a great -- the best airline in history for customers has been my goal for many, many years, and this
would have furthered that.
QUEST: But you poked the ant hill, and everything came out. I mean, the reaction was extraordinary.
KIRBY: Yes. You know, I certainly wasn't trying to poke an ant hill. I was trying to do something great for customer and for our employees.
(CROSSTALK)
QUEST: Right.
KIRBY: Really for everyone.
QUEST: How is it gone away?
KIRBY: Well, you know, I -- as I said in my note, that I, which -- this is too big, you have to look at this through a different lens and traditional,
and the only way to get this done would be with a willing partner, and we don't have a willing partner.
QUEST: You said to me once before that, mergers and acquisitions, whatever, they distract.
KIRBY: Yes.
QUEST: They take away from executive attention.
KIRBY: Yes. Yes.
QUEST: But at the same time, do you think there is going to be consolidation in the U.S. Now, Spirit's gone, do you see much more
movement? Is there the possibility?
KIRBY: There is always the possibility. But it's hard for me to see deals that make economic sense. Deals may happen a new way, but it's hard to see
deals that make economic sense, and in the U.S.
QUEST: Do you -- do you wish to take the JetBlue arrangement? I'm being neutral in my terminology. Do you wish to take the JetBlue arrangement
further, closer?
KIRBY: Yes, I do. I mean, I really respect JetBlue. I think Joanna is great. I like her personally. I think, she is been a great CEO. They got a
hard -- a tough hand of cards, but they are playing them as well as they can. They have a great culture, great deal. Their employees do a great job
taking care of customers. They have that customer DNA, and so, you have the same customer DNA, and we have it at United. They have it at JetBlue.
That's where you can do a lot of good stuff here. So, I'd like to do as much as we can together, and you know, see how far we can take it, just as
being great partners for each other, as opposed to having to put the two airlines together.
QUEST: Aircraft and aircraft deliveries, and engine problems.
KIRBY: Yes.
QUEST: I just despair the -- every CEO I have spoken to. And when I saw that there is almost like a grim realization of resignation.
KIRBY: Yes.
QUEST: This is the way it is.
KIRBY: Yes.
QUEST: And we have just got to live with it.
KIRBY: Yes.
Well, I've realized this was going to be a problem years ago. So, we have done -- so, it's not that grim to us. One, we got ahead of it. We ordered
more -- you know, we ordered excess, because we thought there would be challenges. So, we are managing it pretty well right now.
I do think, though, that this is going to hold supply back and aircraft deliveries back for at least five years.
There is just going to be a limitation because of engines.
QUEST: The problem, of course, and you have been around this industry and you have seen it. Once you are near the top, or at the top. This
complacency.
KIRBY: Complacency.
QUEST: Complacency.
KIRBY: Oh, yes.
QUEST: And hubris.
KIRBY: Yes.
QUEST: Whatever.
KIRBY: Yes.
QUEST: Starts to set in.
KIRBY: Yes.
QUEST: And you start to not worry about what's in front and you forget what's behind.
KIRBY: Yes, yes.
QUEST: You seen this happen.
KIRBY: I have. And it's a natural -- happens to organizations, companies, countries, like it happens. And we are going to try really, really hard to
fight. I think my natural instinct is to not be that way, like, I'm never satisfied, always wake up, what can we do better?
But you've got to keep pushing that ethos, and, like, you know, my job is really a pretty easy job. It's fun, it's cool, but I do a lot of little
things. I had a customer, you know, who give me a great idea this week that I send to the team, and it's a relatively small idea.
[16:35:06]
But, you know, when the CEO is saying, this is a cool customer idea, that infuses throughout the DNA of the company that everyone is focused on how
do we do cool things for the customer.
QUEST: The one thing I think this current crisis of fuel costs.
KIRBY: Yes.
QUEST: And which -- you know, you are passing on like everybody else.
KIRBY: Yes.
QUEST: And is -- isn't it -- one thing it has shown me is that demand is still strong.
KIRBY: Yes.
QUEST: And the people still want to travel.
KIRBY: Yes.
QUEST: And yes, of course, there is an elasticity of demand at some point.
KIRBY: Yes.
QUEST: But people -- the post-pandemic boom is still going. Would you agree?
KIRBY: It absolutely isn't. And I have actually expected a little bit more impact of price elasticity as far as have gone up, but we really haven't
seen. As I think through it, I think it's a lot of it is because air travel had become so inexpensive as a part of the journey, and while airfares have
gone up 20 percent this year, they are still about 10 percent in real terms lower than they were in 2019. While hotels are 40 percent higher, and car
rentals are another 50 percent higher, and cruises are 50 percent higher.
And so, air travel -- you know, often if you are in New York, like, you will often pay more for your Uber to the air -- back and forth to the
airport, then you pay for your ticket to Florida.
And so, air travel is such a great value, and becomes a smaller piece of the pie. I think what is happening is air travel is just regaining some of
its sort of natural share of the travel demand pie, and so, we've seen less elasticity impact, because other parts of the travel are not escalating
nearly the same rate.
(END VIDEOTAPE)
That is Scott Kirby of United Airlines, and his views.
Now, Qatar Airways, who has got a new chief executive, the third in as many years, has brushed aside claims of unfair competition practices, as well as
controversy surrounding his appointment.
Lufthansa, Air France, KLM say the Iran war has highlighted how dependent Europe is on Gulf carriers, and therefore, they say the balance should be
redressed. Qatar Airways has unrestricted access to European markets, despite being backed by the state. It's an old argument, but one that Hamid
Al-Qaeda, I asked if he was worried there will be a political backlash against the Gulf Three.
(BEGIN VIDEOTAPE)
AL-KHATER: We are giving the passengers optionality and choice, and we are still, we are going back to our European destinations in full force. That
means -- what that means is the passenger gets to pick -- the best cabin experience, gets to pick the best service, and the best brand, and that's
why in the ocean of these airlines, they pick that -- they pick the tail with the Oryx of Qatar Airways, because of what it offers.
QUEST: You know, there is no escaping the fact that Qatar Airways has now been through three CEOs in as many years, and the your previous -- your
immediate predecessor, we have no idea why he was let go, and we have no idea the thinking about your appointment.
The world is looking -- the aviation world is looking and saying, what's going on at Qatar Airways?
AL-KHATER: To put things into perspective, I'm the third CEO in 30 years.
(CROSSTALK)
QUEST: Now --
(CROSSTALK)
AL-KHATER: What that means --
QUEST: Now, with respect, sir -- with respect, sir, the first CEO was 25 years.
AL-KHATER: Correct.
QUEST: So, we are talking about the decision making of the last few years, and it seems, somewhat Byzantine that they change -- there is been no
reason given why your predecessor was let go.
AL-KHATER: This was a board-predicated decision. But what that means into - - in practice, we are captains of the same ship, steering it in the same direction. And what that means is that Qatar Airways is going to continue
being the best airline in the world. There is going to continue -- continued renewed focus on passenger. There is a lot of growth, and we are
going to be focusing on our people. That's set to continue and not stop.
QUEST: So, to those who say yes, but the new CEO -- and forgive me, sir, these are not easy questions to put as such, but to quote somebody from the
last few days, you appear to have slender qualifications for this particular role as CEO of one of the world's major airlines. That is an
undeniable fact.
AL-KHATER: Look, it comes from a perspective of I'm very -- I'm very privileged to be leading this organization. It comes with a profound sense
of responsibility, and there is plenty of young leaders worldwide that are capable of demonstrating their resilience, and I'm here to do that.
Qatar Airways is on a trajectory where we are going to receive these new aircrafts. We have, you know, an impeccable network, we have an impeccable
service and brand. Starlink is across most of our fleet. The Qsuite Next Gen is coming pretty soon. There is a renewed focus on A.I. that's coming
up. So, there is no shortage of stories to really propel this organization forward. And I'm looking forward to drive that.
QUEST: So, how are you going to drive it?
[16:40:00]
AL-KHATER: Basically, we have got a group: the airport operator, the airline, the ground handler, the duty-free concessionaire. Everything is
part of that group. We are going to be working on an integrated way. We have a massive order of wide bodies coming.
The A321 long-ranges are coming in October. They are going to give us a narrow body. The narrow body with a wide body potential, giving us
optionality in all of routes, and we're going to double down on highly profitable routes, and we are going to change from a transformation
perspective, making sure we ensure empowerment, we have A.I. upskilling, and get our -- get our -- get our, make sure by 2030 and beyond, continue
being the best airline in the world.
QUEST: OK. But when you sit down at these meetings here at IATA, and you are sitting amongst people who have run airlines all their lives, and they
have worked their way up through ops, finance, whatever, to the CEO position, do you feel at a disadvantage? Yes, they are your partners in one
world, and in other -- and in your bilateral relationships, but they do have the experience that you do not have.
AL-KHATER: Not at all. I -- we were -- our focus is -- my personal focus is delivering on the growth of this airline. I am dealing with my peers as my
peers, and we work with our partners significantly well. And look, is a beautiful trajectory, I'm very honored and privileged to be in this
position.
(END VIDEOTAPE)
QUEST: That is the new chief executive, his first major broadcast interview. The new CHIEF Executive of Qatar Airways.
As we continue tonight, we are going to hear from about Apple, which is hoping to catch up with rivals in terms of A.I.
(COMMERCIAL BREAK)
QUEST: Apple is setting out to prove it can adapt to an industry being reshaped by A.I., arguably a little late, but there we go. Never too late
to get it right.
At its Worldwide Developers Conference, the company unveiled a new version of Siri, as well as an A.I. strategy, which includes a partnership with
Google.
The event was Tim Cook's final conference as CEO after 15 years at the helm.
Lisa Eadicicco is with me. Hey Siri, what's happening? What's different? No, no, I shouldn't have said that. About 15 devices will start to respond
to me.
What is it? What's the difference? What are they going to do?
LISA EADICICCO, CNN BUSINESS TECH EDITOR: Yes, Richard. So, the new version of Siri that Apple announced today, called Siri A.I., will be able
to do a lot of things that the current version of Siri can't do.
[16:45:04]
I think, a lot of people tend to use Siri for things like setting timers and alarms and checking the weather. This new version of Siri, Apple says,
can actually answer questions based on your personal context. So, for example, if you had plans with a friend, check out a new restaurant, and
you forgot what the name of that restaurant is, you can actually ask Siri, and it will refer to the text message that, that person sent you and help
you answer that question.
In addition to that, Siri is also going to be implemented in different apps across the operating system. For example, the camera app will have a Siri
mode. So, when you do go to that restaurant, you can take a picture of the bill, and Siri can help you figure out the tab. Things like that.
And I think --
(CROSSTALK)
QUEST: All right. But these are incremental stuff. Is there a feeling -- sorry, is there a feeling that they are putting in place an A.I. strategy?
Little late, but never too late to do the right thing.
EADICICCO: So, I think, this is probably the first step in what we are seeing could potentially be a shift in Apple, kind of changing the software
of its products to fit with how people are using A.I. As people increasingly do turn to chatbots to get things done, to ask questions, it
really does need something that can, at least at the bare minimum, live up to what ChatGPT and Google are doing.
So, I think, you know, we won't know for sure until Siri A.I. comes out, but if it is really compelling and really interesting, you know, there is
also the notion that this could eventually help Apple drive iPhone sales, or keep, you know, current iPhone users locked in if they get used to using
Siri for just about everything they do on their phone, they are not going to want to switch to Android.
So, and I think that's important, because a lot of other A.I. services, you can use them on any computer, you can use them, you know, on Windows or
Mac, you know, if you are using ChatGPT or something like that.
(CROSSTALK)
QUEST: Oh, yes.
EADICICCO: So, I do think that's an important part of the problem here, but, but I agree that this to me does feel kind of like a first step
towards something bigger. I think, we still have to see how this shakes out and how Apple builds on these updates in the future.
QUEST: And, of course, entire -- attempts to keep us all in the Apple ecosystem. I'm grateful, Lisa. Thank you very much indeed.
First, and New Zealand gave us the cuddle couch, or SkyCouch, to give it his correct. Now, they have come up with the SkyNest. It's the bunk beds in
the sky. The chief executive of Air New Zealand was with me. That's what the bunk beds look like. You know, he will tell me all about them after the
break.
QUEST MEANS BUSINESS, live from Rio.
(COMMERCIAL BREAK)
[16:50:23]
QUEST: Welcome back, and we are in Rio de Janeiro. It is just -- the sun has just set, and it gets dark pretty quickly. Now, we are coming towards
the autumn in the southern hemisphere. On that long flight, all I ever want to do is stretch my legs even better, lie down, get some proper sleep.
Now, if you are at the front of the plane in first or business, then that is now the norm. The options, economy have been almost non-existent.
Economy has been the Cinderella of choice.
Air New Zealand, United, Lufthansa have built this cuddle couch where the thing comes up and you sort of can all get on top of it. But now Air New
Zealand's doing bunk beds, the SkyNest, as it's called. I asked the Air New Zealand chief executive about SkyNest.
(BEGIN VIDEO CLIP)
RAVISHANKAR: It's V-shaped, it's three bunks in a V.
QUEST: Right.
RAVISHANKAR: So, it looks like, you know, a V-shaped bunk, two sets of three beds, and you can rent each one for up to four hours. So, there is a
session, really you are booking, and you enter it through the -- through the front, not the side.
QUEST: Climb to the step ladder.
RAVISHANKAR: Yes, and the sessions all start at the exact same time.
QUEST: I was going to say, you don't really want people getting in and out at different times, do you?
RAVISHANKAR: Precisely. Yes. So, it's -- you start at the same time and the session finishes at the same time. And on our flight from Auckland to New
York, there are two sessions that you can took. You have 12 opportunities to book a SkyNest.
QUEST: And I assume, you are going to have to be very careful that somebody doesn't book it, and then, tries to change over passenger halfway through.
RAVISHANKAR: All of that stuff. Yes.
QUEST: So, that you know, I'll have the first two hours and my wife will have the sex to our -- next.
RAVISHANKAR: That's right. We -- I mean, that's one of many scenarios we have had to almost invent in terms of procedures on how we manage, you
know. And by and large, it's also through the lens of safety. You know, we need to know who is in the SkyNest at any time, you know, turbulence
management procedures. Yes, it's been very exciting, actually.
QUEST: How did you get the thing certified? And the reason I ask, is so many airlines are having such difficulty certifying new business seats.
Now, this is a fairly standard thing, the seat.
You have got beds. How did you get it certified?
RAVISHANKAR: I mean, one of the great advantages of operating in a country like New Zealand is we can be fairly nimble and agile, not just within the
airline, but also with the stakeholders we work with.
So, our civil aviation authority have been very progressive, but Boeing have helped the seat, manufacturers been very helpful. But it's been a
long, complex process, and there is one more round of certification to do when it actually physically gets installed later this year on the aircraft.
But yes, it's been -- it's been quite the adventure.
QUEST: Let's talk about the Air New Zealand. It's a carrier that punches its weight much greater than its size, largely because you are so far away
from anywhere, and you do have to run a different type of airline.
RAVISHANKAR: We are the size of Japan, but there are 5 million people living on two islands predominantly, and we are far away from everywhere
else. Right?
So, aviation for us is extremely critical. It's how we, you know, connect New Zealanders to each other, and New Zealand to the world. And so, it's a
very prominent business in the context of New Zealand. And to your point, we lack scale. So, innovation has been our ticket to the dance, really. You
know, we don't see this as a vanity project to innovate, but actually it's quite existential for us. And we have had to innovate both in terms of, you
know, the physical side of the aviation business.
So, seats, we just talked about, we -- you know, we invented the SkyCouch, we have invented now the SkyNest, and you know, premium economy was one --
we were one of the early airlines to come up with that concept.
All expressly to win on sleep.
(END VIDEOTAPE)
QUEST: Clare Sebastian is with me. You've been here at IATA.
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes.
QUEST: I just love the idea of SkyNest, SkyCouch.
SEBASTIAN: Yes.
QUEST: That they are true innovators at Air New Zealand, for the reasons.
SEBASTIAN: Yes. Well, and I think, that what you're hearing from CEOs is, despite the obvious elephant in the room of pretty much every discussion
we've had here, which is the doubling that -- in the price of jet fuel, that they are paying, there still is room for innovation, but it's going to
mean prioritizing, right?
[16:55:01]
Air New Zealand, the amount they are paying for debt fuel is extraordinary. But they have the CEO, who used to be the chief digital officer, who is
clearly very invested personally in the sort of high-tech space and bringing the airline into a sort of more innovative future.
I spoke to him about A.I., which something he's very passionate about. So, I think there is going to be room for innovation, but it's going to move a
bit slower, and it's going to be more prioritized.
QUEST: So, let's talk about how you viewed what you have heard.
SEBASTIAN: Yes.
QUEST: Because I sort of, I mean, the industry all the time. As somebody who is coming in and dipping the toe in the sea, what did you make of the
move.
SEBASTIAN: Yes. I think that the question that underpinned every discussion that I had was, is this jet fuel crisis going to be a hindrance or a
galvanizer? And in some cases, it could be a galvanizer. Some people see this as a window of opportunity, for example, to lobby for slightly looser
regulation, because that could help bring down ticket prices at a time when everyone's worried that ticket prices are going to go up.
When it comes to the sustainability agenda, I think it's much less clear that it's going to be a galvanizer, because costs of sustainable aviation
fuel have gone up with jet fuel, which means that airlines can even less afford it.
QUEST: The mood was resigned to what they've got, but there wasn't down in glum too much.
SEBASTIAN: Not too for the moment. But I think everyone is waiting for the demand shoe to drop, That's why then --
(CROSSTALK)
QUEST: Oh, come on.
But, your first trip to Rio?
SEBASTIAN: It's my first trip to Rio.
QUEST: What do you think it?
SEBASTIAN: It's extraordinary, and it's enormous. Extraordinary --
(CROSSTALK)
QUEST: The helicopters going backwards and forwards.
SEBASTIAN: I was in one.
QUEST: Were you.
SEBASTIAN: Yes, I was.
QUEST: You are. Oh, I should have got the pictures. You actually in a helicopter. You went around?
SEBASTIAN: It was -- yes, and I only realized, as I was approaching the helicopter, that we were going to be taking off with the no doors. So, but
the view of Christ the Redeemer was extraordinary. It's an extraordinary place. It's a country on a scale that it's hard to fathom until you are
here. And because of that, they have a lot of untapped potential when it comes to aviation.
QUEST: I am grateful for you. Have a safe journey back. You have got a day out tomorrow.
SEBASTIAN: Well, I'm good.
QUEST: You have got a day off tomorrow? Done making a note. Make a note.
SEBASTIAN: Yes.
QUEST: Yes. Thank you very much indeed. Thank you. Clare Sebastian, joining me.
And when we come back, we will take a "PROFITABLE MOMENT" from IATA. QUEST MEANS BUSINESS, live from Rio.
(COMMERCIAL BREAK)
QUEST: Tonight's "PROFITABLE MOMENT" from IATA in Rio.
The airline CEOs are just used to crises of one sort or another, and this is -- it's not quite garden-variety fuel crisis, but they have secured
supply, they will get through the summer, and they can pass on a lot of the costs. So, profits will be lower, but if that's the worst, they will be
happy with that.
I think what I most take away from it is the sense of loss of opportunity.
[17:00:02]
So many plans for new aircraft, new seats, new routes, new wow bits, and its all to some extent being put on hold or change or plan B, plan C, plan
D because of this crisis.
END
