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Quest Means Business
Quest Means Business Live From Sao Paulo; OpenAI, Latest Company To File For IPO; U.S. Officials: Iranian Drone Downed U.S. Attack Helicopter; Interview With BTG Pactual CEO Roberto Sallouti; Interview With JBS Global CFO Guilherme Cavalcanti; World Cup Referee Denied Entry To The U.S.; Interview With Turkish Airlines Chairman Murat Seker. Aired 4-5p ET
Aired June 09, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:17]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street and a pretty grim sort of day that we are seeing. As
you can see, the Dow is up, the Dow is down, the Dow is up and we are closing up, but that does not tell the whole story because it is the triple
stack that really gives you the idea of how far. Once again, it is tech stocks that are being clobbered. The NASDAQ is down the best part of one
percent. We will have the analysis on the reasons why, what has been happening, a one and a two, and a one, two, three four.
Trading is now over. We are in Sao Paulo today. We are guests and very grateful to be guests of our sister network, CNN Brasil.
Marvelous to be here because those are the markets, and now, let me give you the main news of the day.
As the markets continue to fall, OpenAI is putting investor appetite to the test by announcing a massive IPO of its own in the wake of Anthropic and
SpaceX. We will get some more details on that.
President Trump is vowing to respond to Iran's downing of a U.S. Army helicopter.
And here in Brazil, U.S. tariffs are hanging over a very tight election race at the presidency later this year. You're going to hear the CEO of
Brazil's largest investment bank who will be joining me live on this program.
We are live in Sao Paulo tonight. It is Tuesday. It is June the 9th. I am Richard Quest and yes, in Sao Paulo, I definitely mean business.
Good evening.
Tonight it is QUEST MEANS BUSINESS live from Brazil's commercial capital, Sao Paulo. Last night Rio; tonight, Sao Paulo. The country itself is facing
an uncertain economy and an uncertain political future as it prepares for a presidential election in October.
On tonight's program, we will be speaking to the CEO's of the country's largest investment bank and its largest airline, and the chief financial
officer of the country, one of the biggest companies, the meat producer, who will be with us tonight, the meat producer, JBS, all of that.
But we start, of course, interlinked and related: Volatility rearing itself once again on Wall Street. In the last few moments, you've just seen the
Dow close, the investors continue to sell off high flying chip stocks.
The NASDAQ fell about one percent, finishing off its session lows. The S&P 500 also closed sharply in the red. The Dow flat throughout the course of
the session, but then ekes out a small gain towards the end, largely because of a drop in oil prices.
It is the semiconductors that was so much in talk today as they had been for much of the session yesterday. Once again, look at that, one-and-a-half
for Micron, one for Broadcom, Marvel 7.5 percent, which gives you an idea of just how grim the week is.
And in the midst of all of this, OpenAI has filed confidently to go public. The company has not yet decided on the timing of its IPO. It may be a
while, says OpenAI in its post, because there are things we want to do that are likely easier as a private company.
The Barron's senior markets writer, Paul La Monica is in New York.
Paul, is this just more of the same or is there a deepening of the anxiety? And this is actually, if you will, a worsening of the situation.
PAUL R. LA MONICA, SENIOR MARKET ANALYST WRITER, BARRON'S: I don't think it is. It is very similar to when we spoke a couple of days ago. You take a
step back. Yes, semiconductors got whacked today, software as well, and that brought down the tech sector. Oil prices were lower, as you mentioned
and that hurt energy stocks, but those are two sectors out of 11.
The other nine were all higher today. The Dow as you mentioned, did finish in positive territory. The equal weighted S&P 500 index, which you know,
mitigates some of the factors that come into play because you have these giant tech companies with these large weightings, that was up as well. The
Russell 2000 was up slightly. So U.S. small caps also rallying a bit.
[16:05:04]
Again, I don't want to say that this isn't something to be nervous about, but this was by hardly an apocalyptic type of selloff that should have
people running for the hills.
QUEST: Right. No, but it does bifurcate the market in a sense. It shows that the Mag 7, if you will, the high fliers are having their wings
clipped. Now, how long and how far, we won't know for -- you know, that's a rear view mirror debate. But what -- if I understand you correctly, is we
shouldn't be too concerned.
LA MONICA: Yes, I think it is healthy that when you see companies like NVIDIA and Apple and Meta, when they slide, there are other stocks that are
picking up the slack.
I think a bigger question heading into the end of the week, given now that we have seen this weakness in tech and concerns about A.I. specifically, is
that going to be a problem for another little Elon Musk company that I think is going public on Friday? Oh yes, SpaceX at a $1.8 trillion
valuation. It is going to be very fascinating to see if this recent bout of market volatility hurts demand for SpaceX.
QUEST: And that's a perfect moment to say thank you, sir, Paul La Monica.
The OpenAI announcement follows on of course of the third of the big A.I. companies on the verge of going public. We've got SpaceX, which has merged
with Elon Musk's xAI is leading in this horse race. The company begins trading on Wall Street this Friday. We will have all of that for you.
Earlier this month, Anthropic filed the paperwork to go public. On Monday, OpenAI became the latest in the horse race. However, the question is there
enough money in the market to support a trillion dollar IPO one after another? After all, the market cap of the entire NASDAQ 100 is a little
under $40 trillion. That's a lot of money, but not infinite.
SpaceX, Anthropic and A.I. could pull from other stocks.
Jay Ritter is with me, director of the IPO Initiative at the Warrington College of Business, and joins me from Alberta.
A simple, straight, rather obvious, but the question, is there enough money to satisfy all these mega IPOs?
JAY RITTER, DIRECTOR, IPO INITIATIVE AT THE WARRINGTON COLLEGE OF BUSINESS: I don't think there is going to be a problem at all. In recent years, U.S.
publicly traded companies have been paying out about $600 billion a year of dividends and have been repurchasing stock at a rate of about $1 trillion
per year. You add that up, that's $1.6 trillion in cash being distributed with these three mega IPOs, it is probably going to be about $200 billion
being raised, but that's a tiny fraction of the cash being distributed each year.
QUEST: So when that -- when this IPO, where do you think the main investment interest comes from? Is it institutional, which obviously is
going to be there? Will retail also try to get in? It may not get in first blanche, but it will follow on thereafter.
RITTER: Well, SpaceX is a bit different. Unusually, the company is saying we are going to allocate about 30 percent of shares to retail investors, up
from a more typical less than five percent, so the combination of a really big offering and a really large retail allocation means that retail
investors are going to be important.
On the other hand, Tesla has a very large fraction of their shares owned by individual investors rather than institutions. Anthropic and OpenAI haven't
indicated their plans yet, but I don't see any reason to think that they are going to be allocating a big proportion of shares to retail investors.
QUEST: Do you see even if these are all fully funded and there is quite a sizable pop of the market, do you think money is lost elsewhere? I mean,
other companies suffer as a result of this wealth of money, not only into the three companies themselves, but also into those companies that have
invested in them already, if you will, a second play behind the primary play?
RITTER: There is going to be a little bit of an effect, but not a big effect. If you look at a company like NVIDIA, an average day, something
like $40 billion of stock changes hands and that's just one company, you know, albeit the biggest company.
[16:10:10]
But the U.S. market is so deep and so liquid that the effect of selling other stocks to buy this stock, I think is going to be pretty minimal.
QUEST: Have we ever seen anything quite like what we are going to see in the next few weeks? I mean, the market -- the market is used to gigantic
and the market is used to superlatives -- the biggest, the best, the most expensive, et cetera and et cetera.
But I don't think we've ever seen anything quite like this.
RITTER: I would agree. SpaceX is going to be the largest IPO in the history of the world by far. This is not an everyday occurrence, and Anthropic and
OpenAI, if it wasn't for SpaceX, one of them would probably be the largest IPO in the history of the world.
But the public floats are going to be small with all of these companies. The amount of cash coming in from public market investors will only be a
tiny fraction of the company's total market cap, and all three, especially OpenAI have voracious cash burn rates.
QUEST: Final question. Final question, sir, when all is said and done, do these three drag the rest of the market higher with them?
RITTER: There will be a little bit of an effect, but I think it is going to be pretty minimal that SpaceX is a hardware company primarily. The rocket
launches and especially Starlink are the important part of the business that is most likely to be that the big money maker in the future.
OpenAI and Anthropic are mainly software companies, but they are not software companies threatened by A.I. These are the A.I. companies
threatening other software companies.
QUEST: I am grateful. We will talk more. Thank you, sir.
And one of Brazil's largest companies is celebrating its first year on the New York Stock Exchange. I will be talking to the chief executive -- sorry,
the chief financial officer, I beg your pardon, the CFO of JBS later in the hour.
President Trump is vowing to respond after he says Iran shot down a U.S. Army helicopter. The President, writing on social media, says: The Iranians
shot down one of our highly sophisticated Apache helicopters while patrolling over the Strait of Hormuz."
Officials say the aircraft was brought down by an Iranian drone. Iran has yet to comment on, confirm or deny.
Kristen Holmes joins me from The White House. I guess the question is how far they want to take this further? In other words, you know, in terms of
breaching the ceasefire, in terms of giving a bloody nose back, what the U.S. wants to do.
KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Richard, and right now, we don't have an idea of that, especially given
that we don't know and we haven't been told, we have been asking, it is unclear if even The White House knows at this hour if this was intentional
or not. Was this a helicopter being caught in crossfire? Was this an accident, a misfire that ended up in downing this Apache helicopter? Or was
this intentional? That is obviously going to play a role in what the retaliation is.
I will note that it was just two days ago that President Trump was essentially begging Prime Minister Benjamin Netanyahu not to retaliate
against Iran after they launched strikes into Israel. Netanyahu said he had to and did retaliate, but has since stopped.
But now you hear President Trump saying that they are going to respond to this helicopter downing. And just to give you a little bit of a sense of
what we know about the incident itself, it is an Army Apache helicopter. It was patrolling regional waters. It was shot down off the coast, near the
coast of Oman. Two crew members were rescued by U.S. Forces, all within two hours and they initially said that there is an ongoing investigation.
They would not give any answer on how this helicopter ended up going down. Now, we have sources saying it was an Iranian drone, but that question of
intent, that is still the missing piece. And the other part of this, of course, being that President Trump just last night said that he anticipated
some kind of peace deal, possibly between even two and three days from now, of course, we have heard these kind of overly optimistic timelines before,
but this is obviously going to change course, particularly if the U.S. is going to retaliate here.
QUEST: I am grateful. Kristen Holmes, who is at The White House.
[16:15:08]
My next guest coming up on QUEST MEANS BUSINESS live from Sao Paulo is the CEO of BTG Pactual. We will talk about Brazil's economy, the political
uncertainty, and how it is impacting his investment bank.
We are live tonight in the magnificent commercial city of Sao Paulo.
(COMMERCIAL BREAK)
QUEST: The Brazilian presidential election is only four months away. It will be a torrid four months of accusations backwards and forward. The
incumbent president, Luis Inacio Lula da Silva, is facing a challenge from the right-wing senator, Flavio Bolsonaro. Now, that's not just anybody, as
you'll hear in a second. Flavio Bolsonaro, of course, son of --
Brazil's economy is going to play a major role throughout the contest. President trump slapped a 50 percent duty on Brazil last year that was
reversed and stopped by the Supreme Court, partly in response to Brazil's prosecution of the former president, Jair Bolsonaro, and this is where it
all comes together. The father of Flavio Bolsonaro, Mr. Trump's -- and well, he was, of course, Mr. Trump's close ally.
The U.S. Supreme Court may have struck down the 50 percent tariff, but they are trying again and again and again to try and get them up and running.
Trump and Flavio Bolsonaro met recently at The White House. The meeting lasted only a few moments. It was enough to disrupt U.S.-Brazil relations.
With me, good to see you, sir. Thank you, first of all, to you and your colleagues. Fernando Nakagawa is with me.
Thank you for letting us interlope into your studio and to borrow it all.
FERNANDO NAKAGAWA, CNN BRASIL ECONOMICS COMMENTATOR: Thank you for your visit here.
QUEST: No, we are delighted to be here.
So tell me, this political horse race in October, at the moment, as I understand it is pretty much 50/50.
NAKAGAWA: Yes, definitely. Definitely. It is a divided country with a divided people. The last polls shows Lula, 40, and Flavio, 35, but we have
a huge doubt on the this dispute and the debate on, especially on economy, because nowadays, Brazil, we have some problems on economy and nobody offer
answers for this situation.
[16:20:00]
QUEST: But the two parties are very much a part. In a sense, we know Bolsonaro will be more of the same and similar and more to the right, far
to the right. If it is da Silva, it is going to be more of the left wing, arguably socialist policies. But that's left this country with very high
fiscal deficits and interest rates, which I was astonished to remember is 14 percent.
NAKAGAWA: Yes. Definitely. It is a huge problem for us and probably the answer for the fiscal problem we have for this year, probably a deficit of
eight percent of the GDP, in Brazil, eight percent.
QUEST: So you've got a high deficit, high interest rates, low unemployment, low inflation or relatively low inflation.
NAKAGAWA: Yes, but because the government spending is absolutely high outside the fiscal numbers, the offshore numbers. So the public banks offer
a lot of credit with lower interest rates.
QUEST: But we've got -- so here in this country, you've essentially got exactly what you don't want, which is monetary policy, trying to slow
things down to get inflation down and fiscal policy, speeding things up.
NAKAGAWA: Yes.
QUEST: Exactly the opposite direction.
NAKAGAWA: Yes, definitely. That's the proof of the Brazilian dilemma. So this is the problem in Brazil nowadays. And nobody, Flavio or Lula offer
any answer to try to solve this problem.
QUEST: Okay. One thing does surprise me. When Flavio Bolsonaro goes to Washington. Don't the Brazilian people want him to say to President Trump,
stop the tariffs. Stop harming my country? I mean, I know it is his father in prison, and the tariffs are because his father is in prison, but you
would have thought he might be saying, no, I don't want you to hurt my country with higher tariffs.
NAKAGAWA: Yes, probably. This is the main problem for Flavio's campaign because nobody understands why he supports this kind of action in America.
So for me, it is the big problem, the main problem for the opposite side here.
QUEST: You've obviously been following this very closely over many years. At the end of the day, Brazil's economy struggles -- I mean, it thrives in
spite of all of this and that's the interesting thing, isn't it? It is resource led. It is a very big economy. It could do better, but it is
always the question of lost opportunity.
NAKAGAWA: Yes, definitely, and the most interesting thing is the reason is absolutely Brazilian reason. It is a local problem. So fiscal problem or
even political problem and we cannot solve this kind of situation. It is a huge problem.
So what a mess! What a mess!
QUEST: It is a mess, but a wonderful country.
NAKAGAWA: Yes, definitely!
QUEST: Wonderful. Thank you so much, and thank you to your colleagues. You've made us so welcome. I am very grateful. Thank you.
NAKAGAWA: You're always welcome to Brazil.
QUEST: Now, the chief executive of LATAM has been telling me that demand has remained resilient and high. The question is how will future demand be
affected by the ever increasing oil prices?
As I spoke to LATAM's CEO at the IATA Annual General Meeting, remember that LATAM itself, a company that had been restructured, two airlines put
together, been through financial restructuring, but a giant of a carrier on the continent.
(BEGIN VIDEOTAPE)
ROBERT ALVO, LATAM CEO: We have the issue of fuel that everybody is suffering in a way, but demand has been very resilient. The position that
LATAM has in the market is unique. We have a very strong balance sheet.
Our numbers of the first quarter were record numbers. Premium traffic is growing. So I see this as an important event. I don't think I see this as a
crisis, and if things ease out in the second semester, I don't think that we will be talking about fuel much more.
QUEST: You see, that's the fascinating part because there is a sort of quiet resignation that we are in the middle of this. We know what we've got
to do. Some of us will, you know, we will cut back here, we will do this there. But actually, you know, demand is holding up and some people -- and
that's quite strategically important.
ALVO: It is, it is. And not only demand is holding up, premium revenues are growing and clearly people have understood what is going on in the Middle
East, but it is not changing their decisions at this point in time.
QUEST: You don't think that because that premium leisure was the bit that I thought was going to get really clobbered, because people would then just
trade back to economy rather than the middle or the upper cabins, but that doesn't seem to be happening.
ALVO: Neither premium leisure nor corporate are being affected. And, you know, the delivery and the product that we have today in LATAM is creating
a sense of loyalty that we didn't have in the past. So actually, our revenue -- premium revenue is growing faster than revenue is growing faster
than capacity, even in these times.
QUEST: In terms of supply chains and whether its engines or new aircraft, are you being hit?
[16:25:10]
ALVO: We are. We have around a dozen A320 Neos on the ground. We don't have 787s on the ground, so they're fine. It is getting a little bit better.
QUEST: Doesn't it annoy you when you look out your office and you see a dozen planes on the ground for no reason other than you haven't got
engines?
ALVO: Of course it annoys me, of course. If I can say something good on the airframe and the engine manufacturers is that they're improving. It is
extremely frustrating, but I don't get anything out of being frustrated. I need to sort this out.
And in that sense, I think we are getting the support, but if you ask me, honestly, it is going to take a while and I don't think that we should be
very hopeful that this is going to go out anytime soon.
What I really want is that both the airframe and the engine manufacturers understand that this can happen only once. We can't go through another
stage of technology and endure the same thing. It needs to go right.
So at this moment, let us fix what we have before thinking about anything new.
QUEST: I always remember, Bob Crandall famously saying we all fly the same metal tubes. It is what we do inside them that makes the difference.
ALVO: Absolutely.
QUEST: And to that extent, you're all facing the fuel crisis and you're all facing this and you're all facing that. But when you now look to the
future, what are you going to innovate or do that's going to set you apart?
ALVO: Us, it is the people. It is nothing but the people. You know, before being an airline, we are a social organization. And what matters -- of
course it matters if our city is better or our lounge is bigger or better. What matters is the experience, end-to-end, from the moment you want to buy
a ticket until they give you your bag back or your points rewarded in your account.
And I think that there is potential. This industry does relatively well. But I mean, how many times have you not been affected by what we do?
QUEST: You just said it. It does relatively well for the size and scale of the industry and the potential for things to go wrong, but it is not -- but
the consistency of hitting the top mark is what you're talking about.
ALVO: Yes. And we have to be better every day. You know, one of the things that surprise me is that many airlines and airports talk about 15 minute
standard when you take off, why? Why does the passenger need to wait for 15 minutes? It needs to be zero.
Why do we allow ourselves that slack? There shouldn't be there. So, you know, execution can improve significantly. Technology will help for sure.
A.I. will greatly change the way we do things in the future, but the experience is what is going to matter.
(END VIDEOTAPE)
QUEST: Now, we've discussed how tariffs and Brazil's economy is hanging over the upcoming election. Now let's look at the economic picture more
closely because it certainly deserves it.
Unemployment in this country is around six percent, which is not bad going at all and the first quarter growth was barely one percent. You can live
that.
But unfortunately, inflation is well over, the Central Bank, the independent Central Bank's target of three percent. It is about five
percent. But what is fascinating is interest rates.
Interest rate is the benchmark rate. I almost sort of say it as if I don't believe I am saying the rate is 14.5 percent and these elevated rates puts
pressures on the financial institutions, on the currency, you name it! The lot!
Roberto Sallouti is the chief executive of BTG Pactual, Brazil's largest investment bank. Sir, I am so grateful. Thank you for coming in and talking
to us.
ROBERTO SALLOUTI, CHIEF EXECUTIVE, BTG PACTUAL: Thank you for having me. It is an honor to be here.
QUEST: When I say 14.5 percent, how does any bank or any financial system live with that sort of level when actually the economic numbers underlying
don't justify that?
SALLOUTI: Yes, clearly, I think you mentioned the -- if you look at where at full employment, inflation is above target, but around 4.5 percent, five
percent. But the big issue is that that comes with an interest rate that is 14.5. It used to be 15, two months ago.
The problem here is the traditional government expenditures are growing too fast. Since they're growing too fast, they are pressuring the economy.
Unemployment is at full employment and so the independent Central Bank has to act to reduce consumption.
QUEST: It is a tug of war. They are literally going in opposite directions.
SALLOUTI: What we like to see in Brazil is we have the accelerator in the fiscal policy and the brake on the monetary policy, which is exactly what
you don't want.
QUEST: Exactly.
SALLOUTI: As an investment bank with $600 billion under management and the largest, how do you manage this in terms of inward investment, capital,
investment, capital raising?
QUEST: Well, Brazilian corporations learned to deal with high interest rates. So the truth is our economy is much less leveraged than you would
expect from economies that have lower interest rates. And that also has effects on capital markets.
So that capital markets in Brazil are much larger than equity capital markets and that is understood because with interest rates at these levels,
and especially when you can buy some tax exempt products, debt capital markets is disproportional to equity capital markets. It is the opposite of
what you have in the United States for example.
[16:30:19]
QUEST: But where are you deploying? As an investment bank, where are you deploying your firepower and your interest? And what are you looking at
particularly?
SALLOUTI: So Brazil is a -- even though it has its challenges.
QUEST: Yes.
SALLOUTI: We are an agricultural powerhouse, a mineral powerhouse, an energy powerhouse, an environmental powerhouse. And we have an over 200
million people market who we have very good at applied technology. Brazilian customers are very tech savvy. So the truth is we have phenomenal
companies that are both exporters and phenomenal companies which serve internal markets.
QUEST: Do you worry about the ongoing battle with the United States over tariffs, or is this just something that you sort of you can navigate?
SALLOUTI: I think it's something that we can navigate. It's not ideal, but the truth is we actually have a trade deficit with the U.S.. So it's
something that's manageable for us. Most of our products are commodities. So you can shift them to other producers. Naturally there are some specific
companies which are suffering greatly, but overall, the macro scenario, it's manageable.
QUEST: And you are reasonably comfortable with valuations in markets at the moment, even though we're going to have the madness of the U.S. and the
IPOs?
SALLOUTI: Actually, when you compare Brazilian equity multiples to global multiples, things are very cheap, extremely cheap. Valuations are much
lower than global peers.
QUEST: Right. You are a first, by the way, sir. You are a first. You are the first guest that we've had on this program, QUEST MEANS BUSINESS, who's
arrived for his interview by helicopter. Now, I know here in Sao Paulo it is quite -- you came from a partners' meeting and we're very grateful.
There we go. You can see that -- but it's not -- it's the first time. And I'm very grateful that you did make it in time. It's good to give us the
insight. Thank you for coming in, sir.
SALLOUTI: Thank you.
QUEST: Lovely.
Now it's two days until the World Cup kicks off. The U.S. says one of Africa's top referees can't take part. He had the right visa, he had the
right papers, and he still got turned round and sent home.
QUEST MEANS BUSINESS live in the magnificent city, Sao Paulo.
(COMMERCIAL BREAK)
[16:35:42]
QUEST: I'm Richard Quest. There is more QUEST MEANS BUSINESS from Sao Paulo in Brazil in a moment.
He was said to be the first Somali man to officiate in a World Cup. Now U.S. officials then denied him entry into the country and sent him home.
Why?
JBS is celebrating a year on the New York Stock Exchange. I'll speak to the CFO of one of Brazil's biggest companies, get some perspective on that. But
this is CNN in Brazil, and on this network, wherever you join us and whatever country we're in, the news always comes first.
President Donald Trump says Iran was responsible for the downing of an army helicopter off the coast of Oman, and the U.S. must respond. U.S. officials
say the aircraft was shot down by an Iranian drone. The two crew are on board, were rescued and are known to be safe. Iran has yet to confirm or
deny the attack.
Police in Northern Ireland have charged a 30-year-old man for attempted murder after a stabbing attack in Belfast. The victim is said to be in
hospital with serious conditions with wounds to the face, neck and back. Authorities have identified the suspect as a Sudanese asylum seeker and
there are now appeals for calm in the wake of recent anti-immigration protests in the United Kingdom.
NASA is sharing details of its next mission in its Artemis moon program. Four astronauts will launch next year, it's hoped, aboard the Orion
spacecraft. They're set to fly to low earth orbit, where they will attempt to dock with commercial landers built by SpaceX and Blue Origin.
Football's biggest show begins on Thursday. It will begin without one particular participant. The dream for the World Cup is already over. Not a
player, but a referee.
Omar Artan was set to make history as the first Somalian to officiate a World Cup match. And yet, when he arrived in Miami, they first of all
questioned him for 11 hours, hauled him off into a secret room, and then denied him entry to the country, sending him back home. They cited vetting
concerns. Somalia is one of the 39 countries affected by the Trump administration's travel ban.
Don Riddell joins me.
Don, as I read this, he says he had the right visa. Admittedly, he was traveling on a diplomatic passport that was issued so that this would all
be a lot smoother. He had the right visa, the right passport, and it still went wrong. Why?
DON RIDDELL, CNN WORLD SPORTS: Hey, Richard, it seems that FIFA might be losing control of this World Cup because this is a very, very embarrassing
situation for football's world governing body and not something they would have anticipated at all when they awarded this World Cup tournament to the
U.S., Canada and Mexico.
You know, qualifying for the World Cup was supposed to be the hard bit. Now, many are discovering that getting into the United States might be even
more difficult. FIFA says that one of its referees is not going to be able to officiate any of the games this summer because, as you say, he was
denied entry when he arrived in Miami.
Omar Abdulkadir Artan was named Africa's top male referee last year, but he's from Somalia, one of the 39 countries subject to travel restrictions
by Donald Trump's U.S. government. And Trump himself has called out Somalia in the past by name and referred to this country particularly derogatory
terms. A spokesperson for U.S. Customs and Border Protection said that he was determined to be, quote, "inadmissible" due to vetting concerns.
In a statement to CNN obtained from a Somalian official, Artan said, "Despite the circumstances, I'm in a positive mood and I am focused on the
next challenges in my refereeing career. I would like to thank FIFA and CAF for all their support, and I promise to keep my refereeing levels up as I
concentrate on the future. I want to thank the football family for their messages and wish my colleagues all the best success during the World Cup,
and I look forward to joining them again in future competitions."
A statement from FIFA read in part, "FIFA is not involved in host country immigration processes. A host government ultimately determines who receives
a visa and who is admitted into their country."
[16:40:13]
But as I say, this is not a situation that FIFA will be at all happy with. And tournaments recently in Russia and Qatar, they made it very, very easy
for everybody who wanted to participate in the World Cup to come in. It's a completely different story now with the United States.
There are going to be so many stories for us to focus on throughout this tournament because it's massive across three countries.
QUEST: Right.
RIDDELL: 48 teams, 104 games. Lionel Messi is going to be one of the big stars, Richard. He's playing in Alabama tonight.
QUEST: But on the other point is, I guess we can't -- you know, we will obviously focus on, and I know you will be because you take these matters
extremely serious that focusing on this, this goes against the whole spirit of the whole thing.
RIDDELL: Absolutely. But I think anybody that's been following the build up to this tournament and who's been paying any attention to the U.S.
government and the Trump administration won't be at all surprised that something like this has happened. And it's not just with this referee from
Somalia. Some fans are finding it hard to get in. The Iranian team is now saying that their entire ticket allocation has been pulled.
Iran aren't even allowed to stay in the United States. They were supposed to be based in Arizona. Now they've had to set up camp in Tijuana. It's
hard to remember a situation where a World Cup host country has gone to war with one of the teams. It's supposed to be welcoming to play in the
tournament.
QUEST: Don Riddell, I am grateful, sir. Don Riddell joining us now, as we continue one of Brazil's largest companies went public a year ago.
After the break, the chief financial officer will join me to talk about how it's been a year on the market, but also agriculture, how difficult it has
been for JBS Foods with high beef prices and cattle shortages, and funny things going on. In a moment.
(COMMERCIAL BREAK)
QUEST: Wall Street is preparing for three massive IPOs coming up. We are in Brazil today. We are -- Wall Street is preparing for three massive IPOs as
one of Brazil's biggest, largest companies celebrates its first year on the New York Stock Exchange.
[16:45:09]
It's JBS. Now look, there's -- oh, look, happy days. Happy days back a year ago. But the shares have fallen 14.5 percent since then. The world's
largest meat packer has faced serious headwinds, not of its necessarily of its own. There was a labor strike at one of its U.S. meatpacking plants in
March. Then you had record high beef prices. They're up nearly 19 percent. But of course, that doesn't necessarily go to their bottom line.
JBS has lost $670 million from its beef business last year, and the lowest U.S. cattle supply in 75 years, now threatened by screwworm breakout.
Guilherme Cavalcanti is the global CFO, joins me now.
When I put it like that, you're having a difficult time. You go public. And what's it been like being a year on the New York Stock Exchange?
GUILHERME CAVALCANTI, GLOBAL CFO, JBS: Very good. So in fact we are accomplishing everything we wanted from the listing in New York Stock
Exchange. First of all, I think the fall in share prices was at an event recently, given all the factors that you mentioned in the beginning. But in
the first nine months, share price went up more than 30 percent. And what we wanted before listing 49 percent of our free float was U.S. investors.
Now it's 74.
QUEST: And you're happy with that?
CAVALCANTI: Sure. That's what we wanted because the U.S. market is four times larger. The whole emerging markets combine it. So -- and we didn't
have access to this pocket. Now we have it.
QUEST: So you're a Brazilian company that's really an American major company now.
CAVALCANTI: Yes. We are a global company. But basically, for example, we enter in Russell Index last two weeks ago as a U.S. company.
QUEST: Yes. Interesting. Now we had a case where, interesting, we were told don't eat as much meat, so not good for you. Cholesterol. Don't eat as much
meat. Now we're told eat more meat, protein, protein. And that's big for you, isn't it? As you're trying to make a million and one different ways to
expand the protein content.
CAVALCANTI: Exactly. If you see the new directives of the U.S. government saying put animal protein on the top of the pyramid, so basically that's
good for your health. This is exactly what our portfolio is. So we don't need to change our portfolio. A lot of packaged companies, they are
changing their portfolios to go more protein. We are already a protein.
QUEST: OK. But the issue of course is cattle and the supply of cattle. Awful phrase. But the supply and the difficulties, not only of herds being
smaller because of drought and a thousand one other reasons, but you've now got screwworm as well. And it takes several years to rebuild a herd again.
CAVALCANTI: Yes, it takes at least two years, right? Because it's the cycle. It's a long cycle, and it depends on the climate, as you mentioned.
But the good thing is that we are not only beef. In fact, we have chicken and Pilgrim's Pride. We have 82 percent. We have pork, we have aquaculture
in Australia, and we have different regions as well.
Brazil cattle availability is good. Australia cattle availability is good as well. So this diversification gives us less concern about just the
specific U.S. herd.
QUEST: And when you look, you know, at the market and you look at what's happening at the moment, what for you is the most exciting part?
CAVALCANTI: I think it's this protein crazy what people are calling because all the aging population, GLP-1, all these that people driving to have more
healthy food. This is very exciting for our industry.
QUEST: Do you have a favorite, beef, pork, chicken?
CAVALCANTI: I think everybody prefers beef, right?
QUEST: Beef.
CAVALCANTI: Beef, you don't need to put anything else. You just eat it. But other proteins generally have to put sauces or whatever.
QUEST: Good to see you, sir. Thank you very much indeed for joining us.
Now in many respects it's been a boom times for Turkish Airlines. The chairman, Murat Seker, the new chairman, tells me the good times are going
to expand. Just don't call his company aggressive. In a moment, you'll hear from the CEO, the top man, at Turkish.
(COMMERCIAL BREAK)
[16:51:56]
QUEST: Look at this beautiful picture. Downtown Sao Paulo in the evening. It may be autumn but I have to tell you, it's cool but delightful the
weather. And it's such a magnificent city to be in. Thank you to our colleagues at CNN Brazil who have been wonderful hosts to us and allowing
us to interlope into their studios. And we're very grateful for that.
The chairman of Turkish Airlines says the company is well-equipped to handle soaring jet fuel costs. I sat down with Murat Seker. The IATA AGM
was in Rio, just up the road. And he said the disruption from the conflict in the Middle East should begin to ease this summer. He also says no matter
what Turkish Airlines has big plans for the future.
(BEGIN VIDEOTAPE)
MURAT SEKER, CHAIRMAN, TURKISH AIRLINES: We have come a long way. You know, before the pandemic we had -- we were an airline with the size of about 350
aircrafts, and in five years' time, we are about 550 aircrafts. So it's a huge shift. And considering the big order book from Boeing and Airbus that
we have, about the 420 aircrafts to be delivered in the next decade, you know, we are going to move to a completely different scale.
So the -- I was fortunately one of the key members of the team that prepared Turkish Airlines' 2033 strategy. So, you know, I have a big
contribution into it. There is not going to be a major change going forward. We want to be an airline with about 850 aircrafts by 2033, and we
still want to continue to be the airline that flies to more countries than in other airlines. And we want to be in the top three position in terms of
global cargo carriers, global passenger network. So we'll stick to those targets.
QUEST: Do you have your fuel supply secure for the summer?
SEKER: Indeed. Past even -- past summer, we don't have a supply issue. Fortunately, Turkey's geographic location and two refineries in Turkey
enable us to get reasonable fuel supply without any risk of production. And about the crisis, of course, you know, as like any other major network
carrier, about 30 percent of our expenses are fuel. And it went more than double. So it had put a big pressure on the cost. But we were lucky enough
to be able to reroute the traffic wherever there are opportunities of growth.
QUEST: So you -- obviously you're hedged at a certain rate.
SEKER: Yes.
QUEST: And you'll be redoing your hedges in the next few months.
SEKER: Yes.
QUEST: And -- but at the end of the day, how much of can you pass on to the to the consumer, to the passenger?
SEKER: Yes. So we hedge up to 40 percent currently of our fuel consumption. But more importantly, through the surcharge in more than 150 destinations,
we were able to increase the prices by more than 15 percent.
[16:55:07]
So we were able to pass through some of that impact to the ticket prices.
QUEST: Longer term, it's going to hit the margins and the profitability.
SEKER: It will. It will, of course, squeeze the margins through the year. But our belief is that this escalated level of jet price is not going to
last too long. We'll start to see a deceleration after the kind of the middle of summer. And we expect the fuel -- jet fuel to be about a little
below $1,000 by the end of this year, but still it's going to have an impact on our margins.
QUEST: The problem that Turkish Airlines has had is that other airlines are scared. You come in with -- you come in, you have large volumes. You're a
very big carrier and you play to win.
SEKER: So, well, we are growing, but we don't consider ourselves as aggressive growers. We first used our advantages very smartly. Geographic
location. We use our talents very smartly. Our, you know, station managers in covering 300 international destinations and 50 domestic destinations,
very smartly, we use and, you know, as Turks are known, usually as very agile people. We are very quick to adapt. So these are our advantages. We
don't try to deprive some other carriers of the market. We are just doing our own business. And then market is growing and we are benefiting from it.
(END VIDEOTAPE)
QUEST: And that is the new chair and CEO of Turkish Airlines at the IATA in Rio.
We will take a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment."
It is a treat and a privilege to be here once again in Brazil. Last night Rio, tonight Sao Paulo. And to really understand from the guests that
you've heard this phenomenal country, this magnificent economy that's going to face some political difficulties and strife towards the end of the year.
But the way it has just been continually advancing, reforming, sometimes falling back is quite remarkable.
And my thanks tonight to my colleagues here at CNN Brazil. They have welcomed us with open arms. They've lent me the studio and all the kind
people in it. They have made the entire program possible. And we are very, very grateful. And it proves wherever we are in the world, there is one
CNN, because that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in Sao Paulo. Whatever you're up to in the hours ahead, I hope it is
profitable. I'll see you tomorrow.
END
