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QUEST MEANS BUSINESS
Air Travel Over Europe Resumes
Aired April 21, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Filling the seats and flying the planes. But now from ash crisis to cash crisis, who bears the cost of the volcanic disruption?
The cavalry is riding to Greece's rescue. The IMF arrives, how much will they provide?
And picking over Goldman Sachs, what the SEC didn't tell us.
I'm Richard Quest, once again, live from Newark Airport, where I mean business.
The corporate blame game has begun, as companies are now trying to work out who bears responsibility for bringing stranded passengers home and who will pay the bill when its all over? It will cost millions of dollars. Will governments reimburse the travel companies? Some airlines say you can only the claim the cost of the ticket. In a moment we'll talk to the chief executive of Tui, who basically says airlines need to do more and the British government has been a shambles.
The skies over Europe are once again starting to become congested, as planes fly passengers home. But it still a long way from this crisis being over. There is always the risk of more ash coming from Iceland. And certainly there is not enough seats at the moment to go around. CNN's Jim Boulden joins me now live from Heathrow Airport.
Jim the noisy planes are taking off. They're leaving full, but there is not enough seats.
JIM BOULDEN, CNN INT'L. CORRESPONDENT: Yes, well you know, there is- we got some numbers out a few moments ago that showed that 80 percent of European flights that you would normally see today took off and landed. That is better than I think many people expected. And in fact, they are expecting nearly 100 percent of all flights, normal flights, taking place tomorrow. Here at London Heathrow, it hasn't been anything close to that. But it has been a very active day lots of flights coming and going. Number of flights leaving here to go out and pick people up and bring them back, as well. So, expecting something line 90 percent of U.K. flights to take off and land tomorrow.
So, I have to say, Richard, that I'm quite impressed that these airlines have gotten up very, very quickly. London Heathrow came late to the game because of the closure of the U.K. airspace, so they had to make I up quickly. But starting at about 10:00 o'clock last night, when the airspace was opened up, British Airways started to land a lot of people here and there was a lot of joy in Terminal 5, where people, finally, were able to come back, but as you say, a lot of criticism, as well. A lot of people are thinking that the government didn't do enough, and the airlines of course are critical of those who made the decision to keep the airspace closed for so many days.
But as you can see behind me, Richard, airlines are landing all day long, finally, here at Heathrow Airport.
QUEST: Jim, on this question, of the way in which the British civil aviation authority said new rules on engine tolerance for flying through low-density ash, did they just simply move the goal posts in the middle of the game to accommodate the business interests?
BOULDEN: That is certainly one of the questions. You know, last night when British Airways said they had a number of flights heading for London, even though they did not have approval yet, to fly to London, one of them actually had to circle the Isle of Man. It looked to some people as if they were putting pressure on the government. But the CAA and the NAP, who control the skies, simply said they were following the procedures that were given to them. But yes, they talked to the airlines. They talk to the people who manufacture the airplanes and the engines and said that they could have a bit more tolerance.
Now that is the question: Can Europe revise their program for the next time? Could there be a new system put into place? Because the airlines, especially British Airways, say look, we know how to fly around this stuff. We know what we're doing. You should listen to us more often and not just have a blanket ban on airspace, Richard.
QUEST: Jim Boulden, once again being drowned out by a Virgin Atlantic plane taking off.
Now, they seemed to have got their act together extremely well here at Newark. Remember yesterday I showed you Jet Airways which is having one or two little difficulties as a result of a plane going via Athens, not Brussels. Today Jet Airway is moving extremely smoothly. Passengers checking in for not only the early afternoon flight, but also a later flight that will be going from here, Newark, via Brussels, an onto Mumbai.
As the planes start flying so now, well, you may have guessed it, the blame game gets underway. Two of Europe's biggest holiday companies are jointly condemning the British government over its handling of the crisis. Tui Travel and Thomas Cook say that when they met ministers they were given no clear reason for the blanket closure of U.K. airspace for nearly a week. Accusing the government of condoning unfairness, Tui and Thomas Cook say they're bringing holiday makers home by any way possible. While some low- cost carriers are allowed to abandon passengers. Tui and Thomas Cook had 100,000 customers stuck in places far from home.
Tui's chief executive has said the government's response has been a shambles. A short while ago I spoke to Peter Long, and I said, if it wasn't their responsibility, government or companies, where should, who should bring passengers home?
PETER LONG, CEO, TUI TRAVEL: It is all about customer repatriation. And we seem to have two standards, where as tour operators and travel companies, we are focused immediately on the repatriation of our customers. To get rid of all the anguish that they have been facing, where they are obviously distressed away from loved ones, and we're not getting a consistency across the industry, of the importance of repatriating customers. It should not be the role of the government to have to deal with this issue. We should deal with it consistently across the industry. And my concern at the moment is the failure to do that, and as a consequence we will be giving a lot of heartache to customers who remained, and feel as thought they are stranded in resorts or cities around the world.
QUEST: So, you are saying, sorry, you just said then it is not the government's responsibility, it is your responsibility. And what role does government have in this?
LONG: It should be consistently our responsibility, so tour operators have a very clear responsibility. What we're looking to see is the airlines also shoulder the same responsibility and act in a consistent way, so that therefore, it is not the responsibility of government trying to deal with repatriation. This is a complex issue, and it has to be done with military precision. And if it is not it will result in a lot of anguish and a lot of anger from customers. And my concern then, that will do a lot of damage to our industry, over the ensuing weeks.
It is our intention to ensure that all our customers are home by the weekend. So, we focused on this-
LONG: -important issue of customer repatriation.
QUEST: Why do you think some airlines are trying to shift it? I mean, Ryan Air, for example does say, you know, if you have only paid 30 or 40 euros for your ticket, then perhaps it is not unreasonable to expect you to make your own way back. That is part of the bargain, of a cheap ticket.
LONG: Well, the problem is, how can you make your own way back? If the airline that you've flown with, is not making provision for you to come back in a reasonable period after airspace is reopened. As opposed to affect a lottery, while you go on line, and you'll get back when you can. That might be in three weeks time. That is going to cause huge amounts of distress and anguish to customers. And I think it is absolutely appalling that any part of our industry should consider treating out customers in that way. Let's have a consistency across the industry so we look after our customers.
QUEST: Talking of consistency, there is some dispute tonight over what compensation airline passengers are entitled to as a result of this. Do you believe that passengers should be entitled for reimbursement for their expenses for those who have just bought a flight only?]
LONG: Well, that is what the-that's what the laws within Europe say it should be. So, we have to abide by the laws. And I think we should professionally get on, deal with these issues, look after our customers. And then have discussions with either government or the European Commission on this issue, in terms of ways of compensation. But I think that is a secondary issue. And I think we should be absolutely focused on our customer welfare initially. You know, we're talking about within our industry, lots of well structured, very successfully financial organizations. We should focus on customer care and then we deal with the aftermath on this. And discuss who is going to finance and foot the bill for the costs. But we shouldn't be having that debate with our customers. It is totally inappropriate, and unfair for our customers.
(END VIDEO CLIP)
QUEST: Peter Long, of Tui, and the debate over who should pay.
Carl is here. Carl, how long have you been stranded for?
UNIDENTIFIED MALE: One week, actually.
QUEST: You have been stranded for a week. You obviously had to incur extra costs as a result of what's taken place, haven't you?
UNIDENTIFIED MALE: Yes, I think this amounts to $1,000.
QUEST: So, a $1,000, you believe, you had to pay. Will you be claiming that $1,000 back from anyone?
UNIDENTIFIED MALE: I'm going to try to claim as much as I can from the travel agency, from Jet Airways, the company that we have been flying with.
QUEST: It is pretty much essential that everybody here has incurred some extra costs, haven't you? For being in hotels, up to a $1,000, a couple of $1,000 over there.
Thank you, Carl.
The question is what can be claimed by passengers under European regulations, rules in Europe that basically allowed for delays and cancellations. Matt Bath now joins me now from London to talk about that, from which.
Matt, are these passengers entitled to get any of those out of pocket expenses back?
MATT BATH, WHICH? HOLIDAY: Well, while the delay is absolutely awful, certainly the good news is yes, they can. You hit the nail on the head. This is European law. So, basically the airlines are responsible for any reasonable out of pocket costs. Now, that includes accommodation, that includes food, refreshment, even reasonable phone calls. Keep your receipts. When you get back home, as long as you sit with an EU carrier, and you arriving or taking off from an EU airport, then you will be able to claim that money back.
QUEST: But what about that exception that was in the rules, that carriers could avoid that if it was exceptional circumstances? Surely, a volcano in Iceland is an exceptional circumstance?
BATH: You would certainly think so, but again, the rules are absolutely clear. And certainly the message come out of Europe has been absolutely the same across the board. If you are an EU carrier, and you are carrying a passenger, and they are stranded, and they complete their flight with you, any reasonable costs, you have to pick up the bill for and there is not argument about actually being responsible for that.
QUEST: So, the carriers say, lets take Ryan Air, who says they are only liable for the cost up to the maximum of the ticket. They have a point, surly, as the end of the day, if you paid 20 euros or even 50 euros for a ticket.
BATH: Well, you would certainly think that that would be the case, but sorry, Ryan Air, you are wrong. The rules are the rules. And Ryan Air has to play by them. You know, it is a real kick in the teeth to passengers, that are coming back to Europe, to actually get landed with all these bills, basically because they were left out of pocket. Ryan Air signed up to fly in Europe, well they are also responsible for those out of pocket costs. There is no argument about that and Ryan Air are actually on the wrong foot on this one.
QUEST: And with that applied, let's just think about some of the people who may be watching tonight, who are using frequent flyers tickets, reward tickets, free tickets, effectively. Surely they're not entitled to have their expenses paid as well?
BATH: Actually, you have to check with the individual airline to make sure that you understand totally what is covered. But again, European legislation is very clear. You are completing a journey and an EU carrier has what is called care of duty; it has to look after its passengers. They are its responsibility during that time. Now, obviously, it is bad news for the airlines and it is not the airlines fault that a volcano erupted, but these things as they stand the regulations are the regulations. It's the law.
QUEST: Well, Matt, you have put us very firmly in the place of where it is. Many thanks, indeed, for being quite so up front. We'll no doubt hear talk more about that. And indeed, we look forward to that.
Now, one quick point I want to just say. Any of you who are watching us tonight, who are going to put claims in, let me know about the claims. We'd like to follow your claims and we'd like to follow what the airlines say in response. Quest@cnn.com is where you can send me e-mails and details, @RichardQuest is the Twitter address.
The news headlines now and Jonathan Mann joins us now from the CNN Center to bring us up to date.
QUEST: We are clearly on the road to recovery and indeed that road might be getting smoother, according to the IMF forecast. When we come back we'll look at the IMF forecast, but we'll also consider the powerless state of Greece. QUEST MEANS BUSINESS, we're live at Newark.
QUEST: The markets demand our attention now, and shares in Europe didn't have a very good end to the day as you can tell. The traders are focusing on the latest report from the International Monetary Fund.
Let's consider that report in a bit more detail. The IMF says the recovery is progressing at a faster rate than expected, but the global economy is still vulnerable to setbacks. It also says public finances are in a mess. And the IMF is clear on who should pay for it; the IMF believes the banks. A so-called financial stability contribution, it has a flat rate, it is a bailout tax, or levy, whatever you want to call it. The IMF also wants to levy a financial activities tax on banks creaming off a slice of their profits, and pay packets.
The IMF chief, the managing director of the IMF will be talking to CNN tomorrow. We'll obviously be asking him about the financial stability contribution, and also the financial activities tax.
Meanwhile, it has been a busy time for the fund. They are now starting to get into-stuck (ph) into the problems of Greece, sending a team to Greece to actually analyze how much of the $40 billion that the-euros, I beg you pardon-that the European Union has offered to provide should actually be paid out. Assuming, of course, that Greece actually wants the money. All of this at a time when Greek bonds have risen to 12-year highs on the yield curve. Peter Morici joins me now.
Professor Morici, always lovely to have you.
PETER MORICI, PROF. OF INT'L. BUSINESS, UNIVERSITY OF MARYLAND: Nice to be with you.
QUEST: Let's dissect this, first of all. Let's talk about-Peter, yes, absolutely-let's talk about these two things that the IMF want to introduce, the financial stability contribution, and the financial activities tax. Surely they make sense to make those who caused the crisis pay for the costs.
MORICI: You know, the IMF is not an international bank regulator. In fact, any authority like that resides with the Bank of International Settlements, which is the central bank to central banks. I think this is gross overreach by the IMF bureaucracy, to the extent that there is a tax on American banks or British banks, they should be levied by the U.S. and British governments. That is a very controversial issue here. What's more, there is not tax large enough that can compensate for the contribution of central banks in a crisis. The Fed printed $2 trillion worth of aid.
QUEST: But if, Peter, it comes via the IMF, then clearly it will cover most jurisdictions and because of that we stand more chance of it being world wide, and you won't get beg-of-a-neighbor policy.
MORICI: Well, I don't think there is going to be a problem getting the other major countries to levy taxes if the United States would go in that direction. Moreover, I think you have to be realistic. Sovereigns like Japan, the United States, Germany, are not about to turn their taxing and regulatory authority over to the banks-over to the IMF. Historically, in international agreements, finance ministries, treasury departments have been the most jealous of national ministries, of their prerogatives and the least likely to subject them to international authority.
QUEST: Peter, let's talk abut Greece.
MORICI: Ho, ho, ho.
QUEST: Greece still hasn't actually asked for-hang on, hang on! Greece still hasn't asked for the money. The IMF is working out how much money they might be eligible for and under the European agreement. Is it a done deal and inevitable that Greece is going to ask. Or do you think there is still just a scintilla of hope that they'll get away with it?
MORICI: Oh, I don't think there is much hope that the Greeks can get out of this mess on their own. I mean the cost of insuring their debt is rocketing. They are in a situation where they simply have to have a guarantee from the large countries in Europe, and perhaps the IMF to get out. If you go to the IMF you are really getting money from the same place except that indirectly there is Japanese and American contributions. Try to remember the IMF is predominantly financed by the United States, the three or four large powers in Europe, and Japan.
QUEST: Peter Morici, joining us from Maryland-from Washington. Many thanks, indeed. You and I will talk many more times about the position facing Greece.
MORICI: Absolutely. .
QUEST: And when you and I talk again in jus a moment, Goldman Sachs, Goldman Sachs has brought forward a robust defense, but has it been enough to convince the markets? Because there are now suggestions the SEC may not have told us everything they actually knew. Maggie Lake will be with us after the break, QUEST MEANS BUSINESS from the States.
QUEST: Welcome back, QUEST MEANS BUSINESS, we are live at Newark Airport, where as you can see, a well-oiled clock seems to be the way things are going now. There may not be as many seats as they'd like but, from what I understand and from what we'll hear, in a little while, most passengers are being accommodated on flights today.
Goldman Sachs is once again under-in the news, of course, under the question of what did the company do when it sold Abacus '07, the synthetic CDO that is at the heart of the SEC's claim against the Wall Street bank.
Maggie Lake joins me now, from New York.
Maggie, oh look, this is fascinating because the pendulum continues to swing in terms of how the case looks. What's happened today?
MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: Yes, you are right, Richard. It certainly has. You know, at the beginning of the week it was all Goldman on the defense, but there have been a lot of questions about the motivation of the Securities and Exchange Commission, the timing of the suit, their politics at play here. News out today fueling that debate.
CNBC reporting that the Securities and Exchange Commission has testimony that contradicts its own claims against Goldman. According to the report, Paolo Pellegrini, a former top Paulson official told the government that he had informed ACA Management that Paulson intended to bet against, or short, the portfolio of mortgages we have been talking about.
Why is this so important? Because in the complaint the SEC has filed, it said Goldman employee Fabrice Tourre had misled ACA into believing that Paulson's interest were aligned with its own. Simply didn't tell them it was going short. That is very big. It calls into question, you know the strength of this case.
The SEC in response, telling CNN, quote, our case is built on thorough evidentiary records that include testimony, documents, handwritten notes and e-mails that will be presented in court and at the appropriate time. But clearly, the SEC having to go on the defense, itself, at this point; a lot of questions being raised, Richard.
QUEST: Maggie, the question that you and I have argued about, and when I saw you in the office this morning, we had a good bit of cut and thrust on the issue, is whether or not the damage has already been done to Goldman's reputation. Assuming, let's just for argument sake say, the case against Goldman just collapses. And isn't the damage done already to their good name?
LAKE: I don't think so, Richard. Not necessarily. And the big point, and I know you do, the thing is you have to remember, Goldman does not serve the retail investor. It doesn't serve Main Street. It serves institutions, institutions that know what Goldman is about, that know the risk. There are questions about where clients fall, where client interests fall. But they all know that. It is the best on the Street. They have the smartest people. As long as they continue to operate like that. I think they are going to rebound from this. There is the bigger issue about the social utility of what they do, but that is not coming up. The reputation so far, already this week, seems to be bouncing back, Richard.
QUEST: Maggie Lake, on one part of New York. And we turn to another part where on Wall Street we have had some interesting exciting numbers in fact, from major groups, banks like Citigroup. We have also had Bank of America, Goldman Sachs, JP Morgan. If you look at the S&P 500 so far that have reported, 88 percent in Q1 are reporting above analysts expectations. And more are joining the fray.
Darby Dunn joins us now from CNN New York to tell us that things are looking more encouraging the question is, whether that momentum can be continued-Darby.
DARBY DUNN, CNN FINANCIAL CORRESPONDENT: Well, Richard, Morgan Stanley is the latest that is joining the parade of banks posting impressive earnings. Morgan Stanley said it made a profit of nearly $2 billion last quarter, beating estimates. That is a solid first step toward a turn around for Morgan Stanley, which lost money, posted a loss last year due to a wave of real estate write downs.
Revenues tripled in its institutional securities unit. That is the unit that includes investment banking Morgan Stanley also got a big lift from trading, a hot trend this earning season. Morgan Stanley shares are up now some 4 percent. Climbing back to where they were before last Friday's Goldman induced sell off, in the financial sector.
Another big bank, Wells Fargo, also booked a profit. It booked a profit of $2.5 billion, even though that works out to a 1 percent decline in earnings the results did still come out on the high end of expectations. Overall, Richard, still some pretty upbeat positive reports from the major financials.
QUEST: And, Darby, you and I will talk in the next hour to on exactly, whether or not-I need you to keep an eye on that 88 percent number of S&P 500 and we'll see how that changes as first quarter reporting season continues over the next few weeks.
Now, here is a man who has some seats. The questions is whether this man has enough seats for all his passengers. We'll talk to Dieter Grosse of Lufthansa, when we come back in just a moment. QUEST MEANS BUSINESS, we're live at Newark Airport.
QUEST: Good evening. I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN, where once again we are at Newark International Airport, where we're following the plight of passengers who are trying and doing their best to get home. The planes are flaying.
Are there enough seats to go around?
This story now takes on two new dimensions. One is the human nature, of course, of people having to get to where they need to go. The second, of course, being the state of the companies involved and who will pay for the crisis.
In this part of the program, we're going to look at both of those through the eyes of one company. It is Lufthansa.
Let's first talk about how, indeed, planes are actually moving and flying.
Dieter, we spoke to you yesterday. You kindly told us what was going on.
How are you performing today in terms of the flights?
DIETER GROSSE, LUFTHANSA STATION MANAGER, NEWARK AIRPORT: All of our three flights who operate out of Newark are operating on time. They are fully booked. Would have passengers here who do not have a confirmed booking, but we are very optimistic and -- that we will all get them on the flight.
QUEST: OK, let's -- let's just go back a bit to yesterday, where you had a couple of flights missed and you had a lot of people on the wait list.
What happened in the end?
GROSSE: In the end, we did not leave a single passenger behind. So we got everybody on the flights and they went back to Germany.
QUEST: Right. And tonight, what -- I mean I realize -- and I'm not going to -- I'm not going to nail your feet down to the ground on this one, but what's it looking like tonight for those passengers who are on the wait list?
GROSSE: I think we have the same sit -- situation. Passengers have a very good chance to get on the flight, even though they don't have a confirmed booking for today's flight.
QUEST: And I would have thought that things were going to get a little bit more tough at the weekend, because people will, obviously, more passengers will have wanted to have the extra few days in New York, but still go home.
GROSSE: Yes, of course. Everybody is anxious to go home again. And -- but since we are operating again since Monday out of the U.S., passengers are being -- getting more relaxed now, because we know that we are operating and they -- they can depend on Lufthansa again. And so they come to the airport and -- and get on the flights.
QUEST: All right. Well, we won't see you tomorrow, because we won't be here, but many thanks, indeed for being good-natured about it...
GROSSE: Thank you very much.
QUEST: Many thanks, again, Dieter.
And good luck getting all the passengers.
We will check, maybe, by phone and find out if you've got all your passengers out tonight.
Now, that's the operational side as seen by Lufthansa.
But what about the strategic side?
CNN's Fred Pleitgen was talking and spoken to the CEO of Lufthansa, Mayrhuber, to ask him about how things have been going for one of Europe's largest carriers.
FREDERIK PLEITGEN, CNN CORRESPONDENT: What's your message to your passengers and the many who are still waiting for a Lufthansa plane?
When will they get home?
When will things to back to normal?
WOLFGANG MAYRHUBER, CEO, LUFTHANSA: Well, they start immediately now. People are working hard to get the operation up and running. And I hope that we will have more than 500 flights already installed today and come back to the normal operation in the course of time.
PLEITGEN: Now, of course, there's been a lot of criticism, there's been a lot of hectic along the way, a lot of mean words between governments and the airlines.
What do you think -- what consequences does politics have to draw from all of this, as far as getting a common approach to something like this going for the future?
MAYRHUBER: Well, I think any crisis has the opportunity to perform better if it's recurring in the future. So what we need here in Europe, especially, is a coordinated way on the European level. I think this -- this split of operation and the decision-making process that is decentralized here is not the most optimum one.
Secondly, I think we have to make sure that we compile better data in the future and share the roles around the world. There are volcanoes in other parts of the world and I think that knowledge should have been a basis here.
So, yes, there are lessons learned. I'm looking forward to utilize all -- all this meat in the future.
PLEITGEN: Are you -- are you drawing lessons from this?
Is the industry going to try and set measures in place?
PLEITGEN: What are they?
MAYRHUBER: I mean, first of all, I think we need to make sure that what kind of lists, what kind of meteorological data, what is the process between the airlines operating in an area is something that we have also to learn. But at the end, it goes even further down the road to how do we design early warning systems, how do we design airplanes to be (INAUDIBLE) for this, etc. Etc.
PLEITGEN: A final question.
Do you believe the scare is really over now or do you think there -- there could still be more to come?
MAYRHUBER: With the traveling public, there was no scare. They know that we are flying safe and reliable. They know that we are not taking any risks. The scare was more in the media that there is a cloud that impacted Germany we have not seen in the last five days. We had sunny weather. So the concentration of aerosols was so minimal that anybody could have understood that the risk must be low. But, again, it's a legal question and it had to be reconfirmed by tests (INAUDIBLE).
PLEITGEN: It's hard, though, for the government, isn't it?
I mean to -- to -- to make that call, to say we're going to let you fly again when it's like they didn't have the data.
MAYRHUBER: (INAUDIBLE) another loan and as a (INAUDIBLE), you have to take the experts' advice and make a judgment call at the end of the day, nobody wants to take risk. The last time we want to take risks are the airlines. And I think it's important that we have a faster reaction in the future, because it's an -- it's analyzing the whole global economy.
(END VIDEO TAPE)
QUEST: The chief executive of Lufthansa talking to Fred Pleitgen.
In the days and weeks ahead, we want to follow your (INAUDIBLE) flights, if you like, as you claim compensation. This is how you can keep us informed on your claims, @richardquest is the Twitter address, email@example.com and, of course, Facebook, questmeansbusiness.
When we return, we'll follow the plight of the Brit and the election and the battle against New York's financial supremacy.
QUEST: Cracks may be starting to appear for Britain's Conservative Party in the general election and I don't mean on economic policy. Eggs were thrown at the leader of the party, David Cameron, as he was campaigning. The egg, I'm told, merely bounced off his shoulder -- not necessarily egg on political face.
The question of eggs and the economy on -- being on eggshells, that's a very different matter. All three parties are being very careful about what they say about the state of the U.K. economy, especially the city of London, an important part of Britain's economic growth.
In the battle for supremacy between London and New York, it seems these days New York may be getting the upper hand, as I've been hearing on Wall Street.
QUEST: Julia, we're in a vast trading room here in New York.
Does anybody here care two hoots about what's happening in Britain?
JULIA CORONADO, SENIOR U.S. ECONOMIST, BNP PARIBAS: I think, you know, in global banking, we're very aware, more than ever, about what's going on in Continental Europe, what's going on in the U.K., what's going on in China. All of these things are much more interwoven than they ever have been.
QUEST: Well, London or the U.K. is a small European country.
CORONADO: Yes, but it's a financial, you know, mega center. And so for us, as a financial institution, we care very much.
QUEST: What are the pros and cons of London and New York at the moment?
CORONADO: Well, London has the immutable pro of the time zone spanning the globe in a very nice and convenient way, obviously, and -- and just geographically it's much, much better positioned to take advantage of the Asian strength, for example. So that's -- that's there.
QUEST: And, of course, if you look at foreign exchange, and, to a certain extent, corporate bond issuance, London is still way up there.
CORONADO: Yes, absolutely. London certainly has a lot of -- of strength and -- and momentum.
QUEST: But if we only look at New York, New York is big and it like has got depth, because of the size of the U.S. Economy.
QUEST: But it is a parochial market.
CORONADO: Well, it's...
QUEST: New York.
CORONADO: -- parochial in some ways but always developing and moving forward. So...
QUEST: Just (INAUDIBLE) the elections.
As you look at it from here, you're an American.
CORONADO: Yes, I am.
QUEST: As you look at what you're hearing from the U.K., what are you thinking?
CORONADO: Well, there's clearly two very different views of the world represented in this election. And I think that the way we look at it from the economics point of view, it certainly has implications for the growth potential of the U.K. and for the regulatory environment in the U.K. So that could impact the financial industry very significantly.
QUEST: But if you have a sort of a -- a scale on regulatory issues, because that's going to be the big fight involved, isn't it?
CORONADO: Um-hmm. Um-hmm.
QUEST: And one was up and one was down, who's got the upper hand on regulatory issues, at the moment, do you think?
CORONADO: Who's got the upper hand?
QUEST: Yes, who's -- who's more attractive on the regulatory issues, the London or the -- or the New York market?
CORONADO: Oh, I really can't -- we can't say that right now. We've got a bill in front of Congress on regulatory reform that -- that would change a lot of things. And it's being hotly debated. So we don't know how that's going to come out. And we don't even know the results of the U.K. election.
So there's a lot of uncertainties around this. I don't think we can really say with any certainty right now. I think in -- in the next couple of months, we'll know a lot more about where things -- where things stand.
QUEST: All right, I've got a -- I've got an airline ticket for you in my pocket to go to London. Move to London. I'm going to offer you to go and work in the London trading room.
Are you going to take it?
CORONADO: No. No, I wouldn't take it.
CORONADO: You can keep that.
QUEST: Thank you very much.
Well, there you have it. You can't even give away a ticket to London, not that maybe she'd have got on a plane anyway, although they do things -- things seem to be getting back to normal.
Guillermo is at the World Weather Center.
I guess it's some quieter times for you now -- Guillermo.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Yes, absolutely. And the weather is nice in Europe. The weather is nice in North America. The major airports are not going to be impacted. You see here a flight right at 24. We see a lot of action in England, a lot more into the Low Countries and in Italy, too, despite the fact that we have some bad weather here in Italy.
So this is what's going on right now. Every icon is a plane. Let's transition to the other one. There you go. So pay attention to this. Twenty four hours or a little bit more. I'm going to play it from the moment where the air space was not open in England. And now you see how that it's getting thicker and thicker and thicker until it explodes, because a little bit less than 24 hours ago, everything started to work very -- there you go -- very nicely and people are moving and we're very happy to report that.
Let's go to other route. I want to show you the weather. I told you a little bit in Italy, over here. In the next 24 hours, we'll see the same. We do not anticipate any delays. The weather is glorious in England.
Some snow probably in Sweden and in Scotland -- frost, I would say, in the highlands. Apart from that, I Spain, some clouds. In the United States, everything looks OK.
Again, we are going to see, perhaps, a little bit of rain showers in Chicago, but the weather looks very nice, indeed, especially into the Northeast. Here you see it with some clouds. Some severe weather developing for the South in the next 24 hours or so, but it's not going to be that bad -- Richard.
QUEST: Guillermo, many thanks.
Guillermo with our weather forecast.
And that's QUEST MEANS BUSINESS for tonight.
Tomorrow, we come from Wall Street, as President Obama gives a major speech on financial regulation.
Otherwise, whatever you're up to in the hours ahead, I hope it's profitable.
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