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QUEST MEANS BUSINESS
The Billionaires List; Interview with Steve Forbes; Interview with Sir Oliver Wagner; Working with Millennials; German Foreign Minister Warns Austerity Alone Will Not Solve Debt Crisis; More Banks Agree to Greek Bond Swap; Apple Unveils New iPad; World Travel and Tourism Council Predicts Slower Growth for Travel; ITB Travel Trade Show Underway in Berlin; Texas Issues Travel Warning Against Spring Break in Mexico; Indiana Colts Cut Peyton Manning
Aired March 7, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Tonight, we must make, create, and stimulate growth. Germany's foreign minister tells CNN austerity alone is not the answer.
(BEGIN VIDEO CLIP)
GUIDO WESTERWELLE, GERMAN FOREIGN MINISTER: Growth is not the result of new debts. You cannot buy growth.
(END VIDEO CLIP)
QUEST: Faster, brighter, and better. Apple unveils the iPad 3.
And passports at the ready. There's optimism in the air at ITB, the largest trade fair of its kind.
I'm Richard Quest. Tonight, the program's live from Berlin where, of course, I mean business.
Good evening from the German capital, Berlin. Over the course of the next hour, we will bring you the latest, of course, on the travel industry. We'll hear from Lufthansa, you'll hear from trade ministers and tourism ministers from Egypt and from Greece.
But first, we begin with a warning from Germany's foreign minister. It's a brutal warning that says austerity alone will not save Greece.
Now, whilst Greece, of course, undergoes the most painful of five-year recessions, Germany says the measures taken so far are a good start, but more is needed on the wider scale to solve Europe's debt crisis.
The foreign minister is Guido Westerwelle and told CNN's Fred Pleitgen, when it comes to Greece and it comes to Europe, it's all about growth as well.
FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: We've see the rhetoric in the past couple of months regarding Germany, the eurozone, especially Greece, of course. How much damage, do you think, has been done?
WESTERWELLE: We are facing something which I would like to call a defining moment for Europe and the future of -- the image of the European Union.
Which means that, for example, it is much more than an internal discussion. It is also the question, how will the world look to Europe? Do they trust us? Do they think that we are a reliable political model?
And so, I think this is our main issue and it is much more than the competition or the discussions that we saw in the last months.
PLEITGEN: The last thing that a lot of other European countries want to see is Germany being the bully on the block in the eurozone.
WESTERWELLE: We know that we cannot solve this crisis only with austerity, but austerity is one answer. It's a very important answer, because you cannot solve a debt crisis by making it to take up new debts. This is the one pillar, budget discipline.
And the second pillar is growth. And growth is not the result of new debts. You cannot buy growth with public spending. We have to create and to stimulate growth with competitiveness.
PLEITGEN: There are some fundamental problems in tackling the eurozone crisis. We've seen Greece miss a couple of deadlines on reforms that they were supposed to do. How big a problem is this? How fundamental a threat is this for the whole idea of European political and monetary integration?
WESTERWELLE: I do not want to speculate about Greece at this moment, in this hour, because we all know that there is a lot of negotiation at the moment on the financial markets and with the Greek government, and I think it wouldn't be very wise to speculate and make any public comments to this.
We all know that this is not an easy situation. This is not business as usual. We all know that we have a lot of work to do, but we also know what is our goal, and the goal is to support the European Union, to protect our monetary system, our common currency, and to -- to deepen our European integration.
Because the whole history of the European Union was always an answer to a crisis. And if we took the right consequences, if we drew the right consequences, then, I think it is absolutely doable and I think more and more people in the European Union, they understand that only with more Europe we can answer and overcome this crisis.
QUEST: The German foreign minister talking to Fred Pleitgen earlier today. We are in the last and most crucial days before it's announced how many banks have signed up, finally, to the PSI, the private sector involvement, the restructuring of Greece's sovereign debt.
Major European banks and pension funds have now thrown their weight, in many cases, behind the bond swap. Together, they hold around 40 percent of Greece's privately held debt.
Greece now says it's optimistic that it will reach the 75 percent participation level necessary, and that will be clear of the two-thirds target. And that, of course, raises the questions of the CACs, the Collective Action Clauses.
The way the markets reacted and the way the view was today, things were looking a lot more optimistic, as CNN's Jim Boulden explains.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: When it comes to Greece and the euro crisis, there is always a deadline. Banks and hedge funds have until Thursday, 8 PM London time to decide whether to take a big loss on the Greek debt they hold and swap it for new debt.
Those banks and hedge funds are deciding if they should voluntarily take a 53 percent nominal loss on their holdings. In reality, many are losing more than 75 percent of the value of the Greek debt that they hold. But that's, of course, considered better than getting nothing.
We already know that many banks have agreed to the swap. Some big banks, including Deutsche Bank, Allianz, and BNP-Paribas has said they will take part in this swap.
Now, Greece was hoping to have 90 percent of more of their bonds swapped. Now, that seems unlikely. There are holdouts. Greece said Tuesday that those who don't sign up should not expect Greece in the end to pay them back in full. So, lawsuits are sure to follow this process.
Now, if less than 90 percent of the bonds are offered for this swap, then Greece has a right to force the remainder to take this deal, like it or not. That's what's called a collective action clause, or CAC. If it falls below 75 percent, Greece says the offer will be revoked.
Now, that would create market havoc, because this offer needs to go ahead for Greece to get its massive $160 billion bailout. Ideally, this swap will cut Greece's $230 billion debt by half or more. That would save it some $4 billion a year that otherwise would have been spent on debt repayments that can instead go to help rebuilding the economy.
Jim Boulden, CNN, London.
QUEST: Now, we'll be following that in the days ahead as the crucial deadlines come and go and see how many do take part.
Last year, I thought I was very clever when I traded in my iPad 1 and spent another several hundred more than that for an iPad 2. Now the question is, do I need to trade in again as the iPad 3 is launched? Dan Ackerman from CNET joins me from New York.
Before we ask or you answer the crucial question, should I trade up again, first of all tell me what's so special about the new iPad being announced today.
DAN ACKERMAN, SENIOR EDITOR, CNET: Yes, the new iPad's being announced right now. The event is still going on.
But from what they've announced already, the most important thing is it has a very high-resolution screen, more than double the resolution on the current iPad, which means that you can play HD movies in their native resolution, they'll be a lot better for photo and video.
And of course, it also supports LTE, which we also sometimes call 4G, those faster data network. And there's a slightly better camera and, apparently, slightly longer battery life. But the screen and the LTE, those are the two big changes in the new iPad.
QUEST: Is it your gut feeling that this is an incremental improvement sufficient to justify extra expense?
ACKERMAN: Well, the problem with those faster data networks, the LTE and the 4G is that everybody that I know just uses their iPad on wifi, so it doesn't really matter to a lot of us.
If you can figure out a way that you'd use the higher-resolution screen, maybe for photo editing with the new iPhoto app that actually looks really impressive, or maybe video games, then I could see it. Otherwise, this is a little more incremental.
So far, they're not even calling it the iPad 3 yet. They're just calling it the new iPad. They're trying to get away from that number system.
QUEST: All right. Would you stay with me, Dan, for one second? You talk about the incremental change for what has been a revolutionary machine. Tim Cook, the chief executive of Apple, speaking a short while ago in California -- Dan, we'll get your reaction -- talked about the shift, this shift away from the PC to the tablet and beyond.
(BEGIN VIDEO CLIP)
TIM COOK, CEO, APPLE: Last year alone, we sold 172 million post-PC devices. And this made up 76 percent of our revenues. This is incredible. Apple has its feet firmly planted in the post-PC future.
(END VIDEO CLIP)
QUEST: 76 percent, that's an extraordinary number, Dan Ackerman in New York. So, finally, does Apple -- I heard somebody suggest that Apple's at the zenith, now. Of course, from the zenith, it's the nadir that follows. Do you subscribe to that view?
ACKERMAN: Well, since the iPad came out two years ago, it really has been a revolutionary product, and every time you talk to anybody at any other technology company, all they can talk about is tablets and how they're going to replace laptops and PCs.
But so far, I feel talking to people, the only tablet they're really interested in is the iPad. They're not that interested in tablets as a market by itself. I don't think those laptops are going away anytime soon.
QUEST: Dan, many thanks, indeed. I'll let you know if I decide to trade up in the fullness of time. It might be something that'll have to wait a little nearer to Christmas. Dan, joining us from New York with the iPad unnamed or the iPad 3.
Coming up after this very short break, we are in Berlin because it's the ITB, which is one of the largest, if not the largest, travel and tourism show in the world. With tourism in trouble, we'll also being talking to Mexico's tourism minister, who has a few problems of her own. QUEST MEANS BUSINESS, live in the German capital tonight.
QUEST: An old welcome friend returns on CNN. CNN Business Traveler comes back next week, and that is one of the reasons we are here in Berlin, where the World Travel and Tourism Council is predicting growth for the industry of just 3 percent. Its slower pace is causing for concern here amongst those in the industry.
The entire travel world is in the German capital for its annual fest, where they not only see the new products, but they discuss the very real, raw cause issues, whether it's sustainability, environmental protections, debt crisis. As one journal put it, this year's ITB is all about politics.
QUEST (voice-over): If you're visiting ITB, you had better be prepared to walk. For an industry that sells relaxation, this giant exhibition of travel and tourism is hard work.
QUEST (on camera): There are acres of halls, thousands of stands, selling millions of holidays.
QUEST (voice-over): That's the Indian experience, offering kingdom of dreams. Tourism is the world's largest industry, generating 1 in 12 jobs. Some countries, used to a bumper crop of visitors, will do well to keep the numbers up.
Egypt, for instance, is confident it can win back tourists scared off by the violence during its revolution.
MOUNIR FAKHRY ABDEL NOUR, EGYPTIAN MINISTER OF TOURISM: We continue advertising, communicating, incentivizing, being present everywhere in all international rendez-vous like this one. We will be on the market, we'll assure the market that security and safety prevail all over Egypt.
QUEST (on camera): You have 14 million visitors at your peak, 13, 14 million.
QUEST: 14.7, nearly 15.
QUEST: 15. What would you forecast now?
NOUR: We'll get to the 15 million in 2012, and this is my best and --
QUEST: Hang on, hang on, hang on, let's be clear. You're saying that Egypt will hit 15 million visitors in 2012?
NOUR: Yes, sir. And I'm telling you, we're going to double that figure in less than five years, and by 2017, we'll host 30 million tourists and our incomes from tourism will raise to $25 billion.
QUEST (voice-over): In Europe this year, there are potentially more clouds than sunshine. Recession in the eurozone, countries in debt, will all put pressure and slow travelers' demand.
TALEB D. RIFAI, SECRETARY-GENERAL, WOURLD TOURISM ORGANIZATION: Europe is still representing 55 to 58 percent of world tourism, inbound and outbound, so the health of Europe, the performance of Europe, is very important to the overall world travel and tourism industry.
QUEST (on camera): So, when you look and you take the state of play here at ITB, the largest in Europe and one of the largest in the world, travel fairs, what's your gut feeling of what it's telling you about the industry?
RIFAI: I think the industry is here to stay. The industry will continue to grow. The industry has proven that even though it will, logically, be affected by the overall economic, political, environmental situation, it can create a life of its own.
QUEST (voice-over): Greece is one of the European countries battling the odds. Even though prices have fallen, Greece is in its fifth year of recession. There has been riots in the capital, Athens. So, who wants to go on holiday when there's such economic misery?
PAVLOS YEROULANOS, GREEK MINISTER OF TOURISM AND CULTURE: You can travel all over Greece and have an absolutely fantastic vacation, safe and sound, and people know about that. And that's why last year, despite the troubles, we had a record year in tourism, we had the best year ever.
QUEST (on camera): And if we look at the competitive environment, not only have you got your domestic problems, but every one of these countries around you, France, Italy, Spain, all want to eat your lunch.
YEROULANOS: Absolutely. But what we have managed to do is our traditional competitors, we've made partnerships with, and we are working together with the Egyptians, with the Turks, with Israelis, and we're bringing people from the new markets that are growing, such as China and India. We're working together with them.
This has been a completely -- complete change of philosophy. Instead of competing with them, we're working with them in order to open up the new markets.
QUEST (voice-over): There is one comfort at ITB for anyone worried about the future. Every bit of research, every study always shows tourism bounces back.
QUEST: Now, at ITB, you certainly do a lot of walking during the course of the event. My next guest has been doing plenty of walking throughout the course of the day.
But there's one thing we do need to start with. The state of Texas has warned its residents not to travel to Mexico for the college Spring Break vacation. It says violence and drug cartels means hotel resorts could be dangerous.
It's a question for Mexico's tourism minister, Gloria Guevara Manzo. Minister.
GLORIA GUEVARA MANZO, MEXICAN TOURISM MINISTER: Hi, Richard.
QUEST: We've got a lot to talk about, but let's just begin with this first point about what Texas has said, what the State Department has said. What's your -- what's the truth here?
MANZO: Well, the reality is that that travel warning contradicts the warning from the US State Department, is lacking of facts, and also, the timing is very weird, because right now, there are a lot of Spring Breaks from Texas -- Breakers in Mexico.
QUEST: The core point, whether it's from the State Department or from Texas or wherever, the core point does remain, this is a serious crime problem, but also a PR problem for you.
MANZO: Yes, we have a challenge, as you know. Mexico's a pretty large country, we have 2500 counties are equivalent to counties, 80 of those have issues. They are -- it's very localized, they are very remote from the tourist destinations at the end of the day, and that's what matters to us.
QUEST: So, how are you going to address that? Because the US is an important market, but I know just from your figures, and recent figures, you've actually got record numbers at the moment.
MANZO: Yes, we broke the record in 2011, 190 million travelers.
QUEST: All right, 190 million. But all -- as viewers here know, all travelers are not equal, are they?
QUEST: You want travelers on big planes flying long distances spending lots of money.
MANZO: Yes. From Russia, for instance, 60 percent more. From Brazil, 55 percent more. When you count all the nationalities from 126 nationalities, we increase their numbers.
QUEST: So, on an industry-wide basis, what do you think is going to be the key issue? Not just at ITB, but for the industry? Obviously, Europe is slowing down. That must be a concern for you.
MANZO: I think we need to diversify. We need to look at the markets that are growing and not only the markets that are decreasing the number of outbound travelers, but also, what is it that they are looking for?
And in our case --
QUEST: No, no. Go on.
MANZO: In our case, we're for instance launching tonight A Mundo Maya, the world of the Mayans. As you know, the calendar ends this year. There are more than 5 million websites talking about that. And we created a route or ruta that includes the five countries, Mexico and four countries in Central America to talk about specifically that.
QUEST: Right. But how concerned are you that, no matter what you do, if there is recession in the eurozone, if there is a slowdown in the United States and an election and these problems, these are going to take a toll on your numbers.
MANZO: But the reality is there are still travelers, that they are still traveling, that they have money, and they are spending their money in Mexico and many other destinations. We have seen, as I say, an increase, even from countries such as Spain, for instance, that is having some challenges.
QUEST: All right. Many thanks, indeed. Lovely to see you, Gloria, as always. Putting me royally to shame. Here's me with my coat, and you take your coat off.
MANZO: Exactly. It was nice to be here.
QUEST: Thanks again. In the cool of Berlin, see you in the warmth of Mexico.
MANZO: In Mexico, yes.
QUEST: Many thanks, indeed, Minister.
MANZO: Thank you.
QUEST: QUEST MEANS BUSINESS continues live from the German capital, from Berlin, after the break.
QUEST: Now, welcome back to Berlin. We move just with the spring of the gazelle, we move subjects.
He was one of the most famous athletes in the world, in the United States, certainly. Tonight, Peyton Manning is off the team. The Indianapolis Colts are letting their star player go, and not only letting him go, only a day before he wad due to receive a $28 million bonus.
A few years ago -- hours ago, Manning struggled to hold back tears, saying he was parting ways with the Colts. He's been the face of the NFL franchise for more than a decade.
(BEGIN VIDEO CLIP)
PEYTON MANNING, FORMER INDIANAPOLIS COLTS QUARTERBACK: It truly has been an honor to play in Indianapolis. I do love it here. I love the fans, and I will always enjoy having played for such a great team.
I will leave the Colts with nothing but good thoughts and gratitude to Jim, the organization, my teammates, the media, and especially the fans.
(END VIDEO CLIP)
QUEST: Don Riddell joins me, now. Don, some quickfire questions. Why are they letting him go?
DON RIDDELL, CNN SPORTS CORRESPONDENT: Well, some people think, Richard, that it's because if they held onto him past the next couple of days, they'd be obligated to pay him a $28 million bonus. And it, perhaps, looks to some as thought that's why they've decided to let him go.
I think that is a part of the picture, here, but the fact is, Manning is 35 years old, he's missed a whole season through injury, and although he's been a great servant to them over the past 14 years, perhaps he is, now, past his best. And the Colts have the opportunity to rebuild their team.
So, I think they would've let him go anyway, but they've let him go now because they've avoided paying out a huge bonus. And if they'd kept him, they'd have had to pay $28 million plus a very expensive annual salary --
QUEST: Hang on --
RIDDELL: -- as well.
QUEST: Hang on. Are you saying -- this is something of interest to bankers and bonuses -- that -- and I realize you probably -- you haven't seen his contract, Don -- but are you saying that even though it's purely dependent on a date, not, say, from a services or from a performance basis, but just by going by the dates alone, they can whack off $28-odd million?
RIDDELL: Well, that's just the way it goes in sport, that's the way it goes in the NFL in particular. But you know, I think it makes good sense for both parties here, and Manning said as much when he made that appearance at the press conference earlier today.
Incidentally, Richard, it's very, very unusual to see a sports star of his standing leaving a club on good terms with the owner of the team standing right next to him with both men really singing from the same song sheet.
And the Colts are rebuilding. They've had a disastrous season, partly because he's not been able to play because he's been recovering from surgery on a neck injury. They're rebuilding --
RIDDELL: -- he can now go to another team and, perhaps, actually make a difference on a competitive team in the last couple of years of his career.
And another thing that's really interesting. Because he was injured, because he missed a season, because the Colts were so awful this year, it meant that they've actually qualified to take the best player in the next draft.
And because that player is going to be another star quarterback, this guy, Andrew Luck, it makes perfect sense for them to take a new quarterback, rebuild the team around this guy, and they only have to pay him around $15 million.
So, it makes good sense for the Colts to move on, shake Peyton Manning by the hand and say, "Thank you very much, it's been fantastic, but it doesn't make sense to continue with this relationship going forward."
QUEST: Hey! Hey! Hey! Don, I'll tell you, if I was about to get $28 million and was losing out for the cost of a couple of days, I don't think I'd be quite so cheerful about it. And I look forward to your reaction when it's time to buy the drinks in the bar next week.
RIDDELL: If I'd been earning tens of millions of dollars --
QUEST: Don Riddell.
RIDDELL: -- over the last 14 years, I wouldn't mind missing out on another 28.
QUEST: Good point. Well put. Put me in my place. There we are. Of course, I'm thinking of the $28 million to come. You rightly remind me of the tens of millions that he's already filled his boots with. Don Riddell, who is in -- London with us, tonight.
When we come back in just a moment, we have plenty more on QUEST MEANS BUSINESS. Nina Dos Santos will be with us talking to Steve Forbes about the world's billionaires. QUEST MEANS BUSINESS, good evening to you.
QUEST: Hello, I'm Richard Quest live in Berlin.
More QUEST MEANS BUSINESS in a moment.
This is CNN. And on this network, the news that always comes first.
Nina dos Santos is at CNN London to bring us up to date -- good evening.
DOS SANTOS: Good evening.
Thanks very much, Richard.
Well, today, the United Nations humanitarian chief, Valerie Amos, was able to briefly visit the heavily shelled district of Baba Amr in the Syrian city of Homs, alongside a Syrian Arab Red Crescent team.
In the meantime, Syria's state-run television news network has been saying that Homs is currently being restored and that residents are returning home. The government blames the destruction on, quote, "armed terrorists."
In Afghanistan, a roadside bomb has killed six British soldiers. The soldiers are officially missing at the moment and presumed dead. British military officials say that the bomb went off in Helmand Province as the soldiers were on a patrol in an armored vehicle and passing by.
Elsewhere, in Southern Afghanistan, a separate bomb on a motorcycle blew up, killing at least four civilians and wounding several others.
Norway has formally charged Anders Brevik with committing acts of terror and voluntary homicide. He's accused of killing 77 people in a bomb and gun rampage last July. Brevik has pleaded not guilty but he has admitted to carrying out the attacks. Prosecutors say that he was psychotic at the time. His trial starts next month.
And French President Nicolas Sarkozy says that there are too many immigrants in France and he wants to cut the number allowed in from here on. In a television appearance on French TV, Mr. Sarkozy also criticized the system of integrating new arrivals to the country. The comments come as the president competes for conservative voters ahead of next month's election.
And Apple's CEO, Tim Cook, has unveiled the latest iPad. The new tablet features an ultra high resolution screen, a slimmer body, as well as an upgraded camera. But the new faster model will launch as of March the 16th. And what's more, is it will cost the same price as the iPad 2 -- Richard.
QUEST: Welcome back to Berlin.
QUEST MEANS BUSINESS coming from the German capital tonight.
The "Forbes" richest list, the billionaires list is out. And Carlos Slim is once again the richest man in the world, albeit perhaps not quite as rich as he was last year.
Nina dos Santos again with us -- look, there's only one real you know, just how rich is he?
DOS SANTOS: Oh, I've got that figure here. Let's -- let me come to it in just a second, Richard.
As you were just saying, for the third year in a row, this particular mobile phone mogul is at the top of the "Forbes" rich list as one of the richest people on the planet. There's another few familiar figures there.
Well he's still very healthy, his fortune, however, isn't quite as plump as it was last year. And here's the crucial figure I want to start with you, Richard, in answer to your question, he was worth a total of $69 billion in 2012. That's still about $5 billion less than last year.
Well, a record of 1,226 billionaires in total made this list. That compares to 1,210 last year. So it is up on last year's figures.
However, when it comes to their average net worth, well, that's the interesting bit. It remains more or less the same, at $3.7 billion in total.
There were about $4.6 trillion, up from $100 billion of last year.
Now, I spoke to Steve Forbes himself a little earlier on today.
And I started out by asking him how there could be so many billionaires out there, indeed, a record number, when much of the world is facing a recession.
Take a look.
STEVE FORBES, CHAIRMAN, FORBES MEDIA: What's amazing about the billionaires list this year is the churn. Not too many more than last year, only 16 more. A few countries are down a little bit. China is down a little bit. Russia is down among the -- among the BRICS. Only Brazil is up a little bit.
So there's a lot of turnover. We had 117 drop-offs, 128 new names. We have some increases, some downward, Ash Michal (ph) of Middle Steel went way down. Lakshmi Metal. And others went up.
So it was reflective of the world economy. A lot of things are happening, but not much overall real growth.
DOS SANTOS: When it comes to those Eurozone countries, are you seeing some of the billionaires managed to hold onto their money or are they being really affected by the crisis in the Eurozone?
FORBES: You're seeing that most of them are holding on. You're getting a few new names, like in the U.K., Nathan Rothschild is coming on. You have a couple of notable drop-offs, like the author of Harry Potter. She made some gifts of about $150 million. Also, the U.K. tax laws hurt her, as well.
So there is some churn there. But overall, you haven't seen the kind of sharp drop-off that you did see in 2008-2009. So I think some lessons were learned in trying to conserve assets in this kind of turbulent environment.
DOS SANTOS: A lot of these entrepreneurs employ many thousands of people. Some of the names on these company -- companies like, for instance, Microsoft, these are companies that have huge workforces.
Now, the employment picture in the United States seems to be getting a little bit better.
How optimistic are you that we're really seeing a full-blown recovery here?
Or could things get derailed, for the U.S.?
FORBES: Well, it -- well, obviously, things can get derailed, particularly if, which looks more and more likely, you get a blow-up between Israel and Iran. I think that's a very real probability now. But barring some real blow-up, the U.S. economy will grow, after a slow first quarter, about 3, 3.5 percent this year, far better than it was in 2011.
But in the U.S., we compare that to going, say, 40 miles an hour on the superhighway when we should be doing 70, 75. So we're still not up to speed yet. The thing is still fragile. The dollar remains weak. Spending has not been brought under control. Huge uncertainties about regulations and taxes coming at the end of this year and early next year. So those uncertainties weigh.
So we're doing a little better, but not as well as I think a lot of people think we should.
DOS SANTOS: What about the oil price?
A lot of people are saying that that is the one thing that could derail the economic hopes for the United States?
Do you think that that's the case?
FORBES: Well, I think that that is certainly hurting people's psychology, as well as their pocketbooks. And the chief villain on that is not just the uncertainty in the Middle East, but even a bigger one is the Federal Reserve printing too much money.
Over time, there's a very close correlation between what happens to the dollar and what happens to the price of oil. When the dollar gets week, the price of oil, which, as you know, and other commodities are denominated in dollars, they go up. We saw it in the '70s, when the dollar was savagely weakened. Oil went from $3 to $40 a barrel. Reagan brought - - Ronald Reagan, President Reagan brought down the inflation. Oil fell almost in half, down to $21.
So a lot of it's in the hands of the Fed. But a big short-term thing, obviously, is the Middle East. If there's a real prospect of a blow-up, insurance rates on tankers going through the Strait of Hormuz will send up oil prices even if something doesn't actually come to a conflict.
(END VIDEO TAPE)
QUEST: Steve Forbes and whatever your politics on it, when it comes to economics, it always seems to make -- talk extremely good common sense.
And Nina dos Santos there and still with me.
You know, as I heard the figure of more than $16 billion for Carlos Slim now, Nina, I just thought, what would you do with just one of those billions?
Would he miss one of them?
DOS SANTOS: What I would do with it personally, Richard, I'd probably try and solve the Eurozone problems and give a little bit of it to poor old Peyton Manning, given the fact that he's just been dropped from that team.
But, you know, $1 billion these days, as Steve Forbes was telling me earlier today, it doesn't go very far. It's a mere drop in the ocean to solve some of the problems out there today.
QUEST: Ah, your charitable intent to Peyton Manning. Forget manning. Send a check to me.
Nina dos Santos joining us from CNN London.
When we come back after the break, we'll turn our attention to the airport of Berlin and what Germany's flag carrier, Lufthansa, is going to be doing at the new Brandenburg Willie Brandt Airport, after the break.
QUEST: Now, in weeks and months to come, in the future, midweek will always be our business traveler segment, as part, of course, of "BUSINESS TRAVELER," the program, coming back. On Wednesdays during the week, we will be bringing you the latest business travel news, the sorts of things you need to know if you're traveling the globe, whether it's for business or for leisure.
So today, let me update you. Kingfisher Airlines today was told it has been struck off a vital industry payment system for the airline sector. Now, Kingfisher, the struggling Indian carrier, failed to pay its dues to IATA, the International Air Transport Association. It's a clearing system which nets and redistributes the cash between airlines involving different journeys. IATA says Kingfisher can share flights, but it must settle its accounts with other airlines directly. Kingfisher says it hasn't been able to pay on time because the Indian tax authorities have frozen its accounts.
Staying with news from the air, IATA says air accident rates fell to a record low last year. The number of accidents for Western-built jets was 0.37 per million flights, a 39 percent improvement on the previous year, which, of course, is still extraordinarily good.
And, finally, American Airlines' parent company, AMR, is to freeze its pension plan rather than scrap it. The unions say it's a victory for 130,000 people who are part of AMR's plan. AMR, of course, and American is in Chapter 11 bankruptcy protection.
As you saw earlier in the week on Future Cities on this program, in just 80 or 90 days time, the airports in Berlin will be unified. So no more flying into Tegel, as I did this morning, or Schonefeld anymore. Instead, you'll pass through burt -- brand new Berlin-Brandenburg, which is the equivalent of 2,000 football pitches, a fitting size for a capital city.
For Lufthansa, the flag carrier in Germany, this is a new opportunity. Lufthansa, for many years, was barred from flying into Berlin. When the wall came down, Lufthansa was able to start flying in again and quickly, of course, established a presence.
Now, with Berlin-Brandenburg, it is going to increase its presence, as I heard from Lufthansa's Sir Oliver Wagner, about how it will increase the Berlin capital.
OLIVER WAGNER, SENIOR VICE PRESIDENT OF DIRECT SERVICES, LUFTHANSA: The first flight out of Berlin is going to be an A380, which we will name on May 22nd as -- as Berlin. And that plane will be the first, at 5:30 in the morning. That will take off on June 3rd.
QUEST: So the night of transfer will be a hectic night.
WAGNER: It's going to be definitely a hectic night, because they leave here, I guess, by maybe 21:00, 22:00 hours and they have to be ready by 5:00 in the morning at the new airport. So there will be huge convoys over the -- over the autobahn and it's going to be a huge logistics task.
Tegel has come, basically has reached its final capacity. So we do need -- we do think that we do need a new -- a new airport here.
QUEST: What does the new airport say about Berlin, do you think?
WAGNER: Well, I think it says we are a capital and now we have a capital airport. So it's basically that easy for me.
QUEST: And for Lufthansa, as a private company, but the German flag carrier, although I can hear the e-mails arriving from your -- your competitors, is it important for you to be in Berlin in a big number, because your main hubs are Frankfurt and Munich?
WAGNER: Well, it is very important and we are already in Berlin. You know, after the -- the post-war status of Berlin, we came back to Berlin in '90, '91. We weren't allowed to fly into Berlin before. So we came back.
We established many subsidiaries. We created many jobs. And now, you know, it's time to really connect the capital with -- with Europe.
QUEST: How are you going to do it?
Tell me what the plan is.
WAGNER: The plan is to increase the number of destinations up to 50. Right now, we have some -- some 20. So we're adding 30 new destinations. We are bringing in 10 new aircraft, really new aircraft. The newest one is even right now it's still in -- it's still in production. We are bringing a new price system. And, so, you know, we're bringing some really new innovations at the airport, as well.
QUEST: But -- but let's talk about that, because what is your goal?
What is your strategy?
Are you going to turn Berlin into another hub -- obviously not like Frankfurt in size or -- or like Munich, but another hub?
WAGNER: Well, I'd say first things first. Right now, we want to be the -- the carrier that connects Europe with -- with Berlin. We want to be the market leader within three years. And if things turn out very positively, why not add, as well, long haul routes?
QUEST: You're adding some...
QUEST: -- long haul routes or medium haul routes?
WAGNER: Not in the beginning. We will fly through the elemente (ph), like Beirut and Tel Aviv, as the first -- in the first place. So it's, you know, it's sort of intercontinental traffic, but really long haul traffic like over the Atlantic...
QUEST: Why not?
WAGNER: -- it's not the time yet.
QUEST: Why not?
WAGNER: You know, first of all, we have a partner who flies over the North -- North Atlantic. And it's -- it's a step wise approach for us. We have to generate the traffic. We have to generate the markets -- the markets for us, the volume. And if this works out, which we are convinced it -- it will, then we will certainly be thinking of flying, also, long haul. And, you know, we also need new aircraft for these and we need very efficient aircraft. So and they are right now not in the fleet. So...
WAGNER: -- first things first.
(END VIDEO TAPE)
QUEST: So, that's Oliver Wagner, the head of direct services for Lufthansa, talking to me at the old Tegel Airport.
There's only one word to describe the weather in Berlin tonight -- parky.
And Jenny Harrison is at the World Weather Center.
JENNY HARRISON, ATS METEOROLOGIST: I had a different word for you, but, yes, I just checked. Six degrees Celsius, so it's certainly a bit colder there in the wind. And there could be some snow flurries, actually, Richard, a little bit later, not something the people in Austria have had to deal with at all. But instead, it has been all about the rain. And we've been talking about the fact that la nina has been very, very active. We're just going out of a very active la nina phase now, a positive la nina phase.
But this is the reason, according to the Bureau of Meteorology on Australia, that we have seen those widespread floods across the east, and in particular, New South Wales.
Look at this, just -- here's Waga Waga from the air. Remember the Murrumbidgee River runs through here.
And, of course, so many of the rivers literally just burst their banks with the amount of rain that has come down.
And look at how much, indeed, has come down. Over 200 millimeters in some places. The odd location has actually had as much as 400 millimeters.
It now means that the last week has tied with -- or it's tied for the title, if you like, of the wettest week ever recorded in New South Wales.
And there is the -- the minimum average, getting on for 124 millimeters. And, as I say, 1974 was the last time we saw this amount of rain.
And it really has just been so very widespread. And that's, as I say, that reasoning is partly because the system that has been sitting there has been fueled by those very warm waters.
And, again, another image, just to show you from the air, of course. Here is Waga Waga before the rains. And then, when you actually look at the floodwaters on the ground, you can just see how much, of course, has actually come down. And it's still sitting there.
This flood situation really not expected to improve for about the next three to four weeks. We've seen more very heavy showers and thunderstorms along these coastal areas. But the overall picture going forward is better. We are seeing high pressure build in. And that means that this system eventually does move offshore and we should finally see some dry conditions, even along those coastal areas, as we head into the weekend. You can see the rain...
HARRISON: -- in the north and as for those temperatures, still pretty good, but cooler in the wake of that system, 19 in Cambria and 20 in Sydney, which, I would imagine, feels pretty nice j well, it sounds nice -- to Richard, given the temperature where you are right now.
QUEST: Yes, but long johns and a vest will soon cure those things.
HARRISON: I don't want to know.
QUEST: Jenny Harrison...
HARRISON: I don't want to know about that.
QUEST: -- at the World Weather Center.
QUEST: When we come back in a moment, millenials.
QUEST: All this week, we have been introducing you to our new series and the concept of the millennials, the new generation.
Allan Chernoff went to one office where millenials are already running everything.
UNIDENTIFIED FEMALE: What time of day do you think we should be open?
UNIDENTIFIED FEMALE: 10:30.
UNIDENTIFIED FEMALE: 10:00.
UNIDENTIFIED MALE: Yes, 10:30.
ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Twenty-something millennials want to work their hours.
UNIDENTIFIED MALE: We want to be able to see our friends.
CHERNOFF: They need to check Facebook at the office.
UNIDENTIFIED MALE: We work to live and not the other way around.
CHERNOFF: And they want their bosses to listen to them.
UNIDENTIFIED FEMALE: Sometimes people don't understand like that, you know, work is what you do and not necessarily who you are.
CHERNOFF (on camera): When I entered the workforce, the rule was you wore a suit to the office. And the office where you went, that could be where you'd spend your entire career.
(voice-over): But for millennials, a job is often just a stop on their career path. And if they're stopping, they might as well be comfortable. At many offices, they dress as they wish, showing off tattoos and toes.
(on camera): What if somebody came to work dressed as I am here?
UNIDENTIFIED FEMALE: It would be a little out of place.
CHERNOFF (voice-over): It's life first, work second. And what may be stunning is that baby boomer managers often are bending to the millennials' demands.
Marian Salzman is CEO of Euro RSCG Worldwide Public Relations. Most of her staff of about 80 are millennials. And whenever possible, the boss lets the kids have their way -- happy hours on the roof, time off for volunteer work, social networking in the office.
(on camera): Why tolerate all of this?
I mean our bosses years ago wouldn't have.
MARIAN SALZMAN, CEO, EURO RSCG WORLDWIDE PR: Well, first of all, they're the new marketplace. They're the new brains. They come with all the social media tools and tricks embedded in them as native.
CHERNOFF (voice-over): In other words, the boss recognizes she needs these millennial kids because they're plugged into social media -- a revolution that's changing how corporate America communicates.
(on camera): How do you manage these people?
SALZMAN: The first thing you may have to learn is you can't manage them. You need to learn how to work alongside them.
CHERNOFF (voice-over): Check your egos, CEOs, and build up a thick skin, because not only are millennials demanding, they're also quick to voice criticism, even online for the world to see.
SALZMAN: You may be the most experienced, you may be the wisest, you're not the smartest person in the room any more.
CHERNOFF: But Salzman is smart. Her multi-tasking millennials have helped her company become a hit P.R. firm for some of the biggest brands in the world.
NICOLE PONTES, ACCOUNT EXECUTIVE, EURO RSCG WORLDWIDE: We're pretty hard workers. I think that we just have a different way of working.
CHERNOFF: A way that appears to work, if the boss is willing to throw out the old rule book.
Allan Chernoff, CNN, New York.
QUEST: Somehow, I just can't see Allan Chernoff and meself fitting in with pinstripes and ties.
I'll have a Profitable Moment, some thoughts on tourism, after the break.
QUEST: Tonight's Profitable Moment from the ITB in Berlin.
The sheer size and scale of this travel fair is extraordinary. But then when you think one in 12 jobs worldwide and $6.5 trillion on this planet depend on people traveling, visiting and doing business, it makes you realize, this is more than just holidays and leisure. This is the world's fastest growing industry and that is why we take it so seriously and always must.
And that is QUEST MEANS BUSINESS for tonight.
I'm Richard Quest live in Berlin.
Whatever you're up to in the hours ahead, I hope it's profitable.