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Italian Election Gridlock; European Markets Rebound; Italy's Political Paralysis; Austerity Versus Spending Tug of War; US Markets Up; EADS Results Impress Despite Airbus 350 Time Crunch; Ryanair, Aer Lingus Merger Grounded; Euro, Yen Higher; Vatican Corruption Claims; Dow Rallies

Aired February 27, 2013 - 14:00:00   ET


RICHARD QUEST, CNN HOST: Political deadlock in Italy. The old austerity versus spending tug-of-war returns.

The EADS chief executive tells me tonight there's no room for mistakes when it comes to the A350.


TOM ENDERS, CEO, EADS: There is no such thing as schadenfreude on our side. We watch very closely what's happening at Boeing, and we are lucky enough that on that program, we are a good two years behind Boeing.


QUEST: And a fit of Pique. Barcelona football club is accused of spying on its star defender.

I'm Richard Quest. We have an hour together, and I mean business.

Good evening. Italy's rival politicians are refusing to form a government and hurling gratuitous insults at one another. The ratings agencies are warning fiscal reform or Italy faces a downgrade. Whichever way you look at it tonight, it is a mess, and the country's austerity plans are suffocating in the political vacuum.

Join me at the CNN super screen and you'll see, though, the markets have shown tremendous resilience. You could call it a dead cat bounce, you could call it an overreaction. Whichever way you want to call it, Paris, for example, opened and had a nice climb towards the end, largely on the back of probably what was happening on Wall Street.

Probably, you'll see similar sort of movements on the Xetra DAX, all of them taking a cue from over the other side of the Atlantic. And also, very interested to see whether or not Italy managed to sell more than $5 billion worth of ten-year bonds.

Now, the yield was up 4.8 percent, but concern -- if you remember when it was up towards the 6 and 7 percent, which is generally thought to be the threshold of pain, things are considerably better, 4.8 percent is livable with for the time being.

Right now, the anti-austerity camps are holding most of the cards. We go to Rome. Becky Anderson is in Rome for us tonight. Good evening, Becky.

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: A very good evening to you. How would you describe Italy this evening? Well, you've put it pretty well. I'd say this is a state of political paralysis.

But then, some would say what is new? Sixty governments in sixty years, and they don't seem to be able to get it right today, nor have they got it very right in the past, Richard. You're absolutely right --

QUEST: Right.

ANDERSON: -- to say that this sort of wrangling over who does business with whom going forward, it's a mess. It's a nightmare here. You've got two parties, center-left and center-right. They are miles apart when it comes to the sort of policies going forward that they think they should pursue to get this economy back on track, 2.2 percent negative growth in 2012.

I want to remind you here, that the per capita GDP growth here is no better today than it was back in 1999. Richard?

QUEST: Becky, as they come to try and put together a government, I know you're in Rome because, of course, Pope Benedict XVI resigns tomorrow. Is Italy -- which is it? Is it more transfixed with the goings on in the Vatican or in the presidential palace?

ANDERSON: This is a really interesting question, and I put this to somebody just yesterday, a professor from one of the universities. I said, it is remarkable that Italy sits on a sort of precipice, at the moment, of change both politically and, indeed, behind me here at Vatican City. And yet, Italians are quite sanguine about the whole thing.

And he put it this way. He said there is this sense of live and let live in Italy. And it, to a certain extent, comes from the faith here, the Roman Catholic faith that amongst all the change over the years, things will continue and life will go on.

Now, that doesn't make things any easier for people who are living here through this transitional period, but I think there is that certain sense that whatever happens, same, same, but different, things will be OK in the end.

But at this point, you and I know that what happens here politically and economically doesn't just have an impact on Italians --

QUEST: Right.

ANDERSON: -- it has an impact on Europe, the European states, this is the third-biggest economy in the eurozone --

QUEST: Right.

ANDERSON: -- and eighth biggest economy in the world. And outside of the eurozone space, it has an effect on the global economy as well. So, as much as Italians are fairly, like I say, sanguine about what's going on, by no means am I suggesting that they don't want things to change, because they do.

QUEST: Becky Anderson in Rome tonight, and making the point perfectly that what's happening in Italy goes to the core at the moment of the European debate. Italian voters have resumed Europe's grand struggle. It is the tug-of-war between austerity on the one hand and government spending on the other.

Now, the Italian vote was largely regarded as an anti-austerity protest. We had Grillo winning a quarter of the vote, Monti was trounced.

But compare that with the UK. Even though fourth quarter growth still negative, the UK government still pulling towards austerity, and the British prime minister David Cameron attacked during prime minister's questions, but he says he's still firmly in the austerity camp.


DAVID CAMERON, PRIME MINISTER OF BRITAIN: The decision of the ratings agency is a reminder of the debt and the deficit problem that this country faces, and frankly, it is a warning to anyone who thinks we can walk away from it.

It is absolutely vital that we continue with the work of this government: that is cut the deficit by a quarter, that adds a million extra private sector jobs, and has interest rates at record low levels.


QUEST: So, other countries -- Greek voters were caught between the two options. First of all, voters rejected austerity -- sorry, this way. They rejected austerity with Syriza. But then, they eventually said, no, we will have austerity in the re-election run. Voters in France rejected austerity. Francois Hollande said austerity was no longer inevitable.

And now we come to the biggest of all, the debate that's taking place in Washington. Which way is that going, between Republicans on austerity and Democrats on spending? Backwards and forwards this is going as they have to decide whether to have cuts.

Let's forward to Bronwyn Curtis, the senior advisor at HSBC investment banking arm. Bronwyn, who is winning the battle between austerity and spending at the moment, and is it important for economic growth?

BRONWYN CURTIS, SENIOR ADVISOR, HSBC INVESTMENT BANKING: It's really difficult in the West, so in Europe and the US, to know exactly what to do, because we have a budget in the UK, 20th of March, so just less than a month to go.

And what is George Osborne, the chancellor, going to do? He says he's going to stick to austerity now, but there will be pressure on him to take some of that off because the economy is just not growing.

QUEST: It's not growing, and voters in Italy have given their opinion. They don't want austerity, but at the same time, what's the best hope for Italy? That Mario Draghi eventually comes in and starts buying bonds?

CURTIS: No, I think that's probably not what you want, because always the threat of the European Central Bank coming in is better than actually the actuality. But I think in Italy -- look, they've always had weak governments, they've always had coalitions. So, in some ways, this isn't a surprise.

If you're sitting in Italy, are you going to vote for more austerity? Are you going to say I want to have spending cut?

QUEST: Then that means we do end up with this odd situation -- doesn't it? -- where the people are and have been -- Hollande in France, Greece, Italy -- the people are saying no more, and the politicians are continuing regardless.

CURTIS: Well, of course, if you're an economist, like me, what you would say is that you cannot let spending keep on going. You cannot let the debt situation spiral out of control, because you end up in an impossible situation, and you will have a much worse recession. So, it's getting that balance between austerity and spending right that's so difficult.

QUEST: The IMF late last year basically said there was too much austerity and it was killing the golden goose, or whatever, the goose that lays the golden egg. Do you think we've got the balance wrong and it needs to be readdressed?

CURTIS: I don't think we know. I think that's the problem. What we've seen is that on monetary policy, they've -- most countries, the rates are at zero in the Western world and they're doing quantitative easing and --

QUEST: And it's still not growing.

CURITS: And it's still not growing. Austerity alone works better if the rest of the world's growing, and that's not happening now because all of the countries in Europe and the US are doing austerity.

QUEST: Quickly and briefly as we come -- we must talk about the US. Which are you more worried about? The shenanigans in Rome and in Italy, or the forthcoming shenanigans over forced spending cuts and sequestration in the United States? Devil and the deep blue sea.

CURTIS: I think probably the US. It's a huge economy. If you have sequestration coming in, then it is a huge cut. It is one of the drivers of the world. It's not just China. You need the US more than you need Italy.

QUEST: Bronwyn Curtis, thank you for that. Many thanks, indeed.

Now, European markets enjoyed a strong session. We showed you the brief numbers a moment or two ago. This is a more considered look. The Xetra DAX, the Paris CAC 40 up 2 percent. That was the best of the day, but banking stocks, of course. On to the Dow Jones Industrials --


QUEST: -- and how the Dow's trading. It is -- oh, look at that! Bronwyn, that warms the -- why, Bronwyn? Why up 150 points on an average Wednesday when you've go the sequestration coming along?

CURTIS: Well, Ben Bernanke's been talking today, and he's calmed things down, everyone thinks it will be OK that they're not going to stop doing QE, that money will still be pumped in. And I think actually most people still think the Democrats and the Republicans will come to some agreement before sequestration kicks in.

QUEST: Over 14,000 on the Dow. Bronwyn, thank you very much, indeed.

QUEST MEANS BUSINESS. While Boeing's planes are grounded, the main rivals' profits are talking off. The chief executive of EADS next on QUEST MEANS BUSINESS.



QUEST: Airbus has warned that its A350 program is challenging, and there's no room left in the schedule for further problems. The Airbus owners, of course, are EADS, and the parent company took a charge of more than $680 million.

Two problems that they had to fix. Firstly, the A380 wings, and secondly, the development of the 350. It was the black mark on an otherwise strong earnings report: profits up 19 percent, revenue's gained 15 percent. I asked EADS chief exec Tom Enders if the lack of wiggle room on the 350 was now posing a risk to those numbers.


ENDERS: It's our policy that we are very transparent with risks in the company. Investors -- this is why we were very blunt about the 350 program. But this is not meant to ring any alarm bell, it's just stating the obvious, where a program of that size, of that magnitude, the technological challenges that we have in this program is inherently risky, and that is what the statement is about.

QUEST: Fabrice Bregier told me that he was virtually personally overseeing the 350 project, at least from a -- to make sure it stays on track and doesn't become another fiasco -- a flight fiasco. I assume you're overseeing Fabrice Bregier to make sure that at some point you don't have to start answering questions about it.

ENDERS: Yes, Fabrice has been overseeing that program, has been very close to that program, since its very start in 2007. And I have to commend him on what he has achieved in terms of risk mitigation on that program, and I have every confidence in him knowing how to steer a program. We're on a good path here.

QUEST: Look, we've got to talk about the Dreamliner. It's not your plane, of course. You've decided you -- I love the phrase that you were quite open and honest about you decided to go for Plan B with nickel cadmium.

But you must now be also looking very closely at the certification process, because the FAA is questioning how the certification process of the 787 took place. You are about to go through the same process with the 350. It's going to be tougher.

ENDERS: Yes. You're absolutely right. The certification authorities will be more nervous about the certification also of our 350 after what they went through on the 787. So, there is no such thing as schadenfreude on our side.

We watch very closely what's happening at Boeing, and we are lucky enough that on that program, we are a good two years behind Boeing so that we have the chance to activate our Plan B, which is simply to protect the entry into service.

We spoke about risk just a minute ago. There are plenty of risks if you introduce a new aircraft, but those risks that you can master, that you can mitigate, I think you should, and this is exactly what we've done with our battery decision.

QUEST: As the CEO now of the parent group, EADS -- I looked at the numbers. Airbus commercial revenues are twice as much as everything else combined. If you -- the numbers are -- it's what? -- $38 billion, and the rest comes to barely $16 billion. So, if you take that as a starting point, how much is it your priority to rebalance EADS in the future, if you can?

ENDERS: Well, I'll tell you Richard, right now I'm pretty happy with the balance or the ratio that we have. I take note that our dear competitor in Chicago nowadays is advertising its growing dependence on commercial and is playing down the defense side.

So, the defense business in North America and Europe has fled. The commercial business is growing quite significantly. Not a bad position to be in, and -- then again, there's nothing magical about a 50/50 balance of something like that.

The good thing is, our defense business is rather stable. We have $12 billion revenues. That, by the way, makes us probably the second-largest if not the largest in terms of operations in Europe, European defense company.

So, not a small piece of business. We have a well-sorted portfolio in areas that matches the mission requirements of our customers. I'm not unhappy about the situation we're in.


QUEST: Tom Enders who is the chief executive of EADS. Staying in the air, the European Commission has rejected Ryanair's bid for Aer Lingus. It's the second time this has happened. The competition commissioner, Joaquin Almunia, said he had no choice. In his words, the deal would have directly harmed passengers who would have had to pay higher results -- as a result, in his words.

Ryanair has made three bids for Aer Lingus and says the decision is manifestly unjust, describing it as politically inspired, pandering to the vested interests of the Irish government. Ryanair says it will appeal against the EU's decision.

And this is the problem as it relates to Ryanair and Aer Lingus: put simply, Aer Lingus is scratching around for a market, and Ryanair is the largest passenger airline in Europe. It is becoming increasingly more difficult for Aer Lingus to fight off other than by legal means and the protection of the Irish government and, of course, the European Commission.

But the Irish government wants out of Aer Lingus. Ryanair knows it only has to wait out and see its time, and Air Lingus is running short of friends.

You might be tempted to say it's inevitable that Aer Lingus will eventually fall to Ryanair. Inevitable, perhaps not, but frankly, from whichever way you sit, and whichever way you look, most people in the industry say it's pretty likely.

Now to tonight's Currency Conundrum. There's at least one place in the world that still uses coins made from stone for certain transactions. Is it Turkmenistan, the Federated States of Micronesia, or Cameroon. Ooh, I like thins one. The answer later in the program.

Italy's bond sale boosted the euro, rising against the dollar. The yen's also higher. The pound --


QUEST: -- flat. Those are the rates, this is the break.


QUEST: Pope Benedict XVI used his last public speech to talk about the sex scandals and corruption that have bedeviled his papacy. The pope said the Catholic Church had weathered the storms in the past and will not sink.

There were allegations of money laundering and a holy mess at the Vatican, all intensified since the pope's butler leaked secret papers last year. Jim Bittermann reports from Vatican City.


JIM BITTERMANN, CNN SENIOR EUROPEAN CORRESPONDENT (voice-over): As much as sexual scandals and innuendo have come to a boil in the last days of Pope Benedict XVI's reign, what is proving equally damaging to his legacy are the simmering stories of disarray, corruption, and infighting in the management of the Vatican. The pope himself has repeatedly over past months made references to it.

POPE BENEDICT XVI (through translator): The sins against the unity of the church, of the divisions in the body of the church, living Lent in a more intense and evident ecclesial communion, overcoming individualism and rivalry.

BITTERMANN: The secret documents leaked last year by the pope's butler, according to the reporter who first published them, painted a devastating picture of an isolated pope surrounded by members of the Italian curia who actively impeded his efforts, something that surprised the author.

GIANLUIGI NUZZI, AUTHOR (through translator): The pope's loneliness in front of what is happening in the Vatican. A pope that was alone and was left alone. A pope who was a great theologian but who hasn't succeeded in bringing forth his reforms in the battle for transparency.

BITTERMANN: In fact, Nuzzi, whose book is now coming out in English, entitled "Ratzinger Was Afraid," believes the butler took the risk of leaking the documents precisely because he believed making the public would help the pope in his battle to restore order.

BITTERMANN (on camera): According to Nuzzi, the corruption that the pope tried but failed to root out including kickbacks on government contracts, money laundering, and influence peddling among other things. And the author paints Secretary of State Tarcisio Bertone as the villain in the piece.

BITTERMANN (voice-over): It was Bertone who very publicly heaped lavish praise on the departing pope at his last public mass, to which the pope dryly responded --

POPE BENEDICT XVI: Grazie. Torniamo preghiera.

BITTERMANN: "Thank you, and let's get back to prayer" Many of the accusations of mismanagement center around the Vatican bank, as they have for decades.

The bank, which is not a bank at all but a kind of wealth management fund, which oversees billions of dollars in investments, first attracted attention in the 1980s when an Italian banking official was found hanging from a bridge in London. It was classified a murder, but never solved.

The banker had done business with the Vatican institution, and is then director, American archbishop Paul Marcinkus, who Italian police unsuccessfully tried to arrest. Eventually, he was forced to retire.

Last year, as the butler's stolen documents came to light, the bank's board of directors fired its president saying he was not up to the job. Early this month, the pope named a replacement, but not until Italian banks, citing a lack of transparency, cut of all services to the Vatican, including credit cards.

The problem, experts say, is that the Vatican is not subject to any financial controls other than those set by the Vatican itself, and author Nuzzi is convinced each time the pope tried to change the rules, his attempts were frustrated.

NUZZI (through translator): You can keep on believing in the fable that the pope has resigned because he is tired, but I don't believe it.

BITTERMANN: Jim Bittermann, CNN, the Vatican.


QUEST: As the pope prepares to step down tomorrow, join us for a closer look at nearly eight years, his resignation, his legacy as the Catholic Church moves forward. "Legacy of a Pope," it's on Thursday, it's at 10:30 in London, 6:30 in Hong Kong, and it is only on CNN.

Congress debates its own deal to avert spending cuts. They take place in 48 hours. We're in Washington after the break.


QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network, the news will always come first.

Pope Benedict XVI is now less than 24 hours away from retirement, and around this time tomorrow, the pope will officially step down. He's now given his last weekly general audience at the Vatican. An estimated 150,000 people were there for this historic event.

In Egypt, mourners have gathered at the spot where a hot air balloon crashed on Tuesday, killing 19 people. Investigators say it appears the balloon was trying to land when someone from the ground crew tossed up a landing cable, which hit a gas line.

An employee has killed two people before shooting and killing himself at a lumber plant near the Swiss city of Lucerne. Police have told local media that seven people were hurt in the shooting, six of them seriously. The gunman had worked for the wood panel manufacturer for some time and his motives are unknown.

Scenes of heavy warfare are seen in the latest and newest amateur video from Syria. The description on the clip says it was taken today at Homs. On Thursday, more than 60 nations calling themselves the Friends of Syria will be meeting in Rome along with the Syrian opposition coalition.

And the US secretary of state John Kerry is in Rome for those talks. After meeting president -- the French president and the French foreign affairs minister in Paris. At a news conference, the secretary of state said France and the US are looking at ways to accelerate the political transition in Syria.

Look at the numbers and they tell an interesting story. The Dow Jones is over 14,000 at a gain of 162 points. This is a new intra-day five-year high. It's only about 100 points from the all-time record of 14,164.

Now you know, of course, there are just two days until billions of dollars in painful spending cuts, the so-called sequestration, automatic cuts. And no deal on the table, no congressional leaders have been invited to the White House on Friday. The president says they need to be ready to talk solutions. Jim Acosta, CNN's Jim Acosta, is at the White House.

Jim, we can leave the markets to one side. They seem to be on a perverse frolic of their own, bearing in mind what you're seeing on the political front.

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Yes, the political market is very different from the financial markets at this point, Richard.

I think you can probably bet the ranch at that point that this sequestration, as it's being called here in Washington, which may be as foreign a word to some of our viewers out there as it is to many Americans here in this country, but these forced budget cuts that go into effect Friday night at midnight, Eastern United States time, they are going to happen, that the White House and congressional leaders at that point are essentially throwing up their hands, saying that they've been -- they're at an impasse and they've been unable to reach any kind of compromise that both Democrats and Republicans can accept.

Now we should mention, though, on Friday, the White House, the president has invited congressional leaders over here to the White House to try to talk about this. But, really, realistically speaking, that doesn't give anybody really any time to pass legislation to avoid this -- these forced budget cuts from happening.

And White House press secretary Jay Carney was asked about that earlier today at the White House briefing. Here's what he had to say.


JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We hope that Republican leaders will begin to respond to the will of the American people, that they will begin to respond to some of the concerns expressed by some members of Congress in the Republican Party, about the folly that allowing sequestration going into -- go into effect would represent.

You know, they're -- whether it's in Norfolk, Virginia, or Newport News, Virginia, or in some of the districts that Secretary Duncan discussed, or, you know, on the southwest border, the impacts of sequester will be onerous and severe. That was, after all, the purpose of designing this piece of legislation.


ACOSTA: Now you heard the press secretary mention a couple of things there. He said Newport News, Virginia; that was in reference to the president going down to the Tidewater area of Virginia to talk about how these cuts will affect the shipbuilding business for the defense industry, which is obviously a big part of the economy here, Richard.

And then also he talked about Secretary Duncan. That's the Secretary of Education here in the United States and Arne Duncan was at that press briefing and talked about how these budget cuts are going to be forcing him to lay off some teachers and closing of schools for certain days of the week.

And, Richard, he said -- just very quickly let me add this -- he said that's not what's happening in other parts of the world. That's not how other countries are dealing with their educational systems.

QUEST: Jim, if the sequestration -- or at least (inaudible) sequestration is the word that shall not be named, as they say, those four spending cuts -- I can't -- I can't spell it, so I shouldn't say it. Jim, if the -- if they start coming in, I know it's a rolling process. When will Americans start feeling the effect?

ACOSTA: Well, it depends on which department of the federal government we're talking about. I've heard this described as sort of a rolling brownout of spending, Richard. And so for people who are traveling at the airports and obviously this is going to be of interest to our international viewers, if they're coming into the United States, there may be longer lines at security checkpoints.

The Federal Aviation Administration has said that they may be cutting back on the number of air traffic controllers that they have in the control towers. They say that's not going to impact safety, but that will result in a slowdown in terms of how many planes can take off and land at any particular time. So that's one place where things might start happening pretty quickly.

But the Secretary of Education, who was here at the White House earlier today said that there are some poorer school districts that are heavily reliant on federal spending, that they may have to start laying off teachers right away; they may have to cut down the school week to three or four days a week in order to pay for these budget cuts that are coming.

And so it may be -- it may be faster than some people think, Richard.

QUEST: So some people will be doing less work as the weekend comes along; Jim Acosta will be doing more work --

ACOSTA: Yes, that's right.

QUEST: -- grips -- as we get to grips with the forced spending cuts and the word that shall not be named.

Jim, many thanks indeed at the White House.

Still ahead on QUEST MEANS BUSINESS, they are battling the blizzards and the snow and yet the planes keep flying: a close-up on how one European airport fights off frost. Good evening to you.




QUEST: We are on the cusp of a new golden age of luxury travel. That's not my view; it's the view of the chief executive of one of the world's biggest hotel groups, Starwood. And not only are we on that cusp, but that Dubai is at the center of that cusp. So eager is Starwood to tap into the market it's moving its global headquarters from New York to Dubai for the month of March.

It's not the first time they've done this. They did it in China, temporarily relocating to Shanghai in 2011 to make inroads. It's a symbolic but significant market move.


FRITS VAN PAASSCHEN, CEO, STARWOOD HOTELS AND RESORTS: Emerging markets for us today account for about 80 percent of the hotels that we plan to open over the next four years. Dubai's a great example of those new emerging travel patterns that are driving that. You see travel from China into Africa using Dubai as a hub; Southeast Asia into Europe.

So it's a very important and dynamic market for us. The other thing is by being based in Dubai, we can get to Africa, India and throughout the Middle East. So this is as much a regional relocation as it is a relocation just to Dubai.


QUEST: You could almost hear Emirates in Dubai and Etihad in Abu Dhabi or indeed Qatar in Doha cheering at the move. Boeing is going to have to wait to get the Dreamliner 787 back in the air.


QUEST (voice-over): The Federal Aviation Administration in America has denied reports that test flights of the 787 will begin as early as next week. It's grounded because of problems with the lithium ion batteries.

Boeing has put forward a containment plan using ceramic dividers to prevent thermal runaway spillover within the batteries. The FAA says it will not let that plane fly again until it is 1,000 percent sure that it is safe. We'll have a "Profitable Moment" on that subject at the end of the program.

Tonight in Oslo, there is fog. And the temperature has dropped to -3 degrees Celsius. But fret ye not if you're flying into and out of Oslo. The airport's taking it all in its stride. If you look here, Oslo is the world's expert in battling wild weather. This is the departure hall, live picture at the moment, from the airport.

If you look at the arrival and departure halls, you'll see that that all -- this is the new one, by the way, the new one is, again, over here -- everything is expanding. There's still some snow on the ground. But the departure hall itself, according to these latest pictures, everything's going very well.

Gardermoen, as the airport is known, is being regularly voted and elected Europe's most punctual airport, even though it gets up to six months of winter a year. So how do they keep things moving? Why aren't the people sleeping in tents at the airport? There was only one way to find out. I went to Gardermoen.



QUEST (voice-over): A synchronized dance on a challenging stage, elegant choreography, military timing. In just 15 minutes, a runway cleared of snow and (inaudible) the flight. This is Oslo airport's state-of-the-art fleet, 27 vehicles including two of the world's largest snowblowers.

HENNING BRATEBAEK, HEAD OF AIRPORT OPERATIONS, GARDERMOEN: We have two on the TV2000 (ph) and this one is the newest. It's (inaudible) yesterday.

QUEST: It's huge.

BRATEBAEK: Yes. Its weight, it's 40 tons.

QUEST (voice-over): Forty tons and more than a million dollars, and they're willing to let me have a go.

QUEST: Now where's the start button?


QUEST: You really feel this whole thing just moving in the snow and then suddenly slowing down, extraordinary. Keeping things moving whatever the weather.

QUEST (voice-over): In a climate that can be brutally unforgiving, this is one airport that can't afford to be beaten by snow.

NIC NILSEN, MANAGING DIRECTOR, GARDERMOEN AIRPORT: It is as easy as this: we have winters six months out of a year. And we need to be able to handle winter operations more or less like summer operations. It requires good planning, a lot of resources, good procedures and a lot of training.

QUEST (voice-over): The strategy is to keep one runway open at all times, whatever it takes.

QUEST: When your advisers and your staff come up to you and they say, we need another two machines, I'm guessing they don't have to push too hard before you sort of sign off on it?

NILSEN: That is being signed very, very quickly. We have the policy to have state-of-the-art equipment at all time.

QUEST (voice-over): Putting winter maintenance first is an easy decision when snow is your norm. For those airports where it's rare and doesn't drive policy, the consequences are all too familiar. This winter again, Europe was hit with severe disruption.

UNIDENTIFIED FEMALE: And more delays, especially in Frankfurt.

QUEST (voice-over): And hundreds, in some cases thousands of flights were canceled at major hub airports.

QUEST: In Europe, there's heavy falls of causing widespread travel delays.

QUEST (voice-over): Across the Atlantic, an ever-more dismal picture.

UNIDENTIFIED MALE: (Inaudible) of destruction.

QUEST (voice-over): In October last year, Hurricane Sandy caused the loss of hundreds of lives.

UNIDENTIFIED MALE: Ripping through this community --

QUEST (voice-over): Tens of billions of dollars' worth of damage. In February, the bad weather returned.

UNIDENTIFIED FEMALE: Going to have to deal with a nasty wintry weather.

QUEST (voice-over): With storms wreaking havoc over the Northeast.

UNIDENTIFIED FEMALE: More than 5,000 flights canceled.

QUEST (voice-over): Grounding thousands of flights in one weekend.

UNIDENTIFIED FEMALE: President Obama announced a state of emergency --

QUEST (voice-over): Here in Oslo, it's business as usual.

QUEST: When the bad weather starts and hits, are you in favor of airlines starting to cancel proactively? Because that will make it easier for you.

BRATEBAEK: Basically, yes. If they can't be proactive and cancel early, it's better for the airport. But it's also better for the passengers because then they know what to plan for.



QUEST: One of the most amazing things that I've seen is the way that conga line of snowplows moves its way across the airport, perfect symmetry, absolutely extraordinary the way they keep them.

Snow on the runway, though, it is not going to be the problem for the chief executive of Oracle, the software company. Why?


QUEST (voice-over): Larry Ellison bought a large chunk of a Hawaiian island last year and now he's just bought the airline Island Air to get to it. The billionaire purchased the regional carrier, has a staff of 250 or so, at an undisclosed price. He says he did it to ensure the safety and security and the integrity of the service to the islands.


QUEST: He wants to ensure that people and tourists can get there and leave.

I'm sure if I got there I'm not sure I'd want to leave.

Jenny Harrison's at the World Weather Center. Before we get to the serious stuff of the weather, your choice, Ms. Harrison, between the cold and the snow of Oslo or the beach and the sun -- remember, one's got skiing and its own charm -- or the beach and the sun of Hawaiian Islands?

JENNY HARRISON, CNN METEOROLOGIST: Never been to Hawaii, but I think I'd go for the snow. Now that I know that you would be there on hand to shift the stuff. I was very impressed with your snow clearing skills, Mr. Quest. I'm thinking we could ship you off to the U.S., actually, to help out in the Midwest. Yes? No.

QUEST: You're just -- you're just like -- you'd just like to see sit at the machine with a shovel, wouldn't you?

HARRISON: I would.

QUEST: (Inaudible).

HARRISON: Yes, a bit more manual, actually. That was a bit too easy; you got to sit down in the warm.

Yes, you're right. The winter weather, of course, it's still that time of year across the Northern Hemisphere. And across the Plains and Midwest, this is the area that's been really impacted in the last few hours. Have a look at the pictures coming out of Wisconsin because this big blizzard, it passed through. It is continuing to work its way away from this particular region.

But guess what, of course, in the wake of a storm like this, obviously there are many homes still without power, roads are closed across certain areas of the state. And, yes, the portion of snow will continue to come down for a while longer and, in fact, officials are saying that at least three people have died in this recent blizzard.

Now in terms of where it's going next, I can show you that because it is very, very slow moving. So the Midwest, also Canada, you'll notice Toronto, Montreal, New York and Boston picking up more of it, sort of a rain and icy mix.

But the ground stops are still in place in New York, LaGuardia and JFK. Newark has got long delays, an hour and five minutes, and it's likely to stay like that, because as I say, it's a very, very slow moving system. So still some very heavy snow along the line of this system. The warnings are in place.

They've just been removed across the Midwest. So now we're looking at this little corner up and around Boston to the north of there. And the snow will continue to come down certainly in Ottawa, maybe another 30-plus centimeters in the next 48 hours.

But once it clears, it's a fairly compact -- and a few more showers, some mountain snow coming in towards the Pacific Northwest and eventually working its way down the line of the Rockies. So cold across the north, 1 in Chicago on Thursday, not bad in the South, plenty of sunshine, a little bit cool in Atlanta with a high of 9 degrees Celsius.

And then heading to the Southern Hemisphere, this is the story here. It's this cyclone Rusty. This has been making its way now onshore. It's finally made landfall. It's still having an impact across Western Australia, still a few days likely before the (inaudible) production and also the ports open fully for business once again.

And in fact, residents in this area have been told to stay indoors until at least Friday. Winds will diminish very, very quickly. Gusty winds, really, for the most part, but look how gusty it was, Port Hedland, one of the main ports there, 57 hours with gusts over 80 kph, Pardoo, a town close by, over an annual (inaudible) millimeters of rain which is more than their annual total.

So the winds will soon diminish, but the rain will continue to work its way through Western Australia and you can see the accumulations of course, enough to cause some localized flooding. As for Europe, it's a fairly quiet picture.

Some good sunshine, some quite mild temperatures. It's just the southwest we're watching, Portugal and Spain, Spain in particular, we're going to see more scenes like this over the next few days as the next storm system works its way across that region. See, more snow for you, Richard; more snow for you to shovel. Should be a happy man.

QUEST: I'm going to Lapland in a couple of weeks.

HARRISON: Oh, perfect.

QUEST: I'll have more -- I've had more snow in 2012-13 than I ever want to see.

Jenny Harrison is at the World Weather Center. We thank you, Jenny. Many thanks.

An Australian billionaire -- maybe I'll buy Jenny a ticket on this next boat -- an Australian billionaire has unveiled his plans for a replica of the Titanic. Clive Palmer says he will be tempting fate to call it unsinkable. The ship's designer wanted to reassure potential passengers.

I can assure that, from the safety point of view, it will be absolutely the most safe cruise ship in the world when it's been launched.

QUEST: The most safe cruise ship -- sounds like a little bit like unsinkable. It'll set sail on 2016, on the trans-Atlantic route, for which its ill-fated predecessor took. There will be enough lifeboats on hand for any emergencies. The shipyard in China is in talks to build the luxury liner. And of course, it's celebrating its centennial this (inaudible) last year of the sinking of the Titanic.

In a moment, QUEST MEANS BUSINESS, you and I continue. The home of one of the world's biggest football teams, and now an app maker and a spy or maybe not. I will explain all on the other side.





QUEST (voice-over): The "Currency Conundrum" answer: where is stone money still used for certain exchanges? The answer is the Federated States of Micronesia, on the island of Kosrae (ph). Stones are used for certain traditional transactions.

Giant stone wheels measure the hole in the resource so they could be transported with poles. Some of them are so big they have to remain where they are.

I suppose it stops people picking other people's pockets.

Keeping tabs on employees may be one thing. When they're the world famous footballer dating a pop star, it's a very different prospect. Barcelona has been accused of spying on the Spanish defender Gerard Pique whilst he was dating Shakira. The accusation comes from a -- how can you be -- how can you be spying on him when he's in all the newspapers?

According to a Spanish newspaper, former employees of a detective agency say the club asked them to track his movements. They were worried about the relationship's effect on his performance on the field. The club denies the allegations.

But again, what -- I mean, how -- the man's in every paparazzi picture. So I hardly see how -- anyway. It's not for me to worry down that particular road or, indeed, you.

If Barcelona's keeping tabs on its players, plenty of people are keeping tabs on the club itself. As the city's hosting the annual Mobile World Congress, Kristie Lu Stout has discovered the Catalan giants are not only on the field, they're champions of the app world.


KRISTIE LU STOUT, CNN ANCHOR: This is one of the most famous arenas in all of sport, the home of FC Barcelona. The club has long been known for its success and its distinctive style of play. But it's also an innovator in the world of technology.

SANDRO ROSELL, FC BARCELONA PRESIDENT: It is crucial that we (inaudible) the future of new technologies and social media because it's the only way to go.

STOUT (voice-over): One way that Barcelona's reaching out to its fans is through mobile apps. But these apps on the official Barcelona page were not made by the club. They were created in partnership with independent app developers.

STOUT: The FGB Apps program is simple: developers can send in an idea for an app of iOS or Android. And if approved, they get official Barcelona branded. They could use the rich history and famous players of this massive football club and in return revenue is shared between the app developer and Barcelona.


STOUT (voice-over): Getting ideas from developers outside the club also means Barcelona has a wider selection of apps than you'd expect.

DIDAC LEE, FC BARCELONA DIRECTOR OF TECHNOLOGY: One of them is a (inaudible) list app, is like some sort of personal trainer. I guess we will never have our own personal trainer app.

STOUT (voice-over): Apps in the program also benefit from promotion on Barcelona's social media accounts. Barcelona boasts that it has more followers than any other football club on social media. But the club's president says he wants to make sure that additional contact leads to a connection in the real world.

ROSELL: We have to do it very carefully because what we love is the daily contact with our fans, the human contact, to see the faces, to know who is who, to give (inaudible) to our members and that through a computer, this is not possible.

STOUT (voice-over): With nearly 60 billion followers on social media, it is a huge pool of new fans who attempt a visit to this famous stadium. As for why Barcelona has so many fans online? Well, the answer could be very simple.

LEE: Maybe because we have Messi on our team.


STOUT (voice-over): Looks like superstar Lionel Messi's value to Barcelona extends beyond the pitch -- Kristie Lu Stout, CNN, Barcelona.


QUEST: When we come back, there will be a "Profitable Moment" on the Dreamliner after the break. QUEST MEANS BUSINESS.



QUEST: Tonight's "Profitable Moment," earlier on this program, you heard Tor Mendez (ph) of EADS Airbus say there was no schadenfreude at the issues of Boeing and its Dreamliner and for good cause. As I flew through Warsaw Airport this week, I saw this sad sight. Its lot, Polish Airlines.

It's a brand new Dreamliner. It's got the engine covers on. In other words, it's a new plane and it's going nowhere fast. It's not only locked in Poland, it is United Airlines over in Los Angeles, where I photographed this 787, just sitting there, waiting, costing money and making no revenue. For the airlines involved, it's very embarrassing.

They advertised they were the first European airlines flying the 787. They are not. They're flying nowhere. Grounded for five weeks since the battery failure. Boeing said it'll have a fix and hopes to get the planes in the air quickly. It won't. The airlines are now saying don't expect them to fly for many more weeks, in some cases, months.

And as for Airbus, tonight they made it quite clear they take no pleasure in this. They have their own 350. Time is tight. And certification will be more difficult. The Dreamliner is a warning of sleep for everyone.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.


QUEST (voice-over): The headlines at the top of the hour on CNN:

Pope Benedict XVI is now less than 24 hours away from retirement. About this time tomorrow, the pope will officially step down. He has given his last weekly general audience at the Vatican in front of an estimated 150,000 people who turned out for the historic event.

In Egypt, mourners gathered at the spot where a hot air balloon crashed on Tuesday. Nineteen people were killed. Investigators believe the balloon was trying to land when someone from the ground crew tossed up a landing cable which hit a gas line.

An employee has killed two people before shooting and killing himself at a lumber plant near the Swiss city of Lucerne. Police are telling local media that seven people were hurt in the shooting, six of them seriously. The gunman had worked for the wood panel manufacturer for quite some time. His motives are unknown.

Scenes of heavy warfare in the newest amateur video from Syria, a description of this clip says it was taken in Homs today. On Thursday, more than 60 nations calling themselves Friends of Syria will be meeting in Rome along with the Syrian Opposition Coalition, that meeting taking place in Rome.


QUEST: And it is to Rome now that we go. "AMANPOUR" is live from the Italian capital.