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QUEST MEANS BUSINESS
Fed on Tapering; US Markets Fall on Tapering Fears; Tapering Discussion; Mild Losses in European Markets; EU Female Board Quotas; Illinois to Legalize Marriage for Same-Sex Couples; Gay Weddings Booming Business; US Retail Sales Climb; Jaguar F-Type Coupe; Phone "Kill Switch"; LG's Flexible SmartPhone
Aired November 20, 2013 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
MAGGIE LAKE, HOST: Stock markets are stumbling as Wall Street reacts to the Federal Reserve minutes. It's Wednesday, November 20th.
A tapering timetable. The Fed lays out options on when to cut back stimulus.
A boardroom battle of the sexes. Europe's parliament wants more women in the top spots.
And the Gulf's big three just keep on growing. We'll hear from the Etihad CEO on its new role in India.
I'm Maggie Lake, this is QUEST MEANS BUSINESS.
Good evening. We will be hearing from the chief executives of Etihad, Jaguar, and Volkswagen America tonight. We begin, though, with the big economic news from Washington. The Federal Reserve may begin tapering before the economy and the jobs market improve. That's the takeaway from the Fed's minutes released today.
Although many economists and investors thought the timing would depend on improving economic data, the Fed says, quote, "it might at some stage be appropriate to begin to wind down the program before an unambiguous further improvement in the outlook was apparent."
Federal Reserve Chairman Ben Bernanke has often compared running the Fed to driving a car. However, at a speech at the National Economists' Club in Washington last night, he admitted it's not always that straightforward.
(BEGIN VIDEO CLIP)
BEN BERNANKE, CHAIRMAN, US FEDERAL RESERVE: The effects of monetary policy on the economy today depend importantly not only on current policy actions, but also on the public's expectations of how policy will evolve. The automotive analogy clearly breaks down here because it's like the current speed of the car depending on what the car itself expects the driver to do in the future.
(END VIDEO CLIP)
LAKE: Of course, when and how tapering begins is the multibillion- dollar question. The Fed discussed some options. The Federal Reserve Bank could taper according to a timetable by announcing a sum of money left to buy bonds and a plan for spending.
The Fed expressed reservations about boiling the tapering decision down to just one factor, for example, setting up a direct link between the pace of stimulus and the results of one type of economic data.
It's a thought that the Bank of England agrees with. The BOE has expressed concern about raising its bank rate as soon as the unemployment rate reaches its target of 7 percent.
Alison Kosik is at the New York Stock Exchange now. She's been watching the reaction to the Fed minutes. And Alison, it seems like it unsettled investors a little.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh, that's putting it mildly, Maggie. Yes, the rally had actually already slowed down throughout the day, but then stocks did a sharp U-turn right after those Fed minutes came out.
It looks like Janet Yellen wound up giving false hope to investors who want this quantitative easing to continue at the same pace when she testified on Capitol Hill. But what's really happening behind closed doors really came to be a rude awakening for investors today.
Before these minutes, Wall Street had its eye on an improving job market as the catalyst to wind down stimulus. Well guess what? Now they've learned that they're feeling a bit rattled after they've learned that the rules of the game are suddenly changing, and they're interpreting these minutes as one more sign that the Fed is ready to taper sooner rather than later.
Keep in mind, though, the Fed's not at a point where they're actually changing that policy. They're talking about some other possible scenarios that might prompt a taper, but just that talk is enough to spook the market. We are seeing the Dow closing down 66 points going farther and farther away from that 16,000 milestone. Maggie?
LAKE: All right. And this is, of course, a market that a lot of people said was ripe for correction. Alison Kosik, thank you so much.
I spoke to Bob Parker, senior advisor at Credit Suisse, and I asked him if the Fed can scale back on bond-buying without riling the markets.
BOB PARKER, SENIOR ADVISOR, CREDIT SUISSE: On the one hand, we've had some very strong economic data. Last month's labor report was a strong number. It's entirely possible that this month's will be a strong number. We've seen just recently a recovery in consumption. So, the data would suggest that they should reduce the quantitative easing program sooner rather than later.
Having said that, they are very sensitive to a negative market reaction on tapering, and they are very sensitive to the economic impact that that could have, and that's why I think tapering will probably be delayed until the first quarter of next year.
And I think that when it happens, actually the pace of tapering will be very slow. So, yes, tapering will happen, but I think a high degree of caution from the Fed to almost guarantee that the economy does not take a hit.
LAKE: And yet, markets are notorious for running ahead of government officials and anticipating what's going to be going on. That's one of the main concerns of the Fed and why they're trying to make a distinction between tapering and tightening. But at the end of the day, when they take that punch bowl away and they begin to exit these extraordinary measures, what happens to stocks?
PARKER: Well, I think eventually -- and eventually will be two to three years from now -- obviously, the equity markets, stocks, will have a major setback. But will they have a major setback in the near term, the next six months, one year? I think the answer to that is no.
Because if one quantifies it, they are buying -- injecting funds into the markets of $85 billion per month. So, we've got a very easy monetary policy.
If I'm right, and in the first quarter they go to $70 billion a month, they are still following a super easy monetary policy. It's just not as extreme as it is at the moment. So the process is slow, and if the process is slow, you're not going to have a major equity market setback.
LAKE: Bank of England interestingly facing a sort of similar situation in that they are also looking at a recovery, but also seem to be indicating that they, too, are going to err on the side of caution.
PARKER: Well, I think one important point for both the Bank of England and the Fed is that the inflation numbers are very low, indeed. The UK, which had inflation above target, inflation is now coming down.
And the latest inflationary report we've had from the Fed actually -- from America is actually somewhat worrying because the latest number month- on-month was actually negative. So, inflation data suggests that central banks go slowly, including the Bank of England.
And I think the message from the Bank of England is actually very clear, which is they are only going to tighten monetary policy and reduce quantitative easing when the economy is well above the level that we saw in 2007, 2008.
Let's not forget that the UK recession was much deeper than that that we saw in the United States or, for example, Germany. And we need the UK, I think, to recover very strongly before the Bank of England considers tightening. So that again, I think, is way down the road.
LAKE: Now, as you can see, a fairly undramatic day on the European markets. We were looking at losses, although very mild almost across the board. The Xetra DAX the one standout, but it was only up about a tenth of a percent. A lot of investors in New York were sidelined ahead of those Fed meetings. They were, of course, released after the close of European trade.
Well, European lawmakers want to smash through the glass ceiling. The bloc's parliament backed quotas for more women on company boards. Our interview with the vice president of the European Commission next.
LAKE: European lawmakers have overwhelmingly backed a draft law aimed at boosting the number of women on company boards. The measure would force publicly-listed firms to appoint women to 40 percent of their non-executive director roles. Businesses would have until 2020 to comply or face penalties.
Now, the move needs approval of EU member states to become law. Currently, France, Italy, Spain, and Belgium all have quota laws in place. Germany is poised to adopt similar legislation soon.
But if you take a look at this map, the countries that are going to come up on the red show where there is pushback. Nine countries, including the UK, the Netherlands, and Malta, objected to the proposal last year. Many of those nations support gender targets, just not enforced quotas.
The world's leading organizations would need a female recruiting drive if the EU directive applied to them. The US's Fed's top committee has just three women in its boardroom, that is only 27 percent. The Bank of England would need a complete shakeup: all of its top members are men. And the European Commission itself falls short of the 40 percent mark: 9 of the 28 Commission heads are women. That is only 32 percent.
So much needs to change. Viviane Reding, the vice president of the European Commission, watched the vote at the European parliament in Strasbourg. Earlier, I asked her if companies should appoint directors based on experience rather than gender.
VIVIANE REDING, VICE PRESIDENT, EUROPEAN COMMISSION: Well, they can continue to do that, because we do not make quotas which say that you get a position because you are a woman, but you can't get a position because you are competent. So it is procedural quotas in order to arrive to the position. And it is a quota which will have open procedures so that women also can compete.
For the time being, women are left out and we are losing talent, simply. And that cannot continue. And that is why you have seen also this massive vote in the European parliament in order to establish the procedural quotas, which will get rid of the fact that we lose out talent and we leave female competence idle in a corner.
LAKE: There are going to be some in the business community who say this overreach, this is the government meddling in the affairs of the private sector. What do you say to that?
REDING: Well, that sounds very British, if I may say so, and it were only the Brits who were -- the British conservatives who were against this proposal. All the other political parties and all the other member states were for it.
Because we see that we do have 60 percent people leaving the universities who are females, and then these females are lost out. We, in an aging society, we do not utilize and get to action the talent which we have educated. That is bad for business. That should be stopped. And that is exactly the message which has been given.
So, it is not strict quotas, which tell you you have to take a woman and to put her onboard. No. You have to take the best candidate to put him or her onboard. But women should be considered in the procedures in order to design a candidate to be put onboard. Today they are not. They are lost out, and we have the talent being idle.
LAKE: Do you believe this will ultimately become law?
REDING: Certainly. That is what the European parliament -- one of our lawmakers has said today was an overwhelming majority and a very small minority against. So you are seeing, it is 28 members states and all political parties who say yes, we have to go for this.
Because as a continent, we are going to lose out if we do not utilize our trained talent, if we do not utilize our best people. We have not to waste this talent anymore, and that was the symbolic strong movement which the parliament took today. It is going to be followed by law.
It is already in several of our member states. It is going to be in all our member states, and this is going to be a very positive movement for the companies and for the women, of course.
LAKE: Ten years since America's first gay wedding, Illinois is about to become the latest US state to approve same-sex marriage. In around 15 minutes from now, Governor Pat Quinn said he will put Illinois "on the right side of history" when he signs the bill into law.
It will be the 15th state to allow gay marriage. On December 2nd, Hawaii will become number 16. As Samuel Burke found out, the number of gay weddings isn't just going up, so is the price tag.
UNIDENTIFIED FEMALE: So, you guys can have your poster in the post marquee box --
BRIAN RUBIN, GETTING MARRIED: Right.
UNIDENTIFIED FEMALE: We'll have it illuminated.
SAMUEL BURKE, CNN INTERNATIONAL BUSINESS CORRESPONDENT (voice-over): Brian Rubin and Toby Sowers have been planning their New York City wedding for more than a year and a half.
UNIDENTIFIED FEMALE: We'll be coming into the theater.
BURKE: They decided to hold it here, at New York's Hudson Theater, and big weddings, gay or straight, do not come cheap.
RUBIN: It's expensive.
TOBY SOWERS, GETTING MARRIED: Yes.
RUBIN: It is expensive to get married in New York City, and let's just say I was laughed at when I said $100,000.
BURKE (on camera): Just a couple of years ago, gay marriage wasn't even legal yet in New York, but now same-sex couples like Brian and Toby have the right to spend the time and the money to plan a wedding that rivals a Broadway production.
BURKE (voice-over): Same-sex marriages, with all the bells and whistles, were rare just a few years ago. This is what many once looked like: quick, inexpensive ceremonies at town halls.
UNIDENTIFIED MALE: Vows to you.
BURKE: Now, as same-sex marriage has become more accepted, many couples are choosing elaborate wedding ceremonies.
BERNADETTE COVENEY SMITH, GAY WEDDING PLANNER: Couples who are actually legally marrying are spending three times as much as those who are having simple civil unions and domestic partnerships.
BURKE: In the first year of legalized gay marriage in New York, same- sex couples spent an average of about $9,000. Nuptials for straight couples came in above $37,000. But as same-sex weddings get bigger, so do the price tags, and that gap is narrowing.
MARK SPERANZA, MILLENNIUM BROADWAY HOTEL: Twenty percent of our business is now same-sex couples. It's given us a nice boost.
BURKE: It's a boom for everyone involved in a wedding, including planners, caterers, florists, and bakers.
SARAH PLEITEZ, CHEF, CITY CAKES: Actually, it's increased our wedding business for about an extra 50 percent. They're either extremely elaborate or they're tiny and just for really close friends and family.
SOWERS: I think that spending the amount of money we're spending and throwing the party we're spending is a way of showing our pride. And it's funny, because we're showing our pride just by doing what everyone else does.
SOWERS: But I think it's just by being present, you're showing that you are equal and that you --
SOWERS: -- want the same things, you'll do it the same way. I think it's nice.
BURKE: There's still six months to go before their big day, but it's not too soon for something common to all weddings, no matter how expensive, gay or straight: a little case of the jitters.
SOWERS: And now I'm getting nervous.
RUBIN: Now you're getting cold feet?
SOWERS: Yes, yes, yes.
BURKE: Samuel Burke, CNN, New York.
LAKE: Jaguar goes full-throttle at the Los Angeles Auto Show. The carmaker unveils its latest high-performance model. We'll be live with the company's CEO straight ahead.
LAKE: US retail sales had a strong showing in October despite the government shutdown. Figures from the Commerce Department show sales rose 0.4 percent. Auto sales led the way for the month, a surprise for analysts, given the 16-day government shutdown.
Jaguar has taken the wraps off its latest F-Type Coupe in a full- throttle launch at the Los Angeles Motor Show. The high-performance model has a super-charged V8 engine, allowing acceleration from 0 to 100 kilometers per hour in about four seconds.
The CEO of Jaguar Land Rover, Ralf Speth, joins me now live from LA. Thank you so much for being with us.
RALF SPETH, CEO, JAGUAR LAND ROVER: Hello.
LAKE: So tell me, who is the target consumer for this new vehicle?
SPETH: This vehicle, and you see it behind me, is just stunning. Stunning in terms of design, but also overall in terms of drivability, road-holding, precise steering. So, customers who really enjoy driving and have a love for design, this the right car for these kind of customers.
LAKE: Now, you've been doing extremely well. We've been talking overall that auto sales have been leading the way in the US. Your sales were up, I think, 36 percent so far this year. Can that continue, especially if we're in an environment where we're looking at the end of the really easy money?
SPETH: Yes, we are absolutely sure that the US has the power and the strength and will come back. And we deliver only special vehicles for special customers. So we have a very, very small market share. Nevertheless, a very attractive product portfolio, and I'm quite sure that this attractive, desirable product before you can even win more customers in the US.
LAKE: And certainly, in the luxury segment, that segment of the population has been doing well. The stock market gains certainly helping out. But you are global as well. Talk to me about where you see the strength globally as we head into 2014. What's the most interesting market for you?
SPETH: Overall, Jaguar Land Rover is nearly -- nicely balanced across all the regions. Over -- right in the market share of around about 20 to 22 percent all around the world, and that gives a very, very nice leverage.
Overall, I am very much optimistic for the automotive industry around the world. I see the emerging markets still growing, I see the US coming back and Europe leveraged out. So, that's a very, very good position for further growth in the automotive industry and for a proportionate growth for the premium sector of the automotive industry.
LAKE: And Ralf, there was a time when the luxury consumer was really gravitating toward the trucks, SUVs, crossovers. We saw a lot of luxury brands who'd never been in that space move there. Do you feel like that's swinging? Are they going back more to the sleek sports cars now?
SPETH: What we see that -- we see more and more competitors coming up in the SUV sector, highly welcomed, because as you know, Land Rover created this segment, especially with the very capable cars like the Range Rover. And now with the new Range Rover, the all-aluminum new Range Rover, which is even lighter, better drivable and more capable, and now with the long wheel base, we are offering even more for the comfort of the customer in the US.
LAKE: Well, it's certainly a beautiful-looking vehicle behind you. I'm sure a lot of our viewers would love to get behind the wheel. Ralf Speth from Jaguar, thank you so much for joining us.
So, from one great model to another, you could say. SmartPhone makers say they have a solution to stop criminals from using stolen phones. The only problem, cell phone networks don't want to let them use it.
Samsung is working with US authorities to include a kill switch on all of its phones sold in America. The anti-theft function would render stolen phones useless. Pre-loading the software on their phones as standard would require approval from US phone carriers who are not onboard.
Meanwhile, LG has one solution to fixing damaged phones: a SmartPhone that heals itself. Shelly Palmer has one of the curved-display G-Flex phones with him. He is the author of "Digital Wisdom" and he joins us now. Shelly, you've always got something special for us. What is going on with this?
SHELLY PALMER, AUTHOR, "DIGITAL WISDOM": This phone is not available in the United States. It's available in Korea now. There are only a few of them in the world, but this phone blows my mind.
PALMER: Well, first of all, it's got a six-inch OLED screen, it's Organic LED. It is so magnificently beautiful. It has OLED color space. And so when you just -- you can't even imagine how magnificent --
LAKE: It looks like you're looking at a movie, actually.
PALMER: It does. This really is a movie. And this is a six-inch diagonal screen, so when you hold this in front of your face the way that you ordinarily would just as a viewer, when you hold this phone that way, you literally think you're seeing a 60-inch TV set across the room.
It's curved. And what's interesting about the curve is that you can control the glare. The slight curve in the phone, I don't know if it's --
PALMER: -- very easy to see here. The phone is actually curved. But here's the best part. I'm going to turn this down and I'm going to put it on the table. And now, I'm going to stomp on this!
LAKE: Ah! Shelly, there's only like four of these in the world!
PALMER: I'm going to stomp on this guy!
LAKE: Are you sure you want to do this?
PALMER: With everything I have! And I'm going to stomp on him again! And it actually will take the heat. This -- you can sit on this phone, which is amazing, because it's a curved OLED screen that can --
PALMER: -- you can sit on. And what also is fascinating about this phone is they've borrowed a little technology from the auto industry. If you scratch the back, like we often do, you put down your phone, it gets all scratched, the paint is self-healing.
LAKE: This is amazing, because I heard someone in an article -- I read someone, rather -- say it's the equivalent of the X-Men Wolverine.
PALMER: It --
PALMER: That's true.
LAKE: It's interesting that we're at this point, because it is these sort of special add-ons that it's all about. It's not about the functionality of the phone anymore. It's sort of how many cool things you can put around it.
PALMER: There are a couple of things that are coming. First of all, you're going to have phones, ultimately, that fold, literally fold in half, like the old flip phones that are OLED screens.
LAKE: We were just talking about that today. You miss that, right? You do.
PALMER: Yes. It's going to happen. Then, what's interesting is that as the phones become more powerful, as the computers inside the devices become more powerful, we as consumers won't see that in the form of maybe better pictures or better battery life, because those will be incremental changes.
What will be amazing changes is that as the phones become more functional, how they connect to the Cloud and the Internet of things and the machine-to-machine connectivity will become super easy. I'm wearing a Jawbone Up on my wrist. It has nothing to do with this phone at all right now. But it could.
LAKE: And this is the thing, really, isn't it? We're getting to the point where they're all just setting the stage --
PALMER: That's right.
LAKE: -- for what is the next chapter, and that's probably going to be wearable, right?
PALMER: Well, wearable computing, the wrist revolution, that's what everyone's talking about. Google Glass, which I brought on the show last time I was here, all of these are the sort of transitional devices which are going to help us get more out of the technology we're carrying.
Everyone's carrying a very powerful computer with them every day, and we're really underutilizing it. We're taking a few pictures, sending a few e-mails, and texting our friends, and maybe even making a phone call once in a while. But these can do so much more, so yes, what's coming next, wearable, sensors --
LAKE: And this matters -- I haven't talked about an LG phone -- I forgot they were out there, frankly. So I guess it matters to get out there with something special that will translate for that next.
PALMER: Give LG some kudos where kudos are due. This is as innovative a product as you are likely to see. A lot of people always talk Samsung or once in a while they used to talk about that company that -- a fruit --
LAKE: Ah --
PALMER: Oh, yes, Apple, right?
LAKE: I knew you were going to get into Apple --
PALMER: No, I was, but you know, just because it's so easy to do. But ultimately, this really is an incredibly innovative device, and you've got to give kudos where kudos are due. And by the way, I can't wait to have one. You saw the picture. The picture just makes you smile.
LAKE: And Shelly, we appreciate you bringing the early scoop to us, we --
PALMER: Oh, come on.
LAKE: -- thank you so much.
PALMER: You've got it.
LAKE: Shelly Palmer, author of "Digital Wisdom." Always great to see you.
And it has been a huge week for Etihad. The Gulf airline has ordered billions of dollars worth of new planes and announced plans to expand into new markets. I'll speak with the CEO live after the break. Stay with us.
LAKE: Welcome back, I'm Maggie Lake in New York. These are the top news headlines we are following this hour.
A wave of deadly bombings have struck Baghdad. Police say at least 60 people were killed and dozens were injured in blasts across the Iraqi capital, which occurred mainly in Shiite areas. Sectarian violence between Sunnis and Shiites has risen in recent months.
US secretary of state John Kerry has announced that the US has reached final agreement on language of a bilateral security agreement with Afghanistan. The deal will determine the nature and extent of US involvement in the country after troops pull out.
Diplomats say the first negotiating session on Iran's disputed nuclear program in Geneva, Switzerland, ended in a little more than ten minutes. A senior US official says it was only a brief meeting to discuss how the negotiations will proceed.
Police in France are holding a man in connection with the shooting of a photographer at a newspaper in Paris on Monday. The man, who hasn't been identified, was arrested today in a northwestern suburb. The gunman in the newspaper shooting may also be tied to a shooting in front of a bank and a carjacking.
At Arlington National Cemetery, US president Barack Obama and former president Bill Clinton were joined by their wives as they laid a wreath at the grave of John F. Kennedy. Friday will mark 50 years since Kennedy was assassinated.
Abu Dhabi's Etihad Airline has its stake in India's jet airways finally approved today. Etihad will be the first foreign carrier to invest in an Indian one. The deal tops off a huge week for the Emirates-based company. A few days ago Etihad flexed its muscle and doled out big cash at the Dubai Airshow. The company made deals for 56 Boeing aircraft worth around $25 billion and ordered 87 Airbus jets worth nearly $27 billion.
Etihad is also expanding its presence in Europe. The airline bought a stake in a Swiss carrier, Darwin, and will become the first Gulf carrier to offer flights between European destinations. Darwin agreed to rebrand its planes as Etihad Regional. And as we've said, Etihad got approval buy - to buy - a 24 percent stake in Jet Airways. That deal is expected to cost $329 million.
Etihad CEO James Hogan joins me live now from Washington, D.C. James, great to see you. That is quite a shopping list that you had, a lot of planes purchased. What makes you confident that you can meet these very ag-grow-sive -- aggressive -- growth targets?
JAMES HOGAN, CEO, ETIHAD: Well, absolutely, Maggie, we're building a growth rate at 40 percent. You made the point we're based in Abu Dhabi, and within three hours flying time, we have the Gulf States, the Middle East, the Indian subcontinent. That's a huge market in excess of a billion people. It's highly regulated and in a market such as India where you have 40 million people a year traveling internationally, that represents a huge opportunity. Now, we have no doubt we can use these aircrafts.
LAKE: Location, location, location, I suppose. Let's talk about some of these stakes that you've taken. The one in Darwin -- the European airline -- you're rebranding it. A lot of people have asked -- you may not be breaking the law of ownership, but you're certainly skirting very close to the line. What do you say to that?
HOGAN: Well, not at all. We're talking about a business proposition here. One could look at this as a franchise brand. In one hand there's an equity investment, for Darwin which is a brand that isn't well known. By becoming Etihad Regional, they feed into our global program. Not only do I mean brand, frequent flyer and network collectivity. So, for Darwin, it's great use.
LAKE. In terms of India and the Jet deal there, you've got the go- ahead now -- a green light -- now you've got to make it work. What are the challenges? How are you going to do that?
HOGAN: Well, the challenge in any transaction is that first phase. (Neresqueil) is an outstanding Indian entrepreneur. Great airline, Jet Airways, so we'll now build the network, improve the top line and the revenue opportunity whilst we simultaneously look at ways to tackle the cost base and look at effective programs to reduce our unit costs. So, I'm very bullish about the Indian opportunity.
LAKE: You've taken -- you're taking a very different strategy than some of your competitors in the region by taking these stakes, not sort of you know, organically growing it under your immediate umbrella. Why do you think that's the way to go? I mean, this is a tough global economy, there are risks associated with going that way. Why are you convinced that's the right path for Etihad?
HOGAN: Look it's a long game. As you said, we are well positioned in Abu Dhabi, all points of the world (inaudible). We are growing organically. Today 86 aircraft. Over the next seven years another 90. Plus the order you mentioned for 2018 onwards. In the meantime, we're vetted into 42 carrier shares with a range of airlines worldwide and taken a step further with the equity ownership. It's about network. It's about how you expend your network to ensure that your guest or customer has access, and in an age of digital strategy moving forward, I believe this is a smart move. The other side is, you buy more aircraft. We see as a combination of the strategy.
LAKE: We talk a lot you know in the rest of the show -- it's a challenging global environment. We have a situation where we've come through extraordinary downturn, you have the benefit of being exposed to many emerging markets, but things change quickly. What are you most concerned about? Or what issue are you watching most closely for 2014? Is it economic? Is it political?
HOGAN: Well, it's a mixture. We operate in the six corridors of the world, so obviously we have the challenges in Europe with the austerity campaigns. But obviously now home market area of the Middle East, we have the challenges in Syria, we saw what happened today in Iraq and the possible overflow into Lebanon. And these crises we have to navigate also. Is it going to be an impact no oil or other (shocks)? But what's important is that, you know, you're running a safe operation, you're navigating these crises, and this is part of running a global airline, you know.
LAKE: James Hogan, CEO of Etihad Airlines. Congratulations on the big purchases. A lot of aviation companies very happy with that. Pleasure to see you.
HOGAN: Thank you.
LAKE: Coming up we'll tell you what the longest flight is currently and the destination operated by Singapore Airlines. It's due to stop running this weekend.
LAKE: Time for today's "Business Traveller" update. The world's longest flight is about to make its last ever journey. Have you guessed which one it is? The record is currently held by Singapore Airlines flight 21. It flies from Newark Airport to Singapore, covering a distance of, drum roll, 15,400 kilometers and it takes 17 hours and 50 minutes. That will come to a stop this Saturday. The second longest flight on record was discontinued last month. It would have taken 16 hours, 50 minutes to fly from Los Angeles LAX to Singapore on Singapore Airlines flight 37. That is a distance of 14,500 kilometers. So, what's become the longest new flight by distance? The answer -- Qantas flight 7 between Sidney and Dallas. And that comes in at a distance of 13,840 kilometers and you'll spend 15 hours in the air. Bring some reading material.
For this week's "Business Traveller," Richard Quest, has been to San Francisco. He reports on the role of the millennial generation as the future drivers of growth in business travel. And Richard visits the headquarters of, where else, Facebook to meet Lee McCabe, the sites global head of travel.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: San Francisco was once the home of young hippies. Now it's the epicenter of the millennial digital revolution. In nearby Silicon Valley, they're ripping up the rule book of the travel industry. By the end of the decade, millennials, broadly those between 18 and 30 years old, will be the biggest sector of the travel market.
Today's millennial travelers are a world apart from that traditionally seen. No longer dominated by white, middle-aged men, the millennial travelers are ethnically and gender diverse. In other words, all sizes, shapes and colors. They'll account for 50 percent of spending on business flights by 2020, when they'll be entering their peak earning and traveling years. And their loyalty is up for grabs now. There's no disagreement in the travel industry about the urgency involved. Everyone accepts it's essential to have a millennial strategy and to be implementing it now.
Male: Millennials travel differently. They typically have a sense of entitlement. They're very wide-eyed, they're ready for something new. They're not stuck in their ways, so they're very open to a company mirroring that and being experimental as well. The millennial is doing more research, they're making a more informed decision and if they don't like something, they're very quick to criticize. And they expect that they're going to get a response. There's an expectation that the answer is always on the tip of their fingers, quite literally. You know, it's, "Oh, I wonder where I should get a cup of coffee," and -- boom -- you have the answer right away.
QUEST: It's clear, new generation, new rules. So much for the theory if we want to know how it's put into practice, there's nowhere better to talk about millennials and travel than at Facebook's headquarters. It's more a college campus than an office. An ice cream parlor here, a bike shop over there and restaurants galore. There's even the old-school games arcade.
LEE MCCABE, GLOBAL HEAD OF TRAVEL, FACEBOOK: Millennials want to be in control of their own schedule. They want to have that flexibility to determine when they want to work, when they want to eat or when they want to play. So this is Harvest, this is Facebook's salad bar.
QUEST: The one thing you immediately notice of course when you visit Facebook, don't bother looking for the till or the cash register -- it's all free. Two slices, why not.
QUEST: That's very good. If I'd known it was this good, I'd have had some more. It's a sense of community that millennials are bringing to travel.
MCCABE: The two things they want different to other generations, they want spontaneity and they want to be connected. So with Facebook, let's say I'm going to New York, I can -- before I get there, I can see which hotels my friends like, which hotels my friends have stayed at. Which bars and restaurants they liked. So that's changing the face of travel. We've moved from having one person as an expert, to my friend being the new expert.
I think the airlines and the hotels now understand they've got to move with this generation. They've got to move faster with technology. The target millennials on the places where they're going, the websites that they're visiting like Facebook and devices that they're using daily so they might have mobile -- Smartphone-only rates -- and just target millennials on Smartphone.
LAKE: There has been plenty of snow disrupting travel across Europe in the past 24 hours. You need to know about it if you're taking a trip. Jenny Harrison is at the CNN International Weather Center. Snow already?
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Well, yes, it seems a bit early, Maggie, doesn't it? But it's probably, you know, the right time of year. We've had some very cold air coming in across much of the north, the west, (inaudible) filtering all the way down into the southwest of Europe. But it's France in particular. I've got a picture first to show you because I'm talking about the travel delays this time yesterday, and here we go. Yes, not good at all, particularly on the roads and here is some video to show you -- some moving pictures -- of exactly that. It looked lovely of course. It looks very nice when you haven't got to be anywhere or if you've got to get there in not too much of a hurry. But of course after a few days, it does begin to wear thin.
So, there is more of this in the forecast. This is into west central France -- it says Paris there but it's not Paris, I can tell you that. And come back to me and I can show you somewhere else of course where they are still clearing the snow, and that is again in Saint-Etienne you can see here, so really piling up. As much of southern and eastern France is seeing a lot of snow. But look at this, Italy -- 33 centimeters in just the last 24 hours -- that new snow there. And also Austria 23 centimeters.
So looking good across the line of the Alps. This is still to come, so again, quite a lot still really. Geneva, Zurich and also Lyon another 9 centimeters of snow. It's been coming in (certainly/suddenly from the west. You can see that dividing line actually -- the milder and a much colder air. And also of course the high elevations. So whatever sleet and snow mix across much of the U.K., western France, this is why. This is the cold air. But for the next couple of days, you will see eventually it does turn back to green across the northwest. The temperatures actually returning to the average.
Right now we've got temperatures hovering around 4 Celsius across much of central and northern Europe. You factor in the wind, it feels a lot colder than that, just hovering just above freezing. And so expect for the next few days the temperatures will be below the average. Lyon -- look at that -- 3 and 2 degrees Celsius. The average is 9 this time of year and of course colder in the overnight hours as well. But the other problem is this next system producing the snow right now is that ahead across the Central Med that means more rain across those regions and we could do without that. We've had some pretty high totals again in the last 24 hours. Nearly six feet -- no, 17 millimeters there in Croatia.
And the warnings are in place too, this time through the Aegean because more heavy rain, tornadoes even, large hail, all been warned about. And of course, guess what? It also means the Acqua Alta, the warnings, are still in place in Venice. People still getting across Saint Mark's Square but not as easily as normally, is it? Thursday, 11:30 a.m., not as high the expected water level as it has been -- 105 centimeters, so warning of a high tide. It's been higher than that, but this next system is as I say on its way. And you can see it here, for the next few days, snow to those high elevations, wrapping around into the cold air and then there your temperatures fall Thursday -- 6 in London, 4 in Paris. And actually, Maggie, the major airports not really being impacted by the snow at the moment. It's mostly on the roads where the problem will be. And can I also just say it's good we both got the memo about wearing red and black? Don't we look nice. Pair of twins today.
LAKE: Exactly, exactly. Good news about the airport, that leaves a little silver lining.
HARRISON: It is. It is.
LAKE: Jenny, great to see you. Thank you so much. Coming up, the iconic Olympic Stadium in London which played host to last year's games is going to be transformed. We speak to the man in charge of the 2012 legacy.
LAKE: In London, work is about to start to transform the city's Olympic Stadium into a multipurpose venue. This is what it looks like right now. A new roof, twice the size of the original, is going to be built. The first floodlights will be taken down tomorrow. The venue will eventually play host to football matches and concerts, and work is due to be finished in the spring of 2015, just in time for the rugby World Cup. Jim Boulden spoke to the man in charge of the London 2012 legacy, Dennis Hone.
DENNIS HONE, CEO, LONDON LEGACY DEVELOPMENT CORP: If you look out there behind us, you can see that, you know, the field of play is gone, the first 14 rows of seats have been removed, all the enabling works that we needed to do are in place and now we're just getting ready to take the first light panels down -
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes.
HONE: -- and the roof down over the next few months -
BOULDEN: The track is still down there?
HONE: The track is protected under all of this and we're hoping -
HONE: -- that it will survive the works we do here so that we can host athletics.
BOULDEN: It took a while to get the deal with West Ham the football club -- the local football club -- but definitely moving in here come 2016?
HONE: Absolutely. Everything's on track to -- for West Ham to kick off in August of 2016. They'll be our winter tenant and you know primary league football, a fantastic draw around the whole world, so we're very excited that West Ham are going to be part of the future of the Olympic Stadium.
BOULDEN: And this Olympic Stadium will have a name change eventually -- you are looking actively for a big corporate sponsor for naming, rights.
HONE: We are indeed. We believe that you know the economics of running a stadium like this needs that injection of funding that we can get from a naming rights sponsor. We believe this is sort of a unique opportunity almost to be part of what's happening on the Queen Elizabeth Olympic Park, and we think it'll be attractive to many companies worldwide.
BOULDEN: There's always some criticism that naming rights go to betting shops, betting companies -- online betting or some payday loan companies. What kind of companies are you looking for, for naming rights here?
HONE: Yes, we're talking about global organizations. You know, we -- you know -- money isn't everything in this deal. It's a very important factor but it is right that you know we get the right sort of partner for the brand if you like. The brand of the Queen Elizabeth Olympic Park, and we'll be looking very closely at the offers that come forward.
BOULDEN: As far as the park itself goes, some of the building for new housing is already underway and you're also now tendering for the next wave of development. Where are we in that?
HONE: Well, you know, we signed one development agreement for 800 and -- just over 800 homes at Chobham Manor -
HONE: -- where during the games we had the basketball arena. So, again, that's going to start construction early in 2014 and we've just gone to the market to look for development partners who want to come forth for another 1,500 homes that would run down the western edge of the park. We think it's a very exciting opportunity. We -- where could you, as a developer, or and as a future landlord -- buy into an opportunity to build a new estate in London?
BOULDEN: As far as developers and naming rights go, you're talking about worldwide companies -- you're interested in not just British companies?
HONES: Absolutely. We believe that these are major opportunities. We believe that the success of the Games has Stratford is now viewed as an investment opportunity, make this the sort of option it is that worldwide companies would want to be involved in.
LAKE: In another recent Olympic host city, a China investor has turned to robots to dish out noodles. In fact, he's built an army of them as our David McKenzie reports from Beijing -- the Noodlebot is getting good reviews.
DAVID MCKENZIE, INTERNATIONAL CORRESPONDENT FOR CNN INTERNATIONAL BASED IN BEIJING, CHINA: Look out, here comes the future. Mr. Cui started out as a chicken farmer, but when a flu virus wiped out his flock, he searched for a new way to make a living.
CUI RUNQUAN, NOODLEBOT INVENTOR, VIA TRANSLATOR: I went into a noodle shop and I saw the noodlemaker made more money than me, he says. And I didn't know how to make noodles.
MCKENZIE: So this amateur inventor built something that could. Call it the NoodleBot. With this robot, one minute, four bowls of noodles he says, with a chef, one minute, two bowls. So the NoodleBot is fast and it's also versatile. Mr. Cui said he can do eight different types of noodles. This is the widest kind. He says he invents it to look like a person to give it that human touch. They designed it to look like a cartoon so that children like it more. See, if I look at this, it looks a bit like you. You're kind of the same. "It's much more handsome than me," he says.
MCKENZIE: It took Cui three months to design the Bot and years to perfect it. They ship it across China and around the world. So the factory floor is one thing, but the real test of the NoodleBot is in the noodle shop. Let's see the NoodleBot in action. OK. The customers love it says (Inaudible). They call him "Ultraman." But mostly it saves him money. He doesn't need to train, feed or give the NoodleBot a place to sleep. "It saves me energy," says the noodlemaker. "It does the same noodles that I do and it costs less than me."
But as labor costs rise in China, robots are starting to replace human labor. "It's cheaper. In the future the Noodlebots could replace all the human noodlemakers." Chopping noodles today, but who knows what's next for the NoodleBot. David McKenzie, CNN, Beijing.
LAKE: Now to our 2013 CNN hero of the year. Chad Pregracke had dedicated his life to literally pulling trash out of U.S. waterways, one piece at a time. And since 1998, 70,000 volunteers have joined him in collecting more than 3 million kilograms of garbage. He told CNN earlier why he loves what he does.
CHAD PREGRACKE, CNN'S 2013 HERO OF THE YEAR: It's really good, like, I feel like you know we're doing something good for the country, doing something good for the environment -- the river and all the communities are working -- like it's a really positive thing.
LAKE: Don't miss "CNN Heroes, an All-Star Tribute." We'll honor Chad and other inspiring individuals. The encore airs Monday, December 2nd at 3 p.m. in New York, 8 p.m. in London. Well, airline bathrooms are hardly the most glamorous part of traveling. Now, Jet Airways has one that will make you feel like a million dollars. We'll explain next.
LAKE: Of all the things you've ever discovered in an airplane bathroom that we don't want to think about that for too long, this has got to be the strangest of all. Maintenance staff for Jet Airways were checking the toilets on board one of its planes and found more than a million dollars' worth of gold bars. When the found the two black pouches, they initially thought that they were explosives and called in the bomb disposal unit. Instead, they found 24 gold bars with foreign markings. Indian Customs soon took them away for safekeeping. On the day that jet completed its deal with Etihad, perhaps some early spring cleaning might be in order.
U.S. stocks finished the day lower on Monday. The minutes from the Federal Reserve meeting at the end of October showed that tapering may begin before the economy and job market improve dramatically and investors have been hoping that Central Bank would continue its stimulus program well into 2014. The DOW, S&P 500 and NASDAQ were slightly up before the Fed minutes were released, but they dropped modestly afterwards. And that's "Quest Means Business," I'm Maggie Lake. Thanks for joining us.