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YOUR MONEY

Airlines May Increase Rates; President of Cinnabon Recounts Career; Matt Damon Promotes Clean Water Throughout World

Aired November 30, 2013 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CHRISTINE ROMANS, CNN ANCHOR: Thanks in part to service cuts at some airports because of all of these mergers. Fares at Savannah Hilton Head Airport and Dallas Love Field are up nearly 36 percent, up 32 percent at Washington's Dulles Airport, 26 percent in Northern Kentucky, 24 percent at New York's JFK, you get the picture.

Mark Murphy and Richard Quest join me now. Mark is the founder of travelpost.com and Richard is the host of "QUEST MEANS BUSINESS" on CNN International. Mark, could these fare hikes spawn a new generation of low-cost carriers, or do we just have to deal with this?

MARK MURPHY, FOUNDER, TRAVELPOST.COM: In the near term, deal with it. In the long term, yes, people will step in and start filling those spots, because once you see the ticket prices rise, somebody who's got a lower cost per mile is going to step in and say, you know what, I can make my money because some of my costs are lower than some legacy carriers even after these mergers.

RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": I think it's going to be very difficult to get someone coming in who says my costs will be lower, providing if they're operating in the same aircraft infrastructure, they've got to buy more expensive planes that may be less fuel-efficient, and they've got to try and get a decent rate of return. So, it is possible --

MURPHY: Yes.

QUEST: I think it's highly unlikely or improbable because the costs and the barriers of entry to aviation are so high. I'm afraid these airfares, live with them.

ROMANS: Ooh! And the fees, too, ugh.

MURPHY: And the fees, the fees are here. But the one thing I would dig Congress on is I would say you have pilots less cost for the legacy carriers. You have union contracts, pension obligations, all these things that don't exist when the low-cost carrier steps in. Some of the guys on the low-cost carrier are getting paid $28,000 as pilots.

ROMANS: Very big changes in how we're using our technology on airplanes. You might want to pack a parachute on your next trip if Richard Quest gets a hold of these. The FCC may let people use cellphones just this one, well, not like this one, but it's our favorite. A survey from Delta says 64 percent say that would have a negative impact on the flying experience. Airlines would have to install equipment to let the cellphones on planes communicate with towers on the ground. But where you hear -- airlines may hear. Richard, the airlines already bill us for food, to check baggage, to change our tickets. Would they pass on potential revenue to bill us for talking on this?

QUEST: Y-e-s!

(LAUGHTER)

QUEST: Which planet were we all born on? Of course they will! It's going to cost a million-and-a-half bucks minimum to put the antenna in the roof for this thing to communicate.

ROMANS: But it's going to cause riots.

QUEST: Yes.

ROMANS: It's going to cause riots!

MURPHY: I mean, you ever sit on the train coming into New York City --

ROMANS: It's horrible!

MURPHY: Loud talking? This is going to go on --

ROMANS: People talk about personal things.

MURPHY: Oh, yes.

ROMANS: And imagine the problems it could cause on a plane if you're talking about something that could raise suspicions among other people. We'll have to talk about serious etiquette changes.

QUEST: Let's roll back. Everybody's getting terribly excited about this. First of all --

ROMANS: I don't want to hear you talking on the plane or anybody else.

QUEST: First of all, the FCC not may, the FCC will. I'm predicting it.

ROMANS: Really?

QUEST: Even though the chairman of the FCC doesn't really want it himself, he believes, the FCC will believe that airlines should have the right. Remember, that's the FCC's job. It's not the FCC's job to make sure that you have a comfortable journey and a pleasant experience. It's their job to offer you the opportunity.

Then you're going to start seeing rules coming on. You know how you have the little fasten seat belt sign or the no-smoking sign. It will be a no phone calls type of light. Ultimately, there will be rules. There will be rules. There will be nastiness. And flight attendants will have to police it.

MURPHY: Yes, well, you can forget that. Here's what I say. The FCC's going to say it's OK to have cellphones in the air, but the airlines are going to blow up their business literally if you have people talking on the flights. Imagine somebody doing a conference call, a business conference call sitting in their business-class seat, filling that cabin with whatever it is. And you think about privacy. I'm a business guy. Do I want to have conversations, business conversations --

QUEST: Well, maybe we all just need -- hang on, maybe we all just need to learn the art of saying, "Excuse me, would you mind terribly keeping your voice down? Please, would you mind terribly, I'm trying to sleep, do keep your voice down."

MURPHY: I predict a new type of human bubble shield, right, that the airlines are going to implement.

ROMANS: A new kind of noise-canceling headphones.

QUEST: I think public opprobrium will be eventually heaped on those who talk loud volumes.

ROMANS: Gentlemen, thank you very much. Airlines keep changing and not in the right direction. Nice to see both of you.

For more stories that matter to your money this week, give me 60 seconds on the time. It's "Money Time."

(BEGIN VIDEOTAPE)

ROMANS: Obamacare on trial again. The Supreme Court will decide if corporations can invoke religious beliefs to deny birth control coverage to employees.

Home prices jumped 11 percent in the third quarter from a year ago. It's the first double-digit year-over-year gain for the S&P Case- Schiller index since early 2006.

Men's Warehouse likes the way Joseph A. Bank looks. After fighting off a hostile bid from its smaller rival, Men's Warehouse has turned the tables. It's now bidding $1.5 billion for Joseph A. Bank.

If something's trending on Twitter, robots and fake accounts would be why. Twitter says fake accounts are less than five percent of its 230 million active users, but some experts think it's a lot higher.

The world's most valuable book sold this week for $14 million at Sotheby's in New York. "The Bay Psalm Book" is the first book ever written and printed in America.

And it's not exactly an economy car, but Maserati's new car will only set you back only $65,000. The ultimate luxury brand is trying to lure more buyers.

(END VIDEOTAPE) ROMANS: Perhaps the only good news, if you're stuck in an airport this weekend, is this -- OK, maybe it's not good for your waistline. One of these, it's a Cinnabon, of course, the sweet smell of the airport experience. Up next, Zain Asher has the story of how a Hooter's waitress became the president of Cinnebon by the age of 32.

(COMMERCIAL BREAK)

ROMANS: If you're trapped in an airport or a mall this holiday season, perhaps one of the only saving graces with the overflowing crowds and the crying children has been this. Yes, it is hard to miss the smell of a Cinnabon. I can smell it even through this box. Of course, what tastes great may not be so great for your waistline, as comedian Louis C.K. explained in his comedy special "Shameless."

(BEGIN VIDEO CLIP)

LOUIS C.K., COMEDIAN: Here's what a Cinnabon is, let me explain it to you. It's a six-foot high cinnamon swirl cake made for one sad fat man.

(END VIDEO CLIP)

ROMANS: OK, maybe it's not your thing. How about Hooters? Zain Asher has the story of one woman who found success at both companies with a slight upgrade in title along the way. Connect for me, my dear, Hooters and Cinnabon.

ZAIN ASHER, CNN CORRESPONDENT: Yes, well, I met the president of Cinnabon, Kat Cole. She's an extraordinary woman, very much an inspiring story. She started out as a waitress at Hooters when she was 17 and then rose up through the ranks. She never graduated from college and now she is the president of Cinnabon. Take a listen to her story.

(BEGIN VIDEO CLIP)

KAT COLE, PRESIDENT, CINNABON: So, this is where some of the food science happens. The dough will rise --

ASHER: Kat Cole knows a thing or two about rising.

COLE: Come on through, Brenda.

ASHER: It wasn't long ago she was the one carrying the tray. Cole started her career at age 17 waiting tables at a Hooters in Florida. Now she's traded buffalo wings for the boardroom as president of Cinnabon.

COLE: Everybody had a first job. Not everyone worked at Hooters as a first job, but a lot of people were waitresses. Mine's just a little unique, so it makes it a little more fun to talk about.

ASHER: Cole runs a $1 billion franchise empire, one that employs 12,000 people. But she says that first job as a Hooters server gave her a taste of what she had to do to succeed. COLE: If they don't have a great experience, then you won't have a good income. It's pretty simple. And so all I did was apply the same habits that I built as a waitress.

ASHER: Cole soon went from taking orders to giving them, with management sending her to open new Hooters restaurants all over the world.

COLE: I have a few people within the executive ranks I could count on, and she was certainly on the top of the list.

ASHER: She quit college to work full time. By age 26, Hooters had named her a vice president.

COLE: If you have someone who's willing to drop out of school because they have a passion, that's probably an indication of a fire in the belly and an understanding of what their purpose is.

ASHER: At 30, she applied for her MBA, getting a letter of recommendation from the founder of CNN, Ted Turner, whom she met at a non-profit.

COLE: I appreciate all of the help that I got.

ASHER: But Cole didn't have much help growing up. At one point, her mother, newly divorced, could only afford to spend $10 a week on food.

COLE: I didn't want to be defined by where I came from. I wanted to be different.

ASHER: One challenge Cole faces is with the contents of Cinnabon's treats.

Am I doing it right, though?

COLE: Yes, there you go. Perfect.

ASHER: Its classic roll contains 880 calories.

COLE: I think there is a market for really healthy, healthy, high- nutrient products, and that's not what we do. You know, we provide indulgent moments, sweet moments.

ASHER: And her rapid rise from Hooters to the corner office is certainly one of those.

(END VIDEOTAPE)

ROMANS: It's 880 calories! I know, I know. But she makes no bones about it. It's an indulgent experience.

ASHER: Exactly.

ROMANS: You're paying for that.

ASHER: Exactly right. And when I spoke to Kat, I asked her, obviously, you came from a poorer background. Now that you have money, are you more frugal or do you tend to spend a lot? And this is interesting she says she actually gives most of her money away. She spends a lot of time doing humanitarian work. She's been throughout Africa and she's actually opening a Cinnabon in my home country of Nigeria.

ROMANS: Really?

ASHER: For the first time ever. I found that interesting.

ROMANS: You'll have to go on assignment and check it out for us.

ASHER: I would love to!

ROMANS: Tell us whether it's something that sweeps the continent or not. It's certainly swept this one. Zain, so nice to see you. Great story, so inspirational.

College is the gateway to the middle class, but if you're from a low- income family, how do you pay for it? We're going to show you one solution, next.

(COMMERCIAL BREAK)

ROMANS: Get good grades, go to a good college, right? Not necessarily. It could depend on your parents' income. And 70 percent of students at elite colleges come from the top income quartile. That means the richest families. And these students out-number their low- income classmates 14-one. So, why aren't low-income students getting into the best schools? It turns out they're simply not applying.

(BEGIN VIDEOTAPE)

LORIZBETH GUZMAN, DROPPED OUT OF COLLEGE: I grew up in Washington Heights.

ROMANS: Lorizbeth Guzman didn't grow up with much, but she always excelled in school.

GUZMAN: My SAT scores were around the 1400s.

ROMANS: But her small high school in the Bronx had limited resources.

GUZMAN: We only had one school to come and visit, which was Mercy College. So, everybody in my class applied and almost everybody got accepted. So, we're just like, all right, well, we have never heard of this school, but, I mean, if they're all accepting us, I mean, why not?

ROMANS: According to a new study from the Brookings Institution, only 34 percent of top low-income students apply to the country's most selective colleges. That's compared with 78 percent of top high- income students. The college she went to wasn't the right fit. After her second semester, she dropped out.

GUZMAN: I wanted to go in just a few months after I had left Mercy, but everything happens and I was working full time and I got pregnant.

CAROLINE HOXBY, PROFESSOR, STANFORD UNIVERSITY: Low-income, high- achieving students thrive at very selective colleges and universities once they get there, whereas if they attend one of the nonselective post-secondary institutions that they tend to apply to, they have about a 50 percent chance of graduating on time.

ROMANS: Meanwhile, she is still paying off her loans. She says she didn't have enough information to make the best choice.

GUZMAN: I heard about scholarships and opportunities you can get, so I would research, but there are so many out there, so I never knew which one would fit me.

HOXBY: For very high-achieving, low-income students, the more selective the college or university they attend, the less they will pay.

ROMANS: A lot less. The most competitive colleges have more resources and can offer more resources and can offer more scholarships. So low-income students usually don't come even close to paying that scary sticker price.

FAUSTO JIMENEZ, COLLEGE GRADUATE: I understood that I needed to go to school for free because my parents would not be able to afford it.

ROMANS: Fausto Jimenez grew up in Harlem.

JIMENEZ: There were often shoot-outs while we were walking down the street. There was actually a drug factory, essentially, right across the hall from my apartment.

ROMANS: He always dreamed of going to Columbia University.

JIMENEZ: And I remember saying, I want to be here, I want to come to Columbia. I think my mom chuckled at the time.

ROMANS: Thanks to the Gates Millennium Scholars Program, he was able to get that Ivy League education for free.

JIMENEZ: I don't have loans. All I had to do was concentrate on my studies.

HOXBY: It's important to apply to some of the most selective colleges you can get into if you're a low-income, high-achieving student. Narrow in on a set of colleges and apply to several. If you are a low-income student, you can get application fee waivers so you should not have to pay application fees.

JIMENEZ: Attending Columbia has been a transformative experience in my life. I may still live in Harlem, but I know I now understand Harlem a lot better.

(END VIDEOTAPE)

ROMANS: Wow. His story is so, so inspiring, a lot of good advice in there.

All right, you've seen Matt Damon in "The Departed" and "Good Will Hunting." Now you'll see him with his legs crossed.

(BEGIN VIDEO CLIP)

MATT DAMON, ACTOR: Until everybody has access to clean water and sanitation, I will not go to the bathroom.

(END VIDEO CLIP)

(LAUGHTER)

ROMANS: OK, there's a serious point behind his bizarre promise. We'll bring it to you next.

(COMMERCIAL BREAK)

ROMANS: Actor Matt Damon is very outspoken, outspoken about teachers unions. He's criticized President Obama on his education policy, and now he's tackling a problem that kills 3.5 million people a year. Nearly 800 million people around the world don't have access to clean water. An American taking a five-minute shower uses more water than a person living in a slum in a developing country uses in an entire day. Our own Jake Tapper sat down with Matt Damon to find out what the film star is doing to solve the water crisis. Jake?

JAKE TAPPER, CNN CORRESPONDENT: Christine, earlier this month, the world celebrated World Toilet Day. Now, that sounds silly, but it's a very important issue about the hundreds of millions of people around the world who don't have access to toilets. This means they actually have much more dangerous lives in terms of the diseases they can catch and also their security. This is an issue of some importance to actor Matt Damon, who founded a group called Water.org that works on this very issue.

(BEGIN VIDEOTAPE)

DAMON: Do you like apples?

TAPPER: He's been a genius from Southie and "Good Will Hunting," an assassin with amnesia and a brand new conscience in "The Bourne Trilogy," and a contemptibly crooked cop in "The Departed."

DAMON: I tipped you off and you're not in jail.

TAPPER: But to hear Matt Damon tell it, his most compelling role is bringing water and toilets to impoverished villages in developing nations. This isn't just to improve their lives, it's to save them. It's particularly crucial for the young. Water and sanitation issues kill children around the world at a rate equivalent to a jumbo jet crashing every four hours.

Let's go for a second, because you attaching this to yourself means I will be sitting here interviewing you talking about an issue I probably wouldn't, and people at home, viewers, will be paying attention to an issue that they wouldn't otherwise pay attention to.

DAMON: Yes, that's the hope. I mean, that's obviously the small part I bring, you know, to Gary's incredible expertise.

TAPPER: Damon is the co-founder of Water.org. His partner, Gary White, is one of the foremost experts in the field.

DAMON: I was really looking for the expert in the space, and when I couldn't get that guy -- no.

(LAUGHTER)

GARY WHITE, CO-FOUNDER, WATER.ORG: You know, I think we complement each other, and you know, Matt certainly has come a long way in water, not so much for me in acting.

TAPPER: Worldwide, more than 750 million people live without potable water, making them susceptible to disease. Since 2009, Water.org has helped communities connect to clean water through wells and microloans. The founders say their approach isn't just charity but a sustainable solution.

Tell me about the water credit. How does it work?

WHITE: So, if you're in a slum in India, you might be spending hours every day walking to a public tap, waiting in line. The water's sometimes there, sometimes it's not. You might be paying the water mafia, which is basically these people who come around and sell you 20 liters of water for a pretty high price.

DAMON: If you could actually just front them the money to connect to the municipality that was ping water right underneath their feet, you'd give them their time back so they could work at their job and pay the loan off.

TAPPER: This isn't a glamorous topic to discuss at Hollywood fundraisers, but Matt Damon has not shied away.

DAMON: Until everybody has access to clean water and sanitation, I will not go to the bathroom.

TAPPER: Earlier this year, he launched a spoof campaign with fellow celebrities to bring attention to preventable disease and sanitation issues.

UNIDENTIFIED MALE: We won't go to the bathroom.

UNIDENTIFIED MALE: We won't go to the bathroom.

UNIDENTIFIED FEMALE: We won't go to the bathroom.

DAMON: If you can get somebody laughing about something, they can also dive down a little bit on the complexity of this issue, then we're really getting something done.

TAPPER: Now, sure, his fame brings needed attention to Damon's causes, but that spotlight highlights his comments for naysayers as well.

When it comes to getting involved in issues, and you're involved in a lot, you've spoken out about teachers unions and public school. You've spoken out about your disappointment with President Obama. Inevitably, you have critics.

DAMON: I've kind of chosen my words poorly when talking about him. You know, look, the truth is, you know, I voted for him twice. I campaigned for him. It's humbling to think about that job and how hard it is, particularly in the headwinds that he faces, the kind of historic headwinds that he's facing. I really wish him well, particularly right now.

TAPPER: Do you find it difficult to deal with the criticism, though? I mean, it comes with the territory if you're going to become an activist like this.

DAMON: Yes, I think if you put a megaphone out and say something, then it's within any American's right to say something back to you. So that's why when I speak out about something like public education, it means a lot to me, but it's also why I'm particularly happy that I spend all my free time working with Water.org. One of the things I love about it so much is that it's totally non-partisan.

(END VIDEOTAPE)

TAPPER: Damon said when he took to YouTube to make very serious videos about this issue, basically, no one would click on it. He said three people clicked on it and one of them was him and one of them was Gary. Now he does these more humorous videos, and millions of people around the world are finding out more about the issue. Christine?

ROMANS: Jake, so funny. Humor does sell. Thanks for that story.

And thanks for watching "YOUR MONEY" this week. Have you listened to this guy's album? Do you have a guy like this in your bedroom? Does your teenage daughter love this person and you don't even know who it is? Head to the "YOUR MONEY" blog. We want you to check out the business of being One Direction. It's big business and it's coming out of your teenage daughter's pocket. See you next Saturday at 9:30 a.m. Eastern. Have a great holiday weekend, everybody.