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QUEST MEANS BUSINESS
Evidence Mounts That A Journalist May Have Been Killed In The Saudi Consulate In Istanbul Where Outrage Could Cost The Saudi Government Billion Of Dollars In Investments, Business Leaders Are Pulling Out Of A Saudi Investment Conference Billed As "Davos In The Desert;" Wall Street Gives The Market Something To Celebrate With Some Solid Bank Earnings; Turkey Claims to Have Proof of Khashoggi's Murder; Pastor Andrew Brunson Finally Heads Home to the United States; Uganda Floods and Mudslides Cause Death and Destruction; Richard Quest Completes World's Longest Flight; Airlines Ultra Long-Haul Routes Do Battle; Qantas Eyes Sydney to London Nonstop; Ticketmaster Denies Colluding with Scalpers; Dow Rallies 300 Points in Final Moments of Trade. Aired: 3-4p ET
Aired October 12, 2018 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CORRESPONDENT, CNN: Well, after this week, you didn't think it was going to be easy, did you? It's going to be of course, a nail-
biting final hour of trade as the Dow looks set to end the week a thousand points, at least below where it began. But you know, anything could
happen.
This is what's driving the day on Friday, October 12th. Volatility rules the Dow - as we've been telling you, swinging between losses and gains,
once again, Wall Street gives the market something to celebrate though with some solid bank earnings, and investors abandon Saudi Arabia's "Davos in
the Desert."
I'm Paula Newton, and this is "Quest Means Business."
Okay, so we have a busy hour ahead. Here stock markets are scrambling to try and snap their dire losing streak in the last hour of trade.
Meanwhile, we're expecting to hear from the President at any moment with more information about the release of Andrew Brunson.
Now, he's the Christian pastor whose arrest sparked big sanctions against Turkey and there is at this hour, more Middle East tension with Saudi
Arabia, which is where we begin tonight as evidence mounts that a journalist may have been killed in the Saudi consulate in Istanbul where
outrage could cost the Saudi government billion of dollars in investments, business leaders are pulling out of a Saudi investment conference billed as
"Davos in the Desert."
Uber CEO, Dara Khosrowshahi is out, a particularly significant withdrawal at a Saudi Arabia's sovereign wealth fund is a big shareholder in that
startup. Meantime, Sir Richard Branson is suspending discussions about a $1 billion investment in his space companies and media companies including
our own are also pulling out of that Saudi conference. Hadas Gold is in London with that business angle and senior international correspondent Sam
Kiley joins us now from Saudi Arabia's capital and that is where we begin.
Sam, we have heard precious little from Saudi Arabia, but is it not a win for them? They continue to deny any involvement, but the fact that the
investigation ongoing right now is in conjunction with Saudi Arabia and Turkish officials.
SAM KILEY, SENIOR INTERNATIONAL CORRESPONDENT, CNN: Yes, I think you're absolutely right there. I think that the - by internationlizing it or
bilateralizing it with a joint investigation between the Turks and the Saudi Arabians, which we understand is underway since this afternoon is a
step forward, and as a result of that, Paula, the Saudis have finally issued a statement, intriguingly though, it's just a statement by an
unnamed spokesman and it doesn't have a name to it, let alone a face or video.
But what Saudi Arabia does say is that it welcomes the announcement by the Turkish presidency that it has approved of the Kingdom's request to form a
joint team of experts representing both countries to investigate the disappearance of Jamal Khashoggi, a Saudi citizen in Istanbul, a Saudi
official said.
The official expressed appreciation and so on, and then at the end of this statement, they say - he said that the Kingdom attest utmost priority to
its citizens' safety and security irrespective of their location.
Now, rather longwinded statement, but intended to suggest that they are now moving forward in a brotherly response to what the Saudis are saying is as
much of a mystery to them as it is to the outside world, the whereabouts of Mr. Khashoggi. Of course, the Saudi position remains that he went to the
consulate and left the consulate perfectly safely although they have not yet provided any evidence to prove that statement.
More widely though, Paula, there has been real condemnation of Turkey for selective leaks which have suggested that Mr. Khashoggi may have met with a
violent end inside that consulate. Again, no physical evidence being provided for that allegation, from particularly the United Arab Emirates
saying that this whole issue was really perhaps trumped up and a number of pro-Saudi columnists in Saudi-backed media outlets suggesting that perhaps
Qatar, a regional rival of the Saudis, especially and of the United Arab Emirates could be behind those nefarious plots.
So very much, the Saudi position still, Paula, that they want to investigate it, but they're certainly not involved in any criminality.
NEWTON: And that will be the line that Saudi Arabia hopes they can stick to, but more importantly, hopes to convince others. Hadas Gold has been
following this throughout the day as well, and Hadas, you know, we've had media organizations, but also crucially one person saying they continue to
go to that conference and that is Steven Mnuchin, the Treasury Secretary from the Trump administration.
[00:05:14]
NEWTON: At this point, is the feeling that this is a game changer for those who had built Saudi Arabia as wanting to reform and putting that
money to help them do it.
HADAS GOLD, MEDIA AND BUSINESS REPORTER, CNN: Well, listen, I mean, there's a lot of people waiting to see what this investigation will bring
forward or what evidence might come forward to show what happened to this "Washington Post" columnist, so we have a lot of companies now that are
having to balance both their business interest in Saudi Arabia where there's been so much money invested and a lot of hopes for the future, and
also, the sort of the moral ground and the human rights ground of what may have happened to, especially a journalist when we're talking about these
media companies who have pulled out.
I just checked the conference's website and it's been changing all day long. Their entire media partner section is now completely deleted.
There's been so many media partners that have dropped out, including as you noted earlier, CNN and now when you go into their program schedule, and you
look at who might be the speakers, there's no speaker section anymore and the program scheduled only talks about the specific sessions.
It doesn't say anybody who might be participating because so many people have dropped out because they're taking a stand here and saying, "Until we
know what happened with this journalist and all of these allegations around Saudi Arabia, somehow being involved, then we cannot participate," because
they don't feel comfortable doing so.
It's really notable to see so many of these companies coming forward and doing this because as you noted, all of the money that they are putting
into this, both businesses and also media companies. I mean, Bloomberg has a huge investment in Saudi Arabia with the newspaper there, so it took a
lot to bring these media companies to pull out of this conference.
It goes to show you how serious they are taking these allegations, but beyond the conference, as you noted in the intro, Richard Brunson has
announced that he is suspending the talks with the one - potentially a $1 billion investment fund and he said specifically that if these allegations
are true, it would clearly change the ability of any of us in the west to do business with the Saudi government.
That goes to show you how serious the outcome of this investigation is to Saudi Arabia and to the business world.
NEWTON: Yes, and the problem is of course whether that journalist - there is proof of life or death with that journalist so far and at this point,
everyone is saying they need more information. Sam Kiley there for us from Saudi Arabia and Hadas Gold for us from London. Appreciate it.
Now, a roughly 10 Washington lobby firms, we just want to show you the repercussions here, that have been representing the Saudi government. One
has already dropped it as a client and others of course now are following suit. The mass retreat would be in stark contrast to the past two years
when many hailed Saudi Crown Prince, Mohammad Bin Salman, known as MBS as a game changer capable of transforming the region and its relationships by
softening its hard line stance.
Now, the great reformer's grand vision for his country maybe unraveling. John Defterios has more.
(BEGIN VIDEO TAPE)
JOHN DEFTERIOS, EMERGING MARKETS EDITOR, CNN: Mohammad Bin Salman emerged as a young and ambitious reformer who promised the world. Under the brand
of Saudi Vision 2030, he aimed to rebuild the status of the Kingdom by harnessing the support of those in his generation, Saudi youth.
His plan was bold, cutting what he called an addiction to oil reducing the role of conservative Islam by opening up entertainment and tourism. And by
developing the world's largest state investment fund, to become a major player on Wall Street.
(BEGIN VIDEO CLIP)
NEIL QUILLIAM, RESEARCH FELLOW WITH THE MIDDLE EAST AND NORTH AFRICA PROGRAMME: This is why many of the western powers sort of embraced him or
thought he is the answer to this because he does really want to take the country, Saudi Arabia from A to B and he wants to do it at break neck
speed.
(END VIDEO CLIP)
DEFTERIOS: To catapult his ambitions, he forced a tight bond with US President Donald Trump's son-in-law Jared Kushner.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The relationship is probably the strongest since ever been, we understand each other.
(END VIDEO CLIP)
DEFTERIOS: It resulted in the President's first overseas trip to Riyadh producing $110 billion of US military contracts.
(BEGIN VIDEO CLIP)
QUILLIAM: Because you're tying together two very important and influential people and that's absolutely key.
(END VIDEO CLIP)
DEFTERIOS: The relationship emboldened the Crown Prince. He flexes muscle in the Middle East leading a nasty ongoing war in Yemen, putting an
economic embargo on neighboring Qatar and prodding the US to pull out of the nuclear agreement with Iran.
(BEGIN VIDEO CLIP)
QUILLIAM: They had gone directly to the top and they feel that that's where the green light is coming from. We can be as adventurous as we like,
and we're not going to pay for it.
(END VIDEO CLIP)
DEFTERIOS: Back at home, an alarming show of force at what western business leaders suggest was a key turning point after hosting a large
international investment conference, he used the same venue, the Ritz Carlton to arrest more than 300 businessmen and seized assets of $100
billion.
And some say, the suspected killing of journalist, Jamal Khashoggi will only make matters worse.
(BEGIN VIDEO CLIP)
MEHMET OGUTCU, CHAIRMAN, GLOBAL RESOURCES PARTNERSHIP: So there will be less and less trust in the prospect of Saudi moving ahead.
(END VIDEO CLIP)
DEFTERIOS: The numbers support that view. Foreign investment hit a 14- year low last year and an estimated $80 billion of money fled the country with another $65 billion expected this year.
[15:10:07]
DEFTERIOS: MBS appeared as an agent of change, but is now being viewed as too impulsive for his own good.
(BEGIN VIDEO CLIP)
OGUTCU: His image of a reformer, young and vibrant Prince has been somehow rewarded.
(END VIDEO CLIP)
DEFTERIOS: In a region that as a result of his actions is riskier than ever. John Defterios, CNN, Abu Dhabi.
(END VIDEO TAPE)
NEWTON: Director for Government Relations, Policy and Programs with the Middle East Institute Gerald Feierstein joins me now from Washington and
thanks for joining us as developments continue for the Middle East. You know, you've argued that look, no one should be naive here that any kind of
reform was never going to be political and that this Kingdom and this Crown Prince at the end of the day is an autocrat.
GERALD FEIERSTEIN, DIRECTOR, GOVERNMENT RELATIONS, POLICY AND PROGRAMS WITH THE MIDDLE EAST INSTITUTE: That's right. You can look at Saudi Arabia
very much along the lines of the China model that the Vision 2030 program, that the Crown Prince has initiated is really about economic and social
reform. It's about moving the economy away from dependence on energy, away from dependence on public sector programs towards diversification,
development of the private sector - that's really what Davos of the Desert is all about.
And it was also about responding to the demands of young Saudis who wanted to live in a more normal country. They wanted to be able to go to a movie,
they wanted to be able to travel freely, and of course bringing women more fully into the society and into the economy, a very important plank in this
Vision 2030 program.
But what it was never about was about political reform, and the Crown Prince in fairness never said that it was. He is an autocrat. His program
is really aimed at cementing the leadership of the House of Saud in Saudi Arabia going forward. He intends to be the King after King Salman, his
father passes from the scene, and that's really what this is all about.
NEWTON: Yes, and you make a good point there because any kind of political reform would essentially be in existential crisis for the Saudi Royal
Family, but then that brings us to the reaction. We have heard Donald Trump have a very transactional and blunt response to the fact that look,
if we don't sell arms to the Saudis or we can't, that is going to cost the US money.
I mean, let's be clear, Gerald. There has been a transactional relationship with Saudi Arabia, not just with this administration, Democrat
and Republican - is this a game changer in your view about that because many are quite skeptical. We already have a Turkish and Saudi Arabia joint
investigation after Turkey pointed the finger, right, at the Saudi Royal Family. Do you get the sense that politically, for allies in Saudi Arabia
that this will still blow over?
FEIERSTEIN: Well, I think that that's certainly from an administration standpoint. I suspect that they are desperate to see the story move to the
back pages of the newspapers. If you look at what the principal elements are of Donald Trump's Middle East ambitions, it's confronting violent
extremism, challenging Iranian expansionism and maybe doing something on the Israeli-Palestinian account, all of those issues are absolutely
dependent on the US-Saudi relationships.
So the administration is not going to want to change the nature of the relationship. They're going to hope that this is a short term story that
they can get past. More important really is where the private sector is and I think that the report that you were filing just before this
conversation where the business community is, where investment is going to go to somebody like Richard Branson look at us and say, "I don't want my
brand associated with Saudi Arabia."
Those are really in terms of Saudi's stability and where they go from here, those in many ways are more important questions than what the Trump
administration is going to do or not do.
NEWTON: Yes, which belies really the millions of dollars that Saudi Arabia has put into a lot of PR and lobbying in this country and others over the
last few years. Mr. Feierstein, thank you so much, we appreciate you joining us.
FEIERSTEIN: Pleasure.
NEWTON: Now, markets are trying to break higher with less than an hour to go in the trading day. we'll have a full report. Have a look at the
markets now. You know that's not bad compared to where we were. A lot of that on the backs of hopes for corporate earners.
Later, we have a special edition of "Quest Means Business" for you because 17 hours and 25 minutes in the air, Richard Quest has now finally
disembarked from the world's longest commercial flight. Didn't he look happy there? We'll explain why Singapore Airlines brought the route back
after five years having stopped the service.
Where is he? I see an empty chair.
[15:15:16]
NEWTON: Okay, I know it doesn't look all that impressive but the buyers are trying, trust me. Stocks on Wall Street are trying to have that last
hour rebound. It has been the worst week for US stocks since March. The Dow, believe it or not, I know it seems like a long time ago, but at the
beginning of the day, it was up 414 points helped by strong gains from the tech giants, but the Dow's gain vanished around lunch time. We have been
going between gains and losses. We better hope we end up at least above water.
JP Morgan is the biggest loser out of the 30 stocks that make up the Dow. We will get to those bank earnings in a moment, but first, we are going to
take a temperature of those markets with our Clare Sebastian who has been watching them all day and determining that there really isn't much sense to
be made at this market at this point in time.
CLARE SEBASTIAN, CORRESPONDENT, CNN: No, I think I would describe this as a weird day on the markets, but I was surprised that early Friday, we saw
the 400-point plus gain in the morning and that was on the back of two days which saw more than 1,300 points loss of the Dow, 5% wiped off in two days
is significant, and there was a lot of talk out there about how the market is oversold and there might be some bargains to be picked up, plus a little
more optimism perhaps coming in about tech and the trade war which we now know that there is a possibility that Trump might meet with Xi Jinping at
the G-20 in November, which is something to be fairly optimistic about when to comes to the markets.
But overall, there jus - they don't seem to able to come back to those original gains. It's going into the weekend, so that's something people
tend to avoid.
NEWTON: Yes, I am describing it as a no man's land and I have never heard so many experts on in one day actually say, where is the market going?
Actually, I don't know. And these are people who have great insights into the market and the movements there.
Clare, we are going into earnings season. Some people have argued that look, no matter how spectacular they are, they are already priced into this
market.
SEBASTIAN: At the moment, I think, certainly, if you look at the run up over the last couple of months from kind of June to October, we saw them as
10% coming back into the market, and so I think there is a lot of that, and I think people aren't convinced that this bout of selling is over. I think
that's why you see these weird movements on the market today and even though we've got three big bank earnings today, all of which were beating
expectations, they are still not convinced the financial sector is the one that is now losing the most in the S&P 500 at the moment despite that JP
Morgan which was the - perhaps the best of them all is being punished, down more than 1%. So there's a lot of paradoxes out there, but I think
overall, there's just a lot of caution.
NEWTON: Yes, and you certainly can't blame people. The one line everyone has been saying is why be a hero? Sit it out, at least for the weekend.
[16:20:16]
NEWTON: It should be a really interesting earnings season seeing all of that. Clare, appreciate it. Thanks so much. Have a good weekend.
Now, there has been one factor that investors have had to contend with all year as Clare was saying, that trade war, especially between the US and
China. Now, that has caused volatility in the stocks that make up those Dow Industrials.
The index is up about 2% and that is for the year though. Ken Rogoff served as the IMF Chief Economist. He is now an Economics Professor at
Harvard. You know, Ken, we keep talking about what China - the implication of China can have at this market.
In terms of what we've seen in the last few weeks, does it make you perhaps a little bit more skeptical that there isn't going to be a boomerang effect
to what is a China that is slowing?
KEN ROGOFF, FORMER IMF CHIEF ECONOMIST: Well, China is slowing and the trade war is sort of kicking them while they are down. The IMF estimates
that it could knock another 2% of their growth over the next couple of years.
I mean, that is one of the things weighing on the stock market for sure. It's not the only thing I think, rising interest rates are the biggest
thing.
NEWTON: And let's get to that, the rising interest rates, I mean, there's been a lot of criticism about the fact this week, not the least from
President Trump. I won't even go over all of the crazy things he called them, but he did use the word "crazy." Having said that, a lot of people
are second guessing the Fed yet again. Is it right or wrong to say at this point that the Fed is like the rest of us, data dependent. They will take
a wait and see approach and obviously, it is not in their interest to raise interest rates too quickly.
ROGOFF: They are like the rest of us, especially and they are not quite sure what's going on. They've had this period of unbelievably low
inflation for a long time and so the economy is strong. The US is doing really well and some people are saying, "Wait, whenever it does really
well, inflation is going to explode." That's hard to believe. So, I think they are going to be patient.
But at this stage, it's very hard to call. Like up to here, it's been pretty easy. It's getting tougher. I think the US economy still has ways
to go. It can be strong without high inflation, but there are people at the Fed who disagree.
NEWTON: Yes, and it's interesting that for the first time on Wall Street, and in Washington, the answer is, "I don't know." And that is an
acceptable answer right now. One of the things though, the uncertainties out there is the whole China issue. There are a couple of things that I
look at that have been really interesting though and the fact that on the trade issue, even Steven Mnuchin repeated - the Treasury Secretary repeated
again today that they are going for broke with these negotiations, and what that does that mean?
They want technology transfer to stop and they want the Chinese government to not set the parameters of investment. Do you see these as prolonged
problems to getting a deal with China and that that could reverberate in the months to come?
ROGOFF: Yes, it's a big deal. I mean, I don't think the US is wrong to argue about these things and if you're looking at how can the US be a
strong economy over the next 10 or 20 years if China is engaged in intellectual property theft. Of course, it's going to be really hard, but
on the other hand, how much strength does the US have? What can the US really do? So they say they are going to be really tough. I suspect, at
the end of the day, if the economy starts to weaken because of the trade war, the US will back down and declare victory.
NEWTON: So that's interesting. So you think that China does have some cards at the table here?
ROGOFF: Well, I mean, of course they do. I mean, a big slowdown in trade with China is not very good for the United States. It's not a win - it's
not something where we win, and let's not forget that one of the reasons interest rates might go up is because of a cutoff of flows from Asia and
from China. We're vulnerable. We, the United States are very vulnerable to that.
I am not going to say that the US is hostage, but absolutely, China has cards to play and the US, if they don't trade with China, the goods will
come from somewhere else. I mean, as long as we are spending the way we spend, I don't think the US is ever going to be a big manufacturing
employment place again. We may be producing with robots, so no, we can get scared down, but I don't think it's nearly over.
NEWTON: And we end the week with a big question mark and it's going to be an interesting few weeks to come especially with - we should have the
Treasury Department coming out with whether or not they are going to declare China a currency manipulator, so we will wait for that next week.
Thanks so much for being with us. Appreciate it.
ROGOFF: Thank you, I think they won't.
NEWTON: Okay, good. We've got you on the record on that one. Take one into the weekend, everyone. Thanks again, Ken. Appreciate it.
Now, the first earnings reports of the third quarter are in from Wall Street's biggest banks. Investor Relations are mixed. JP Morgan's profits
surged, but bond trading revenue was in fact weak. At Citi Bank, higher bond trading revenue boosted profits.
[15:325:08]
NEWTON: finally, Wells Fargo reports that their deposits fell. The bank though is lending less even as the US economy powers ahead. Joining me is
William Cohan, he was an M&A banker. He is now a special correspondent for "Vanity Fair," and I have to say, real insight into what the bankers who
run these banks are actually thinking these days, and William, I want to ask you, deregulation is back for these people. How do you think that will
propel them going forward especially coming from someone like you who documented the bank meltdown so well from a decade ago?
WILLIAM COHAN, FORMER M&A BANKER: Well, I mean, the bankers couldn't be happier, honestly. First of all, they have far less competition than they
had before the financial crisis. There really aren't that many big US banks sort of who are considered major players on Wall Street anymore. The
European and the Chinese banks are basically - are still are not that competitive.
Their cost of funding has been extremely low, virtually free for 10 years. Now, it's what they pay people who are savers and who have checking
accounts at banks that if you look at your checking account or your savings account, you see that you're getting paid close to zero for giving them
that money and since they take that money and they lend it to their customers, their corporate clients, the governments, endowments, whatever
it is and capture the spread, the combination of paying us so little for their raw material and the fact that they can charge a lot for these
corporate customers and government customers and that there isn't that much competition, this is literally a golden era for big banking in America.
And you combine that with the lower corporate tax rate from 35% to 21%, whereas last year, JP Morgan Chase is making record profits of about $7.5
billion a quarter, now, abracadabra, they are up to like $8.7 billion a quarter. It's a gusher.
NEWTON: It's a gusher and some people still worry about this sector. I don't have a lot of time here, but are you worried at all or do you think
they are on firmer footing?
COHAN: I am not worried at all about US banks. This is a golden era of US banks. European banks, maybe; Chinese banks, maybe. US banks - they all
love it. It's great to be a banker right now.
NEWTON: I can imagine. Especially with all of those bonuses. Okay, we will continue to check in with you as you chronicle that banking sector in
the United States. Appreciate it. Now, when we return, yes, the wanderer returns, Richard is back from the longest commercial flight in the world.
Why are you making so much racket in here? It was so nice and quiet and then you return. You're not even wearing a tie?
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Excuse me, do you mind? I'm just getting rid of my luggage. Thank you.
NEWTON: We will be back.
(COMMERCIAL BREAK)
[15:30:00] PAULA NEWTON, HOST, QUEST MEANS BUSINESS: Hello, I'm Paula Newton, coming up in the next half hour of QUEST MEANS BUSINESS, Richard's
commute to the office will take a little longer than usual today to be with me in a second to talk about the world's longest passenger flight.
And if you would rather be at a sold-out concert than watching TV on a Friday night, we all know you'd rather be. Ticket scalpers might be the
ones to blame. I'll speak to one CEO who thinks he has a solution.
Before that though, these are the headlines on Cnn this hour. A source familiar with the investigation tells Cnn Turkish authorities claim to have
audio and video evidence to prove Saudi journalist Jamal Khashoggi was murdered inside the Saudi Consulate.
Saudi Arabia firmly denies any involvement in his disappearance. American Pastor Andrew Brunson has left his home in Izmir, Turkey and is finally on
his way out of the country. He spent more than two years in Turkish custody, charged with helping plot a coup against President Recep Tayyip
Erdogan.
He was released Friday after the court sentenced him to prison, but released him for the time served. Mudslides and floods are wrecking havoc
in eastern Uganda as a result of heavy rains across the Buduba -- Bududa District, pardon me. Homes were destroyed by a flooded river and crushing
mountain slopes.
The Uganda Red Cross said at least 34 people were killed and dozens more are feared missing. Although rescue teams are actively trying to rescue
people from the debris. OK, so Richard Quest has completed an aviation first -- I know, you're thinking, what again? Yes, again, he did it again,
and it's a dream come true of course for our geek in residence Richard Quest.
There you go, as you can see him now, marching down the Airbridge before setting off for the longest commercial flight in the world from Singapore
to New York. I point out, he couldn't find his boarding pass at this point in time. But take a listen at the rest of the journey.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN (voice-over): Many months in the planning. Lots of care and dedication, a brand new aircraft and a record to be broken. The
longest flight in the world.
(on camera): Here we go, will not.
UNIDENTIFIED MALE: Sixteen hours level of flying, nothing really much to do really except keep an eye on things. Plan as high as we can,
communicate with Air Traffic Control, nothing exciting which is how I like it.
QUEST: So this is the selection of food that is served with which we have to take off. I've chosen to have (INAUDIBLE), the main option.
What is this?
UNIDENTIFIED FEMALE: This is -- we call it Gradue(ph), so this is for exterior, dispose all the items like rich tops, so that it won't choke the
thing -- yes --
QUEST: Also, it was the rice maker. Yes, so we've got 11 and a half hours still to go. Most of the planes are still -- I can't sleep here, I want to
see next for the last six or seven hours which like -- fresh, we land in the early morning.
[15:35:00] So that means time can be reversed, and on this flight here on.
UNIDENTIFIED MALE: So we did a -- tried a number of black crowd, most of the passengers after the first meal, they will sleep for about six hours
and then they wake up, they're looking for food to eat.
QUEST: Coming out two hours out of New York Airport, trying to get dressed once again, I always get dressed at about this time while landing on our
flight from the backroom, get real nasty.
Biggest A350 has 161 passengers on board. There's no economy class here, but there's premium economy. Morning, good flight --
UNIDENTIFIED MALE: Good morning --
QUEST: What do you think of it, longest flight in the world? Did you enjoy it?
UNIDENTIFIED MALE: Yes --
QUEST: Yes! And so we have arrived, 17 hours, 25 minutes, a quicker crossing because of the excellent tailwinds. This flight along with the
other ultra-long hauls ushering in an entirely new era of travel. Longer distances, any two places on the globe can now pretty much be joined up.
The world really is now always stop.
(END VIDEOTAPE)
NEWTON: And Richard joins me now, as you can see, he still has those empty jetlagged glasses, is that what they're called?
QUEST: Yes, it's from a company called AO, and they make these glasses which gives blue light that you wear for 30 minutes at a time for several
days and after.
NEWTON: And when are we going to know if they work?
QUEST: It's really several days afterwards that you know because --
NEWTON: OK --
QUEST: The goal here is to -- I get light when I shouldn't, therefore it rebalances my --
NEWTON: And --
QUEST: Circadian rhythms.
NEWTON: And as you can see there, you wore them during --
QUEST: Yes, I did --
NEWTON: That's the longest flight, of course, I had great fun with this yesterday because I thought you resembled very much, you know, a minion in
this glasses.
(LAUGHTER)
Come on --
QUEST: Ding-ding, there's a lady who is annoying me. Studer, it's the Newton --
NEWTON: I am not leaving --
QUEST: Thank you --
NEWTON: Or the cabin, I am not leaving the cabin. In all seriousness, what does that studer won't display? I mean, do you really think people
want to be on an airplane this long. You had a very nice, comfortable cabin, I know that.
QUEST: Yes, I do, because the direct flight is usually preferable to a one stop and people do want to have them, and these new aircrafts, the 350 and
the 787 allow you to have these longer haul flights at cheaper costs, opening up what they call these long thin routes; Chicago to Houston for
example.
NEWTON: Interesting, OK, now Richard, as we said, you are --
QUEST: Did I say Chicago?
NEWTON: You mean --
QUEST: That's how tired I am --
NEWTON: I shouldn't try --
QUEST: Not Chicago to Houston, that's -- it's a major route, I meant Chicago to Auckland.
NEWTON: Excellent, Auckland, I thought to go there, OK, next, this is the first time you've done something like this. We want to take a little look
back into your greatest aviation hits.
(BEGIN VIDEOTAPE)
QUEST: Flying the Qantas kangaroo route from Perth to London in 17 hours. Your hopping days are over, Perth to London, nonstop.
Then it's just extraordinary.
(voice-over): From Auckland to Doha on Qatar Airways, just over 9,000 miles on 17 hours, 30 minutes using the Boeing 777 200LR, long range.
UNIDENTIFIED MALE: I'm about at that stage where I'm ready to pass out.
UNIDENTIFIED MALE: It was fantastic, yes, had to proud of especially inaugural flight like this.
UNIDENTIFIED FEMALE: Thank you really.
QUEST: And with Boeing, Hong Kong to London, the long way route on another 777 200LR, just to prove it can be done. Celebrating 22 hours, 40 minutes
in the air.
UNIDENTIFIED FEMALE: We feel like this is a flight of a career, we won't have another opportunity like this.
QUEST: That truly is the longest flight in the world. It's fair to say, I've had my fair share of longest flights in the world. I know by now to
pack the essentials, compression socks, we snuckle the legs.
Not to forget to stretch and to resist the urge to wind. Holiday yet! And when all is said and done, you might be a little worse for wear after that
ultra-long haul.
[15:40:00] But without that layover, you can go to far flown places with far less fuss.
(END VIDEOTAPE)
NEWTON: They always say that the glamour has been taken out of thought, and I mean, I suppose for a certain extent that's true, but when you're
going on a long flight, 17, 18, 19 hours, how do you re-adjust to getting ready for a flight like that?
QUEST: The important thing to remember is that the body is going to deteriorate after 10 hours in the air. And what Qantas and to a certain
extent Singapore Airlines have done is re-engineer the flight, make sure that the lighting is controlled that creates the correct light temperature
for morning sunrise or sunset.
NEWTON: OK --
QUEST: It can control it certainly, cabin has different shades. The food that's on -- yes, if you want a big, heavy staunchly state, they're giving
you. But they also offer a variety of other options. Things like exercises before you actually get on.
So for example, ensuring before you fly, that you may be do a few --
NEWTON: Before you fly --
QUEST: Before you fly --
NEWTON: Will have to be on a flight too, just do some stretching.
QUEST: Go to the back of the aircraft, just do a few of these.
NEWTON: Tell me the truth, Richard, I've never asked you, when you're on these really long flights and you're all over the world all the time, what
really is the trick to getting over jetlagged.
QUEST: There's none.
NEWTON: Oh, there's --
(LAUGHTER)
QUEST: No, there's -- seriously, there's no trick to it, jetlagged is a natural phenomenon that will affect most of us. There are a few who
doesn't, good luck to them. The real trick I find is one or two things. One, get sunlight, go outside, Vitamin D as much of it as you can --
NEWTON: OK --
QUEST: If it's hot, then suddenly go outside.
NEWTON: You sleep when you're tired.
QUEST: And nap, don't be afraid to say I'm tired, I'm just going to my hotel room to have a 20-minute nap. Become a napaholic(ph).
NEWTON: OK, back to that, you can take the show back by the way, go, I'm in a nap.
QUEST: Very much, you need these. Right, well, as we continue, another veteran of flight SQ22 Geoffrey Thomas from Airlines Ratings joins me. The
battle for the longest flight, Geoffrey, shame on you. We were on the plane together, look at me and look at you, I know, you deserve the C-suite
for this.
GEOFFREY THOMAS, EDITOR-IN-CHIEF, AIRLINES RATINGS.COM: Thank you.
(COMMERCIAL BREAK)
QUEST: Thank goodness, that annoying passenger has been removed from the plane, put further back near the toilet, no doubt. The longest flight is
no novelty, and with new planes like the 787 and the 350, there's fierce competition to go further and win the battle for the business travelers.
Now, these are approximate timings, they all depend on the winds, and they would change on a daily basis, and it's all according to OAG, the air
travel intelligence company.
[15:45:00] My flight was Singapore to New York. It times in at roughly, I know, 17, 18 hours, 30, can go up to 19 hours.
From November, SQ will also be flying to Los Angeles, and that's roughly 18 hours as well. Now Qatar Airways takes you from Auckland, this was -- this
was the longest flight in the world, from Auckland to Doha. I know it doesn't look as far, but that's the way the map goes. Doha to Auckland.
Then you've got United Airlines from San Francisco to Singapore. Qantas, this was a great one, Dallas up to -- Dallas to Sydney, these are massively
long routes, 17 hours and five minutes.
You've got Etihad which from Abu Dhabi to LA, 17 hours, and then of course Qantas, Perth to London. That was also a great favorite. Just to show how
big these routes do get. For example, the Qantas CEO Alan Joyce, he is eyeing up what would be even longer than Singapore-New York, it would be
Sydney to London.
And he says the way to do that directly is the way forward.
(BEGIN VIDEO CLIP)
ALAN JOYCE, CHIEF EXECUTIVE OFFICER, QANTAS AIRLINES: The reason we want a direct service is that more people attract -- the business people, people
avoiding a stopover, people making a direct service. And our business class on this is the biggest business class as a proportion to the
aircraft, we've never boarded an aircraft and it is filling.
And we know people, business people will be attracted to it. And that's what makes the economics something like this work.
(END VIDEO CLIP)
QUEST: Geoffrey Thomas is the editor-in-chief of Airline Ratings.Com, he joins me now, good to see you.
THOMAS: Richard, great to see you.
QUEST: You're well dressed considering you were on the flight last night. Look, I'm wearing, I mean, a version of what I was wearing last night.
THOMAS: Well, you were -- you came, trying to work, and I've had the benefit of a shower and changed, but --
QUEST: What did you make of last night's flight?
THOMAS: Look, I thought it was terrific, a beautiful smooth flight. The captain said to us A350 is a very responsive aeroplane, very stable
aeroplane. And we had a great flight.
QUEST: Right, is Alan Joyce correct when he says that direct flights are the way forward? Because there's a limited number that will be profitable,
and they do damage -- they haven't spoke.
THOMAS: They do, and this goes to the core. Haven't spoke versus point- to-point, Boeing versus Airbus if you like. And it's interesting that Airbus aeroplane doesn't have a longest route in the world. But the Perth-
London flight for instance, 94 -- 92 percent low factor from that aircraft, 94 percent in premium cabins.
So they're proving conclusively that people really do want to go point-to- point.
QUEST: But will there also be a quicker speed to drop a route? Because we always know London-New York will be popular.
THOMAS: Yes --
QUEST: But the one I see, that's looking -- and that's looking at is Chicago to Auckland, how making that connection with United Air. But these
are all very long thin routes --
THOMAS: Yes, there are lots of very long thin routes. I mean, since 787 was introduced, there's been a 117 new point-to-point routes that weren't
there before because the airplane is perfectly sized.
QUEST: And will they -- those routes, will they be the first to go in an economic downturn?
THOMAS: Look, I don't think so, because I mean, the economy -- the economics of this airplanes, this ones we flown overnight, 35 percent less
fuel in the plane that replaces. So this is brand new generation of aircraft.
QUEST: Are we in a revolution in terms of air travel? Are we entering -- about to enter a new golden age with better beds at the front and low costs
-- let's take Norwegian, low cost expansion at the other end.
THOMAS: Low cost at the other end, and yes, more confident at the top end, and in the middle premium economies is going to get better and better and
better and become probably the value proposition for flying.
QUEST: As between Qantas, Singapore, and all the big carriers, is there -- what's going to be their fighting ground for them? Is it going to be how
many trinkets they can throw at you and me at the front, or is it going to be how many trinkets they can throw at that other woman who was down at the
back?
THOMAS: I think it's the -- I think it's the trinkets they can fly to the retired couple, the moms and dads, the tall passengers, premium economy. I
think that's going to be the new battle ground for aviation.
QUEST: I've got to tell you, I take my hat off to you if I was wearing one. Good to see you as always --
THOMAS: Great to see you --
QUEST: Thank you very much indeed, great flight last night, lot of fun --
THOMAS: Lot of fun.
QUEST: Still to come, have you ever been ripped off -- oh, sorry, I thought I was meant to read that. That woman was back after you --
NEWTON: It's my show a little bit longer? You guys following along at home, I am the other woman, and yes, still to come, have you ever been
ripped off by a ticket scalper? Ticket master is fighting accusations that it colluded with scalpers at your expense.
[15:50:00] (COMMERCIAL BREAK)
NEWTON: Ticketmaster is facing questions from American lawmakers after a report alleged the company was colluding with ticket scalpers or touts,
helping them to buy tickets before fans have a crack at them. Now, the controversy started with an investigation by the "Toronto Star".
Ticketmaster though says look, it's all a big misunderstanding according to them. In a statement to Cnn, Ticketmaster's president said "Ticketmaster
does not have and has never had any program or product that helps professional resellers gain an advantage to buy tickets ahead of fans.
Period."
Joining me now, Jorge Diaz Largo runs Tracer; it's an app designed to stop ticket scalpers by giving promoters and ticket companies the power to
define whether tickets can even be resold, how and for how much. And thanks so much for joining us, it's been a topic that we've been talking
about a lot, and why?
Because we all go online nice and early prepared to drop a lot of money on these tickets, and yet they're not available to us at times or at
exorbitant rates. Three times, four times, five times the face value of the ticket. What can your company do especially since people have been
trying to do something about this for decades literally.
JORGE DIAZ LARGO, CHIEF EXECUTIVE OFFICER, TRACER: I would say that the -- that the -- I would think before that the second that industry, these
resellers, they have a six-six probably is one of the oldest business in the history of -- in human history.
You can imagine in the Roman coliseum, probably resell this --
NEWTON: Those scalpers are out there too --
LARGO: Scalpers --
NEWTON: Sure.
LARGO: And the thing is that until now, I believe that artists and teams, they all feel powerless. It's when I sell tickets, they get out of my
control, there's nothing I can do to prevent someone from resell my tickets somewhere.
And I can say it's important to understand that this industry -- the second that you think of an industry, it's not a small one, it's $15 billion spent
every year. These are not --
NEWTON: Fifteen billion --
LARGO: Fifteen billion, that's right --
NEWTON: On the resale --
LARGO: On the resale --
NEWTON: Resale --
LARGO: On the resale. So for some events, it's even larger than the original face value. So there's a great economic interest in keeping this
industry on. And what we bring is technology that help our best teams, theaters to prevent the tickets from being in the hands of the scalpers by
giving them control.
So all that fear they have, well, we sell our tickets, we don't know what's going on with them, we're giving them technology with technology, we're
giving them control and what's going to happen after digits have been sold already.
[15:55:00] NEWTON: A lot of people have wondered because it's been going on for so long. If your company is going to be successful or forward, what
is needed is literally legislation laws that say that you can't sell a ticket for more than double the price or let's say on a resale.
LARGO: That's a fantastic question, and I think that's very similar to piracy with music or piracy with films and movies --
NEWTON: Another interesting concept, you're saying it's like you can't reproduce a song for nothing, you have to pay for it, it's kind of the same
concept.
LARGO: That's right, that could stop it, could the legislation stop reproducing a song or and after 15 years ago, no. What killed piracy
mainly is Spotify and Netflix. So there's legislation, there's many governments around the world, trying to legislate the U.K., Italy,
Australia, South America as well.
But one I believe is this is done through technology. Legislation, you can say, you cannot resell it for more than X price, and then how do you prove
it? How do you know that that ticket hasn't been resold, it's impossible.
What we're bringing is able to track, to trace entire journey of the ticket. So the artists, the team they know that, that ticket has or has
not been resold depending on their policies.
NEWTON: And hopefully, there will be more people that can afford it in the seats. Thanks so much for coming in, we appreciate and we'll continue to
follow this.
LARGO: Thank you.
NEWTON: Now, we're going to have a quick update on that Dow, it has been as we've been saying a wild and volatile week, this hour is no exception as
you see there. The Dow now up better than 1.3 percent or 330 points. That means though it's still down a 1,000 points this week.
Do not miss Richard, he will be back in a moment with the profitable moment.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, I'm not sure anything I'm about to say is going to make much sense, having just come off the behemoth longest
flights in the world. But get used to it, Richard and indeed, you should too. Because whether it's Norwegian, whether it's new flights to South
America or it's Qantas looking to do London to Sydney nonstop, this is the future, new fuel efficient, low cost aircraft that are going to open up the
world for the rest of us.
And that's something we should all celebrate. Whether you're -- those nice big beds at the front or there's cramped seats at the back, we will get to
enjoy this new way of travel. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in London -- New York, where am I?
(BELL RINGING)
Whatever you're up to in the hours -- shame, shame on you. The day is done! The Dow is up! The market is closing.
END
