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QUEST MEANS BUSINESS

South Korean Ferry Captain Charged; Growing Anger Among Relatives of Missing Ferry Passengers; Search for Ferry Survivors; Pro-Russian Separatists Reject International Deal; World Military Expenditure; Ukrainian Army Unable to Oust Pro-Russian Forces; Eggs and Earnings; BMW Announces $1 Billion Investment in US

Aired April 18, 2014 - 16:00   ET

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


RICHARD QUEST, HOST: No trading on Wall Street this Good Friday, so no closing bell to bring you. We have, however, a full hour together.

Tonight, the captain of the capsized South Korean ship has been criminally charged with negligence. We're going to explore the fate of the sunken ferry and, of course, those still missing.

Also tonight, as pro-Russian forces refuse to give ground, Ukraine's military faces a crucial test of its resources.

And more taxi trouble for Uber. The app faces a ban in Berlin. The company gives its response.

I'm Richard Quest. It's a Friday, and of course I still mean business.

Good evening. We begin tonight, of course, with events in South Korea. The captain of the sunken ferry off the South Korean coast has now been arrested and formally charged.

State media in South Korea is reporting that Lee Joon-seok, highlighted here as he was rescued from the ship, is now in custody. Officials have charged him with five violations including abandoning his ship and negligence.

Twenty-nine people are so far confirmed dead in the disaster. As many as 270 others are missing. And a prosecutors says the captain was not at the controls when the ferry started to go down on Wednesday.

The government today released this desperate exchange between the ferry crew and the local control center.

(BEGIN VIDEO CLIP)

SHIP (through translator): Please notify the coast guard. Our ship is in danger. The ship is rolling right now.

DISPATCH (through translator): Where is your ship?

SHIP (through translator): Please hurry. Absolutely hurry.

DISPATCH (through translator): Yes, OK. We will contact you. This is group 12.

SHIP (through translator): Ship rolled over a lot right now. Cannot move. Please come quickly. We're next to Byeongpung Island. Byeongpung Island.

DISPATCH (through translator): Yes, understood.

(END VIDEO CLIP)

QUEST: Families of the missing passengers are growing more and more angry over the pace of the rescue effort. Desperate relatives are now sleeping on the floor of a local high school gymnasium to be close to the mission base. As our correspondent Paula Hancocks now tells us, the distress is simply proving too much for some.

(BEGIN VIDEOTAPE)

(PEOPLE SCREAMING)

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Howls of horror fill the auditorium. Rumors of an autopsy report emerge suggesting one ferry victim died just before being found. CNN cannot confirm this report. The hospital is looking into it. But the mere suggestion passengers may have waited in vain for rescue was simply too much for some.

At least two women collapsed and were taken to a nearby hospital. Nam Sing Won is waiting for word on his 16-year-old nephew.

NAM SING WON, UNCLE OF MISSING PASSENGER: Really, my nephew is still alive for now. So, even if -- how hard it is, how difficult it is, how hard it is, I don't care. I want to hear the truth.

HANCOCKS: The boy's father does not want to talk on camera, suffering from diabetes, he's lost consciousness twice since the accident. The boy's mother is so overcome, she cannot talk. Frustration and anger is directed at maritime police. So many questions, but so few answers.

HANCOCKS (on camera): Some of these relatives have been living in this auditorium since Wednesday, and the more time that passes, the less trust some of the families have in what they're being told by authorities.

HANCOCKS (voice-over): But this is all the information they have, and all they can do is wait.

(END VIDEOTAPE)

QUEST: What heart-rendering scenes, Paula Hancock's report. Now, the number one priority for the authorities is to find and reach any survivors that may still be trapped inside the sunken ferry. And they are, of course, already preparing to tackle what comes next, and in that case, well, obviously, it is a salvage operation.

This is the area that we're talking about, South Korea, that's where it took place and that's where the ferry was heading down to. The job's been made even more challenging, given the fact that the vessel has now completely submerged in the waters off Jindo.

For a long time, of course, the ferry had turned over, but part of it was still visible. That has now disappeared under the water, too. So, three giant floating cranes are at the scene. There's a fourth that's on the way to try to raise the ferry.

The families fear the arrival of these cranes heralds a very new and deeply disturbing phase in the operation, as perhaps it moves from search and rescue to search and recovery.

Earlier, I spoke to Captain John Noble. He's an oceanographer and an expert in marine salvage. I asked him his opinion, bearing in mind that the cranes are now onsite, what did he think this told us?

(BEGIN VIDEOTAPE)

JOHN NOBLE, CAPTAIN, OCEANOGRAPHER AND MARINE SALVAGE EXPERT: I actually believe we're really gone to the situation beyond any reasonable chance of finding anybody alive within the wreck. Therefore, I would suggest they started thinking about recovery.

QUEST: Will that be extremely difficult? They've brought the cranes in and I suppose the only thing most of us know is Costa Concordia, which took several years and many millions. Will this be easier, do you think?

NOBLE: Yes. I noticed one of the cranes there, and I suspected they'll need two of them, but once they get the wires in place, it should not be too difficult to invert the ship. It has been done before, and we're not looking at a prolonged Costa Concordia-type operation.

QUEST: What is the fundamental method by which they will do this, do you believe?

NOBLE: Well, essentially, if they're going to use cranes, which does look as though they've got them on station now, they will have to put wires or heavy-duty chains around the hull of the ship in such a way as they get some leverage to rotate the ship.

And once they can get the leverage, she should upright. She may, indeed, break up during that operation, you never know, but at least that is what I suspect they will try and do first off, because that is the quickest way to do it.

QUEST: You raised the point that I was going to ask you, the risk of the ship breaking apart is real?

NOBLE: Yes, it is. Once you put chains or other wires around a ship like that, to get the leverage, you have to put some stress on the hull. It's relatively straightforward mathematics, but when you do that, you're probably going to put the hull under more stress than it's designed to withstand.

QUEST: We don't know what happened, do we?

NOBLE: No, we don't, is the short answer. We can speculate at this stage, but until the investigators continue and finish, we really don't know.

QUEST: I'm old enough to remember the Herald of Free Enterprise, and I'm sure you, obviously, remember it much more than I do. I helped cover the story --

NOBLE: Yes.

QUEST: -- as a young reporter. In that situation, so much focused on a minimum amount of water getting onto the car deck, which has a disproportionate effect when the ship rolls. But I thought we'd learned a lot more about how to handle water on car decks by now.

NOBLE: Well, you're right, we have. But even after the Herald we had the Estonia case, and modern car ferries -- by modern, I mean ones built more recently than this one -- do have some sort of subdivision dividing the car deck. Because the loss of stability is a function of the breadth, and it's a treble function. So, if you have water on an open car deck, you lose a lot of stability.

(END VIDEOTAPE)

QUEST: Captain Noble giving me the facts as he sees them this evening. Amid all the analysis and reporting that we will provide on a disaster of this magnitude, tonight it really is simply worth restating the appalling numbers that we have so far.

And really, it comes down to this: 29 people are already confirmed to have perished. As many as 270 people are still missing, and many of them, of course, are those school children.

We'll be back in a moment.

(SILENCE)

(COMMERCIAL BREAK)

QUEST: Pro-Russian separatists in the Ukraine city of Donetsk have rejected an international deal to ease the crisis in eastern Ukraine. Officials from Russia, Ukraine, the United States, and the European Union, they thrashed out the deal. We talked about it last night on this program. The deal was done in Geneva, John Kerry was there.

The self-declared leaders of these separatists told reporters that Russia does not speak for his group. The separatists have occupied government buildings and say they will not leave until Ukraine's interim government resigns. The Ukrainian prime minister, Arseniy Yatsenyuk, today called for unity.

(BEGIN VIDEO CLIP)

ARSENIY YATSENYUK, PRIME MINISTER OF UKRAINE (through translator): The Russian Federation had to condemn extremism, and the Russian Federation has signed a statement which has to result in disarmament of all illegally- formed armed units, and all illegally-occupied administrative buildings must be vacated.

(END VIDEO CLIP)

QUEST: Now, what is really fascinating about this story, of course, is not just what's happening in Ukraine, but the wider, larger geopolitical situations, and that, of course, involves military spending. Come and look at these numbers at the super screens.

For the first time in more than ten years, Russia is now spending more of its wealth on the military than the United States. Here's the United States. The United States spent 3.8 percent of GDP on its military last year.

Obviously, you get this very sharp fall off as a result of the recession -- after the recession of 2008, you've got the sequester, you've got the fiscal restraint, the fiscal compact, all these things took US defense spending down to 3.8 percent of GDP.

Now, look at that. Russia is estimated to have spent 4.1 percent of GDP on military and defense. Again, fascinating to watch. You get this downturn during the Great Recession, but just about here, when Putin comes back into office as president, takes over again from Medvedev, you get an increase. And in 2013, you get the crossover point where Russia is now spending more.

All this data is from the Stockholm International Peace Research Institute. Russia's in the middle of a ten-year effort to modernize its military equipment. Despite the spending, the US still spends more in total, $640 billion in all, obviously because it's a larger economy, more than the last of the next eight countries combined.

By far the biggest spender in Eastern Europe is Russia, spending 16 times as much as Ukraine. It's no surprise, then, that efforts by the Ukrainian army to oust pro-Russian forces from eastern Ukraine have largely failed. Frederik Pleitgen joins me now from Kiev.

Frederik, we know on military grounds, we're not -- even Yatsenyuk has basically said we might put up a fight, but it won't be -- it'll be a good fight, but it won't be a winning fight. But when you look at these sort of numbers -- and with your knowledge of Russia and Russia's military spending, this is significant now.

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Well, it's absolutely significant, and it's certainly something that is very much showing on the ground. If you look at what the Russians did in Crimea, it's very different, for instance, Richard, than what the Russians did in Southern Ossetia in Georgia only a couple of years ago.

You see that the army is much more sophisticated, it's much better equipped, and we have seen that modernization program that was especially aimed at Russia's special forces, at their special operations forces, and that's why these operations are so much more significant and so much better organized.

So, the Russians have been modernizing their military. But the Ukrainian military has not only been deteriorating, the problem they've also had is that first of all, their military has become smaller, but also they've actually sold off a lot of the good military equipment that they've had to other countries that have been trying to boost their military.

So on the one hand, you had the Russians getting better and better, while the Ukrainians were deteriorating. And it's certainly something that shows on the ground in the situation, not only in Crimea, but also in the east of the country as well. We investigated that. Here's what we found.

(BEGIN VIDEOTAPE)

PLEITGEN (voice-over): It was a humiliating moment for Ukraine's army. Armored personnel carriers sent out to oust pro-Russian protesters from government buildings all of a sudden in the hands of the separatists, flying the Russian flag.

They were supposed to spearhead what Ukraine called an "anti-terrorist operation," but military analyst Oleksiy Melnyk tells me the episode shows Ukraine's army is not ready for counter-insurgency operations.

OLEKSIY MELNYK, MILITARY ANALYST, RAZUMKOV CENTER: First year cadet in the military academy already knows that you can't send APCs without any proper reconnaissance, without any proper escort by police, if you expect this kind of situation.

PLEITGEN: The government in Kiev was forced to look on as pro-Russian militias did donuts with the tanks apprehended from Ukrainian soldiers. Melnyk says this was just the latest in a series of mistakes by the military's leadership.

MELNYK: One of the main problems is our general staff. And those people who already made great mistakes by letting things happen in Crimea as it happened, now they are still in control.

PLEITGEN: But Ukrainian politicians and the military praised their soldiers for holding out on bases for as long as they did as a far better- equipped Russian force moved into Crimea. For, while tourists marvel at Cold War era tanks at this museum in Kiev, Ukraine's troops are still often using the same models on the front line today.

PLEITGEN (on camera): During the Soviet Union, the army in Ukraine was a formidable fighting force, but since this country became independent, it's continuously deteriorated. Several of the forums to try and upgrade the force have produced only mixed results.

PLEITGEN (voice-over): The military denies any serious shortcomings in its ranks and blames the government of pro-Russian former president Viktor Yanukovych for the outdated state of much of its hardware.

BOGDAN SELNYK, UKRAINIAN DEFENSE MINISTRY SPOKESMAN (through translator): The last few years, the army did not receive adequate funding. We basically only got budget leftovers. Now, there's a better understanding of what we need, and the army is receiving more funds.

PLEITGEN: But those additional funds have yet to impact the state of Ukraine's army, and recent events have shown the difficulties Ukraine's army faces, and why so many are worried about any potential confrontation with tens of thousands of Russian troops along the country's border.

(END VIDEOTAPE)

PLEITGEN: So Richard, you see, it's a leadership problem, it's a morale problem, it's a training problem. And of course, at the heart of it also, it's very much a gear problem. It's the amount of military spending that's been conducted by the Ukrainians.

And at this point in time, there are many people who believe that even if the Russians did not go into eastern Ukraine, the Ukrainian military would have a lot of trouble solving this problem, if you will, of those people who are in those government buildings in the east of the country using their military force alone, simply because the military has deteriorated to such a point, Richard.

QUEST: Frederik Pleitgen in Kiev tonight. Frederik, thank you, have a good weekend.

Now, as for the markets as they took their break for Easter, we're going to look at which investments are the good eggs, which ones are not, in a moment.

(COMMERCIAL BREAK)

QUEST: Markets worldwide, and many markets were closed for the Easter break. It gave investors their first time out in what's been a rocky 2014. In terms of investment, it's clear there have been some good eggs and some not-so-good eggs. They may not be sour, but they, perhaps, have been, as it was famously said of the Curate's egg, "good in parts."

Jim Awad is the chairman of Plimsoll Mark Capital. Good to see you, sir.

JIM AWAD, CHAIRMAN, PLIMSOLL MARK CAPITAL: Always my pleasure.

QUEST: Good to see you. Now, here's our Easter basket --

AWAD: Right.

QUEST: -- to enjoy a little as we -- let us begin with the question of stocks. Now, plenty of chocolate in the stocks, but if we look at the way stocks have performed and how things have moved forward, what's your -- that's the Dow Industrials. I know, broad barometer, had a very nasty fall in February but a recovery towards -- and we're still down a little touch for the end of the year. But do you think they are a good egg or a bad one?

AWAD: I think they are a reasonable egg. Clearly the least ugly egg in town. And I think they should have a respectable return this year, but you have to drill down.

And I would say that the momentum eggs, the very hot ones that everybody has been playing, are likely not to do well, and more of the more mundane, value, global companies with balance sheets and dividends are likely to do better than the momentum, risky eggs.

QUEST: Right. But we're just getting to the, if you like, the egg reporting season.

AWAD: Yes.

QUEST: And we're finding out just how tasty the eggs are. And we've had some warnings about not-so-good eggs going in the season.

AWAD: Right.

QUEST: So although we're not going to see the 20-plus percent that we saw last year, the Dow or any of the major indices, you're still bullish on an egg?

AWAD: I am bullish on properly-chosen, quality eggs, not all eggs. But yes, mildly bullish, respectably bullish on the egg.

QUEST: Right. So, let's go for oil. Now, here's -- whenever -- oil is one of those eggs, to mix the metaphors beautifully, that, well, the price -- look at the price.

AWAD: Right.

QUEST: The price is now -- for Brent is back up at towards $110 for Brent. But the effect that this rising price of oil has on economies is more dangerous, if you like, than the actual rise of price itself.

AWAD: Well, oil becomes a problem for the economy if it's not available. Its price can be adjusted to and worked through the economic system. So, as long as the price goes up at a measured rate, the economies can handle it.

Where you have a problem is like in 1973 where there was an oil embargo and the price shot up and --

QUEST: Oh!

AWAD: -- and there was no chance to --

QUEST: Well --

AWAD: -- to react to it.

QUEST: Well, if we start getting up to $120 -- not that we are --

AWAD: Yes.

QUEST: But if we start getting up to $115, $120 and plus, then you're starting to have an economic impact from the price of oil, even though --

AWAD: Yes.

QUEST: -- the relative effect of the price is less than it was in the 70s.

AWAD: Yes, absolutely. It becomes a restraint and a deterrent for the world economies because you're taking money that would be spent on consumption and spending it on oil.

QUEST: All right. What about this one? Gold? I am a believer that this is probably the worst of all investments. And other people just simply say that I'm deluded, I'm wrong, I'm antediluvian, whatever you want to call it.

AWAD: Well, it --

QUEST: Where do you stand?

AWAD: I'd love to disagree with you, but I can't. Gold does well in two environments: hyper-inflation, where people lose faith in currencies, or periods of confusion, distress, despair, where people want something that they can hang onto.

And you have neither of those. You have reasonable growth, but not enough growth for inflation. And the financial system right now has been somewhat repaired and is not in danger.

QUEST: I'm going to give you one choice of an egg.

AWAD: Yes.

QUEST: Stocks, gold, or oil?

AWAD: I'm going to take the stocks. With -- between those three, without a doubt, stocks. But I want to emphasize again, quality stocks, not momentum stocks.

QUEST: Have some chocolate as well.

AWAD: Thank you very much, and happy Easter.

QUEST: Happy Easter to you. All right. The New York International Auto Show opened its doors to the general public today -- all this chocolate is around. The German giant BMW unveiled its new X4 model earlier.

The company's investing a further $1 billion in South Carolina in the United States. BMW's North American president Ludwig Willisch told Paula Newton why the US is still important to the brand.

(BEGIN VIDEOTAPE)

LUDWIG WILLISCH, PRESIDENT, BMW NORTH AMERICA: It's not only made in the USA, it's also made for the USA, because the US will be the biggest market for that car for sure. So, we've had huge success with the X6, let alone the X5 is a home run.

But that car, just looking at it, I think it'll sell extremely well. And well, we asked for it, and now we've got it, and it's made on home turf. So, I think we will have great success with the car.

PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: What do you think going forward will be the story of manufacturing being revived in the United States? You're about to make an investment, more of an investment in South Carolina, $800 million, it was just announced to do -- to manufacture your X7 there. Why the United States?

WILLISCH: Well, first of all, we want to balance our production base around the world. We also say that production follows the market. US is one of the biggest single market that we have for BMW, so it makes sense to produce cars here.

But also it makes sense in the way of balancing our production base around the world, balancing risk, if you want. That's why we're expanding our plant. Twenty years ago, that plant was designed to build roughly 100,000 cars.

Now we're expanding it another billion that we're investing. All-in- all we then will have invested $7 billion into the plant and we'll be able to produce more than 450,000 cars.

NEWTON: So, four times -- more than four times the amount --

WILLISCH: Absolutely. And let alone all the jobs we create with that.

NEWTON: How do you keep that, though, maintained across the pond? You have a completely different culture of work in Germany that you do in the southern United States.

WILLISCH: It's processes. Clearly adhere to the process and that's it. And there's no difference between -- we're also producing cars in China, we're producing cars in South Africa, we're producing cars in other parts in Europe, in the UK, so it really is about the production process that doesn't have to do much with the culture. It really is how you produce cars in the first place.

NEWTON: In terms of the X brand itself, how was this important to the BMW lineup of cars that you have?

WILLISCH: Well, it obviously -- if you look at the US market, roughly half of the market is trucks.

NEWTON: Half of the market in the United States is trucks? I didn't know that.

WILLISCH: Yes. So, it's -- if you look at 2014, this year, it's going to be roughly 8 million cars and 8 million trucks. So you might as well play on both fields, and that's why we had to come up with trucks, and we made that decision a long time ago, and it's been used.

BMW has done great with the X5 to begin with, and that added more cars to the X lineup, and it's been a success all the way.

(END VIDEOTAPE)

QUEST: The head of BMW in the United States talking to Paula Newton. Still ahead, a rocky road for Uber. The taxi app's troubles grow in Europe. We'll hear from the company about where it now turns.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There is more "Quest Means Business" in a just moment. This is CNN, and on this network the news always comes first. The captain of the ferry that sank off South Korea has been arrested and criminally charged. The Yonhap News Agency says the captain's accused of five crimes including abandoning ship. The death toll from Wednesday's disaster now stands at 29. Some 270 people, mostly high school students, are still missing.

Barricades surround a building in Donetsk in eastern Ukraine where pro-Russian protesters still haven't vacated the building. This is despite an international deal reached in Geneva on Thursday. A protest leader says separatists won't leave the building until the government in Kiev resigns. Nepalese officials say a dozen shepherd guides have been killed in an avalanche on Mt. Everest. The avalanche gook place just above the base camp - that's about 6,000 meters up the mountain. Three others were seriously injured. Four people are reported missing.

A magnitude 7.2 earthquake has hit southern Mexico on Friday morning. U.S. Geological Survey says it struck outside Japan between two major resorts, and there are no reports of any injuries. Pope Francis has marked Good Friday by leading the Stations of the Cross. His Holiness led the service at Rome's Colosseum. Millions of Catholics and Christians across the world observed - are observing - the solemn day in the Christian calendar.

So the slogan goes, "There's an app for that." When it comes to booking a taxi in parts of Europe, you will come across some difficulty if you use the Uber app. It may be phenomenally popular and there can be no doubt about that. But the company's international expansion isn't quite going to plan. A court in Berlin has issued an injunction against Uber on the grounds of hurting competition claiming that it's more like a rental car company than a taxi service. Uber's run into problems in Paris where angry taxi drivers reportedly attacked Uber cars, and look at this protest sign. It points with traditional taxi lights saying "Made in France." As for Uber, it's made who knows where? Brussels has also issued a ban. The city's transport minister told me on this program this week Uber simply wasn't playing by the rules.

(BEGIN VIDEOCLIP)

BRIGITTE GROUWELS, BRUSSELS MINISTER FOR TRANSPORT: -- it would have been a better idea if Uber had sought contact with the taxi sector to see how they could work together. But no, they came in this market not respecting the rules -- .

(END VIDEOCLIP)

QUEST: Pierre-Dimitri Gore-Coty is Uber's regional general manager for Europe and joins me now on the line. Sir, I understand that you're going to put the argument of anti-competition and all these rules are against competition, but let me just be blunt. Both in Brussels and in Berlin the law says you can't do certain things and you've been trying to do them and you can't. It's as simple as that.

PIERRE-DIMITRI GORE-COTY, UBER'S REGIONAL GENERAL MANAGER FOR EUROPE: Hello, sir. So, it's not as simple as that actually because the law you're referring to has been existing for decades, well before Internet even existed, and I think right now what we are seeing is that technology is definitely changing the name of the game. And so, Uber is trying to bring more choice to cities, more choice to rider, more choice to drivers and of course you are seeing big taxi companies attempting to fight innovation and constrain customer choices. But we are very convinced that we can bring -

QUEST: No, no, now just a minute, just a minute. You've basically restated Uber's position which I accept, but my question was if the law says you can't or you have to fill in a form or you have to do something, you have to do it. The alternative, sir, is to get a change in the law. But it's not to say the law is wrong.

GORE-COTY: So actually, I mean, at no point we go against the law and there are definitely some legal stuff going on as you know and there are some appeal process, so we are vigorously defending our share of in these (ph) processes, but at this stage we are still operating in those markets because we can.

QUEST: Whichever way this comes down, I mean, we can argue backwards and forwards on the technicality of licenses for drivers in Brussels or whether it's a rental car in Berlin. The truth is - back to your point - that you are annoying. Putting it crudely, you're pissing off taxi driver in large, big cities who are now fighting back. That's really what you've done. You've got them angry, haven't you?

GORE-COTY: I mean, of course some taxi drivers are - especially certainly (ph) taxi drivers. It's about companies that have benefited from monopolistic positions and those person of course they don't want to see other people getting into that - it cuts system (ph) in that market. So they are the one that are training to constrain the choices for consumers. And guess what? We have on our side all the cities and those riders - drivers - that have benefited from Uber - to be Uber-licensed in all of those cities. And we also have as you've mentioned in your introduction some very strong support from people such as Neelie Croes from the European -

QUEST: Right.

GORE-COTY: -- Commission who's been very clear about the need to kind of stop those protective type of regulation that are just here not to serve consumers but to essentially protect an industry.

QUEST: Uber is backed by Google and you have some very powerful supporters behind you - some deep pockets. The taxi driver in Paris, Mr. Leipold, who - in Berlin, I beg your pardon - who took it to court. He said, "If I'm wearing gym shorts, I don't want to compete against someone wearing hobnail boots." In other words, Uber is a bully.

GORE-COTY: I don't think to be honest it's a question of money. It's more a question of power actually, and when you - when you look at those taxi industries around the cities you mentioned, those taxi industries are actually powerful. Logie (ph) that have been very close to the power and close to power for the case. So it doesn't - it's not about money, it's about who you know and the political history that you have. And because those big taxi companies are close to the political - the public - authorities and have the power to kind of strike and block cities that've mandated for the case to get what they wanted and to prevent choices for consumers.

QUEST: Pierre, thank you for coming on the program this evening, putting the other point of view. We'll talk more about this. One thing I do know, there is one discussion. Mention Uber at a dinner party and before long the discussion heats up nicely. Thank you, sir, for joining us tonight. Have a good Easter weekend. When we come back in just a moment, we talk about the man who literally brought magic to reality. The world has remembered the Nobel Prize-winning novelist Gabriel Garcia Marquez. We're going to look at his impact in Colombia and the place that's paying special tribute to him this weekend.

(COMMERCIAL BREAK)

QUEST: There must be something wrong with the world "when men travel first class and literature goes as freight." The full quote was a little more `fruity' (ph) indeed, but as any traveler knows, words of wisdom from Gabriel Garcia Marquez, one of the 20th century's greatest authors who died on Thursday. "When men travel first class and literature goes as freight." It set us thinking about literature and its impact on travel in the cities. Now of course the city - one city itself in Colombia prides itself for its relationship to Garcia Marquez.

(BEGIN VIDEOCLIP)

Male Narrator: Cartagena inspired the mind of a Nobel Prize novelist. Imagine what you can experience here. Colombia, magical realism.

(END VIDEOCLIP)

QUEST: Magical realism of course from Marquez, part of the tourism campaign launched by Colombia's Tourism Board last year. Cartagena in Colombia is a must-go destination for Marquezan (ph) his fans because he actually said it, Garcia Marquez lived there for a short time before his career took off. He once said, "All of my books have loose threads of Cartagena in them." Fascinating way of putting it. Now, there have been many other literary hotspots where of course we can put a good phrase, a good quote to the effort (ph). Let's go to Stratford-upon-Avon for instance. Shakespeare said, "This royal throne of kings, this sceptered isle." It's popular with tourists yearning for a taste of ye olde English way of life. There will be celebrations next weekend to mark the bard's (ph) 450th birthday.

And then of course you've got Paris where the House of Balzac is popular on the tourist trail. And it is where the French author lived between 1840 and 47. He said "Whoever does not visit Paris regularly will never really be elegant." Finally of course, less of the elegant and more of the umph-a-rama (ph), New York and Long Island. One of the characters in F. Scott Fitzgerald's "The Great Gatsby" described a "feeling of satisfaction, presence and rightness which arises from the mere sight of the city." Now today there are tours to Long Island's Gold Coast to see the grand mansion that inspired the Great Gatsby.

So, to mark our weekly "Business Traveller" segment, Marelvy Pena-Hall is a tour guide specializing in Garcia Marquez's impact on Cartagena. And she joins us now via Skype. Good to see you. Thank you for joining us. Can you hear me?

MARELVY PENA-HALL, CARTAGENA TOUR GUIDE: Yes, thank you for inviting me.

QUEST: Delighted. Now, Marquez, Cartagena - how do you bring the two together for the tourists?

PENA-HALL: Actually I didn't dream it, it came to me just by pure chance. We were taking care of a group of people from Switzerland and the agency I was traveling with at the time offered Garcia Marquez's tour. And but they didn't tell us anything in advance -

QUEST: Right.

PENA-HALL: -- they just asked us who has read Gabriel Garcia Marquez's books and there were only two of us who had done it. So we started to do it and they gave us a script, but from that moment on, I realized that that would be a great tour -

QUEST: OK.

PENA-HALL: -- since I had such an -

QUEST: Let me ask you - what is the thing, what is the place, what is the absolute must-see from Gabriel Garcia Marquez in Cartagena?

PENA-HALL: Well, there are several places because some of his stories are based in Cartagena like stories like "Love in the Time of Cholera" or (Labor Mordan Temos) and even "The General in his Labyrinth." So we go to places where his house is very close to a old convent - the old convent of Santa Clara where part of the story "Of Love and Other Demons" take place.

QUEST: Right.

PENA-HALL: But we also go to places like la Casa Casalduero where Fermina Daza, the main character in "Love in the Time of Cholera" got married with Dr. Juvenal Real (ph) -

QUEST: I see.

PENA-HALL: -- we even see his house in Manga in new neighborhood when they moved after they married.

QUEST: When you read Garcia Marquez and you read his books in Cartagena, does that give a special feeling and understanding to the book, do you think?

PENA-HALL: Oh, absolutely. Of course he doesn't mention that it is Cartagena, but the background of the city and the stories that he tells in his books, you know, if you have ever been here or if you have any notion of Cartagena especially if you are a Colombian, of course you know that's Cartagena.

QUEST: Thank you very much for joining us. I wish you a pleasant Easter weekend and I'm looking forward to my first visit to Cartagena where hopefully -

PENA-HALL: (Inaudible).

QUEST: -- you'll be able to show me `round. Many thanks.

PENA-HALL: OK.

QUEST: Now, as shareholders at the company that owns Travelocity - something to celebrate this Easter holiday.

(BEGIN VIDEOCLIP)

(BELL RINGS)

QUEST: Sabre shares continued to rise in after-hours trading on Thursday. It was a positive debut on the NASDAQ. Sabre rose over 3 percent, they closed at $16.50. Sabre's known best for its online brands Travelocity, Last Minute - in the U.S. - Lastminute.com in Europe. Sabre's software business is the engine of growth. I - it basically is a major computer system that runs airlines and hotel companies. I spoke to the chief exec Tom Kleen (ph) - Klein -- on Thursday and I asked him are debates taking place in the distribution about how companies like Sabre give you and me enough choice.

(BEGIN VIDEOCLIP)

TOM KLEIN, CEO AND PRESIDENT, SABRE: We provide our suppliers the ability to personalize. Today we announced a few product launches just today. One was for airlines to be able to manage unique experiences and personalize travel to travelers which is what that NDC IATA initiative's all about. And then today for hotels we announced the ability post- the guest making their reservation to be able to push out specific offers based on that guests' profile. So we believe that that personalization trend is real and from a big, complex industry like the travel industry, it's going to take software from companies like ours to make it happen. So, you know, we're excited about that trend and we're working with IATA and the work group to deliver services to airlines that allow them to personalize their product, and it's because that's what consumers are saying they want to have.

QUEST: Everybody in the entire industry is now watching with something more than curiosity, the result of course of Malaysia 370. Now, you're not an airliner -- I understand that. But you are imbedded firmly in the industry and you know what people are thinking. As we wait for further details on 370, how do you think this incident is going to change the industry?

KLEIN: Well of course the first thing is that, you know, for the families of the crew and the passengers on that flight our hearts go out to them. Malaysia is a great customer of ours and, you know, I think at the end of the day, technology is going to be part of the solution, and I think the debate that's going on in the industry right now is healthy, and over the long haul will make the industry better. But, again, I think technology is going to be the answer and the airline industry will decide what makes the most sense going forward to make sure that situations like this aren't encountered again.

(END VIDEOCLIP)

QUEST: That's the CEO of Sabre, whose company basically takes you to many places in the world. And I've got me own map tonight - Stratford, Paris, Cartagena, New York. There'll a front coming up from over here and maybe a little bit of a cold spell coming in over there. Jenny Harrison is at the World Weather Center. I think I've got the hang of this sort of.

JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Oh, sort of. Yes, I like you've got Stratford-upon-Avon on there, Richard because you know next week it's Shakespeare's 450th anniversary since he was born - and since he died actually. Did you know that?

QUEST: Well, I, I, I yes, sort of.

HARRISON: Sort of. OK, jolly good. And well let me talk about the weather for all of those locations. In fact, hopefully, Richard, I shall get to some cities a bit further around the world. But basically it's a far - it's a rather unsettled picture across much of Europe. We're seeing the rain again across the southeast. It's not making a lot of movement in the next couple of days, so it's staying very unsettled, very showery, a little bit cooler as well. A front slipping down from the north but actual fact better conditions across the southwest in the last few hours.

But, as I say, more of the same really throughout the weekend, certainly the first part of the weekend. What you will notice is with this system in the southeast, as it works its way slightly up towards those more central regions, it will actually bring in some fairly gusty winds. Look at these winds - about 60, 65 kilometers now at times into London. So, that's windy enough. That's later on Sunday. That's windy enough to cause a few delays at those major airports. This is showing you the temperature trends for the next couple of days - cooler air pushing off to the northwest and so for the most part some pretty good temperatures. And in fact with the warm air coming up from the southeast, look at what it does here to Bucharest. The average is 18 for this time of year. By Monday it's 23. Up into Warsaw we've got some very nice temperatures - 22 on Saturday, against an average of 13. Some nice sunshine too in Warsaw. Good sunshine as well in Berlin and, again, temperatures here are quite a few degrees above the average. So there's a lot of unsettled weather, even one or two snow flurries, but quite wet snows to those high elevations. And you can see this rain coming in across into Poland, Germany as we head into the latter part of the weekend. Hence the fact Sunday not as good as Saturday, and Monday for most cases, you will see some rain.

Quite cloudy on Saturday, so that's the only thing here possibly delaying you from these airports. Vienna, you can see and Milan and particularly into Milan we've actually got some thicker clouds. So maybe longer delays in the morning hours. These are temperatures across Europe on Saturday - 17 in Bucharest, 16 there in Kiev and there's that nice 22 across into Berlin.

Elsewhere around the world, well maybe you're in New York. Some pretty good conditions on Saturday and nice sunshine 16 Celsius. Sao Paulo, I'm afraid we've got thunderstorms on Sunday. And nice and pleasant in Buenos Aires Saturday and Sunday, and then across into Tel Aviv and Cairo. Again, some pretty high temperatures, and particularly in Riyadh. Look at that, Richard - 38 on Saturday. That's 100 degrees Fahrenheit already, this time of year.

QUEST: Yes, you anticipated what was that in old money. Thank you - more than 100 degrees -

HARRISON: (LAUGHTER).

QUEST: Thank you very much. Jenny Harrison at the World Weather Center. How about - how about - have a lovely Easter weekend. When we come back, the coffee pod wars are over in France. Anti-trust authorities are ordering Nestle to make some room for rivals. We'll explain.

(COMMERCIAL BREAK)

QUEST: Now, do you recognize what this is? Have a quick look - get right in there. It's a coffee pod and it is manufactured by Nespresso. You'll be well familiar with these little pods. They go into machines like this one behind, also manufactured by Nespresso. Now, the French anti- trust authorities say Nespresso's parent company, Nestle, unfairly changed the design of these little pods to go into machines like this to prevent rivals from creating compatible pods. Nestle has agreed to remove labels from its machines warning against the use of competing pods. In other words, all pods will be equal. And it will honor warranties on its machines for those who use competing pods. Your pods are not relevant. It will warn its competitors three months before changing the designs of these. So much, so far, so good for Nespresso. However, there's been a severe drought in Brazil that's driven up the price of coffee. Isa Soares has the story.

(BEGIN VIDEOCLIP)

ISA SOARES, REPORTER AT CNN INTERNATIONAL: It's strong enough to give you a jolt and keep you wired for the rest of the morning. But at this coffee exhibition on London, little do these customers know there may be a storm brewing in their coffee cup. According to the Intergovernmental Panel on Climate Change, or the IPCC, pests, rising heat, extreme temperatures resulting from climate change may impact the supply of coffee, and the industry it seems is worried.

MAURICIO GALINDO, INTERNATIONAL COFFEE ORGANIZATION: I am very concerned. I will say climate change is the most serious threat to the sustainability of the coffee supply chain right now.

SOARES: The IPCC says that a temperature rise of 2 to 2.5 centigrade means some coffee-growing countries could run out of cool mountainsides from which to grow their coffee by 2050. It also predicts that by 2020, coffee production could decline by 34 percent with profits shrinking from $200 per acre to less than $20. In Brazil, for example, the biggest producer of coffee in Arabica coffee, a rise in temperature would cut the air suitable for coffee-growing by two thirds, and that basically means that Brazil will need to look beyond their principle growing areas of Minas Gerais and Sao Paulo for their coffee. More importantly, it will impact millions of livelihoods.

GALINDO: We're talking about at least 25 million farmers. And this means if you think about their families, it's really 100 million people. It's a vast, vast number of people who depend directly on coffee as the number one source of cash.

SOARES: The losses (ph) may prove challenging and devastating for many coffee-growing countries. It can also be an opportunity for others.

JEFFREY YOUNG, MANAGING DIRECTOR, ALLEGRA STRATEGIES: Vietnam, for example, has become a much, much bigger player and is now the second largest exporter of coffee or producer of coffee worldwide now after Brazil. India is now developing its own coffee industry as is China.

SOARES: A dramatic change of landscape for an industry that for years has depended on Brazil, among others, for their economic coffee fix. Isa Soares, CNN London.

(END VIDEOCLIP)

QUEST: Well, as the song goes, they grow an awful lot of coffee in Brazil (RINGS BELL). Back in a moment.

(COMMERCIAL BREAK)

QUEST: Tonight's chocolaty "Profitable Moment." Some people are celebrating Easter, others are celebrating Passover at this time of the year. Well, whatever you're celebrating, I hope you take a moment or two this weekend to rest and relax because that's "Quest Means Business" for this week. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. Let's get together on Monday.

END