Return to Transcripts main page


World Leaders Call for Climate Action; Green Aviation?; 'JobQuest' Is Back

Aired September 22, 2009 - 14:00:00   ET


RICHARD QUEST, CNN INTERNATIONAL ANCHOR: A climate for change, world leaders call for action, but is it just hot air?

Going for the clean green flying machine, fresh promises from those magnificent men in aviation.

And tonight, the return of an old friend with some new faces, yes, "JobQuest" is back.

I'm Richard Quest, you're very welcome, because I mean business.

Good evening. A call for action, global climate change in the spotlight. E.U. President Jose Manuel Barroso warns that if it isn't sorted out, then Copenhagen's draft text will be the longest suicide note in history.

I'll be speaking to the president shortly.

Also on tonight's program, British Airways Chief Executive Willie Walsh on how the aviation industry can clean its act.

The leaders of the world's biggest economies and some of the world's biggest polluters are vowing to do more to protect the planet. Speaking at the U.N. Conference on Climate Change in New York, President Obama says the world must address climate change now, or what he calls suffer irreversible catastrophe.

The president says his country is determined to act. And he says he won't let the global economic crisis get in the way.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Difficulty is no excuse for complacency. Unease is no excuse for inaction. And we must not allow the perfect to become the enemy of progress. Each of us must do what we can when we can to grow our economies without endangering our planet. And we must all do it together.


QUEST: Resolute words. But President Obama is so far short on concrete action. Meanwhile, the Chinese president, Hu Jintao, says his country will be at the forefront of the battle on climate change. He is vowing to cut emissions by a notable margin by 2020.

Japan has gone one better, pledging a 25 percent reduction in emissions by the same year. And the E.U. is urging rich countries to match its pledge to cut emissions by 20 percent by 2020.

All of these pledges and promises, all are just on the steps along the road to Copenhagen, where in December, leaders will attempt to strike a lasting deal to slow down climate change. There are economic problems in doing so. And these discussions take place at a time of just recovery.

Jose Manuel Barroso is the president of the European Commission, and says talks are dangerously close to deadlock, in danger of acrimonious collapse. I spoke to the president and wanted to know, who is deadlocked and who is not willing to give?


JOSE MANUEL BARROSO, PRESIDENT, EUROPEAN COMMISSION: I'm not going to enter in the blame game. I'm saying that I'm very worried the slow pace of negotiations. I think everybody now has to give. Today I'm encouraged by the positive speeches made by President Obama, by President Hu of China, by the prime minister of Japan, and others.

But in fact, we have to be serious about it. There is still a long way to go if you want to make a success, and to seal the deal at Copenhagen.

QUEST: You see, the problem is, in general terms everybody will agree with you. It's when you get to the specifics, you're familiar with the phrase "the devil is in the detail."

BARROSO: Yes. That's why I want to be clear about this. We believe that the developed countries should commit to binding targets in terms of greenhouse gas emissions, as we have done in Europe.

We have offered 20 percent, we'll do it unilaterally by 2020, and we are ready to go up to 30 percent if others make the comparable effort.

We believe also that the big emerging, developing countries should also accept some actions to go below business as usual so that they can reduce, in fact, their normal pattern of greenhouse gas emissions.

And that's where there was today an (INAUDIBLE) announcement made by President Hu of China. And also we need financing to help the poor countries to cope with these huge challenges in terms of technology, and adaptation (ph).

And that's way these -- we have recently put forth some ideas on financing.

QUEST: But can there be a successful conclusion of Copenhagen when the world is just coming of a global recession, and there is little appetite for, if you like, anti-growth policies, or the way in which such policies might be put forward?

BARROSO: I think the costs of not doing things are much higher than the costs of doing it. It's certainly a better deal to save the planet than to allow its destruction.

And there is an important thing we have to explain to all treasury ministers in the world, is that there are some kinds of expenditure that we can postpone. In developing (ph) countries, if you want to build something, we can wait some more years.

But in this issue, the later we act, the more expensive it will be to build. So from an economic point of view, it makes all sense to act now. The later we act, the more expensive.

QUEST: But you can't.

BARROSO: . it will be to build, we will have to pay.

QUEST: But you can't get the agreement now, even President Obama has admitted it is going to be more difficult on economic grounds alone to get people to sign up to uncomfortable decisions.

BARROSO: It is fair to recognize that President Obama has made an important change and progress in his eight months. The United States are moving. They have presented -- at least (INAUDIBLE) has presented important legislation.

Of course, we would like to see this legislation passing as soon as possible. But of course, we are aware that there is resistance, that's precisely because there are resistances that we have to make the case globally that (INAUDIBLE) that we should make a decision based on science.

And science tells us that we cannot accept a rise of temperature above 2 percent, 2 degrees Celsius. So we really have to act, and on the basis of this shared vision. Afterwards, of course, we have to be pragmatic, the way to achieve it. But we need this shared vision.

QUEST: If you -- your speech yesterday is downright pessimistic about the reality, the pragmatism of getting an agreement in Copenhagen. So my final question to you may sound obvious.

You're not optimistic.

BARROSO: I'm very worried. I think there is a real danger of failing, Copenhagen. And that's why I hope this week here in Copenhagen, and also in Pittsburgh, we create a new momentum to achieve it, if not, it will be a real disaster for the global community.


QUEST: President Barroso of the European Commission.

Whenever the subject of greenhouse gas emissions and industry is talked about, one industry always comes up short. It is the aviation industry. Today the aviation industry all came together in some shape and form, and came up with a proposal from leading airports, backed by IATA, that they said would halve emissions by 2050.

The deal goes along the lines of this. According to Willie Walsh, CEO of British Airways, this plan is the best option for the planet. It is supported by 230-odd members of IATA, the idea being that they will move towards halving their emissions through a series of different plans, including new aircraft, new engines.

But also through things like perhaps increased air fares and carbon emission trading schemes. This is all -- the idea is ways in which people can -- the airlines can incentivize -- to use that horrible word, incentivize themselves to actually trade carbon emissions. But some suggest that alone could cost the industry billions of dollars a year.

Aviation accounts for 1.6 percent of global emissions, depending on your point of view. Some say it's up to 3 percent. But the significance is, it's a rising number. As more of us are flying, there are more planes, there are more routes, low-cost carriers.

So when you take all of this together, halving of the emissions, the amount of global emissions involved, I turn to Willie Walsh, the chief executive of British Airways, who joined me on the phone line a little bit -- while ago, and I said, look, you're going to halve the emissions, but you're not going to do it for 40 years. Why can't you do it sooner?


WILLIE WALSH, CEO, BRITISH AIRWAYS: We're clear, from an airline point of view, that the option of having an alternative fuel source is not going to be available in the short term.

Now I'm much more optimistic about the prospects of an alternative to kerosene. But realistically, the industry's opportunity to reduce our carbon footprint is limited by that absence of a credible alternative fuel source.

But I still believe that a target of 50 percent reduction by 2050 is both ambitious, which is important, and, you know, achievable, which I suppose may sound like a contradiction when I say it's ambitious.

But it's very important that the industry demonstrates that we're prepared to meet our commitments.

QUEST: Are you finding any difficulty -- either for yourselves or with your fellow CEOs that it is difficult to put forward an environmental agenda when your airlines are losing money and are in such difficult economic times themselves?

The two -- you know, is now the time to be making environmental initiatives?

WALSH: That's an excellent question. And I personally believe there is never a better time. I think we've got to start taking steps today to ensure that we exit this very dramatic downturn in a better position from a structural point of view.

And clearly for the long-term viability of our interests, we've got to address our environmental performance. So I think it's actually very encouraging that the industry -- and this is an industry approach, is facing up to this issue at what is the most challenging time in the history of the airline industry.

QUEST: Finally, Willie, the airline industry has done a spectacularly bad job of putting its argument forward. Aviation CO2 emissions are just some 3 percent, and yet you have managed -- not you personally, but the industry has managed to become the bogeyman of emissions.

WALSH: I think that's a fair comment, Richard. We actually account for about 2 percent of global emissions. And I think part of the problem is up until recently, and when I say recently, I mean, probably the last two years, many within the industry refused to acknowledge that environmental issues were something we should be concerned about.

Now what I've seen is a huge change in attitude, which is really encouraging, in the past 24 months, where the industry has woken up to this issue. And many who refused to acknowledge it are now leading the campaign to ensure that the industry address it.

So we've seen a big a turnaround. And that's encouraging. And that gives me even greater reason for optimism around our ability to become more aggressive, more ambitious in terms of our targets as we move forward.


QUEST: More aggressive and more ambitious, the chief executive -- Willie Walsh, chief executive of British Airways, talking to me earlier today.

The news headlines now, and on an extremely busy day, Fionnuala Sweeney is at the CNN news desk.


U.S. President Barack Obama says it's time to move forward on peace. He has been meeting with the Israeli prime minister and the Palestinian president on the sidelines of the U.N. General Assembly in New York. No concrete agreement emerged from the talks, and chances for a breakthrough were slim. But Mr. Obama says it's time for both sides to demonstrate common sense to achieve common goals.

Violence erupts outside the Brazilian embassy in the capital of Honduras. Supporters of ousted President Manuel Zelaya are clashing with police. Zelaya himself is holed up inside the embassy. We're also getting word from the U.S. State Department that the embassy there has shut its doors due to what is called a fluid situation in the capital.

French police have raided and dismantled a camp for illegal immigrants near the city of Calais. They arrested some 278 residents of the camp known by locals as "The Jungle." Authorities say the camp was a haven for human traffickers, but protesters say arresting the migrants won't solve the problem.

People are bailing out from widespread floods that have inundated the southern U.S. state of Georgia. At least seven deaths have been blamed on the floods there. And washed out roads and bridges continue to make travel difficult. Georgia governor Sonny Perdue has declared a state of emergency in 17 counties, and is asking for federal disaster relief money.

And stay tuned for more on those stories in "WORLD ONE" at 8:30 p.m. London time. We'll have a special "In Focus" report from Greenland. Have a look at these stunning images of ancient glaciers. The question is, though, how long will they last? The outlook, unfortunately, is pretty grim. That's "In Focus" on "WORLD ONE" in about an hour and 20 minutes.

In the meantime, back to you, Richard, in the studio.

QUEST: And congratulations to yourself, Fionnuala, for a splendid launch last night. Fionnuala Sweeney at the CNN news desk.

When we come back in just a moment, we're going to talk about M&A, merger-acquisition activity. (INAUDIBLE) is going to be discussing what it all means. Are deals being done and are they the right ones? In a moment.


QUEST: Welcome back. QUEST MEANS BUSINESS. It is our Tuesday edition of the program.

Cadbury could be softening its attitude towards Kraft, or indeed, it could be going exactly the opposite way and demanding a put-up-or-shut-up attitude towards the indicative offer that Kraft has made, because so far, no official offer on the table.

The boss of Cadbury, Todd Stitzer, says a tie-up with the U.S. makes some strategic sense. Now that is as much as an opening gambit if ever I saw it. But the bottom line remains the same. It's still no deal, the $10 (sic) billion or so price that Kraft has come up so far.

Earlier this month, the British chocolate-maker, you'll be well aware, revealed 16.7 -- the 10 billion, of course, I managed to convert that into dollars for you, $16.7 billion offer.

So a strategic deal perhaps, but still no actual agreement on the way to go forward. Several more companies are vying to gobble each other up, and not just in the food sector. Tech is also setting for a wave of mergers. Two big mining companies have been talking about tie-ups. Simon Perry from the financial services firm Ernst & Young is with me.

Simon, it's worth pointing out right at the start, we ain't going to be talking Cadbury, is that correct?


QUEST: You're restricted on Cadbury. So if it seems like I'm not asking -- you're sitting at home going, why won't he ask? Now you know why we're not doing that.

Let's talk about what is happening with M&A. Now deals are being done. The question is, what is the logic behind them, and is that different nowadays?

PERRY: I think we've been through a very difficult period with the credit crunch and the banking crisis. We're now in a position where the market is loosening up somewhat and I think we're seeing strategic deals done with strong buyers talking opportunities to pursue assets that they find attractive and that are -- deals that could be possible in this environment that maybe wouldn't be possible in a bull market.

QUEST: Well, give me some idea of what sort of deals we're talking about. I mean, I'm thinking -- you know, off the top of my head, the one I think of is, for example, this week we saw Dell with Perot Systems.

PERRY: Yes, and I think that's an excellent example of the sort of thing I mean. I think you are going to see -- we're seeing already a number of situations where you have very strong corporate, but you've got a white space maybe in a particular geography, or you can see a very logical way to grow in an adjacent set of products.

QUEST: Now but is this being predicated on the basis of price that you expect to get something cheap? Or that it's just the right time to do a deal?

PERRY: It's a bit of all of those. I think it's more about, it's the right time to do a deal, because we're at a point in the cycle where there is a reasonable likelihood that we're close to the bottom, if not at the bottom, and we can see some stability and we can see the likelihood of an improving market.

QUEST: Many viewers may well be saying, how on earth can anybody be doing deals? We've seen huge losses. The banks are supposedly bankrupt and haven't got any money. So who is paying for all of these deals?

PERRY: Well, I think that's why it's just -- when I say a strategic buyer, there are buyers that do have the capability to do the transaction, either because their shares are very well thought of...

QUEST: So enough paying by paper.

PERRY: Paying by paper, but.

QUEST: Even if your paper has already been down by 50 percent?

PERRY: Even if your paper is down, it may not be down relatively. So it may be still strong, from a relative point of view. Also, there are many companies that are in a strong defensive position. And their markets are still relatively strong. So they're able to take advantage of their strength.

I mean, one of the interesting things, when we went into the recession, corporate cash balances were at an all-time high. So there are strong corporates and other institutional buyers out there.

QUEST: OK. So we've not -- well, that -- you've moved me nicely to my next point. So you've got your company (INAUDIBLE) to take over another company for strategic reasons. But there is a vast wall of private equity cash still out there. Do you agree with me on that?

PERRY: I do. I do, absolutely.

QUEST: I mean, this is cash that has just been sitting on the table since it was taken out of the market previously.

PERRY: It is committed. It's not really out of the market. But you're absolutely right. There is -- some observers would say there is up to a trillion dollars of money to be invested.

QUEST: Really? And people are talking to you about that sort of money?

PERRY: Well, I know that because I read the right surveys. But nobody is going to invest that kind of money in one lump.

QUEST: No, but I mean -- but you're seeing it from your clients and the people that you talk to, they are in private equity -- whether it's private equity or venture capital, people are now saying, we want to do a deal, it's the right deal, not just any deal.

PERRY: Oh, I think they've always been saying they would like to do deals. But they do have to be the right deal. And clearly the right financing needs to be available. So there is a lot of equity available, but there has been problem with the amount of leverage that is available in the market.

That may be getting a little bit better, but it's not going to return to the levels that we saw in 2007 for a very long time.

QUEST: Simon, please, a standing invitation to you to come back on this program and talk to the M&A world, we are very grateful. Thank you very much.

PERRY: Thank you.

QUEST: Simon Perry.

Now it's a year since a momentous power-sharing agreement was signed in Zimbabwe. A struggling economy has started to recover. In a moment, the prime minister, Morgan Tsvangirai, on the economics behind the politics. We will have an interview with Mr. Tsvangirai in just a moment.


QUEST: Zimbabwe's president, Robert Mugabe, is expected to demand that Western sanctions against his nation be lifted when he makes a schedule plea to the United Nations assembly on Friday.

CNN has had the opportunity to sit down with his power-sharing partner, the prime minister, Morgan Tsvangirai, who discussed Zimbabwe's economy, aid from overseas, and hopes for democracy in Zimbabwe.


MORGAN TSVANGIRAI, PRIME MINISTER, ZIMBABWE: I can't state categorically, but we have a right to evaluate our situation. And we've got members, we've got constituents out there, the people of Zimbabwe expect no less. They want to see this transition move to a free and fair election, created by the conditions that are within the global political (INAUDIBLE).

That's the whole purpose.

NKEPILE MABUSE, CNN INTERNATIONAL CORRESPONDENT: President Robert Mugabe's party, ZANU-PF, wants you to advocate for the lifting of sanctions. For them, this is a huge hurdle.

TSVANGIRAI: I was in the West, I talked to President Obama, all of these presidents, all of these leaders in the West. They say that we hear you, we are making a very concerted argument to help you. But please, we don't believe what you say, we believe in what you do. Go back and implement the global political agreement, at least that demonstrates that Zimbabwe is not sliding back, that it is on an irreversible path to progress. And on that basis, we'll come on the table.

MABUSE: When it comes to economic recovery, foreign donor countries have not exactly come to Zimbabwe's aid, have they, Prime Minister?

TSVANGIRAI: First of all, we cannot force people to give us anything. It's their own goodwill to the people of Zimbabwe. It's disappointing that we've not been able to realize as much cash injection as we had expected, certainly not $8 billion. But we were only looking at a billion, we've raised half of that.

MABUSE: Your finance minister has been quoted as saying that Zimbabwe should go it alone, but that's not really possible, is it?

TSVANGIRAI: He was quoted out of context. There is no way Zimbabwe can go it alone. We owe people so much money in terms of debt. We don't have sufficient resources for ourselves. And therefore the need for cooperation and assistance from our side is an essential part of the recovery.

MABUSE: So what are you going to do?

TSVANGIRAI: We will just have to work within the context of our constraints and minimize that because of these limited resources and so much (INAUDIBLE) competing demands, we just have to rational and realistic.

MABUSE: There is a perception that President Robert Mugabe is still very much in charge and that the MDC, your party, are very junior partners in this unity government.

TSVANGIRAI: Well, I don't believe that we are a junior partner. If we are a junior partner, why did we spend 10 months negotiating? And I don't believe that President Mugabe is fully in charge of everything.

MABUSE: MDC MPs are being arrested and intimidated on a daily basis. And it appears you cannot do anything about it.

TSVANGIRAI: Well, it's shortcoming. We have a joint minister. You know, this is the complexity of the agreement. It also is a weakness. Let's accept it's a shortcoming. And let's accept that there are elements within the police force who feel that they can act with impunity. And that happens. And it's natural at this stage of the coalition.

I'm sure that in South Africa, during the transition there were acts of violence even then. And naturally in any transitional process, there are people who like to resist a change. But I want to say, change is irreversible.

MABUSE: Farmers are still being intimidated and pushed off their land. And they say they've appealed to you to intervene and that you're reluctant to do so.

TSVANGIRAI: That's not true. We initiated to find out who is being affected, few remaining farmers -- white farmers, let's talk -- let's be very frank here, we are talking of farmers as whites, but to me, any disruption of farm production affects the whole -- the whole viability of agriculture.

So we have been trying there should be no disruption of any farm activity, (INAUDIBLE) they are desperate. Why don't we find methods of resolving it? And we have said the only way we can do it is let's have a comprehensive analysis of what is happening on the ground.

But certainly I'm not going to condone violence against anyone.

MABUSE: Thank you so very much, Prime Minister.

TSVANGIRAI: You're welcome. You're welcome.

MABUSE: I really appreciate your time.

TSVANGIRAI: Thank you very much.


QUEST: The prime minister of Zimbabwe, Morgan Tsvangirai.

In just a moment, it is the story of this recession, the growing number of people out of work around the world.


UNIDENTIFIED MALE: I lost my house. I was evicted. I had to come live with my fiancee. I'm on the verge of losing my car.

UNIDENTIFIED MALE: I hope to find a job in the next couple of weeks, otherwise, I might sell my car and start to think of relocating.


QUEST: You remember our series "JobQuest"? It's back. We have new faces and new challenges after the break. This is CNN.


QUEST: Good evening.


This is CNN.

A lingering theme of the recession from 2009 -- more and more people are losing their jobs. It is getting harder to find new work. You remember our series, Job Quest, where we made it our business to shine the light on your search for work. It took a break for a few months but today we begin with a new group of job seekers.

Raja Kanafani is a freelance copy editor and photographer in Beirut.

And in a moment, you'll meet Les Young, who lives in Atlanta, hoping to start his own business while looking for permanent work.

Job Quest has been one of the most popular parts of QUEST MEANS BUSINESS. We're pleased and proud to bring it back.


RAJA KANAFANI, JOB SEEKER: I'm Raja Kanafani. I'm Lebanese. I'm 42. I work as a conceptual copywriter, currently unemployed.

Electric bill.

UNIDENTIFIED MALE: For your neighbor?



KANAFANI: Just comparing. A lot.

I'm pretty much desperate at this point. I mean I'm an editor, I translate, I can edit video, I can edit copy. I'm a conceptual copywriter. I'm a photographer. I mean I -- I can do a lot of creative things for -- for an agency or a publishing house. If a new opportunity entails any of those elements, then I will gladly take -- take the -- accept an offer or a job opportunity.


I have been officially out of a job for about two-and-a-half months, living on very little, freelance jobs here and there, not even worth mentioning. Just enough to get me by day to day.

I have exhausted all my savings. Hopefully I -- I hope to find a job in the next couple of weeks. Otherwise, I have -- I might sell my car and start to think of relocating from my current apartment.

I owe the banks. The banks wake me up every morning. My landlord has so far been -- hasn't called yet. I owe him last month's rent.

I'm pretty optimistic for some reason. Independently, I'm working on a photo exhibition with a -- with a big gallery in town. The exhibition will be in Dubai. I'm hoping this will come through and hopefully will get me out of a jam. It won't solve my unemployment problem, but at least it might buy me a little time.

LES YOUNG, JOB SEEKER: There's a church there and there's another church right down here. There's a church right here. And there's a church right across the street from where I used to live. A lot of things seem to remain the same over here.

Hi. I'm Lester Young and I've been unemployed for about eight months now. I've been doing truant (ph) sales for about five to six years now total. The last job that I had, it was consulting and contracting work. And I was working for a number of different employee benefits organizations. And what we would do is go out and interview the employees. And that would last for about a month or maybe six weeks. And the last one was in November. And that ended around the second week of November, 2008.

My situation got very dire. I lost my house. I was evicted. I had to come live with my fiance. I'm on the verge of losing my car through repossession. And I'm -- I haven't had any, really, income. Most of my income has come from borrowed credit cards or borrowed finances from others that I know. So it really hit rock bottom.

I found that the comfort level that I had, I -- I felt very secure, very satisfied with the economy. I had a line of credit of over $70,000 and I had about probably 15 or 20 different credit cards. So my credit -- line of credit was probably close to $150,000. That's all been maxed out.

I've got collectors calling me asking for -- for money and then now some of them even going to the point of a lawsuit and now I'm at the point where I've got to probably file bankruptcy within the next three to six weeks.


QUEST: Two new Job Questers here on the program.

And we'll be adding more in the weeks ahead, bringing home to you the plight of those out of work from the great recession.

And many thanks to all those of you who did submit your applications and your thoughts to

The European markets and all the main bourses ended the day higher, only just so. Oil and mining stocks on the FTSE, with oil climbing over $70 a barrel. It was a weaker dollar that also added to that. Eurasian natural resources (INAUDIBLE) rose between 2 and 4 percent.

In Germany, it was Daimler adding 3.5 percent. The Paris publishing Largardere gained 4 percent after reports that it was examining options for its U.S. magazine -- magazine market.

The market in New York is open and doing business. And as you can see, just a half a percentage point, 4187. It's very interesting what we're seeing in markets today in Europe and in New York -- small movements -- 9820. We're not seeing these 100 point movements at the moment. And that suggests that either it's a consolidation or the rally is taking a breather.

Now, investors in Asia took heart from news that that region is to lead the global recovery. Growth in the region accelerating beyond previous predictions. It was the Asian Development Bank, which is raising its outlook for the reason. And the reason I'm bringing it to your attention, of course, is because in the hours ahead, to make investment decisions, you want to know what -- what other parts of the world are saying.

So let's begin with the ADB's forecast, 2009, for China. A revised growth of 8.2 percent. That's 1.2 percent bigger -- higher, I should say, than the number it was offering up in March; largely, perhaps, because of the half a trillion dollar stimulus package. But China's growth at 8.2 from the ADB is still one of the storming things.

And storming ahead, also, is India. Here we have a growth rate increase from 5 to 6 percent. In India's case, the warning from the ADB is not to withdraw stimulus too soon because that, of course, could knock over the fragility of it.

But still, 8.2 in China, 6 percent in -- in India. You're starting to see the best growth in where it is.

Overall, the forecast from the region-wide, 3.4 to 3.9 percent. Now, that is a sizeable increase for -- for Asia overall. You get the idea, when it comes to the growth post-recession, it's going to be particularly in the Asia market.

Now, one industry which we continue to look in after the recession, the cruise ship industry.

Why do I tell you about that?

Because we've got the chief executive of one of the top companies, after the break.


Thank you.


QUEST: Business leaders were in Dublin over the weekend to participate in the Global Irish Economic Forum. Its object -- to explore ways to turn Ireland's troubled economy around.

One executive present, James Hogan, is the chief exec of Etihad, which, of course, is the national airline based in Abu Dhabi.

And Jim Boulden asked him why Etihad still has a strong commitment to a small country like Ireland.


JAMES HOGAN, CEO, ETIHAD AIRWAYS: As a business, we operate an airline daily into Dublin Airport. And it's an important part of our network. So a successful economy and a successful home market -- tourism industry is important for us to continue to invest in our operation.

JIM BOULDEN, CNN CORRESPONDENT: I think some people might be surprised to hear you fly directly from the Middle East to Dublin.

Why not just fly to London and let people just take the hop?

HOGAN: Well, one could say maybe it's the experience from terminal four or three across to terminal one, which can take between three and four hours. There is, as you know, one stop over in Abu Dhabi, the Middle East hub.

If you look at -- at global network, we look at traffic feeds. And the beauty of the Dublin service, in fact, into the Middle East, GCC, it's nonstop. It connects to a range of cities. You've got the Irish College of Surgeons in Bahrain. You've got a very large Irish community in Saudi Arabia, in the United Arab Emirates.

But we also, then, connect to other key markets, like Bangkok, the backpackers moving there for their annual end of the year (INAUDIBLE) pilgrimage. The Philippines -- strong medical tourism between Manila and Dublin. Then down to Sydney, Melbourne way -- each year, approximately 400,000 people travel down to Australia, visiting friends and family.

So there's strong traffic flows and we're the only airline who, in fact, does fly east out of Ireland. So three years we've built it up quite well and the traffic flow is around an average of 80 percent.

BOULDEN: You mentioned flying east out of Dublin. Most people think about flying west out of Dublin. The North Atlantic route is so crucial for Ireland.

But do you think that maybe Ireland spends too much time thinking west, not thinking east?

HOGAN: Look, I -- I think in any business, one has to understand the segmentation. We work in a -- a global market today. Continually, the rules are changing. Markets are opening up. If you look at the region where I work of India, a middle class of 300 million; China with the new tourism programs that give access to Europe; Southeast Asia, where there's a genuine interest in traveling independently, not the traditional groups; understanding the culture, the -- whether it be playing golf, whether it be looking at educational opportunities.

BOULDEN: We've heard some terrible predictions for airline travel this year.

How has it been for Etihad and how has it been in the Middle East?

HOGAN: I've been in this business since 1975. So it's -- it's the -- it's the cycles of business. This is the toughest one. But whether it be war, (INAUDIBLE), tsunami, you -- you have to roll. You have to look at your cost base. You have to adapt.

The beauty of the Gulf, perhaps, is that with new aircraft technology, we can fly nonstop. So I operate from Abu Dhabi down to Sydney 14 hours nonstop; to New York; to Toronto; to Chicago.

So it's a convenience for the traveler of one stop travel over a central hub. And then we obviously distribute into Europe, into Southeast Asia, into the Middle East, into India.

So what we've seen is that whilst the yields for all the airlines are probably down 15, 20 percent, maybe down to, you know, 2007 levels, the seat factor has -- has maintained in most cases, because airlines are stimulating more in the economy cabin to compensate for the decline in premium traffic.

BOULDEN: One of the first indications of the recession a few years ago was a drop in cargo. It may sound boring to some people, but cargo is a really good indication of the economy.

Do you see cargo coming back now?

HOGAN: The cargo -- that body space in freighters, as you say, is the first to go down, heavy discounting. What I am pleased to see is we're now starting to see cargo come back. Those are also the first indicator.

As we track what we call our RAS -- the revenue and (INAUDIBLE) factor -- we're starting to see cargo, an improvement in yields and also in our passenger revenues in the back quarter.

You know, people were talking about, it wasn't a V, you know, it was the U, but maybe we're starting to see the U. We're starting to see some - - some indications.


QUEST: That's James Hogan of Etihad, the story a seen from the aviation industry.

If we go on board to the high seas, shares in the world's largest cruise operator surged more than 6 percent. And despite a drop in earnings, Carnival Cruises upped its outlook for the year. The cruise ship industry, like just about everything else, has been forced to ride the waves of economic storms.

Royal Caribbean is getting ready to unveil the world's largest cruise ship. And I asked the president and chief exec, Adam Goldstein, what shape his company and his industry was in.


ADAM GOLDSTEIN, PRESIDENT & CEO, ROYAL CARIBBEAN: The value that cruising represents has allowed us to get through these very difficult and challenging economic times and that while the downturn has been around us, the cruise industry has continued to become a more global phenomenon.

QUEST: Is it still regarded as the luxury end of the -- of the tourism?

Traditionally, it had been the luxury end of business.

GOLDSTEIN: It's fair to say that cruising is still an upscale holiday choice. But it is much more accessible to a large volume of -- of holiday makers than 30 or 40 years ago. This is a vacation that millions of people per year are taking.

QUEST: And it must be also one that has been affected by, obviously, the great recession.

The question is, for you, running expensive capital investment in your ships, how has it been?

GOLDSTEIN: It's been a very challenging time. And we have chosen to keep our ships fully occupied with guests and we have sacrificed price through discounting to maintain a high occupancy situation.

QUEST: Has it been difficult to raise money or to continue to raise money for the purchase of new ships or for the continued financing of ships during this crisis?

GOLDSTEIN: It's certainly been different than it was prior. There was concern about a -- about our ability to raise the financing for Oasis of the Seas, the big new ship that we have coming in. We were able to do that, which is what we had indicated to the market that we would be able to do, but it was definitely a case of where we needed to prove it. And when we did, then I think the market was much more at ease.

QUEST: And you had to pay more for that money than you would have previously done in maybe two or three, four or five years ago?

GOLDSTEIN: Well, we were very, very fortunate, because we have long- term, excellent relations with a lot of banks and a number of key countries. In this case, Finland in particular, where the ship is being built, really came through for us.

QUEST: When you look now at where you want to take the company next - - because I think just about every chief exec agrees, the landscape has shifted and none of you really know whether it's shifted permanently or whether it pretty soon will revert back to what (INAUDIBLE).

GOLDSTEIN: I think there was a permanent shift occurring in our industry before the downturn. And I think the effect of the downturn will be to make that shift permanent, which is we are becoming a more global phenomenon.

The dependence on the United States as the overwhelming number one market for sourcing of cruise customers was already changing. But it's clear now that from a diversification of risks standpoint, from a market opportunity standpoint, we want to be present marketing in all of the principal countries that produce vacationers.

QUEST: But where will provide your biggest income in the future, do you think?

GOLDSTEIN: Continue to be U.S. as the number one country...

QUEST: By which percentage?

GOLDSTEIN: Probably coming to half from U.S. half not from U.S.

QUEST: So you're sort of there but -- with this being the U.S. But longer-term, you want to move it...

GOLDSTEIN: Well, we're coming toward 50-50. Only three years ago, we were still more than 80-20.

QUEST: Right.

GOLDSTEIN: So it's shifting quite rapidly.

QUEST: Looking at the cruise industry, your company in particular, from what you're seeing, join me at the -- I was looking at the traffic lights.

What would it be, red being recession, things getting worse; amber being steady as she goes; green being full steam ahead?

Which one are you going to go for today?

GOLDSTEIN: We're at yellow heading for green. The value of cruising and the high satisfaction are definitely taking us in the right direction.

QUEST: So we'll give you a -- I shall -- I shall do a bit of work meself and go between the two.

But do you see green on the horizon?

GOLDSTEIN: Well, we have to market in the reality that we face today. It's still more yellowish, but we're -- we're thinking that we'll come through this cycle and the value of cruising will prevail.

QUEST: Here we are. I'll make it flash for you.

Thank you very much, indeed.


QUEST: And I promise you this, that our traffic light will remain in this studio until at least we're getting a preponderance of green, which means economic growth stronger across-the-board.

I'll be back in just a moment.


QUEST: When it comes to investing, some like stocks, some like bonds. I'm sure there's a song in there somewhere. But others are partial to products guaranteed to accelerate. And I don't mean on the market.

Adrian Finighan reports on the classic investment vehicles and some are choosing to park their money.


ADRIAN FINIGHAN, CNN CORRESPONDENT (voice-over): These high octane investments appear to be going full throttle over this rough recessionary road -- Ferrari, Porsche, Maserati, Aston-Martin. It seems owners of classic rare cars have fared better in the downturn than investors in many other assets. That's according to a new index that tracks prices across a range of historic automobiles.

Meet former banker Dietrich Hatlapa, a car enthusiast and founder of the Historic Automobile Group.

(on camera): And this beautiful automobile, I'm told, was owned by Richard Carpenter...


FINIGHAN: ...of the Carpenters.



HATLAPA: That's a...

FINIGHAN: What -- what is it?

HATLAPA: That's a 1970s Ferrari 365 GTP-4, also called the Daytona.

FINIGHAN (voice-over): Dietrich has used his banking experience to apply rigorous, independent financial analysis to the rare car market so that owners can measure their investment performance over time. His Haggi Index (ph) has risen nearly 39 percent since its launch at the beginning of 2008 to the end of July. That's better than art, wine, gold and even the stock market. And while the Index has softened of late and other asset classes have rebounded, it's the performance over time that matters.

HATLAPA: If you look over -- over the very long term or -- our database starts in the '70s. But if you look since 1980, the auto performance is very, very dramatic in -- in terms of the internal rate of return, we are beating the S&P 500, for example, by more than 2 percent over 30 years.

We (INAUDIBLE) for example, the Ferrari 275 GTP-4, which is part of our Ferrari Index, is one of the most sought after Ferraris, I would say, for collectors today.

FINIGHAN: In that case, how much would it fetch?

HATLAPA: About 700,000 pounds.

FINIGHAN (voice-over): While turnover at classic car auctions has fallen, auction houses like Bonham's, continue to set records, as investors look for a safe haven.

Ah, but, says James Knight, head of the International Collectors Motor Cars Department at Bonham's, those with deep pockets take note.

JAMES KNIGHT, BONHAM: There is a cautionary tale to this, of course, that, like most markets, it can go up and down. And it is a collector's market. It is -- it is -- it is a hobby market. So we would like people coming into the market to feel as though there's a bit of emotion, as well, and not just that sort of rationale on investment. We don't particularly like the word investment in the collectors motor car market. We work on the principles that if you treat cars like stocks and shares, then, well, they might start behaving like stocks and shares.

FINIGHAN: So it seems that even classic rare automobiles like these might not avoid the old adage, now what was it -- what goes first must slow down.

Adrian Finighan, CNN, London.


QUEST: And I'll be back with a Profitable Moment.


QUEST: Before I go, tonight's Profitable Moment.

Today we have heard the airline industry proposing to reduce emissions by 50 percent by the year 2050. Willie Walsh of B.A. told us on this program it was a major achievement -- ambitious, which would make a real difference. I asked if the targets are tough. The critics still view aviation as evil when it comes to global warming.

Why do I say this?

The airline industry has done a terrible job of putting its own argument.

Now, I'm not here to defend aviation. But after all, airlines contribute only 2 or 3 percent max of global emissions. Shipping, trucking, railways far more than that. Even allowing for the fact that aviation numbers will rise, the future is of new planes more efficient engines. It will all mitigate those rises.

Mainly by benign neglect, aviation has allowed itself to become the whipping boy industry. And this proposal in New York may be the first ever to change that. Frankly, aviation -- 50 percent over 40 years is not going to excite many or change that perception.


I'm Richard Quest.

Whatever you're up to, I hope it's profitable.

Christiane Amanpour is next, after the headlines on the hour.