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QUEST MEANS BUSINESS
As Another Volcanic Cloud Hovers Over Europe, Airlines Demand A 'More Sensible' Approach To The Travel Industry Crisis
Aired May 17, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: Good evening. The volcanic ash story in just a moment, but if you are traveling over the next few days, particularly on British Airways, you do need to know this. A court in London has ruled that the proposed strike action, several days of striking, by British Airways cabin crew is illegal.
The walk out was supposed to start just five from now, it will not go ahead. Those are the headlines on that particular story-the details- because if you are traveling that is all really you need or want to know about. The details we'll bring to you a little later in the program with Jim Boulden.
Our other major story concerns the airline industry and Europe's major airports are open again tonight following a further day of frustration and cancelations for passengers, due to volcanic ash.
The experts are saying this is something we might have to used to for some time to come. Now, at this hour, airports in London, Amsterdam, and Dublin are finally getting people onto planes. They were closed for several hours in the early part of Monday. It was a dense plume of ash which drifted over large parts of European air space. Euro Control, the body which oversees air traffic in Europe, says up to 1,000 flight were canceled as a result. Most of the affected airports reopened at around midday local time. All warned of disruption and delays for the rest of the day.
The people in the know say that this could go on for some years and it is costing the airline industry as small fortune at a time when few airlines can spare a dime. Bare in mind when they were closed for just five days last month IATA estimates up to $2 billion was lost by the industry. As CNN's Atika Shubert now reports the row over the restrictions and when they are implemented is growing louder.
ATIKA SHUBERT, CNN INT'L. CORRESPONDENT (voice over): The volcano ash cloud is back, causing havoc for air travelers in parts of Europe yet again.
The last time Iceland's volcano closed most of European airspace it cost the airline industry more than $3 billion, according to EU estimates. And the prospect of losing more money has some airline chiefs lashing out. Virgin CEO Richard Branson called the latest closures beyond a joke, and British Airways CEO Willie Walsh is demanding a quote, "more sensible approach."
WILLIE WALSH, CEO, BRITISH AIRWAYS: I think Europe should adopt a model that has been very effective in the United States, where they have to deal with volcanic ash on a daily basis. And the situation that applies there is that the airlines, who have the expertise, and have the experience, assess the risk based on all available data and make a judgment as to whether we should fly or not.
SHUBERT: The U.K.'s Civil Aviation Authority is ultimately responsible for deciding whether or not to close British airspace. Based on weather projections from the MET office on how dense the ash cloud is and a safety threshold determined by airplane manufacturers. That threshold has already been relaxed after intense pressure from the airline industry. Regulators may be reluctant to change yet again no matter how bitter the airline CEOs complain.
If they actually break the rules, if they went against the regulators' advice, and something did happen, then clearly the insurance companies would not ensure the airlines, and there would be problems from a passenger point of view, because they wouldn't trust that airline again. So, reputationally there a lot riding on a decision by an airline boss to send the planes up into the sky.
SHUBERT: The European agency overseeing air traffic expects 28,000 flights across the continent on Monday, similar to the daily average, but the uncertainty persists. Iceland's volcanic ash eruptions could continue for months, even years, as they did back in the 19th century. Airlines may have not choice but to simply factor in the cost of volcanic ash disruption to their business. Atika Shubert, CNN, London.
QUEST: The low-cost budget carrier RyanAir has been fuming all day over the latest closures, saying that they made no sense. A short time ago I spoke to Ryan Air's head of communication, Stephen McNamara. And I asked Stephen he thinks the U.K.'s Civil Aviation Authority is closing airports, after all, it is not in the CAA's interest to have unsafe air, is it?
STEPHEN MCNAMARA, HEAD OF COMMUNICATION, RYANAIR: I don't think it is anybody's interest, clearly it is not in the interests of the airlines to do anything that wouldn't be safe. But what I think what we need to do here is look at managing risk and managing safety and I think we're just being overly cautious. I think there is a move that, you know, because a British Airways aircraft in the 1980s had issues when flying through a huge plume of cloud that we, for 20, 30, or 40 years have to be all held (ph) to the actions of a volcano, when I don't think its required. You know, I think today's action from the CAA to open up airspace which at one stage was going to be closed, whilst airports all around us remained closed is questionable, to say the very least. And I think it comes on weeks of questions as to whether this situation is being handled correctly. You know, we had a six-day closure to start this off.
MCNAMARA: It has been brought down to pockets here and there. And I think we do need to examine this again.
QUEST: But to answer your substantial allegation about today, about London and Gatwick, the CAA have told us that actually they were on the edge of the cloud as the chart makes clear. And that is why they did introduce various restrictions, but still allowed the airspace to remain open.
MCNAMARA: Well, the charts that we had didn't say that they were on the edge and the charts showed that they were very much in it. And those charts were even for 6:00 o'clock tonight. So, you know, what seems to have happened here is a bit of a flip-flop, perhaps coming under some pressure from some of the airlines to come into the likes of Heathrow and Gatwick and to get passengers and to get business operating again.
QUEST: So, Stephen, RyanAir still going to keep banging away, but pay out on EU 261, the law, of course, which allows for claiming of expenses?
MCNAMARA: Yes, I mean, Michael has said in the past that he made a mistake when he said that he was going to restrict it. That he's going to adhere to the EU 216 legislation, the legislation is there. We don't agree with it, but that is the legislation in place at the moment. I think it does need to be reviewed. It is a perfect case as to why it is not fit for purpose.
QUEST: Well, that takes us very interestingly, onto the future. The last time I believe this volcano erupted it went on for many years. If this does go on for an elongated period of time, then the airlines and the regulators, you are all going to sit and have to rethink fundamentally, aren't you, how you handle this?
MCNAMARA: Well, I think the rethink needs to start already. I mean, if this were the U.S. and this compensation simply would not be happening, because there would be that exclusion zone, and yet, we all know that the argument of the congested traveler, but whether an aircraft can travel safely to a piece of airspace or not is the issue here. We believe that it can, we believe that we are a sufficient distance away from Iceland so that by the time any ash does get here, it is absolutely harmless. And we believe that going forward we can return to normalcy. If the eruptions continue we'll have to deal with it. But I think between the airline industry they'd like that the CAA and the engine manufacturers, there is a solution out there and we can get people moving around Europe again.
QUEST: Stephen McNamara of RyanAir talking to me earlier.
A currency in crisis as fear engulfs the euro. We're going to talk to an expert from Chatham House about what could be next for the embattled single currency.
QUEST: You and I have talked a lot about this over recent weeks, but now confidence in the European single currency is well and truly crumbling. At least as seen by the value of the currency, let alone maybe the bond market, which has had slightly different factors at play. Investors aren't convinced that European governments can actually stop the region's debt crisis from damaging the continent's economy. So, in that environment it is not surprising that the euro is taking a real hammering. It is at a four-year low at the moment. Against the dollar, at $1.2232.
Now, look, let's put this into a bit of perspective. Before we all get too hot under the collar and have to be removed to a darkened room. At $1.2232, it is still, you know, it is not by any means of the lows. Several years ago the euro was down near parity against the dollar. So, it is a four-year low. And at this rate, as "The Financial Times" makes clear, in this morning's editorial, at this level there are some advantages to European exporters, which of course will do well, German exporters, particularly, with more-with more currency.
So they are-so, that is the rate that we are at the moment. Over the last seven days, perhaps, this is what is worrying most of all. It's down some 4 percent. Very-of course, the currency had gone back up nearly to $1.31, on the back of the $1 trillion rescue package from the EU and IMF. But at this sort of level of losses, it does give rise to the question of whether it is an orderly decline in the currency, or rather a helter-skelter and slightly panicked. And that, of course, is what is worrying most policy makers.
Look at the sell off that we saw in Asia, very sharp. The Hong Kong market, but the one really to watch is the Shanghai Composite in China. And that is worrying, because if there is austerity coming in this market, then that will very quickly translate itself across a variety of other markets. Not only in Asia, but also of course, if we take a look at the European markets, a much more interesting, much more muted, perhaps this is the sort of thing we might-Euro mining stocks were down in London and Paris. Metal prices fell. Banks stocks in the red around the region. So that gives you an idea of the markets, the currencies, and the general feeling for where we start at the moment.
Now, when we-there are signs, though, of stresses in the money markets, and that is a very different kettle of fish. The cost of borrowing between banks, the so-called LIBOR rate, London inter-bank offered rate, is now at a nine-month high. The three-month U.S. dollar rate is now 46 basis points, nearly half a percentage point up. Now, then these sort of rates, may not seem much to your eye perhaps. But in the financial world, as LIBOR goes up, that suggests-well, it doesn't suggest, it actually tells us that the banks are concerned about their exposure to within the Euro Zone countries and its debts. Banks are now becoming much more cautious about lending to each other. And it was the rise in LIBOR to much higher rates, and euro-BOR, frankly, that ultimately lead to what we called the credit crunch, and all the problems that we had. We will keep an eye on-well, we will keep an eye on LIBOR.
Earlier I was joined by Vanessa Rossi, a senior research fellow at Chatham House's international economics program. Vanessa is always talking good common sense and I needed to know if we had a huge promise of money last week, why was it failing to calm the market and why was the euro still weak?
VANESSA ROSSI, SR. RESEARCH FELLOW, CHATHAM HOUSE: I think there are several factors going on here. It was clear that the first week bailout wasn't going to go very far in terms of restoring confidence, because every one could do the numbers, including the IMF and come out with a view that Greek debt will be higher in a couple of year's time, than it is now, although you are going to have a restructuring later rather than sooner. But now we're looking at this whole Euro Zone package, huge as it seems. And you have to start adding up several things here. How long will it really last, if you have problems with the picks (ph)? And actually the answer is, a couple of years. Maybe that is not quite so confidence building?
QUEST: But the market seems to have accepted, up to a point, that the immediate crisis has abated. But now, it seems to be transferring to a political crisis about restructuring the Euro Zone. And a potential banking crisis of those banks that are holding the debt.
ROSSI: But what is guaranteed, as you say, is that there is no default immediately.
ROSSI: So, calm down, not going to have default now. But you start thinking about this problem for a couple of years down the line. It's not that far away. What does this hinge on? If the Euro Zone doesn't get its act together now, if it doesn't get the right mechanisms in place. The Euro Zone is going to have to think again about what its future will be. And that is a serious enough question to rattle many people.
QUEST: The question which begs from that is, is it possible for the Euro Zone, as currently constructed, to actually get its act together. Because let's face it. There was Maastricht. There was euro stat. There was the European Commission. There was name and shame. We've been-there was no shortage of regulators?
ROSSI: Well, we can say the same thing for the bank problems as well. That was also the case. So, I think in total, the public sector- the public confidence in any government or financial market ability to solve these problems and get on top of them, is low. But they are going to make yet another attempt, I'm quite sure of this.
QUEST: But what do they need to do?
ROSSI: Germany, in particular, I think is going to take some of this by the scruff of its neck and say that basically you have got to get the mechanisms together to police this more toughly, than we have done so far. Now, the problem I have with that is that tough policing, you go coshing (ph) these countries around to get them to be able to behave, but this doesn't necessarily solve the underlying economic problems, which are where are these countries going to grow again? How are they going to produce jobs that will really satisfy these populations will get (UNINTELLIGIBLE) on the streets?
Now, well there are some ways of doing this. We are completely feckless in terms of sorting out economic problems, but I fear that the emphasis is going to be more on the policing than on actually tackling these other problems. And that is going to leave us with a lot of difficulty for the next couple of years.
QUEST: Let's go to the extremes here. Are we now, out of the woods of saying that any country could or should be ejected from the euro, if that was even possible and feasible?
ROSSI: Well, I turn the question around, you see? It is not easy for a country to leave the Euro Zone. In particular, it is very difficult for a country that has problems to leave the Euro Zone. Now, it is easier for a country that is strong to leave the Euro Zone and that implies that we are going to have a couple of things going on, over this couple of year period that they have bought for time. The one is that perhaps we'll find that countries will be urged to create living wills. Just as we are urging banks to do that, countries will have to do this. How could you actually exit if it came to this problem?
The other side of it, I would be at all surprised if back home in Germany some people are not already penciling out the framework for how do we exit this thing if we are being asked to sign blank checks and we can't do it?
QUEST: Vanessa Rossi from Chatham House talking to me earlier.
Euro stocks are falling for the third session on growing concerns that Europe's debt problems will hamper a global revamp. Stephanie Elam is in New York. Stephanie joins us, join me now, and joins you.
Good evening to you. Looking at the markets, down 84, we are well off the lows of the session for today. But whenever I see the New York market and I hear this excuse about, worries about debt problems, is that really what's behind it?
STEPHANIE ELAM, CNN FINANCIAL CORRESPONDENT: That's a lot of it. I just think there is a lot of uncertainty, Richard. And so that is what is really dragging things down. People like want to see everything with roses, maybe some butterflies, some sun coming out. And that is just not how the markets work right now. So the fact that the euro is falling, that is not helping the U.S. market. Simply because of the fact that we export our goods to-out of the United States, to Europe. And if the countries there can't afford them because they are more expensive, because the dollar is higher, that could affect our business here.
So the Dow now, is down close to where it was-if you take a look at these numbers-close to where it was the day of the flash crash, having erased the quick recovery that we saw early last week. So, we don't have a lot of news on our side of the Atlantic. So basically everyone is just focusing on what's going on in Europe, right now, Richard.
QUEST: Now, General Motors gave a momentary respite of cheer. Could it be profits?
ELAM: I mean, the P word. It's been a while since we put GM and the P word together, but you're right. The headline from GM is that it turned a profit for the first time since 2007.
ELAM: GM made $865 million in the first quarter of this year. That is a turn around from a loss of $6 billion in the first quarter of 2009, when it went through bankruptcy. And the company says it is about two things. It is about savings and it is also about sales. And the quick trip through bankruptcy, that helped to get off a big load of debt, off of their books. And then they also got additional savings from massive layoffs and factory closings.
Now, if you take a look at sales, they have made a big comeback. Especially here in the North American market. GM sold nearly 2 million vehicles worldwide. U.S. sales were up 15 percent. International sales, get this, they surged 45 percent. And GM increased its production by 57 percent from a year ago. So all of this putting it back on the track to recovery and headed back to the next step all over again, which is an initial public offering.
QUEST: Right. I need to just ask you briefly, though, whenever- when I heard this story this morning, I really get into the details until you and I have just talked about it. My first instinct is say have they fiddled the numbers? Is this financial-ese? Is the company actually performing better?
ELAM: Yes, well, I think if you get leaner you have to be performing better. Think about it. Richard. If you get-if you are laden down with all this debt and someone says, OK, I'm going to take that away. It makes it much easier to operate and do better. Also, it does help that people are actually buying their cars again, because the economy has improving. So these things show that it is doing better. Now, is this enough to make it do better in the long term? Or is this just you look better versus the worst possible picture ever?
QUEST: Right, right.
ELAM: And that is part of what we are looking to see as we go forward with GM, here.
QUEST: We'll talk more about it. Many thanks, Stephanie Elam, who is in New York. The Dow is off some 80 odd points.
In a moment from trash to flash, America's glitziest city is turning the country's biggest landfill into a power source. We'll show you the Vegas power play, in depth, as we open our series, "The Future Cities", in a moment.
QUEST: So we turn our attention now to the question of future cities and how we live our lives. Our weekly look at the cities planning for a better way of life, not just in the years, but the decades ahead. And we're still in Las Vegas, where America's glitziest town is going green, and using every power source it can to just keep the lights on. It includes other things that people have thrown away.
QUEST: You know the saying, "What happens in Vegas, stays in Vegas." Bu the nation's largest landfill 30 miles outside of the Strip, that seems to be entirely true, where the business of collecting garbage is a constant affair.
That fact is evident for all to see. The city built in a desert is with out resources. The sun and, yes, even the trash. So, for Nevada Energy Chief Michael Yackira, finding ways to power the city means exploring absolutely every option.
MICHAEL YACKIRA, CEO, NV ENERGY: Right now that methane, that is in that landfill is just sitting there. It is not being used. We are taping into something that can be converted into electricity. Why not?
QUEST: Yackira's company is getting ready to break ground on a 2011 project that will turn methane gas, created by decomposing trash, into 11 megawatts worth of electricity.
This is a city with one pricy electricity bill. On a hot summer's night, Vegas consumes up to 6,000 megawatts of power. So, 11 megawatts, by comparison, won't even be enough to power one of its casinos.
YACKIRA: It is tiny but every step that you ca make to improve efficiency and reduce waste, will be another way to improve the environment and reduce costs. If you look at our industry we've always thought that there is one answer. Nuclear power was the answer in the 1970s, natural gas was the only answer of the 1980s through now. I think just like a stock portfolio, there needs to be a balance.
QUEST: A balance that will rely more and more on renewable energies in the future.
YACKIRA: We have the renewable resources in this state to a greater extent on a per person, per capital basis than any state in the United States. The state has been aggressive and rightly so, in trying to get more renewable development in this state.
QUEST: Behind Yackira is the constant hum of one of Nevada's energy workhorse, natural gas plants. This was built in 2006. It is a constant reminder to Yackira of one resource that is in very short supply.
(On camera): I could use approximately-and this might be hard to believe, 2.5 percent of the water of a conventional old, generating station. So, it is phenomenally efficient in terms of its conversion of natural gas to electricity. And also very cognizant of the fact that we are in a desert, and using water here to produce electricity, when it could be used for other reasons. We're very fortunate to have this kind of technology.
QUEST: And even with a plant that produces as much electricity as this one, every megawatt still counts.
YACKIRA: We are taking the waste heat that comes off that compressor station, just goes into the air, capturing it, and making into six megawatts of electricity.
QUEST: in Las Vegas, where neon lights beckon tourist after tourist to come, eat, drink, and spend money. A night without electricity isn't an option. So, a gamble with power is a risk, not even this city is willing to take.
QUEST: Interesting stuff. The energy requirements of a future city. And we'll stay with the energy requirements of our current planet Earth. This time the energy is oil, and the head of BP America, is in the hot seat on Capital Hill, where lawmakers are questioning the company about its response to the giant spill in the Gulf of Mexico. We'll be in Washington after the break.
QUEST: Hello, I'm Richard Quest. QUEST MEANS BUSINESS, this is CNN. And these are the main news headlines tonight.
QUEST: We are just hearing that flight restrictions due to volcanic ash are easing. The U.K.'s Civil Aviation Authority says now it will allow some aircraft to fly at higher ash density than it normally permitted. It is creating a new time-limited zone, between its no-fly zone and its enhanced procedures zone. To operate in the new zones the airlines need the agreement of their aircraft and engine manufacturers. The measures come into force on Tuesday at midday, U.K. time.
Right now on Capitol Hill, the chairman and president of BP America, Lamar McKay, is testifying and is expected to testify, before a Senate panel, where he will explain the oil giant's response to the massive spill in the Gulf of Mexico. Now as you can see, these pictures coming to us from the Senate hearing room. Those talks haven't yet- although that hearing hasn't yet begun.
BP's American chief isn't the only company official who is trying to explain what has been happening. The oil giant's chief operating officer for exploration and production, says BP's latest attempts to curb the flow is showing progress. Doug Suttles says he has faith in the company's newest maneuver, which is siphoning oil from the blown well, into a tanker.
(BEGIN VIDEO CLIP)
DOUG SUTTLES, COO, BRITISH PETROLEUM: I'm really pleased that we have had some success-(AUDIO GAP)
(END VIDEO CLIP)
QUEST: CNN's Brian Todd is standing by in Washington.
Brian-I do beg your pardon, we appear to be having one or two problems with Brian Todd in Washington at the moment.
It is worth, though, us remembering BP has tried a variety of different methods and means to try and deal with the crisis. And those can be expected, of course, to be dealt with in the evidence that will be given to the panel at the Senate.
The disaster in the Gulf is giving new life to the push for clean energy. CNN's Money.com Poppy Harlow sat down with CNN founder and environmentalist Ted Turner and got some surprising insights. Now, look, Ted Turner, of course, started the network upon you and I are privileged to work and broadcast.
POPPY HARLOW, CNN FINANICAL CORRESPONDENT: Right.
QUEST: And Montana Ted, the bison steak, you name it, all these other raft of policies.
QUEST: But what's oil got to do with it, Poppy?
HARLOW: It is interesting, of course, Ted Turner founded CNN, Richard. But he is also an avid, avid environmentalist. This is a man who right now teamed up with Southern Company, a big energy provider in this country, and is currently building the largest solar field in the United States. He wants the United States to kick our addiction to oil and to coal. And he talked to me pretty candidly when we sat down in Washington, just a few days ago, about what he thinks was the message behind the Gulf oil spill. I was very surprised to hear what he had to say. I think you'll be, too. Take a listen to Ted Turner.
HARLOW: Talking about the ongoing oil spill, spilling thousands and thousands of gallons into the Gulf of Mexico.
TED TURNER, CNN FOUNDER: Millions.
HARLOW: Right now could be millions. How does that make this debate even more immediate? I mean, you look, they cannot plug the hole. It has been over 20 days. We're trying to send people to Mars and we can't plug the hole.
TURNER: Sad. It is sad. No, I'm not a real religious person, but I am somewhat religious. And I'm just wondering if God is telling us he doesn't want us to drill offshore, because it sure is setting back offshore drilling. And right before that we had that coal mine disaster in West Virginia, where we lost 29 miners, and last week, or two day ago, the Chinese lost 29 miners, too, in another mine disaster of very in China. There seems like there is one over there every week. And maybe the Lord is tired of having the mountains of West Virginia, the tops knocked off of them so they can get more coal. I think, maybe we ought to just leave the coal in the ground and go with solar and wind power, and geo-thermal where it is applicable.
HARLOW: So, possibly God is working in a way?
TURNER: Well, could be. He's sending us a message.
HARLOW: Talk to us about-I mean, you support nuclear energy?
TURNER: I-I-I like wind and solar better, but I'd sure rather see a nuclear plant than I would a coal burning plant.
TURNER: Because it is cleaner.
HARLOW: It is cleaner?
TURNER: Even with coal you know you are going to get killed. And with nuclear you have a chance of getting killed. At least you have a chance of not getting killed, either.
HARLOW: Most people don't say it that way. That's an interesting way of-
TURNER: That's the way I see it.
HARLOW: That's the way you see it.
TURNER: Give me nuclear over coal.
HARLOW: And as you heard, he did say, coal will kill you, nuclear may kill you, Richard. He's a big proponent of solar and wind. And in terms of what he thinks about Washington and how they are dealing with U.S. energy policy. He says, simply put, we have no energy policy in the United States, yet we are the biggest polluters, the biggest user of energy, that is why this country needs to lead on the issue. He's trying to, in his own way, putting his money into renewable energy. And obviously has some strong thoughts about off shore oil drilling in this country, Richard.
QUEST: The G word, that he was using, the God word.
QUEST: Now that certainly adds a different element to-you know, Poppy, when you said to me we might be surprised, I thought, hey, what's coming down the road here. I wasn't expecting that.
HARLOW: Right, right. No, I wasn't expecting it either. That is why I asked him again, so you really think that God could be behind this? And he said yes, potentially, he's sending out the message, and when you look at the series of events, the coal mining disaster, and then this, it is an interesting confluence of events, Richard.
QUEST: Poppy, I'm not touching it. Many thanks. I am, not getting involved is what I meant. In that particular debate, whether it is a message or not. I'm going to leave that to my greaters and betters.
Let's turn our attention back to Brian Todd, who is now with us in Washington, D.C. Brian, BP America is going to be on the Hill. Is this basically how much can they bash the company, right down the line?
BRIAN TODD, CNN CORRESPONDENT: I think it is, Richard, you are seeing some accountability being sought here in Washington, this week, and last week. It is really a chance for the politicians here to kind of get involved and to bang their own drum, essentially, saying look at how we're hold their feet to the fire. We are making them accountable. And frankly, that is a bit of posturing as we know.
But also the executives from BP, Transocean, and Halliburton didn't make themselves look very good either, when the appeared last week. They turned-they pointed the figure at each other. They turned the blame on each other for various things. They did not make a very good spectacle of themselves, then. So it is not like the congressmen need much help to be able to bash them at this point.
QUEST: Each time the administration bashed BP, and we've had two examples of it, haven't we?
QUEST: Particularly yesterday, with that letter. I mean, BP has said it will pay for the clean up. Short of asking them to start writing checks before they know the amount, I am sometimes not sure what more they need-the politicians want here?
TODD: I am not either, frankly. I know, I saw the letter that you did, from Janet Napolitano, the Homeland Security secretary. And Ken Salazar, the Interior secretary, to BP, essentially saying that, gee, you promised to do this. And you promised to not hold it to a cap of $75 dollars, and all the claims that you are going to pay out. So we just want to make sure you are going to do that. It is almost like, why add more and more layers of saying, you know, BP is responsible. We're going to hold them accountable. I think they just-they're doing that to kind of remind the public that hey we are on top of this. We are monitoring this. And they haven't really taken charge of much of the clean up, if any of it, really themselves. So this is their way of getting involved in that and basically saying that we are accountable, and we're holding them accountable.
QUEST: Brian, many thanks. Brian, who is in Washington for us. And on the other side of the screen, that you could see, Brian there, as the live hearing taking place, on the Capitol Hill. It is the BP executives who have just been out there at the Homeland Security. We have just been listening to-well, there you see, Senator Joe Lieberman.
Let's just hear what he's saying, it could be interesting.
(BEGIN LIVE FEED, IN PROGRESS)
SEN. JOE LIEBERMAN, (I) CONNECTICUT: has knowledge of the disaster independent of what BP was telling it. I've said-I would say, myself, that I have spent, since this accident and spill, some time studying what the law requires of the oil drilling companies and our government. And what should be on the response plans that were filed and approved by the U.S. Coast Guard, and the Minerals and Mining Service, for the Deep Horizon Well.
And I must say that I emerge with an unsettling tentative conclusion and questions that I hope can be answered today, by our witnesses.
There is set of witnesses that -
(END LIVE FEED, IN PROGRESS)
QUEST: Well, you win some you loose some. I suspect we weren't joining Senator Lieberman at the most interesting part of his opening testimony. And be assured if he does say something more interesting we'll bring it to you later in the hours ahead.
Now, when we come back in just a moment, stopping the strike, right down to the wire. British Airways has got a reprieve at the last minute. Why has the judge said the strike is illegal, Jim Boulden, hopefully will answer that question in a moment.
QUEST: In the last 90 minutes British Airways has won at the high court. The airline was granted an injunction stopping its cabin crew from going on strike. There was supposed to be a walkout that would have started just about four hours from now. But a judge has ruled that the strike was illegal, would be illegal. And his decision is based on a technical issue about balloting rules. We are hearing that the cabin crew union, called Unite, expected to appeal against the decision on Tuesday morning.
Believe it or not, talks between the two sides are continuing tonight. This was going to be a series of strikes; going on many days throughout the course of the month. Jim Boulden was at the high court.
Jim, the first question, why did the judge say it was illegal? Or do I really not want to know.
JIM BOULDEN, CNN INT'L. CORRESPONDENT: Very, very tight, legal ruling here. He basically said that when the union announced the strike ballot results they didn't announce it correctly. I could spend five and a half hours telling you why, because that is how long it took today for that decision to be made. But it was from the narrowest legal point. And I would hazard to say, even British Airways did not really think they were going to get this today.
QUEST: What is it really saying, though, about the strike? That it is time to bring it to an end?
QUEST: That it is time to negotiate?
BOULDEN: This is two times that a high court judge has stopped this union from striking against British Airways. The only successful one was the one in March, we of course, didn't have the one over Christmas and New Year; 12 days would have been very damaging. And this is playing into this. This economic damage.
QUEST: What is the difference now between the airline and the unions? I got an e-mail from British Airways setting out how much their staff versus other airlines, their staff are paid more, the number of regulations. What's the core of it, Jim?
BOULDEN: What happened was that over the last strike British Airways fired some employees, because they said they were bullying other members and staff. And they rescinded some of the perks that the British Airways cabin crew get.
BOULDEN: And they told everyone before the strike, if you strike, we are going to take them away. Now the union wants some of that reinstated. BA says they have reinstated some of it. You know, they are going back and forth. The actual reason for the strike that they have been moaning about the last 18 months, appears to have been settled. That stuff is not-seems to be-
QUEST: This is all about the crews on-
QUEST: The number of flight attendants on a flight.
BOULDEN: It is personal, it is nasty. And they need the government's intervention. And they need somebody to come in and try and stop it. The judge has stopped it temporarily. It doesn't stop the actual reasons.
QUEST: OK, all we care about tonight?
QUEST: Is two things. The planes are flying over the next few days?
BOULDEN: No, BA announced on Thursday that they were obviously going to have to cut back on what-their schedule. They said they cannot reinstate their schedule on Tuesday, that quickly. So it will take a couple of days.
QUEST: And the final thing and then we'll-does it seem as though Willie Walsh is getting the upper hand here?
QUEST: Right, thank you. I'm glad we sorted that out quickly.
Right, the weather forecast. Jenny Harrison is at the World Weather Center.
QUEST: When we come back, in a second or three, you could call it "pay & display". We'll show you how a new generation of shoppers are making money from bagging a bargain. They are showing of their purchases on line, and the retail sector is looking to get in on the act.
QUEST: You don't nee me to tell you, anything you pretty much want can these days be bought on line. But you can't your friends along for advice and until some people are uploading their retail experiences to the Web. They are turning themselves into your very own online shopping buddy. As Katie Wolmsley (ph) reports, their advice could prove valuable in more ways than one.
KATIE WOLMSLEY, CNN CORRESPONDENT (voice over): Sharing shopping tips is not new phenomenon. Now thanks to YouTube, some shoppers have taken it to a new level. They are called "Haul Vloggers". Yes, that is bloggers with a V. And they are just one example of the growing influence of social media, on the retail marketplace.
UNIDENTIFIED FEMALE: I can see the shape is different and everything, but the color, this one is a little bit more on the brown side.
UNIDENTIFIED FEMALE: A "Haul" video is pretty much just a girl who goes out shopping, or a guy, and they go into a room. They put up their camera and they just talk about the items that they purchased at the mall, at the store, and just put it on YouTube, so the whole world could see it, pretty much.
WOLMSELY: Haul Vloggers tend to favor cost-saving retailers, for whom it is valuable free marketing. Adam Bernhard, CEO of online marketplace, "HauteLook" says his site gets 40 percent of its traffic through social media.
ADAM BERNHARD, CEO, HAUTELOOK: Why it works is because the credibility that you are hearing from some one who is not being paid to tell you about another brand. It really resonates with individuals.
WOLMSLEY: Haul Vloggers can make or break a specific product. Indeed, for some demographics social media trumps traditional forms of advertising in terms of influencing the consumer.
UNIDENTIFIED FEMALE: I definitely relate more to the YouTube gurus, than I do magazines. So, I definitely trust their opinion a lot more and I'm willing to buy a product if I hear from the mouth of a girl on YouTube.
UNIDENTIFIED FEMALE: I think they are just like me. I mean, we're not famous people, we're just regular girls. We go to school. We have jobs.
WOLMSLEY: Dulche's Haul Videos have become so popular that YouTube has made her a partner, meaning she gets a share of the advertising revenue she generates. Teenage tycoons Blair Fallah's Haul Videos have over 52 million upload views.
So the first thing that I got from Ferber 21 (ph), is the shirt I'm wearing. And it is just really simple. I like the neckline. It is just black and white stripes. It is perfect for fall and going into the winter.
WOLMSLEY: And it is not all driven by the promise of financial return. For every Haul Vlogger that gets free merchandise and a share of YouTube profits. Thee are many that don't. Indeed, for many bloggers the real incentive is making a connection.
UNIDENTIFIED FEMALE: It is just sharing with the girls what I buy.
WOLMSLEY: And sharing your personal style, no matter what that might be. Katie Wolmsley, CNN, New York.
UNIDENTIFIED FEMALE: I can't believe you talked me into this.
QUEST: I'll tell you what, next time I'm about to buy a suit, I'll put it up on line. And we an all have a vote on whether it should be the blue pinstripe, or the gray pinstripe, or maybe that funny thing with checks.
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I'll have a "Profitable Moment" after the break.
Tonight's "Profitable Moment", if you have been following my Tweets over the weekend, @RichardQuest. Then you will know I was away on assignment, or something like that, over the weekend.
On the way back, of course, my flight was severely delayed by the volcanic ash cloud, which continues to bedevil international travelers. Airlines and regulators are regularly at logger heads nowadays, over the closure of airspace. What is clear is that human beings we have no say over when and how long the volcano will continue to spew dangerous ash.
If history is any guide, the spewing could last for months, if not years. All and all, the industry had better start thinking of ways of dealing with this threat. And the starting point is clearly to get better data on modern engine performance. Does the ash actually cause the harm it is said to? And we need to develop ways of circumnavigating the clouds. And there has been some movement there, as you heard tonight. Governments, airlines, passengers, we're all in this together. And the sooner everyone stops blaming each other, well, the better for all of us.
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Wherever you are up to in the hours ahead-
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I do hope it is profitable. "WORLD ONE" starts now.