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BA Given Green Light to Merge; Intel Leads Tech Stock Surge

Aired July 14, 2010 - 14:00:00   ET


RICHARD QUEST, HOST, QUEST MEANS BUSINESS: A good day for BA, a yes to the merge with Iberia, and nearly a yes to alliance with American.

The chips are down no more, Intel lit a fire under tech stocks.

And when you are on the top of the ladder you don't want to fall off. The chief exec at Heinz will be here to tell all.

I'm Richard Quest. Midweek, and I mean business.

Good evening.

A long time in the air but BA and Iberia are finally tying the knot. And economic and strategic necessity, it is said, for both airlines. And tonight on this program will be looking at the main alliances forged by Europe's major airlines. And the chief executive of Virgin, Steve Ridgway tells me what he thinks of the day's developments.

British Airways and Iberia have been told they can actually do the deal, according to European regulators who cleared the agreement. They've also said yes, to an enlarged company that BA, Iberia, and American forging that deeper trans-Atlantic alliance. The three carriers will be allowed co-chair (ph). For that deal to go through now all they need is the final go ahead, the seal of approval from the U.S. authorities, which is just weeks away. And then, of course, the anti-trust alliance will take place.

The airlines say they expect an answer from the DOT if all goes according to plan soon. And then the joint business agreement, that is when they say BA/AA will be up and running. The deal between British Airways and Iberia, it's big, but it will still only create Europe's third largest carrier, together with the combined airlines they have a market value of $6.6 billion, according to Bloomberg.

Now, Isha is with me.

Isha, you and I have talked on many occasions about this.


QUEST: But now it looks as if the deal is done, both Iberia and anti- trust. Give me a bit of a briefing, please.

SESAY: Well, if you look at ATI, the anti-trust immunity first of all, between BA, Iberia, and American. This is essentially leveling out the playing field, on the lucrative trans-Atlantic route. BA is merely catching up, getting the privileges of sharing costs and revenue, already enjoyed by its main competitors the giant German Lufthansa, with United, Air France, Kirlin (ph) and Delta.

But when we look at just the merger between BA and Iberia, this is the jewel in the crown, Barajas International Airport in Madrid. Heathrow is already bursting at the seams. There are no slots available and the new coalition government says no to a third runway. The BA chief executive, Willie Walsh says no problem, Madrid will be our third runway.

QUEST: So, by any stretch of the imagination, a good day for BA, in the sense of that it joins these two groups as having their anti-trust immunity. And it gets its hands on Barajas. What about for Iberia? What role does Iberia play in the BA world, if you like, in the New World, in terms of Latin America?

SESAY: Well, BA is essentially filling its geographical gaps in its route network.

QUEST: So that is a bit harsh.

SESAY: So, with Iberia then they will be able to offer passengers more flights, more destinations, in South and Latin America.

QUEST: BA does the trans-Atlantic, Iberia South Atlantic.

SESAY: South Atlantic, yes.

QUEST: OK, and this has to be seen in a wider context, though, doesn't it?

SESAY: Yes, so if you look at the three airlines that we are talking about tonight. British Airways, Iberia, and American Airlines, they are all members of the One World Alliance. And it is very clear that airlines are-well, the airline alliances are becoming the backbone of expansion. And so if you look at what the developments of the three major alliances, One World, Star and Sky Team, in the past 12 months, that there are safety in numbers with-safety in numbers with joining with the airline alliances, so-

QUEST: Who is joining which, because there has been a lot of activity on these three.

SESAY: Yes, in the past 12 months you have got the Indian carrier, Kingfisher Airlines, joining One World.


SESAY: Tam Airlines of Brazil joining Star Alliance, and most recently, last month, Vietnam Airlines and Tarom, the Romanian airline, joining Sky Team.

QUEST: There you have it, the alliance-the deals that have been done, the deals that are underway, and the future.

Isha, many thanks, indeed.

If you want to know why all this is so important, just look at this. British Airways don't get to team up for free. They have had to give up various routes and slots at London's Heathrow Airport. This is a live map of the aviation over the southeast of England, at the moment. They had to give up slots, in all, 14 slots, seven pairs three New York Authorities, London-Boston, London-Miami, and a London-Dallas. All had to be given up to get the price of this deal. It was considerably cheaper than the price that was originally-but just look at the-this really shows tonight, in Europe. Isn't that fascinating? Obviously, you've got London Heathrow here. You've got Frankfurt, you've got Paris, and you've got Amsterdam. The major hubs that will form-that do form the backbone of European aviation and those are the planes in the sky at the moment.

There is one airline that is more worried than most and it is based at London Heathrow Airport, as well. Virgin Atlantic has campaigned and bean opposed to British Airways getting anti-trust immunity with American for more than a decade. Now it has to face the prospect of being out on its own. The chief executive of Virgin Atlantic, Steve Ridgway, joined me. And I put it to Steve that quite clearly today was simply a disappointment, but inevitable.


STEVE RIDGWAY, CEO, VIRGIN ATLANTIC AIRLINES: And that is what is so wrong about it. And that is why I think we are very worried, because this is being done because BA wants to become even more dominant on the North Atlantic. We know that London dominates all the traffic flows out of Europe, to the U.S. And so, I think, our response is we are going to compete and fight even harder. And I think if ever there was a message, if you like, to all our corporate customers, and to our consumers that they need Virgin Atlantic to be there and be even stronger to provide that choice and that competition.

QUEST: BA-A says they will launch their partnership across the Atlantic in the autumn. What are your plans going to be for the autumn.

RIDGWAY: Well, there will be no change immediately for this autumn, because we can't change and bring in new aircraft in that short of time, and we are starting to look ahead now to see what the response will be. The remedies are so small, though, and so insignificant. And I think we're being asked, ironically, to pay for what they believe is damage to competition, by leasing these slots. But there is virtually no remedy as far as we are concerned.

QUEST: So, now you and I have talked about this before and Sir Richard and I have talked about this. He says he wouldn't sell the airline. But now you must start seriously looking at an alliance to make Virgin stronger.

RIDGWAY: I think we have never been opposed to things like that. I think we are a very independent carrier, we can carry on being an independent carrier. All we have been practicing (ph) against, is yes, consolidation is going to take place in the industry, but is it good consolidation where people are competing more effectively? Or is it consolidation that is going to stifle competition? So, if opportunities come up, we may have to look at that.

QUEST: Have opportunities come up? Have you started looking around?

RIDGWAY: No, I think we're always out there. We're aware of what is going on. We're aware of the shifting sands. We, I think sit in a very strong position in the London market. We're not dominant by any means, and we will never be in the position that BA is, and it is now getting itself another unfair leg up.

QUEST: If you were to look to an alliance, clearly One World is out of the question, because it is the BA alliance. So, we're talking Sky Team and Star Alliance. Now, Star Alliance has natural advantages to you. You are part owned by Singapore Airlines, they are members of Star. You have good relations with Lufthansa, they are a member of Star. Would you favor Star over Sky Team?

RIDGWAY: I think we have-right now we have more bi-lateral agreements with Star carriers. And I'm sure they will carry on, but I think equally the sands shift, don't they on alliances, so we'll have to see. But right now we have been-our relationships have been stronger with Star than with Sky Team, but equally I think Star is stronger in London.

QUEST: I am pushing hard here, I'm not sure I'm getting very far.


When would you expect there to be developments on that front.

RIDGWAY: I think we will look now, we need to-first of all we need to keep a very close eye on what this means and what it does and we will be out there making sure we are protecting the market and laying out our store (ph). And if opportunities come along on the alliance front, and it looks like it will work for us, and it will work for them, then who knows.

QUEST: Finally, one thing about Virgin and to your eternal credit, the way in which you came from nowhere, built up your presence on the very competitive market, saw dirty tricks from BA, and so you have a long history of surviving in adversity. But this really is a different league now.

RIDGWAY: Well, I think we're going to have to make sure it isn't. And we, I think, and the competition certainly will be watching this like a hawk over the next five years and through till these rules apply for the next 10 years. And it is just very sad that this is going to be allowed to go through. That there aren't real remedies there.


QUEST: The chief executive of Virgin Atlantic Steve Ridgway.

In a second or three, a quarterly report for the record books. What Intel's results about the economic recovery. We are in New York at the stock exchange, where the Dow is having a very good day. In a moment, good evening.


QUEST: If you needed to know Wall Street, shares of Intel are leading the technology section extremely higher on Wednesday. Alison Kosik is in New York, in fact, on the floor of the New York Stock Exchange.

And the Dow, well tech stocks are up, the Dow is off 40-odd points, despite my prognostication, a second ago that it must be higher. Alison, Intel has done some good but not much.

ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: Exactly, sure. Intel reported after the bell yesterday with stellar results. In fact, it said its second quarter was its best ever.

But what just sort of happened here at the New York Stock Exchange is we just got the minutes from the Fed's most recent meeting. And what the Fed did was sort of downgrade its earlier statement, saying the pace of recovery is going to be slower than it hoped. It doesn't see a double-dip recession but it does say that it could take five to six years before we fully recover. The Fed also said that we may have to go ahead and revisit another stimulus. The traders not liking that kind of talk.

But back to Intel, you know, we did see stocks take a nice jump today, earlier today after the bell Intel reporting that it had strong personal computer and server sales. It helped Intel ring up sales and profit of almost $3 billion. And the better than expected results were showing here for a while. Here, Intel shares are up about 2 percent. Intel also upgraded its outlook and we talked to CEO Stacy Smith, this is what he had to say.


STACY SMITH, CFO, INTEL CORP: Q2 was the quarter where we had the volcano at the beginning of the quarter. We obviously had the shocks to the system based on Southern Europe debt issues in May, and of course, World Cup at the end of the quarter. So, it was a more exciting than normal quarter. But at the end our business remained strong. The enterprise market came back with servers and notebooks. And our inventory levels, overall, as we look at the worldwide PC supply chain, look to be healthy and appropriate. And that gives us confidence in the seasonal second half, which is the forecast that we're making.


KOSIK: So, some of the rally from earlier today losing steam because of word about the Fed's minutes, but we are seeing tech shares higher, Dell, Microsoft, Hewlett-Packard, still kind of keeping up that rally in the tech sector. Richard, back to you.

QUEST: The thing I found fascinating there, Alison, was a technology company CEO that the effects of volcanoes, and the World Cup on Intel's results. A travel company, perhaps; a retail company, certainly, but a computer company, Alison?

KOSIK: Don't ask me, I'm not inside his head. I'll tell you what though, when the World Cup was in its heyday during the month, traders here were more busy watching the TV than they were making trades. Maybe that is what he was talking about, Richard. I don't know.

QUEST: Well, I think you have made the point adequately there. In terms of exactly, people were too busy watching than buying computers. Alison Kosik, lovely to see you. Many thanks a the New York Stock Exchange.

In Europe, much like in the U.S., a day of consolidation for shares, after a rally lasting more than a week. Let's go back over to the library and you will see what I'm talking about.

The London FTSE is up 9 points, 33 percent in the previous six days. Mining stocks took a bit of a tumble today, Antol Figasta (ph) and Xtrada. Interestingly, tonight, BP says that there are problems-not problems-delays in testing their new cap on top of the well head. And that, of course, has taken the shine off the optimistic news. BP down 2 percent. And the biggest faller, ICAP, the inter-dealer (ph) says lower volumes. And I'm wondering whether that might also be a bit of World Cuppery.

The DAX did eke out a small gain, seventh in a row. The Euro Zone inflation slowed in June, the chipmaker, Infineon up 2.4 percent after Intel was up, you would also expect Infineon to be up as well. If their sales weren't as good, that would be a crisis indeed. And the IBEX's mark, it is better expected markets from Bernesto (ph). Data showed Spanish banks borrowed record amounts from the ECB. Now that borrowing, that record borrowing, of course, raises interesting questions about the strength of the Spanish banks ahead of the stress tests that we are going to get next week. The prime minister of Spain, Prime Minister Zapatero has given a state of the nation address. And not surprisingly the economy was issue one.


JOSE LUIS ZAPATERO, PRIME MINISTER OF SPAIN (through translator): Spain is in a transcendental moment, crucial for its immediate future and the coming decades. We need to take steps to reduce the impact on our economy of the worst crisis we have known and to also push for the most intense economic change of our country, of recent times.


QUEST: Vanessa Rossi is a senior research fellow at from the economic think tank Chatham House.



QUEST: One of the great things about having you on the program is a old fashioned bit of common sense that we can talk. Is Spain in trouble?

ROSSI: Well, I love that last headline there, from Zapatero, austerity is the way forward. Yes? Just think about it a moment. Now Neill Ferguson, U.S. guru, has been around in London talking about this idea. Basically saying, we've said some things in the past, but he's saying it quite publicly now. Prosperity is the name of the game, not austerity. He obviously hasn't been to Spain yet. I suggest he needs to travel. I think this is clearly a problem. You can't say that austerity is the way forward.

QUEST: Why not?

ROSSI: Austerity is a necessary step to get certain factors put right. But to put this forward as the idea of the plan for the future is really a bit strange. Now, why is he saying this at the moment? We know why, because they have got the upcoming bank stress test. They've got difficulties still going on with the property sector. Unemployment is high. Good thing they won the World Cup at least that has given them a bit of a boost.

QUEST: Ah, you are cruel this evening.


Those stress tests? All the major banks, the biggies, the Deutsches, the HSBCs, the BNP Paribas, they'll all get a pass aren't they?

ROSSI: The big ones should be OK, yes. That is not the problem. Last year we had banks stress tests, apparently they all past. We never saw anything of it. We didn't see the results. We didn't see the exam papers, but they passed. This year we are going to get to see them, 91 of them. Next Friday, we'll all be watching I'm sure.

But the big ones will not be the problem. I think the concern is for that next tier down. And of course, the very small banks are not in here anyway. So we won't hear a lot about the Spanish Cajas, for example.

QUEST: Because they are only worried about the systemically important banks, aren't they. Those that could take the whole system down.

ROSSI: Except people forget there are a lot of small banks going down causes problems for governments like Spain. But that's not what is going to be tested. The ones in the spotlight are, for example, the German Landis Banks, the view there that some of those could be difficult. And all of this means that if we come out with a stress test, in public, the governments have to be ready to line up and provide help if there is a problem. Now they know that in advance. So, I'm sure that the timing of all these stress tests, and the release of the results, will be suitable for when the money is lined up.

QUEST: Let's come back to this, this interesting (INAUDIBLE) we've covered a lot on this program, between austerity and prosperity, growth and hair shirt. Where do you stand on this?

ROSSI: I feel that absolutely if you are talking about projecting a future to people, you've got to talk about how you rebuild prosperity.

QUEST: But you can't-

ROSSI: That has to be the key. Now, it is perfectly true that you have to do some rather nasty things to get there perhaps. You have to trim back the fiscal budget, you have to have a bit of austerity in the government spending. But if you are projecting the future of a nation, if you can't tell them that you've got prosperity out there, it doesn't look to me like you have a very good economic plan.

QUEST: Except, if you do not at least make the noises of sack cloth and ashes, the markets are punishing. Even they're pushing even those countries that they don't have to punish.

ROSSI: That's why you have got to get the talk right.

QUEST: Maybe that is all he's doing. Maybe that is all he's doing?

ROSSI: Cameron has done a pretty good job on this. Now, Osborn and the new government here, they've done a pretty good job on this. They have got tough measures into the budget. They have convinced the market they're doing things. Probably everybody knows that they are trying to convince them they're doing more than they'll really do.

QUEST: Right.

ROSSI: But that is fine. It squares away the problem. But then you can get on with the business of talking about what we're growing for the future economy. And that, I think, is the other part of this launch. Now at the moment the mix in Europe doesn't seem to be quite as good.

QUEST: We'll talk more about this. And, as always, I thank good common sense, and that is what we always love to have with you. Vanessa, many thanks, indeed.

All right. Now, when you and I come back together, could China's economy be pulling over from the fast lane? It may not actually be on the hard shoulder by any means. But we ask what putting the breaks on might mean when the currency is tied to the dollar, in just a moment.


QUEST: The dollar and the currency very much in vogue at the moment. Look at that, 1.27, bearing in mind that it was just down to 1.19 a few weeks ago.

China's galloping growth, could be about to slow to a cantor, when we get numbers for second quarter GDP. They perhaps show the pace is easing a little. It is still likely to be in the double figures, the envy of every other economy. The problem, of course, is lower numbers are not good news for China as it seeks to grow its middle class. Paul Mackel is senior foreign exchange strategist at HSBC. And for him I needed to know whether it was likely to be a serious slowdown and what sort of effect it has on FOREX.

PAUL MACKEL, CURRENCY STRATEGIST, HSBC: Well, I think that the market is obviously a little bit nervous about trying to manage the slowdown. And in our view, I mean, warning signs for a slow down actually have been coming for some time. And latest data set, whether you are looking at, say, looking at some of the surveys that have been pointing to a slowing of the economy. But in our view it is going to be a gentle slowdown, something that the markets should not be too alarmed with.

So if we are thinking about what it means for currencies overall, I know where the market is going to be much more sensitive to significant down side surprises, say, in China GDP. But overall, I'd say that the currency story should still be generally constructive. That is your commodity currencies, yes, they could be sensitive to a weak reading, say in GDP, but overall, I think you have to buy into longer-term story for China. And what it means for commodity currencies like the Australian dollar, the Canadian dollar, and really that story is going to be fairly promising.

QUEST: We have to put this into context, though, with China loosening, some would say, abandoning the peg for the one against the dollar. Unfortunately, we haven't really seen a significant or appreciable appreciation have we? So, it does seem as if it was a bit of political grandstanding ahead of the G20?

MACKEL: Well, I think China is just trying to demonstrate to the international audience that they're trying to come through this new currency regime and really trying to communicate to the market that this is not necessarily going to be the currency regime which they had in 2005 to 2008. It is very, very different. And basically what it sums up to be is there is going to be more two-way volatility for a currency. Not just one direction for a currency.

And this is what the market is trying to get its head around, which way is the currency going to move. And this is appropriate. This is the way that exchange rates move. They go up and down all the time. Not in just one direction. And I think that the new currency regime in China is a good thing, in terms of the longer term story, about internationalization of the currency.

QUEST: While we're talking in this zone (ph), let's move to Europe. It seems hardly a few weeks ago when the euro down at $1.19 against the dollar, now we're back towards $1.27. One is tempted to say an element of confidence in the euro.

Or, yet even you are smiling at that. Or it is just merely the pendulum swinging a little bit back towards normality. Is the glass half full or half empty?

MACKEL: Well, I think that there was just an extreme amount of pessimism coming through and hurting the euro quite a bit, in particular, May and early part of June. And you are seeing this stability coming through in the currency. It is constructive. I mean, we have been more constructive compared to the market about how we should be looking at the euro. And you are seeing these scare stories about the euro breaking up, going away. I think that the market is getting a little bit tired of some of the scary stories that have been trying to come out of the Euro Zone and hurting the currency.

And increasingly the price action is quite constructive. And with that, confidence is building in the currency. And I think it is going to continue to go higher versus the dollar through the course of this year.

QUEST: And that is where we have, just before we end, some quick fire questions and answers. What is your forecast, best guess, for euro dollar, end of year?

MACKEL: Our year-end forecast for euro dollar is $1.35. It is a very non consensus view but we are very happy with it.

QUEST: And your cable, pound-dollar rate, end of year?

MACKEL: $1.62.

QUEST: $1.62. Finally, dollar-yen, end of year?

MACKEL: $0.95.

QUEST: And there we will play all those answers back to you at the end of the year. Paul, many thanks, indeed.

MACKEL: Thank you.


QUEST: You've got your numbers, now of course, we just have to see if he's right.

A lot of people think they've got what it takes to get to the top. Most could learn a thing or two from people have actually been in the hottest seat of all, the chief executives. Bill Johnson is the head of Heinz. He tells us the ingredients for a great leader in just a moment.


QUEST: Hello, I'm Richard Quest. QUEST MEANS BUSINESS, this is CNN, where the news always comes first.


QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.

This is CNN, where the news always comes first.

In the headlines, the man who admitted trying to bomb Times Square has threatened a revenge attack against the United States. According to a video broadcast by Al-Arabiya. The TV network says the man -- seen here -- who boasts of plans to wage jihad -- is Faisal Shahzad. He's pleaded guilty to plotting and planting a car bomb in New York. CNN cannot confirm the authenticity of the tape.

A new challenge to Israel's naval blockade of Gaza has been averted. The Libyan charity that charted a humanitarian aid ship to Gaza now says the ship will dock in Egypt. Israel had repeatedly said it would not allow the ship to breach the Gaza blockade.

It's been a deadly two days for coalition troops in Afghanistan. Eight American soldiers and four British troops have been killed in attacks and battles in various places, including Kandahar City and Helmand Province. The death toll is on a pace to match June, the bloodiest month so far for coalition troops in the Afghan War.

It is lonely at the top, says the cliche. You may earn the big bucks, says another. But the buck stops with you to complete a raft of cliches. And if you want to be a CEO, consider this -- these are some of the things that you have to look at when you look at it. For example, the chief executives of Pepsis, Johnson & Johnson, Bank of America, wish they had known that when they took the jobs.

Some of it may surprise you -- preparing for the isolation of being at the top of the tree.

There is, of course, a worry that lack of a private life. You protest you want privacy, but you just don't get it. The need for better leadership skills -- you may collect skills on the way up the corporate adder, climbing the greasy pole, but are those the ones you want when you're sitting at the head of the table, to mix my metaphors?

It's all part of a new book based on interviews with chief execs of 27 of the largest corporations in America. The CEO study was sponsored by the food giant, Heinz.

And the company's chief exec, Bill Johnson, very pleased, Bill, to have you with me now from New York.

Bill, why does a chief exec of a major international corporation feel the need to find out what makes -- or what other CEOs think about leadership?

Why did you do it?

BILL JOHNSON, CEO, H.J. HEINZ: Because it is about leadership, Richard. If you think about it, many of us get to these jobs by successful operations and other ways of -- of venues up to the top. When we get there, we're not sure how to -- how to acclimate. We're not sure how to navigate. And, frankly, we're not really sure how to innovate, because that's not necessarily what we've done.

So I was concerned that maybe I had a unique view and maybe I was the only one that had that view. So I asked a group to go out and do a study of 27 sitting CEOs, including myself, to determine what others felt. We originally titled the study, "What I Wish I Knew." It's now become, obviously, a study on leadership. But it was very enlightening to learn what others didn't know as well as what I didn't know when we acceded to these jobs.

QUEST: Bill, this -- this is a quote that I read from the book: "Never forget in this job you are only as good as your last quarter."

That's a bit like me saying tonight, I'm only as good as my last show.

But isn't that exactly the problem with leadership?

If you're focused on the last quarter's EPS, you're not focused on the long-term strategic goal of the company?

JOHNSON: I think there's a real value to understanding the quote and the context of it. I think, ultimately, it comes down to establishing a creative tension between the short-term and the long-term and reaching an appropriate balance in terms of how you manage both. It is a very difficult thing to do. And, frankly, most of us who get to the top are not prepared to -- do deliver that balance, because that's not what we've done. Our focus has always been on delivering next week's results or last month's results or whatever it may be. And as we get to the top, there's enormous balance required.

QUEST: Another quote : "I had no idea how physically demanding this job would be," it says. "To be successful, I need to be energetic, focused and disciplined." A fascinating idea. I frankly have always wondered how you guys manage to sleep on planes, sleep in cars. You never yawn when you shouldn't yawn.

How do you do it?


JOHNSON: Well, partly it's discipline and partly it's just a function of the beast. I think those of us who get to these jobs -- you know, I got up this morning and went five-and-a-half miles on a run and I try to do that every day. I've been in Russia, Eastern Europe, Turkey, Asia, the last couple of weeks. And you just sort of acclimate to it.

And the secret is just to keep going, to keep disciplined...


JOHNSON: -- and to keep focused on the task at hand.

QUEST: Right. But that brings me to my point.

Are CEOs born or are they made?

Now, I recognize it's a truism, that we can't prove one way or the other, because by the time you've got to the job, you're already there.

But do you think it's something you learn or it's something that's innate within you?

JOHNSON: You know what, Richard?

I believe it's a bit of both. I think you can teach leadership. I think Vince Lombardi, the great American football coach, once said leaders are made, not born.

Having said that, I do think there's a certain amount of energy that's inherent in the being. I think there's a certain amount of -- of curiosity and -- and desire to learn more. I mean one of the things that I've really enjoyed about my job is seeing different cultures, learning different ways of living around the globe. If you don't have that drive, if you don't want to have that curiosity, you're not going to succeed, no matter how talented you really are.

QUEST: Finally, as we come to the end of this, I mean, I, frankly, could talk to you for the next half hour, but we don't have the time. Though, I -- this -- I notice that you are the chairman, the president, the chief executive. You're also -- you know where I'm going. I can see you're nodding already. But the traditional view in the rest of the world is you don't have the same man or woman being all three. You have a non- execed chairman, somebody who stands as a foil to you as the -- as the leader.

JOHNSON: Well, I -- I sort of dispute that, Richard. There's been no inherent or empirical evidence to support one view or the other. And we have a board of directors that's independent and fiduciaries of the shareholders. And believe me, there's sufficient tension in the boardroom to question the things we do and to make sure strategically and morally and objectively we're on track.

And so I think the tension exists. And when I first got this job 12, 13 years ago, I did have a non-executive...

QUEST: All right...

JOHNSON: -- chair for two years, moved into that job and, ultimately, that's what will probably happen to my successor.

QUEST: But will you know -- this is the toughest question, perhaps, of all -- will you know when it's time to go or will you have to be taken out and shot?

JOHNSON: No, I won't have to be taken out and shot. It will come from a number of sources, Richard. One will be my wife, who once said to me, I'll let you know when it's ready to -- when you're ready to go, because you owe me you. One will be my own sense of whether or not the challenge and the interest and the energy is still there. And another will be if the skill requirements have dramatically changed because the environment has dramatically changed and whether it's time to bring someone else into the job who brings a different perspective.

QUEST: Bill, wonderful to have you.

If I come to visit you in the office, can I spend a day and learn what it's like being CEO of Heinz?

JOHNSON: Absolutely, Richard. Be glad to do that.

QUEST: Ah-ha. That's on tape.

Bill, many thanks, indeed.

The book is just out. It is a fascinating read concerning the -- the goals and the responsibility of leadership, "Preparing CEOs for Success: What I Wish I Knew," by Bill Johnson, the CEO of Heinz.

And we -- we've got some Tweets that we got from your good selves.

Rihad Bridges ph: "A good CEO is able to get the right people to do the right thing at the right time."

Trunka (ph) says: "Fascinating things."

No, Asian Sting (ph): "A good leader is accountable for any downfalls that happen. That includes not taking government bailouts and no golden parachutes."

The Vacant Lot: "I think what makes a good CEO is someone who has humility and humble, not ego-driven. Not many of them around."

We'll continue this debate today and tomorrow, what makes a good leader?

E-mail me, The Twitter address, as always, is atrichardquest.


Good evening to you.


QUEST: A crucial day tomorrow, St. Swithin's Day. St. Swithin's Day a thou dost rain, for 40 days, it will remain. St. Swithin's Day, if thou be fair, for 40 days, 'twil rain ne mere.


QUEST: (INAUDIBLE) at the World Weather Center.


The last part means I have the -- the translated version into modern English. Of course, it happens tomorrow, and I think that we are not looking very nicely. No more, he says, ne mere, because Richard knows it well.

This is the forecast. Here you go. Forty days of wind and showers. I have another one, Richard, more modern. I'm going to read it. I have a cheat sheet here. If on St. Swithin's Day, it really pours, you're better off to stay indoors.

How about that?

Well, is it going to be raining, not only in England, all over up here to the north.

But what can we do?

It's unfortunate that we didn't get the weather that we had last week. It was gorgeous. It was a little bit warm. We are going to see storms also in the Low Countries here. The warm will remain. There are 16 countries in Europe under warnings -- heat warnings or heat advisories.

But to the north, we have a pattern of thunderstorms -- severe, because the cool air is in the north. So more marks that we have approached that are records -- 36 in Geneva, for example -- Richard, get ready for the heat in the south. Get ready for the rain in the north.

QUEST: Thank you, Guillermo, with a cheerful forecast.

See you tomorrow.

Tonight's Profitable Moment.

I once wrote an article saying that it was not a question of if, but when British Airways and American Airlines will get anti-trust immunity. I wrote that article 12 years ago, when they first announced their plans for a tie-up. I had no idea it would take this long to get that agreement.

The fact that it has taken so long to sort out B.A. and American is a testament to the importance of the transatlantic and London's Heathrow Airport and the dominance of those two airlines between London and New York.

Compared to 1998, though, the aviation landscape of today is very different, with cities like Frankfurt and Amsterdam growing and transport hubs with other airlines, like United, Lufthansa and alliances of their own -- strong competitors on the transatlantic market.

The loser in all of this is Virgin Atlantic, which will probably have to seek strength in an alliance, most likely Star Alliance. With Virgin about to face a new competitor, I'm guessing it won't take 12 years to do that deal.

And that's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest.

Whatever you're up to in the hours ahead, I hope it's profitable.