Return to Transcripts main page


FIFA's Sepp Blatter Reelected, U.S. Stocks Falling Off, Debate Over E. Coli Outbreak, Fighting Climate Change; Changing the Record; Travel Tomes; U.S. Stocks Selling Off; Monarch's Metamorphosis

Aired June 1, 2011 - 14:00:00   ET


RICHARD QUEST, HOST: It's the FIFA or FIF-dum (ph). Blatter's re-election raises questions of governance. Tonight the New York mayor Michael Bloomberg on this program, on why climate change is a local issue. And we're breaking into the clouds with Apple's latest trick, which might take it way into the sky. With an hour together, I'm Richard Quest. I mean business.

Good evening. Unopposed. Some say unpopular. But certainly unbowed. Sepp Blatter has won a fourth term as FIFA's president. The confidence in his ability to lead football's governing body may already be lost according to some.

Moments ago, Mr. Blatter promised he would shake up FIFA's ethical practices. After a tumultuous week, Mr. Blatter said it was time to start moving on.


SEPP BLATTER, PRESIDENT, FIFA (through translator): We have been hit. I have been slapped. We are standing and we will no longer be slapped because we have created the necessary means to react against what we (INAUDIBLE) so they say. We've shown transparency -- transparency in financial matters, and now the transparency will be shown as to control of the activities of FIFA.

QUEST (voice over): Less of an election, we're in more of coronation. Blatter won 186 votes out of 203. His only rival suspended for alleged corruption. Blatter's name was the only one on the ballot paper. He's already been forced to change how future World Cup host are decided. National football associations, all 203 of them will now get more of a say.

Those associations gave the go ahead for today's election. The English FA and the Scottish FA had wanted a delay. They were roundly rebuffed by them.


QUEST: All right Alex Thomas is with us. I mean, look the numbers speak for themselves. I may get hot under the collar about corporate governance, you may get hot under the collar about football, but FIFA's members didn't seem to care.

ALEX THOMAS, CNN CORRESPONDENT: No. And it's not run like a limited company even though it deals with global brands and makes them $100s of millions of dollars. Let's face it. But, football fans around the world clearly care. You just have to take a look at social networking sites to see that. However, when the English FA, tried to stand up this morning in the FIFA congress and say let's postpone this presidency vote.

There's too many questions about bribery and corruption, too many allegations, there was a quiet, sort of embarrassing silence. When lots of other members stood up and said no we must vote today, they all got applauded. And 186 votes in favor of Blatter tells the story.

QUEST: OK, so here's the man who's at the top, who presided over much of the calamities and fiascos, whose now got another four years. What's he going to do? He's the chief exec. What's he going to do?

THOMAS: He may look like a bit of an old blithering so-and-so at times. With the greatest respect to Sepp Blatter --

QUEST: I -- I -- not for a moment. The man is as wide is as it's possible to be.

THOMAS: I mean with phrases like, I may not be the best swimmer, but I can take a ship safely to harbor, he's sounding like Eric Cantona (ph) in the 1990s. But he's a canny operator is Sepp Blatter. And he has made certain statements today, not least of which saying he's going to reform the way they vote the host World Cup nations. And that should appease many critics.

QUEST: When you see countries, and I'm not going to name them, but some of the countries, who are very public in their support of him. Who are less than transparent in their own governance, and, one doesn't want to sound pompous about this, and -- but, how much of this was a bunch of countries - - I mean, you know enemies and friends all getting together. My enemy -- my enemy's my friend.

THOMAS: It's a footballing United Nations. The congress resents -- represents the whole world. Now it wasn't just the English FA that objected to this. The German FA had strong criticism as well. My sources at the Italian and French press say football fans there care, but it didn't make front page news the way it did in the U.K.

QUEST: What does it say -- look at -- let's look at the ballot paper, if you just move your head out the way. I mean that is the ballot paper. One name, Sepp Blatter.

THOMAS: It was parcicle (ph).

QUEST: What does it say about the state -- and I'm not a -- you know me Alex -- what I know about football could be written on the ballot paper. Give me a ballot sheet rather than a ballot paper. But, what does it say about the state of football? That this can take place.

THOMAS: The live feed was broadcast around the world because of all the headlines FIFA's made this week. But that's -- it's a bit embarrassing. Why go through the process, because even if people abstain from the votes. Abstentions didn't count. Mr. Blatter was always going to be a re-elected - -


QUEST: He only needed one vote.

THOMAS: He only needed one vote, and he was always going to get that. So it was a bit farscicle (ph). But he wanted to go through the process, stand up victorious at the end and say you were wrong, I can lead FIFA for the next four years.

QUEST: We'll talk more about this obviously in the future. As we focus on this, and -- how -- how long does he -- he's got four years, but how long does he have before other countries would say it's not working.

THOMAS: There were rumors that he'd done a deal with Michel Patini (ph) the head of Europe's governing body to stand down in two years. We don't think that's going to happen. Let me give you cold, hard figures, quickly.

QUEST: Please do. Please, please do.

THOMAS: In 2007, he was re-elected unopposed. Even more popular than now. FIFA made a $49 million profit. Though hit by the (INAUDIBLE) of the MasterCard. This -- last year, the profit had gone up to $202 million --

QUEST: (INAUDIBLE) That says it all.

THOMAS: Figures say it all. He's successful in that respect.

QUEST: Alex, really, thanks indeed.

The U.S. president, Harry Truman had to sign on his desk the buck stops here. The mere existence of troubled waters is often enough for a leader to step down. Join me in the library of governance, and I will show you what I mean.

Howard Davies -- Howard Davies, when it all came about for the London school of economics, resigned as the director of the LSE when the school admitted to accepting money from the Libyan government.

Now it was his policy to forge the deals, even though he said it's right for me to step down even though I know it will cause difficulties for the institution. I am responsible, said Sir Howard Davies, for the reputation that has suffered.

In the United States, the head of the Air Traffic Control of the FAA, Hank Krakowski, he handed in his resignation after controllers were found to be sleeping on the job earlier this year.

Now no one's suggested that Hank was snoozing, but he was the man at the top. And, of course, two weeks ago the president of Tokyo Electric Power Company resigned after the nuclear crisis in Fukushima. Again he was the man running the company. The company took a $15 billion loss and he said it is a symbolic close. To bring symbolic closure to this incident. That's the way things happened of course, in terms of taking the blame.

FIFA, of course, is not the only international group at this moment, having an election -- a controversial election to worry about. The IMF is choosing it's leader to replace Dominique Strauss-Kahn.

Now the IMF sent out clear rules on how their election -- the funds executive board said quite clearly, the next -- the next managing director will be chosen in an open, merit-based, transparent manner. It's the executive board that has the final choice of who gets the job. They're hoping for a consensus from the short list.

And, of course, if there's more than one candidate, and they can't get consensus, then they will go to a weighted voting. Open, merit-based and transparent manner.

There seems to have been a world of difference in the FIFA's handled things and the way the corporate world does. Let's go to Carl Rosen the Executive Director of the International Corporate Governance Network. Carl joins me from New York.

You watch what happened. Would this pass muster in the shareholders and boardrooms?

CARL ROSEN, EXECUTIVE DIRECTOR, INTERNATIONAL CORPORATE GOVERNANCE NETWORK: I think what would happen in companies of course -- that the shareholders - - they are there, they hold the board accountable -- accountable and the board, they look after the CEO. So, what would happen in a listed company at least, is that the mere dreft (ph) of being moved --

QUEST: Right.

ROSEN: --would mean that the CEO would actually step down. I think it's quite interesting to look at the BP situation last year. It was a listed company with another governor structure. And even to propose that Tony Hayward would clean up the mess after the disaster in the Mexican gulf -- I think that that would not be even possible.

QUEST: Well, hang on, hang on --

ROSEN: -- and I think we look at --

QUEST: No, no, hang on a second Carl. He did try. He did try to start the clean-up and he did try to -- that's maybe not the best the best example, because Hayward stayed in that job for a long time. And it was only when he put his own size 10s in his own mouth, that he finally was ousted by the White House.

ROSEN: Yes, that's right. On the other hand what we have in a listed company is the governor structure, which you can discuss how good it is, but still you have shareholders, you have an AGM, you have -- you have disclosure about company facts and so forth.

Here we have a self-governing body, more or less, which is an aggregation of membership parties, so it's very far, to the (INAUDIBLE) client, you can say. And what I expect from this is that it will take -- as you have mentioned already in the program -- is that where basically the brand of football is threatened. And of course that would mean that this will change over time, but it will take a longer time.

QUEST: All right.

ROSEN: And one of the reasons is of course that the coverage from media will go away after -- after this, and they will come back after four years. So I think it's --

QUEST: And then like a company of course it does not have shareholders and quarterly results which we can pour over every three months. Carl many thanks indeed. Carl Rosen joining me from New York. \

I need to show you this, also in New York. The DOW Jones is up 215 points, a fall of 1.7 percent. Now the DOW has been reaching a multi-week high at the moment. Or at least it was when it was over 12 and a half thousand. Now it has fallen back and it -- the worry's over.

The economy that is causing the DOW to fall. And indeed we saw that on the bond market with U.S. tenure bonds now at the lowest levels on the yield that there have been for some years.

Next, political facts over the deadly E Coli outbreak. Germany was quick to point the finger at Spain. Now everybody seems to wonder what did actually cause the E. Coli outbreak.


QUEST: A deadly E. Coli outbreak which has killed as many as 16 people is getting worse. Germany's disease control agency is now reporting 365 new cases this Wednesday.

An instance also causing a political rift within Europe. Spain is furious that German officials have accused it of being the source of the disease. Now the country's deputy prime minister says there's no proof the bacteria came from Spain.

And they're not even ruling out legal action for the slur. The accusations have hit Spain hard in the pocketbook. It's project export specter says it stands to lose $219 million a week as consumer's have stopped buying Spanish vegetables.

Germany is the top purchaser, according to this Spanish Project Federation, Fact Ex. They bought a quarter of its fruit and veg exports last year. Al Goodman is in Madrid.

What are they furious about Al? Is it just the mere suggestion that it's come from Spain?

AL GOODMAN, MADRID BUREAU CHIEF: No it wasn't the mere suggestion, it was the allegation, last week by the officials in Hamburg, Germany the epicenter of the outbreak, implicating the Spanish cucumbers as the potential cause of this.

And that's what has caused in the recent days this huge drop in the sales, with trucks being sent back, orders being canceled.

So now that those officials -- those same officials in Hamburg, Germany have backed off of that initial assertion. Spain has come roaring out with this counter offensive lead by the deputy prime minister who by the way is bucking to become prime minister, making all of those threats.

And that's what Spain is trying to do he says, is first and foremost, is repair the damage to the image of Spain and to its agricultural sector. That's what he's on -- that's what he's on for this day. Richard.

QUEST: The -- the whole mess, and the way in which it is being played out, which way does it go from here Al because, whatever does happen there's no doubt people are going to (TECH INAUDIBLE).

GOODMAN: Well people are -- there are -- have been deaths and hundreds of people are ill because of this and so Spain is saying to Germany we want you to find the cause of it.

Germany, we are told, is widening it's search, looking trying to find a cause, but while -- in the meantime Spain is saying, while all of that serious is going on -- serious stuff is going on, don't hurt the Spanish economy just at the worst possible time. 21 percent unemployment, a deep economic crisis.

And so what Spain wants to do immediately, is get off the watch list for its fruits and vegetables from the European union. They think that will trigger the United States to take them off the watch list and things could start to get back to normal. Richard.

QUEST: All right. Al Goodman, who is in Madrid for us tonight. When we come back in just a moment, financing the fight against climate change. Up ahead we talk to Mayor Michael Bloomberg about teaming up with the World Bank and the way in which cities are having their difficulties in dealing with climate change.


QUEST: The World Bank has stepped into the fight against climate change announcing a partnership with 40 of the world's largest cities. It'll help provide financing for projects to reduce greenhouse gas emissions.

The deal was signed in sub-powlow (ph), by the World Bank president Robert Zoellick, and the chairman of the C40 cities climate leadership group, along with I've been saying the New York mayor, Michael Bloomberg. And under this agreement, the new global standard for reporting C02 emissions at local levels will be released.

Cities can asses where they stand and access funding for projects to reduce their carbon output.

Mayor Bloomberg joins us now live from Brasilia.

Mr. Mayor, why was it so significant to have -- I beg your pardon, you're in Sao Paulo -- why was it so significant to have a common standard. I mean everybody knows what are each city's doing.

MICHAEL BLOOMBERG, MAYOR, NEW YORK CITY: Well they really -- number one I wanted to say happy 30th anniversary to CNN, number two every city doesn't know what the other's doing, because if everybody uses a different standard, a different way of measuring, it's like apples to oranges. And if you can't measure a problem you can't fix it.

So having a common standard will let us know where resources should go. Whose doing the most polluting, which things that -- trying to stop polluting actually work.

Being able to measure something is really important, and I've always had a saying -- on the back of a dollar bill it says in God we trust, but everybody else better bring data. And that's what we're trying to let them do.

QUEST: The statistic I always find fascinating is two percent of the earth land mass are cities and there are 50 percent of the population. But because so much of environment C02 emissions is dealt with by central government, the areas which you deal with are often the most important. Transportation, public housing, waste management. So what more do you want to see done?

BLOOMBERG: Well, what we'd really like to do is to get the international organizations and national governments to face the fact that we are doing something that is hurting our lives today and scientist tell us is going to hurt our lives and our children's lives tomorrow.

But we can't just sit around and -- the fact that they aren't doing very much and -- just talking, and sometimes they don't even do that, we can't just sit around and cry in our -- and complain we've got to go and do the things that we can do.

And you can, with building regulations, reduce the amount of greenhouse gases coming out of heating and cooling systems. With better traffic management you can reduce the pollution that comes from the traffic. You can have hybrid buses and trucks and cars that will reduce pollution. You can capture gases from garbage dumps.

Methane, which is terribly dangerous to the climate, but will give you another energy source that will free countries from being dependent on other countries energy.

QUEST: We're -- the stoplight's just about out of time, but I do need to ask you one other issue. It's this, New York bid for the World Cup in 2018, 2022. Knowing now what you know and what we've heard about that fitting process Mr. Mayor, do you feel badly done by, the way FIFA handled things?

BLOOMBERG: I think you're probably asking the wrong person. I'm not an expert on the soccer world, and, maybe climate change might be a little bit more important. After all, we could be doing damage that your children and mine are going to suffer with. ' QUEST: Well let's just stay on that climate change. If we do turn, what will be for you, when you leave office? On the climate change question, what will be for you the biggest barometer of your success, as such it is?

BLOOMBERG: Well it would be that national governments and international governments understand what's happening to our economy today. To the air we breathe today. The water we breathe today. And, what the scientists tell us is great damage to the globe for tomorrow.

You know if the gulf stream were to change, which is predicted to happen as the ice caps melt, you're going to see all of Europe with a very different climate change. You look central United States. We're having tornadoes like we've never had before. We're having floods and draughts, as they are around world, in places where those things didn't take place before.

But I think you're not going to solve these problems overnight. But we have to get away from just talking about them and having national and international organizations work to actually do something.

In the meantime, the mayors from around the world are not sitting back. They're responsible to the people that elect them day in and day out. They've got to make their lives better.

You know in New York City we've improved life expectancy in the last ten years by one year and seven months. You will live longer on average if you live in New York City than in the average place in the United States.

That's the kind of change that cities can have. We really can make -- have a very big impact on whether people live. And how healthy they are when they do.

QUEST: And with the way the dollar is at the moment -- the gains per pound, I might even manage to actually spend some money whilst I'm living there that bit longer.

Mayor Michael Bloomberg joining us from Sao Paulo this evening we appreciate it. Now, when we come in just a moment, QUEST MEANS BUSINESS, it's everything, everywhere and it's shaking up the way we store our music.

Apple has a bit of a late comer to the cloud music. But, it's fashionably late. In a moment.


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

This is CNN. And on this network, the news always comes first.

The newly reelected chief of world football is vowing to, in his words, put FIFA's ship back on the right course. President Sepp Blatter was the only candidate after his one rival dropped out amid a corruption scandal. Blatter got 186 votes from the 203 voting members of FIFA.

Now, Pedro Pinto is standing by outside FIFA's headquarters in Zurich. And Pedro joins us now.

So the ship is -- the captain hasn't changed, but the ship is going to be heading in a new -- in a new direction -- Pedro.

But the question is, how many of the members of crew are on board, to push the analogy way beyond the breaking point?

PEDRO PINTO, CNN CORRESPONDENT: I think I got the analogy, Richard.

Judging by the vote results, I would say that everyone, maybe except the cook, is on board with the -- with the new course that he wants to set for -- for FIFA. I believe, after what I heard, that Seth Blatter is convinced he's the right man to lead FIFA out of these troubled waters, as he has so often called this chaotic period that his organization is going through.

I was just in there listening to his press conference and this was a proud man. This was a man who feels strengthened by this vote -- 186 out of 203 members that voted chose Blatter. I know they didn't have another choice, but more could have abstained. So over 90 percent of the delegates in world football, Richard, believe that Seth Blatter is the captain that would still steer this ship.

QUEST: All right. Pedro Pinto, who is in -- in Zurich, I think -- yes, Zurich, with us tonight.

Other headlines on CNN. Researchers are still working to identify the source of a spreading E coli outbreak linked to the deaths of 16 people. Officials in Spain are angry that Germany has pointed a finger at their exports, specifically Spanish cucumbers, which they say the facts are that there are no cases of E coli in Spain and it's proof that the illness didn't originate there.

Libya's oil minister has deflected, telling CNN that the suffering of the people has become unbearable. The development comes as NATO says its mission in Libya will go on for at least another 90 days -- a sign of NATO's determination to protect the Libyan people. The Gadhafi regime claims that hundreds of civilian martyrs have been killed by NATO forces since March.


UNIDENTIFIED MALE: Main gear touch down.


QUEST: The middle of the night, but main gear touch down and the Space Shuttle returned. It happened exactly 12 hours ago. It's sending Endeavour into retirement. The Space Shuttle Atlantis is set to make NASA's final shuttle journey on July the 8th. Endeavour is going to be placed into a museum.

Apple is floating its iCloud into position. The company is set to unveil the service on Monday in San Francisco, potentially delivering your music in a whole new way. What's interesting, of course, about the way Apple is doing it is that it's announced what it's going to do. The -- the usual secrecy that Apple has not necessarily been present.

We might call this the sound of music because if you take a look, this is the cloud that currently exists in terms of cloud music. Now, Apple, and Google are all in this business of looking after your music for you. The problem is, the problem is, in the case of Amazon, all individual users have to upload their own music. Lots and lots of people all uploading music to Amazon. It's the same case with Google, where everybody uploads their own music time and again. Thousands, millions of people all uploading music one after the other. It's cumbersome, it's time consuming, it's certainly annoying for all the people at the bottom.

The difference is Apple has managed to do it in the cloud. Apple already has the rights to all the music. So it can just simply feed it back to people if they have already bought it. And the reason is because Apple has already got licensing agreements with Warner, Sony, EMI and is expected to get a deal with Universal. As long as Apple has those deals in place, it can continue to do and to send the music down.

Shelly Palmer

As long as Apple has those deals in place, it can continue to do and to send the music down.

Shelly Palmer is a tech expert and host of "Digital Life with Shelly Palmer".

And we're always good and glad to have Shelly with us to make sense of this.


QUEST: How big an advantage is it?

I mean I've gone through the rough opening of it.

But how big an ex -- advantage is it for them to have these deals over Amazon and Google?

PALMER: Honestly, Richard, this is a game-changer in a lot of ways, because it calls into question what does it mean to own something in the 21st century. If the music you want is in the cloud and you have a license to hear it anytime you want, if the videos you want are in the cloud and you have a license to view them anytime you want, what does it mean to own?

And the answer is nothing. So Apple has got a huge advantage by having these licenses, because they are -- they've gotten past the hardest part, which is copyright laws. And, by the way, international copyright laws are different literally in every single country...


PALMER: -- and the -- the record companies are not the only holders of these rights. So it's an amazing coup for them.

QUEST: But let's say a million people have got "Bad Romance" on their iPads or MP3 players and we all upload it.

I mean, surely Amazon and Google aren't going to keep a million copies of it that we can listen to each time I want my copy and I -- and you want your copy?

Surely, if it's...

PALMER: Oddly enough -- no, Richard, oddly enough, they are, because that's the deal that's sitting there right now. You have -- you're renting -- literally, you're renting a hard drive in a remote location. People call it the cloud, but the cloud is really a marketing term. It's not a technical term.

What it is, is either storage or computing power in a remote location to you. It's exactly like having it...

QUEST: So it's...

PALMER: -- on your own hard drive.

QUEST: OK. All right, but...

PALMER: You're just renting the space.

QUEST: All right, but then it won't be long, will it not, before deal with Warner, Sony, EMI, Universal, whoever, will come along to Amazon and Google?

And, frankly, the only reason they haven't got their deals so far is because they wanted to steal a march on Apple.

PALMER: Truly, there are a lot of things, like I said, that are being called into question by this deal. The number one thing I'm interested in is, again, what does it mean to own something in the 21st century?

What happened -- I don't need a DVD. I don't need a CD. I don't even need the file anymore, I simply need access to it, because you're right, it's very inefficient to have a million copies of "Harry Potter" or 10 million copies of a Lady Gaga song on Google or on Amazon, or anywhere, for that matter. It's much simpler and much easier to have it -- one copy of it...

QUEST: Right.

PALMER: -- and have it edge distributed and get to it through the cloud. There's no question, this is where everybody is going. No question about it.

QUEST: We're going to talk more about cloud computing next week, Shelly.

We'll have you to talk about that. And we want -- I want you to start thinking about, never mind whether it's the future, but why it shouldn't be. There's a thought for you.

Shelly Palmer joining me from...

PALMER: That was good.

QUEST: -- joining me from New York.

QUEST MEANS BUSINESS coming to you tonight, because as I alluded to, we'll be going inside the cloud next week to get to the bottom of how it works. Next week on CNN, we'll tell you everything you need to know about how your data is stored remotely, what is the cloud, where is the cloud, what are the security issues with the cloud, what are the business opportunities of the cloud. It's clearing up the cloud. It's CNN and it's all next week.

If you have more people in the cloud, it means more people need to be informed and online. Cisco predicts the Internet will quadruple in size over the next four years.

What does a quadrupling of the Internet mean?

Look at this article that I have posted online, at Good charts, an interesting breakdown and the numbers in terms of mobiles, tablets and videos. And, of course, you'll want to become a friend.

Why wouldn't you want to become a friend of the program?

Find out what we're really up to and who's doing what to whom, where, when and why, and, more importantly, who is paying for it?


Meet the man finding success by sharing luxury travel secrets. The city guides are breaking the mold, in a moment.


QUEST: Time now to meet a man who knows how to mix business with pleasure.

With travel publishing dominated by guide books for the budget conscious.

Grant Thatcher, who is the founder of the Luxe City Guides literally rewrote the book.

He explains how his focus on luxury is breaking the mold.


GRANT THATCHER, LUXE CITY GUIDES FOUNDER: The Luxe Guide started very organically. And it was a, really, a one man band. And I lived in Bangkok for two years. And I'm very passionate about design -- design and passionate about style. I like style. And in Bangkok, you can pretty much design anything you want -- furniture. You can have fabric woven, glass blown, you know, iron work founded.

And so I did. And people kept asking, you know, where did you get that ball, where did you get those drapes?

And the truth of it was that actually, the majority of it I designed and I had it made. And this became a list and then I added a few snarky comments, as is my way, and a few kind of, you know, hotels and a few restaurants and so forth. And I started to send it to friends, you know. It was just like one of those kind of light bulb moments where you're going like, ah, I see, other people have clearly enjoyed this. And that's really where Luxe started.

It was difficult and it still is difficult. And our biggest challenge is, when we're entering a new market, is to persuade people to take a look at this. It's a piece of (INAUDIBLE). And people are -- people want pictures. Yes, we know. I'm like (INAUDIBLE).

Yes, we know that, too.

And do you know what?

We broke the mold. I mean we completely rewrote how travel guides are. We just took a list and we said, you know, go with us and trust our word. This is -- this is an opinionated voice. We've been there. We've traveled there. We've spent the money. We've done it. We've done all your work for you. Believe us. Come with us and experience it.

To have an opinion, you really have to experience what you're talking about, whether it's about travel or whether it's about anything. And the minute that you do, you, you know, your placement rockets. You really can say I've been there, I've eaten there, that's delicious, you should have it.

You know, isn't that better than just like, oh, they've got a great menu?

Well, that doesn't help anyone, does it?


The important thing about Luxe and I think why we took off and why we were different in the marketplace and why we were successful is fun. We're the giggle, you know. We -- we travel for two reasons, right, business and pleasure. Those are the two main reasons why anybody travels, basically. And I don't see why business and pleasure should be mutually exclusive.

When you speak to the average business traveler, you get this kind of well, dreary kind of love one of those, yes, yes, I travel for business and it's like, you know -- because they sit in their room and they have the old club sandwich and it's 9:30 and they're like, you know, and they're -- they're missing their family and they'd rather not be there. But, actually, there might be a great little jazz club just around the corner from their hotel.

We have a very strong opinion. And you might not like our writing voice. I know nobody really likes how snippy and snarky we are. And I know we are. But that's our voice. That's our personality. And if I had to say - - if I had to sum up Luxe in one word, it would be that we have more personality than anyone else in the business.


QUEST: Breaking the mold.

Wall Street has started June with a whimper, thanks to a double dose of bad economic news.

Alison Kosik joins me now from the New York Stock Exchange.

What on earth has caused this fallout of bed this afternoon?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, yes, but we did get the first of three job reports we're getting this week. This one coming out today from payroll processor, ADP. And I'll tell you what, Richard, it missed big. The expectation was that private companies added 175,000 jobs in May.

Guess what we got?

We got just 38,000 jobs added. It's below the recent trend of average job gains in the past six months, which was 205,000. And then, when you look closer at this report, you see where the job cuts are. And where you see the -- the job cuts are really disturbing are in manufacturing. And that's noticeable because that sector has really been growing. And there's been some, you know, hopes sort of pinned on the manufacturing sector to kind of power us out of this -- out of this very slow recovery. And now it looks like that's not the case.

And what -- what this ADP report essentially does, Richard, and what's really worrying Wall Street today, is that this sets us up for a weak government jobs report that we're getting on Friday. In fact, as soon as this ADP report came out, analysts were already slashing their estimates for Friday -- Richard.

QUEST: OK. So, we -- the fear has been that there is a sizeable correction out there in equities. And we saw it in the bond market today, with the yield on the 10-year falling quite dramatically.

Is that -- is that still -- has that been reinforced by what we're seeing today?

KOSIK: Oh, sure. I mean you're seeing -- you're seeing the safety play in bonds today. I mean it's really -- it's -- it's a sign of fear and it's really or it's risked off here. You know, everyone is -- is really running for the exits here on Wall Street. They don't want to put their money into equities with -- with the economy in such flux. I mean, you know, you look at the yield, it's below 3 percent for the first time since December.

I mean this report really took everyone for a loop. I mean economists are really calling it a big shock. They really are concerned about what's going to be coming out on Friday -- Richard.

QUEST: Alison, many thanks, indeed.

Alison Kosik is in New York.

And the U.S. jobs data sent European shares deeper into the red. As you can see, the lower open intensified after jobs data. Financial shares were the biggest users. Lloyds was down 3.18 percent. The energy sector down. Royal Dutch Shell down nearly 1.5 percent.

Asia was also -- well, what is happening in Asia, they were, more than anything else, looking for direction and the direction they got was too up and too down. In Tokyo, the power companies were amongst the biggest losers. The U.N. watchdog said Japan had underestimated the potential hazards of a tsunami and the barrier wasn't big enough around the Fukushima plant. That's obvious by what happened.

Gloomy manufacturing out of China that the Shanghai Composite just about unchanged.

Sydney's main index was also flat. Official data showed Australia's economy shrank 1.2 percent in Q1, the biggest quarterly GDP contraction in 20 years.

But the reasons are known, of course, as you look at the problems that affected the Australian economy, particularly with weather-related.

Emerging from its cocoon, Monarch Airlines is transforming itself to take on the budget carriers in a niche way.

Will we pay for quality?

Monarch's talking and saying, yes, we will.


QUEST: Monarch Airlines is one of Britain's smaller carriers and a niche player in Europe. And a metamorphosis is underway. It's having a brand revamp and the British carrier is steering away from nearly four decades, now mainly a scheduled, not charter carrier, focusing in the future, particularly on its scheduled service. It will see the airline go head-to- head with European sector heavyweights, Ryanair and easyJet.

And so take a look. David and goliath battle. Monarch has roughly 30 aircraft -- not roughly, it has 30 aircraft. Ryanair has 272 planes. You can start to see the difference.

So when the chief executive, Conrad Clifford, joined me, it was quite obvious that Monarch, which has been around for decades, was going to have to find a different form of strategy if it's going to compete.


CONRAD CLIFFORD, MONARCH GROUP CEO: Really, where we want to be is we want to be profitable. We want to be the, really, the first choice for people that would like to have a little bit better service than what's currently on offer from the traditional low cost carriers.

QUEST: What's wrong with them?

CLIFFORD: I think it's about mass transportation. It's about one size fits all. And you have to -- you're forced to behave in a particular way. We would like to offer people a choice. You can make choices. You can still have cheap fares, but you don't necessarily have to follow a sort of one size fits all model.

QUEST: But the reality is, you need -- in aviation, you need scale these days.


QUEST: You need scale to be profitable.


QUEST: And you're not profitable on all routes.

CLIFFORD: Not on all routes. But we are -- we are certainly profitable in a number of them. And it's not -- the -- the whole low cost model is more about ancillaries and at -- and sort of additive services that -- that you can offer to people. And -- and, really, what we're talking about is all those sorts of things, so extra leg room, hot meals, the ability to pre- book your seat.

We pre-allocate every seat, but if you wanted to actually book a particular seat, we also offer that service.

And those additional things which you sell to passengers, one, they make the passenger's time more -- or less stressful and more enjoyable. And, two, you make money out of it.

QUEST: From you, as the CEO...


QUEST: -- which, for you, is the best incremental income?

CLIFFORD: Oh, I see. It will be baggage. Baggage. And then followed by the extra leg room seats.

QUEST: So that costs you the least and gains you the most?

CLIFFORD: Exactly. Yes.

QUEST: So putting a bag on the plane and -- is profitable -- is good business for you. You'd like us all to be putting bags on the plane.

CLIFFORD: Of course. But not everybody wants to. And that's why when we offer our prices, we've got -- the first price you get offered is without a bag, so you get the opportunity to have the cheapest possible fare.

QUEST: How far do you think we've gone in the commoditization of air travel in Europe now, you know, this cheap and cheerful with extra things on top?

CLIFFORD: I think we've gone far enough. And I think -- I think one of -- because we're small, we have the ability to -- to really tailor a lot of things to meet -- meet customers' needs. I think we've gone far enough in terms of standardization. And at the end -- the other end of the scale, you have the legacy carriers giving you whole bundles -- lots of things you don't really want.

What we're trying to do is to give you the things you do want and then, equally, you don't have to pay for other people enjoying a sort of bundle of services.

QUEST: Has Monarch Airlines' day been and gone?

The -- the future in Europe, in aviation, is the legacy carriers with their hub and spokes and the easyJets, Ryanairs and airlines like yours. Let's face it, if you weren't a private company, you'd be nut crackered and maybe out of business by now.

CLIFFORD: No, that's not true. We're -- the first thing to remember is we are a group, so we have -- we also have a tour operator and an engineering division. Those -- those support to hold the group together. It works very well together. We've got a lot of different distributions, as well. So it's -- no, our -- our days aren't numbered at all. And it's about offering a differentiated product within a niche, which is something different than the sort of big players are -- are doing.


QUEST: Well, that's the chief executive of Monarch Airlines talking to me about the niche players.

Moody's -- one bit of information to bring you. Moody's has downgraded Greek debt and Greek -- I'm just looking. It's downgraded it to Caa1. Now, just looking on the -- just to give you an idea of what that means in reality, Caa1, Moody's judges it as being of poor standing and subject to a very high credit risk.

I suspect they're looking at re-profiling and some form of credit event.

A Profitable Moment after the break.


QUEST: Tonight's Profitable Moment.

The vote is over and Blatter, as the only candidate, obviously won. And we are left wondering what it says about the principles of governance that the man who ran for so long and presided over misfortune was able to be reelected unopposed.

As we suggested earlier in the program, one point of comparison might be the IMF's election.

Now, with the IMF's election, here, established rules of European supremacy have been altered in favor of the open merit-based and transparency. There are two candidates at the moment and possibly more will arrive. If Christine Lagarde gets the job, it will be, obviously, after a good deal of politicking, but also having gained the trust of many emerging markets, too.

FIFA would do well and look and see how IMF and how a global organization like that has handled the crisis.

But then again, the IMF is only dealing with the global economy, nothing really serious, like football.

And that's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in London.

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

"PIERS MORGAN TONIGHT" is next after your headlines.