Return to Transcripts main page

First Move with Julia Chatterley

Taliban Parade their Captured U.S. Weapons; Joe Biden Defends Decision to End America's Longest War; Taliban Takeover Plunges Afghan Economy into Crisis. Aired 9-9:45a ET

Aired September 01, 2021 - 09:00   ET

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

[09:00:06]

ELENI GIOKOS, CNN ANCHOR: Live from Dubai, I am Eleni Giokos, in for Julia Chatterley, this is FIRST MOVE and here is your need to know.

Victory parade. Taliban fighters show off seized U.S. military vehicles.

The U.K. and Japan have a latest countries to discuss relations with the Taliban as President Biden remains defiant over the withdrawal.

And China's $3 trillion tech clamp down. The global investors are not deterred.

It's Wednesday, let's make a move.

Well, the Taliban is holding a victory parade in Kandahar Province and showing off some of the U.S. weapons they captured during the takeover of

Afghanistan. This video was posted to social media. It hasn't been independently verified by CNN.

As the group tries to form a new government, Japan says it is willing to work with them to help people who want to leave Afghanistan. The U.K. is

also holding talks with the Taliban in Qatar.

Meanwhile, a Taliban commander rails against the U.S. Take a listen.

(BEGIN VIDEO CLIP)

MAULVI ZAKERULLAH, TALIBAN COMMANDO (through translator): We will kill the Americans 10 times more than that. The Islamic Emirate has now been

established in Afghanistan and there will be no chaos at all after that. We will sacrifice our heads to defend our nation.

(END VIDEO CLIP)

GIOKOS: Afghans who are trying to leave their homeland are continuing to flock to the Pakistani border. Nic Robertson is live in Islamabad, Pakistan

with the latest.

Nic, look, the message is clear. The Taliban clearly want to work with the U.S. in some form, and of course, Western nations are trying to figure out

what their diplomatic relation is going to be now in the next few weeks.

In the meantime, people are desperately still trying to get out.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: There is a large number of people who didn't make it out on those evacuation flights out of

Kabul. So, there is still a lot of fear among some people that they want to leave, that they don't know if they're going to be secure in the future,

particularly those people who had roles in the military or roles in the Afghan military, and particularly those who were assisting U.S. and other

NATO forces. So, that really still exists.

In terms of Pakistan, there hasn't been a high influx of refugees here. The border is being controlled. Only Afghans who have the proper permissions

and papers to come into Pakistan are being allowed in. The country is hosting a relatively small number of what it calls evacuees and on a

temporary basis.

Pakistan really feels that it has been as generous as it can be, particularly in the past towards hosting refugees. But I think a lot of

focus, if you sort of look politically and diplomatically, and I think this was sort of partly a part of what President Biden was saying yesterday

that, you know, the diplomacy that he thinks he can affect with the Taliban right now is something that will sort of happen regionally that the United

States voice will be alongside that of others in the region.

And Pakistan here clearly has, you know, a lot in the game, if you will, over what happens in Afghanistan. Instability, a broken economy, that's

going to be bad for them. So, the attention at the moment here is really focused on the Taliban and forming that government that you're talking

about.

The Taliban themselves seem to be focusing their attention internally on the Panjshir Valley, their sort of last holdout of resistance against their

rule and they have said very recently that they don't believe that the talks that they were having with the people there are going to work out.

And it's a very straightforward message now to those people. Essentially, it's time to surrender. It's time to accept that you can live in a country

with the Taliban rule.

GIOKOS: Yeah, Nick, I mean, what's also fascinating here, and you talk about the economy, because if the Taliban can get the equation right, when

it comes to sorting out the economy, that's one step closer to being legitimate and to governing, and then people wanting to stay within

Afghanistan.

The question is, can they get that right when you know, they have been blocked of aid and I.M.F. funds, for example?

ROBERTSON: Well, President Biden's National Security adviser, Jake Sullivan yesterday told CNN, look, the Biden administration is not going to

use humanitarian aid that needs to go to the people of Afghanistan as a bargaining chip with the Taliban.

The Taliban's difficulty, however, is that when it comes to dealing with international financial institutions like the International Monetary Fund

that lends money to poorer countries like Afghanistan. The IMF expects those countries to pay interest.

[09:05:16]

ROBERTSON: The Taliban because of their strict interpretation of Islamic law or Sharia law, they would refuse to pay, so far that's been their track

record, refuse to pay, refuse to be obligated by interest. That's against their principles and against their understandings of how to interpret the

laws with which they say they're going to govern the country.

So, you can already see a conundrum there. How can the Taliban integrate economically with the rest of the world and get access the moneys that

they're going to need that have supported previous governments inside Afghanistan? How can they hope to do that, you know, if they refuse to

accept the money?

So these are, you know, that's just one tiny fragment of how the economic picture will look going forward.

GIOKOS: Nic, thank you very much. That was Nic Robertson in Islamabad.

Now, the U.S. President has vigorously defended his decision to withdraw all troops from Afghanistan. He rejected criticism of the chaotic exit and

said the U.S. no longer had a clear purpose in Afghanistan.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: This decision about Afghanistan is not just about Afghanistan. It is about ending an era of

major military operations, to remake other countries.

That was the choice, the real choice, between leaving or escalating.

I was not going to extend this forever war, and I was not extending a forever exit.

(END VIDEO CLIP)

GIOKOS: John Harwood joins us now. John, there was one security analyst who said to me, you know, the U.S. might be done with Afghanistan, but

Afghanistan might not be done with the U.S. Hearing what the White House has to say and listening to Biden yesterday, he is still just justifying

the entire process.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: He is, and Joe Biden is convinced that he is right about the decision to leave. Not only that he is

right now, but that he has been right, for 10 years, and that his critics are wrong.

He also believes that his critics are wrong to call the withdrawal, botched. His view is that the source of the chaos that we saw on television

screens was the collapse of the Afghan government and security forces and that anything that could have been done earlier to accommodate that, if you

envision that happening, would have only accelerated the collapse.

But you're right, Afghanistan is not done with the United States, there's a lot of work to do and there's a lot that could still go wrong for the

President. You've got 100 to 200 Americans who perhaps belatedly have decided that they want to leave the country. He has committed to bringing

them out, and he said he's going to do it not through military means because the troops are gone, but through diplomatic means and that's a test

of his administration to see if they can make that work, if they can leverage whatever things they hold over the Taliban, including financially,

as you were just discussing with Nic Robertson, to get those people out.

Secondly, the Taliban, of course, have a history of medieval brutality. If they do not alter their behavior to ingratiate themselves with the

international community and revert to that behavior, and that becomes something that is known in the Western world that's seen on television

screens, that's going to redound against President Biden. That's kind of the heat that comes with deciding to leave a country and say, it's not in

our interest to determine who governs the country.

GIOKOS: John Harwood, thank you very much for that insight.

All right, the Taliban takeover plunged Afghanistan into economic crisis. Central Bank assets abroad were frozen, but unless the Taliban are granted

access to these funds, a humanitarian crisis looms. Now that's according to a senior board member of the bank who spoke to Reuters.

Joining me now is Gul Maqsood Sabit, the former Afghan Deputy Finance Minister. Mr. Sabit, really good to have you on. Thank you so much for

making the time.

GUL MAQSOOD SABIT, FORMER AFGHAN DEPUTY FINANCE MINISTER: Good morning.

GIOKOS: A warning from the Central Bank of Afghanistan. We've heard it from many experts saying, look, Afghanistan desperately needs funds. We

know the I.M.F. halted a payment of $450 million a couple of weeks ago, putting Afghanistan again in a very vulnerable position. I guess, the

question is here: Is the country headed towards an economic collapse scenario?

SABIT: Well, thank you for having me. Sure. Yes, as the situation is right now, it is heading to bigger troubles actually, economically, if not

others.

[09:10:04]

SABIT: Right now, there is nothing happening in terms of the economy. Things are on hold and as you can see the $9.4 billion foreign reserve

money has been frozen, too, and other aid has stopped, too.

In the country, not much is happening. And as I can see, today, it is actually 16 days since the Taliban took over Kabul, banks are pretty much

closed. People are allowed to withdraw only $200.20 or 20,000 Afs a week, which is not enough, and they don't have probably -- it's only those people

who have some savings in their accounts.

And I hear reports right now that people are selling their personal home items on the streets to find money in and they are able to get food.

The only trade that has begun is the inflow of consumer goods, such as food items and others from the crossing points, which again, requires money in

the market to buy. So, if nothing changes, I think we are heading towards a bigger trouble.

GIOKOS: So, here's a scenario, right? Because we know that Afghanistan relies on imports. We're hearing news of an increase in prices. So, you've

got an inflationary environment that's increasing. You're talking about a dollar crunch right now, cash crunch. There is a worry about run on the

banks. I mean, this is, you know, a very, very vital scenario that could be mitigated if there are funds released.

But if the West decides to release these funds, that means that the Taliban has money to use and play with. What do you think is going to be a game

changer so the I.M.F. can trust the Taliban? Keeping in mind the I.M.F. had made negotiations and discussions with the former Afghan government, so now

we're talking about new negotiations that need to be held. If the Taliban doesn't get this right, what does it mean for the average Afghan person?

SABIT: Well, if it is not done right, what I just explained will continue. And I think we will -- the Afghan population of over 35 million will be

pushed into extreme poverty, which is not good for the region and for the world. I think there will be massive economic integration, and we'll be

actually dealing with a human catastrophe.

So in a way, it's the responsibility of the Taliban, number one, and then also the world to realize that, you know, with sanctions and restrictions,

they can push the common people into extreme poverty. So, I think everything will depend on the new government Taliban forms. Is it all

inclusive? Does it meet minimum international standards or expectations -- what the world expects from them?

If that is done right, I think it will at least restore what was there in place before in terms of trade, economy and maintaining value of the Afghan

currency, which is, you know, for which U.S. dollar is the main backup.

So if the reserves are released, at least the value of the money will be maintained and the country will not be hit with a very high inflationary

force. So, it's I think it's their responsibility.

GIOKOS: The reality is Afghanistan needed to overhaul its economy, needed to diversify and start producing and manufacturing its own goods. What can

the Taliban do now that the Afghan government couldn't do and the U.S. occupation for 20 years? And keeping in mind that, you know, the Taliban in

the 90s also impacted negatively the economy.

It seems almost a Sisyphean task to be able to overhaul the government and the economy with such a delicate political situation that's playing out.

SABIT: It will be challenging, but not impossible. Again, things begin with the kind of governments or government they form.

If they get it right and things become to -- things do -- the former economy or the economy that was in place before their takeover, that

restores economic activity to begin, I think the next step they can take is begin instituting policies that are investor friendly and invite investment

-- foreign investment to the country that will really help with the domestic production and the industry.

And if they consider there are opportunities, there are opportunities with the natural resources, and in many other areas that Afghanistan is the

bridge between South and in Central Asia. So, a lot can be done. But all of these can done one thing with security making sure the country is secure

whereas with the Taliban being the only force right now, if they can do that.

[09:15:09]

SABIT: Second, providing security for the investment. Investors have to feel confident that their capital is safe, and it will not be lost. So,

they have to institutionalize those policies in action, not just safe. Once they do that, I think that will really help with the domestic industry and

production, and we will get what we did not have before, which was a domestic market that will support the value of the currency and hopefully

will move in the right direction.

GIOKOS: Absolutely. And you're so right to say it, it is about confidence and investors feeling confident with the Taliban and the government, of

course, as well. So, it will be an interesting one to see.

Mr. Sabit, thank you very much for your time and your insights.

That was the former Afghan Deputy Finance Minister.

Now, these are the stories making headlines around the world. Rescue operations in Louisiana continue three days after a Category 4 hurricane

slammed into the Gulf Coast. At least five deaths have been linked to Ida's impact. Nearly one million homes and businesses in the state are without

power.

With temperatures in the region now expected to soar, some people could still face life-threatening situations.

Gasoline in Louisiana is in short supply. Food and other necessary supplies are dwindling. CNN's Ryan Young has the latest on Ida's devastating

aftermath.

(BEGIN VIDEOTAPE)

RYAN YOUNG, CNN NATIONAL CORRESPONDENT (voice over): With no power and sweltering heat, Louisianans are waiting in long lines for a chance to find

essential items like food and gasoline.

UNIDENTIFIED MALE: These people are going to wait hours to get gas. Probably seven to eight hours to get gas. It's not good.

YOUNG (voice over): Hurricane Ida knocking out water systems and shutting down cell phone service for many. As the days go on, residents are

increasingly frustrated.

RONALD PEGUE, ALGIERS, LOUISIANA RESIDENT: It's food issue, the water issue. I don't think that they have these things out quick enough.

YOUNG (voice over): And with dangerous conditions after the storm, local leaders say it's tough to get resources in here.

CYNTHIA LEE SHENG, JEFFERSON PARISH, LOUISIANA PRESIDENT: The difficulty is the supply chain. They're having the same difficulties getting their

supplies here as we are having, you know, living here. So, it's going to take some time --

YOUNG (voice over): Nearly a million homes and businesses in Louisiana have no electricity, and for many, it will be out for weeks.

GOV. JOHN BEL EDWARDS (D-LA): I'm not satisfied with 30 days. The energy people aren't satisfied with 30 days. Nobody who is out there needing power

is satisfied with that.

YOUNG (voice over): The New Orleans Mayor saying some power could be restored today.

MAYOR LATOYA CANTRELL, NEW ORLEANS, LOUISIANA: Again, the expectation should not be because it's not a real one that the entire city will be lit.

YOUNG (voice over): At Tulane University, classes are canceled until September 12th. Students loading into buses and evacuated to Houston where

some will stay and others will make their way home.

MIKE FITTS, PRESIDENT, TULANE UNIVERSITY: Even if we have power on campus, if power is out in all of New Orleans, you can't stay here. You can't go to

-- there's no food. There's no supplies. It's not -- it's not a good situation.

YOUNG (voice over): Volunteers tried to help setting up in New Orleans to provide hot and cold meals.

ERICA CHOMSKY-ADELSON, EXECUTIVE DIRECTOR, CULTURE AID NOLA: New Orleans is known for caring for our community. And a lot of the ways that we show

love is food.

YOUNG (voice over): With patience wearing thin, the Governor urging people who evacuated to wait to return.

EDWARDS: Please don't come home before they tell you that it's time.

YOUNG (voice over): But for some who stayed through the storm, it's time to begin cleanup. In LaPlace, one residents saying Ida was unlike any other

hurricane she has experienced before.

DOMINIQUE THOMAS, LAPLACE, LOUISIANA RESIDENT: We kept telling ourselves it was just stuff, and as long as everybody was okay, that's all that

matters.

YOUNG (voice over): Meantime in Lafourche Parish, this neighborhood is now filled with debris, remnants of warehouses and other structures once stood.

UNIDENTIFIED FEMALE: It was real scary. I wouldn't stay again. No way. But I just thank God we all made it.

YOUNG (voice over): Floodwaters still surrounding homes in Grand Isle where it could take years to rebuild.

BRYAN ADAMS, DIRECTOR, JEFFERSON PARISH FIRE SERVICES: I've never seen it look like this. It's decimated. People are very sad. A lot of people have

lost their homes, talking about they don't know whether they will go back or not because they don't have the money to go back, can't afford to go

back.

(END VIDEOTAPE)

GIOKOS: An oil leak from Syria's largest refinery is spreading further into the Mediterranean Sea. Officials in Cyprus say the slick is

approaching the island, and they are monitoring its movements.

Syrian authorities say they've been working to contain the leak since it began last week.

And still to come on FIRST MOVE, China's President consolidates power with a tech crackdown, and a new addition to the school curriculum.

And Britain's Foreign Secretary faces questions on Afghanistan after coming under criticism for his handling of the crisis.

(COMMERCIAL BREAK)

[09:22:22]

GIOKOS: Welcome back to FIRST MOVE and we are a few minutes away before the start of trade in New York. It's also the first of September. So, let's

take a look to see how markets are doing right now.

Global stocks are mostly higher. The S&P 500 and NASDAQ are set to open in record territory. Europe is trading mostly higher as well with French

stocks in the lead.

Asian markets advanced despite new signs that the Chinese economy is slowing. A private survey shows factory activity contracting last month for

the first time in over a year.

Now, August was another rough month for investors in many Chinese tech stocks. Alibaba shares fell more than 14 percent in New York trading. Ride

hailing app, DiDi plunged more than 20 percent. Online tutoring firm Tal Education fell sharply as well.

Now, the biggest Chinese tech names have lost some $3 trillion in market value since China launched its ongoing regulatory crackdown, and the pain

may not be over just yet as Kristie Lu Stout reports.

(BEGIN VIDEOTAPE)

KRISTIE LU STOUT, CNN CORRESPONDENT (voice over): A sector under siege. China's leading tech players from major e-commerce platforms and ride

hailing companies to education tech groups, all have been targeted by Beijing's crackdown on private enterprise.

STOUT (on camera): Casualties include some of China's leading tech firms - - Alibaba, ByteDance, DiDi, Meituan, New Oriental Education, Pinduoduo, Tencent, and the list goes on.

STOUT (voice over): Companies have been slapped with fines, banned from app stores in order to overhaul their business, prompting sharp falls for

listed Chinese tech firms and stoking fear about the future.

But observers say the end goal of Beijing's bid for control is not about creating chaos, it is all part of a top down plan.

STOUT (on camera): Why is this happening?

DAN WANG, TECH ANALYST, GAVEKAL DRAGONOMICS: This isn't simply a power play by Beijing to crush these upstarts, these billionaires, these

entrepreneurs. A lot of this crackdown is driven by political campaigns like Common Prosperity.

STOUT (voice over): Common Prosperity is the prosperity of all the people says Chinese President Xi Jinping as he pledges to redistribute wealth in

China. Analysts say the crackdown is out to fix social ills like income inequality and hyper competition.

WANG: Big Government believes that these companies are mostly in the business of monetizing status anxiety, in which you have the sales people

from these online education firms really preying on the middle class dreams of sending the kids to the best universities.

STOUT (voice over): There's another force behind the takedown, redirecting the sector toward hard tech like semiconductors and AI.

[09:25:10]

KEYU JIN, ECONOMIST, LONDON SCHOOL OF ECONOMICS: The Chinese government wants to have technological supremacy. That means setting global standards,

shaping future technologies, especially in the critical and high tech areas, creating general purpose technologies that will influence economies

all around the world.

STOUT (voice over): That's one reason why influential investors still see opportunity. BlackRock, the world's largest asset manager is reported as

saying investors should as much as triple their allocations in Chinese assets.

While billionaire hedge fund founder Ray Dalio says investors should keep their faith in China, writing: "I urge you to not misinterpret these sorts

of moves as reversals of the trends that have existed for the last several decades and let that scare you away."

But as China's sweeping tech crackdown continues --

STOUT (on camera): Could this crackdown kill China's entrepreneurial spirit?

WANG: That's something of considerable debate. A lot of the regulatory crackdown has focused on 10 to 20 of China's best and brightest

entrepreneurs. So, these includes the founders of Meituan, Alibaba, Pinduoduo, but I think for the broader masses of entrepreneurs, this is not

so much bothering them.

JIN: Especially in the new generation. These eager young minds are very motivated by China's large markets, they see lots of opportunities.

STOUT (voice over): A sector under siege is also being remade to serve the people and their master planners.

Kristie Lu Stout, CNN, Hong Kong.

(END VIDEOTAPE)

GIOKOS: Chinese President Xi Jinping's thoughts on the economy and society are sure to be hot topics of conversation in China's school this autumn.

Beginning today, millions of Chinese students are being given mandatory lessons on Xi's philosophy. Steven Jiang reports from Beijing.

(BEGIN VIDEOTAPE)

STEVEN JIANG, CNN SENIOR BUREAU PRODUCER: The full name for this new class is quite a mouthful. Xi Jinping thought on socialism with Chinese

characteristics for a new era.

Now this, of course, is a set of policies and ideas derived from speeches and writings by the Chinese President, the country's most powerful leader

in decades.

Xi Jinping Thought has already been enshrined into the ruling communist parties and the country's constitutions, and now it's become part of a

mandatory national curriculum.

The Education Ministry has made clear studying Xi Jinping Thought is the primary political task not only for the Communist Party, but also for the

entire nation. That's why they say they are now arming the students' minds with this philosophy to cultivate successors to the communist cause. And

they have also emphasized that this is going to be a continuous process starting from elementary schools, but going all the way to colleges and the

universities.

Now, for many of course, this is yet another unmistakable sign that a Communist Party under Xi Jinping is now trying to play a dominant role in

every aspect of Chinese society, not just in politics and military, but also in businesses, cultural institutions, and especially in schools as the

authorities are increasingly focused on indoctrinating and shaping the minds of the younger generations at a time when geopolitical tensions

continue to grow between China and the West, especially the United States.

Now ironically, the government has recently banned after school private tutoring to relieve students' burden, but obviously they don't see this new

mandatory class as a burden for millions of schoolchildren around China.

Steven Jiang, CNN, Beijing.

(END VIDEOTAPE)

GIOKOS: Well, you're watching FIRST MOVE. The market open is up next.

(COMMERCIAL BREAK)

[09:31:47]

GIOKOS: Welcome back to FIRST MOVE. U.S. stocks are up and running on this first trading day of September. We have mostly green arrows in early

trading with the S&P and the NASDAQ trading near record highs. The S&P is coming off its seventh straight winning month as investors cheer continued

strong profits and signs that the Federal policy will remain market friendly for some time to come.

The first big market test of the month comes on Friday when the U.S. releases its latest read on jobs. A bit of caution on the employment front

today, however. New numbers show private sector firms adding 374,000 jobs in August, well below the estimates, and they are creating a bit of

concern.

In the meantime, British lawmakers are questioning Foreign Secretary Dominic Raab right now on the Afghanistan mission. He was asked why the

U.K. did not plan to take on the responsibility of evacuating people out of Afghanistan once the U.S. announced it would pull out.

(BEGIN VIDEO CLIP)

DOMINIC RAAB, BRITISH FOREIGN SECRETARY: ... I don't think there was any viable alternative coalition once the U.S. decision had been taken. And

again, I think there needs to be some reality about that in the public discourse because it's clear to me they won't -- there is not going to be

anyone that could backfill for the capacity that the U.S. provided, and the U.S. was unlikely to shift the parameters beyond a few months, and that's

exactly what happened.

(END VIDEO CLIP)

GIOKOS: All right, so many questions about what went wrong. We've got Melissa Bell listening into what was going on by British lawmakers. What is

the latest Melissa?

MELISSA BELL, CNN CORRESPONDENT: Eleni, I think the least that can be said about the Foreign Affairs Select Committee members is that they had

questions, and a lot of them. Of course, this will continue now for some time more.

Dominic Raab, really on the defensive there. You heard in that little snippet that we just played for you that central point that once the

American decision had been made to leave with very little coordination with its NATO allies, we now know it was very difficult for the last remaining

other combat troops, the British, not to leave as well.

But this is a Foreign Secretary under a great deal of pressure. Remember that earlier this month, he'd come in for criticism for not coming back

from his holiday as Kabul looks set to fall. The British policy now in terms of the way it carried out its evacuation, the question that he simply

couldn't answer of how many Afghan nationals that could be helped under the program to help those who have helped the British forces might be eligible

for entry to United Kingdom over the coming months and years, an answer he couldn't give simply because he said the vetting processes took longer than

that.

And then I think what's likely to come before the end of this session, Eleni is the more fundamental question about what this means for the United

Kingdom going forward, post Brexit and post this catastrophic departure from Afghanistan as uncoordinated as it was with the United States?

And that speech by Joe Biden last night, making it so clear that it is towards domestic challenges that he intends to turn. Where does that leave

British foreign policy? Where does that leave the United Kingdom? And is it going to be as isolated as it now seems going forward -- Eleni.

GIOKOS: Melissa, thank you very much for that update. Melissa Bell.

All right, evacuating so many people out of Afghanistan in such a short time was a gargantuan effort, and it wouldn't have been possible without

civilian help.

[09:35:08]

GIOKOS: For only the third time ever, the Civil Reserve Air Fleet was activated by the U.S. Secretary of Defense. Selected commercial carriers

are contractually obliged to help with evacuations in emergencies when the needs exceed the military capabilities.

Twenty four carriers are part of the scheme. Eastern Airlines is one of them. The company helped transport evacuees from U.S. bases in Qatar and

Germany to their final destinations.

Joining us now is the CEO and President of Eastern Airlines, Steve Harfst. He is at the headquarters outside of Philadelphia.

Steve, I was looking at the photographs of you welcoming some of the evacuees upon landing. And I know this flight -- these flights must be so

different to what you normally do. So, tell me about how you felt when you received the call when the Department of Defense activated the Reserve

Fleet?

STEVE HARFST, CEO AND PRESIDENT, EASTERN AIRLINES: Yes, thank you, Eleni, and you're right, it is a significant humanitarian effort.

Eastern Airlines has been a member of the Civil Air Reserve Fleet since June of last year. We actually volunteered our entire capacity flight

crews, pilots, flight attendants, and airplanes before the Stage One Activation. And when it was actually activated, we already had two

airplanes in the air returning evacuees home.

It's an amazing effort, and our pilots and flight attendants have done an amazing job taking care of those people and bringing them home safely, to

freedom, really.

GIOKOS: And how long are you going to continue these efforts working side by side with the U.S. government?

HARFST: Sure. We've transported a little over 1,500 evacuees so far and we will continue to support the effort until everyone is brought here to the

United States. The Department of Defense has said that mission is going to last here for the next couple of weeks, and as long as it takes, we will

continue to support that effort.

GIOKOS: In terms of logistics and the process, has it been a difficult one to try and figure out routes? I mean, I know that you weren't involved in

Kabul, but you're involved in Germany and in Qatar, as well.

Tell me about what logistics go into this? Are you seeing this just as a normal route?

HARFST: No, it's not normal by any means. It's been very challenging. And our ground staff, our pilots, our flight attendants, the team here in

Philly that's been supporting the planning and the logistical efforts of making sure everybody has been in position has been a real monumental task.

No one was really prepared to support this kind of an operation. You've seen reports of the challenges that the military is faced in processing the

evacuees at the staging locations in the Middle East and Europe and then even deplaning them here on American U.S. soil.

So our team has really done a phenomenal job, multiple trips to Walmart, back and forth to make sure that the airplanes were supplied to take care

of these people that are really, you know, leaving their homes with nothing and coming halfway around the world for freedom.

GIOKOS: Yes, Steve, take me through some of those challenges. You're saying multiple trips to Walmart. At what point did you come in and

intervene? Because it sounds like more than just offering a flight home, you know?

HARFST: Yes. Yes, no, you're absolutely right. It was really the first flight. Once we really realized the gravity of the situation and the fact

that these people, many of which have never seen the inside of an airplane, let alone, you know, the standards that we take for granted here in the

United States. So our team responded really quickly with everything from diapers, to sanitary wipes to nutrition bars, anything we could do --

blankets, towels, pillows -- anything we could do to help make that journey more comfortable.

You mentioned the photos here in Philadelphia. We were fortunate to have two of these -- two of our airplanes fly into Philadelphia. So, I was able

to greet our flights as they arrived and to see the look of joy on the faces of the people, especially the young children as they stepped on to

American soil for the first time was really moving.

And talking with our flight crews after they got off the airplane, it has really been an amazing job, what they've done taking care of these people

and bringing them home to freedom.

GIOKOS: Steve, yes, it's very heartwarming to see these photographs and I'm sure very emotive and as you say, you are still going to be involved

for the next few weeks or until you're needed.

But pivoting now to what you're doing at the moment with Eastern Airlines. You're looking at the cargo space at the moment. It's been an important

part of, you know, countering some of the demand destruction that you've seen through sort of the normal passenger air travel space.

How is this going to alter your business model down the line and do you think it's going to be able to plug the hole that you've seen because just

people are not flying as much because of the pandemic.

[09:40:02]

HARFST: Yes. No, you're right. That's a great question. This is part of our business strategy that we have been executing even before the pandemic.

But certainly, the reaction to the pandemic and the depression of international travel, the number of airplanes that have been parked on the

ground has had a huge impact on cargo capacity because much of the cargo capacity carried around the world globally had been carried in the belly of

passenger airplanes.

So, with all that lift taken out of the market, it's really had a significant impact on the cargo market. And what's really interesting about

what's happening today is as the air transportation system around the world has retracted, and that capacities come out of the market. You and I and

households around the world are continuing to buy online and expecting all our goods to come to our front door the next day.

So, in the midst of reduction in capacity in the marketplace around the world, demand is increased and is increasing at an accelerated rate. So,

we're really excited about the opportunity to bring what we see as a real innovative product to the market quickly and help fill a small piece of

that void in the market.

GIOKOS: So very quickly, you've bought a 35B-777 aircraft, and you're you know, going from passenger to freighter conversion. It's the first time a

company has been doing that with a B777. I wonder about margins, and whether you think there's going to be so much demand down the line that

this is sort of become such a big part of your business model now. What percentage of the company is it going to count for?

HARFST: Sure? Well, it'll grow over time, without question. We're still really bullish on our passenger segment of our business. We think we've got

a real competitive advantage there.

At the end of the day, Eleni, the ability to have a low cost of ownership asset and to be able to be a low cost producer in the marketplace we think

is a real strong position to be.

So we think in markets like we are in today, where there's a pretty huge disparity between supply and demand, we can create upside margins. But once

that equilibrium comes back in a couple of years, we think we're still going to be in a real, real strong position.

GIOKOS: Steve, thank you very much. Good luck with the rest of the evacuations and the routes. Much appreciated for your time.

Well, that's it for the show. I'm Eleni Giokos. Thanks so very much for watching.

"Marketplace Asia" is up next.

(COMMERCIAL BREAK)

[09:45:00]

END