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First Move with Julia Chatterley
FBI Executes Search Warrant at Trump's Florida Home; Analysts: Ruto, Odinga in Tight Race to be Kenyan President; White House Touts $44B Investment in Semiconductor Manufacturing; AirAsia's Super App Offers all its Gig Workers Jobs; Police Battle Gangs for Control in Port-Au-Prince; Meme Stocks on the March Again. Aired 9-10a ET
Aired August 09, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
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JULIA CHATTERLEY, CNN HOST: A warm welcome to all our First Movers around the globe great to have you with us this Tuesday.
And plenty to get into on today's show, including a Mar-a-Lago raid the FBI digging for documents former President Trump's Florida home we'll discuss
the political implications and the legal message conveyed. And then there's the meme stock trade the stock surging momentum investors remain unafraid
of consumer prices paid another look at U.S. CPI this week. Will that be a July inflation downgrade, the number too low to be closely read after the
Fed?
Now from inflation to market hesitation take a look at this U.S. futures software tech underperforming after a second revenue warning and as many
days from the chip sector. This time it's from micron following invidious announcement on Monday, micron shares down 4 percent.
Pre market in video checked again after Monday 6 percent tumble took about a bad memory micron warned on profits just last month, citing a glut in
memory chips.
Now over in Asia, the NIKKEI dragged lower by the tech sector to nothing soft about Soft banks 7 percent hard landing, it reported a record $23
billion quarterly loss on Monday. And from Softbank to firmer Brent oil back on the boil amid reports that Ukraine is suspending the flow of
Russian oil to Southern Europe, due to an issue with transit fee payments by Russia. Sounds like a technical issue with EU sanctions to me so if we
get more than that, we'll provide it for now lots to get to you today, so let's get straight to "The Drivers".
And an unprecedented move; the FBI is searching former President Donald Trump's Mar-a-Lago home in Florida. We know it because he announced it
saying in the statement nothing like this has ever happened to a President of the United States before this an unannounced raid on my home was neither
necessary nor appropriate.
Multiple sources telling CNN its part of an investigation into his handling of White House documents, including classified material. Katelyn Polantz
joins us now on this. Katelyn, what more do we know?
KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Well, this really is a situation like we have not seen before. This is apparently part of an
ongoing criminal investigation into the handling of presidential documents and possibly classified documents as well.
So here's the story that played out yesterday. Yesterday morning, down in South Florida law enforcement arrived at Mar-a-Lago. And they were there
for several hours; they were focused on looking at the areas around Trump's offices, around his personal quarters, and also looking where documents
were kept. By the end of the day, they had removed boxes, they had removed paper documents. And we even saw last night the President son, Eric Trump,
go on Fox News and say that the purpose of this raid was to corroborate whether or not Donald Trump had any documents in his possession.
Now, there has been an existing federal investigation into the handling of classified documents after the Trump presidency. We haven't heard a lot out
of that investigation for several months. But we do know what's ongoing. This is believed to be part of that, but I should say there are lots of
questions that remain unanswered here. We don't know who the target of this investigation is if there is one at this point. And we really don't know
how far along this investigation may be and whether it will result in any criminal charges back to you.
CHATTERLEY: Yes, plenty of questions. Katelyn Polantz, thank you so much for that. OK, let's dig more into this with senior legal analyst and former
federal prosecutor Elie Honig. Get Elie, great to have you with us as always. You can't just get hold of a search warrant? Can you just explain
to us because essentially, it has to be approved by a federal judge, and that federal judge has to believe that there's some reasonable cause of a
crime having been committed in order to allow it. Is that correct?
ELIE HONIG, CNN SENIOR LEGAL ANALYST: Yes, Julia, so there's a fairly arduous process here. First, the prosecutor has to establish what we call
probable cause that a specific federal crime or more than one crime was committed, and I've done this many times; you have to write it out in
detail in an affidavit. You can't just go to a judge and say, hey, Judge, we have probable cause, take our word for it, and then the federal judge
independently reviews that document and has to agree sometimes they don't agree.
But in this case, clearly a federal judge did review it, did agree that there's probable cause and signed the search warrant. Now it's important to
note though probable cause is not proof beyond a reasonable doubt. That's a much higher legal standard that you would ultimately need to satisfy in
order to convict any person in the United States.
CHATTERLEY: So we're looking for some kind of willful violation of the law I guess. I'm going to skip ahead a few steps. How likely is it that he's
actually charged by the DOJ for mishandling documents in this instance let's call it that?
HONIG: So Julia, in my experience, getting a search warrant is often but not always a precursor to a criminal charge.
[09:05:00]
HONIG: There is no nationwide database here. So we can't say X percent of cases involving search warrants result in charges. But in my experience,
it's the majority of times when you go get a search warrant, you do end up charging that case, however, of course, this case is not like all the
others, we are talking about a former President, all of this even last night search warrant are unprecedented. So DOJ is going to have to tread
very carefully here. If they do bring a charge, they better make sure they have that proof locked up.
CHATTERLEY: Yes, I mean, that the backlash on that politically. Yes, devastating on a number of reasons, or for a number of reasons. If Trump is
found to have violated the law, whether it's on this or something else, because it could be something else, perhaps that they find? Would that
disqualify him for running for the presidency in 2024? Because I guess that's the big question now that people are asking.
HONIG: Yes, that's a great question. So the technical answer is generally no, believe it or not under our constitution and laws. A person can be
convicted of many different crimes and federal crimes and still run for and actually be the President however, important to note here.
The federal law that relates to mishandling of certain government documents says that if you are the custodian of that document, meaning if you're the
official responsible for that document, and you destroy it, or intentionally hide it, or conceal it, and you're convicted, a you can be
sentenced to prison up to three years.
But being you can be disqualified from holding future federal office. It's a very rare statute that says that this statute does. But that said it's
not entirely clear that the law itself is constitutional. If this happened to Donald Trump, he would argue. Now the Constitution sets limits on who
can be president, you have to be 35 years old; you have to be a natural born citizen. And it's unconstitutional for Congress to say if you're
convicted of certain crimes, you can't serve as President. So this is a complex legal battle that lies ahead.
CHATTERLEY: And it goes back to your point about if you're going to make charges here, then you have to make them stick because it's only going to
rally the Republican base who are suggesting once again, that this is a witch hunt. And they're already doing that. There is a sub plot here very
quickly, le And aren't we waiting for an imminent decision on whether or not the Justice Department will indict Hunter Biden, on various charges due
to his business dealings?
HONIG: Yes, Julia, so that investigation has been pending with DOJ for over two years now, the reporting is that DOJ is nearing a point where they're
going to have to make a decision one way or another. If there is a charge, that'll be another unprecedented situation, we would have the United States
Department of Justice, bringing a criminal case against the son of the sitting President. Another thing we've not seen before, we don't know how
that's going to come out, but that will take us into uncharted territory as well.
CHATTERLEY: Yes, we need more words other than unprecedented. You're running out of them. Elie, great to have you with us, thank you.
HONIG: Thanks Julia.
CHATTERLEY: Elie, CNN's Senior Legal Analyst and Former Federal Prosecutor. OK, let's move on China's military still conducting exercises in waters and
skies around Taiwan a week after U.S. House Speaker Nancy Pelosi arrived on the island. The drills were supposed to end over the weekend.
At the same time, Taiwan's military says its holding land based live fire drills today and Thursday. Selina Wang joins us now on this. Selina, just
explain what's going on China has extended their military exercises, Taiwan already had those scheduled and are now doing them too.
SELINA WANG, CNN CORRESPONDENT: Yes, Julia, so after Pelosi's visit, Beijing had announced that these military drills would last for several
days in end on Sunday, but they have continued and it's unclear just how long they're going to last for. Now, China's military said these ongoing
drills, they're going to focus on joint blockade and joint supply operations.
But when we talk about the impact here, many military experts tell me we're not talking about days or weeks here, but we could be talking about months
or years long impacted. They say that we are entering a new phase that, Beijing has used Pelosi's visit as an excuse to up the ante and over the
long term increase not only the frequency, but the aggressiveness of Beijing's military action around Taiwan.
Now, if you look at the size and the scale of these drills, military experts tell me that this indicates they were planned far in advance of
Pelosi's visit, but they say her trip provided the perfect opportunity for Beijing to justify going significantly farther than they had in the past.
Now these military drills they essentially encircle Taiwan and what Beijing is calling a practice blockade. We've seen the military flood the seas and
skies around Taiwan with war planes and ships for the first time missiles even went over Taiwan Island. And we are hearing also from Taiwan's foreign
minister who said on Tuesday that China is using these military drills as a playbook to prepare for invasion of Taiwan. I just want to pull up a quote
from him from what he said at a press conference in Taipei.
The Foreign Minister said "China is conducting large scale military exercises and missile launches, as well as cyberattacks, disinformation and
economic coercion in an attempt to weaken public morale in Taiwan".
[09:10:00]
WANG: After the drills conclude China may try to routinize its action in an attempt to wreck the long term status quo across the Taiwan Strait.
Now, Julia, we have seen Beijing's aggressive actions when a lot of praise at home among the nationalists, it has unified the country amid all of the
ongoing COVID and economic challenges we've been talking about for months and months. But of course, it's also further antagonizing Taiwan, many of
its neighbors and of course, the U.S.
CHATTERLEY: Yes, and it's up the ante, to your point, I think it's very important. But speaking of the United States, it was interesting to hear
from a Pentagon official yesterday saying despite what we're seeing in terms of the launching and the missile tests and drills, they've not
changed their timeline on when they see potential for China's take military action in Taiwan, and they're still saying it's not going to happen within
the next few years.
WANG: Yes, exactly, the Pentagon is sticking to its assessment. Despite all of this provocative activity we're seeing from Beijing. They're saying that
Beijing will not try to invade Taiwan in the next few years. Sticking to a previous statement, they've said, the Pentagon official also added that
clearly the PRC is trying to coerce Taiwan and the international community.
The Pentagon official said, "We're not going to take the bait". We also did hear from U.S. President Joe Biden, and he said that while he is concerned
about China's movements around Taiwan, he doesn't think that China is going to do anything more. The backdrop here is that you've got the two
superpowers of the world pointing fingers at each other and to bickering. China is claiming that the U.S. provoked them that they're hollowing out
chipping away at the One China Policy, while the U.S. claims that its China that is manufactured this crisis. So we're going to see the U.S.-China
bilateral relationship also continue down this downward spiral in the ensuing months as well.
CHATTERLEY: Selina Wang, thank you so much for that. OK, let me bring you up to speed now with some of the other stories that making headlines around
the world.
A buyer in Lebanon has rejected the first shipment of grain to leave Ukraine since the early days of Russia's invasion. According to the
Ukrainian embassy in Lebanon, the buyer refused to accept the cargo on board because delivery had been delayed for five months. The grain ship is
now looking for another port to offload its cargo of 26,000 tons of corn.
Mexico's President says everything has been done to reach 10 miners trapped in a flooded coal mines since last Wednesday. He visited the site over the
weekend and said progress is being made in removing water. More than 550 emergency workers have been deployed to the rescue operation.
And flooding in South Korea Capital, Seoul is being blamed for at least 9 deaths and authority says another 6 people are missing. Terrain called
storm drains to overflow leaving streets and subway stations on the water. More than 700 shops and homes have reported rising water. More rain is
expected in the same area through Thursday.
And people in Kenya voting today in a crucial general election polls close in around an hour's time. They're picking a new president Deputy President
William Ruto and veteran opposition leader Raila Odinga are the leading candidates and a race analyst has said could be close. And CNN's Larry
Madowo is in Eldoret, Kenya for us. Larry, good to have you with us! It clearly is at a pivotal election for the future of the election and for the
future of the country. I mean, what turnout been like so far do you have any gauge.
LARRY MADOWO, CNN CORRESPONDENT: We do have some data from the Independent Electoral and Boundaries Commission that said that by noon, after six hours
of voting, only about 6.5 million Kenyans had voted. That's about 30 percent turnout, there are 22.1 million registered voters and we can see
that in real time.
This is one of the busiest polling stations in outdoors, the city and the poll officials are waiting for voters and there are no voters. They have 15
different streams and every single one of them. There are no voters; we have 47 minutes until polls close here and there's nobody coming to vote.
That's a bit of a problem because they expected there should be a higher turnout in the last election that first election in 2017. That an 80
percent turnout. But there seems to have been some voter apathy in this election. Their voter registration numbers were lower, especially among the
youth than they expected last time.
And that's also it appears showing itself in the number of people turning up to vote here. This is a stronghold of Deputy President William Ruto
who's running for President for the first time this is people who come from here. He's very well loved here.
This is some somebody supposed to get a lot of votes. We'll have to wait and see when they begin to count the votes in about an hour when the polls
close. He is up against former prime minister and leader opposition Raila Odinga, who's running for the fifth and last time he says, and he says the
man with the experience to turn around the economy.
There has been a big economic problem in this country, partly because of the impact of the pandemic, partly because of fair battle the Ukraine war,
partly because of the drought hitting parts of the country the surging inflation. Some common commodities have gone up as much as 100 percent in
the past few there's rampant unemployment here.
[09:15:00]
MADOWO: The country is saddled with debt. These are some of the things that the candidates have been talking about trying to turn around the economy.
And so you think that'd be a motivation for people to come out here and vote who don't seem to see that? Let me show you here. Julia, they closed
out an entire street to allow people to vote in the morning when we were here. There were a couple of people maybe 100 couple 100 people in several
lines now it's mostly empty even the security forces people kind of milling around wondering why it that there aren't more people here is. But maybe
when the final numbers announced when the whole vote schools around the nation will get a better sense of the turnout but still really concerning
this appears to be depressed turnout, Julia.
CHATTERLEY: Fascinating, see what's going on there. Larry, will continue to come back to you throughout programming today and we'll see what happens
Larry Madowo for now, thank you so much for that report.
OK, straight ahead from gig worker to All-Star employee AirAsia offers super app workers a full time job capitalized. Tony Fernandez explains why
and semiconductor splurge as President Biden prepares to sign the landmark Chips Act in the semiconductor CEO on what it means for his company. That's
all coming up. Stay with us.
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CHATTERLEY: Welcome back to "First Move", in the next hour President Biden will be signing the Chips and Science Act into law aiming to boost
semiconductor production to address the chip shortage and to strengthen U.S. manufacturing and competitiveness in the future.
The White House is touting more than $44 billion in new investments by U.S. chip makers on company that welcomes the Chips Act is California based
indie semiconductor and maker of next generation chips and software for the auto industry, including advanced driver assistance and autonomous driving
systems.
Its customer list is stuffed with famous names like General Motors, Ford and Stellantis. And joining us now is Donald McClymont; he's the CEO and
co-founder of Indie semiconductor. Donald, fantastic to have you on the show! Let's talk about this act clearly you welcome any support for the
industry. But what specifically does it mean for your business? What is it going to allow you to do better?
DONALD MCCLYMONT, CEO AND CO-FOUNDER, INDIE SEMICONDUCTOR: Morning Julia, thanks for having me, first of all. So the Chips Act itself is heavily
focused, of course on bringing manufacturing back to the United States. That in itself have in our form, we are a so called fabulous semiconductor
company, which means that we design and sell the chips.
[09:20:00]
MCCLYMONT: And we use subcontract manufacture to manufacture them typically as has become kind of common now overseas.
For us initially having direct access to a manufacturing platform inside the United States can only increase the competitiveness of the product that
we have. And then additionally, inside the Chips Act, there are provisions which allowed direct awards for company such as ourselves who are designing
and building the technology, which will ultimately be manufactured and in likely U.S. manufacturing as a result of that. So for us, it allows us to
continue sharpening our game, make our competitiveness greater, and continue to invest in the United States and have our design teams very
close to our to our customers, to which to a large part, or in our case are in the U.S. and really being driven by the U.S. car manufacturing industry.
CHATTERLEY: OK, so there's a lot in there, there's the point that you made about outsourcing the manufacturing, which is crucial to your business and
the design teams being as close to the clients and predominantly your clients. And I mentioned a few of them are in the United States. What have
they seen to you at this moment as well, because we've gone through this period of various chip shortages of those clients pushing you as well to
say, hey, we don't want you to have a supply chain that's outside the United States or elsewhere, or can't be guaranteed at times like we've been
through in the last two years. They still push you to do that too.
MCCLYMONT: Yes, absolutely, I mean, they've suffered very badly in the last year and last two years. And having more visibility and transparency into
the supply chain is extremely important for them. And really having it close at hand is one of the best ways of achieving that. So we are
beginning to see mandates for the manufacturing of the chips that we provide for these guys to be put into the United States such that they can
fulfill that goal.
CHATTERLEY: Wow, so they're saying to you look, we'll only give you this order for X amount of chips if the manufacturing is done in this country,
which is it goes to the point of needing an act like this.
MCCLYMONT: That's right, I mean, so I mean, we deployed the instigation of the act. I attended a meeting yesterday, and one of the attendees actually
pointed out that the real terms, cash of the act is equivalent to the amount of money in, I guess, in policing, inflation adjusted that was
required to put the man on the moon. I didn't check his math, but it sounds like a lot of money to me. And for that, to that end, for our industry,
it's a significant boost.
CHATTERLEY: Yes, and this is a lot more people involved, let's be clear, beyond the technology of putting someone on the moon and the delight that
ensued. How difficult is it to hire, in terms of designers, particularly relative to, let's say, Europe, for example, that also managed to sign the
Chips Act actually far quicker than the United States? What's that the relative cost?
MCCLYMONT: Well, the U.S. has always been a very buoyant market for our industry, it's really sort of center of the industry, it's where the
critical mass of employees and talent is. Many of the universities offer programs which provide direct training in the areas that we need. Europe,
on the other hand, also managed to instigate their own Chips Act, and their cost basis is also very good in some countries, which offer also the
ability for companies such as ourselves to hire can be maybe of the order of 60 percent of the cost of the U.S. So having a boost from the government
in order to offset that really allows us to continue to invest in the U.S. and have our engineering teams as close to our customers as possible.
CHATTERLEY: Wow, so just to be clear, so my viewers understand 60 percent of the cost of hiring in the United States is hiring in Europe. And I guess
that's simply because demand is so high in the United States, because you've got all the big tech companies that are sucking up these employees
as well, I guess.
MCCLYMONT: It's true.
CHATTERLEY: The direct question is you going to hire more people in the United States as a result of this act?
MCCLYMONT: Yes, absolutely, assuming that we get approved and, you know, as our business needs, in any case, we'll continue to hire in the U.S. We're
very focused, as I said, on the U.S. car industry, in addition to customers outside, but to that end, we are committed to growing our footprint as
close as possible to our customers. And yes, we will do as a result of that.
CHATTERLEY: The Global Foundries CEO said to us last year that when you talk about building out manufacturing capabilities and factories for an
ordinary company, you can talk in millions. When you're talking about fabs and the manufacture of facilities to create semiconductor chips, you need
to talk in billions. So I look at the amount of money that was agreed here and as good as it is. My question is, is it enough or is more required?
MCCLYMONT: Well, I mean, building these fabs is extremely expensive there, it's billions of dollars to create a single fab.
[09:25:00]
MCCLYMONT: Global Foundries is actually one of the manufacturing partners that we use, and they are perhaps the most valuable fab inside the United
States right now. And, you know, I'd expect that they will grow very substantially as a result of that. So perhaps, in order to continue the
fund, we need to have enough money to put two men on the moon.
CHATTERLEY: We're going to come back to that. Hopefully in a few years, we're talking about multiple people on the moon. On a more serious note, I
want to ask you, how close you're watching Taiwan; obviously, there are humanitarian concerns with the escalating tensions that we're talking
about. There are also business concerns with Taiwan manufacturing. What more than half of the world's supply of semiconductor chips? What would it
mean for the industry itself? And for players like you should that capacity be incapacitated for some reason?
MCCLYMONT: Well, I mean, first of all, and it echo what you said, I mean, you know, fundamentally, first and foremost, any armed conflict should be
avoided at all costs. And as the humanitarian concern is always, at least in my mind, that the primary aspect of any of these kinds of situations.
But that being said, I mean, more than half of the world's foundry market is based in Taiwan. We use several subcontractors there ourselves. And if
anything, were to disrupt that it would, of course, be catastrophic. So it's extremely important that the tensions in that region stay as calm as
possible.
CHATTERLEY: Yes. And deescalated, if at all possible at this moment, Donald, I would love to talk more about the business but you are in closed
period ahead of your earnings. So I wish you luck on that and come back and talk to us soon, please. And we'll let me --.
MCCLYMONT: That's right you have to wait till Thursday.
CHATTERLEY: Yes, exactly, we wait; we shall Donald, great to chat to you. Thank you so much.
MCCLYMONT: Thank you, nice to meet you.
CHATTERLEY: Likewise, the CEO and co-founder of Indie semiconductor there, we're back after this stay with us.
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CHATTERLEY: Hi-Fi's, fist bumps and celebrations there at the New York Stock Exchange U.S. stocks are up and running. On this Tuesday U.S. morning
in a softer start to the trading day, Wall Street under a bit of pressure with all prices firming up.
Amid new European supply concerns bond yields also ticking higher to ahead of tomorrow's big inflation print in the United States, prices expected to
have eased a little in July due in part to falling energy prices.
So we shall see when that data comes out tomorrow morning in the United States. For now the Federal Reserve getting some encouraging news on prices
yesterday to showing consumers inflation expectations dropped sharply last month. Remember the big fear at the Fed is that inflation is getting
embedded into future expectations making it all the harder to control in the future.
Now the tech sector is the big loser in today's trade after a revenue warning for memory chip maker micron, micron warning of softer demand for
chips used in PCs and in smartphones.
And video which warned on revenue yesterday is extending Monday's 6 percent decline as you can see off almost a further two and a half percent shares
of both firms already down more than 30 percent year to date.
Just to give you some perspective on that. Now it's been a busy 24 months for the company once known as AirAsia. In 2020 it launched a Super App
offering a one stop shop for food delivery, ride hailing FinTech and of course travels services.
The company says it has 51 million users across Asia; the app has been downloaded 14 million times. The new name of Capital A was chosen to
reflect the diversification and changes.
And with the Super App now in growth mode, the company has taken the unusual step of making gig workers who provide ride hailing and food
delivery services into full time employees are guaranteed income and benefits are part of the package.
Joining us now to discuss what's going on Tony Fernandes, Chief Executive Officer of Capital A and Acting Group CEO of AirAsia X. Tony, great to have
you on the show as always.
TONY FERNANDES, CEO, CAPITAL A & ACTING GROUP CEO, AIRASIA X: Thanks for having me.
CHATTERLEY: Let's start, great to have you with us. Let's start by talking about the gig workers. How many workers are we talking about making into
full time employees and give us the rationale?
FERNANDES: Well, we started small. We've had, we started with 20. We've had 1000 applications since it was announced. And so we're going to scale up
quite rapidly. Reasonably highness same reason when I started airline 21 years ago, you know, 20 years, or 21 years, we haven't had a single day of
industrial action, we don't have a single union when we have 21,000 staff.
I've always said if you put people first productivity will be the best, we are the best fuel burn in the world was our pilots care. And so I felt
there was a big disconnect between how gig workers were treated by these companies.
And I felt that if I and my company looked after these workers and treating them the same way we did for cabin crew, or pilots or ramp handlers, then
productivity really increased. And we've already seen that with the small amount of drivers that we've had, and the huge response.
And we think that'll be a huge productivity and cost advantage to us in ride hailing and food delivery.
CHATTERLEY: Just to be clear, are you going to have some full time employees but still allow those that want to remain flexible to be flexible
delivery? Yes, you're offering both options.
FERNANDES: We're offering both options. I would say the majority of what we're seeing is people who want to be full time they want to get the full
benefits of being in Capital A. And we're seeing a lot of pride a lot of loyalty already, even though it's very short, and huge productivity
increases.
CHATTERLEY: Do you think this is going to become the model perhaps for other gig economy companies in the future? I mean, you've got some big
competitors in the region, grab Foodpanda, for example, if I just name a couple, offering flexibility to those that want it work, whatever hours
they want.
They can click on if they want to, they can do something else if they don't, but also to provide full time employment. Should those people want
the security and the benefits?
FERNANDES: Yes. The reality is a lot of these people have become full time employees. So they should be treated as full time employees. And the
companies will benefit from productivity, but there'll be some who do want to have it as a part time so that's why we have both.
Interestingly enough, I received all our company received a gift from Foodpanda today, welcoming us into their field and level field of
competition and said you bring great ideas to the business. So maybe they thought what we were doing was a great idea and maybe they'll implement it.
[09:35:00]
CHATTERLEY: Do you think that was then being cheeky? Or they're actually acknowledging that perhaps they've taken ahead?
FERNANDES: Probably they're little bit cheeky, let's see where they grab sense me at present.
CHATTERLEY: Yes, but a free PR. The other thing you offer is training. So it is, in a way sort of avenue route via becoming a full time employee,
perhaps to other options, and other opportunities within the business too, because you know, these people better you know, what their skill sets are?
I think that's an important back to your point.
FERNANDES: Absolutely.
CHATTERLEY: Yes.
FERNANDES: Yes, absolutely. I mean, you know, we've been famous for taking dispatch boys and girls and making them pilots, people who are checking in
staff and our engineers, talent is our biggest asset. I mean, it's readily thrown around a lot, but we really use it.
And, you know, because of economic disparity, just because you may not have had education, because you don't have the right financial background,
doesn't mean you're not super smart. So we are good at turning raw diamonds into diamonds. And I'm sure many of our riders and drivers will move on to
bigger and better things within the AirAsia Group, Capital A group, as many others have, and that is our strength and will continue to be our strength
in developing people.
CHATTERLEY: It's hard to price, goodwill, and productivity in many respects, is it going to net cost you money if you don't quantify the
benefits that are fluffier?
FERNANDES: Yes, we've had 21 years of it, you quantify it by, and I think three things I can say, which are very real. One is, we've never had a
strike, and we've never had industrial action. We've never had to negotiate collectively.
There's been huge transparency in a business which has had rife with unions and internal strife. So that's a real quantification, you can see in our
cost structure with the lowest cost airline in the world by far.
And that's because of high productivity. I think the second thing is COVID. You know, the goodwill we built even with our passengers, while there is a
minority that have complained a lot about taking a long time for us to get refunds. 88 percent of our passengers said, look, you've been great with
us.
We know you're in trouble; we'll take your credit shell. And so a lot of that has come from the way AirAsia has treated people in our company and
treated our guests.
So, you know, many people would laugh at the fluffiness. But there are huge intangible benefits in the way we run our company.
CHATTERLEY: Yes, he who laughs last laughs longest. And Tony, let's talk about the airline business because it has been challenging, I know you're
furiously getting all the planes back to capacity.
And you've said 100 percent capacity by March 2023. I think an 80 percent recovery now in domestic travel, but international remains as everybody
knows, I think still a huge challenge. Talk us through what you're seeing?
FERNANDES: So for us, we have you know, we have different issues from Europe and America, airports have enough work supplied by one or two. And
for us, you know, we have a huge fleet of 205 planes, getting them serviced and getting them back operationally, has been a huge challenge.
Today was a big day for us. We crossed 100 planes with 108 planes, load factors very strong. We hope by the end of the year, we'll have 180 planes
and then by the by the first quarter, all our planes flying.
We've kept our pilots current; we've kept our crew current so that we don't have any manpower issues. And they will all get into the operation as the
planes come out.
So our big challenge over this last 12 months have been one, borders reopening, which they principally are apart from North Asia, and getting
planes in the sky. And our team has done a fantastic job to get 108 and business is strong and long may that continue as we get the other 100
planes back in the air.
CHATTERLEY: And you said AirAsia will be profitable in 2023. I just wonder also for the other side of the business, as you're growing, you're
diversifying, you've got a lot going on big pay the digital side of the business as well.
It sort of all ties to a question about that you've discussed briefly, let's be clear about a potential U.S. listing two separate listings
actually for the business. And I just wondered, can you combine all those things?
I mean, talk about the kind of benchmarks required in your mind in order to go OK, we're ready, perhaps, to come and do a listing in the United States
in whatever form.
FERNANDES: Yes, I think we've got to show that I mean we're very keen on a U.S. listing. We think it's the home of the best capital and the best
research and, and talent to understand businesses.
We also think the U.S. understand Southeast Asia much better, especially recently. And benchmark for me is to prove our cost structure is in place
to prove that the airline recovery is in full force.
[09:40:00]
FERNANDES: And, and that we are able to generate good free cash flow and strong profit growth. I think those are the benchmark for the airline. And
frankly, for the other businesses that we're looking at, we've got the airline, we've got a very good engineering business.
We've got two strong digital businesses and a wonderful logistics business, which just had kind of been neglected by us because we were so passenger
focused. And as an LCC, but really, we think we can do to logistics services, what we did to passenger services, and that's extremely exciting
for us.
CHATTERLEY: Yes, as always, I always say to you, and I think I get repetitive that you have a lot going on, you always do. And I remember a
year ago, I was congratulating you on the birth of your daughter as well.
So I just want to say, I think as we approached her first birthday, happy birthday to her on that. And can we also talk about your dancing because
you did do an Instagram video when you were talking about this work your transition?
I think we can share it or not. We've got some other people. We have to work we have to see your dancing. Tony, can we talk about your dancing?
FERNANDES: I'm a happy go lucky guy and I'll celebrate in any which way I can, that's a great way of expressing. After the three years that I've been
through, I think I should be allowed to celebrate in probably more different ways than most CEOs would.
CHATTERLEY: That's you. Great to have you with us, Tony, thank you. We'll chat again soon.
FERNANDES: Pleasure, thanks very much.
CHATTERLEY: Thank you. The Chief Executive Officer of Capital A and Acting Group CEO of AirAsia X there, thank you. OK, breaking news. Just into CNN
tennis great Serena Williams has announced her impending retirement.
William has posted on Instagram that the countdown has begun. Serena Williams has won 23 Grand Slam championships more than anyone else in
history. She is expected to compete in the U.S. Open in around three weeks' time. We're back after this, stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". Haiti is spiraling deeper into crisis following the assassination of its president last year. Inflation is
estimated to be running at 30 percent and there are shortages of fuel and food as armed gangs take control in much of the capitol.
CNN's International Security Editor Nick Paton Walsh traveled with a SWAT team in Port-au-Prince.
[09:45:00]
(BEGIN VIDEOTAPE)
NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR (voice over): The descent into the abyss in Haiti is fastest here. The one certainty is when
the police SWAT team we are with cross into gang territory, they will take fire. It is now a belonged war for control of the capital.
The police need to prove they can be here, the gangs that the police cannot and its ordinary citizens who were caught in between. Here a passenger on a
civilian bus that was hit in the street.
And the days before police said they rescued six hostages in this same area and killed a leader of the 400 Mawozo gang. But the police struggle to hold
ground so the gangs whose currency is kidnapping and drugs are gaining far too much, especially right here.
Rounds hit the armored vehicle; they think they see with a gun man - they run, but not like it's their first time on the fire perhaps even this day.
UNIDENTIFIED MALE: As soon as we get to that point, anything that moves, light it up.
WALSH (voice over): They slide back; perhaps the gang has fled down the alley.
WALSH (on camera): It's this kind of intense violence that so many sites when they talk about - spiral towards collapse.
WALSH (voice over): The firepower they bring doesn't in itself change who's in control. Gangs are able to block main roads at will with trucks and it
requires a major operation to clear them. Gangs now often match or outgun the police.
They have a bulldozer to demolishing rivals houses in one area, Cite Soleil. Locals fled at night during 10 days of clashes in July. That left
over 470 dead, injured or missing said the UN as the G9 gang expanded control burning and demolishing.
Those who survived flood tonight's here were a mix of flies and rain stopped them from even sleeping.
INTERNALLY DISPLACED MOTHER: They burned my house in Cite Soleil and shot my husband 7 times. I can't even afford to see him at the hospital. I have
four kids, bur my first is missing and I can't find him. I looked for him everywhere but can't find him.
UNIDENTIFIED FEMALE: My mother and father have died. My aunt saved me. I want to go to school but it was torn down.
WALSH (voice over): To see where acute desperation can lead, we traveled to where what's left of the government rarely treads. Don't be fooled by the
beauty. That is no paradise here, only hunger, heat, trash and the business of leaving.
Traffickers boats out to the Bahamas, Cuba, and Florida if you're lucky. And while these places are sending Haitians back in record numbers, the
U.S. Coast Guard is also stopping four times as many this year as last. These exits are what Johnny arranges.
JOHNNY, MIGRANT SMUGGLER: If we die, we die, if we make it, we make it. I'm the one who buys the boat. It can cost up to $15,000 we're hoping to get
250 people for the next trip because the boat is big.
WALSH (voice over): Not everyone made it on their last trip three months ago.
JOHNNY: The boat had an engine problem. While they got inside the boat we call for help. But it took too long. 29 people died on that trip.
WALSH (voice over): These aren't people who usually share their trade secrets, but maybe now they're relaxed as the authorities are busy. The
boat is aging scraps of net plugging holes. Engine's not fixed yet. But this is where Johnny hopes 250 people will huddle maybe as early as next
week.
WALSH (on camera): And they not really something you want to be in on dry land low - - out for days.
WALSH (voice over): One man tells us why he saved for a year to get into fear.
[09:50:00]
WALSH (voice over): I graduated and work as a teacher he says, but it did not work out. Now I am driving a motorcycle every day in the sun and the
dust. How will I be able to take care of my family when I have one? I'm not afraid. I will be eaten by a shark or make it to America.
A hope, so remote, it could only exist here. Where they say the choice is between fire and water even if all day, every day already feels like
drowning. Nick Paton Walsh CNN, Port-au-Prince Haiti.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". The mean team is back in the green and reigning supreme at momentum stocks aping the oversize gains that
made headlines a few years ago. I'm talking about shares of stocks like AMC for one up more than 55 percent over the past month.
AMC the cinema chain announcing a so called ape special dividend that some might feel is better called Monkey Business. Paul La Monica joins us now on
this. Just to be clear for our viewers we're talking AMC GameStop. Remember the GameStop saga Bed Bath and beyond was another one. Is this completely
bananas? Because if we bring it back to the fundamentals once again, Paul, I mean, these guys are set to lose money this year next, I believe all of
them.
PAUL R. LA MONICA, CNN REPORTER: Yes, yes, it is a bit crazy. I think that Wall Street insanity is a constant and it's alive and well. But to be fair
to some of the retail traders that are trying to squeeze the short sellers that are betting against these companies.
When you look at AMC, for example, AMC does benefit from the fact that we've had a pretty solid summer for Hollywood. And that is good news for
AMC. GameStop, I think has done a lot with Ryan Cohen, the chewy founder.
Now is its chairman really trying to latch on to the NFT trend with gaming and hopefully boosting its business there? But these moves are so sudden
that you can't help Julia, but think that it is about this army of Reddit apes that wants to inflict pain on those short sellers who are fairly
looking at the fundamentals and recognizing that, hey, these are companies that aren't profitable and may not be profitable for some time.
Why should they be valued at these prices? And you know that's why Wall Street is this great debate of sellers and buyers.
CHATTERLEY: And let's just be clear for context before someone complains to us. The meme stock fans themselves call themselves apes, so we are--
LA MONICA: We are not using it as a derogatory term by any stretch of the imagination. It's - the point that AMC is even having a preferred stock
dividend that is going to trade under the ticker symbol of APE.
[09:55:00]
LA MONICA: So, you know, CEO Adam Aaron at AMC really going all in on this phenomenon.
CHATTERLEY: Responsible to buy into this?
LA MONICA: I think if you are a short term trader that recognizes the risks and knows that you might have to be in and out of these stocks quickly, it
could make sense.
But some of the hopes and dreams of the Reddit crowd that these three stocks in particular will one day be retail leaders in an industry that is
evolving rapidly. I think that that might be a big misguided. I understand why the short sellers are betting against these companies. Let's just put
it that way.
CHATTERLEY: Yes, that's so funny. So I was talking about responsible on the part of the executive committee sort of leaning into this meme stock price,
and you chose to answer on the investors which as you said something about - we're running out of time.
LA MONICA: No, I think it cross - for AMC's CEO does pay homage if you will to a class of investors that is clearly supporting this company. Why not?
If institutional investors are shorting you go where the love is.
CHATTERLEY: Totally, drink the Kool-Aid. Its banana flavored. Paul La Monica, thank you so much for that, too much fun on the show. That's it for
the show. "Connect the World" is up next. I'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
