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Quest Means Business

BA Strike Is On; Google Leaving China

Aired March 19, 2010 - 15:00   ET

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

RICHARD QUEST, HOST, QUEST MEANS BUSINESS: The talks collapse, the strike is on. How many planes will fly tomorrow?

One on one, China tries the personal touch in its currency dispute with the U.S. And soon to be dot.gone, Google, of course, leaving China.

I'm Richard Quest, the end of the week on a rainy night at Heathrow, where I mean business.

Good evening, from a noisy Heathrow Airport. One of the late flights taking off on runway 27, tonight, a British Airways plane, but one asks, how many more flights will leave once the strike by 12,000 cabin crew kicks in, in just a few hours from now. Last minute talks failed to reach an agreement between British Airways and the union, Unite. A last-minute offer was rejected, and now it seems BA is going to be put to its ambitious plans to run 65 percent of its schedule.

So what went wrong? Why were the talks such a failure? CNN's Jim Boulden spent many a work (ph) hour outside the trade union's congress. Jim joins me now from the warmth.

Jim, why couldn't they agree?

JIM BOULDEN, CNN INT'L. CORRESPONDENT: Well, the reason really was that Willie Walsh, the CEO of British Airways, was not willing to put back on the table an offer that he made last week, that the union said that they would go ahead with and that they would stop the strike if British Airways would bring that offer back to the table.

But Willie Walsh said no, because the company is losing $10s of millions because of this strike. He wanted to have a less good offer, because he said they need to make some of the money up, Richard. So, that's where it broke down. It broke down around 2:00 o'clock this afternoon, after more than two days of talks, some of those talks were secret. We didn't even know they were going on. We knew the strike was going to go ahead, we didn't know the two sides had decided to talk, but around 2:00 o'clock London time, the two sides came out and they made these comments. Tony Woodley, first, from the Unite union.

(BEGIN VIDEO CLIP)

TONY WOODLEY, GENERAL SECRETARY, UNITE: I think it is a classic case of Mr. Welsh, unfortunately, being one of the hawks, was looking for a war with our members, as opposed to a negotiated settlement. There is absolutely no doubt that this is the second occasion that this could be missed the moment to call off this dispute, missed the moment that we could have put negotiations back on the table.

(END VIDEO CLIP)

BOULDEN: Now, Willie Walsh said that he was not trying to break the union, he said, of course, the airline does need to cut costs, and the cabin crew has to come onboard. He came out a few minutes after Tony Woodley, and this is what he had to say.

(BEGIN VIDEO CLIP)

WILLIE WALSH, CEO, BRITISH AIRWAYS: Tens of 1,000s of BA people stand ready to serve our customers. And BA will be flying tomorrow, and will continue to fly through these periods of industrial action.

I remain available to talk to Tony Woodley, at any time, with the view of reaching a sensible agreement, but our business much make changes, and I'm disappointed that the union has not been able to see the sense of the proposal that we tabled today.

(END VIDEO CLIP)

BOULDEN: As you heard there, Richard, Willie Walsh, of course, saying that BA will continue to fly during the strike. They have a very complicated and very-a contingency plan. Some about, maybe around, 65 percent of British Airways normal flights will take place over the next three days, Richard.

QUEST: Jim, did you get the feeling that neither side really wanted to settle this. Actually that a strike, although very damaging, is what was inevitable.

BOULDEN: I didn't get that feeling. I got the opposite, actually, Richard. To be honest with you it seemed like it was a surprise that these talks took place, they went until midnight on Thursday night, they came back first thing Friday morning, talked through lunch. And then, all of a sudden, it all fell a part. It just seems to be that whatever offer Willie Walsh-the specifics that he made, that British Airways made today, the union said they absolutely could not support.

QUEST: Jim Boulden, joining me. Many thanks indeed.

Jamie Bowden is now with me. Former BA executive and consultant in the industry of many years-well, not too many years.

(LAUGHTER, CROSS TALK)

QUEST: How bad are industrial relations that mean that once this strike starts it is going to go to the death?

JAMIE BOWDEN, AIRLINE INDUSTRY CONSULTANT: Well, I think that what we've seen is the last seven days a lot has happened. A week ago today, Unite, the union, decided after negotiations could not be reached by settlement, they decided to call a strike. The last seven days British Airways has been busily beating away to try and make sure they can put a (UNINTELLIGIBLE) on. That is where we are now.

QUEST: Right, do you believe that this ambitious program, that they are hoping to run, is realistic.

BOWDEN: It is absolutely realistic. I've been customer service manager of terminals here at Heathrow before, the fact that 65 percent of the program is going to fly means that, in fact, they've got a little bit more latitude to play with. That is why British Airways has been pretty conservative about how many they can fly, and they've actually-they are actually very confident that over the next three days 65 percent of the services are going to be achievable.

QUEST: And how much from the workers side, how much of this is going to-is the strike just going to add more weight? More and more flight cabin crew are just going to come back to work?

BOWDEN: I think the cabin crew fall into very two distinct groups. There is a large group that do not want to strike, but they hope that by voting to go on strike they were going to be able to leverage the company to give them a better deal. That clearly has not happened. The strike starts in less than 12 hours' time. There are other people who want to work. And there are people, even though they voted, have now decided that they probably are not going to get anything, they may as well come into work.

QUEST: All right. Those who strike, will lose their travel perks, permanently, won't they?

BOWDEN: Yes, the company has said to them, if you do go on strike, you are going to have to take the consequences. They have decided to take away their travel concessions, which are very important to many BA staff. They are taking them away for life. And that means that they take a personal and individual consequence for choosing to strike.

QUEST: Is it likely that BA would reinstate them as a gesture at the end of the strike?

BOWDEN: I think at the moment, because these two sides have become so intracted (ph), in terms of this dispute, I think it is highly unlikely that given the situation that we are at the moment, with millions of pounds being caused in damage to British Airways over the next three or four days, I cannot possibly say that British Airways are going to find a way to give those concessions back any time soon.

QUEST: And we'll hear from Willie Walsh on that point in just one second.

Jamie, you've known BA all your working life. What has happened that has got the airline to this desperate state and such bad industrial relations? I mean, the cabin crews say it is all Willie Walsh's fault.

BOWDEN: Well, I started work at British Airways in 1978, and I have to say that it doesn't really matter whether it was Carly Marshall (ph), or Bob Ailing (ph), or Rod Eddington (ph), or Willie Walsh, there are always going to be some groups that have an issue about chief executives who have to make change. One thing that is certain about British Airways, at the moment, whichever side of this dispute that you sit on. It must make change. We've seen Japan Airlines essentially go bust. Thirty-four carriers in the past year go bust. If we look back to the pas 25 years people like Pan Am, people like TWA, Eastern, these were names that were known around the world as global carriers.

No airline, however, big, however small, are immune (ph) to the kind of changes that the business is forcing on them. If British Airways do not change and change dramatically, then the market will change it for them.

QUEST: Jamie, you'll help us understand what's happening in the days ahead. Jamie, many thanks, Jamie Bowden joining us here.

Now, we were just alluding to fact that those travel perks, it is one of the most sought after perks in the aviation industry. You basically get free tickets and deeply discounted travel for you and your family. BA's chief exec has warned that the lifetime perks for anyone taking part will go. And this is the way he put it.

(BEGIN VIDEO CLIP)

WILLIE WALSH, CEO, BRITISH AIRWAYS: That was an adult statement to adult employees, where we said to them, that we will not continue to provide valuable perks and benefits to people who seek to inflict serious and ongoing damage to our business. So it wasn't a threat. When we said that those travel concessions will be withdrawn, that is exactly what we meant.

(END VIDEO CLIP)

QUEST: The question we're asking you tonight: Is it just downright mean of British Airways to take away those travel perks? Surely a gesture of good faith, who knows? Anyway, have your say. You can get a hold of us, these are the ways, by e-mail, Quest@ cnn.com. And there is also, of course, the Twitter address, as well as the Facebook address where you can get us. The Twitter address, the Facebook is, Quest Means Business, and Twitter is @richardquest. We will get to some of your responses before the end of the program.

Now, the news headlines now and for that, in the warmth, Becky Anderson at the CNN News Desk.

(NEWSBREAK)

QUEST: Now, we are already getting some responses to the Twitter question.

TITSS (ph), "That is so mean of BA. It is like taking candy from a baby. They must restructure their system, not worsen the affliction."

"No, they should not", said CritiveM (ph). "I think it is important for them to keep their travel perks."

Wayne6565, "I don't think they would care much about tickets, if their real problems are not addressed."

Don't forget, @richardquest, we'll have some e-mails as well, to Quest@cnn.com, where we ask, should they keep their travel perks?

When we come back in just a moment, business can be brutal, especially when serious sums are involved. China and the United States arguing over what it is in the currency.

(COMMERCIAL BREAK)

QUEST: Welcome back.

Beijing says it wants to strengthen economic relations between China and the United States, even as the two sides have an ongoing currency controversy between them. China says it is sending a cabinet official to talk to Washington and explain its position to diffuse trade tensions. Critics say China's yuan is undervalued, by 30 to 40 percent, giving its exporters an unfair advantage. For its part, Beijing is urging the U.S. to cool, an it is calling it the politicization and "emotionalization" of the dispute.

For more on this, I'm joined now, by Carolyn Bartholomew, the vice chairman of the U.S./China Economic and Security Review Commission. She joins me now from Washington.

Carolyn, when we look at this dispute, is it not inevitable that the two sides will be in disagreement when you look at the trade discrepancy between the two?

CAROLYN BARTHOLOMEW, U.S./CHINA ECON. & SECURITY REVIEW: But, Richard, it certainly is. There are clearly huge disagreements between the United States and China, and elsewhere in the G5, about China's currency. It is very interesting that China is sending a high-ranking person to Washington, D.C., to talk about the issue.

But, frankly, what we need here in Washington, D.C., is not to see more talks. Not to have China explain why it does what it does on its currency, but we need to see some action taken in order to revalue that currency to start stopping these discrepancies and the distortion of trade that is taking place.

QUEST: All right. You've got two ways that can happen. Either China decides to revalue on its own, or the U.S. starts some form of sanctions and forces China, which as you probably realistically know is most unlikely.

BARTHOLOMEW: Well, there are-you know there are certainly mechanisms that could take place. The IMF could actually step up to the plate, which it hasn't done to date. But I'm not so sure that you should be as sanguine about the U.S. Congress doing some thing on China currency. Just last week 130 members of the U.S. House of Representatives, both Democrats and Republicans, signed a letter to the administration urging that China be cited as a currency manipulator. And Senator Schumer and Graham, a bi- partisan duo, have put forward new legislation they proposed a few years ago to try to deal with this issue. So, I don't think-oh!

(JET ENGINE ROARS)

QUEST: I promise you, that at the end of the day, though, the two sides are very far apart. Now, the last time the yuan was revalued it was some years ago. If China refuses to revalue, what do you believe happens in the end?

BARTHOLOMEW: I think that if China refuses to revalue, and by that I say, refuses to revalue by any significant level, then I think there is real chance that the United States moves forward with some of this legislation that would put some sanctions on some Chinese products.

QUEST: Carolyn, many thanks, indeed. Please, when I'm not at a noisy airport, next time we'll be able to talk in more detail about these issues.

BARTHOLOMEW: Thank you. Thank you very much. Thank you, Richard.

QUEST: Thank you very much.

BARTHOLOMEW: Bye-bye.

QUEST: Nice to have you.

Now, let's turn our attention to India, which is ready to move on Friday to help fight inflation. It hiked is benchmark interest rate, this is interesting, rates are going up to 3.5 percent, from a record low of 3.25. India's unexpected rate rise is the first in almost two years. Some economists see this as the start of a long money timing cycle. The country's top economic advisor said India's inflation was worrying and unacceptable.

Now, India has an effect on markets, as it traded during Friday. Stephanie Elam joins us now from New York.

Stephanie, you have the advantage over me I haven't been too closely watching what's been happening today on your markets. So, please, do bring me up to date.

STEPHANIE ELAM, CNN FINANCIAL CORRESPONDENT: I will do that. And I hope you can catch your flight very quickly after this since you are so close to the airport, right now, Richard.

But as for the markets here, it does look like the Dow is going to snap the eight-session winning streak that we have been on. Investors are doing some profit taking as we head into the weekend. There are also new concerns about interest rate hikes. As you were just mentioning what is going on in India. This goes, despite what we heard from the Federal Reserve earlier this week; India's central bank raising its key rate today. There is speculation China could do the same next week, and part of the reason why we have seen the Dow on this winning streak was the belief that interest rates are going to stay a historically low levels in the U.S. for some time. So we'll be keeping our eyes on that.

So the other thing happening here today Richard, it is a quadruple witching day. It only happens four times a year on Wall Street. And it means we could see some volatility in the last hour of trading as the series of different contracts and options expires, and everyone wants to make sure that they have their set up right as they go into the weekend, Richard.

QUEST: And some day, I will actually understand the mechanisms of triple and quadruple witching, but I suspect not in this lifetime.

Stephanie, PALM shares tanked quite sharply; is PALM out of the business?

ELAM: PALM is probably on what you could call a death spiral at this point. It is just a free for all. That is after the smart phone-this all started because the smart phone maker reported dismal fourth quarter earnings. They came in well below what Wall Street was expecting. The report caused a pair of analysts to se their price targets for PALM, and get this, zero dollars. So they are basically saying the stock is worthless. PALM was once a leader and a pioneer in the smart phone market, but has fallen far behind its competition. Just getting crushed by the BlackBerry, which belongs to Research in Motion, and also the iPhone that belongs to Apple.

PALM saying that some of the problems are because sales people at wireless stores don't have enough knowledge about its phones, analysts say that is a pretty weak excuse. And one even says PALM could be history within the next year. PALM, just in case you are wondering, employs under 1,000 people. PALM, right now, trading lower by about 27 percent; so its last trade about just above $4 a share. So, it is definitely on the way down, Richard.

QUEST: Many thanks, Stephanie Elam, in New York. Have a lovely weekend, we'll see you next week. Many thanks, indeed.

Now, the European markets, and if we look at what happened to stocks across Europe, I suppose a bit of a disappointing close at the end of the week. These are the closing numbers for you. The FTSE in London jumped higher, led by steep jumps in the banking sector. Lloyd's, now there is Lloyd's Group, saw 8 percent after predicting a return to profit this year. Rio Tinto lost 1 percent, adding to the mood of caution. And as you know about India, they raised interest rates.

Now, when we come back in just a moment, the U.K. is looking better on the economic front, according to the latest numbers, but what about Greece, and interest rates? We'll talk to a top economist on that issue in just a moment.

(COMMERCIAL BREAK)

QUEST: Welcome back. QUEST MEANS BUSINESS coming to you tonight from just by Heathrow Airport, in London.

The latest economic details from the United Kingdom have been slightly more encouraging than in recent months. Government borrowing is now perhaps not going to be as great as first thought. Still astronomically high by traditional standards, but not stratospherically high and that employment might even be coming down just a tad or two.

What does this mean for the Chancellor Alistair Darling, as he prepares his budget next week? And with an election just a few weeks away? I turn to Deanne Julius the chairman of Chatham House, here in London, and a former member of Britain's Monetary Policy Committee.

(INAUDIBLE)

(BEGIN VIDEO CLIP)

DEANNE JULIUS, CHAIRMAN, CHATHAM HOUSE: We are through the worst. We have turned the corner, almost certainly. One can never be certain in these things. But we are seeing unemployment is pretty much stabilized, in fact, gone down a little bit. The GDP numbers are positive instead of negative. Even house prices have turned around, mortgage arrears are down. So, I think that there are enough signs out there that the worst is behind us.

QUEST: And the government, the U.K. government, actually didn't have to borrow as much last month, than it first thought. Why was that?

JULIUS: Well, yes, it didn't quite have to borrow as much as they first thought. It is still a huge number. And the reason seems to be that tax revenues came in a bit higher than they had expected. But I wouldn't get too excited about that.

QUEST: How much of economic activity in the U.K.-and for that we can also talk about the rest of the euro-of the European Union. How much of economic activity is, at the moment, just government based? Just stimulus supported? Take it away and the thing will fall off the cliff again?

JULIUS: It is a pretty significant contributor. But personally, I think that the low interest rates are an even more important current stimulus. Because we have a very high homeownership, most of those people have a mortgage. And most of those mortgages are on floating rates, so when the policy rates is half a percent, that puts a lot of money in people's pockets to spend on other things.

QUEST: We'll come to Europe in one second, I have to ask you the obligatory question, when do you think is the right time to start tightening monetary policy in the U.K.?

JULIUS: Well, we have already in a way started by putting quantitative easing on hold. And I think that was necessary. The big step is when the first interest rate rise goes in. And I think it will probably be before the end of this year, frankly. I mean, this is an inflation targeting Bank of England. Inflation has been higher than they expected for quite a few quarters now. The governor is having to write these letters to explain why it is 3.5 percent, instead of the 2 percent target. So, I think they will focus on inflation. And it is pretty likely that they'll need to raise interest rates before the end of the year.

QUEST: Let's talk about Europe. Let's widen our bailiwick. Greece is in a mess, it remains in a mess, and European partners-well, one is reminded, with friends like these, who needs enemies?

JULIUS: Well, yes, there is an element of that. And certainly Greece has gotten itself, it has dug itself into a major whole. I personally don't think that this is the end of the euro. I think that would be going far too far. And even what Angela Merkel says this being the most severe test of the euro since its existence. I'm not quite of that mood. But I think that Greece is going to face a lot of difficulty rolling over its debt.

QUEST: Was there something structurally flawed in the way the euro has been created? Because that really becomes the issue, not just for this crisis, but for future crises?

JULIUS: It depends on how much of a purist you are. It is certainly possible to say that European countries in the Zone are not an optimal currency area, but nor is the United States.

QUEST: Will you have fiscal union, as opposed to-

JULIUS: They do in the U.S.

QUEST: Without just monetary union?

JULIUS: Yes, I mean, the euro is an experiment. You know, it doesn't fit the full theory of how you unify an area. But at the same time it is politically sustainable, as long as most of the countries feel that they benefit from being in it, as opposed to being outside of it. And certainly Greece has benefited from being in it, not outside.

QUEST: All right. Let's put some hard questions on the table, if we may. Should the euro have a mechanism that countries can either leave or be booted out of?

JULIUS: I think it would probably be a help. I don't think many countries would leave. Now whether they would be booted out is a political question.

QUEST: Finally, the question we ask everybody these days. Should they bail out Greece? Should the European partners bailout Greece?

JULIUS: No. No, I think the moral hazard is too high. If they bailout Greece it will be Italy next, it will be Spain, it will be others. They cannot afford, in the long run, to bail out Greece.

QUEST: That means that European countries, that are in financial dire straits, are destined to either have to go to the IMF, or suffer the severity of the austerity measures in a painful recession and contraction.

JULIUS: That is absolutely right. Governments are disciplined by the market. And indeed-

QUEST: Ooh, you are a hard one.

JULIUS: -they cannot get out of that. That is globalization.

(END VIDEOTAPE)

QUEST: Deanne Julius, the chairman of Chatham House, talking to me earlier. Now, when we come back in just a moment, some more on the BA strike and some more of your responses to exactly what it all means. And by the way, the runway 27 Right, tonight, at this time in the evening, this runway is the take off runway and that is why it all sounds so loud.

I'll be back in just a moment. This is QUEST MEANS BUSINESS. Good evening to you.

(COMMERCIAL BREAK)

QUEST: Good evening, I'm Richard Quest, QUEST MEANS BUSINESS, this is CNN.

Within a few hours British Airways cabin crew will go on strike over pay and conditions of service. BA says it hopes to run up to 65 percent of its schedule using volunteers, chartered aircraft and by putting passengers on other airlines.

The cabin crew say they expect a good turnout for the strike. For passengers it promises to be at least chaotic and there could be some misery ahead. To what this all means for passengers, airline, and union, I turned to Simon Calder, the travel editor of "The Independent" newspaper and asked for his thoughts.

(BEGIN VIDEO CLIP)

SIMON CALDER, AUTHOR/TRAVEL EDITOR: Richard, it's going to be exactly the opposite of what would have happened had the strike caught three months ago for Christmas and the new year taken place. That would have wiped out the travel plans of one million people.

British Airways didn't have the capacity. It didn't have the time to mount any sensible kind of schedule. They have had three months to work on everything from training volunteer crew to recruiting other airlines.

QUEST: But you'd agree, it's an ambitious target to try and run 65 percent of your schedule.

Do you think they're going to be able to do it?

CALDER: I think they will if this airport, the busiest international airport in the world, can handle it. If things start going wrong at Terminal 5 behind us, this 4.3 billion pound structure, a marvelous pinnacle of aviation, if things start going wrong, for example, because the aircraft they've brought in from other airlines simply don't work with the facilities there, then it could get quite sticky quite quickly.

QUEST: What about these volunteers that you've heard about?

And it's not going to be amateur hour on board, is it?

They're going to know what they're doing.

CALDER: Well, British Airways prides itself, of course, on a professional operation. What they have stressed is that this is a conservative schedule with a simplified service.

What does that mean?

Even if you pay first class fares, you are not going to get a hot meal. And if you're down the back in economy with me, then you will find that some gruff old captain is doling out the sandwiches rather than having a lovely meal served by maybe a professional cabin crew member...

QUEST: All right...

CALDER: But, of course, the key thing is safety. And these volunteers have been trained in line with aviation authority guidelines. However, the union has still expressed concerns about that.

QUEST: Have you been surprised -- as some have -- at the sheer bitterness and determination of union and airline to see this through?

CALDER: I have never seen anything like this in British aviation history. I was at Sandown Park Racecourse earlier, where they had the final rally before the strike began. The fury...

QUEST: So what...

CALDER: -- that the cabin crew expressed at one man, Willie Walsh...

QUEST: -- so what...

CALDER: -- the chief executive...

QUEST: So what were all those talks -- what were those talks about?

CALDER: They were about the union desperate to get the strike called off because, apart from anything else, it's become very political. They were also about an airline determined to push through changes.

QUEST: OK, let's just look forward, finally. Three days now, do you think the four day strike goes ahead or is it just simply too unknown?

CALDER: Richard, I've been wrong about many things in this dispute. It's taken all sorts of twists and turns. I think by, say, this time on Monday evening, we will know how successful the strike has been and that will set the course for, I hope, a settlement of the dispute before the next one goes ahead and hits another quarter of a million passengers.

QUEST: I can compete with most things, but I can honestly say that JAL 777 taking off for Tokyo or Japan, that's a bit too much for anybody.

OK, now, look, let's have some of your Twitter and e-mail responses to the question of whether or not it is right that they should lose their travel perks, the B.A. staff.

Michael Ruiz (ph) says: "Perks and candies come with the job. It sounds good to unemployed ears."

Atian (ph) says: "The B.A. employees are way above the industry standard. And perks -- they are lucky to have jobs."

Max101 ph: "Why should they get the benefit from the company offers when they are going against them?"

I'm trying to find somebody who's in favor of the strikers keeping their perks, but I'm afraid I'm not being able to.

Oh, yes, here we go.

Rampos: "BA is hitting crew below the belt. These are not mature management policies. It's a cheap shot."

QUEST MEANS BUSINESS.

When we come back, we're going to talk about Google in China and we'll discuss that in just a second.

(COMMERCIAL BREAK)

QUEST: Decision day is close for Google on whether or not it is going to pull out of China. The company says it will make a decision and the historic announcement, apparently next week.

Maggie Lake is in New York -- Maggie, what is the thinking?

Will Google go?

MAGGIE LAKE, CNN CORRESPONDENT: It's certainly looking that way, Richard.

You know, all week, we've sort of been waiting for this. You've been talking about it. It looks now like Monday is going to be the day. Neither Google nor the Chinese government are -- are commenting or confirming that. But reports both inside and outside of China say that Monday is going to be the day. And although there's no comment, it certainly seems like both sides are hardening their position, if anything, and moving further apart from any type of compromise. In fact, China is saying that it will not compromise. So we're going to have to wait and see.

You know, could be there an eleventh hour development?

Certainly. I know a lot of people are hoping there is. It doesn't look very likely right now. It looks like April 10 will be the end of the line for Google in China, in terms of the Web site, anyway.

QUEST: I'm pausing just to let a British Airways 747 take off, because Maggie, even with your voice and mine competing with each other, that will be (INAUDIBLE). But it's all peaceful now, so I can -- I've got you long enough just to ask the question, YouTube and Viacom doing battle. It's getting nasty.

What's happening?

LAKE: Yes. And once again, Google at the center of this, because they own You -- YouTube. They've been engaged in a court battle over YouTube, over copyright infringement. And Viacom is suing Google and YouTube for $1 billion, saying they're infringing on copyrights.

Well, today some court documents were unsealed and it gives us a peek at just how nasty this has been.

Viacom saying, basically, that Google is a sit built intentionally -- intentionally built on infringement -- the whole point is to rip off other people's stuff. And they've got a whole list of e-mails that they say prove that -- that the -- the owners, the managers know -- top brass know that people are posting stuff on there without the proper copyright rules.

But Google responding, saying, listen, this is just sour grapes. Viacom is mad that no one goes to visit their site and that, in fact, they're accusing them of secretly uploading their own stuff onto YouTube to make it seem like the video site is infringing and stealing their material. And Google sums it up finally by saying, listen, if you think we're just a pirate site, then why did you unsuccessfully try to buy YouTube, if you're so against it?

So this is a real they said/they said, very nasty. The gloves are off. In the end, it's still making its way through the system, though, and we'll see where the judge comes down on it -- Richard.

QUEST: I appreciate your time.

Maggie Lake, you've finished your questions as one of these things goes past. And just -- neither of us -- neither of us can compete.

All right, Maggie Lake in New York.

Many thanks, indeed, Maggie, with that.

Now, I think I know one person who might be able to compete over the 747 as it roars past with all engines rolling -- Jenny Harrison at the World -- listen, Jenny, yesterday, you said to me, make the best of the good weather, it wasn't going to last. You were 100 percent right. It's just bucketing it down and it has been.

What's it going to be like tomorrow?

JENNY HARRISON, CNN METEOROLOGIST: Pretty much the same, actually, for you, I have to say. Just as well you've got your trusty rain mac, of course, as always.

But you know what, one place you don't want to be, Richard, your mac would not -- I know. Look at it.

Your mac would not help you at all. And that, of course, is Queensland. Now, that is because we are still following very closely trouble with Cyclone Ului. This is now coming ever closer to the shoreline, you can see here, between Cannes and Brisbane. The warnings and watches are out. They've been posted by the Australian Bureau of Meteorology. Winds just over 100 kilometers an hour and probably going to see it about that strength just before it comes onshore. And, of course, as soon as it does that, it will weaken very, very quickly.

But this has been sitting out there for the last few days, churning up the ocean, churning up the -- also, really causing some erosion along coastal areas. That is where the warnings and the watches are in place.

And this is what I mean, of course. The closer it gets, well, we're going to see even higher waves. They've been at seven meters or above for the last couple of days. And the closer it gets, though, those winds are really going to have an impact.

This is the forecast showing that storm system coming onshore, expected, by the way, to come onshore the morning hours, Sunday, local time. You can see here just between Townsville and Mackay. And look how strong the winds are forecast to actually be -- sustained winds of 111 kilometers an hour.

So it really is just going to get worse. The rains, of course, coming onshore in line with the storm. We could see some flooding. But it's moving quickly and also bearing -- (INAUDIBLE) telling me, as well, that this storm is coming into an area of Queensland that didn't see the worst of the flooding. So that is also some good news.

But once it comes onshore, it should certainly lose a lot of its power. But, of course, the rains are still to come in with that storm system.

Now, Richard, then, of course, it's wet out there in London, but it's mild -- 11 degrees, 16 in Paris. The day time high this time of year is 11 I Paris. I said the same thing yesterday. So you can see we've got this mild air in place. Fifteen in Marseilles right now, 17 in Lisbon.

There is, of course, a lot of cloud and it's that cloud bringing in with it the rain. But, of course, it has now pretty much turned over to rain and there's not really a great deal of snow in the forecast at all. The mild air being pumped up from the southwest. Temperatures above average slightly for Portugal, Spain, the West and Central Med and also southern areas of France. And, as we're saying, not a great deal of snow, just really to the far north, across into Scandinavia, as you can see. But a lot of cloud over the next couple of days.

So even if you don't see a shower, quite cloudy. But at least it will be mild.

Now the winds not too bad at the moment. But my goodness, those winds are really going to have an impact in the next couple of days. Look at Saturday. Look at all these delays, mostly because of the wind. And you'll notice, in all cases, the afternoon hours look to be about the worst.

Some rain delays in Copenhagen. But one thing we haven't got is a snow delay. Really, it's about the rain and the strong winds. Rome also impacted there in the Central Med.

And now to the temperatures on Saturday, 18 in Paris, well above average; 13 in Berlin; 16 in Vienna. There's all that cold air retreating well up to the north and the east.

And guess what, of course?

You know what day Saturday is, officially, the first day of spring. And it takes place at precisely 17:32 GMT. And that is when, the days don't really get longer, of course, Richard. And they don't get shorter in the Southern Hemisphere, of course. It's spring in the north turning into autumn in the south. It means we have more hours of daylight in the north. More hours to enjoy the rain -- Richard.

QUEST: Thank you, Jenny Harrison.

I think there's a conspiracy there. You've just finished exactly as a plane is about to do its take-off run.

You're a hard bunch, by the way, you (INAUDIBLE).

Why should B.A. continue to give travel perks?

The stray cabin crew should all be thacked (ph). You're a hard bunch, that's all I can say.

And that's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest doing me best at Heathrow Airport.

As always, we will have full coverage over the next few days of the B.A. strike. I'll be here tomorrow. Jim Boulden will be covering on Sunday.

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

I'll see you next week.

END