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Quest Means Business
New Questions About Crash of Metrojet Flight 9268; Interview with former IATA Director General; World Travel Market In London; Obama Speaks in New Jersey on Prison Reform; HP to Split; Trading in MTN Shares Briefly Halted; Security Challenges in Kenya; India Expands Electronic Visas; BAE Systems Investments in Reaction Engines. Aired 4-5p ET
Aired November 02, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[16:00:00]
RICHARD QUEST, CNN HOST: The closing bell is ringing on Wall Street, a start of a new week, and the Dow Jones is showing some strong gains during
the course of the session. Trading is coming to an end, as the man hits the gavel. I think we call that a firm gavel on Monday, November the 2nd.
Tonight, new questions and conflicting claims about the crash of Metro Jet flight 9268. A failure to disconnect puts Africa's biggest mobile operator
at risk. And reaching the final frontier for less. An extra boost for a company making revolutionary engines.
I'm Richard Quest. We start a new weeks together, and I mean business.
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QUEST: Good evening. We begin tonight 224 dead and no answers. It's been two days since the crash of Metro Jet flight 9268 in Egypt. There are
conflicting claims that are emerging that we bring you tonight.
According to one airline official, talked about external influence, the only reasonable explanation, ruled out technical problems and human error.
Then you've got U.S. Officials who say there's no evidence of missiles whilst the Russian authorities say that it is too early to speculate.
Russian and Egyptian authorities are now in Cairo, where they're going to begin the process of opening and analyzing the flight data recorders, but
it's not clear where that process will take place, or indeed whether in that the Egyptian authorities have the capabilities for downloading and
interpreting that data, or whether the boxes will need to be spent to Moscow, Paris or London or somewhere else.
All of this is little comfort for the victims' families. The bodies of the loved once have begun to be returned, repatriated to Russia. CNN's Matthew
Chance has our report from St. Petersburg.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: It's not the homecoming they were meant to have, but the bodies of the 224 victims of
Russia's worst ever plane crash are now returning to St. Petersburg and a solemn welcome by stretcher bearers.
And after two agonizing days of grief Russia's President has finally broken his silence. Appearing on the state television, meeting the country's
transport minister and addressing his nation.
VLADIMIR PUTIN, RUSSIAN PRESIDENT: (As translated) Before we begin to discuss the issues at the crash site I would like to, again, express my
condolences to the families and relatives of the victims. This is a great tragedy and certainly we are with you in heart and soul.
CHANCE: But as investigators scour the remote crash site, the real impact of this catastrophe may be yet to emerge.
The Kremlin has refused to rule out terrorism, but any suggestion this is blowback from Russia's military intervention in Syria retribution for air
strikes there, may have political consequences at home.
For the moment, many Russians are still grieving for what has been a devastating loss of life and a national tragedy. Here at the airport in St.
Petersburg mourners are still placing flowers and children's toys as a mark of respect to the families who have been torn apart. The questions are
being asked about why so many Russians died in such appalling circumstances. Questions only investigators may be able to answer.
Already the airline which operated the crash plane is playing down technical failure as a likely cause, although they may face criminal
prosecution if it's found otherwise.
ALEXANDER SMIRNOV, DEPUTY DIRECTOR GENERAL, METRO JET: (As translated) There is no such combination of system failures that could lead to a plane
breaking up in the air. That is why the only possible explanation of a break of an aircraft could be certain impact, some mechanical or physical
impact.
CHANCE: At a morgue in St. Petersburg the grim task of identifying the remains is now under way. Grieving relatives being escorted in for this
painful formality. But identifying the cause of this tragedy may prove painful, too.
Matthew Chance, CNN, St. Petersburg.
(END VIDEOTAPE)
QUEST: Now the tragedy has raised questions about where exactly is too dangerous for passenger jets to fly.
(BEGIN VIDEO CLIP)
QUEST: Air France, KLM, Lufthansa, Emirates, Qatar Airways, Air Arabia, Ethiad and Fly Dubai, now they've all opted to reroute away from the Sinai
region. ISIS militants have been fighting Egyptian forces there.
[16:05:11]
And at the same time there's the whole question of what's likely to have happened, who should have known what?
Well joining me is Giovanni Bisignani, the former Director General of the IATA, the International Air Transport Association. And is well familiar,
good to see you, sir.
GIOVANNI, BISIGNANI, FORMER DIRECTOR, ITA: Hi, good to see you.
QUEST: First of all, let's deal with the question of, it's too soon to say, but where do you lean on this at the moment?
BISIGNANI: You know, it's difficult to give an answer to this, but let's see some facts. Metro Jet, a charter company, Russian charter company not
any other member, so it did not pass (inaudible) flying a 321, 18 years old, 18 years of age is not important.
QUEST: If maintained.
BISIGNANI: If maintained, it makes a difference. Russia's flight record is not good. What is the scene?
1:50 in the morning, plane takes off from Sharm el Sheikh, a wonderful airport, in a wonderful tourist destination -- location. It flies at 28,000
feet, normal. After 20 minutes, it starts descending. At 6,000 feet per minute.
QUEST: So something catastrophic, something dramatic, something
BISIGNANI: . devastating happened.
QUEST: Right.
BISIGNANi: Now, what happened? It disappeared after from the radars. Three minutes after the plane crashed in the desert. And that is the first
indication that can give you a sense, three minutes. Three minutes means there has been a structural problem, a wing, an engine, a piece of the tail
disappeared from the plane.
QUEST: So
BISIGNANI: So it's not a technical issue, it's a structural problem.
QUEST: You believe it's a structural problem.
BISIGNANI: It's a structural problem. Three minutes, if no -- normally when we have any kind of problem and there is a crash, the captain or the crew
have at least between 5 and 10 minutes to communicate with air traffic control system.
QUEST: So in that situation we're now looking at structural failure of the airframe or some form of external.
But on this question of external, should -- where is the responsibility, do you think, for when you fly over these areas?
BISIGNANI: Let's say the last -- just to give you an idea on the problem of structural problem, the last structural problem, it happened I think 20
years ago, 25 years ago, at the time I was running Air Italia. Now you don't have any more of those kinds of accidents. So structural problem,
it's difficult because of a technical reason.
It could be a structural problem due to an external cause.
QUEST: Right. But on this question of flying over dangerous zones and dangerous areas, do you think those airlines are right to stop flying out
of an abundance of caution?
BISIGNANI: You know, I think so here it's government that has to intervene and know what is a level of safety in that area. I would say in the Sharm
el Sheikh, we all know that the situation was quite easy. In the north part of the Sinai, we know there are some terrorists linked to the Islamic
Republic. So that's a big difference - that's a big difference of the - of the situation.
And if it's not for this, what could be the reasons?
QUEST: Well (inaudible) time, do you have confidence in the Egyptian investigation with the Russians to find out what happened?
BISIGNANI: You know, the experts in looking at those black boxes, it's a (inaudible), it's French.
And I think the most -- the most -- I would say the decision would have to have them involved with the Russians and with Egyptians, because they have
been so involved, so it's important. But the French has a very, very sophisticated kind of experience.
QUEST: Good to see you, sir. Thank you very much.
Thank you.
Now the Metro Jet crash comes as 50,000 travel industry professionals descend on London. Nearly $4 billion dollars changes hands today tomorrow.
And you'll hear from the biggest names tonight.
At the World Travel Market, India's Tourism Ministers working on accessibility and infrastructure. Kenya's tourism minister, it's security
that's the major challenge in recent years. And I spoke to the Secretary- General of the U.N. WTO, Taleb Rifai, he said the biggest challenge is making tourism safe and at the same time friendly.
I asked him what tourism leaders at the conference are saying about the crash in Egypt.
(BEGIN VIDEO CLIP)
TALEB RIFAI, U.N. WTO SECRETARY-GENERAL: What I know is that we should not pre-judge4 things, we should wait. The reasons are yet unknown and of
course whatever the investigation leads to is what we will have to work on from that point on.
[16:10:10]
QUEST: And each year we meet at WTM and behind us is an entire industry selling dreams. But I'm wondering from your point of view what are the
challenges for them?
RIFAI: The challenge is not just to make it safe, you can make it safe, but in the same way not friendly and not seamless and you'll be killing the
very same industry that you're trying to protect.
So the challenge is not just safety at all costs, it's safety with a smiling face.
QUEST: Can that be done?
RIFAI: Absolutely, absolutely. We're not utilizing enough technology, we're not utilizing enough management skills to do it. We cannot have it safe and
not friend, we cannot have it friendly and not safe.
QUEST: Do you think the industry, the individual destinations have quite twigged-- they know they can bring in the military to keep it safe. They
know they can bring down the iron wall, but this other side that you're talking about, the cleverer side, they haven't twigged to that yet.
RIFAI: Well, it's because of the fact that the tourism is not on the table when issues like this are discussed. As much as we respect and we have to
honor and recognize the efforts of the security people, this is not just a security call on its own. Tourism people have to be there and discuss
detailed plans of how things are done.
QUEST: Can we talk about, then, the other big issues obviously growth, the part -- those parts of the world that are growing and the way in which they
can incorporate tourism into their growth strategies.
RIFAI: One thing we must be very careful not to fall into to be anti-growth as such. Growth is not the enemy, we should embrace growth. The challenge
is to make growth and sustainability not a zero-sum game, but two things that work to strengthen even other. And it has been done, it can be done,
that's the real challenge.
QUEST: What I hear from you again in this discussion is it can be done. I often think it does get done.
RIFAI: Oh it does, it does, and there are many, many examples all over the world. I don't want to start naming examples now because I don't want to
distinguish and discriminate between one destination and another. But yes, we can. We can bring the best out of the tourism, but we should not assume
it happens on its own. 1 billion tourists around the world can be 1 billion opportunities or 1 billion disasters. It's all up to us, and we can do it.
(END VIDEO CLIP)
QUEST: Taleb Rifai, from the U.N. WTO, we'll hear more from the World Travel Market, taking place in London.
A new tech firm has been born by breaking away from an old one.
The chief of HP Enterprises says splitting up is the best way forward. You're going to hear Meg Whitman on QUEST MEANS BUSINESS next.
(COMMERCIAL BREAK)
QUEST: Now let's listen to the President of the United States speaking in Newark, New Jersey, on prison reform.
[16:15:00] BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let me first of thank your Chancellor, Nancy Cantor for hosting us here today, where's
Nancy? [Applause]. There she is.
Your Mayor,
Your senator, Corey is in the house, where did Corey go? He (inaudible).
Your congressman, Donald Pain Junior [applause]. You know [laughing]. Over the course of this year I've been talking to people all across the country
about reforming our criminal justice system to be fair, to be smarter, to be more effective.
I've met with police chiefs and beat cops. I've met with prisoners, corrections officers. I've met with families of fallen police officers and
families of children who were killed by gun violence.
I've met with men and women battling drug abuse and rehab coaches and folks working on new solutions for treatment. And I have to tell you that from
all these conversations I have at times despaired about the magnitude of the problem. I've asked myself how do we break the cycle that has young
children somehow on that pipeline where they end up incarcerated.
And yet what's interesting is I've been very hopeful as well during the course of this year. Because what I've seen is that there are people across
the board, folks who work inside the criminal justice system, folks who are affected by the criminal justice system, who are saying there's got to be a
better way to do this. And are not just asking questions about how we make the system smarter and more effective, but are also showing us how it's
done and actually implementing it.
This afternoon I spent with the mayor and senator Booker getting a firsthand look at how Newark is helping lead the way. And as a partner in
our my brother's keeper initiative, the mayor and the senator, congressman and others are working in a public/private partnership to focus on
disrupting the pipeline from underfunded schools to overcrowded jails.
Here in Newark, when it comes to rehabilitating prisoners and reintegrated former inmates into society, you've got organizations doing extraordinary
work. And that's why I wanted to focus here today, because places like Integrity House, the work that's being done in our federal renew program
through the District Court and our U.S. Attorney's office. They are accomplishing extraordinary things. And when you meet folks who are taking
that step to break addiction and overcome great odds, and you see what they've already accomplished and what more they're going to accomplish in
the future, you cannot cannot help but feel hopeful about the future.
Now right now there are 2.2 million Americans behind bars. 2.2 million. We incarcerate people at a rate that is unequaled around the world. We account
for 5% of the world's population, 25% of its inmates. They are disproportionally black and Latino. As one of the Corey's colleagues, John
Cornyn from Texas, no you know bleeding heart liberal here, that likes to point out almost all of these individuals will eventually be released.
More than 600,000 inmates are released each year. Around 70 million Americans have some sort of criminal record. 70 million. That's almost 1 in
5 of us, almost 1 in 3 Americans of working age. Now a lot of time that record disqualifies you from being a full participant in our society, even
if you've already paid your dead -- debt to society. It means millions of Americans have difficulty even getting their foot in the door to try to get
a job, much less actually --
[16:20:24]
QUEST: President Obama speaking there in New Jersey a major prison reform he's hoping to try to get some reform through, but of course it's highly
likely to be a controversial issue in the Presidential election between more conservative hard-line right-wing Republicans and the Democrats. We'll
leave the President there. As he comes back to more details, we'll bring them to you.
London's Mayor is pushing for low paid workers to get a pay rise as part of the living wage campaign. What is a living wage? After the break.
(COMMERCIAL BREAK)
QUEST: A stalwart of the tech world is breaking up 76 years after it all began. HP is now two companies and the separate shares began trading on
Monday. HP Inc. now that's the part that will make devices like PCs and printers and a business with relatively slow growth. But there are
earnings, mature earnings, and as long as we have to print paper, then that's what they'll be.
There will also by Hewlett-Packard Enterprises, which sells hardware for big clients like computer servers and services like cloud computing, data
handling and cyber security. In many ways the enterprises, of course is the sexier part, it's the growing part and it has been the inability of
investors to separate one from the other to decide to split the two in half.
HP's been struggling as businesses have moved to the cloud and sales of HC have fallen. The Chief Executive, Meg Whitman will continue to run the new
part HP Enterprises.
CNN's Poppy Harlow spoke with her and asked her to explain the strategy.
(BEGIN VIDEO CLIP)
MEG WHITMAN, CEO HEWLETT PACKARD ENTERPRISED: Hewlett-Packard as you know is splitting into two companies with really quite different businesses. The
first company is HP Inc, which is our printer and personal systems group, and then Hewlett-Packard Enterprises which is the server/storage,
networking converged infrastructure, cloud, software and services business.
[16:25:05]
WHITMAN: One's really focused at the enterprise and solution selling, to help customers take their legacy IP system and move it to the next
generation. And the other is you know fantastic printers, pcs, ultimately, 3D printing and emersive reality but different customers, different
competitors, and really you know just completely different businesses.
POPPY HARLOW, CNN INTERNATIONAL CORRESPONDENT: We're sitting here one year from the split. What do you hope that HP, the two HPs, HP Inc, and HP
Enterprise, what do you hope they look like, Meg?
WHITMAN: Well, I hope they continue to look like really strong companies that are servicing the customers' needs brilliantly and that we are at the
top of everybody's list when they're trying to think through on the Hewlett-Packard Enterprise side, you know their future IT needs ought to
look like, I hope we're the first people they think of. And I hope HP Inc., continues to lead in personal systems and printing.
And then on the Hewlett Packard Enterprise side, we need to grow. So growth and being at the top of everyone's list for, you know when you've got a
challenge, what do you call?
HARLOW: Let me ask you this Meg, obvioulsy you know that splitting the companies is a risky move. I sat down recently with Jim Chanois who is a
hedge fund manager, and who has been pretty bearish on HP, and I want to play for you what he told me he thinks about the split.
JIM CHANOIS: The split is it epitimises everything that's wrong with Hewlett-Packard. Its another piece of financial engineering. They're not
improving their products, they're not getting the best people, and in Silicon Valley, if you're not growing, you're dying.
I think any tech company that's losing revenues to the tune of 5% to 10% a year ultimately is doomed.
HARLOW: What do you say to him, Meg, and to shows who don't see what you see in splitting the companies?
WHITMAN: Yes, so I would say, listen, we have two very interesting markets, and by splitting these companies, we're going to be able to be more nimble,
faster with more innovation. And if you look at what we have done with the company over the last four years, boy, we have reignited the innovation
engine. Everything from all flash storage array, to converged infrastructure to the machine, to as I said, immersive computing.
So we have ignited the innovation engine, we've delevered the company significantly, and we are poised now I think to take advantage of these two
new markets, and obviously our objective is to prove the nay sayers wrong and deliver for customers.
HARLOW: You joined Ebay in '98 before the last sort of tech bust, and a lot of people talk about, are we in a bubble now? Where might the bust come?
I'm interested in your read on tech right now. Anything frosty that you see, meg?
WHITMAN: Well, first of all, it is an incredibly exciting time in Silicon Valley. I have never seen anything quite like this here. It is a
renaissance. That said, there are certainly sectors that are trading at very high multiple. You know you still have companies that don't have a lot
of revenue, have no profits and are trading at extraordinary evaluations and are very, very young companies, right, they haven't actually proven
themselves.
So I worry that we're there are certainly sectors here that are bordering on being too frothy, but I will tell you there's many different opinions of
that in the valley. I just tend to be a little conservative about those things, and because I lived through that 1998, 1999, 2000 and 2001
timeframe, when I see, you know pre-revenue companies or very small revenue companies with no profit that are valued in extraordinary ways, I just
think, you know, gosh, they may be a little out ahead of themselves.
(END VIDEO CLIP)
QUEST: Meg Whitman talking to Poppy Harlow. And there was a mixed reaction to the breakup on Wall Street.
Now, if you look at HP Inc. that shot up more than 12%. HP Enterprises have a volatile debut, and they did close slightly higher, but nowhere near in
the same range. And I think what that clearly shows you is the revenue stream that is known and is almost certain and mature for HP, which at
least supports the share price at the moment, vis-a-vis a future potentially less certain revenue for the new HPE, the Hewlett-Packard
enterprises.
As for the broader market U.S stocks ended with good solid gains. That market opened up and it never looked back.
The Dow Jones closed 165 points higher, just about the high point of today, and puts it back into positive territory for the year, only just. The
NASDAQ was up more than 1.4%.
As QUEST MEANS BUSINESS continues its a massive find for Africa's largest mobile phone provider it put the company's future in doubt. The bottom
drops out of the stock price, and we'll be in Lagos, so you can have the full story.
(COMMERCIAL BREAK)
[16:30:00]
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QUEST (voice-over): Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in a moment.
When a failure to disconnect puts Africa's biggest mobile operator under threat and four hours to get anywhere in the world, a fantasy perhaps that
may become reality, says BAE Systems.
Before all of that, this is CNN and the network always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Aviation authorities plan to analyze the flight data recorders of the Russian plane that crashed in Egypt. The bodies of some
of the 224 victims have now been flown home to Russia. Experts say it's too early to speculate on the cause of the disaster.
Romania is in mourning after a fire at a night club fire killed 30 people. The fire started when fireworks were set off in the club. The Romanian
deputy prime minister says an investigation has been opened.
European observers says a climate of fear marked Turkey's parliamentary elections. The ruling Justice and Development Party won a convincing
victory on Sunday, taking enough seats to return to single-party rule. Monitors expressed concerns about a crackdown on the media, the violence
and security issues.
People in Yemen are bracing for an unusually strong cyclonic threat heading their way.
Just look at the footage from the Yemeni island of Socotra, where more than a thousand families have had to leave their homes. The storms are expected
to hit mainland Yemen early on Tuesday, in the next few hours.
Japan and South Korea South Korea have agreed to step up efforts to resolve the issue of comfort women, Koreans who were --
[16:35:00]
QUEST (voice-over): -- forced to work in Japan's military brothels during World War II. The two prime ministers met a day after holding a trilateral
summit with the Chinese premier.
(END VIDEO CLIP)
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QUEST: A most dramatic and some would say unnecessary reaction of a failure to disconnect that's putting Africa's biggest mobile operator under
threat. Join me at the superscreens and I'll show you what it means.
It's all about MTN shares. MTN shares, which is the largest mobile operator, fell some 6.1 percent. In fact, they were halted on the
Johannesburg stock exchange, down 6.1 percent, 14-8-1-7.
So why was MTN in such trouble? The firm was slapped with a crippling $5.2 billion fine in Nigeria. The reason is the government says MTN failed to
cut off customers who were using unregistered SIM cards. You might say that's an extraordinarily large amount of money, $5 billion.
But what was the reason behind it all?
Well, MTN is by no means a small operator. Just look at the continent and where it operates. It has 231 million subscribers operating in 21
countries in Africa and the Middle East. Nigeria is the biggest market by far but, as you can see, it goes up here all the way down into Southern
Africa as well.
Christian Purefoy joins us now from Lagos.
Christian, this $5.2 billion is a very large amount of money simply for failing to disconnect unregistered SIMs.
So what is really behind it?
CHRISTIAN PUREFOY, CNN CORRESPONDENT: Yes, just quickly, to put that number in perspective, Richard, MTN Group earned about 12 million --
(AUDIO GAP)
QUEST: Now one wonders whether or not indeed Christian Purefoy -- MTN pulled the plug as we're talking about them.
Is he still there? Let's see if he is, give it one more go.
No, he's not there. Christian Purefoy, we didn't pay the electricity bill. If we can get him back, we will, otherwise, we move on.
Now in common with Nigeria, leaders in Kenya acknowledge that security has been a major problem in the tourism industry.
Phyllis Kandie is Kenya's cabinet secretary for tourism. Kenya, as you'll be well aware, has had some extremely well-publicized deadly tourist
terrorist activities.
But the country has moved forward and has put huge amounts of effort into security. And she told me that it is starting to change the perception and
people outside Kenya are taking notice.
(BEGIN VIDEOTAPE)
PHYLLIS KANDIE, KENYA'S CABINET SECRETARY FOR TOURISM: The past two years has been tough for us in terms of the security challenges that we had.
But lately we've been seeing that, you know, quite a number of countries have lifted their travel advisories; U.K. just recently lifted one of the
last ones that we were looking forward to, lifting mainly destination as the last travel advisory that really was affecting us very negatively.
You've also seen that consequently the Americans have also lifted the travel advisories, so all this is positiveness (sic) for us, confirming
what the government of Kenya has done in terms of beefing up the security situation in the country.
QUEST: And whilst you have beefed up the security situation, though, events such as Egypt or events such as Tunisia remind you that there's no
room for complacency, is there, because those in Tunisia, for example, remind you of the importance that, if you take the eye off the ball, it
could happen again.
KANDIE: And the truth for Tunisia, it's true for Egypt, it's true for Kenya, it's true for any other country in the world. We're facing a
situation that is not unique to any country. It is all over the world the challenge that we face in terms of security.
And so, yes, I agree with you, eye on the ball, all the time. And that's what happening in Kenya.
If you see the positiveness (sic) coming from Kenya, you see prominent personalities going to Kenya. We're getting -- inviting -- the pope is
coming to Kenya next month, you saw President Obama was there just over two months ago. We have all these great personalities coming in, meaning that
there's confidence in terms of what you are doing in terms of security.
QUEST: Now that confidence has to now translate into business. That means how you're going to position the product, because what I see now in --
[16:40:00]
QUEST: -- large parts of Africa, it's all about the differentiation of the product, isn't it?
Everybody -- there's quite a few places for safari, there's quite a few places for beaches, so where is your plans to position Kenya?
KANDIE: As we see, not only tourism, luxury tourism as something that we are selling, we are also seeing business tourism as another product that we
need to sell. And I tell you why, because Africa is now becoming a destination not only for tourism but also for investment. And Kenya has
positioned itself as a gateway for exactly that.
And so that's why we're saying, going forward, we will be selling -- we are seeing a growth in business tourism, we're investing in conference tourism
as -- so Kenya will be the future in terms of a destination for conference tourism.
(END VIDEOTAPE)
QUEST: That's the Kenya minister joining me earlier.
When it comes to tourism, one of the largest countries that shows the most potential is, of course, India, incredible India. Now the country
following the new prime minister's dictate is also ensuring that it's easier for tourists to go and visit. You're going to hear from the tourism
secretary after the break -- QUEST MEANS BUSINESS.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
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QUEST: Can I just clarify one particular point, of course, Christian Purefoy, who was talking about the MTN story, just in case anybody for one
moment thought I was being serious, of course, the line just went down there. These things happen. We're trying to get Christian back. If we do
get him back, we will hear what he has to say.
While we do so, India's tourism minister says better infrastructure is one of the keys to increasing the number of visitors the country attracts. I
spoke to Mahesh Sharma at the World Travel Market and he told me it all begins by simplifying the visa process.
(BEGIN VIDEOTAPE)
MAHESH SHARMA, INDIA'S TOURISM MINISTER: The Indian government had very recently started the e-tourist visa regime and now it's in 113 countries
over the span of one year. It has gone to more than 100. And we're going to touch the figure of 150 in the next three to four months.
That would mean that at a click of the button on the computer, you will get the e-visa at your doorstep.
QUEST: Infrastructure --
[16:45:00]
QUEST (voice-over): -- is a much more difficult question, that you can't deal with in a massive way in quite the same way. Now I know you have new
airports and I know you have spent quite a lot of money developing those new airports. And the airlift has increased quite considerably.
But there is still some way to go, isn't there.
What are your plans here?
SHARMA: Well, we have moved already; the right steps have been already made and, as I mentioned in the press conference today, the government is
all set to launch a new travel visa (ph) policy as well. Now that is going to take care of the ease of doing business, ease of setting up airports,
ease of opening more connectivity, ease of increasing the seats, you know, in terms of capacity.
Now this has been taken up combinedly (ph). And you will have noted that the air, you know, it's -- there's a more open sky, you know, in India.
(CROSSTALK)
QUEST: Now that's interesting. You have used open skies. That's not a phrase that one ever used to use when it comes to India. Protectionism was
what used to be the phrase for India, wasn't it?
SHARMA: Well, I -- what is now is more important, so we are moving forwards the open sky, you already see the private carriers coming to --
coming abroad, coming to lots of countries, and that is expanding day by day.
So this policy, which is a draft policy, will take care of some of these requirements of the day.
(END VIDEOTAPE)
QUEST: That's the minister from India talking to me earlier.
A mixed day for the European markets, London's FTSE closed flat. Shares in HSBC dipped after it posted lower underlying revenues for the third
quarter. They were shadowing a rise in pretax profit.
Now in Frankfurt, Volkswagen shares rallied 3 percent. After the market, though, there was news that the U.S. regulators are accusing the company of
installing systems to cheat emission tests in more cars, including some Porsche models.
Now this is the statement that we've received from Porsche.
Porsche says, "We are surprised to learn this information. Until this notice, all of our information was that the Porsche Cayenne Diesel is fully
compliant. Porsche Cars North America will cooperate fully with all relevant authorities."
So the question, of course, is whether or not this scandal for Volkswagen is now about to get somewhat even larger.
How about a flight to anywhere in the world in four hours?
And a new era in space travel?
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QUEST (voice-over): It's been often promised but never delivered. It's all possible. I'm going to show us space fans that it's all possible. I'm
not only going to show you the look at the latest in invention -- QUEST MEANS BUSINESS.
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[16:50:00]
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QUEST: Just about as long as I can remember, somebody, somewhere, has been promising me that I can get anywhere in the world in about four hours.
They're always saying there's a new kind of aero engine. And one day it could be possible; according to the company that's developing them.
Well, in this case it's Reaction Engines. And it says its technology could also mean a revolution in cheaper, more accessible space flight. The firm
is getting a turbo boost from BAE Systems, the British defense company is agreeing to buy a 20 percent stake for around, if I'm not mistaken, $30-35
million.
Mark Thomas is the managing director of Reaction Engines and joins me now.
I'm trying to be skeptical, not cynical.
Tell me how your engine works in a brief version.
MARK THOMAS, MANAGING DIRECTOR, REACTION ENGINES: Yes, well, it's absolutely revolutionary, it's a visionary concept developed 20 years ago
in terms of concept. Requires some fantastic technology but it's an air- breathing rocket engine so its heart is a rocket engine but the really neat thing is when it's in the atmosphere, it can breathe air. So you don't
need to carry as much liquid oxygen on board your vehicle, massively reduces the weight and you can give it -- into that vehicle design
capability or payload.
QUEST: Now the theory upon which it's based has been known before but clearly there have been problems putting it into practice.
So what have you succeeded in doing to make it executable that previous people haven't?
THOMAS: The really key challenge was you had to be able to deal with extremely high temperatures there that come into the front of the engine,
doing hypersonic speed. The area's around 1,000 degree centigrade, which is more typical of the air that comes out of the back of an engine than
goes into the front of an engine. You have to be able to cool that down really quickly.
So what we have developed in Reaction Engines is a really high-performance heat exchanger that can reduce that temperature by over 1,000 degrees in
0.01 of a second.
QUEST: Now even if you've got the engine, which I agree, I'm not doubting for a moment is the core point, you've still got to deal with the rest of
the aircraft to be able to withstand the forces of that sort of flight.
But that's really up to other people to worry about that.
THOMAS: Absolutely, hence BAE Systems, great partners to have. Fantastically excited to announce this deal today with this company.
Amazing capability that they'll bring to bear on the program.
QUEST: Now as I understand it, the plane takes off and it sort of goes up and it goes almost ballistic, it goes into space and out the other side and
comes down the other side.
THOMAS: That's right.
QUEST: That's a very basic understanding.
THOMAS: Reusable space plane that takes off and lands like an aircraft is one of the concepts that could be made possible by this engine. We have
other possible applications. But that's one of the ones we've been focused on, a reusable late-cost responsive, reliable space access vehicle.
QUEST: Right. Now you're not a bunch of cranks because clearly BAE Systems has decided that 20 million pounds of its hard-earned cash is worth
putting behind you.
THOMAS: Absolutely. We've been through a long process with BAE Systems. They have done their due diligence and they really believe in the
technology. They find the whole concept truly exciting and groundbreaking. They really see something special here and that's why they're keen to do
this with us. And we're absolutely delighted and it will be transformational for the company.
QUEST: What do you now do to get this from concept to something that's working, to something that's in a model to something that flies?
THOMAS: It's pretty close to that process, exactly that process. We have developed and demonstrated some of the fundamental building block
technologies. The next phase is about bringing that together as a system, a system being the engine, and then demonstrating that initially on the
ground, so ground-based demonstration and then taking that to flight.
So in all of those areas BAE Systems can be tremendously helpful and valuable to us because they have proven their ability to do this over and
over again. They have some great capability that can deploy on this program. We know we can work together. It's going to be very exciting.
QUEST: Again, I have done much work and interviewed many times BAE Systems. They really know their onions and they're very much putting seed
capital at the forefront of -- finally I am 53 years old and, in my lifetime, whether it be four score years and 10, will I see this in a
vehicle that will go to the air with passengers?
THOMAS: I think in your lifetime, I believe you will. I think we're two decades away perhaps from that passenger carrying vehicle but space access
within the next 10 to 15 years, that reusable space access vehicle, that's really the focus and drawing --
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THOMAS: -- for the company, that's going to enable us to bring this to market.
QUEST: I was writing that down. I only have to live until 73.
Thank you, sir, thank you very much indeed -- 73, I have booked me first ticket.
I'll have a profitable moment after the break.
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QUEST: Tonight's "Profitable Moment": in some ways my heart always sinks when I have to go and cover the World Travel Market in London or the ITB in
Berlin. This is an industry, the travel, where 10 percent of the population of the world is employed, it's worth hundreds of billions of
dollars, thousands of them, trillions of dollars.
But it's selling dreams and it's sometimes closes its mind and its eyes to some very real problems.
And when you try to prompt them on these problems, they always look upon you as if you've offended them or said something indecent, which is why
today it was particularly gratifying to hear not only from Taleb Rifai, the UNWTO secretary-general, that the balancing act that has to take place is
between security and a friendly face.
And if you look at Kenya, tonight you saw a country that has done exactly that, recognizing a security issue, having to deal with it but also
realizing that it has to do so from a feeling of friendliness and hospitality.
And to make it all complete, India, which is finally executing on its policies of e-visas and infrastructures.
Now that's something to be pleased about at WTM, which is QUEST MEANS BUSINESS for tonight, I'm Richard Quest in London. Whatever you're up to
in the hours ahead, I hope it's profitable. We'll do it again tomorrow.
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