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Quest Means Business

U.S. Markets Down, Tech Stocks Under Pressure; Major Vaccine Makers Sign Joint Safety; Carnival Implementing Safety Protocols. Aired 3-4p ET

Aired September 08, 2020 - 15:00   ET

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

[15:00:23]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: That was Brooke Baldwin. QUEST MEANS BUSINESS for you now.

The traders are back on Wall Street, but the selling continues, and it is pretty grim, so those of a nervous disposition looks the other way. Down

two percent for the Dow Jones, the big board, which is the broader stocks.

All the major indices are lower. The triple stack is off as well with the largest losses being seen on the tech stocks. NASDAQ is down 3.5 percent.

We will explain that. That look at the underlying stocks in those indices on the Dow 30, and you see Boeing down five percent, Apple down five

percent.

We will understand. We will get to the reasons why on exactly what's going on tonight.

Tech stocks, they are stuck in a selloff mode. It is the third straight day of loss for the NASDAQ. There are technical and underlying reasons.

Highly charged sessions for two companies, both taking from the name Nikola Tesla. We will understand that, too.

And South Africa's economy suffers its worse quarter in decades. It is down nearly 20 percent if not more.

We are live from London on Tuesday, it is September 8th. I'm Richard Quest, and I mean business.

A very good day to you. Good evening to you wherever you are joining me this evening. A terrible day for stocks. As I showed you in the opening,

all the major indices are sharply lower and there is very little enthusiasm for buying at the moment.

It is the technology stocks that seem to be pushing the market down hardest. That's ignoring Boeing, but that has unique factors that we will

come to in just a moment.

The losses across all indices, and oil, which is significant is down nine percent. That is going to be a demand-led fall rather than supply-led as we

saw a couple of weeks ago with the hurricanes.

There is no hiding place either. Tesla, just have a look at Tesla, now, bearing in mind that during the month of August, it rallied up -- not

rallied, it roared more than 80 percent. Tesla is now down as much as 18 percent at the moment. That followed the S&P 500 Index Committee opting

against its inclusion.

Elon Musk has tweeted "A la guerre comme a la guerre." It is the French historic tradition that roughly translates to all is fair in love and war.

There is no love lost it seems at the moment. "A la guerre comme a la guerre." Sounds good.

Quincy Krosby is Chief Market Strategist at Prudential joins me now. All right, the markets are being routed, Quincy. But it has to be seen in

context, I realize, with the great run-up that we saw in August.

Now, I am guessing the run-up wasn't really justified and this is sort of putting things right.

QUINCY KROSBY, CHIEF MARKET STRATEGIST, PRUDENTIAL: Well, yes. I mean, you have a relentless move higher. It was dramatic, and now we know one of the

major underpinnings for that move was call buying that we saw from the big whale, $50 billion worth from Softbank.

We don't know how many other whales there are, but what happens is, Richard, that when you have that, you are working with a broker/dealer

selling you those options, call options on the thought that your stocks that you bought the options on will move higher.

What happens then is that those broker/dealers usually buy that underlying stock as a way to hedge. So you have that going on.

And then, in addition to that, we have inexperienced traders hoping to make a killing. They did, but they went in for too much and kept going and

going. They have gotten killed.

And then what happens with any kind of selloff like this is, one, you are looking for more whales or little baby whales. And then you are also

looking at the margin calls. Those who borrowed money in order to join this relentless move higher. They are under fire now.

And what happens in that in real life is, I will sell whatever I can sell to meet that margin call.

QUEST: All right. Now, Quincy. Is it believed that Softbank, I mean, if they took -- if they made the call option and then they bought the

underlying security, then they've covered or at least hedged.

But is it believed they may have lost money on all of this?

[15:05:03]

KROSBY: Yes, well, they did lose money. They did lose money on it. You see their share prices being battered. Then, again, the question is, how many

others have been doing this?

You know, there is an old expression from Wall Street, Richard. Money goes to where it is best treated, until it isn't, and that leads to that

relentless buying until something comes along that stops it. That's what has happened.

And the market was overbought. It was extended. You began to see call buying outnumber buying, which means I am protecting the downside.

We began to see the idea of, you know, going in and shorting the market. Everyone just caved.

You mentioned Tesla. The analysts that were the most bearish on Tesla actually caved. They wound up just giving up. That ultimately, from a

contrarian standpoint, we were due for this kind of selloff.

QUEST: But, Quincy, I have an element -- forgive me, in my voice, if you hear an element of exasperation bordering on anger that, you know, the

economy's market players here, the economy is not in good shape.

There is no vaccine yet, and it will be months before it is in full throttle. The Fed has changed its inflation, but the Fed is still pumping

money into the economy. So the Fed is the major player in town.

The last thing we need is traders playing shenanigans with the market.

KROSBY: Well, yes. But the fact is they always do. The problem is, as you know, Richard, all of these products -- we haven't even gone into the

products that are filled with leverage, that now are also being unwound.

Sometimes people think they are smarter than Mother Nature. They think they are smarter than the market, and then they get caught. It always happens.

We are not through with this. The unwinding is going to continue until the market just is oversold, the air comes out, and then we start to see buyers

come into these very stocks.

They are good companies. They are companies that make money. They are companies that have a buzzing resume.

QUEST: But.

KROSBY: It is crazy -- yes.

QUEST: If we are looking, though, to trade the value of the stocks in terms of the economy, because, as we look towards the winter, and we look

to the difficulty BS that we are going to be seeing if there is a resurgence, where do you place the market?

I mean, it's been clearly overbought as against the economy, where do you place it now vis-a-vis the real economy?

KROSBY: Well, what is going to happen as is the tech names become oversold, buyers will go in there. Why? Because they are growth names and

they actually made money. The valuations were thrown out the window. No one cared about valuations, and you see what happens.

However, this isn't 1999 when it was only about tech names. You have got -- how about consumer staples? Clorox? You have got SPAM, Hormel, that's the

mother company. Campbell Soups. That's the other side of the equation, the other side of the barbell.

You also have material names moving higher. The weaker U.S. dollar has been helping. The turnaround in China has been helping. And you also have

consumer discretionary names.

Some of those companies that are associated with the housing boom in the United States. They have been doing well. But you can't beat the market

capitalization of these big tech names.

Over in NASDAQ, you have Tesla. Obviously, they are not in the S&P 500. They make up -- the six names make up about 50 percent of the NASDAQ has

unbelievably gone higher.

Money will go back into those names when the share prices come down if -- if the economy is not healing and if we don't have the vaccine on the

horizon.

QUEST: How good to have you with us tonight, Quincy, to make sense of it all. I really appreciate it. Thank you for joining us.

KROSBY: Thank you so much.

QUEST: And we will talk more, and we will keep on top of this.

Now, the other big, extraordinary story today in the business world. Nine of the world's top vaccine makers came together to write a letter and in

doing so, a warning to governments not to start using their vaccines until they are properly safe.

They are the world's largest pharmas, and they are usually fierce competitors. You see the names there on the screen. Now, they are saying

they promise to uphold high ethical standards and will only release vaccines under sound scientific principles.

It follows Donald Trump's suggestion of a vaccine before the election.

[15:10:12]

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: We are going to have it soon. Wait a minute. So now what they are saying is oh, wow, this is bad

news. President Trump is getting this vaccine in record time.

By the way, if this were the Obama administration, you wouldn't have that vaccine for three years, and you probably wouldn't have it at all.

So we are going to have a vaccine very soon, maybe even before a very special date. You know what date I am talking about.

(END VIDEO CLIP)

QUEST: So that indication that there would be some sort of emergency authorization has clearly helped to prompt the vaccine makers. Let's review

where they all stand the moment.

This is the state of the vaccine race, so to speak, at the moment. According to the data from the "New York Times." Now, more companies are

entering the fray. Sanofi and GSK are in Phase 1. In Phase 2, we have old friends Novavax and Johnson & Johnson. There are 14 in Phase 2.

And in Phase 3, the names we have heard again and again -- Moderna, Pfizer, AstraZeneca, all of them of course are part of Operation Whale -- sorry,

the U.S. one, which is under way at the moment where they are buying billions and billions -- Operation Warp Speed -- of vaccines to be given in

the future.

BioNTech's chief executives has told CNN that the companies won't be swayed by politics. There was an exclusive interview with Fred Pleitgen at a time

when everybody is saying they will go along with an October surprise for the presidential election.

(BEGIN VIDEOTAPE)

UGUR SAHIN, CEO, BIONTECH: It has an excellent profile, and I consider this vaccine as a vaccine which is near perfect, which has a near perfect

profile. We have done preclinical experiments. We have shown that this vaccine is able to protect animals from infection in really tough challenge

experiments, and they have, of course, done much more, more testing than we have published so far, and this provides us a lot of confidence in

combination with the understanding of the mode of action, in combination with the safety data coming in from the running trial.

Yes, we believe that we have a safe product and we believe that it will be able to show efficacy.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: You are not in any rush to bring it on the market either, right? Because I mean, as we

have said, something like this should never be rushed.

Because right now in politics, people are talking about the end of October. Everything has to do with the American election. But you guys are just

focused on the science.

SAHIN: Yes, there is no other way. We are considering all options how development can be accelerated. So we have, for example, implemented 24/7

research program. Really ensuring that we don't lose any time.

We are corroborating with the authorities who help us to review our documents including the safety data almost in real time to ensure that

there is no time lost. But we will not make any shortcuts.

(END VIDEOTAPE)

QUEST: We have Stephen Collinson is we me. Stephen, the President is clearly hoping somehow to bamboozle with this idea of an October surprise

on vaccines. It won't work if the vaccine companies won't play along?

STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER: That's right. I think, Richard, what the President wants to do, clearly, is to give everybody

hope, a way out of this nightmare that he has not been able to chart so far and to distract of course from his rather disastrous handling of the

pandemic.

Now, of course, he doesn't have the power to force these companies to apply for authorization. What people are worried about, though, and what this

crisis has borne out is that the regulatory authorities in the U.S. the F.D.A., health authorities like the C.D.C. have proven that they are

vulnerable to political browbeating by the President.

We saw with hydroxychloroquine. We saw with it convalescent plasma. So, I think that is the level of concern. It is not that there is distrust of the

companies or even the lower down the chain scientists in the U.S. or authorities, it's the political appointees who may be persuaded to go along

with the President. And of course we have every reason to expect that he will try to pull the wool over the American people's eyes and claim credit

for something which, you know, perhaps isn't all there at the time.

QUEST: Right, but, Stephen, already we know from surveys and polls that Americans are dubious about taking a vaccine that may not be -- I mean,

even if all goes according to plan, they are still dubious about the integrity of such a vaccine. Who is going to take it early?

[15:15:10]

COLLINSON: That's right. There was a poll recently, a CNN poll which found that 40 percent of Americans are dubious about it. If that was borne out in

reality, it would severely cripple the effectiveness of this vaccine which of course is absolutely crucial to ending this pandemic.

I think also, I think we also have to bear in mind that if Trump announce as vaccine on October 30th, it would mean that 100 million Americans are

going to get a jab on November 1st. This is something that is going to take months and months to be able to be rolled out.

So, I think as much as the President is pushing the vaccine, as much as there are many doubts in the U.S. populace not just about the President's

handling of this, but vaccines as a whole, I think the political impact in the end is going to be a lot less sort of significant a few days before the

election than many people think.

QUEST: Stephen Collinson, thank you. Stephen, unfortunately, we weren't able -- we heard what you were saying, but it wasn't a good connection. So,

I do apologize to our viewers for that. But thank you, Stephen, it was worth staying with you because of the importance of this.

Carnival Cruise Lines is going back in business, or at least taking back to the high seas. The first route in some six months, and it is going to be in

Italy. The Costa Line will set sail from Sunday. Carnival's stock is down 60 percent. It had been down much more, so a marginal rally, as you can see

from the graph there.

The services announced so far, the Italy-based Costa Line will begin over the weekend. Germany's AIDA Line starts in November. In North America so

far, operation is voluntarily suspended along with other major lines until the end of next month at least and that affects those states with major

ports. And the season is suspended in South America, 21 to 22 season is though on sale.'

Australia, Carnival has paused all operations through to the end of the year.

Arnold Donald is the chief executive of Carnival Cruise. Let's meet him and as they say, Arnold, it is good of to you. Thank you, sir. Good the see

you.

All right, so there is an irony here, isn't there? That the European country that was at the worst of the pandemic at one point is now the

country where you feel it is safe enough to begin cruise line cruises again?

ARNOLD DONALD, PRESIDENT AND CEO, CARNIVAL CORPORATION: First of all, Richard, always good to be with you. So, good to see you.

Yes, I guess there's a bit of an irony, but at the same time, if you think about it, the pandemic moved from East to West. So, you know, it's not out

of the question that resumption would also move from East to West.

QUEST: If you look at the measures being taken. The tests, which are all understandable, but the tests, the swab tests, essentially everybody on

that ship has had a COVID test before the thing sails.

These are -- and with social distancing, I mean, can you have a good time? Is it worth going to all this testing and trouble for what's a relatively

short cruise?

DONALD: You know, first of all, it is a seven-day cruise. As you mentioned it sailed on September 6th, Costa Deliziosa is our first ship. Costa

Diadema will be sailing out of Genoa, I believe on September 19th and the Deliziosa will continue its seven-day sailings out of Trieste. Italian

residents only in Italian ports only initially.

But of course, it is worth it. The guests are still going to have a great time. They are still doing shore excursions. They have to stay on the shore

excursions that we define. A lot of testing, of course most of that happens prior to boarding the ship. So once you are onboard, there are additional

measures, of course, protocols.

There is some physical distance, mask wearing in public spaces wherever you can't achieve the physical distancing. There is of course lots of hand

sanitizers and other personal hygiene things.

But the essence is still there. You still can have a good time. You still have great food and great dining. You are still going on excursions and

experiencing new places. And it is still a good experience.

Now, you have to keep in mind, Richard, that the incidence of the COVID-19 is reduced in the Italian population. I mean it is much lower than what it

was obviously at the time when Italy was making the news on that.

QUEST: Right. So this -- it is difficult to overstate the significance in the sense of getting back -- a ship back on the seas. But also, the huge

amount that's at stake, God forbid, if anything were to go wrong.

[15:20:12]

QUEST: So to that extent, how much of this Italian and German experience is preparing you for the U.S. resumption, whenever that might be?

DONALD: As you know, more than half our business is from guests from outside the United States. So it is very important to us in that market.

That market is a very significant market for us.

We have nine world-leading cruise line brands, several based in Europe. You mentioned Costa. We just talked it. AIDA, you mentioned earlier, our German

line. We also have two, Noordam and P&O, two of our British lines and then some of our U.S. based lines, Holland America and Princess, they also sail

lots of European guests.

So it is really important we do it right everywhere, and so it is not just a matter of testing in the airport later. This is actually, you know, real

time experience that's relevant where it is.

Having said that, I think that, you know, the measures that are being taken are the point in time. So as you know, this virus has evolved. Treatments

have evolved. Testing has evolved. Everything is evolving.

QUEST: Right.

DONALD: And what is working right now literally may or may not be required when it is time to sail in the U.S.

QUEST: When we spoke earlier in the crisis, there was a distinct flavor of financial crisis as well as the fleet is laid up and questions about the

survivability. Can you now say that Carnival, not out of the rough seas but that you are at least financially smooth sailing?

DONALD: I am sure all of those puns were intended, Richard, knowing you. But the reality is that, we had to raise over $12 billion of new capital to

give us a long runway for a pause that could be extended where we have no revenue.

We have gone through serious cash preservation measures. As you know, this has been devastating for travel and leisure broadly. And certainly, it has

been a challenge for the cruise industry.

But we have raised capital. That gives us a long runway with no revenue through at least 12 months, if not longer and we have taken the other steps

to ensure that. So it has been a trying time financially, but we rallied. Our people have rallied. The markets, the investors have rallied with us.

The banks have been tremendously supportive, and so we feel financially we are in a position to weather the storm, and we are anxious to get back.

QUEST: You know, I am sure you found this yourself with sea-faring puns, the moment you start them, you go ever deeper into them and before long,

Arnold, you are wondering what on earth you have gotten yourself into and how you are going to dig yourself out.

Thank you, sir. I appreciate it. Arnold Donald there from Carnival. Arnold was talking about runways, long runways -- but the runways aren't long

enough for the aviation industry.

Alexandre de Juniac, to the continue the puns, the head of IATA, after the break.

(COMMERCIAL BREAK)

[15:25:49]

QUEST: IATA, the airline association believes that European flyers can learn to live with the virus. It is calling for a traffic light system to

be introduced across the E.U. Red, amber type of system with the green telling flyers when it is safe or when they need to quarantine.

Data should be shared and quarantines should be the last resort. The industry worldwide is losing a quarter of a billion dollars a day.

Alexandre de Juniac is the CEO of IATA, he joins me now.

Alexandre, I am in the middle of my third quarantine. I am in quarantine here in London because there is no transatlantic corridors. So you must be

very frustrated at the inability of airlines to get governments to actually create these corridors necessary.

ALEXANDRE DE JUNIAC, DIRECTOR GENERAL, INTERNATIONAL AIR TRANSPORT ASSOCIATION: You are certainly right, we are very frustrated. Because you

know, we have worked a lot with -- we have convinced government to put together a takeoff set of measures that are now implemented everywhere. But

the borders still remain closed.

Either they are fully closed or you know governments are restricting flights or travel by imposing quarantine, and the quarantine is a clear

stop to any travel. Who would like to travel for two weeks, you would have to spend that two weeks in a quarantine in a hotel or whatever --

QUEST: The British government makes the point that, look, you travel at your own risk. Quarantines are necessary, they say. But your argument is

that the way in which these are imposed at very short notice, in draconian ways just basically kills the whole industry.

DE JUNIAC: That's exactly the point. It kills the industry and what they are saying to governments is, we fully understand that you want to protect

your population and to avoid reimporting or importing the virus. We understand that fully.

And we say to government, there are now processes that should be implemented to reduce significantly, minimize the risk of importing virus

by testing passengers. The industry -- the testing industry, the pharmaceutical industry is now ready. They are antigen tests that are ready

that are quick, that are scalable, that are produced in very big quantities, millions per day in October. So we will try to discuss and

convince government.

QUEST: Right.

DE JUNIAC: That by testing passengers, they can avoid imposing quarantines.

QUEST: We have seen a good example of what is going to happen or could happen on the wider scale. The sheer number of jobs that are being lost.

Virgin Atlantic manages to get itself refinanced and still has to lose another 1,500 jobs. Is it your fear on travel, aviation and tourism that

there will be jobs that will never come back?

DE JUNIAC: It is a real risk because, you know, there is a very big need for this action because we have no revenues basically or major drop in

revenues. So it triggers immediately restructuring plan, layoff, and probably a shrinkage of this industry.

So in the future, the coming two to three years, it is very likely to happen that the number of companies will reduce. That the size of companies

will probably be smaller because they will operate less flights. They will open less routes.

And at the end of the day, you know, there are two big diseases in that division. First one, for the passenger, there is less connectivity, less

choice, less travel, and for the economy. Much less strong, much less fast recovery.

QUEST: All right. Alexandre de Juniac, your line was just breaking up a little bit there, but we got the -- we certainly got the point Thank you,

sir, as always for joining us in -- aviation is a crucial part of QUEST MEANS BUSINESS coverage. And markets, I do need to show you what the

markets are doing before we take a short break. They are down heavily. You'll see the numbers on both the Dow which is off nearly 500 points.

Nearly just off the worst of the day. Triple stock shows the NASDAQ is down even more. The NASDAQ is down nearly four percent. We will talk more about

this as the program goes on. This is QUEST MEANS BUSINESS live tonight from London.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There's a lot more QUEST MEANS BUSINESS tonight from London. Another alternative -- the alternative fortunes for

the companies named after Nikola Tesla. We'll look at both of them. And Willie Walsh retired today after 15 years. British Airways and IAG. You'll

hear his thoughts on leadership from the man who went from the cockpit as a captain to the -- to the boardroom as the CEO. First, though, the news

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

The Russian media says the Belarusian President Alexander Lukashenko is blaming the United States for the protests in his country. He says

Americans are behind the telegram channels demonstrators are using to gather and communicate. Lukashenko added he has no intention of resigning

as protesters have demanded. Russian activists has at least three volunteers got sick after an attack on the Siberia office of the Kremlin

critic Alexei Navalny. The activists said two men ran into the office and threw a bottle of yellow liquid. The German government says Navalny was

poisoned by a nerve agent last month. He's recovering in a Berlin hospital.

South Africa is condemning U.S. President Donald Trump over allegations in a new book by his former attorney. The Michael Cohen claims Mr. Trump

crudely insulted South African President Nelson Mandela, following his death in 2013. A statement from South Africa's ANC Party described Mr.

Trump as divisive and disrespective -- disrespectful. The White House has denied the claims.

[15:35:21]

South Africa's economy dropped 17 percent in the second quarter, largely, of course, as a result of it being shut down. South Africa also had some

rather unusual restrictions, such as a national ban on cigarettes and other such things. Eleni Giokos is our correspondent in Johannesburg, joins me

now. Not surprising, Eleni, to see the market -- the drop in GDP by such a large extent. Take me underneath the figures and tell me what they mean.

ELENI GIOKOS, CNN INTERNATIONAL CORRESPONDENT: Yes, I mean, look, the point here is that it came in worse than anticipated. We constantly revised the

number downwards. And the extent of the lockdown is really reflective in that 17 percent contraction in GDP. But importantly, Richard, that South

Africa was already in a recession in the first quarter of this year before the pandemic. This is the fourth consecutive quarter of contraction for

South Africa, which means that the fundamentals in the country were already questionable before COVID-19 hits.

And of course, the pandemic has merely exacerbated an already downward trend. We saw big hits on all fronts, manufacturing, construction, you

mentioned alcohol and tobacco, that was down 92 percent. And of course, one of the strictest lockdowns in the world was, you know, with an aim to try

and curb the spread of COVID-19. South Africa embarked on a very strict lockdown before COVID-19 cases got out of control. They were able to

flatten the curve, but then it became a lives lived versus livelihoods conversation. And then, they were an effort -- there was an effort to try

and reopen the economy. But then, Richard, we're facing an electricity crisis now. And that basically means hopes for a V-shaped recovery, or at

least a straight line up has completely been derailed.

QUEST: Before just throwing this out to you, you'll have heard what's saying in the news, this story about South Africa and its response to

apparently crude comments made by President Trump concerning Nelson Mandela. I mean, you know, whites, blacks, every kind of color and

political persuasion in that country reveres the man. What's the mood on that?

GIOKOS: Yes, I mean, it's been interesting. I was looking at what the Nelson Mandela Foundation came out with, and they actually used a quote by

Nelson Mandela, something that President Trump should take into consideration, and he says, "A good leader can engage in debate frankly and

thoroughly, knowing that at the end of he -- at the end, he and the other side must be closer and thus emerged stronger."

So, it was interesting to see not only the government, but also the Nelson Mandela Foundation come back and hit against the news that President Trump

had criticized Nelson Mandela, a man that has been revered for reconciliation in South Africa. It's an interesting one. Of course, the

White House, as you say, has denied those claims. One to definitely take a look at in terms of relations between the U.S. and South Africa going

forward, I would say.

QUEST: Eleni, thank you. There's much we must talk about in the days and weeks ahead, particularly those electricity cuts and strikes taking place

in South Africa. Eleni Giokos in Johannesburg. After the break, it took some time and he stayed longer than he'd intended. Willie Walsh has now

finally left the building waterside, no longer the head of IAG. We'll hear his thoughts, though, on leadership from the man who's a leader for many

years.

(COMMERCIAL BREAK)

[15:40:00]

QUEST: Willie Walsh, the chief exec of IAG, owners of British Airways, Iberia, and other airlines has left the building. He's finally retired

several months after he first said that he would. The COVID pandemic forced him to delay his retirement. Willie Walsh has been at the helm of an

airline for more than 15 years. First, he was a pilot for Aer Lingus, then chief executive of Aer Lingus before 15 years ago, joining British Airways

as the CEO. He put together the group IAG, bringing in other airlines, and now finally says, it's time to go. He spoke to me just before he turned in

the keys.

(BEGIN VIDEO CLIP)

WILLIE WALSH, OUTGOING CEO, INTERNATIONAL AIRLINES GROUP: It's a very long time. And to be honest, I never thought I would do that. When I signed up

for British Airways, I assumed it would be three to five years, you know, the average tenure of a FTSE 100 CEO is still only five years. So, to have

done 15 years, 15 years plus. Yes, it's -- I have to be honest, Richard, it's not what I had expected, but I've enjoyed every minute of it.

QUEST: The one thing that comes back to me when I review, you know, your time at Aer Lingus, your time at B.A., your time at IAG, you seem to have a

-- have a -- have a -- I want to say love of a fight. You closed B.A. in 2010 or the Union's did, and you saw that fight. At Aer Lingus you have

problems, work management problems that's an old management, but do you go around spoiling for fights?

WALSH: Quite the opposite. And you know, I don't believe in looking for a fight, but I've always been clear, I'm not going to walk away from one. So,

if you look at my career, you know, yes, I have had a few skirmishes along the way. But not of them started by me. You know, where we face challenge.

I've been absolutely clear, you need determination to see your way through, and I think I have that determination. I don't know where it comes from,

probably, you know, from my parents, but, you know, I don't look for a fight, but I'm not going to walk away if somebody wants to pick one with

me.

QUEST: There have been times and I'm not being uncharitable here, where you've not exactly been the most popular CEO.

WALSH: But you don't do this job to be popular, you know? And I've always been clear on that. You know, I realized very early on in my career, that

if you were to run your business to satisfy the press or to be popular with people, you would go out of business because it's a -- you know, the

airline industry is brutally competitive. And to succeed, you have to be prepared to take decisions that are unpopular. And I think that's what

leadership is about. You know, good leaders will face up to difficult challenges.

I know lots of people who, when it comes to the crunch, don't like to give bad news, and don't like to face difficult decisions. I've never had a

problem with that. And that may come from my training as a pilot, you know, where you don't have the opportunity to put everything on hold and wait for

people to decide what to do. You have to, as a pilot, and particularly as a captain, you have to be ready to make decisions. And you know, to assess

everything quickly, make decisions in the interest of safety and move on. So, yes, you know, I've never sought to be popular and, you know, I'm

popular with my friends, but, you know, I probably have fewer than most people.

[15:45:19]

QUEST: The ability to drive forward change in the airline industry, which is the most complicated and the capital costs, and all of those sorts of

things. Did you ever -- what was your moment of doubt? In 2010, look, you're shaking your head before we've even (LAUGHTER)

WALSH: No, I've never had any doubts. And you can't, you know, you -- I've been really lucky in my career. You know, I've got to where I am not

because I was the best or most-qualified person, but I was the person in the right place, at the right time, and the person who took the risk.

Because it's no secret, you know, I became the CEO of Aer Lingus because nobody else wanted the job. You know, other people were offered this, and

they turned it down because they saw an airline in crisis that was unlikely to survive.

So, I became the CEO and that, you know, I'm not trying to rewrite history here. I know myself; I became the CEO because nobody else wanted that job.

So, you know, I happen to be in the right place at the right time. And I happen to have the determination to take on a challenge. And, you know, we

saw that challenge true, not just me, you know, but working with a team of people. And as you know from my time at Aer Lingus, I worked very closely

with two colleagues there, Brian Dunne and Seamus Kearney, the three of us, you know, I think collectively achieved fantastic things at Aer Lingus.

And, you know, that's really defined my career, I suppose.

QUEST: When you sat in exec meetings and your weekly executive meetings, how do you choose between your children? I mean, B.A. is obviously the

favorite child since you joined -- you were the CEO there. How did you stop yourself?

WALSH: I think you have to be disciplined. And, you know, I found it very tough when I became the CEO for Aer Lingus and being the COO, I found it

very tough to let go areas of responsibility that I had, but I learned a lot from that. So, the same happened at British Airways, becoming the CEO,

and then moving on to IAG, you know, letting go of the responsibility, particularly for operational issues in British Airways. And I think you

just have to do that. You have to have good people with you and around you, and you have to trust them. And I've been very, very lucky, you know, to

work with fantastic people over the years.

QUEST: I've read all the comments where you've said, you want to go on holiday, you want to rest, you're going to go and travel and see the places

that you've been to but never seen and you're not getting away with that. And what are you going to do next? Rumor is if and when the job at IATA

comes up, Willie Walsh is the man.

WALSH: Well, I can honestly tell you, and you've asked me these questions before. I said I would retire when I finished up at AIG. And as you know, I

originally said I was going to retire when I was 55. I'm 58 -- 59 this year, so I've stayed on a lot longer than I had expected. And, you know,

I'm not looking to do anything else. I think this is an industry that is fascinating and challenging, but, you know, working 12 hours a day and, you

know, it's only five days a week. It was seven days a week for a long time. But you know, it just gets you after a while. And so, I'm looking forward

to taking a break.

(END VIDEO CLIP)

QUEST: Taking a break. I give him about six months, maybe a year, I don't know, before we hear what Willie Walsh is up to next. When we come back

after the break, I can tell you what (INAUDIBLE) next. Nikola, Tesla, two companies named after him. One called Nikola, one called Tesla, and both

having very different reactions on the market. We'll talk about it after the break. It's QUEST MEANS BUSINESS, (INAUDIBLE)

(COMMERCIAL BREAK)

[15:50:00]

QUEST: There are two car companies who are inspired and named after the same inventor, the electrical engineer Nikola Tesla. He lends his name

obviously to Elon Musk's Tesla, Inc. But there's also the startup Nikola Corporation, and that makes green vehicles. There you have, Nikola himself.

Now, Nikola says, that's the green vehicles, not the man. Badger pickup truck will be ready by 2022. With a battery and the hydrogen fuel cell

models. General Motors is to supply the fuel cells.

Nikola shares were up, or Nikola, it must be Nikola. There we go. Up -- they were up 11 percent on G.M. taking a stake. Tesla's was down 20 percent

on woes concerning investors. Paul La Monica is with me. I think it's Nikola, Nikola Tesla. But these two companies, both going in opposite

directions, and yet both in the same business.

PAUL LA MONICA, CNN BUSINESS DIGITAL CORRESPONDENT: Yes, clearly, I mean, Tesla had all the momentum, Richard, you had the speculation that it would

be added to the S&P 500 Index soon. It's not. We had some new news Friday with the S&P, CA announcing some other constituents and one of them, Etsy,

the arts and crafts online retailer. They're being added, but not Tesla. But I think in the case of Nikola, you have a company that is getting the

backing of G.M. And that's reminding people that there is a lot of competition in the electric vehicle area.

You've got Nikola, with G.M. You have Rivian, another hot electric truck company of Lordstown Motors, which is going public as well, not to mention

Volkswagen-Toyota, all the major auto companies have realized, they've woken up and found religion in electric vehicles. This isn't going to be

just Tesla's market to lose.

QUEST: Nikola and its trucks will make a wave. But Tesla and its cars are sexy.

LA MONICA: Yes, I think a lot of consumers still like the Model S, the Model X. Those are the ones that are a little pricier, a lot of early

adopters buying those. But now you have the Model 3 which is the quote unquote, more affordable Tesla sedan. The model Y SUV is coming. There's

the cyber truck, as odd as it may be, may have some fans.

And keep in mind, Richard, too, Tesla with its stock pulling back in the past couple of days, it's still up more than 300 percent in 2020. So, Elon

Musk isn't exactly poor as we know, because he's rocketed up the Forbes and Bloomberg ranks like the World's Wealthiest People because of his

investment.

QUEST: OK. So, Elon Musk's cars have split the stock, which is we've talked about on this program, is a clever way of sort of making it look less

valuable. So, people in retail investors will buy it. But the run up was unjustified. I sort of always wonder where is fair value for that stock?

LA MONICA: Yes, I think it is hard to say. I mean, to be fair, Tesla has now been consistently profitable for a couple of quarters which is why you

had the speculation that it might get added to the S&P 500 soon. But still, you're talking about a P.E. multiple for us old folks who still care about

traditional valuations.

[15:55:10]

I say that sarcastically, of course, but this is a company that is still trading at an exorbitant premium to other automakers, when you look at its

price to earnings ratio, and that does still matter. And I think it just goes to show even though the stock price is cheaper, so to speak, because

of the split, you've had the stock fall just going to show that people were willing to buy it when it was in the quadruple digits. They're not willing

to buy it now that it's triple digit stock, really shows that it's all about momentum. It's not about what the share price is.

QUEST: Paul, the Dow is creamed today at two percent. NASDAQ's off the best part of four percent. Is this just a froth of an -- of an unseemly rally

that we saw in August? Or is this something more and more going on?

LA MONICA: I think that it's going to be hard to say just yet because, I mean, I'm not sure what more the Fed can do, the Federal Reserve, to

support this stock market. I think investors now are waiting for the prep in Congress to come up with a deal on new stimulus. And that's what might

be the second leg to get this rally going again, unless I don't know. I mean, does the Fed go negative? I seriously doubt they cut rates below

zero.

QUEST: No.

LA MONICA: If the Fed may have to --

QUEST: No.

LA MONICA: if it continues to fall.

QUEST: No, they've said they weren't, but that doesn't mean anything. Paul La Monica, thank you. We'll take a profitable moment after -- we'll take a

profitable moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment, Willie Walsh's mantra, when he said tonight about leadership, the outgoing CEO of IAG. He said he didn't become

chief executive to be popular. Well, you can certainly say that. If you look back at the strike of British Airways at 2010, which is one of the

most bitter, and then you look back at the current -- at this pilot strike at British Airways.

But he did create an airline group that was amongst the most profitable in Europe, behind Ryanair and certainly, of the three legacies, Lufthansa, Air

France-KLM and IAG, be it that the IAG group is the most profitable. But this does beg the question, this idea of strong leadership, the role that's

necessary in an industry like aviation.

In the German market, of course, there's a lot more consensus, but it hasn't stopped (INAUDIBLE) from being very tough with the pilot's union.

And if you look at the future direction of running an airline group, IAG now Willie has gone. Well, Luis Gallego has his work cut out for him. It's

one of the most profitable, but it has deep-seated problems at British Airways with industrial relations, (INAUDIBLE) pilots can be truculent too.

And what do you do about level, the long -- for the long haul, low cost carrier. Willie Walsh was one of those characters you enjoyed interviewing

every time. He's that sort of colorful character that will be missed. And that's 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. The market is heavily down. You might want to look the way at the closing bell

rings.

END