Check of the Markets; United Readies for U.S. Airways/AA Merger
BLITZER: Yesterday the Dow Jones hit a big milestone when it crossed the 16,000 mark for the first time. So how are we looking right now? There you see, pretty flat, up one point basically the Dow Jones. Richard Quest, the anchor of "Quest Means Business" on CNN International is joining us right now. Richard, was yesterday's number more -- anything more than just symbolic?</s>RICHARD QUEST, ANCHOR, "QUEST MEANS BUSINESS": Oh, we're going to -- it's going to do 16,000 again. That I'm pretty certain about. No, what we're seeing today is a pause for breath. I think the market really went on a tear when it got up over 40 points yesterday at the open, and it tore through and then came back. In classic market fashion, Wolf, you know everybody went, oh, what happened? It all happened a bit too quickly and now it's a classic pause for breath. And don't be surprised if you see some money coming off the table. A bit of the old profit taking. This is what we would expect to see at the moment.</s>BLITZER: Yes, and let's not forget, when President Obama took office, Richard, what the Dow Jones was right around 7,000. You think about that now, 16,000. It's pretty amazing the way the Dow Jones, the markets have moved over these past few years.</s>QUEST: There's no question that -- I think the issue is whether the wealth has been equally divided. And, of course, the critics would say it's gone to the top few percentage points and the bottom in equality and the range of inequality in the United States has widened. And that really is the fundamental economic equity argument in the U.S. at the moment.</s>BLITZER: Yes, but you can't deny that a lot of people who have 401(k)s, other retirement plans, they've made money investing on the Dow Jones, the S&P;, the Wall Street markets over these past few years. People have made money. But you're right, there is this income distribution issue. Rich people are making more than middle class or poor people, which is a subject for serious debate. Let's talk about something else right now, something you know a great deal about. Last week the government cut a deal with U.S. Airways and American Airlines that would let the merger go ahead after it was originally opposed. That's putting a lot of pressure on the competition, isn't it? You've been speaking to the head of United Airlines, for example. An airline that wants to make billions in cuts.</s>QUEST: Right.</s>BLITZER: Tell us about your conversation.</s>QUEST: United Airlines had third quarter numbers. And by the airlines own admission, they were not good enough. Now, with an American/U.S. Airways, a new hard competitor, and with Delta eating everybody's lunch, United's chief executive announced today they're going to save, their numbers, $2 billion annually by cutting costs, and by finding some new ways to raise revenue. I asked Jeff Smisek, the chief exec of United Airlines, what that meant.</s>JEFF SMISEK, CEO, UNITED AIRLINES: We'll have hundreds of millions of dollars of additional revenue, including a pretty sizable amount of ancillary revenue, with has a high margin. And with that, I think we ought to be able to earn multiples of what we earn today.</s>QUEST: Oh, ancillary revenues. That means charging passengers for extra things and things and options and the like.</s>SMISEK: Well, a lot of our ancillary revenue comes from our mileage plus program for partners. For example, we have partners with Marriott, we have partners with Mercedes Benz. We have a huge credit card base with Chase today. And that's a very profitable line of business for us. And we intend to expands that.</s>QUEST: But is the goal to increase ancillary revenues for things like baggage or food or any of the other things where you can charge passengers extra?</s>SMISEK: Not necessarily increase, but to offer different products and services. For example we can now -- we've unbundled a lot of things and we can rebundle things into packages, for example, a combination of premier access, a club pass, and a ticket. We can rebundle that into a price that's very attractive to customers.</s>QUEST: So, Wolf, having had a difficult merger with Continental, what I now see from Jeff Smisek and United is they've got the bit between the teeth and they're now determined. They see Delta snapping around. They see American on the horizon. And this is their plan to at least stay as competitive as they can be.</s>BLITZER: Yes, they're all trying to be competitive. All right, Richard, thanks very much. Richard Quest reporting for us. When we come back, we're going live to Sanford, Florida, again. This time George Zimmerman waiting to be arraigned. Our own Jeffrey Toobin, he's standing by. He'll weigh in on what kind of prison time Zimmerman potentially could face. Lots of legal questions. Stay with us.