Complex Made Simple

Window or aisle? None! Travel is in so much trouble that video is replacing airlines

Is business travel on the way out?

Cancelling over 4.5 million passenger flights means that (cargo) capacity is scarce, costs more and takes longer The aviation industry supports 65.5 million jobs around the world Zoom is now valued more than the combined market capitalization of the five largest airlines in the world

The International Air Transport Association (IATA) has been pleading governments to come to aviation’s rescue and the pleas have so far fell on deaf ears.

Postal services are in dire straits

IATA and the Universal Postal Union (UPU) warned that air capacity for postal services is insufficient and urged governments to do more to support the movement of mail by air during the COVID-19 crisis.

Owing to the drastic 95% reduction in passenger flights, which are typically used to transport mail, and a 25-30% increase in demand for e-commerce as customers and businesses resort to online purchasing in response to social distancing restrictions, postal administrations are facing a challenge in sending and delivering international mail, in particular, cross-continental mail.

IATA and UPU are calling on governments to facilitate the flexibility that airlines need to meet this critical demand by removing border blockages to ensure trade flows continue, avoiding unnecessary regulations and fast tracking the issuance of permits for chartered operations. 

Read: COVID-19: Insights on Travel Impact, Middle East and Africa

“Posts are trusted partners in the delivery of goods, vital medical supplies and essential information on the pandemic. The cancellation of more than 4.5 million passenger flights has meant that capacity is scarce, costs more and takes longer.” said UPU Director General Bishar A. Hussein.

Financial relief 

Airports Council International (ACI) World and the International Air Transport Association (IATA) have recently come together to call for governments to quickly grant financial relief to assist airport operators and airlines during the unprecedented COVID-19 crisis and support the essential connectivity the industry will provide for economic recovery.

Airports and airlines continue to face a financial liquidity crisis.

The current state of the global air transport industry risks the loss of millions of jobs. The aviation industry supports 65.5 million jobs around the world, including 10.5 million people employed at airports and by airlines, and supports $2.7 trillion in world economic activity

Said ACI World Director General Angela Gittens: “Urgent tax relief and direct financial assistance that is to the benefit of the entire aviation ecosystem is needed to help preserve millions of jobs, protect essential operations, and foster a balanced recovery.  

IATA’s Director General and CEO Alexandre de Juniac said the situation could not be more dire. “Governments will depend on aviation to be ready to lead an economic recovery when this pandemic is behind us,” de Juniac said.  

Read: Passenger Demand Plunges in March as Travel Restrictions Take Hold

Video conferencing vs. business travel

An opinion by the Luftanza innovation Hub said that demand for teleconferencing has skyrocketed as companies around the world have gone online to stay connected while practicing social distancing.

Travel, on the other hand, has come to an almost global standstill.

 The statistic best describing the situation is that Zoom (Video Communications) is now valued more than the combined market capitalization of the five largest airlines in the world.

Zoom’s 2019 revenue was $622 million. Total 2019 revenue of the five biggest airlines came in at close to $205 billion.

 According to Lufthansa Innovation Hub, in late 2018 they wrote: “Technology related to video communication is rapidly evolving from fragile video conferencing to frictionless holographic 3-D technology that emulates face-to-face interactions without the need for physical presence. This trend will allow individuals to interact, brainstorm, and collaborate to deliver collective results without the actual need to travel. Individual workspace pods equipped with high-end virtual-reality tools, potentially set up at major travel hubs (e.g. airports), will imitate the real-time presence allowing all interactions to be highly productive and thereby significantly reduce the need for business travel.”

Read: Impact of COVID-19 on GCC: Growth Implications, and Responses in Mobility Industry

The analysis was tied a 5 to 10-year timeline and scenario before it becomes a mainstream reality. Covid-19 literally squeezed years into weeks.

Today video conferencing still has issues like:

  • “Can you hear me?”
  • “Can you see my screen?”
  • “Please unmute”

The tech is not yet where it needs to be in order to compete with anything close to a face-to-face meeting, but tech companies are quick to remind us that quick fixes are always there to allow for better working tech solutions.

Bottom line. More troubled times ahead for travel.