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NEW YORK: The COVID-19 pandemic has ushered in the era of video conferencing. But can Zoom really replace in-person meetings that require business executives to travel?
American airlines have suffered a sharp drop in this lucrative travel category. They expect a rebound, but not immediately.
“I suddenly stopped traveling in March due to COVID concerns,” JJ Kinahan, TD AmeriTrade market strategist, told AFP.
The outage was a bit shocking for someone who typically spent about 75 nights a year away from home for work. Now your company only authorizes travel on a case-by-case basis.
While Kinahan says she doesn’t miss flights, she does miss the personal connection with the porters and hotel receptionists she would regularly run into on her travels.
As for the Zoom meetings, he said, “there is not the same back and forth.”
Airlines are really feeling the pain: The four largest US carriers, American, United, Delta and Southwest, together lost nearly $ 11 billion in the third quarter.
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Americans have tentatively resumed leisure travel.
For the first time since mid-March, the number of travelers passing through airport security on October 18 surpassed the 1 million mark. But that is still well below the 2.6 million recorded on the same day in 2019.
Many companies have started authorizing travel, but only in very limited quantities.
LAWSUIT RISK
Businesses should consider the legal ramifications of asking employees to get on a plane.
Alexandra Cunningham of the law firm Hunton Andrews Kurth notes that travel is unavoidable in some cases, such as repairs that require a specialized technician.
While some workers in confined spaces, such as slaughterhouses and cruise ships, have been able to claim compensation after falling ill, it is unclear whether an employee could successfully prove they contracted COVID-19 while on a business trip, he said.
Still, “the best protection for an employer right now … is to follow the CDC’s guidance, to limit travel to essential businesses,” he said, referring to the Centers for Disease Control and Prevention.
Different quarantine rules in some states in the US can also make short trips impractical.
READ: SIA to restart flights to New York amid ‘first signs of optimism’ in air travel recovery
The disappearance of business travelers is a big problem for airlines.
While they comprise only about a third of passengers, they account for half of annual revenue, according to the industrial group Airlines for America (A4A).
“BREAD AND BUTTER”
“Business travel is incredibly important to United,” said airline director Scott Kirby on a recent conference call.
“It was our bread and butter,” he said of the segment that has collapsed between 85 and 90 percent.
Kirby tried to stay upbeat, though he said he doesn’t see a rebound until the end of next year, while volume won’t return to normal until 2024.
READ: From travel to nowhere to ‘flight lessons’, how airlines stay afloat amid COVID-19 pandemic
Southwest CEO Gary Kelly said recovery could take much longer.
“Like September 11, everyone said that the world is going to change, that people are not going to fly. They were wrong,” he said this week on CNBC.
But he added: “I bet it’s a long time away; it may be 10 years before business travel picks up.”
Delta chief Ed Bastian said the new normal could mean business travel is 10 to 20 percent lower than the pre-pandemic level as video conferencing replaces some travel.
But “it’s not going to be a substitute,” he said.
Meanwhile, the rise in telecommuting could even help air travel, as remote workers have to return to their offices a few days a month, United Executive Vice President Andrew Nocella said in a conference call.
“Commercial traffic may be different, but we think it will come back,” he said.
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