On this episode, Jeff discusses imagining the unimaginable. As the airline industry rebounds after the pandemic, what will the industry look like? Tune in for this and more!

 

Transcript – Plus Bonus content!

Imagine the Unimaginable 

The key to overcoming video conferencing is in aviation’s future, not it’s past

By Jeffrey C. Price

Imagine the unimaginable, and then humor your imagination. Author and former Delta Force operator Pete Blaber listed this as one of 7 core operating principles he followed during numerous missions.

Many airlines, trade associations, and other aviation-related industries report the industry will come back in full once this pandemic goes away, calms down, or we get a vaccine, (or an omniscient spirit-being parts the sky or whatever). Some projections show a need for 250,000 pilots in the next ten years. Airline fleets and business aircraft sales are expected to increase.

I agree. We will come back, better than before in fact. There will always be a need for pilots and others that support flight operations. However, several resources I reviewed failed to take into account a new competitor in the transportation industry, Zoom.

Zoom, or more accurately, video conferencing, is the world’s newest teleportation device. If we want to compete, we need to get real and get moving – faster.

REALITY SUCKS LESS IF YOU’RE PREPARED

We need a realistic outlook on the industry. We did not win World War II because we ignored the fact the other side had airplanes or some other type of weapon system. We acknowledged the facts and then built strategies based on those realities.

Another principle from Pete Blaber is: it is not reality unless it is shared. I would rather have you understand the industry dynamics rather than toss out statistics that don’t consider the effects of video conferencing. It’s a game-changer for our world. It’s like an STD; once you have the virus in your system, it’s there to stay (random reference to make sure you’re still paying attention).

Let’s you and me get real: I’m not saying the entire traveling world is switching to Zoom. We will always need aviation. We have an entire world built on aviation infrastructure. But we’ve stayed in business by filling essential needs, making life easier and more mobile, and adapting to the world’s changes. Adaptation and innovation are essential to growth of our industry.

IT’S NOT JUST AVIATION 

Aviation workers aren’t the only ones seeing the impact of COVID-19; it’s also working in industries that rely on aviation. Workers in the hotel and restaurant industries and airport concessionaires see unprecedented levels of layoffs.

• The American Hotel & Lodging Association at one point, reported 70% of hotel employees are furloughed, with 8 out of every ten hotel rooms staying empty across the country.
• Restaurant worker furloughs are as high as 80%.
• Furloughed employees don’t spend as much money on daycare, gasoline, and consumer goods, which results in even more layoffs.
• Thousands of small businesses have filed for bankruptcy and are never coming back. That’s hundreds of thousands of employees, now out of work, or under-employed.
• Hundreds of big businesses are also going out of business. Add a few million more to the unemployment roles.
• The real unemployment rate is closer to 25%, rather than the 7% reported by the Bureau of Labor and Statistics. Compare the statistics yourself: (the BLS report to get a better understand of what is and isn’t measured https://www.bls.gov/news.release/pdf/empsit.pdf and the LISEP (The Ludwig Institute for Shared Economic Prosperity) at https://www.lisep.org ))

WHO IS COMING BACK, WHO IS STAYING HOME?

Leisure passengers will come back. Virtual reality headsets are awesome, but I still can’t feel the ocean breeze, get sand stuck in my shorts, or get a righteous sunburn to remember the trip by.

But what about the business passenger, who makes up a significant amount of the airline market? What about those frequent flyers who will occasionally make a zoom call rather than getting on a flight from New York to London? In a recent Bloomberg article, in a survey of 10,000 frequent flyers, 31% said they would travel less often after air service returns to normal.

Let’s do some basic math. Consider that some 900 million or so passengers travel out of US airports every year. Pre-pandemic numbers, of course. Let’s be conservative and say that 40 million are business passengers. Now let’s drop our numbers down even lower. Consider if just 10 million of those business travelers took one less flight per year, deciding a zoom call was adequate. Let’s say the average airline ticket is, let’s call it $500 round-trip, which is pretty low, especially for an international flight. That is a potential $5 billion the airline industry will not make because of video conferencing. I am just spit-balling these numbers, so don’t take this as gospel. I’m using it to make a point.

BUT PEOPLE WANT TO MEET IN PERSON, DON’T THEY?

Of course, business relationships are built better, when in-person. Business travel will continue, and shortly after the pandemic, you will see a massive surge of air travel. But as things level off, like many of us have found out during the pandemic, while relationships can’t be built through video conferencing, but they can be maintained.

Just how much in-person contact does your client need? Of course, that is as individual as every grain of sand on the beach (what is it with the beach references today?), and no one can truly predict it for a total population. But like any hurricane, we know that things will be different after it moves through the city.

The popularity of video conferencing may hit the charter and private aircraft industry to some extent. Managers for major department stores (a major user of private and chartered planes) are getting used to having their daily and weekly meetings by webcam. That said, during the pandemic, the charter industry is seeing a boost in traffic, so we’ll see how this works out. What may be bad for one part of our industry, may be good for another.

Some companies are finding an increase in productivity, with many of their employees working from home. There is also less need for infrastructure. The airlines know this better than anybody else when it comes to business; you reduce expenses and increase revenue. If companies can get away with just a few fewer in-person meetings per year, the multiplier effect could be significant.

So where is that good news I promised?

WHAT DOES THIS MEAN FOR PILOT HIRING AND THE FUTURE OF AVIATION? 

Honestly, no one can say how many pilots or planes are needed with any certainty. That 250,000 number might be too low (I hope). We are in unprecedented times. Since the beginning of aviation, we’ve never experienced a worldwide pandemic. No one can accurately predict what will happen. However, we can take a few things into account that may influence future passenger traffic.

During this pandemic, the airlines and charter industries have made air travel much better. These changes may push passenger traffic to even higher levels than before. Flying may be a pleasant experience once again, without being nickel and dimed with fees. It’s cleaner, and overall, the focus has returned to the passenger as a person, instead of cargo.

Just like after 9/11, once this pandemic calms down, the world we return too, will not be the world we left. It’s like Marty McFly going back to an alternate 1985. There are specific changes we cannot ignore, in this new “alternate,” 2020. But we can’t go back to the past to correct our problems, we have to live in the now.

DESPERATION SPARKS INNOVATION

I don’t think that air travel will get back to what it was before. I think it will be better. Desperation tends spark innovation. Companies are making inroads into airliners and business jets traveling at supersonic speeds, but with a noise footprint equal to today’s subsonic planes.

A few business jets already fly just under the speed of sound, and hypersonic business jets have been a topic of discussion going back over ten years.

The critical path to aviation’s future is in the commercial space industry. That industry must make innovations, technologies, and discoveries to make spaceplanes viable to the general public. Their findings benefit the companies in the supersonic and hypersonic flight industries (and vice versus).

The students moving through the aviation program at my university and others may start their careers in a subsonic airliner, a chartered business jet, or a private jet. But I predict by the end of their career, they will be traveling at supersonic and hypersonic, speeds. And going higher, further, faster than we’ve ever gone before.

I’m so jealous.

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