Travel is only now recovering from the pandemic. Total demand/capacity is still 30% lower than it was before the pandemic, and America's international flight demand is only half of what it was before the pandemic. Asia Pacific is 1/5th of what it was! Traffic partners may have been modified permanently.
As an example, a banker friend who is based in NYC, prior to the pandemic would fly to Europe once a month to meet with a specific high-value client, the bank could have been covered out of London, but the clients wanted him. He would catch his flight, to London and then get another flight to Ireland to his meeting destination. The truth is that this was all-in-all a three-day trip. My friend, for a few hours of meetings, would be gone for 72 hours and would return tired and often with a cold, but that was the business!
The pandemic changed that, first off, all meetings are now by videoconference, which gave the client more flexibility in rescheduling and it cut my friend's total travel by almost 20%, but as he said last week, he's only gone to Ireland once since the end of the pandemic, the client is comfortable with videoconference, and they speak more often. He calculated that he saved his company not only in travel expenses, which were substantial but also the lost work time. Now, he visits the client once or twice a year, the client is happy and my friend just recovered 36 business days a year. prior to the pandemic, he would fly at least twice a week (back and forth), now it's once a month. The saving for his employer is substantial, and, as he said the relationship with his clients is better today than it was since they can meet with my friend whenever they need to, He has no issue having two videocalls a week with his Irish client, for him a huge productivity boost. He told me that his travel budget has gone from nearly $300,000 a year in 2019 to less than 35,000 in 2022
Today, the idea that you have to jump on a plane to attend a board meeting is a thing of the past, 95% are done virtually. That business is gone too. Because governments all over the world changed the rules during the pandemic, you can now remotely access all your board meetings. In addition, the technology has evolved to such an extent that 2023 video conferencing and 2019 videoconferencing are completely different basts. That business is gone for good, and that's the profitable business of the airline industry.
As they say, this is not the airline business's first rodeo. Today, airlines are rebuilding their capacity, and some are better positioned than others, still most airlines today are better prepared to face the challenges that the post-pandemic presents.
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