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kalvado
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Re: Pt2: SouthWest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 2:49 pm

travelsonic wrote:
rising wrote:
It's not just about the money. If it was, travel, meetings, conventions, etc. would have come full stop back in the 90s with the advent of the internet and webinars.


Would it?? Seeing how even in the 90s there were a lot of hard limits to the tech that we don't have today, that did somewhat limit its usefulness?

There is a pretty interesting argument that fax machines significantly undermined the business case for Concorde as a lot of legal documents could now be sent across Atlantic - and across the world - faster than any airliner could take them.
 
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lightsaber
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 3:11 pm

Folks, take the vaccine discussion to non-aviation.
Winter is coming.
 
jagraham
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Re: Pt2: SouthWest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 3:16 pm

FLALEFTY wrote:
I'm going to take an optimistic stance and predict that a safe and reliable vaccine will be available within the next year. However, even with a good vaccine it will take months to treat a large enough portion of the world's population for things to return to "normal". Therefore, patience and diligence will be required by all, because there are no short cuts out of this pandemic-constructed maze.

However, airlines will be facing some tough long-term planning decisions:

For the US "Big 3", they will need to grapple with multiple issues: 1) Do they have too many hubs? 2) Fleet simplification (while still dealing with the impact of the B737MAX fiasco). 3) Future relationships with their regional partners, especially as it pertains to 50-seat jet flying (do they still need this feed?). 4) Inflexible work rules that currently limit productivity. 5) How much international flying is needed and to where? 6) How do they service all that debt they took on when business was booming?


1) They don't have too many hubs at this time. Hubs allow the US3 to dominate flying from a metro area.
That may change if the major companies in a metro area reduce travel more than say 2/3

2) Each of the US 3 was handling fleet simplification in their own way. COVID actually makes that easier since there are large redundancies in aircraft. Unless you are AA and most of your aircraft are new and mortgaged.

3) There will be blood regarding the regional partners. Has already started (with Expressjet). But 50 seat flying, while it may shrink, will not disappear anytime soon. There are markets that will pay the 50 seat cost.

4) I don't understand what work rules are limiting productivity other than scope clauses. Which for the most part, are legitimate efforts to keep airlines from flying more than half of their flights with regionals

5) International flying is the big question. For the most part, the US3 fly to major city pairs that will survive if anything international survives. But will international flying survive? Or will the US3 have to dump most of it to conserve cash? Significant question that deserves its own thread.

6) DL and UA have been paying down debt since 2008. WN never had a whole lot of debt. The only one with significant debt issues is AA. Which has its own thread already.
 
LAXdude1023
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 3:21 pm

Making statements like "corporate travel will be less than 1/2 the size of 2019" is pretty useless. How big the industry is going to be is something no one on here knows. We cant predict it, we just dont know. Only time will tell.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
FlyingElvii
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 4:22 pm

LAXdude1023 wrote:
Making statements like "corporate travel will be less than 1/2 the size of 2019" is pretty useless. How big the industry is going to be is something no one on here knows. We cant predict it, we just dont know. Only time will tell.

Perhaps, but you can’t do long term strategic planning that way. You have to make your best educated guess, and go for it.
 
ethernal
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 4:36 pm

LAXdude1023 wrote:
Making statements like "corporate travel will be less than 1/2 the size of 2019" is pretty useless. How big the industry is going to be is something no one on here knows. We cant predict it, we just dont know. Only time will tell.


Agree that no one can predict the future, but you can easily bound things and get a decent estimate.

At least in the near term, it is highly unlikely that it will be larger than it was in 2019. It will also not be 0, or even 10% - even now about 5-10% of business travel is still happening. So at a minimum, your range is 10-99%. 50% is probably a decent estimate - +/- 10-20%.
 
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NameOmitted
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 4:58 pm

ethernal wrote:
The point is that, yes, a vaccine will result in normalization for all but the most vulnerable populations. That's what relevant to this discussion.

But what is normal when the legacy bushes model requires high yield business travelers, and every major firm in the world now has the IT infrastructure to reduce the amount of business travel that is necessary?
 
LAXdude1023
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 5:14 pm

NameOmitted wrote:
ethernal wrote:
The point is that, yes, a vaccine will result in normalization for all but the most vulnerable populations. That's what relevant to this discussion.

But what is normal when the legacy bushes model requires high yield business travelers, and every major firm in the world now has the IT infrastructure to reduce the amount of business travel that is necessary?


But we had that in 2019.

This again goes back to we dont know what the long term patterns of humans are going to be. If I was asked to guess, corporate travel will be about 75% of 2019 long term. But that said, its an estimate. Human patterns cannot be predicted. Thats why I think UA has had the best approach in the pandemic. Theyve been very conservative and have upscaled as needed. Thats in contrast with other airlines that have operated as big a schedule as possible.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
32andBelow
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 5:20 pm

LAXdude1023 wrote:
NameOmitted wrote:
ethernal wrote:
The point is that, yes, a vaccine will result in normalization for all but the most vulnerable populations. That's what relevant to this discussion.

But what is normal when the legacy bushes model requires high yield business travelers, and every major firm in the world now has the IT infrastructure to reduce the amount of business travel that is necessary?


But we had that in 2019.

This again goes back to we dont know what the long term patterns of humans are going to be. If I was asked to guess, corporate travel will be about 75% of 2019 long term. But that said, its an estimate. Human patterns cannot be predicted. Thats why I think UA has had the best approach in the pandemic. Theyve been very conservative and have upscaled as needed. Thats in contrast with other airlines that have operated as big a schedule as possible.

We’ve had this level of video conferencing for over a decade now. I don’t get the infatuation with zoom.
 
ORDPlanesTrains
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 5:55 pm

32andBelow wrote:
LAXdude1023 wrote:
NameOmitted wrote:
But what is normal when the legacy bushes model requires high yield business travelers, and every major firm in the world now has the IT infrastructure to reduce the amount of business travel that is necessary?


But we had that in 2019.

This again goes back to we dont know what the long term patterns of humans are going to be. If I was asked to guess, corporate travel will be about 75% of 2019 long term. But that said, its an estimate. Human patterns cannot be predicted. Thats why I think UA has had the best approach in the pandemic. Theyve been very conservative and have upscaled as needed. Thats in contrast with other airlines that have operated as big a schedule as possible.

We’ve had this level of video conferencing for over a decade now. I don’t get the infatuation with zoom.


Because we had a decade of road warriors that were doing anything and everything to protect their FF status saying "I need to be there in person."

I know, because I was one of them.

Yes, it is better face to face, but now that more people are used to connecting via WebEx/Teams/Zoom companies are starting to ask if it's enough of an improvement to justify the thousands of dollars per person per trip. Since it was all we had for months, and the world didn't fall apart, more and more companies are saying it's good enough.

Everyone that keeps saying "we need to get back on the road" should ask themselves if the service really is THAT much better or do they not want their EXP/1K/Diamond and associated perks to go away. I know this is an airline site and I was one of the biggest defenders of business travel, but unfortunately, this is a game changer.
 
32andBelow
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Joined: Mon Sep 03, 2012 2:54 am

Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 5:58 pm

ORDPlanesTrains wrote:
32andBelow wrote:
LAXdude1023 wrote:

But we had that in 2019.

This again goes back to we dont know what the long term patterns of humans are going to be. If I was asked to guess, corporate travel will be about 75% of 2019 long term. But that said, its an estimate. Human patterns cannot be predicted. Thats why I think UA has had the best approach in the pandemic. Theyve been very conservative and have upscaled as needed. Thats in contrast with other airlines that have operated as big a schedule as possible.

We’ve had this level of video conferencing for over a decade now. I don’t get the infatuation with zoom.


Because we had a decade of road warriors that were doing anything and everything to protect their FF status saying "I need to be there in person."

I know, because I was one of them.

Yes, it is better face to face, but now that more people are used to connecting via WebEx/Teams/Zoom companies are starting to ask if it's enough of an improvement to justify the thousands of dollars per person per trip. Since it was all we had for months, and the world didn't fall apart, more and more companies are saying it's good enough.

Everyone that keeps saying "we need to get back on the road" should ask themselves if the service really is THAT much better or do they not want their EXP/1K/Diamond and associated perks to go away. I know this is an airline site and I was one of the biggest defenders of business travel, but unfortunately, this is a game changer.

The world hasn’t fallen apart yet. But how many equipment upgrades and scheduled services have been put off this year? I’d reckon a lot
 
Miamiairport
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 6:41 pm

Making statements like 1/2 of business travel will be no more is nothing more than grasping at straws. The truth is while it's certainly plausible and highly likely that business travel will never recover 100%, long term no one knows. Five years from now will it be down 50%, 25%, 10%???

The "difference" now is that video conferencing by force has been rolled out to a scale never imagined before. Suddenly we all are communicating by virtual. And that has lead senior managers to believe that some in person activity that involves travel can be now accomplished by this means, and what a cost savings. Business travel won't go away entirely but all parties are going to start to move some level of activity to this much more cost effective means. And yes the "experience" may be less but there's a cost benefit analysis.

I think we've got on this site and Flyertalk road warrior addicts that don't want to face the fact that their days of the highest elite levels, the free upgrades, fancy hotels, lounge memberships, etc. won't be what they were. And for many that's something they don't want to face. Like being AA GOLD and realizing that you're number 38 on the upgrade list.
 
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Tugger
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 7:15 pm

Miamiairport wrote:
I think we've got on this site and Flyertalk road warrior addicts that don't want to face the fact that their days of the highest elite levels, the free upgrades, fancy hotels, lounge memberships, etc. won't be what they were. And for many that's something they don't want to face. Like being AA GOLD and realizing that you're number 38 on the upgrade list.

Wouldn't it be more likely that the airlines will adjust their FF systems to be more like they were just to get more people wanting to fly more. Especially if there is extra capacity on the planes?

I know they will cut capacity etc but still the idea is to get people to fly. The last few years the airlines had the luxury of really more people flying, increasing each year so had the ability to make FF's perks tighter constrained. They don't have that now, but those points still make them money and they want to keep that going as much as possible.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey
 
Miamiairport
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 7:19 pm

Tugger wrote:
Miamiairport wrote:
I think we've got on this site and Flyertalk road warrior addicts that don't want to face the fact that their days of the highest elite levels, the free upgrades, fancy hotels, lounge memberships, etc. won't be what they were. And for many that's something they don't want to face. Like being AA GOLD and realizing that you're number 38 on the upgrade list.

Wouldn't it be more likely that the airlines will adjust their FF systems to be more like they were just to get more people wanting to fly more. Especially if there is extra capacity on the planes?

I know they will cut capacity etc but still the idea is to get people to fly. The last few years the airlines had the luxury of really more people flying, increasing each year so had the ability to make FF's perks tighter constrained. They don't have that now, but those points still make them money and they want to keep that going as much as possible.

Tugg


Not everyone has the time or money to travel personally to reach status level if their business flying becomes far less. I do-I can work from anywhere and have no family. But I'm probably the exception. What I do see airlines doing is making premium cabins more affordable particularly to higher end leisure flyers. While they won't get hordes of flyers upfaring they will get enough so that lower elite levels will still find upgrades hard to come by. Last week At some point if I want F I will need to pay for it.
 
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Tugger
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Re: Pt2: Southwest CEO Kelly, "If things don't improve, this cannot continue"

Mon Sep 14, 2020 8:05 pm

Miamiairport wrote:
Tugger wrote:
Miamiairport wrote:
I think we've got on this site and Flyertalk road warrior addicts that don't want to face the fact that their days of the highest elite levels, the free upgrades, fancy hotels, lounge memberships, etc. won't be what they were. And for many that's something they don't want to face. Like being AA GOLD and realizing that you're number 38 on the upgrade list.

Wouldn't it be more likely that the airlines will adjust their FF systems to be more like they were just to get more people wanting to fly more. Especially if there is extra capacity on the planes?

I know they will cut capacity etc but still the idea is to get people to fly. The last few years the airlines had the luxury of really more people flying, increasing each year so had the ability to make FF's perks tighter constrained. They don't have that now, but those points still make them money and they want to keep that going as much as possible.

Tugg


Not everyone has the time or money to travel personally to reach status level if their business flying becomes far less. I do-I can work from anywhere and have no family. But I'm probably the exception. What I do see airlines doing is making premium cabins more affordable particularly to higher end leisure flyers. While they won't get hordes of flyers upfaring they will get enough so that lower elite levels will still find upgrades hard to come by. Last week At some point if I want F I will need to pay for it.

It's not the flying as much and the points and thinking the points will mean more when they can be/are used. Remember how much money the airlines makes by their points.

Tugg
I don’t know that I am unafraid to be myself, but it is hard to be somebody else. - W. Shatner
There are many kinds of sentences that we think state facts about the world but that are really just expressions of our attitudes. - F. Ramsey

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