Future of the airlines

B767

B767

Well-Known Member
Airlines make the majority of their money off of business travels, correct? What will happen ten years down the road when technological advances are so amazing that all business is done via teleconference? I assume that with advances in technology that there will be less and less business travellers. So what would the airlines do then?
 
We tried conference calls, and do use them still now and again, but we travel more for sales now then we used to. I have been awarded work because I showed up to talk about it, not try to handle via phone and email.
 
First it was the telephone that was going to kill business travel, then the fax, then teleconferencing, then videoconferencing, then the internet.

Bottom line is there is nothing that beats face to face interaction.

If it costs you a grand to fly somewhere to finish inking a $100K contract, it's well worth it from a business perspective.

And that's why business travel will continue to take place.
 
tonyw said:
First it was the telephone that was going to kill business travel, then the fax, then teleconferencing, then videoconferencing, then the internet.

Bottom line is there is nothing that beats face to face interaction.

If it costs you a grand to fly somewhere to finish inking a $100K contract, it's well worth it from a business perspective.

And that's why business travel will continue to take place.
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Spot on -

Imagine being the CEO of a company evaluating two other companies bidding for a contract. One of the companies sends a team to meet face-to-face, while the other just shoots some emails and conference calls. At face value, the first company took more effort to seal the deal. Business travel costs are negligible when it comes to large deals.
 
Can't go to Disneyland on Skype.

Can't meet the in-laws via iChat.

Can't work on an oil rig via AIM.
 
Actually, even if there were such a device, there would still be full employment for the airlines. At least with a plane crash or equipment failure you have a chance. Try putting your 10 gazillion atoms back into place if the transporter shorts....
 
It's ok, it'll be windows-based!

"Oh, schnap, Norton's trying to download updates. Your uncle's data is stuck in the cache"
 
Our management said "Travel less this year! Use this new hand dandy videoconferencing software we spent a bundle on!"
When it came down to it though, no amoung of technology could beat face time, and we traveled just as much, at managements request!
And I am not even in Sales.....so go figure there.

Like it was said, until there is a faster way to get to there from here, the airlines will have plenty of business.
 
My uncle works in IT and networking for a major retailer. He has to go onsite to set up the stores and trouble shoot and repair problems. There is NO WAY that the stuff he does could be done remotely.
 
It's already happened, in a sense. The business traveler was important because of the fares they paid. Last minute walk-up fares were the airlines bread and butter. The internet and the LCC's have altered that dynamic. I'm sure that there are as many business travelers as there ever were, but not many are paying those high dollar fares any more.
 
skydog said:
It's already happened, in a sense. The business traveler was important because of the fares they paid. Last minute walk-up fares were the airlines bread and butter. The internet and the LCC's have altered that dynamic. I'm sure that there are as many business travelers as there ever were, but not many are paying those high dollar fares any more.
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They might not be paying them, but they are charging clients for it! I just had a discussion with a service engineer that will be returning to PA from IL next week. Told me the ticket would cost $700. Went online and saw a rate of $216. After showing him this he told me his ticket this week was even less, and I already got the bill with the flight at....you guessed it $700. Can't wait for the backup documentation I have asked for before paying.
 
B767 said:
Airlines make the majority of their money off of business travels, correct? What will happen ten years down the road when technological advances are so amazing that all business is done via teleconference? I assume that with advances in technology that there will be less and less business travellers. So what would the airlines do then?
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Won't happen. You can already install quite comprehensive vdeo conferencing facilities for not a huge amount of money. In fact, I'll tell you a tale.

I managed the installation of a comprehensive multi-monitor video conferencing system for a company at it's 5 major locations. The system was sold to management as being a cost saving because of all the money on travel they would save. Six months later - no reduction in travel cost, even though the video system was being used extensively.

The company then decided (perhaps a little late you might feel) to conduct a survey of their employees, who, to a person, initially responded with "what the f*!k are you talking about - you think we CHOOSE to travel - we HAVE to travel." Why? The main reasons for this company were two-fold:

1. They needed to visit co-workers in their offices because they needed something from that co-worker and they needed to sit in the their office and be sufficiently annoying that the co-worked would get them what they needed. In theory you just make a phone call, in practice that's just ignored.

2. They needed to touch something, a prototype, a manufacturing problem.

The company was already doing all the remote work it could via the simple plain old voice telephone - all the video system did was replace simple cheap phone calls with an expensive video hookup but it added little if any value.

The one other reason teleconference won't work - people buy from people they know - and you can't get to know somebody over a video linkup - so salespeople have to travel.

Bottom line - there are VERY few business travellers who travel because they want to - they travel because they need to. They help justify it with the "perks" of hotel points and airline miles - but if they could stop tomorrow, most of them would - but they can't.
 
CFIse said:
Won't happen. .................but if they could stop tomorrow, most of them would - but they can't.
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The main danger for airlines is to take business travelers for granted, as they did in the 90s.

When I started in this business we often carried the very wealthy, top CEOs, big celebrities. Now we carry none of those people. The treatment of business travelers by the airlines helped fuel the fractional jet boom in the 90s, making it such a growth industry that Warren Buffett gladly got out of the airline business and into the fractional business.

There are a number of ways that businesses can avoid airline travel. And entrepreneurs are constantly thinking of new services to help them avoid doing something "they would stop tomorrow, if they could."

They are customers and the airlines need them as much (or more) as they need the airlines.
 
flyover said:
They are customers and the airlines need them as much (or more) as they need the airlines.
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I'm not saying the airlines don't DESERVE to lose very passenger they have. The level of inept I couldn't give a damn customer service at the airlines is mind-boggling in it's extent. That's what happens when you drive your service down to the lowest common denominator - which turns out to be price.
 
As has been stated business travelers aren't going anywhere. Airlines today however have found a new lucrative niche to suplement business fares.

Heterosexual and homosexual D.I.N.K's are the new target customers. The travel market is booming and profitable!
 
I agree w/ CFIse. I have often wondered what percentage of business travel was sales related. I am not a salesman myself, but I do know how important relationships are when trying to sell something. I think sales related business travel will continue to grow, and most of those people will be flying on the same airlines that they always use.

However, the general ugliness of airline travel, especially the portion before you are even allowed in the terminal, will drive many people to the VLJ's and air-taxi services. IMHO.
 
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