(7i) Return to (travel) business in times of a virus

Economies are restarting, a necessity

Societies are slowly restarting their country, including opening borders so people can travel again. In Belgium shops opened while schools for some students restarted. People can also restart non contact sports. But, we're also reminded to continue to keep a distance from others and to continue washing our hands regularly. 

Unfortunately, for many people this restart comes too late as the economy plummeted worldwide and companies need to fire people or close completely when they couldn't survive two months of inactivity. And, although many people acknowledge this lockdown was necessary, up to 25% of businesses say they won't survive a second lockdown; I also think "Mr Doom" is more realistic when he says that the recovery will be much slower than the IMF thinks it will. And yet, bars and restaurants still can't reopen in Belgium while also tourism that includes travel agencies, airline companies, hotels and others suffers and people lose jobs while travel agencies warn against having to refund booked holidays or they may go bankrupt so everyone will loose; therefore, Belgium wants to use a system of vouchers to delay refunding although it seem the EU doesn't agree. And yes, similar as after the financial crisis when banks profited to get rid of employees because apps took over most normal functions, again certain companies will use Covid-19 to replace people by automation, jobs permanently lost. 

This lockdown is difficult, certainly for many ordinary people who have little reserves, certainly in case they lost money and their job during the financial crisis only just over 10 years ago. Of these people, many had to accept low paid jobs, sometimes more than one, to pay bills and buy food. That's why many "stupid" people protest (and of course some people are stupid). Still, they may be people whose business will fail if they are not allowed to reopen. Or people who will lose or already lost their job. Or people who can't feed their children because their income plummeted, even when many governments take actions to soften the pain. This protest started mainly in the USA as the country doesn't have the best social system (although wealthy people can give directly and not via an anonymously social system) but also elsewhere such as Brasil and even Europe people start to protest when the choice may be survive SARS-CoV-2 but starve to death. And extreme right may gain unless the virus becomes more deadly.

Thus, economies need to restart, first locally but eventually at national and international level. And thus also travelling will restart, first within nations (e.g. in Belgium people must wear a mouth mask when they enter stations and travel on public transport) but already countries are discussing when to open borders and thus allow again international traffic by trains, planes and boats such as cruise ships (although the latter demonstrated how contagious the virus can be so even today many crew are not allowed to leave their ships for fear they may restart the pandemic where they come to land. Thus, how can this business restart?

Not only businesses but also tourism will have to restart as this is a major part of many countries their economy on which many people rely but tourism results per definition in humans migrating from one region to another. When tourism can't restart in countries such as Italy and Spain, already heavy in debts before the coronavirus crisis while they were very severely affected by the virus, it may result in the end of those countries as it will be even more difficult for them to repay their debts. And thus these countries may restart their economy too early and reopen their borders to stimulate tourism but also because of pressure from action groups so a second peak may be likely. The only thing that now needs to happen is that vultures, i.e. those with the power to influence credit ratings of countries, lower the rating of countries in difficulty as they did after the financial crisis and succeeded to nearly destroy Greece. Therefore, international organisations such as the European Union (EU) are needed to prevent this can happen as countries became too small compared with multinationals. To prevent countries open too soon, the EU should show solidarity by supporting the worst hit countries and as Germany and France are suggesting although other countries may refuse to join; therefore, the EU Commission and Parliament should decide by majority to act. Such a rescue pact is in everyone's interest: to prevent countries reopen too soon and spread the virus again but also to prevent those major economies may fail and bring down the euro and affect all eurozone countries. Remember, the EU was founded to help each other in times of crisis to prevent new troubles, not to create divisions although during normal times countries should indeed try to balance their budgets. But, certain countries may not mind division to end the EU.

Planes, boats and train transport many people and are a risk

How travel in large groups may be organized

Now, how do I think travel with a minimum risk of new infections can be organised? Not everyone may agree and yes, individual states and even regions may decide against international and national travel when they think it is still too risky. Still, others will start to allow again to travel, first nationally and later internationally as they need the cash. Therefore, we must think how to minimise potential new long distance infections due to people travelling in groups.

Discriminatory quarantining

When in a certain region a possible outbreak of the virus is detected that may cause a problem for other regions, than that region should be quarantined before the people are told to prevent they can move out and thus spread the virus. This way the virus is maintained in one location. When it is located in one area, other regions and countries can send help including healthcare professionals, medicines and equipment that includes respirators and protection. This way the burden is not for one region or country but is divided over a larger group while the outbreak can be stopped as quick as possible as that benefits everyone. I think this should be the first action.

Organisation of people in planes

Normal travel may not return soon, although. At the restart, I think planes should be filled only half or a third so space is left between passengers. This may reduce fear and thus possible tension among passengers and crew. What will be safest: everyone on one line or zigzag? On one line seems more logic but this may need to be studied. Not everyone seems to agree with empty space between passengers with the argument that the ventilation system is sufficient to remove nearly 100% of bacteria and viruses. If so, fine but than this needs to be proven; in addition, when people sit next to each other than skin contact is possible. Thus, possibly one empty chair between passengers is sufficient without the exaggeration of seven chairs per person. This way social distancing is not over the top on condition a good functioning ventilation system is available. And not airline companies but governments should decide what is possible. However, the next steps may allow a full airplane.

Organisation of travel

Some countries think to quarantine arrivals at the airport for up to 14 days while others are relaxing restrictions. I think quarantine is only practical when most traffic is halted so only a few people who really need to be in the country arrive such as citizens (I think it is strange this wasn't done more so stranded tourists could return and quarantine as everyone was asked to stay inside as much as possible). However, when normal traffic resumes than I think quarantining is impossible as you can't quarantine tens if not hundreds of thousands of people because than business people and tourists will not travel as two weeks quarantine will be longer than most business trips and holidays while upon return home they may be quarantined another two weeks. Thus, what may be more realistic?

Maybe a nose swap is the solution. It takes about 24 hours to have its result. Thus, people should arrive 24 hours before departure to be tested at the airport and stay apart from travelers they don't know (thus organised via time slots) to avoid as much as possible that people mix. After the test, people who take the same plane are brought to their rooms in one closed place to avoid mixing with people from other planes while they too are forbidden to mix. The next day the result of the nose swap should be known and people who test negative can move with face mask to the departure of the airport where their temperature is checked before boarding as an added security in case the previous day detection levels of the virus in certain people were too low. People with normal body temperature can board the plane while those with a higher body temperature and anyone who travel with them have to stay and separated from other people for another nose swap to be sure they are still negative; if indeed still negative than they can fly with the next plane. 

People who test positive with a nose swap and anyone with whom they came in contact can't leave but instead they must quarantine themselves for 14 days. 

Upon arrival, countries may decide passengers need to be tested again to be sure the virus was undetectable upon departure but multiplied sufficient during the flight. Or countries may decide that measuring body temperature should be sufficient upon arrival. Experience may teach us that when people are negative at departure this means they are still negative upon arrival and thus no additional testing is needed. It may be that measuring body temperature at departure and arrival is sufficient although it seems not everyone with the coronavirus has an increased body temperature and vice versa.

Certain countries may decide not to test at departure so countries where the plane lands may decide to test the arrivals. Trouble is that, in case someone tests positive the whole plane will need to quarantine for up to 14 days; therefore, planes may be barred coming from countries that don't test. 

And yes, when airline companies can proof the ventilation system is 100% trustworthy than less draconian measures are needed. But, not airline companies but instead governments should decide what is possible as airlines have to think about making money and thus transporting as many people as possible.

The problem are stops where people leave the plane while others arrive. This may need to be prevented while in these cases a noise swap or automatic quarantining at the final destination may help to prevent the virus is transported to a new location. Still, when most people are checked at departure, the virus may find it more difficult to spread as there is little chance the virus can spread in the plane.

The above can also apply for travel by trains and boats over longer distances. Indeed, certainly cruise ships have a risk of spreading the virus as many people are close together. May this be the end of always larger cruise ships? Over shorter distances face masks and maybe also temperature checks may be useful to prevent the spread of the virus but masks may be too inconvenient over longer distances as some people may even have panic attacks.

Organisation of work

A return to normal as before Covid-19 is probably unlikely as China shows. The crisis costs companies and countries lots of money (although some think the recession may not be as bad as originally feared - still, growing troubles due to climate change are probably forgotten) and thus they may decide to cut back on business trips, certainly as companies invested in optimisation of equipment for telecommunications during these 2-3 months. Also tourism may suffer because some people may fear to travel while social distancing may be in place so fewer people can travel but also because people already lost or fear to lose their job.

As a return to normal is unlikely soon, there may be too many (expensive) pilots and cabin crew. Thus, either many will lose their job while older employees retire or expect a redistribution of work with loss of income. An example is Brussels Airlines that may have to fire up to 1000 employees, even with government support, but as a goodwill gesture pilots propose to work less hours with reduced salary in the hope this will save jobs. Although they hope this will be temporarily, I think they should prepare themselves this may be permanent. The problem is that many people have to repay mortgages that are too high as after the financial crisis in 2008 house prices were allowed to continue to rise whereby some people profited during the temporary drop in house prices to buy as an investment so prices continued to rise. Unfortunately but mortgages need to be repaid. 

Certain airline companies have billions and still intend to fire thousands of employees. When times are getting better again and more employees are needed, airline companies that may have fired employees may rehire them on worse conditions or, when people resist, companies may replace more expensive Western employees with cheaper English-speaking and well-educated ones from developing countries as they are still less expensive because wages are lower but also because companies will need to pay less taxes and social contributions such as pension contribution on top of their wages. If this is the case than we can expect growing anger by these employees but also in society in general. Therefore, governments should be sure that foreign employees are paid according the rules of the country where they live.

But, not only airline employees but very likely people throughout the economy may start to earn less or become jobless because companies need to reduce costs to avoid bankruptcy and to remain in competition with companies in developing countries where people are starting to become educated but still earn less. Be prepared to accept this.

When governments inject money to save an airline company, of course it is normal they will be able to have some control over the company, preferably the mother holding, just like any other company would do. In addition, conditions can be added to the injection of public money such as new plane must be clean while older still polluting planes should be finished. Further, short distance flights (I think of around 200 km) should be stopped when alternatives such as high speed trains can be used (an example are connections between Amsterdam, Paris, London and Brussels) and thus airports should work together with train and bus companies for shorter distances. Finally, governments may demand airline companies specialise in certain destinations such as Asia or Africa while abandon less successful destinations but work together with other companies so all places on the planet can be reached without companies going in competition over destinies they can't win and thus having to fly almost empty planes.

Not only airline companies

The above not only applies to airline companies but can be used for any international or long-distance traffic, i.e. by boat and train. The coronavirus showed that certainly the enormous cruise ships can be vulnerable as many people travel together on relatively small and mainly enclosed areas for a number of days so the virus can easily spread.

For travel within countries and certainly for shorter distances, the above is too difficult and measuring temperature and wearing mouth mask may be sufficient while people should try to keep a distance.

Changes in society in general

For too long companies were encouraged to become larger via a tax system that benefited them and "the rich" (example: USA). However, growing numbers of people and not only "the stupid ones" are saying the tax system needs to change so everyone benefits. Indeed, like banks became too big to fail, also other companies (such as airline companies) became too big to fail because if they fail many people, directly and indirectly, will lose their job and thus, support or failure, it will cost society fortunes. But, although larger can mean more cost-efficient, this is not always when e.g. in the pharmaceutical sector companies buy smaller ones to get a certain drug but may not be interested in other research when that is outside the interest field or when the research is still to immature. 

In the past, governments supported small and medium businesses while today managers of these companies complain this is no longer the case and unfair competition destroy their businesses. An example, no-one is against support for starting companies. Indeed, people who want to start a business may need aid. However, in case the owner decides to expand, than they should not receive more tax reductions as they should be able to finance this expansion or it creates unfair competition with someone else.

In addition, interest rates for money in saving accounts should be sufficient (I think minimal 2%) so owners receive a return on their money they in effect lend to banks so the financial institute can invest this money to make profits. But, with higher interest rates on saving accounts, interest rates on what people and companies can borrow will also be higher and thus people will think twice before they borrow. Cheap loans resulted in a debt crisis that may eventually finish a company.

Finally, when foreign companies are located in a certain place, they need to pay according the rules of that country and city that include paying taxes and social contributions of that country while society may also demand people are well-paid in other societies to prevent companies exploit people elsewhere while it creates unfair competition. This includes that when internet companies sell products, taxes on the product should be paid in the country where the buyer lives as is the case for any other product that is sold in shops and not in tax paradises. When companies refuse, government should be able to ban the import of their products so the company loses markets and thus money. The country where the company is located already receives benefits as people have jobs and thus pay taxes and social contributions while the country doesn't need to pay benefits to the employed.

Indeed, the future will be as it was in the past whereby companies can only be as large as they would naturally become by making it more expensive to borrow so they don't grow too fast outside proportion and destabilise themselves, other companies but even countries.

This should apply to any company to prevent they become too big to fail. Of course, companies can grow or decide to work together but in such a way that they don't buildup large debts due to too rapid expansion and when one part may fail it doesn't bring down a whole sector or, when an external factor such as a virus brings imbalance than governments may decide to support companies that were still viable before the crisis so employers from companies that fail still have a possibility to find a job by another company.

 

Concerning redistribution of work and wages, this is something that may apply to almost anyone. Indeed, companies may have to sell products at lower prices (more people unemployed, even when temporarily) but then also employees may have to work for lower wages. Governments that receive less income from taxes may have to reduce expenditure and thus even civil servants may earn less. If people don't agree to earn less than more people may lose their job so stress levels at work increase with risk of burnout. And, we can earn less and work less hectic as the past showed on condition the economy is not ruled by some who earn from mismanagement. The very rich will have to contribute by using some of their wealth to keep people employed (creating unfair competition) but also by paying taxes without tax reductions to generate income for governments to help stimulate the economy; indeed, paying benefits to unemployed people creates work as they can still spend. But, as reducing special treatment for some (whether person or company) seems to be the hardest thing we may expect a solidarity tax to be paid by small businesses and ordinary people. 

The transition to the future economy is the hardest part when people may see a drop in income while they have historic debts such as repaying a mortgage or paying rent. This future economy will be a return to a calmer economy with regular control and as was in the past. Add climate change that we should not forget, and food prices can be expected to continue to rise. Still, a correction will benefit future generations as things such as property became too expensive for the coming generations but also for companies that need to pay always higher rents for their building but also wages so people can pay their rent or mortgage. Those who think I speak nonsense, imagine having your own business and what may happen, certainly when you're forced to close for two or three months. Of course, this doesn't apply for everyone as some companies even benefit. But for most companies it may become expensive. That doesn't mean that workers and environmental rights should go down as these are important acquired rights that will create jobs although many people don't realise but yes, nothing can grow unlimited as I wrote about before (I think one of my main publications to understand how an economy should be) while an automatic indexation mechanism is important but without an inflation model that results in always higher prices as sometimes corrections are needed (I think this is also an important article as it goes against what economists but also people say because when correctly used, wages will follow prices and can go up but also down to prevent jobs become too expensive).