Business air travel
Posted by Yankee on October 25, 2005 - 11:36am
TODers know that flying, for the most part, is a luxury and not a necessity. Well, that's the way it should be, anyhow, but often, there's that pesky matter of business travel. Even academics do a considerable amount of travel, since we have to show our faces at few conferences a year in order to stay current in the field and make sure that our colleagues remember us. In other professions, some businesspeople may get on a plane 2-3 times a week (or more!).
I'm interested in people's personal feelings about business travel on airplanes. Do you believe there's no problem with it? Is it a necessary evil? Should we as employees try to take a stand against air travel? Are people who believe in peak oil morally obligated to find a job that doesn't require air travel? Obviously, some of these are extreme positions, but I'm trying to get a sense of where people stand on this issue.
To that end, I give you a poll.
“My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel.”
—Saudi saying
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On the one hand, I'd be delighted if a lot more businesses started reorganizing to be more locally and regionally oriented--it'd be good for everybody. On the other hand, there are some businesses that will always be global.
I can't bring myself to put much of the onus on the employee when it comes to choices about air travel. Of course every employee should work to cut waste where they work. Of course every employee should try to align their job choice with their values. But I don't think an employee has an obligation to (as an extreme example) quit a job where they enjoy the work, contribute to the success of the company, and make a good salary, just because the job requires air travel.
And we might build a flotilla of very large and very fast nuclear powered container ships to tie togeather the worlds rail networks as a replacement for airfreight.
A problem would be faster on/off facitilites at the ports to better exploit the ship's speed and minimize port stays.
Medical research, for example, is naturally global because deseases are global. (Even without cheap oil, enough people will move around to transmit diseases from one community to another, and some diseases can be transmitted long distances by non-human vectors.)
Anything that can be represented by data (music, video, money) can remain a global business, even when it is too expensive to move stuff.
I look at the nineteenth century as a possible model. Capital was quite globalized; natural resources and labor were somewhat mobile. Energy intensity was much higher than in the eighteenth century, with things like steam ships, railroads, but we'll probably be able to maintain that level of energy intensity for a long, long time post peak. Combine that with existing infrastructure (we don't need to reinvent a nineteenth century-style telegraph network because we already have fiber optic cable strung across the world) and the opportunity to remain globalized is high.
I look forward to increased localization, but there's lots of good stuff that comes from globalization as well.
None of which is to say that I think businesses flying people all over the world is a good use of fuel.
Regarding my thoughts on if one should leave a job which requires air travel, I think not. However, it would be in one's own best interests to consider the future, and how much security they have in their position if the "necessary" air travel is no longer possible. It doesn't make sense in a possible era with a recession or maybe depression on the way to take a job where one would be one of the first to go as a cost saving measure.
The simple fact is that a LOT of "necessary" business travel really isn't, and could be replaced relatively easily with one or another form of teleconferencing.
One computer consulting job I worked on years ago had an executive who practically lived in airplanes. This guy would literally rack up 400,000 miles a year, and would often leave the US on weeks-long trips that would have stops in 5 or 6 countries. He was visiting with customers for high-end, industrial products that had a high profit margin, so his company was willing to eat the huge travel cost. But as far as I know they never made a serious effort to trim back his travel.
I think not. People have a fundamental need to "see it in the flesh," and that will never change. As oil becomes more scarce, the bar will simply go up on business travel, and all air travel will once again revert to an elite, unusual activity, rather than the common activity it is today.
Try to have a teleconference with one of the nationaol oil companies in India. They will laugh at you and wil not take you seriously as a supplier. They may even blackball you for 3-5 years.
Teleconferencing is great for domestic/European meetings (I've participated). But the 2nd and 3rd world requires my presence. I will send any of my employees anywhere in the word if my customers request it. Even if I lose money. The goodwill created by presence, by actually being on the ground, breaking bread with these guys, is more than worth it.
And I still travel for internal reasons. Our Norwegian facilities and personnel are incredibly capable as their main market is the North Sea, an incredibly regulated marketplace. Problem is, they assume my US manufacturing is to Norwegian North Sea specs.
It's not. It's not worth the cost. US market demands a Chevy. Norway demands a Ferarri. I can build a Ferarri easily. If I built nothing but Ferarris I would destroy my domestic market share.
So I get to go to Norway in January or February to visit multiple facilities to explain the differences. We've been trying to explain this by email and phone for two years to no avail. We still lose money or break even at best on Norwegian bids as they don't understand this. I'll pound it home soon enough. Face to face. In meetings and over a few beers. It's worth it.
Though they won't disappear overnight. I suspect we'll end up with one government-run airline, which normal people, even normal business people, can rarely afford to use. By the time it fades away, few will miss it.
Around the time my children go into retirement, so even they won't notice.
[A working definition of "demise of mass air-travel" might be when the point is reached when only the upper-classes can afford to fly on any sort of regular basis; and when those of lesser means are only able to do so at tremendous cost under the most extraordinary of circumstances.]
I think it's likely to happen before most of the people posting to this blog retire. The airlines are in a death spiral right now. It will only get worse as fuel prices rise, the economy falters, and travelers - business and leisure - cut back.
A modern airliner consumes about 3 litres of fuel per 100km per passenger seat. I don't know what is current price of kerrosine, but perhaps we could assume it is something like 0,5 euros per litre.
So, how much fuel for 10000km trip costs per passenger? Currently it is then 150 euros. Not very much if you compare with price of whole trip. If you then add for example hotel costs of one week business trip, this is really small.
How much price of kerrosine have to rise in order to destroy air travel? Price of oil goes to 600 dollars per barrel, the fuel costs will be 1500 euros. Well, maybe companies will stop doing some trips, but for big bosses this is not much. Price of oil goes to 1200 dollars (eh?), 3000 euros for fuel. Companies will stop doing more trips, but if you compare this with current ticket prices of first class intercontinental flight, not a big deal.
So, I think air travel will not suffer very much because of rising fuel prices, but because people start to save in everything and try to find new places to save. Reducing travelling is probably one place.
Regarding business air travel, current US ticket costs are dramatically less (many US round trips were over $1500!) than they were a few years ago on account of competition from Southwest and Jetblue, even though fuel costs have tripled. As an aside, if we turned to a single state airline, costs would rise and service would decline, probably sharply in both cases. (Talk about ignoring the benefits of deregulation.)
As noted, if we all have less disposable income on account of higher fuel costs, we will do without some things, and vacations may be one of these, but this is a second order effect.
Shipping costs are for most US imports a very small portion of the cost, in some cases microscopic, so will be very little affected by rising fuel costs. The situation is a little worse for grain exports, but fuel costs are not likely to outweigh the US inherent advantages any time soon.
The big savings to come will be where fuel costs are a substantial portion of the activity AND where they can be substantially reduced, namely commuting. Prius type vehicles combined with four-person car pools would cut commuting fuel consumption around 90%, with additional savings from reduced stop and go and less road building. This change, plus more work from home, will come long before 'the end of suburbia.'
Even now most airlines operate on the edge of covering their costs. Why? Because of the enormous fixed costs that must be covered by large volume of travel (airport time slots, planes amortisation and maintainance etc.). In 2004 for the US carriers fuel costs were 15% of the operating costs (at 45$ per barrel). At 90$ per barrel they'd have to raise prices with 15% which is quite significant. They will lose flights, passengers etc., while facing the same fixed costs. Eventually they will have to rise prices again and again while scaling back or simply going out of business.
Put another way if you have the same plane for 100 passengers at 600$ per barel the price for fuel will be 1500 euro and the ticket will be 2000 euro. But the plane will be just 20% full so the ticket will have to be 10000 euro to cover costs. If alternatevly, they cut flights five-fold the price of fuel will be again 1500euro and the ticket will be 4000euro (because of the 5 times higher fixed costs). So they'd have to cut flights again and again...
It is the large middle and low class price-sensitive segment that keeps air companies afloat. If it is gone - so is the air travel. If price gets in the range of 200$ per barrel just forget about air travel.
One should also note that if there's no enough demand for airport slots, the price of airport slots will probably go down also. And airports can also adapt to smaller traffic and lower their costs.
In every business the way down is much more painful than the way up; there are investmenst to be payed-off (I think I read that an airplane on average pays off for 20 years), jobs that are not so easy to be cut etc. The industry will scale back, yes - but will probably have to be much faster than we think and to an extent that flight will become hardly affordable.
Because of the relative time that most people spend working vs. the time that they spend consuming, I'd imagine that we'd all be better off putting more power in the hands of the workers. However, most people in the haste to get both tend to orrient toward's wanting consumer power. Possibly they don't realize the spreading effect of poor work/wage conditions.
We did see a brief, three-year period at the end of the seventies when world oil production shrank. Air travel shrank a bit, but hardly collapsed. (Not just the airlines were in trouble - FOrd and GM nearly went under. For a view of the future, look at the decade from 1972. In my view, we are now about where we were in 1977, with actual oil output contraction just ahead.)
Very high oil prices were mentioned in the above discussion. We are already moving (slowly) towards European efficiency because gasoline prices are climbing to where they were in Europe over the last couple of decades. I think $200/barrel is a more than sufficient goad to reduce world consumption to projected world output. This price, while greater than at any point in the past adjusted for inflation, is not so high as to bring business air travel costs to where they were just a few years ago, and certainly not as high as they were in 1975 for all passengers when adjusted for inflation. Indeed, competition from low cost airlines for business travelers has been far more damaging to the major carriers than higher fuel costs.
We might expect less auto travel, particularly commuting, which can be adjusted by car pooling, Prius vehicles, etc, as well as some less air travel, particularly by families with kids. Couples and business air travel will probably not be much changed for a long time. Air travel may decline, but probably no more than other forms of travel. Airlines will go under, as they have since the dawn of aviation, but will be replaced by those with lower costs. Since 1998 oil is up 6x, but air travel prices are so far unchanged, and air travel itself is up. Three cheers for the hidden hand of capitalism, hard at work bringing all of us more goods at lower costs!
Incidentally, a vision that planes will fly progressively less full, forcing airlines to raise prices to unbearable levels, bears no resemblance to what is happening now. When has anybody flown in an empty plane recently? The increasingly desperate majors have become quite adept at sacking redundant workers and grounding planes as they lose market share. Meanwhile, low cost carriers are quick to expand into the slots vacated.
But there is another thing that can make air travel uncompetitive while energy scarcity kicks in, and it is the efficiency improvement potential.
The potential of improvements in efficiency of motor vehicles is at least 300% relative to now, maybe more. If rail transport takes over efficiency can go up to 1000% compared to air travel. At the same time airplane efficiency has been so far tweaked out almost completely. And with downsizing of the industry efficiency actually drops. Small companies/planes have smaller fixed costs but they spend more for fuel per passenger.
The reason why people are taking planes versus cars/rail is the travel time. If air companies go along the way of slowing down planes at some point it will become preferable to take a car/rail than plane.
P.S. This year particularly air companies did raise their fuel surcharges. I don't have statistics but the same ticket for a flight to Europe costed me about 10% more than in 2004. Delta and United filed for bancrupcy, indicating that higher fuel prices from recent years might have been eating profits rather then being reflected in price.
Flying is a relatively effective means of transport so it will not be the first one to stop. But it will decrease, may be back there, where it was in the '50s or '60s.
The world had global trade already in the 16th century. Sailing ships will do if necessary. We should expect the trade volumes to go down, but not to cease altogether. Overly dramatic, unrealistic scenarios will not help. Remember, you all had a peak oil experience in 2000-2002. Anybody noticed a petrocollapse? Yes, the real one will probably be more visible and the supply drop may be more discernible, but the oil will not end suddenly and life change overnight.
What ends up happening then, is that all of the carriers who run trips to the smaller air ports have to either cut the freqency down severly, or end up just cancelling the route (if a plane only comes in to Madison, WI once every three weeks, most people will say ef it, I'll drive to Chicago and take a plane from there). And we end up with only the highest traveled routes being supported. The simple fact of having to drive hours or a day+ to get to the nearest serviced air port might further cut down into the airlines passenger count, which makes fewer flights possible.
Eventually, costs per ticket create enough demand destruction that the airlines declare it's just not worth operating anymore. And then that's the end of air travel. There will still be privately (corporate or personal) owned planes, and military planes in the sky. But no commercial planes.
Of course, with many (most?) airlines operating at a loss, and the governments continually willing to bale them out, we're not on that route yet. But if the government eventually regulates (re-regulates?) that every commercial flight must at least cover costs or else the air line is inelligible for bankruptcy protection or a bail out, well that will be the death blow to the airlines and it will all be just a matter of time. But then again, this is all just a guess, but it seems feasible in my mind.
Too much jobs are dependant on it not only in the carrier sector but in the tourism, sales etc. Its like to decide to dismantle the highway system because it costs too much to support.
On a little more philosophical note... If somewhere in the future americans lose the ability to travel, everyone will become stuck in this uniform and boring suburbs and will have the time to think a little on how we got there. No government likes people who think, especially in bad times.
As petroleum becomes more and more scarce and as the remaining sources of petroleum become more and more expensive to tap or process (tar sands), the price of petroleum relative to other useful things (housing, clothing) will soar. Meanwhile, the economy will suffer and go through cycles of ever worse recession/depression.
In this context, not only will governments be unable to subsidize air travel, they will be forced to give up highway maintenance as well. I hope that they will devote their limited resources to maintaining the food supply and to developing an alternative energy infrastructure that will make it possible for our present population to survive at a much lower level of energy consumption. I fear that they will instead devote their limited resources to warfare.
As for the warfare... I feel (or hope) that after Iraq the neocons are seeing the dead end this course will lead us. In a way US is the most vulnerable country in the world and if aggressive policy escalates the world has the choice of isolating it. Without imported oil, without an ever expanding cheap credit the country would collapse in a matter of months.
The answer I've seen from conference-goers is that they need the face time, and if anything on-line information flows spawn MORE, not less, physical world conferences.
That is unfortunate to say the least.
(I'm retired, and don't fly to peak oil or environmental conferences, in part because of the absurdity of the act.)
However, for certain service-related sectors, such as management consulting firms, large engineering and construction companies, and even large law firms, there is a certain irreducible fraction of air travel that is absolutely essential to their business. No travel; no business. As air travel gets more tedious (i.e., long delays caused by security screening and more widely spaced scheduling of a shrinking number of flights per route), there should be a slight shift to more localized business by same companies. The shorter routes should be hurt the most, because there is always the alternative of driving.
It has been my qualitative observation that business air travel is very closely linked to the state of the economy. As I think anyone who has done considerable business travel will agree, airports are noticeably more empty during a downturn and noticeably more crowded during boom times. As such, the relationship between daily passenger miles and GDP is probably far stronger and far more direct for air travel than it is for personal automobile
travel.
One other point about air travel that might have some relevance regarding price sensitivity: unless you are in business for yourself, your employer pays for your air fare (a reason why not many self-employeed people attend trade shows in Hawaii). So, an employee doesn't really care very much how expensive the air fare is. Of course, his employer will eventually realize that the company's travel expenses are increasing and will sooner or later start clamping down on marginally necessary air travel. What this tells me is that there might be a longer lag time between a rise in the price of business air travel and a response in the form of reduced travel.
I also agree with a previous poster that we are probably eventually going to wind up with a nationalized airline system. This development will probably worsen the already bad situation regarding air travel.
No, I don't see how anyone can possibly be bullish about air travel.
Often, the prospective customer does not rigorously define what it is they want. All to often, my firm does not rigorously define how our software works. We then say "lets save some time and meet-face-to-face and hash this all out". Of course, by and large, we waste tremendous amounts of time and money and energy by taking this approach.
I have to work several hundred miles from my family because I couldn't find work in our city. My wife is still working and can't make the move yet. I also have a young son. Even though I limit my driving, take the bus everyday, keep my electricity and other consumption down - in other words, do everything I can to be responsible - I go home to see my family almost every weekend. Since it costs me the same to fly or drive, I fly. I know other people are doing this too, because I talk to them on the bus from the airport.
What's the point? Even people who 'believe in' Peak Oil are going to do whatever they have to do to take care of the people in their lives. The only solution to our situation is to 'relocalize' our family economy, by getting everyone in the same city again, but that's easier said that done.
About air travel and fuel consumption - I once did a back of the envelope calculation and determined that a 737 3/4 full got about 50 miles per gallon per person. You have to own a hybrid to get that kind of milage driving alone.
This is partly because many people are not good at verbal communication and rely instead on visual and vocal cues in conversation (i.e. the words are not very important). Often these are not technical conversations. Further, certain mangers seem to enjoy it (sometimes they bring their third or forth spouses with them), or at least it becomes a badge that shows they're "in the club".
My company has a large amount of political operators (useless overhead). For these folks, it's all about appearances and perceptions, and often back-room deals. They need to be there so that they can use all the body language and tone of voice to convince someone that what they are saying or doing is other than what it appears to be. Of course I am being a little facetious, as there are many jobs where you do have to be there, but nowhere near as much as has become the norm based on cheap fuel.
As the costs of air travel go up, companies that cannot adapt by reducing their travel costs will fail earlier. Those with staffs who can find a way to communicate more cost effectively (using video conference technology, for instance) will have a competitive advantage. And companies with too much useless fat and political infighting will probably not survive anyway, so this will only help them along their merry way to oblivion.
But really, lots of heavy brain power has been applied to this idea, and what they come up with is absolutely possible. Look for vacuum tube trains on the web, and read all the heavy numbers that have been cranked out on the subject.
Obviously (to me) that's the way to go. Airplanes are for the birds.
Because the people in third world factories don't know how to fix an American made machine there will always be a need for air travel. Large aircraft is the only logical use of hydrogen as a transport fuel because weight is the most important factor in flight. H2 packs 3 times the energy per pound as jetA. Fewer pounds for fuel means more pounds of payload.
As someone has already pointed out fuel costs are still a relatively small part of your ticket cost, and fuel prices will have to go up very dramatically to change this. This plus the storage and design problems will almost certainly mean that air travel will be the last form of mass transportation to switch to H2. And I think H2 for ground transport is optimistically still 20 yrs out.
Also consider that a sphere would probably be the ideal tank size, because of the ratio of volume to surface area. However, most vehicle designs won't work well with a spherical or cubic design. It's rectangular, which means there's a long edge which needs reinforcing or additional thickness.
In the end, the much larger tank might have savings over the smaller tank, but I find it hard to envision a tank which allows one to store as much hydrogen as it weighs. If you've done the materials math, or have links to others who have, I'd be greatly interested in eating some crow.
The fundamental determinant of a pressurised tank thickness is the tank pressure. I made the following calculations:
Equivelent kerosine tank capacity: 20 000 kg.
H2 tank capacity: 6700 kg.
Tank pressure: 100 MPa (1000 bars) (H2 specific weight is 89.3 kg / m^3)
Tank volume: 75 m^3
Assuming aluminium-carbon fiber composite for the tank ( tensile strength > 2GPa) and security coefficient of 2 the tank thickness would be:
d = 2 * 100 * 10^6 / 2 * 10^9 = 0.1 m = 10 cm
Let the design is of two cylindric tanks (37.5 m^3 each) under each wing with
D = 3 m and L = 5.3 m
The weight of each tank when empty would be (specific weight of the material ~ 2000 kg/m^3):
M = 13 000 kg
so the total tank weight will be 26 000 kg and 33 700 kg when full. I don't know the parameters of kerosine tanks but just for the discussion I can estimate them around 6000 kg. and 26 000kg. when full.
The increase of 7 700kg. of take off weight does not look unbearable. The difficulties would be:
The design you mentioned allows for bigger tank volume which at least in theory should slightly decrease tank weight. Tank volume increases the surface area with approximate exponent of 2/3 while wall thickness decreases proportionally. The overal efect is decreasing weight on exponent of 1/3 of volume but only on similar designs. Longer tank deviates from the optimum sphere and can in fact be heavier. But these are details - the designers will tune it up.
My calculations meant to show that it can be done with current technology and it will not affect the weight of the plane significantly.
It will be difficult for engineering and construction firms to do this - they have to move the right people to the right job, wherever it is. These jobs are all over the world. Every big job needs specialists and experienced managers - they will go by boat if they have to.
Sales is another item. It is really hard to close big deals without gaining a sense of who you are buying from and what their level of commitment is. Salesmen are probably the #1 air travelers. Unless business has to retool to the regional level, or we accept dirigible and trans-oceanic shipping times, salesmen will still make even the expensive trips to get the big deals inked. There just isn't any viable replacement for tete-a-tete meetings when there is big money on the table.
But I too would love to see trains at least take over continental routes. There is absolutely no reason that a bullet train cannot take the place of commuter jets across any country, and carry far more people with much less energy expense and pollution. It's using the right tool for the right job.
Imagine NOT having to get to the airport early so some high school dropout can frisk you and dig through your bags. Instead, you just get to the station and climb on board the train. My experience in Germany tells me this would actually be a very easy sell to Americans, who are ALWAYS pressed for time.
But the airlines will have to crumble while the railroaders begin to get creative to replace them. Until there is a cry for the railroads to carry passengers, they will stay as they are - diligently hauling chemicals and containers where they can make a buck. The airlines destroyed them once - they will not be eager to engage them until they are nearly dead and buried.
Of course travel will become much more expensive, but most probably tourism will take the bulk of travel reduction, not business trips.