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BRAIN TRUST
BRAIN TRUST
How COVID-19 Is Changing
the Airline Industry
We just aren’t flying as much as we used to. The number of flight passengers has
recovered somewhat from lows seen in March and April, but airlines still aren’t able
to cover the cost of flying—and they don’t expect that to change for quite a while.
Coronavirus-induced uncertainty has many humans staying on the ground.
Here are seven big trends facing the airline industry and its passengers.
Arriving (really) early for your flight: Guidance on arriving an hour early
for domestic flights and three hours early for international might soon be
out the window, said Maryland Smith’s Roland Rust, as airports redesign
check-in and security processes to allow social distancing.
RIP middle seat? “The big question is whether the airlines will enforce
"It is notable that
Warren Buffett
already dumped all
of his airline stocks."
—
Roland Rust
social distancing onboard, by not filling middle seats,” said Rust. The move
hurts profits.
Business travel, from boom to... Zoom: If the pandemic has taught
executives anything, said Smith’s Martin Dresner, it’s that most meetings
can be conducted online with video conferencing technology.
Long wait for immunity passports: They may be possible eventually,
Rust says, but not soon. “There are too many bad antibody tests out there.”
Slower recovery: This isn’t SARS. It could take years for air traffic to reach
pre-pandemic levels, Rust said. “It is notable that Warren Buffett already dumped
all of his airline stocks."
Higher flight prices: With fewer passengers per flight, and costly new safety and
disinfecting measures, the price of putting a plane in the sky is itself gaining altitude.
That’s going to keep some travelers grounded, he said, particularly those who
endured layoffs, furloughs or other income cuts.
Road trip rebirth: As social distancing is “not possible on aircraft,” Dresner said,
drivable vacations are in vogue, and likely will be for some time. /GM/
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rhsmith.umd.edu
Why It Takes So
Long To Restock
the Toilet Paper
A
s COVID-19 grew into a pandemic, consumers did
what they usually do when disaster looms: flocked
to retailers, clearing store shelves of essentials—toilet paper,
hand sanitizer, soap.
This consumer stockpiling urge is the subject of new
research from Maryland Smith logistics professor Martin
Dresner and three co-authors, including Smith PhD Xiaodan
Pan, now at Montreal’s Concordia University. They studied
four big U.S. hurricanes and parsed data from stores near the
hurricanes’ paths.
“What we found makes intuitive sense,” said Dresner.
“Before a hurricane or other emergency situation, people
are going to stock up on essentials, so a good place to go
is a store that sells a lot of essentials. That’s why drugstores
experience more stockpiling than other types of retailers.”
Consumers also turn to national chains with extensive retail
networks. These chains carry greater inventory across their
networks and can respond quickly to regional demand shocks
by shifting inventory to affected regions. These are often the
stores that recover most quickly after a disaster.
When a disaster hits the whole country, as the coronavirus
pandemic did, recovery slows everywhere.
In times of shortages, suppliers typically allocate products
to their best customers first. That’s why upscale chains had at
least some inventory back on the shelves first.
Low-margin discount stores, where purchasers are always
scouting for deals, were low on resupply lists. Incentives to
negotiate are low in a disaster.
“Prices on essentials should go up when there is a surge
in demand, but because companies don’t want to appear to
be price-gouging, they are reluctant to raise prices. So you
get shortages instead. Retailers try to handle the shortages
through policies such as quotas on purchases,” he said. Limit
one pack of toilet paper per customer, for example.
While ultimately it’s human nature to gather essentials
when a crisis is looming, preventing stock-outs of critical
goods comes down to better retail planning, Dresner said, and
better messaging through government channels.
“Somehow you have to tell people to think about society as
a whole. Stay calm, be careful about what you buy, and don’t
hoard stuff that you don’t need.” /CH/
rhsmith-editor@umd.edu
The Upside to All the Alone Time
With COVID-19 still a threat to personal and public health, chances are, your social
calendar doesn’t look quite as busy as it used to.
That’s not a bad thing, said Maryland Smith’s Rebecca Ratner, who has spent
years researching the act of doing things on your own. Through all her research, she
said, one thing stands out.
“When people do things alone, they enjoy themselves more than they expected.
People overestimate the benefits of being with someone else.”
Keep connecting with others, safely, she said. “But also embrace this time. We
might never have this kind of alone time again.”
Here’s her advice on making the most of pandemic-induced alone time:
Get outside. Take advantage of the
cooler weather and go for a stroll or
a bike ride outside.
Explore what you like, virtually.
Love museums? ”Stroll” the Louvre.
Prefer zoos? Watch live webcams of
polar bears, birds and aquariums. You
may get more out of it. Often, she said
of her research, people worry about
whether their companion is having a
good time, and they forget to absorb
the experience itself.
Stream it solo. In original research, less
than 30% of people said they’d see a
movie alone in a theater. Want to binge
on dramas at home? Go ahead! Want to
watch nothing but comedies? OK! “The
good thing about watching alone: No
need to compromise."
Treat yourself. You also may have been
reluctant to dine alone at a restaurant
before the pandemic. Ratner's advice
now: Treat yourself to a fine dining
experience for one, at home. Break out
the nice dishes, pour a glass of wine,
and enjoy. “You are excellent company.”
Post your triumphs. Don’t be
embarrassed about your solo
endeavors—post about them on social
media. One of her studies finds when
people see others doing activities alone,
they perceive them as having more
expertise or interest in those activities.
Make an itinerary. “Use this time the
way you want, doing things that make
you happy. Create a list to prioritize
activities that bring you joy.” /CH/
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