X

Subscribe to our newsletter

Enter your email address here if you wish to receive our newsletter, factsheet and company information alerts.

We respect your privacy and do not sell, rent or loan any information collected on this site and your data will not be used in ways to which you have not consented.

You can unsubscribe at any time by clicking on the unsubscribe link on any email we send you.

13/07/20202 mins

Planes, trains and automobiles – how will Covid-19 change business travel?

Have you experienced Zoom fatigue, a malady that hadn’t been invented a few months back but is now familiar to many home workers? The ailment is triggered in some by the mental drain of being ‘switched on’ regardless of the environment around you, and is exacerbated by forced smiling at a screen for protracted periods. Not everyone is a sufferer though, and those with a phobia speaking to large groups are finding video calls a godsend.

In addition, managers of corporate budgets have also been fast in recognising the benefits of avoiding physical meetings. At a time when companies are generally tightening their belts, video calls have the obvious benefit of being cheaper than business travel, and possibly even more efficient when it comes to employees’ time. The ubiquity of virtual meetings has removed, for now at least, the perceived benefits of being able to build business relationships and sealing the deal with a firm handshake. Why bother flying in, for a meeting when an online meeting is no longer seen as a cheap alternative and could do the job just as well?

Speaking of flights, the pandemic has dealt a huge blow to the airline industry. Aircraft manufacturer Boeing is making job cuts at its Sheffield plant, while airlines including British Airways, easyJet and Ryanair have benefitted from the Bank of England’s Covid Corporate Financing Facility, as they adapt to the ‘new normal’. With social distancing rules in place, airlines will face the same fuel and staff costs but with far fewer passengers. That could lead to higher fares longer term, which in turn might discourage people from flying. Couple this with the new-found benefits of video calls, and frequent business flyers could become a relic.

Until a vaccine is developed and Covid-19 is under control, people are likely to be wary of using public transport to commute. The desire to be independent and avoid the virus could also influence car ownership decisions, at least over the medium term.

The humble bicycle has been a beneficiary of the lockdown, as people incorporated more cycling into their daily routines. Online sales of bikes rose by 192% during the lockdown, according to Cycling Weekly, while Halford’s share price had rocketed on the back of demand for both electric and conventional bikes. It might, however, be a mistake to extrapolate these trends in commuting habits as, once road traffic returns to a more normal level, the attraction of getting on your bike may be less appealing. It would require a large investment in cycling infrastructure before bike use is normalised in the UK.

Until we can all return to offices and our daily routines adjust, it’s difficult to say with certainty which work or travel trends will become embedded in our culture and which will prove to be passing fads. Meanwhile, we won’t be jumping on the next bandwagon but will continue it invest in companies that can endure.

Please remember that past performance may not be repeated and is not a guide for future performance. The value of shares and the income from them can go down as well as up as a result of market and currency fluctuations.

Please note that SIT Savings Ltd is not authorised to provide advice to individual investors and nothing in this article should be considered to be or relied upon as constituting investment advice. If you are unsure about the suitability of an investment, you should contact your financial advisor.

Subscribe to our newsletter

Enter your email address here if you wish to receive our newsletter, factsheet and company information alerts.

We respect your privacy and do not sell, rent or loan any information collected on this site and your data will not be used in ways to which you have not consented.

You can unsubscribe at any time by clicking on the unsubscribe link on any email we send you.