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   Vol. 19 No. 59
Monday August 24, 2020
Pandemic Pulled Blacket Off World Economy
Ram Menen

If ever there is a perfect storm, this is it! The Covid-19 pandemic makes every other crisis that we called a perfect storm during that time (e.g. 2008/09 market crash etc.), look like a walk in the park.
     Having gone thru our own share of wars, market crashes, epidemics and pandemics, even though this time around the air cargo industry came into its own to support the world, I am quite happy to sit this one out and watch it all playing out from a gallery seat.

Life Without A Plan

     I am sure every business/company always has a contingency/business continuity plan. But none of those plans would have made provision for a situation where the entire world comes to a standstill.
     So with the best will in the world, no country or business would have had a plan for the 2020 global pandemic.

Everybody Is Caught Short

     It is very evident that world governments seem to have been caught short on anything and everything!
     We all know and lived through the globalization process and have seen manufacturing and supply chain operations being optimized.

One Country Sourcing Big Disaster

     However, this pandemic has exposed how the aforementioned optimization has ended up in reliance on one single country (China) and while this was happening, how this country has also managed to get in within the various economies and were yielding firm control on world trade.
     It has virtually pulled off the blanket and exposed how naked the world economy was underneath.

The Shape We Are In

     We were already reeling from the effects of the various trade wars and geo-political activities that were putting undue stress on world trade.
     The global village right now is also seeing the best and worst in leadership in dealing with and containing the pandemic; in some cases, self-inflicted addition to the woes that the world is already going thru and putting more pressure on already strained front liners who are helping to contain this pandemic.

Aviation Got Clobbered

     Face it, the aviation industry, by far, is one of the worst impacted by COVID-19. Though a lot of the governments have come out supporting it, the uncertainty of the borders opening up to regular travel and trade, has created fresh agony as cash reserves/funding are drying out.
     The airlines who had a strong cargo product have fared much better than others who had not invested in cargo.
     The fact remains that, outside of an economic downturn, cargo has to fly to support any kind of crisis anywhere in the world.

Can You Hear Us Now?

     It is a very loud message we send to all in the commercial airlines that a strong cargo operation is a very strong pillar of any airline business.
     The passenger side of the business is likely to take 2-4 years for a full recovery.
     Cargo revenue, therefore will be very critical to the sustainability of any airline.

Hope of New Technologies

     In situations like this when the world is in a lock down mode, the evolving technologies play a very important role.
     We are very fortunate that this has happened at a time that the world is already quite well into digitization that has allowed remote working keeping the wheels of large numbers of businesses in motion.
     Physical contacts have been replaced with virtual online contacts/meetings.
     The air cargo industry has been very slow to embrace digitization and is now playing catch up.

Time To Reset & Reboot

     Situations like this should be looked at as an opportunity to reset and reboot the business. It allows one to discard old inefficient ways of working and embrace the new paradigm where the old rules don’t apply and the new rules are not written. Embracing the change has got to be the top priority.

What We Did In 2008

     My team at EK SkyCargo embraced big change during the global financial crises of 2008-10 period and had excellent outcome that allowed us to completely digitize, resulting in increased productivity and optimized efficiencies bringing our unit costs down.

Homeward Bound

     WFH (working from home) has become an operative acronym now.
     Remote working facilities have been available for quite some time, but it has taken a pandemic to establish the value of working remotely and actually putting it into practice.
     Companies are also realizing that it adds value to their business in terms of lowering cost of real estate by allowing employees to work from home and also improved employee productivity.
     Employees are also finding that they tend to get a lot done with flexi timings, while improving their life on the domestic front.
     Less traffic on the roads also benefits the environment.

The Human Connections

     Remote communications/working are great, however, this should not take the warmth away from human interaction, which is critical to building relationship.
     So, we will all need to create a new hybrid norm which will have a balance between human and remote interaction.

Less Retiring Than Expected

     As a retiree I have found that this pandemic has allowed me to create SFH (socializing from home) as a norm. The advantageous part of it is, that with the lockdown, most people were home and had plenty of time for interaction. So virtual get together with friends around the world has become quite a norm enhancing social connectivity. To sit at home with a glass of adult beverage and talk to friends and family in various parts of the world at the same time also brings people closer to each other, especially in a world where people tend to be too busy and scheduling a physical meeting/come together is very challenging.
     I have now been able to establish connection and rekindle friendship with folks that I have not had any contact with for several decades.

Look For The Silver Lining

     I have caught up with folks going back to my school/college days.
     So, this situation has given us so many possibilities to enhance the quality of our work-life environment as well as business efficiencies.
     Most businesses and households are now burdened with higher costs/loss of income, piling up debts, so it is very imperative that we look to reducing our costs through the use of available technology of today and tomorrow.
     There has been a lot of human loss and pain and there will be a lot of pain in the short term, but there is also a bright future we can all look to ahead.
     Like it or not, there has been a reset and reboot situation in all aspects of our lives. Going forward, we must unload the baggage of yesterday so that the new norm can be embraced and fully developed, as has always been our tradition in air cargo.
Ram Menen


If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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