The Digital Signage ExpertSince WWII we’ve not had an air travel shutdown as big as we have now, this dwarfs even 911. I need not go into detail as there are other and better sources to pontificate on this.
At the moment what is more concerning is the economic impact, an impact that will also reach the digital signage industry quickly. It is no secret that we’ve just about got our lower lip above the waterline in this last recession. And as The Blotter reflects, a good many projects are being moved forward. With the flying ban nearing almost a week now, we have to seriously consider the future of business and companies that source and supply our still fragile industry. I wish to reflect aloud my feelings.
The obvious first hit will be Tourism and Hotels, this no doubt is a huge industry, dependent on the airlines and reflecting all the way down to bed and breakfasts around the world. The first to feel it will be those in the tourist industry here in Europe. If the ban remains then even those in other countries will have the knock on affect because many who use them will not be able to travel to those areas. The residual that still can fly will be unsure that while on vacation they might too be stranded. So do reconsider your travels plans NOW.
Conventions and exhibitions, yes these too will have a similar washout like the tourism industry. I think our first possible victim will be the Screenmedia Expo here in London beginning of next month. Although the operators are in London, many of the exhibitors will not be, and visitors are expected from around the world.
The Airlines, as a former airline employee I can only confirm that these folks manage on a narrow margin. This margin has been endangered many times yet they’ve been able to adjust. I fear that this is the mother of all margin losses ever. Some airlines are losing as much as $20 million a day. Except for the cost of fuel all other operating factors remain static. Staff wages, leasing fees cannot be easily whittled down in such a crisis. I doubt much that any insurance will cover these losses. Some of our favorite companies may not be around on the other side of this. If the volcano spews for a year as it did in 1821 then many airlines will have fleets that cannot be returned to service. In the end they probably will not even own the planes anymore because they themselves will have gone out of business.
Our food, very critical, what has happened over the years is that five companies that own nearly all the food in the world have moved production to remote areas, mostly to South America. The supply chain is for the most part the modern jet plane. Perishable foods cannot be transported by ship or trucks; they need the speed of the planes. Locally grown foods will benefit from this and it is now an opportunity for them to grab market share. Monoculture farms produce too much of a good thing to be able to sustain their income. The result? Food prices that are already inching upward will begin to skyrocket.
Oil, here is about the only good news to this. Dubai will have to reconsider the palaces they are building on the back of rich oil incomes, no doubt the fuel guzzling aircraft demand will slack off quickly and the price at the petrol station will drop.
Defense, here I don’t see a major impact because although Europe is the exchange fulcrum of all troops heading to Afghanistan, that fulcrum can be shifted to alternative locations, and I think this has already begun.
Globalization will have a knock, but only shortly. Popular manufacturing locations will have a tough time getting components to market – computers and screen manufacturers will feel the pinch and prices for these will, along with food, begin to rise rapidly. This sadly will pour cold water on those projects that have been finely tuned to costs.
An answer to all this? Keep a close eye on the news, monitor your suppliers carefully, work your spreadsheets diligently and most of all be sure your customer is liquid before nailing up those precious screens.
James van Etten, Editor CLIPPINGs