Flight risk: airlines and covid-19

Hello and welcome to The Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. Divorce is still illegal in the Philippines, although a bill that's currently with the Congress may change that. We ask why the country's politics and its politicians are so much more socially conservative than the citizens seem to be. And the era of delivery by drone is nearly upon us. But how will drones avoid the thieves and the mischief-makers who will try to down them? We look into some technology that may help keep drones and your delivery safe. But first, Over the weekend, global reactions to the COVID-19 pandemic led to more travel restrictions, more border closings, and more canceled flights. Spain began a national shutdown like the one in Italy. France shuttered all of its nonessential public buildings. And today, Germany will close its borders. [FOREIGN LANGUAGE] Rwanda, Morocco, and Kenya, among other African countries, put tighter controls in place, halting flights and closing schools and universities. America's ban on travelers from Europe took hold, leading to chaos in American airports. Without a national plan in place, American cities and states are enacting their own restrictions. New York's mayor, Bill de Blasio, closed public schools.

So this is a decision that I have taken with No joy whatsoever, with a lot of pain, honestly, because it's something I could not in a million years have imagined having to do. But we are dealing with a challenge and a crisis that we have never seen in our lifetimes, and it has only just begun.

The most decisive top-down move came from America's Federal Reserve, which cut interest rates to near zero and promised to pump $700 billion into the economy. Like others, we expect that the illness and the measures now being put in place to stem its spread —will have a significant effect on economic activity in the near term. Those in travel, tourism, and hospitality industries are already seeing a sharp drop in business. The industry clobbered hardest by the pandemic, it seems, is the one responsible for helping to spread it.

This is looking as bad as it's ever been for airlines, even past disruptions. Airlines are coming out with statements saying this looks far, far worse. Partly because it's not clear that there's a sort of an end in sight to it.

Simon Wright is The Economist's industry editor.

If you're a network airline in Europe, for example, you have two problems. One is that international travel seems to be sort of drying up to almost everywhere. And second is the domestic flights that feed those flights, which are vital to fill up those planes, are also being affected. So the whole system is breaking down. And I think that's why European airlines are taking the drastic action they have already that's been announced. And I'm sure there'll be further announcements very soon.

And how much of that malaise comes from travel restrictions that are ever-expanding, and how much of it from just failing demand from fearful passengers?

Well, there are two things going on there. The sort of immediate impact is from travel restrictions, but of course, because of travel restrictions and because of unwillingness to fly and uncertainty about the future, bookings have slumped enormously as well. And of course, bookings is pretty much the only way that revenue comes in for airlines.

So what are airlines doing at the moment to try to stem the flow?

SAS, the Scandinavian airline, is going to cancel most of its flights Lufthansa has said it's going to cut half its flights in May. But even as far afield as America, you know, the big carriers there are cutting domestic routes. And American Airlines, for example, is cutting 75% of its international flights because a lot of these airlines rely on the transatlantic traffic for a lot of their revenues.

But will those kinds of cuts and cancellations be enough, do you think?

So cancellations are one thing. Looking further ahead, there are other things they're doing. Hiring freezes and of course laying off workers temporarily. Norwegian Airlines, which was undergoing a restructuring and is financially fairly weak anyway, has said it's going to temporarily lay off half its staff. Scandinavian Airlines, who I mentioned earlier, said 90% of their staff will be laid off temporarily. And I think this is just a foretaste of much more to come.

So how much can we learn from what's happened in China's airline industry?

Chinese airlines might offer some sort of guidance as to what will happen, but it's not entirely clear that it will play out exactly like in China. In February, at the height of the cancellations, some 70% of flights weren't running in China. That's now ticked up a little bit. I mean, I think it's only around 40% of flights that aren't running, as China seems to have got the virus under control. So it's bounced back a little bit there. But what you've got to remember is China has an enormous domestic market, and they've been slashing prices, and it could be the domestic market that's picking up rather than international travel.

And is there no confidence in the industry that the scenario will look like as it has during past emergencies, pandemics, global problems?

I wouldn't say there was confidence. I would say there was hope in the industry that that's how it's going to pan out. But again, you know, this is such a unique situation. It's not really clear. Look, for airlines, what they need to do is they need to preserve cash and they need to weather the storm. But it's a storm that there's no apparent end to.

And there's already talk from plenty of airlines about the prospect of state aid. How do you see that playing out?

Look, airlines are asking for state aid. There are other things that are working in their favor, things like slot rules that insist that they use slots for 80% of the time or lose them. And these slots can be very valuable at big congested airports. Regulators have relaxed those rules so they don't have to run ghost flights. The oil price has crashed, which will help airlines eventually. Some will have hedged at a higher price, but that'll sort of unwind. But I think government support is the thing they're looking at in the first instance. I think that would come in the form of loan guarantees and that sort of thing, just to keep liquidity for airlines that are feeling the pinch. And I think that pinch is going to be felt fairly soon.

Which is to say you think some airlines will in fact fold before this is all over?

I think that's undoubtedly the case. I mean, many in the industry are predicting that. There are plenty of weak airlines around. Citigroup have pointed out that in Europe, where they're being hit particularly hard, a third of airlines don't make a profit. I mean, if they're already not making a profit, this is going to be devastating for them. There's plenty of overcapacity in Europe. That could start to unwind very quickly.

And surely that will have knock-on effects in the rest of the industry in terms of airports, plane makers?

That's absolutely right. Look, airports are already reporting that they're losing out in America even before the travel ban. They said they were going to lose $3.7 billion as a result of this. Planemakers already— airlines are asking to defer the delivery of new planes. There'll be cancellations. We won't see growth, I don't think, at Boeing and Airbus in deliveries this year. And there'll be a knock-on effect after that. That will have the effect of reducing their profits, which will mean they'll have less money to invest in newer, more environmentally friendly planes. So this sort of thing will spread across the entire aviation industry.

And so how much do you think the overall change to the industry is dependent on how long this crisis goes on?

I think that's very important. The longer this goes on, the longer behaviors that have been sort of learned while people have been forced to stay at home might become sort of baked into how they behave. So it's not clear that business travel will come back to the extent it has. Maybe that holidaymakers, if they come back, decide to stay at home rather than going abroad. It could change the way people think about travel as a whole.

Simon, thank you very much for joining us. Thank you, Jason. To follow all of The Economist's coverage of the COVID-19 pandemic and how it's swiftly reshaping the world, visit economist.com/coronavirus. Divorce was long taboo in many majority Catholic countries. The first seismic shift came in 1970 when Italy legalized it. Then came Brazil in 1977, Spain in 1981, then Argentina, Ireland, Chile. It took until 2011 for the tiny island of Malta to follow suit after a bitter campaign. Now, with the exception of the Pope's home, just one country is left.

The Philippines is extremely socially conservative.

Miranda Johnson is The Economist's Southeast Asia correspondent.

It's the only country in the world, bar Vatican City, where you can't get a divorce unless you're Muslim.

Annulments can only be done on narrow grounds and at great expense.

Abortion is illegal, and anyone undergoing one or performing one risks jail time.

Same-sex marriage and civil unions are banned.

Even getting hold of contraceptives is rather difficult.

And Miranda, how much does all that reflect what Filipinos actually believe?

So actually, Filipinos appear to be rather less conservative than their laws. 70% of them, for example, supported a bill which, among other family planning measures, allows the distribution of contraceptives to poor women. And that was enacted in 2012, and yet there is still ongoing rows over it, legal obstacles. And then when it comes to asking Filipinos about whether they think divorce should be legal, which is very much a live issue in the Philippines at the moment. A bill is in Congress that would legalize divorce, and more than half of Filipinos do think that divorce should be legal. But actually, it's not clear whether that bill is going to get through Congress and whether it's going to be made so.

And so why is it the laws don't represent public views?

So it's a function of the Philippines' its history and its religious persuasions. So really a mix of politics and faith, and faith suffuses much of what goes on in Philippine society. And the hold of religion on politics over the decades has been extremely strong, and about three-quarters of Filipinos even still consider religion to be very important. And about 2/5, according to polling in recent years, still cast their ballots for a candidate who has been endorsed by their church or by their religious movement. So politics and faith very much intertwined in the Philippines.

Do you think that kind of mix of politics and religion is a holdover from the time that the Philippines was a Spanish colony, essentially under Catholic rule?

So it's tricky to say because on the one hand, the church and its teachings on contraception and marriage have been extremely important to Filipinos. But then when you compare the Philippines to other countries where Catholicism was brought by the Spanish centuries ago, you actually see that the Philippines is more conservative. So in Mexico, in Mexico City, for example, it's possible to get an abortion, and that's been available to women since 2007. 17 Mexican states have also legalized gay marriage, whereas same-sex marriage is sort of barely under consideration in the Philippines, let alone legalized. So while we've seen historically the enormous importance of Catholicism in the Philippines, increasingly we're seeing a trend towards Protestantism among certain groups in certain sectors in Philippine society. The number of Filipinos who say they attend weekly Catholic services, for example, is dropping. And that means that a hardcore of Protestants—about 10% of Filipinos describe themselves as Protestants or as evangelicals—these Protestant groups have become more important in a way that their voice has become louder. And they espouse a literal interpretation of the Bible often, which means that they are opposed to divorce and same-sex marriage and abortion.

So why is there this tension then between what the people believe in and what the politicians are pushing for?

It comes back to the mix of politics and religion, and some members of Congress belong to those evangelical groups that are so vocal. Eddie Villanueva, for example, who is the Deputy Speaker of the House of Representatives in the Philippines, is a prominent television evangelist, and he is the founder of Jesus is Lord, which is perhaps the country's largest evangelical movement. And when you consider the Senate, there are prominent members there who also espouse similarly socially conservative views because of their faith. And there are only 24 of them. So if they believe something strongly enough, it's not that difficult for them to influence the direction of policymaking. And with those 24 members of the Senate, they're actually elected nationally. So they have to occupy broad platforms, appeal as widely as possible, and it helps if they can get the backing of religious groups in the brutally competitive elections for those spots in the Senate. On top of all of that, in the Philippines, political parties are rather weak, and so there isn't an overriding ideology which governs politicians much of the time. Instead, they often go along with what the president wants, or they leave it to their own consciences.

And so with all that in mind, then, what chances for this divorce bill that's going through Congress now?

There have been various efforts to get a divorce bill through over the past few years. Certain lawmakers keep coming back and keep pushing for divorce legislation on the grounds that it will allow Filipinos who are trapped in abusive marriages to escape them more easily. The fact that people keep coming back and keep pushing divorce is a sign itself that change is underway. I mean, in the past, it was barely mentioned at all. So that's a sign of progress. But whether the divorce bill is going to go through on this occasion, I'm afraid I have my doubts.

Miranda, thank you very much for your time.

Thank you, Jason.

As COVID-19 makes more and more people avoid shopping centers and grocery stores, delivery companies are stepping into the breach. There's always been one problem with home deliveries, though: packages that are left unprotected.

Porch pirates are kind of stalking delivery vans, looking for juicy-looking parcels to steal from people's front doors.

Paul Marks writes about technology for The Economist.

And in New York City alone, the New York Times did a survey and found that about 90,000 parcels a day are being stolen by these so-called porch pirates. So it's a pretty bad problem.

I mean, I suppose one way to defeat them is perhaps to get things delivered by drone.

That's certainly been talked about. Yes, absolutely. You could use the drone to put down the parcel in somewhere where it's much harder for the porch pirate to reach. Perhaps a balcony space, something like that, for instance. But it also gives you the opportunity to do a much finer-grained delivery time. You know how long it's going to take from the warehouse to your house, and so you know when your parcel will arrive to the minute.

I mean, the very concept of drone delivery has been around for a while. Certainly Amazon has been threatening it for years already, and yet they're not buzzing around my house. I mean, what are the big challenges to making that happen?

They're manifold. And first of all, the air traffic has to be managed properly. That's one of the big problems. And we also have eVTOL, electric vertical takeoff and landing urban air taxis developing now as well. So there are those to deal with. The researchers here are also saying that, you know, drones are becoming much more visible publicly. The police are using them to find missing people. Firefighters are using them to look for the, you know, the glimmer of a restarting wildfire. Hospitals are using them to move drugs and tissue samples around their massive sites. They're very visible now, drones. And, and these researchers say that they think, unfortunately, they're going to be subject to vandalism. And there is also the problem, at some point, the post-carrying drone is going to have to come in low and slow, and it's going to have to dodge things like power lines, street lamps, clotheslines, any kind of infrastructure around houses and apartment blocks. And it's at that point that a drone could actually become victim to an improvised attack, perhaps from a baseball or a well-thrown stone, anything that could destabilise it, knock it out of the sky, and the parcel could be pinched.

I mean, how would you defend against that kind of problem?

Well, there are multiple ways to do it, but what you have to remember with a drone is they are very low-power devices with only enough computing power on board to do the job they're meant to do. Ideally, you would have some kind of computer image processing system on board that can see all around and see an incoming threat and dodge out of the way. But really, the kind of image processing needed to do that is beyond the battery power and computer power of the average drone. So a set of researchers in the US have come up with a very lightweight, very low-computer-power way to sense an incoming threat. They're using ultrasound and the Doppler effect to sense an incoming half-brick or baseball, and they're sensing it in time to tell the drone to jump out of the way of the threat.

The Doppler effect, the thing that makes a siren seem to change tone as it passes. I mean, how does that apply to drones?

So what happens here, on the drone they mount an ultrasound transmitter, and when it's at an altitude where there could be a threat, it's constantly emitting ultrasound, and a frequency shift of a signal reflected from an incoming half-brick, say, will be realized by the onboard computer. It'll say there's something coming in, where is it? At what angle is it coming in, and a little bit of mathematics, and it works out which way to dodge out of the way. And they're testing this in the lab, and they are soon going to be testing it on drones too. And they hope to have a system that will work up to about 30-meter range by June.

This potential for hijacking, I guess, is one of the challenges, but do you think it's among the biggest? Do you think the world really is ready for for packages delivered by drone?

This is one of the threats, but I think the bigger threat to parcel delivery is going to be air traffic management. There are 130 companies developing the urban air taxi, electric vertical takeoff or landing aircraft, so-called flying cars, and there's going to be quite a lot of competition for airspace. I think that's the greater problem, but when you're flying low and slow Certainly, thieving parcels with an improvised attack is another one.

So until this gets sort of industrialized and drone makers overcome problems also, I guess, of air traffic control, then we're stuck with fighting off the porch pirates.

That's right. Absolutely.

Paul, thank you very much for your time. Thank you. That's all for this episode of The Intelligence. If you like us, give us a rating on Apple Podcasts, and you can subscribe to The Economist at economist.com/radiooffer. 12 issues for $12 or £12. See you back here tomorrow.