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AIR TRAFFIC IS PROFITING FROM THE "NEW ECONOMY"

Companies engaged in telecommunications, digital technology and the internet constitute a new branch of economy which is called "New Economy" by experts. They promise awe-inspiring growth rates and are intriguing share-holders and investors alike. Quite often they are present at the stock-exchange, their booking notation frequently exceeding their companies' value in a manifold way. Although the euphoria concerning the New Economy corporations at the stock-exchanges has been giving way to a rather moderate view of affairs, the growth rate forecasts are still enormous.

As a result, companies referred to as the "Old Economy", aerospace firms as well as airlines among them, have more difficulties to win over investors with long-term profit prospects. Not seldomly it is overlooked that the New Economy cannot survive without a functioning Old Economy.

The internet as a marketing organisation for goods and services replaces traditional means of communication like telefax, telephone or letters. Yet without logistic enterprises that organise the transport of the ordered items from the production location to the wholesaler and the final user, the flow of goods is fastly coming to a standstill. Old and New Economy influence and are dependant of each other. They can only prosper together.

Fears stating that air traffic itself is limiting the growth of air traffic are out of place. Aviation is one of the largest profiteers of the new communication technologies. In ticket sales, all airlines increasingly use the internet. With Delta Air Lines, frequent flyers now can choose and reserve the seat on their flight on-line. Another, highly profitable advantage for the airlines is the easier updating of maintenance information. While literally tons of paper in the form of maintenance handbooks used to be sent-out regularly, now this happens on-line to a large degree, which saves substantial costs.

World-wide the internet simplifies human communication to a high degree. Everyone can communicate with anyone without any problems. Information are immediately available on a global scale. Every internet user can extract the very information out of the web that s/he needs. And this awakens needs that have to be satisfied.

The demand for quick transport of goods is growing. Customers who order their merchandise by the fastest available medium do not intend to wait three or four weeks for the delivery of their orders. Internet users have high expectancies regarding customer service. Companies that cannot deliver within 48 hours do not have to present themselves in the world-wide web at all. Since in internet communications it does not matter whether seller and buyer live on different continents, the logistics chain is a decisive factor for the success of a New Economy enterprise.

Only air traffic can assure the transport of goods demanded by the customers in terms of wanted speed and necessary volume. Logistic companies like FedEx, UPS and DHL as well as air transport corporations like Lufthansa Cargo do not record favourable rates of growth for no reason. While their fleets frequently consisted of converted, used jets, the number of newly ordered freighters is continually increasing. For the first time ever, Boeing will deliver more 747s this year in the cargo version than in the passenger variant.

Internet and New Economy are going to change air traffic. That is fore sure. But they will not render it redundant in any case.

From page 4 of FLUG REVUE 10/2000