The Airlines' Greatest Future Competition: The Speed of Light

June 7, 2005 -- -- We've all seen pictures of the old wall-mounted, wooden-box crank telephones from the early part of the 20th century. The "transmitter" was mounted on the box -- the earpiece you had to hold against your ear separately -- and after cranking the thing to ring a bell at the operator's switchboard somewhere in town, you could be plugged directly into someone else's line and, hopefully, have them answer the bell you were manually (electrically) ringing at the other end.

The sound was little better than using two tin cans connected by a cord, but with a certain amount of effort and often a bit of yelling (so that the entire south 40 could hear every word of your end of the conversation), actual communication could occur.

Contrast that to the tiny cell phone and headset that enables you to walk down the street looking like you're talking to yourself -- today a common sight that yesterday could easily have landed you in psychiatric evaluation.

Today's phones -- landline or cellular -- have enabled transparent communication. In other words, we don't spend the conversation thinking about the technology involved nor, in most cases, having difficulty hearing each other. The medium has become invisible, and the result is two minds communicating orally as effectively as humans can.

Now, hold it. This column is about transportation and flying, so why am I on about phones?

Because we're in the crank telephone stage of a thing loosely referred to as teleconferencing, and when it matures to the status of transparency -- when people can sit in two different parts of the planet and see and hear each other with the same degree of transparency we've achieved with voice communications -- two very large challenges to commercial aviation will begin to roll across the industry like an economic hurricane -- a change driven first by convenience, and then by cost.

Front-line businessmen and women will drive the initial wave of this economic tsunami. We're talking the average so-called "road warriors" (I'm also a card-carrying member of that millions-strong club) who have to haul their bodies physically to and from meetings, conventions, sales pitches, site inspections and a withering list of other personal appearances. This is road time on which American businesses currently spend between $400 and $600 per person per day. Senior airline executives for the last 10 years have blithely argued away this potential impact -- often with a derisive snort -- on the grounds that people will always have to meet person to person. But for the airlines that's a dangerous and false sense of security based on their archaic dependence on the business traveler to provide the majority of their currently scarce profits.

It's true that international business involving cross-cultural human contact will always tend to require more in-person travel. But after that initial personal contact bond has been established, the mere press of business will call into question the sanity of spending three days on the road to get back to the same people when the same meeting could be done in a teleconferencing environment costing no more than an hour of valuable time.

When I use the word teleconferencing, you probably have the image of business people huddled in a small conference room watching a very poor single picture of their counterparts staring into a single camera somewhere (or an executive leaning forward to peer too closely at a tiny computer image). That's the crank telephone stage we're currently in. Tomorrow will be very, very different.

Imagine, instead, sitting in a comfortable, well-appointed boardroom with your counterparts in full color and essentially three-dimensional clarity across the table in what appears to be the other half of the same room -- when in fact they're in Tokyo or London and presented to your eyes as a high-definition, digitally reassembled, liquid crystal image on a seemingly transparent glass wall that divides the table. When someone speaks, you hear his or her voice coming from the same place you see their image. No cameras jerk around, eye contact is instant and easy, and documents can be exchanged in full color by very high-speed facsimile devices built into the table. Add to this a new breed of service organizations that will specialize in catering the same lunch on the same plates on both sides of an ocean, and you have what we in aviation have understood for a very long time: The effectiveness of good simulation. With the realism of a flight simulator, you're essentially together, with the exception that trying to shake hands through the glass won't work.

Now, imagine a cost of $40 per person per day versus $400 to $600 and you see why, when the technology matures to achieve transparency (where the medium no longer gets in the way), businesses simply won't have a choice. The result will be a massive decline in business airline travel.

Convention travel will be largely unaffected, but for most other road warrior trips, this shift will be huge and dangerous for an airline industry that has traditionally leaned on business travelers for more than 60 percent of its scarce airline revenues.

Bottom line? Those domestic airlines in denial about transparent teleconferencing eventually dismantling the airlines' long-standing addiction to the business traveler's dollar will join the dinosaurs. Simply put, airlines that position themselves to primarily serve the leisure, discretionary traveler will survive. Those that don't, won't.

John J. Nance, ABC News' aviation analyst, is a veteran 13,000-flight-hour airline captain, a former U.S. Air Force pilot and a lieutenant colonel in the Air Force Reserves. He is also a New York Times best-selling author of 17 books, a licensed attorney, a professional speaker, and a founding board member of the National Patient Safety Foundation. A native Texan, he now lives in Tacoma, Wash.