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Good morning, and happy Friday.
If you wonder how badly the pandemic is going to hit the transportation and hospitality businesses, take a look at research out this week from Fortune Analytics. In a survey of U.S. adults, 74% said they have cancelled domestic trips they had planned for this year as a result of the pandemic. And a similar amount—71%—said they won’t consider flying until at least four months from now. A substantial number—35%—said they wouldn’t consider flying anytime in the next 12 months.
By the way, once they do resume flying, Southwest and Delta remain the popular favorites—with 46% and 41% net favorability ratings respectively. And Frontier and Spirit remain the dogs, with favorability ratings of 2% and 12% respectively. (Note: the full research is available only to our Premium Tier subscribers. Sign up here.)
One person who is bullish on travel is Egon Durban, co-CEO of Silver Lake, who spoke yesterday to a virtual gathering of the Fortune Brainstorm Tech community. Silver Lake revealed yesterday it had joined Apollo to invest $1.2 billion in online travel booking engine Expedia, just a couple of weeks after joining Sixth Street Partners to invest $1 billion in Airbnb.
When does he think travel will come back? “We believe that we are going to go back to being a functioning society, and capitalism is not going to fail. At some point, people will travel, and at some point, they will stay in hotels,” Durban said. “Whether travel comes back in six months, 12 months, 18 months, is less relevant to us.”
Separately, take a moment to read Dov Seidman’s Fortune essay on why business leaders need to demonstrate moral leadership to survive the pandemic. An excerpt:
“The business of business can no longer just be business. Everything is now personal; the business of business is therefore society. Mission and margin, profit and principle, success and significance are now inextricably linked. In the fused world, how we behave, how we operate, how we govern, and how we relate to people and communities matters more than ever. Going forward, businesses are going to compete on trust, on responsibility, and on creating and maintaining deep relationships with their stakeholders rooted in shared truths and values.”
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Remdesivir disappointment
Gilead Sciences' remdesivir antiviral drug failed a crucial clinical trial as a COVID-19 treatment, according to a draft document accidentally published by the World Health Organization. Per that document, the Chinese trial showed remdesivir neither improved patients' condition nor reduced the coronavirus's presence in their blood. Gilead says the study was terminated early because of low enrolment, and its results were inconclusive. Nonetheless, its share price fell 4% on the news. A subsequent drop in global stocks has also been pinned on the blow—but the EU's failure to agree a major economic recovery program is also a likely factor there. Financial Times
Penney drops
J.C. Penney is reportedly in advanced talks for bankruptcy funding from existing lenders Wells Fargo, Bank of America and JPMorgan Chase. The troubled retailer could file for bankruptcy within weeks. It has been losing money for years, and the coronavirus lockdown could be the last straw. Wall Street Journal
Chinese figures
A study published in the Lancet medical journal estimates that there are as many as four times as many coronavirus cases in China as officially reported. It noted: "The case definition was initially narrow and was gradually broadened to allow detection of more cases as knowledge increased, particularly milder cases and those without epidemiological links to Wuhan, China…Estimates of key epidemiological parameters using epidemic curves could be biased if they do not account for such changes in case definitions." Fortune
Digital currency
McDonald's, Subway and Starbucks are, according to Chinese media, participating in a digital-currency trial that's underway in the Xiong'an special district near Beijing. The People's Bank of China has been developing its digital-currency concept for a few years new, though details about its functioning remain scarce. CNBC
AROUND THE WATER COOLER
Easterbrook protest
Union pension funds are protesting against the pay package being granted to former McDonald's CEO Steve Easterbrook, who was sacked in November over a consensual relationship with an employee. Easterbrook is getting a $44 million payout and CtW Investment Group—which works with the funds—wants investors to vote against board members Enrique Hernandez, Jr. and Richard Lenny, who were responsible. Bloomberg Law
Gates memo
Bill Gates penned a 6,000-word "memo" on the coronavirus pandemic, arguing that the response has been no overreaction. The essay is heavy on can-do spirit, noting: "This is like a world war, except in this case, we’re all on the same side…Everyone can work together to learn about the disease and develop tools to fight it. I see global innovation as the key to limiting the damage." Fortune
Really, please don't
President Trump suggested during a live TV briefing that coronavirus might be beaten if people inject themselves with disinfectant. Over to pulmonologist Dr. Vin Gupta: "This notion of injecting or ingesting any type of cleansing product into the body is irresponsible and it's dangerous. It's a common method that people utilize when they want to kill themselves." BBC
Empty showrooms
Germany may have allowed car showrooms to reopen following weeks of lockdown, but that doesn't mean customers are flocking to scope out their next purchase. As showroom manager Joachim Niersmann puts it: "As before the virus, customers don’t know what they have to buy: hybrids or electric vehicles or diesel. I think it will be better in coming times, but this week they don’t want to make a mistake with the car, or with the virus." Fortune
This edition of CEO Daily was edited by David Meyer.
