Name: International air travel might not recover until 2024
Uploaded: 2020-10-27
Duration: 3 min 57 s
Description: Raytheon Technologies CEO Gregory Hayes explains why.

 ALAN MURRAY: The airline business has just been pummeled. When do you think you'll be back to anything close to normal? GREGORY HAYES: Close to normal, I guess we would define as 2019, which was the highest level of air travel ever. And just to put it in perspective, on a typical day in the US, you'd have about 2 and 1/2 million people going across to the TSA checkpoints in the US. Back in early April, that was down to less than 200,000. Today, it's back to around just under a million. I think we had one day over a million a week and a half ago. Let's call it about a million. So we're still down significantly. I think domestic air travel is going to take several years to recover. The more problematic piece, I think, is the international air travel, and that remains down about 88% from pre-pandemic levels. And it's hard to imagine getting on a wide body airplane, a 777 or 787 or an 8350, and going across the Atlantic because frankly, they don't want us. And you can't go to Asia. And again, that will take a really long time. I think that's 2023, maybe early '24 before we finally see a recovery. ALAN MURRAY: Your business depends heavily on innovation, new products on both sides, defense side and commercial side. How have you found maintaining innovation during this crisis? GREGORY HAYES: It's another great question, Alan. I think what we have found is a couple of things. Where we have specific development programs underway and we have people, that is, engineers, program engineers, project engineers, other folks working from home, we've actually seen an increase in productivity. And that's probably not surprising because you don't have people commuting. You don't have people talking at the water cooler. People are getting their work done. And so we've seen about a three point uptick in productivity across all of our development programs, so that's the good news. The bad news really goes to your question on innovation, and that's where we have seen a significant slowdown. And the way I would measure it is patent applications. We've got over 10,000 patents in our portfolio. We're generally developing somewhere between 500 and 600 new patents a year. As we look today, as we sit here in October, our patent application rate is down about 50%. What that tells me is that while we're getting work done, it's not a same as being together and innovating. And I always tell people this. Companies don't innovate. People do. And if you don't have people in the same room going back and forth, this is not, I would say, innovation like many people would think of. But we do some of the most complicated systems in the world, whether it's a radar, whether it's a jet engine, whether it's a cyber program. Those things require close collaboration, and that's where the discovery happens. That's where the innovation happens. So I don't think we're not falling behind anywhere, but clearly, it's an issue for us. ALAN MURRAY: You don't think they're digital tools that could be developed that can help you fill that gap without bringing people back together? That's a big change, down 50%. GREGORY HAYES: It is, and I think it is a challenge that we're going to have to face as I suspect we won't be fully back in the office until sometime probably the middle of next year. And we can't afford to lose a year of innovation. Look, we've got lots of tools that we're using. We're use the Teams platform from Microsoft. We've got Zoom. I don't know about you, but I think people get fatigued on Zoom. And when you've got seven or eight hours on Zoom in front of the camera, it's not the same as talking to somebody sitting next to you in a room. And it is that personal interaction, I think, that's missing here, which goes a long way to driving innovation. 

International air travel might not recover until 2024

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Raytheon Technologies CEO Gregory Hayes explains why.