Over 100 million workers will be affected by Biden's vaccine mandate

Kevin Delaney, Charter Co-Founder & CEO, talks about how the new OSHA vaccine mandate will affect businesses and travel.

Video Transcript

- Kevin, I mean, you know, whether or not, OSHA is the best way to go with all this. At the end of the day, this is the rule that's going to be put in place. And a lot of legal experts are saying that this is fully within the law to do. But how is it looking in terms of how businesses want to operate and actually get this done?

- Yeah, so it looks like the businesses will actually have some a little time. You know, it's first it's important to note. It does take some time for OSHA to get this rule through and approved. And then it does actually-- they usually give a lag for businesses to actually put this rule in place to have it fully enforced.

And so you know, what we're saying-- we're going to see probably is some question of weeks or months before this rule is fully in effect and businesses are forced to comply with it. So this gives them some time.

And you know, what we've seen from polls is that businesses roughly 20% of businesses seem to have some kind of vaccine mandate already. And about a little bit more than 50% had planned to put it in place by the end of the year.

So you know, in that context, we-- we know that a lot of businesses were heading in this direction. Some of that had concerns about legally being able to do it and the possibility of being sued.

The OSHA rule actually gives them tons of cover for that for putting it in place. And so it just-- I think it accelerates a direction that a lot a lot of businesses we're headed in already.

- Yeah. And as we were discussing last week, it kind of gives them the pass there in terms of the fears that employees would want to leave and go somewhere else where this wasn't impacted if it's kind of across the board. Not really any other employer to go to.

But when you look at maybe some of the other issues around and all of this, I know another one that you were looking at was the return of business travel. And that one seemingly losing some steam here.

And I'm not sure how much it's tied to the decision. At a lot of firms to just say, look, we're going to hold off on business travel until we figure out what exactly our policies are going to be moving forward. What are you seeing play out on that front?

- Yeah. Well, I think there are two dimensions of it. The first one is like the truth is that we have been going through this surge in infections, that people don't want to get on airplanes, and don't want to travel around to other areas.

So that, you know, that's obviously a big factor. The second thing is what you just mentioned, which is that if you're not back in the office, business travel is less likely, you're not going to travel to see a client in their home. If they're not in the office, that actually that-- that means that you're less likely to travel.

And the numbers really reflect that. So as of this summer, July, and August, a lot of the airlines, the US airlines are saying business travel was about one third of the pre-pandemic levels. So somewhere 30%, 40% of pre-pandemic levels.

And Delta for one had predicted that it would actually be closer to 60% of pre-pandemic levels by the end of September. And they've just acknowledged. And the airlines pretty much across the board have acknowledged that there were not actually seeing that.

This-- this return to the workplace. And return to business travel is-- is taking a lot longer for you know for the reasons we've been talking about than they expected. And I think there are fundamental questions about what business travel actually will look like when things normalize.

- Yeah. I wonder too how much staying power there is. You know, the longer businesses. At first, you know, a lot of this travel is called off and everyone was kind of in the same boat. But the longer this happens, I wonder if they just get used to doing deals via Zoom, via Skype.

Not ever needing to travel if. That becomes the norm how much weight that-- that has one year two years past the pandemic.

- Yeah. I think you know, Bill Gaetz is probably the most extreme forecast on this, which is that business travel would be 50% lower after the pandemic than it was before. Wall Street Journal did a pretty good detailed analysis. And their prediction was about 35% lower.

And you know, the reason for this is that people don't actually need to travel as much they realize. What I've heard from talking to a bunch of business leaders is that they're going to still do the client calls. But for internal meetings, they're more likely to do it by Zoom, for example.

The other thing that's a factor here is that a lot of businesses increasingly have commitments around their carbon impact. And for a lot of services businesses, especially the amount at which their employees fly on airplanes is one of the biggest contributors to their carbon footprint.

And so if you've committed to within a few years cut your corporate carbon, carbon footprint by 50% or more, one way that you can actually achieve that is by keeping the traveling down once things actually come back. And so my-- you know, I think that there's a decent chance that over the next few years things settle in, not that far from where the Wall Street Journal is forecasting. About 30% down or so from pre-pandemic business travel levels, which is not great for airlines.

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