Sreekant Khandekar
Editor's Note

Can your business survive the financial cost of social distancing?

Airlines will not be able to fill their planes to capacity and restaurants will have to reduce the number of tables. Social distancing is a necessary but expensive business. Will companies be able to bear the burden?

Epidemiologists say COVID-19 will be around for a long time, finally infecting between 30 and 60 per cent of a country's population. The hope is that a cure will keep mortality low.

Social distancing will, therefore, also prevail till then.

But can businesses bear the cost of social distancing?

An airline needs a passenger load factor of, say, 70 per cent to break even. But if the law demands that the middle seat be kept vacant, breaking even is impossible - unless it sharply raises fares.

A restaurant has 30 tables. It does middling business in the week, but makes up with a full house on weekends. But social distancing demands that at most 15-20 tables be occupied simultaneously. If peak supply is restricted, how will it make money?

The same would be true for movie halls if they have to keep every second seat empty. It would apply to co-working spaces, which keep rates low by cramming tiny tables together.

And come to think about it, what about our own offices? If we have rented space to seat 100 people, we can no longer have more than 50 people at any moment. Can we afford the rent to seat only half the number?

My colleague Samarjit Singh thinks that to accommodate the demands of social distancing, many services will have to hike prices sharply - at the very time when the economy is in the dumps. This would be dangerous and shrink the market.

That, or companies will have to find a totally new way of looking at their business. For example, an airline may try to make up on cargo what it is losing on passenger revenue. And a restaurant may push harder for home delivery. Whether this will be enough to save them is what they have to find out.

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