Popular video conferencing company, Zoom Communications is now valued more than the combined market capitalization of seven of the world’s largest airlines
As coronavirus pandemic continues to sweep across the world, the demand for teleconference has skyrocketed as companies around the world go online to stay connected while practicing social distancing.
Zoom’s teleconference services are being widely used for education, telehealth and have even spread into personal space through weddings and “zoom parties”.
As of May 15, 2020, Zoom’s market capitalization has skyrocketed to $48.8 billion, despite posting revenues of only $623 million over the past year.
Conversely, the airline industry has suffered unprecedented plummet in demand due to international travel restrictions
The world’s top airlines by revenue have fallen in total value by 62% since the end of January 2020. The table below shows Market Capitalization of seven of the world’s largest airlines.
With countries scrambling to contain the spread of COVID-19, many airlines have cut travel capacity, laid off workers, and chopped executive pay to try and stay afloat.
If and when regular air travel will return remains a major question mark, and even patient investors such as Warren Buffett have pulled out from airline stocks.
“The world has changed for the airlines. The future is much less clear to me about how the business will turn out”, Warren Buffet reportedly said.
Zoom’s recent success is a product of its circumstances, but will it last? That’s a question on the mind of many investors and pundits ahead of the company’s Q1 results to be released in June.
As many states and countries begin taking measures to restart economic activities, airline industry could see a cautious return to the skies—although any such recovery will surely be a “slow, long ascent”, according to some experts.