Economy

The Economic Lessons Of Portuguese Sardines

In Portugal, crisis or no, value is measured one can at a time.

Sardines at the Loule market in Portugal
Sardines at the Loule market in Portugal
Claire Gatinois

MATOSINHOS — If Antonio Pinhal’s life was to be summed up in one word it would be consistency. In a moving and restless world, this quiet man has managed to keep his father’s sardine cannery as it was. Just about.

Pinhais, the family company that was established in 1920 in the small Portugese fishing town of Matosinhos, has remained in its original condition for almost a century now. The same beige marble tables are used to prepare the fish that the boats from the Algarve region bring in every morning. Only the machines that lubricate the fish and can them have been upgraded. “I don’t like change,” Antonio says.

His son Antonio Junior comes up with all kinds of new ideas, including wrapping the boxes of the sardines with peppers in a flashy yellow package. But his boss isn’t very enthusiastic about it. “He is young, and young people always want to change everything,” he says gazing at his son’s latest idea: business cards in the shape of a sardine can.

His stubborn consistency, his love for tradition, his refusal to sell to supermarkets that “want quantity but not quality” — this is why Antonio Pinhal is successful.

A luxury product

Thanks to a simple sardine can, Antonio Pinhal has made a luxury product he sells in high-end grocery stores in Portugal as well as abroad. Ninety percent of the cans go to France, Austria, Denmark, the U.S., Italy and the Netherlands.

Thanks to the exports, neither the company’s revenue nor the number of employees has changed because of the economic crisis. Plus, this company is one that has helped Portugal’s foreign trade improve progressively.

Portugal is hoping to free itself from the Troika — the European Commission, the International Monetary Fund and the European Central Bank, which gave the country 78 billion euros in May 2011 — by the end of June. In this context, Pinhais stands as an economic model, proving that the country can get through the crisis by ennobling its past and not deprecating it.

In Matosinhos, purchasing power has been greatly affected by the economic crisis. “After the Carnation Revolution in 1974, the wages shot up,” explains Dr. Narciso Castro e Melo, secretary-general of the Portuguese Association of Manufacturers of Canned Fish. “The competition with Morocco killed most of the factories. Only the best remained.”

An adapting industry

But the sardine industry had already adapted and adjusted its strategies. Some companies, like Pinhais, chose the niche market while others opted for the larger-scale market. With some innovation, new products such as rillettes and pâté, and new flavors such as oil, tomato and pepper, the professionals tried to focus on exports and the top-of-the-range market.

A fisherman in Matosinhos — Photo: Lamúrias por gole

“In 1938, there were 153 factories in Portugal and they produced 43,000 tons of fish,” Castro e Melo says. “In 2013, 20 factories produced 80,000 tons.” According to him, this is “progress towards modernity.”

Other manufacturers also invested in exports to hold on during the crisis. Textile and agribusiness companies were forced to abandon the grim domestic market and look overseas. This explains why the country re-examined its GDP growth perspective from 0.8% to 1.2% this year.

“We still have a long way to go,” notes Joao Loureiro, a macroeconomics professor at Porto University. “We were asleep for years but now we are waking up. The companies that produced for others are reclaiming their products and enforcing the Portuguese added value of their brands.”

But after three years of supervision, the “post-Troika” era seems scarier than desirable. “Since the beginning of the year, we had many positive economic signals,” says Joao Cesar Das Neves, professor of economics at the Catholic University of Portugal. “But the public sector’s budget is not great.”

Is the Troika essential?

Whether supporting right or left wing parties, the majority of the country is angry at Prime Minister Pedro Passos Coelho’s government, which made cuts in public service wages, pensions, bonuses and subsidies, rather than reform the economic model entirely.

“When the Troika leave, our problems won't disappear with them,” says Eurico Dias, the Economic Secretary to the Socialist Party, the main opposition. There’s a high deficit, a debt that equals 130% of the GDP, high rates of unemployment, and a drain of young people emigrating, he notes.

Plenty of people think it would be crazy to let the country escape the Troika without any guarantee. “We still need the EU — the public’s confidence in the financial markets hasn’t recovered yet,” says Das Neves. The public also mistrusts politicians, who are tempted to make promises they won’t be able to keep just so they can win the upcoming election next year.

But none of this scares the Pinhal family. The only concern for them at the moment is bad weather and smaller schools of sardines.

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Future

7 Ways The Pandemic May Change The Airline Industry For Good

Will flying be greener? More comfortable? Less frequent? As the world eyes a post-COVID reality, we look at ways the airline industry has been changing through a pandemic that has devastated air travel.

Ready for (a different kind of) takeoff?

Carl-Johan Karlsson

It's hard to overstate the damage the pandemic has had on the airline industry, with global revenues dropping by 40% in 2020 and dozens of airlines around the world filing for bankruptcy. One moment last year when the gravity became particularly apparent was when Asian carriers (in countries with low COVID-19 rates) began offering "flights to nowhere" — starting and ending at the same airport as a way to earn some cash from would-be travelers who missed the in-flight experience.

More than a year later today, experts believe that air traffic won't return to normal levels until 2024.


But beyond the financial woes, the unprecedented slowdown in air travel may bring some silver linings as key aspects of the industry are bound to change once back in full spin, with some longer-term effects on aviation already emerging. Here are some major transformations to expect in the coming years:

Cleaner aviation fuel

The U.S. administration of President Joe Biden and the airline industry recently agreed to the ambitious goal of replacing all jet fuel with sustainable alternatives by 2050. Already in a decade, the U.S. aims to produce three billion gallons of sustainable fuel — about one-tenth of current total use — from waste, plants and other organic matter.

While greening the world's road transport has long been at the top of the climate agenda, aviation is not even included under the Paris Agreement. But with air travel responsible for roughly 12% of all CO2 emissions from transport, and stricter international regulation on the horizon, the industry is increasingly seeking sustainable alternatives to petroleum-based fuel.

Fees imposed on the airline industry should be funneled into a climate fund.

In Germany, state broadcaster Deutsche Welle reports that the world's first factory producing CO2-neutral kerosene recently started operations in the town of Wertle, in Lower Saxony. The plant, for which Lufthansa is set to become the pilot customer, will produce CO2-neutral kerosene through a circular production cycle incorporating sustainable and green energy sources and raw materials. Energy is supplied through wind turbines from the surrounding area, while the fuel's main ingredients are water and waste-generated CO2 coming from a nearby biogas plant.

Farther north, Norwegian Air Shuttle has recently submitted a recommendation to the government that fees imposed on the airline industry should be funneled into a climate fund aimed at developing cleaner aviation fuel, according to Norwegian news site E24. The airline also suggested that the government significantly reduce the tax burden on the industry over a longer period to allow airlines to recover from the pandemic.

Black-and-white photo of an ariplane shot from below flying across the sky and leaving condensation trails

High-flying ambitions for the sector

Joel & Jasmin Førestbird

Hydrogen and electrification

Some airline manufacturers are betting on hydrogen, with research suggesting that the abundant resource has the potential to match the flight distances and payload of a current fossil-fuel aircraft. If derived from renewable resources like sun and wind power, hydrogen — with an energy-density almost three times that of gasoline or diesel — could work as a fully sustainable aviation fuel that emits only water.

One example comes out of California, where fuel-cell specialist HyPoint has entered a partnership with Pennsylvania-based Piasecki Aircraft Corporation to manufacture 650-kilowatt hydrogen fuel cell systems for aircrafts. According to HyPoint, the system — scheduled for commercial availability product by 2025 — will have four times the energy density of existing lithium-ion batteries and double the specific power of existing hydrogen fuel-cell systems.

Meanwhile, Rolls-Royce is looking to smash the speed record of electrical flights with a newly designed 23-foot-long model. Christened the Spirit of Innovation, the small plane took off for the first time earlier this month and successfully managed a 15-minute long test flight. However, the company has announced plans to fly the machine faster than 300 mph (480 km/h) before the year is out, and also to sell similar propulsion systems to companies developing electrical air taxis or small commuter planes.

New aircraft designs

Airlines are also upgrading aircraft design to become more eco-friendly. Air France just received its first upgrade of a single-aisle, medium-haul aircraft in 33 years. Fleet director Nicolas Bertrand told French daily Les Echos that the new A220 — that will replace the old A320 model — will reduce operating costs by 10%, fuel consumption and CO2 emissions by 20% and noise footprint by 34%.

International first class will be very nearly a thing of the past.

The pandemic has also ushered in a new era of consumer demand where privacy and personal space is put above luxury. The retirement of older aircraft caused by COVID-19 means that international first class — already in steady decline over the last decades — will be very nearly a thing of the past. Instead, airplane manufacturers around the world (including Delta, China Eastern, JetBlue, British Airways and Shanghai Airlines) are betting on a new generation of super-business minisuites where passengers have a privacy door. The idea, which was introduced by Qatar Airways in 2017, is to offer more personal space than in regular business class but without the lavishness of first class.

Aerial view of Rome's Fiumicino airport

Aerial view of Rome's Fiumicino airport

commons.wikimedia.org

Hygiene rankings  

Rome's Fiumicino Airport has become the first in the world to earn "the COVID-19 5-Star Airport Rating" from Skytrax, an international airline and airport review and ranking site, Italian daily La Repubblica reports. Skytrax, which publishes a yearly annual ranking of the world's best airports and issues the World Airport Awards, this year created a second list to specifically call out airports with the best health and hygiene standards.

Smoother check-in

​The pandemic has also accelerated the shift towards contactless traveling, with more airports harnessing the power of biometrics — such as facial recognition or fever screening — to reduce touchpoints and human contact. Similar technology can also be used to more efficiently scan physical objects, such as explosive detection. Ultimately, passengers will be able to "check-in" and go through a security screening anywhere at the airports, removing queues and bottlenecks.

Data privacy issues

​However, as pointed out in Canadian publication The Lawyer's Daily, increased use of AI and biometrics also means increased privacy concerns. For example, health and hygiene measures like digital vaccine passports also mean that airports can collect data on who has been vaccinated and the type of vaccine used.

Photo of planes at Auckland airport, New Zealand

Auckland Airport, New Zealand

Douglas Bagg

The billion-dollar question: Will we fly less?

At the end of the day, even with all these (mostly positive) changes that we've seen take shape over the past 18 months, the industry faces major uncertainty about whether air travel will ever return to the pre-COVID levels. Not only are people wary about being in crowded and closed airplanes, but the worth of long-distance business travel in particular is being questioned as many have seen that meetings can function remotely, via Zoom and other online apps.

Trying to forecast the future, experts point to the years following the 9/11 terrorist attacks as at least a partial blueprint for what a recovery might look like in the years ahead. Twenty years ago, as passenger enthusiasm for flying waned amid security fears following the attacks, airlines were forced to cancel flights and put planes into storage.

40% of Swedes intend to travel less

According to McKinsey, leisure trips and visits to family and friends rebounded faster than business flights, which took four years to return to pre-crisis levels in the UK. This time too, business travel is expected to lag, with the consulting firm estimating only 80% recovery of pre-pandemic levels by 2024.

But the COVID-19 crisis also came at a time when passengers were already rethinking their travel habits due to climate concerns, while worldwide lockdowns have ushered in a new era of remote working. In Sweden, a survey by the country's largest research company shows that 40% of the population intend to travel less even after the pandemic ends. Similarly in the UK, nearly 60% of adults said during the spring they intended to fly less after being vaccinated against COVID-19 — with climate change cited as a top reason for people wanting to reduce their number of flights, according to research by the University of Bristol.

At the same time, major companies are increasingly forced to face the music of the environmental movement, with several corporations rolling out climate targets over the last few years. Today, five of the 10 biggest buyers of corporate air travel in the US are technology companies: Amazon, IBM, Google, Apple and Microsoft, according to Taipei Times, all of which have set individual targets for environmental stewardship. As such, the era of flying across the Atlantic for a two-hour executive meeting is likely in its dying days.

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