In a downturn time How to run a business?

high inflation is unwelcome. It is also unfamiliar. Warren Buffett, 91, the oldest boss in the 500 indexes of big firms, most recently warned about the dangers of rising prices in his annual shareholder letter for 2011. The average chief executive of a company in the index, aged a stripling 58, had not started university in 1979 when Paul Volcker, inflation’s enemy-in-chief, became chairman of the Federal Reserve. By the time average, the rise of capitalism was ushering in an era of low inflation and high profits (see chart 1). Their firms’ share prices rose between the global financial crisis of 2007-09 and the pandemic, a decade of rock-bottom inflation.

Didi global ought to be dead. Over the past year, the Chinese government has stopped the domestic ride-hailing giant from signing up new users and launched a cyber-security investigation into its operations, days after its $4.4bn initial public offering in New York last June. In a seemingly fatal blow, Didi is being forced to delist from America but blocked from relisting in Hong Kong. That the company has not collapsed is a testament to the strength of its business. Its future survival—and that of other Chinese tech darlings—remains in the gift of the Communist Party.

The probe into Didi is expected to wrap up shortly, and on June 6th the Wall Street Journal reported that the firm will soon be able to take on new customers. The news propelled Didi’s share price up by 60%. It still faces an investigation in America, where it is alleged to have underplayed regulatory risks in its domestic market, and investors are suing it on similar grounds. But these problems seem piffling next to what it has soldiered through at home.

The pandemic denied both the pleasures and tribulations of travel. The urge to make up for lost holidays and reunions with friends and families has brought the sort of airport holiday chaos that avoided scuppered their plans. A rush to take advantage of school breaks caused recent misery in Europe. Passengers queued for hours at airports from Mallorca to Manchester, and flights were delayed or cancelled. Americans were furious after nearly 3,000 flights were scrapped in the four days around the Memorial Day weekend in late May.

At least the hordes of unsatisfied customers are a sign that air travel is returning to normal. “Pent-up demand for travel is becoming,” says Andrew Charlton of Aviation Advocacy, a consultancy. The number of seats available on European airlines in the week commencing June 6th was only 9% below the same week in 2019. In North America it was just 5.6% down, another consultancy. Japan, which was in effect shut to tourists for two years, said on May 26th that it would start to relax restrictions on visitors. Where severe recent lockdowns set back a strong recovery in domestic flying, the planes going to be with you.

For the last two months it has been busy like the weekend every day, sighs a sales assistant at a large Zara store on a shopping street in the middle of Berlin. On the Tuesday after the long, about a dozen ladies were queuing for the fitting room, each carrying several items, many of them in hot pink or canary yellow, en vogue this season. They don’t seem to be deterred by Zara’s higher garment prices. At least not yet.

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