The importance of time zones to business and London’s competitive advantage


An extended trip to Asia and Australasia demonstrates the problems the world’s different time zones pose for business. People call bright and early from an English morning, acknowledging only perfunctorily that it is late evening in Sydney, that you have already downed a glass or two of Australian wine and that you would like nothing more than to go to sleep.

It is widely recognised that part of London’s competitive advantage in financial services is derived from its timezone. Not because the power of the Royal Navy established Greenwich Mean Time as the standard for the world, but because the business day of London overlaps with those of other global financial markets.

At 9am GMT in London, it is 5pm in Singapore and Hong Kong and 6pm in Tokyo. Sydney is slightly less convenient (as I have noticed) but in European summer the difference reduces from 11 to a more palatable nine hours. And at 5pm in London, it is midday in New York and 9am in San Francisco.

The maximum time difference easily managed is between eight and nine hours, so for every location there are about seven time zones difficult to access. In the case of London, to the city’s good fortune, these time zones span the Pacific Ocean, where not many people live (sorry, New Zealand and Hawaii).

Do the same exercise elsewhere and the answer is less satisfactory. For Tokyo, the area more than eight but fewer than 16 time zones away covers eastern America and western Europe. If New York is the city that never sleeps, perhaps it is because Asia is doing business in the late evening and early morning of Eastern Standard Time. London’s advantage is here to stay.

I wondered if similar reasoning could be applied to airport hubs. The maximum range of a modern commercial jet is about 12,000km, and the circumference of the earth is about 40,000km — so you can fly nonstop from any location to about 60 per cent of the earth’s surface, just as you can talk business in real time to a little more than 60 per cent of possible locations. A good location is one whose 60 per cent is well chosen.

But there is a difference between the finance problems and the aviation problems. While what matters for time zones is longitude, this is less relevant to travel. First-time flyers from London or New York to Tokyo, where the aircraft take polar routes, are often surprised how short the flight is.

Yet what is important for finance is that hardly anyone lives in the Pacific Ocean, what is important for flight is that hardly anyone lives in the southern hemisphere (sorry, again, New Zealand but almost 90 per cent of the population is found north of the equator).

The admirable website, FreeMapTools, enabled me to draw a radius round any location. Despite the excellence of equatorial Singapore’s airline and airport, the city-state has limited potential as a hub because the territory that cannot easily be reached nonstop is the American continent.

Singapore Airlines abandoned direct flights to the US after failing to attract enough premium business to make an 18-hour or so flight profitable, though it announced plans last year to revive the service. From New York, aircraft struggle to reach southern Africa and, more significantly, Southeast Asia.

But, from western Europe, Australia and New Zealand are the only major destinations out of reach. From the Gulf you can get to almost everywhere. That is why Dubai and London are among the world’s busiest international airports.

At Sydney Airport they have just called the flight to Dallas; confused passengers will land at about the same time as they take off after 15 hours in the air. And I am bound for Wellington, with an almost unmanageable 13-hour time difference to London.

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