Video conferencing has always made the business case as an alternative to business travel.
It's not just the airfare to consider. In this table, constructed for a white paper I've written for AT&T IP Videoconferencing services, the contrast is made for a 400 mile flying trip – say Boston to Baltimore or San Francisco to Long Beach.
Here are a few elements to consider in the business case for video conferencing:
The 16.3 US Gallon calculation is from the wikipedia's estimate of fuel efficiency of aircraft. There, they claim that airplanes do 49 passenger miles per US gallon, so 400 miles/49 mpg = 8.16 US gallons but there is a return leg so it is now 16.3 US gallons.
With the high cost of gasoline and the high opportunity cost in today's hyper-fast economy, how does this compare to a 40 mile trip?