Southwest Airlines has tons of cash, not a lot of debt, and a new view on economics of on-time performance. They’re not rushing back the 737 MAX. And they shared interesting data on the financial performance of Rapid Rewards, how business travel is doing, and explained the financial reason blocking middle seats made sense before but no longer does.
After 50 years committed to Boeing, Southwest Airlines said on its third quarter earnings call that if there was ever a time to consider buying non-Boeing aircraft it would be now. They aren’t growth constrained. They have plenty of unused and underutilized aircraft in their fleet. And that gives them the space and time to transition to a new aircraft.
American Airlines held its third quarter earnings call this morning. There were several news items included today beyond just the airline’s financial performance. And there was a greater-than-normal amount of ‘color’ on the airline’s strategy going forward.
Customers often don’t like it. It isn’t something that should be done before 8 a.m. or in the morning prior to arrival at the end of a redeye. But ultimately the people most likely to take an airline’s credit card are the people who are actually already flying the airline.
Today Spirit Airlines announced the new program which goes into effect January 21, 2021. They’re launching a revenue-based program, introducing a new elite program, and allowing co-brand cardmembers to earn elite status from credit card spend alone (or through a combination of travel spend and card spend).
Southwest Airlines has limited the number of seats they’d sell on each flight, so that no one would have to be in a middle seat and everyone would have some space between them. They’ve been in a camp with Delta, Alaska, and JetBlue offering customers greater comfort (both physical, and peace of mind during the pandemic) and in opposition to United Airlines and American that have been booking to full capacity.
We’ve known that this strategy wouldn’t last.
A woman died of Covid-19 on a Spirit Airlines flight from Phoenix to Dallas Fort-Worth on July 24. The story is only just now being reported. And the facts seemed so obviously not alarming that I didn’t cover it right away. But now that I’m seeing claims like, “so much for the ‘you can’t catch covid on a plane’ nonsense” that it’s clearly important to dive in.
American Airlines CEO spoke to a group of pilots a question and answer session posted to the company’s intranet on Monday. In his introductory remarks he talked about the politics of the next coronavirus stimulus bill, which includes more payroll support for U.S. airlines.
He suggested that it’s only “a handful of really fiscal conservative Republicans who just think you know, who just viscerally disagree with the government doing anything that looks like you might be funding a business” who push back on another $25 billion airline bailout.
In an employee question and answer session with pilots, posted to the American Airlines intranet on Monday, CEO Doug Parker laid out an overview of his airline and the industry.
American may fly more and still not earn as much money because they’re doing lower revenue flying. With a bit of a chuckle, Parker offers that today’s passengers are “somewhat different from our normal clientele.” Then he backtracks a bit, “we love all our customers of course!”
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Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
