Category Archives for Airlines.
Norwegian Air says they may run out of cash in a matter of weeks. Their long haul business is between several European countries and the U.S., but Europeans largely cannot travel to the U.S. for the next month. Bookings are down anyway in the current environment, and this was a troubled airline to begin with.
At the beginning of the week airlines knew the novel coronavirus impact on their business could be large, but no one was taking this as seriously as United. That’s changed. Delta has sent a memo to employees outlining unprecedented changes to their business in light of drying up revenue.
Delta’s CEO Ed Bastian says that they’re receiving more cancellations than new bookings, and that “the demand fall-off is unlike anything we’ve seen” as a result they are “moving quickly to preserve cash and protect” the airline.
Effective today United Airlines plans to stop offering some seats that used to be available for upgrade to members of their MileagePlus program, holding those back to sell to infrequent customers at check-in instead. This helps the airline generate extra short term cash now as they prepare for a drop in revenue of as much as 70%.
American is extending their AA20 program – 20% off paid travel for employees – to web special awards. If there was any doubt that these web specials were revenue-based redemption, this change should offer insight into how American thinks about them.
In light of the U.S. government’s limits on travel by non-U.S. citizens that have been to Europe within the past 14 days, in addition to reduction in travel broadly in reaction to the novel coronavirus, United has announced that it will only fly it’s current schedule through Thursday, March 19. That gives people time to get home, and to bring employees home.
Here’s what Europe should look like after that for United.
The President of the United States is said to be considering travel restrictions between California, Washington, and the rest of the country. I’ve heard rumors of this prior to this reporting and it is certainly not confirmed and not at this point certain to happen.
Meanwhile it appears that travel restrictions haven’t been effective in stopping the spread of this virus.
The airport chief “was disheartened by refusal from other agencies” including immigration, health and the military, to provide cooperation in screening passengers. Indeed, reports are that face masks intended for workers screening passengers have been taken away from the airport and given to other government agencies.
United is farthest ahead preparing for the worst as a business. They are cutting capital spending, slashing flying, and eliminating discretionary expenses. They have raised additional cash and assume that their revenue is down 70% in April and May and not fully recovering this year. We don’t know yet if things will be even worse than this, and more drastic measures will need to be taken.
For now there aren’t any layoffs, but United is trying to reduce personnel spending and they’ve imposed a hiring freeze so that retirements will reduce their head count. Here’s the detail of the United Airlines voluntary leave plan.
Roundtrip tickets used to be cheaper than buying two one ways. For the most part that isn’t true anymore. One way tickets, at least domestically, do not usually raise the cost of a trip.
Still many people book roundtrip travel because of change fees. But for the most part those do not apply right now.
Effective March 12 Southwest will let companions on the same reservation as an elite member board with the elite. Companions on the same booking will be assigned boarding numbers at the same time as the elite.
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 »
