A lot of people are grounded right now. Most of us are going to travel again. And we’re sure going to be itching to do so.
No matter what happens with the business of any of the airlines, we’re going to have big airlines to take us where we want to go. There are fleets of planes, airports, runways, and gates and there are outstanding aviation professionals who will be excited to do get us moving again.
It’s going to take time before business get employees flying, until governments lift restrictions, and until people are comfortable. But once the restrictions lift it’s going to be an exciting time to be a passenger.
To be sure it’s painful getting there. And we’re going to see real service cuts that take a long time to come back from. Already United is closing all of its Polaris lounges along with a dozen United Clubs. This is temporary, but temporary is likely to last longer than we want it to.
Once it’s prudent to take discretionary trips there are going to be plenty of empty seats. That is great for several things.
- Real deals on airfare. Via Notiflyr I’m already seeing $1000 roundtrips in business class between Europe and Asia. Many deals like this are bookable now far into the future, so consider booking travel 11 months from now. But don’t rush – there are plenty of deals to come. Party like it’s 2002…
- Outstanding award availability. Empty seats frequently mean great opportunities for using miles. United Airlines rarely makes business class saver awards available on its own flights, but Dan’s Deal’s notes that saver space is widely available to places like London and Tel Aviv into next fall and winter. This is only the beginning of course. Party like it’s 2009…
- Mileage bonuses and elite incentives. Airlines are going to want customers and they’re going to finally turn back to their marketing engines, the frequent flyer prgorams, to move the needle – both to generate incremental trips as well as “share shift” where they compete aggressively with each other for customers. I’ve already talked to the heads of multiple programs who tell me their teams are brainstorming how they’ll do this. Reminds me of the time 20 years ago that I earned nearly 100,000 miles off a single roundtrip between the Coasts in the Continental OnePass program.
For years frequent flyers haven’t felt the love from mileage programs. Planes have been full, which has meant a real difficulty scrounging for award seats and airlines not needing to invest much in marketing to fill empty seats. That’s going to change.
There’s one elephant in the room. What if an airline doesn’t make it?
- United (and Continental which merged into United), Delta (and Northwest which merged into Delta), and American (and US Airways which now controls American) have all been through bankruptcy, some even twice.
- Frequent flyer programs are the most valuable assets the airlines have. If there’s a viable business coming out of bankruptcy, the miles will be protected.
- Miles have been lost when the airlines themselves haven’t made it. airberlin’s topbonus program was small, not only didn’t airberlin continue but the airline hadn’t been paying for the miles awarded to customers so the loyalty program had too many receivables – a real outlier.
I’m continuing to earn miles with impunity, with excitement even. It’s my only ‘financial’ account where the balances are rising these days.
We won’t be grounded forever, even if the weeks and months ahead begin to feel like forever. Now is the time to start accumulating miles, so you’re ready to pounce when the best awards become available. And remember that research shows that planning trips generates much of the enjoyment we get out of the trips themselves.
For $50 Billion of our money they had better give us some good deals.
@ JetAway — It will only be a matter of time before they screw us again.
@Gene-Unfortunately, you are correct. That will be the moment the money is in their pockets. So they must be forced to make some public, enforceable commitments for better customer care before any money is released.
Too bad that the airlines and hotels have already killed loyalty for this 100K + / year traveler … free agency has been great for me.
However, I’ll evaluate everything on the merits of the math, and while I don’t plan on any loyalty long term, I’m gonna churn, burn, and ride those deals like a borrowed mule.
Will be an interesting year.
I’m planning to downgrade both my Chase Sapphire Reserve (to Freedom) and United Explorer (to the no fee version) when the next annual fee comes due in August. I don’t want to earn points or miles anymore (other than actual flight miles). I want to earn cold hard cash. I’ll take my chances with future flight purchases. No more award tickets. The only factors will be convenience and price. Loyalty is gone.
In exchange for $50B I want increased seat spacing in coach and more professional FAs or the ability to get rid of the bad apples. Of course that won’t happen.
Gary, this study came out yesterday from the London Imperial college calling for a minimum of 18 months of self isolation for our entire population and that’s if we immediately all cooperate. Your thoughts on the state of travel if no one can go outside at all besides the basics for 18 months. Please read the summary.
https://www.imperial.ac.uk/media/imperial-college/medicine/sph/ide/gida-fellowships/Imperial-College-COVID19-NPI-modelling-16-03-2020.pdf
GSTP suggested that we give them the $50 billion in exchange for an EU261 law. I think it’s a brilliant idea.
All I am seeing is increased fare prices……. No deals or discounts where I’m looking!
We can only hope.
To the extent there is a slight uptick in award availability, I’m willing to bet it’s transitory. With the need to earn cash the focus is much more likely to be on monetizing rather than give aways. Discounted biz is much more likely, than award seats.
It never occurred to me till I wrote this how ludicrous the term award is, in this context. Redemption is probably more accurate.
@Christian – There are lots of changes I would like to see, but I am cautious about imposing my preferred policies on airlines desperate for short term cash. There’s a DOT regulatory process for a reason.
@Will – I am skeptical that people will stay inside for 2-3 months let alone 18.
Gary, any thoughts on whether all this would have an impact (positive or negative) on the ongoing AA purge?
@Will-Absurd. Many people will begin to run out of money after 3-4 weeks, some even sooner. And no government has enough money to keep everyone afloat for a year and a half.
@John – maybe it slows it down via distraction? I doubt it causes them to reconsider. Remember they haven’t even reconsidered expiring miles yet.
There will be a nice short-term blip in upgrade/award availability, but the moment they are feeling confident again (no doubt helped by $50B), they will go back to shutting all of that off again and kowtowing to high spenders only.
@Gary
@JetAway
That’s kind of my point you guys. Your skeptical of us being able to do it and know that it’s financially not possible yet that’s what we have to do to continue the spread from the virus… so now explain if your skeptical as you state and know it’s financially not possible how the travel industry will look if the marker as a whole continues downward for more than 12 months and how we’re gonna finance our citizens? Idk bout travel deals. I’m not saying they won’t some day obviously come back but it seems hopelessly optimistic to believe it will happen this year especially if you want to be a responsible person and not endanger other people til we have a solution.
@Gary
There is a greater point here, somewhat down the road…
As people can’t or won’t fly, they won’t be building status for 2021. How will the airlines handle that? Will they just let it go or will they Grandfather their customers for a year? My sense is, as airline execs never miss an opportunity to show they have only half a brain, they will do nothing. In which case, like @Charlie, a lot of folk, and maybe even me, will just freelance our travels to the best priced and serving carrier. Now would be a great time for the airlines to lock in their best customers. Bet they don’t do it though…
BTW, on awards, I’m with @Charlie. The CITI executive MC is toast on renewal. I’ll save the $500 fee and spend it.
@Will, it’s a moot point. There’s no
way any government will give in to a full “suppression” scenario, as described in the report, for more than a few months. The economic toll would be catastrophic. Honestly, we have to compare the quality of life: social/economic turmoil vs. COVID-19 mortality rate (especially considering it skews towards elderly). I suspect that mass unemployment and economic collapse would have a
larger impact, thus will be avoided.
@Will – those models are only as good as the parameters they put in.
The real life example of China shows that 2 months of total isolation in an out of control situation like in Wuhan shut down the virus to 1 new local case yesterday.
Of course if governments dither (like in the UK) or people don’t follow the guidance, it’ll be a lot worse …
Why are airlines and hotels so special? Are they going to bail out all the restaurants and bars that will be closing? And their employees? The lawyers and engineering firms and caterers and wedding planners and a thousand other types of companies that will go under? No, they won’t.
And who gets to pay for these bailouts? Me, that’s who. Screw that. Sideways.
Let the market work. For once. It will be a helluva wrench, but it will resolve pretty quickly and not drag out for a decade.