Suspending paid services like Gogo and Expert Flyer makes sense. Don’t spend money on a service you aren’t using right now. From a travel company’s perspective they can generate some revenue from customers who forget to cancel, but it’s better to keep all of their customers long term by making it unnecessary to cancel. Many who give up the services temporarily won’t come back
Delta-controlled Virgin Atlantic has its hand out for government subsidies on the one hand, while running new bonus miles and elite qualifying promotions on the other.
I still think it’s too early to move the needle on travel with promotions, but Virgin is in a different boat than U.S. programs whose status years run with the calendar. They don’t have the option of waiting to extend elite status.
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We’re now way beyond reduced landing fees at airports (moving the financial hardship onto government-owned airports) and a tax holiday on tickets (which would have to be made up by the government to continue funding aviation). Don’t forget Congressman Jim Moran after 9/11, “It’s an open grab bag, so let’s grab.”
Work from home tips are like a cottage industry now, but I’ve got a real head start on you and I think I can offer solid concrete advice. I transitioned out of being in the office every day back in 2014, and I’ve worked from home and on the road ever since. It’s the best decision I ever made, but it isn’t for everyone and it isn’t ‘natural’ for someone that isn’t used to it. Some people thrive, and others flounder.
What we care about as a society is that an airline industry exists. The reason for government intervention is to prevent economic contagion (the spread of one failure to another). That was the argument for bailing out banks during the financial crisis, and it doesn’t exist in the same dimension with airlines. Nonetheless the industry is an important one once we’re ready to recover.
However the planes will still exist. The airports and gates will still exist. Skilled pilots and mechanics will still need work. The only reason to intervene will come later, if at all. Once airlines are in bankruptcy the relevant question is if they keep flying. And that’s dependent on available new capital during the bankruptcy process. Shareholders should take their haircut first.
As some travel providers fight to hold onto cash without delivering services you may need to turn to credit card charge backs – putting your credit card issuer on your side to get your money back.
The normal approach is to cut spending everywhere possible, from capital expenditures to labor. It’s harder to cut employee salaries but Delta is throttling down spend on contracting firms and consultants. It is parking up to 300 planes.
So far flight loads haven’t been as bad as you’d expect, overall think of planes as 60% full towards the end of last week. That’s probably higher than we’ll see going forward.
United Airlines sent out a press release this evening, a copy of a letter to employees under the signatures of outgoing CEO Oscar Munoz and soon-to-be CEO Scott Kirby in which they lay out how bad they expect the novel coronavirus to be for the business – and in the middle of the letter they reveal that it “no longer appears realistic” to “avoid [taking] steps that affect [employee] paycheck[s].”
The airline reports that this weekend they have been in discussion with its unions to reduce “payroll expense.”
American Airlines has cut its international schedule by 75% and its domestic schedule by 30%. Load factors are dropping. People aren’t buying tickets. The one thing American Airlines has too much of is seating capacity. And the one thing American Airlines has too little of to make it through this crisis is money. That’s why they’re running to the government for assistance.
And yet they’re continuing their ‘Oasis retrofit’ program where they replace the interiors of domestic aircraft to add seats to planes, making them less comfortable for passengers.
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 »
