United and Delta Discussing Big Discounted Mileage Sales to Chase And American Express

by Gary Leff

credit cards
Apr 13 2020

In the years following 9/11, as airlines struggled, and again during the financial crisis airlines pre-sold miles to their credit card partners at a discount in order to raise cash quickly. United and Delta each pre-sold miles, the former for about $500 million and the latter twice totaling about $1 billion. American did it too with Citibank. These ‘cheap miles’ paved the way for banks to offer big bonuses to consumers both for acquisition and for ongoing spend.

These conversations have started again as a way to raise cash.

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Europe May Ban Visitors Until September; Australia Through End Of The Year

by Gary Leff

Apr 13 2020

It will take some time before international travel comes back in more than a limited way. Countries won’t open their borders all at once, and may impose quarantines or restrictions on entry with greater health checks initially when they do. More onerous procedures will mean less travel overall and fewer flights.

Europe is talking about limiting entry through September, including an especially from the United States, while Australia may not even let its citizens leave their country this year.

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Hotels And Airlines Have To Ramp Up Cleaning If They Want People To Come Back

by Gary Leff

Apr 13 2020

One reason that the economy won’t return quickly to the way that it was is that people’s preferences are shifting. It’s going to be hard to get people to return to movie theaters, concerns, and sporting arenas – places where large groups congregate, and people are forced close together. Restaurants may have to halve their capacity for some time to move people farther apart. These changes in consumer preferences, which will persist once lockdowns lift, will change what products people want to buy and change how companies need to market to them.

Cleaning is going to be an important selling point to bring back travel.

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Expect A Lot Less International Travel For A Long Time

by Gary Leff

Apr 12 2020

There’s this idea out there that ‘once this is over’ (whatever this is, the first phase of lockdowns or the immediate virus threat) travel will turn back on like a light switch. I do not expect that to happen.

More travel will start back up domestically. International travel will take a lot longer to recover. Some parts of the world won’t get through the virus as quickly as others. It’ll take longer for some governments to lift restrictions than it will for others.

However lifting of outright bans alone won’t mean it’s as simple to just buy a plane ticket and ago, provided you have a passport, the way it was before for many destinations.

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Will More Videoconferencing Mean More Travel?

by Gary Leff

man in suit looking at computer screen
Apr 12 2020

One of the trends that’s really accelerated during the current crisis is the use of online videoconferencing – whether Zoom, Webex, Google, Skype or any number of other solutions. A lot of meetings used to take place in-person that are now happening online. There are predictions of less travel in the future as this change remains sticky even after lockdowns.

However more videoconferencing also means greater location independence. You don’t have to be in the office for meetings. You can do more trips.

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How Much Does The Value Of a Frequent Flyer Mile Change During The Current Crisis?

by Gary Leff

Apr 11 2020

These are the broad factors need to be taken into account when estimating the change in value of a mileage currency, and they’re likely to apply differently to each program based on, among other things, the tendency to print miles and the financial stability of the program in uncertain times.

We need to be thinking about how much we value miles – and how much they need to change – recognizing that there are forces pushing the value both up and down at the same time.

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