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.
You know that business travel done when the Islamic State declares non-essential trips to be haram. All Islamic State employees will have to conduct jihad as remote workers for the forseeable future.
American Airlines, slow off the dime in its moves to protect its business compared to United and Delta, already began major capacity cuts in response to the administration’s ban on non-U.S. residents entering the country if they’ve been to Schengen Area countries of Europe within the past 14 days.
With the government extending that restriction to the U.K. and Ireland, and with demanding drying up more and more each day, they’ve now taken things a step further. They are reduce international capacity by 75% year-over-year. Ostensibly this will apply March 16 to May 6, but many of these cuts will almost certainly last longer.
Airlines are offering travel credit for cancelled reservations. Hotels are letting customers with prepaid reservations cancel without penalty. It’s frequently not possible to travel, either because of a government ban or an employer’s policy. The events or activities you planned to go to may not be happening – all of the world’s Disney theme parks are closed, even. Yet Hertz is keeping your money from prepaid car rental reservations.
Fortunately there is a hack to save some money if Hertz won’t offer a refund.
The U.S. is limiting international travel and funneling it through a limited set of airports. That’s supposed to allow them to screen passengers better entering the country. Here the government is failing and making things worse.
The virus is already here and spreading. We don’t know how badly because we are keeping out foreign tests. Our solution to that appears to be keeping out foreigners and forcing everyone in close proximity to each other to encourage spread.
This is United’s fourth refunds policy change in just a week. If they change your international flight by 6 hours or more they will give you a credit for the amount of your ticket. If you don’t use the credit within a year then and only then are you eligible for a refund.
As recently as March 6, United offered refunds if they changed your schedule two hours or more.
Starting on Monday American is dropping buffets from its lounges. This will be replaced with “individually portioned, covered food items and will shift most self-service beverages to individual portions such as milk cartons or bartender/wait staff service.
There will also be changes to how drinks are service on board.
United has revised their refund policy for reservations where they impose a schedule change three times in the past week. They are more draconian than competitors, and the changes to published rules apply even to tickets purchased prior to the changes. This points to how United is viewing holding on to customer cash in the short run – over taking care of their customers in the long run.
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 »
