I wrote on Thursday that American Airlines could find itself in chapter 11 bankruptcy. It wasn’t a prediction that this would happen, or a claim that it’s somehow inevitable. Instead it was an explanation that it is now thinkable because of their vulnerable financial position combined with high fuel prices, increasing labor costs, and looming recession. If these stars misalign for them, they’re the most likely big airline to take that hit.
Last week a man on board a United Airlines flight sat in his coach seat and pulled out a full-sized iMac to work. A standard United coach seat has just 30 inches of pitch – the distance from seat back to seat back – making this impossible most of the time.
The top line message from the American Airlines second quarter was record revenue and a return to profitability. But their financial statements actually show that flying planes from one place to another, and selling tickets, doesn’t generate profit for American Airlines. Instead, the AAdvantage loyalty program is responsible for all of American’s profits.
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Capital One launched the new Spark Travel Elite card this week. It’s the ‘small business version of Venture X’ and has an initial bonus offer to earn up to 250,000 miles.
Currently the card is only available through Capital One business relationship managers, though that’s expected to change and the card should become available more broadly. Existing customers of Capital One business cards except for Spark Cash Plus are eligible to apply for the product.
Qatar has one of the best business class product in the world in its ‘QSuites’. These are revolutionary suites with doors and movable partitions that allow two and even four passengers to travel together in their own space.
Right now there’s fantastic award availability at the end of the booking window. You can use this for travel from the U.S. to Doha and beyond to the Mideast, India, the Maldives and even to Africa. And you can book it with American and Alaska miles or points transferred from American Express, Chase, Capital One, Citibank or Bilt.
Three successive rounds of taxpayer bailouts and the recovery of the airline industry should be good news for American Airlines, as it is for other U.S. carriers. However American remains in a more precarious financial position than its competitors and has less maneuvering room than other airlines do facing the headwinds that are on the horizon for the industry.
American’s financial statements show liabilities that are greater than their assets and they face four major challenges that could make things worse.
In March 2019 Delta CEO Ed Bastian said the airline would offer free wifi within “a year or two.” They needed to ensure they had enough bandwidth for everyone to use it, since not charging would mean far greater usage.
Delta tested just how much people used wifi when it’s free and found that their Gogo inflight internet couldn’t handle it without degrading service. The airline has since moved to retrofit planes with ViaSat internet which works faster. And now, according to an internal memo, they’re ready to go.
Amsterdam’s baggage systems broke down and KLM informed passengers that connecting passengers couldn’t check bags on Thursday, July 21.
Reader Don shares his experience this morning checking in for a trip to the U.S. via Amsterdam.
Amsterdam Schipol airport was already in meltdown. Now its baggage systems have broken down.
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 »
