Brent SnyderLaura Jackson details the year-over-year drop in aviation traffic during the traditionally peak summer travel season.
And this past week, a PR firm promoting the Chase Sapphire Card shared details of their survey on upcoming travel plans. While not comparative data, it’s suggestive that early (leisure) bookings for future travel may be soft.
[A]ffluent Americans may be taking a wait-and-see approach to winter holiday travel. Intuitively, the economy is still weighing on travel considerations, even for affluent consumers. According to a recent poll of Americans with a household income of at least $150,000, a majority (57%) of respondents confirmed that economic considerations are affecting travel mindset in planning personal travel for 2011. What’s more, only 30% have booked travel for upcoming holiday travel season (in late December), and 39% are committed to staying home this year.
With economic confidence on the decline, the rebound in business travel may fall off as well.
Last year, United and American each offered double elite qualifying miles for about 6 months of the year. (Each time American announced the offer and United quickly matched.) US Airways promoted double elite qualifying miles and double redeemable miles. Delta’s double elite qualifying miles skewed towards higher fares. But everyone was boosting sagging elite ranks and juicing their light bookings.
Pretty much every year since I’ve been watching these programs closely there has been some sort of promotion to yield elite status more quickly and easily than flying the full required miles.
So it’s hard to imagine this year that there won’t be something. Of course so far those things have been route or city-specific (or partner activity specific), rather than across-the-board. And in the past there have been offers that required not just registration but payment. So it’s possible that anything forthcoming could require a fee or require flying on higher fares. But one imagine there’d be something.
The only thing that worries me a little is that the leader here has traditionally been American, and American AAdvantage is on its third President in two months. I poked at a veteran at AAdvantage last week that hopefully the new President was settling in nicely so that they could pull the trigger on double elite qualifying miles! She laughed…
My own guess is that there will be something. It won’t be for the full fourth quarter. It’d guess it’ll run for a short period, when bookings are the weakest. Maybe just November 30 – December 15, a dead period between Thanksgiving and Christmas when business travel tapers. Or perhaps it’ll be November and December on higher fares or with payment of a registration fee.
I’d also guess that American at least will offer a ‘status buyback’ for those who didn’t requalify this year. Those offers are usually expensive, but perhaps less expensive than mileage runs to retain status (and certainly if you value the cos of your time to fly the needed miles).
I’d love to see US Airways bring back their status miles for partner activity offers, keep the front cabin free of elites on mileage runs while still generating revenue for the program.
US has offered EQMs for flying and for purchase at various times this year. No one else matched. And there’s a big difference between airports reporting lower revenues and airlines reporting losses. The airlines were mostly up YoY in Q2 and most of them made money, too.
I don’t see a need for the airlines to offer anything like the DEQM promos of last year at all. Buy-back? Maybe, but why? If there really was a need to increase the elite ranks I think that they airlines would have started to act already.
@Seth my refernece was to the lower traffic numbers for major hub airports, not just airports having reduced revenue. No one matched DEQMs because advnace bookings were looking good, I think the economy really did seem like it would be better at the end of 2010 than it now appears. And at least reading tea leaves it appears that advance bookings into 4Q10 are light. Expectation of much lower elite ranks in 2011 and light bookings suggest to me a good chnge of something, perhaps more creative than in the past being done.
And why during 4Q10 rather than earlier in the year? Because things are looking a bit bleaker now, and because travel falls off at the end of the year which is also why it’s traditionally been done then..
Could be wrong, we’ll see!
As an FYI, Synder didn’t actually write those (pretty ambiguous anyway) comments about travel demand. He’s lending his byline to “guest columnists” as he’s on vacation (odd way to do it, but anyways . . .).
As far as fall travel demand goes, I don’t think it will be weak. Sure, demand isn’t going gangbusters, but airlines have solved this problem by not any seats and thereby make inventory tight. That’s why the bargains are still a bit hard to find now, even though we’re in an off-peak travel period. As far as the “holiday travel season” goes, you have as much chance of finding an airfare deal as winning the lottery (which means it’s possible, but few will).
All this said, there will be frequent flyer promos. There always are. And maybe we’ll get lucky and there will be an aggressive one. Indeed, the high airfares this year are likely whittling down the ranks of elite frequent flyers, especially among those who earn that status partially or wholly through leisure travel (which is certainly more elastic in demand as prices rise). Perhaps an airline exec will see that the number of members “on track” for elite status is lower year-over-year, and launch a promo to try to boost the numbers. It’s a theory, at least!
@iahphx – corrected, thx
Gary, you act like there has been NOTHING.
I think the abundance of city specific offers we have seen this year is actually an indication that the airlines are getting more sophisticated with their promotions.
Remember, from an AA perspective, we’ve seen Triple EQMs and RDMs for the NYC market to Chicago (LGA-ORD is a huuuge AA route) and LGA-Boston (competing directly with the DL and US shuttles).
And from an AA perspective, the RDU/PIT/BNA/STL promos are much more specific. There may be areas of the market that are hurting more than others, and the airlines are targeting those.
No need for blanket system-wide promos when certain areas of the market are doing just fine.
US’s Grand Slam promo allows up to 6,000 EQM…without flying.
Well here it is Nov. 11th and still no DEQM Promotions on United or Continental. Any update?