The Daily Flyer
Welcome to the seventh edition of “The Daily Flyer,” The Higher Flyer‘s daily newsletter gathering up and summarizing some of the day’s most important happenings in the world of airlines, hotels, award points, and other travel-related things. Today’s feature — for March 9, 2020 — covers the implications of the current state of affairs (vis-a-vis the coronavirus outbreak, the reduced demand for airfares, and the ongoing stock market volatility), as well as United’s frustratingly customer-unfriendly response, an extraordinarily hot (if not insanely irresponsible) take from Live and Let’s Fly, and an official warning for potential “cruisers.”
The Headline Feature
Prior to the COVID-19 outbreak, airlines, particularly those based in the United States, have been doing quite well. That has all come to a screeching halt over the past few weeks as the coronavirus developed into a global pandemic. Fears and panics have escalated accordingly, and now would-be travelers are instead opting for self-quarantines at a home as a means to contain the spread of the virus. That’s not good for the economy and today, March 9, 2020, could be the nadir of this trend; collectively it was one of the worst days in the history of the Dow Jones.
Airlines all over the world unsurprisingly have been suffering similar fates. FlyBe, a regional carrier based in the United Kingdom, ceased operations last week, and Korean Air warned that the outbreak could be the flag-bearer’s death knell. The North American Big Three, for example, have been having rough go at it too, and that’s reflected in their stock prices.
There are fewer passengers in the skies and the effects of such are (potentially) partially driving a recession. This raises an interesting question: what will happen to the airlines if demand continues to dwindle for a prolonged period of time? Corporate management is already starting to feel the heat, and Southwest CEO Gary Kelly has even gone so far as to say that this drop off in travel is comparable to the aftermath of the 9/11 terrorist attacks. In the decade proceeding that tragedy, a number of carriers filed for bankruptcy and there was a move towards industry-wide consolidation. Naturally nowadays, no one wants their companies to go under because of the coronavirus or an economic downturn, so it’s imperative that the powers-that-be find ways to get people on their planes.
Encouraging would-be travelers to get back out there would undoubtedly create some interesting, if not compelling, possibilities for higher flyers. There’s a precedent for this in the late-2000s following the Great Recession and the subsequent corporate mergers. Good times rolled for higher flyers as the economy recovered, and they were able to exercise remarkable power in extracting value from their preferred loyalty programs. In fact, this period of time inspired the rise of an entire cottage industry devoted to maximizing the available deals and opportunities.
This eventually got to the point where airlines could start cutting elite benefits; they no longer had trouble filling their seats. The need to incentivize flying became non-existent, and you could argue that the devaluations of the past five years have been a “re-balancing” in response to the concessions carriers previously made to encourage more-frequent travel.
It’s too early to tell if history will repeat itself in 2020, but there are some signs that it might. Alaska Airlines has gone so far as to offer a 50 percent bonus on elite qualifying miles until April 11. Perhaps this deal will be extended, but who knows what the next month or so will bring. Meanwhile, United Airlines is not altering its status qualification requirements, but it is making it easier to complete status matches by extending trial periods by 30 days. It seems like it’s a matter of time before their competitors introduce their own offers, but again, we’ll see what happens…
To answer the original question that this article poses: no, a recession would not be good for higher flyers because recessions are unequivocally bad things. Yes, there could very well be silver linings as a result — we’re already starting to see a few interesting developments — but don’t be selfish! If you can get a good deal and maximize your bang-for-your-buck when you travel, sure that’s cool; if/when airline employees lose their livelihoods because their employers start tightening their belts, that’s sad. Celebrating your fortune and giving thanks to the same thing that’s ruining professional careers is not good, nor will it ever be.
<end rant; please excuse the preachiness of the last paragraph>
Other developments, discussions, and articles in higher flying
1. United to reduce (coronavirus-related) issued refunds
United has subtly revealed new changes to its refund policy, and they’re pretty draconian and VERY customer-unfriendly. Previously, if your flight’s schedule was adjusted by more than two hours, United would let you refund your fare. That was nice and fair. Now, that window of time has been increased to twenty-five hours. This means that you could be booked on a flight, have your arrival delayed by more than a day for whatever reason, and you wouldn’t be eligible for recourse. Per this rule, United is no longer obligated to fly you on the day it sold you a ticket for. That’s ridiculous but, as cliche as it is to write, desperate times call for desperate measures. Skift editor Brian Summers, who first caught wind of this change, succinctly analyzed this as a means for the carrier to save money in the wake of the COVID-19 outbreak.
Here’s to hoping that things go back to a more-normal two hour standard once the coronavirus is under better control and people feel confident to travel again…
2. Scalding hot take alert: “Flying Into Coronavirus Zones, For Fun” by Kyle Stewart
This isn’t the first time that Live and Let’s Fly contributor Kyle Stewart has been “recognized” on The Higher Flyer; he first appeared in this feature in February when he defended the U.S. Department of Homeland Security and its decision to halt TSA PreCheck and Global Entry applications. Now he’s back again, this time explaining how we are in the midst of “the definition of great deal season” (emphasis his) thanks to the low travel demand due to the COVID-19 outbreak. He rejoices that “near-term bookings are incredibly affordable” and “upgrade space is a near certainty for elites.” He concedes that you have to weigh the risk of contamination before you travel — OMG you might be quarantined!!! — but “contracting the virus is…more of an inconvenience” than anything for him… so, all’s well that ends well, right?
Indeed, all of his points are true, but it seems wrong to be: 1) celebrating your good fortune when the cause of such good fortune (ie the coronavirus) is also killing thousands of people worldwide; and 2) potentially spreading the virus back home in the United States (or wherever else he happens to go). Even if he doesn’t suffer any symptoms of the coronavirus, he could still carry it and then ultimately infect the vulnerable people who he comes in contact with. But, as he concludes: “It may seem crazy to some travelers to fly through a country with known outbreaks when it’s not absolutely necessary. However, I believe the risk to my health is low, the opportunity is good and the timing is personally very convenient.” Thank God COVID-19 is so great for Kyle!
3. U.S. Department of State: “U.S. citizens should not travel by cruise ship.”
The United States Department of State recently released a statement warning American citizens to refrain from traveling by cruise. Citing reports from the United States Center for Disease Control (CDC), officials note that ships are particularly susceptible to the COVID-19 virus. Indeed, they’re like floating petri dishes (those are not the words of the State Department though!) and, on top of that, many countries are instituting quarantine and screening procedures at ports-of-call. So, not only could you catch the coronavirus, but you could also find yourself held up at in some boat yard on the other side of the world with not a lot of recourse. Tread very carefully!
Got any tips? Questions? Comments? Email anything and everything to Paul@TheHigherFlyer.org, or comment below! In the meantime, thanks for reading, fly higher, and see you tomorrow!
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