Some Turbulence Ahead, but Good Opportunities on the Horizon
2010 was the year the airlines flew headlong into ancillary revenue, also known as the fee frenzy. There were charges for checked bags and meals, and “premium” seats in economy were offered at a price. Perhaps taking a cue from the Federal Reserve, the airlines printed vast amounts of miles and sold them at a loss in the form of buying promotions, with Delta and US Airways leading the pack with discounts up to 50%; and BA offered 100,000 bonus miles just for getting its credit card. While the fees were annoying, the buying promotions were a boon for the strategic premium traveler, allowing a war chest to be built that could be used to make traveling more bearable—dare we even say enjoyable—by upgrading.
The Coming Year
All indicators lead me to think that 2011 will be another pretty good year for the strategic premium traveler who knows how to take advantage of short-notice Business Class fare promotions and loyalty-currency deals, new Business and First Class seats, and service changes such as the increase in A380s from the U.S.
Prediction 1: The Business Class bargain destination will be Europe.
Business and leisure travelers alike are seeing unbelievably low Business Class fares to Europe: $999 on Delta from NYC to Shannon (FCF Dec. 10 post), $1,300 on US Airways to Munich (FCF Dec. issue), $1,100 on Iberia to Valencia (FCF Dec. 10 post). Until now, these fares were only offered during holiday periods. Now they’re appearing more frequently but won’t be everywhere all the time; nevertheless we will find them often, but you’ll have to be quick on the draw.
Prediction 2: Alliance side-door mergers will continue.
Business and leisure travelers alike are seeing unbelievably low Business Class fares to Europe: $999 on Delta from NYC to Shannon (FCF Dec. 10 post), $1,300 on US Airways to Munich (FCF Dec. issue), $1,100 on Iberia to Valencia (FCF Dec. 10 post). Until now, these fares were only offered during holiday periods. Now they’re appearing more frequently but won’t be everywhere all the time; nevertheless we will find them often, but you’ll have to be quick on the draw.
Prediction 3: Look for mileage redemption inflation.
That will soak up some of the miles given away through buying and credit-card promotions, and the big pools of miles created by mergers. Also, look for increases in upgrade surcharges and new fees, such as for award processing, whether you book in advance and/or on-line or not. (US Airways already charges $25 for this.) This doesn’t bother me so much because it’s to be expected, and because added fees reduce the competition for otherwise limited space, so the added costs increase the odds of getting what I want!
Prediction 4: Corporate America’s profits will be the source
of airline investment in new First Class cabins. Mainly because international airlines will introduce (or reintroduce) A380 service from the US. Until recently only two international airlines flew this behemoth from the U.S.: Air France (NYC to Paris) and Qantas (LAX to Sydney). Emirates reintroduced A380 service from NYC to Dubai last October. Here’s a list of A380 service introductions slated for 2011: Lufthansa on Feb. 18 from NYC to Frankfurt; Singapore Airlines on Mar. 27 from LAX to Tokyo; and on June 6, a second Air France A380 from Washington to Paris.
The new A380s also mean new and better First Class seats.
- Lufthansa: Eight redesigned First Class seats (31 inches wide, 81-inch long flat bed) on the upper deck.
- Singapore: 12 First Class suites with sliding doors on the main deck, with a 78-inch-long, 27-inch-wide bed and a separate 35.25-inch-wide seat that reclines 130 degrees.
Prediction 5: Asia routes will see new Business Class seats.
Two major Asian airlines will offer new Business Class seats: Singapore on the A380 from LAX to Tokyo, and this spring, Cathay Pacific (finally!) on all of its new B777s, with retrofitting of the current B777 fleet starting in late 2011.
Prediction 6: Mileage-award inventory will increase.
Mainly because of new routes: American Airlines from JFK to Tokyo-Haneda in Jan., to Manchester and Budapest in April, and from Chicago to Helsinki in May. Cathay Pacific introduces Chicago-Hong Kong service in Sept. Continental starts flying from Houston to Auckland in Nov. Delta from LAX and Detroit to Tokyo-Haneda in Feb., Atlanta to Shanghai in June, to London from Boston and Miami in March, and to Paris from Boston (March), JFK and Pittsburgh (June).
Prediction 7: Mileage and elite-status-earning promotions will become more frequent.
Marketers and merchandisers have taken over the airlines, so look for them to start offering highly targeted incentives with lucrative payoffs (double, even triple rewards) on elite qualifying miles and redeemable bonus miles.
Prediction 8: Business Class fares to Asia, South America, and South Pacific will remain stable, with fewer fare wars, requiring alternative ticketing strategies much of the time.
Fares will stay in the $3,000-$4,000 range for advancepurchase tickets. Look for lower Business Class fares on second-tier carriers and to lower-fare destinations, such as Beijing, Shanghai, and Seoul.
South America Look for LAN (oneworld) to offer Business Class fare promotions, which at times will be matched by American and Delta. Also keep an eye on promotions to lowcost destinations, in particular Rio de Janeiro and São Paulo.
South Pacific Over the last two years fares have been decreasing as the number of airlines have skyrocketed. The average 2009 fare was $4,800+ and the 2010 range was $3,800 to $4,600, which will carry over to 2011.
Prediction 9: Premium Economy will continue to be a good deal on international routes.
Look for more airlines, especially airlines that currently only offer a two-class cabin, to announce the product in 2011.
Prediction 10: Avoiding fees will become an increasingly important elite-status benefit.
Who knows what fee the airlines will think up next? If you’re a strategic premium flyer, it’s not an important question because elite status comes with a get-out-of-fee pass (or at least a fee-reduction card).
Bonus Prediction 11: Domestic First Class fares will continue to increase in 2011.
As in 2010, having top elite status will be the ticket to save on domestic First Class, a region where fares are high and rising. Otherwise, resort to mileage awards or upgrades to lower your premium ticket.