ExpertFlyer Hot Topics — Where the Rubber Meets the Runway
French boutique air carrier, La Compagnie, is betting frequent international business travelers will. While the most airborne corporate flyers may scoop up these unlimited passes as the deal of the century, others may be better off scouring for more traditional deals.
According to a CNBC report, the airline is looking to collect $350,000 in revenue on the idea that $673 a week is a great deal for New York-area travelers making numerous round-trip flights to London or Paris, which can easily cost in the thousands of dollars.
As part of the CNBC interview, La Compagnie CEO, Frantz Yvelin said $35,000 for unlimited travel is an offer too good for some frequent flyers to pass up.
“The demand is there,” he said. “When we started our load factor [the percentage of seats filled on a plane] was 30 percent. These days we are oscillating between 70 percent and 90 percent load factor.”
Read the full story and watch the video interview here.
Air France is anticipating its Business customers need to rest up on departure from New York-JFK airport on its night flights to Paris. Eager to offer them optimum comfort, the company is introducing its “Night Service”, only available on departure of flights AF011 (21:45) and AF009 (23:25) from New York-JFK as of April 11, 2016. Passengers may opt to enjoy the same meal in the airport lounge as the one served on board*, with the meal served at their table in a dedicated private area.
During the flight, customers can enjoy a good night’s sleep in the comfort of the Air France Business class cabin. A quiet, private cabin guarantees a peaceful night’s sleep in a seat that transforms into a lie-flat bed. Customers with a very healthy appetite can choose to eat again during the flight.
* Except for special meals that can be enjoyed on board only.
ExpertFlyer Hot Topics — Where the Rubber Meets the Runway
Joe Cortez, travel expert and contributing writer for FlyerTalk, the Frugal Travel Guy, About.com and others, took ExpertFlyer for a deep dive on hot topics and predictions that are generating buzz in the airline industry and among consumers.
It’s still early in the year and travel experts are still making predictions on where the airline industry is heading in 2016. One trend we’re seeing is airlines competing for customers in the front of the plane – business class, first and premium economy. What’s your take and will economy flyers have any perks to look forward to?
There is good news and bad news here. The truth is that airlines are focusing more attention on the front of the cabin – but even that is changing. Legacy carriers are moving from a three-cabin aircraft to a combined business first, and offering more rewards to those who are flying in the combined Business-First class and premium cabin.
The bad news is that economy travelers will see more divide in their experience. That is, those in economy class will get exactly what they pay for. You may recall in 2014 when Delta Air Lines changed their economy pricing model to run across five tiers, with the lowest tier being just the seat and nothing more. Those in economy class can expect to see more of that, along with encouragement to upgrade to premium economy for more perks.
The good news here is that for what the economy experience lacks, airlines are making up for in customer service and customer experience. For example, United Airlines is resuming free snacks and free drinks on certain flights. Airlines realize that the only way to retain customers is to improve the customer experience – even in the economy section.
Frequent flyer rewards programs from Delta and United have seen significant overhauls, now basing award points on dollars spent vs. miles flown. Last fall, AA announced that it too would be following suit much to the dismay of many AAdvantage fans. This seems another striking blow to consumers. Is there a work around for leisure travelers – can they still find ways to accrue miles without breaking the bank?
There are two different points to differentiate here: elite qualifying miles and award miles. Prior to the American Airlines changes, a mile flown was an award mile earned. With the announced changes, an award mile flown is no longer earned. Instead, award miles are earned based on the base price, as well as certain other purchases. Therefore, flying is no longer an efficient way to earn miles alone.
However, miles flown are still miles earned when it comes to Elite Qualifying Miles. Those who are looking for airline status can still accrue elite qualifying miles for the distance flown on their flight. Therefore, there is still some value to be had for flying with one airline across country – just not towards discounted flights.
Which credit cards are the best for building points? Any pros/cons?
It all depends on your traveling style. For those flyers who know they will be loyal to one airline, it may make sense to do all your spending on an airline branded credit card that offers miles for everyday spending. If you are focusing all your attention on one airline, then it may even make sense to consider an upgraded credit card. For example: while the Chase United Explorer card offers miles for spending, the Chase United Club card offers bonus points for spending with the airline, as well as membership to the United Club lounge.
Those travelers who are not married to one airline may want to consider a card that offers cash back or flexible points instead, such as those offered by American Express, Chase, and Citi. Cards with flexible points offer travelers the opportunity to book flights direct through their portals, or transfer their points to airlines or hotel partners. Through these opportunities, travelers can make the most of their regular credit card spending.
Now that Expedia and Priceline have a monopoly on airline bookings, are there any creative alternatives worth exploring?
There are still some very good opportunities to book flights outside of the Expedia-Priceline monopoly. Many people still don’t necessarily know that Google purchased ITA Software years ago, and uses their software to power Google Flights. I always recommend Google Flights as a great tool that offers a lot of flexibility for travelers to determine when and how they want to travel. For those advanced users who know they will be traveling a lot, it may be worthwhile to learn how to use ITA Matrix, for complete flexibility.
While travelers cannot book through ITA Matrix, they can build ideal itineraries through the matrix and then go back to a booking engine to complete their itinerary. Finally, if all else fails – it does not hurt to consider working with a travel agent. After building an itinerary, travelers can take their information and hand it over to a travel agent, who can then build out that flight in turn.
Up and coming budget airlines, like Norwegian, WOW and Viva Columbia seem to be offering to-good-to-be-true prices to Europe, South America, among other desirable destinations. Are there any catches or should we be jumping on these deals?
As with many things in life, there is good news and bad news. The good news is that yes – these fares are believable. Travelers can fly on the advertised fare. However, that’s where the good news ends. While not “hidden,” fees can increase the price of those flights very quickly. Want to carry on more than one bag, or select a seat prior to flying? There are fees for that – and the fees can add up. If you are a traveler that can get away with flying around the world with the clothes on your back and one small personal item? Then you can get away for free. Otherwise, consider budgeting more than the printed price if you plan on flying an international low-cost carrier.
This month’s One-on-One features an in-depth discussion about Air Travel trends with ExpertFlyer co-founder and president, Chris Lopinto. Shifting competition, oil and airline ticket prices, changing loyalty programs and the pitfalls of new basic fares are covered, as well as insight on business traveler behavior and plans in 2016 based on a recent poll conducted by ExpertFlyer and View from the Wing (VFW).
ExpertFlyer recently teamed up with View from the Wing to take an end of year pulse on business travel. From your perspective, what were the big surprises?
In general, we were really excited about the survey. With View from the Wing’s help, we polled 1,500 of our most loyal top-tier business travelers, as well as readers from VFW. We found some really interesting trends. One of which was the amount of people that actually take alternative transportation, such as Ride Share services, like Uber and Lyft. We’re finding that it’s more accepted nowadays by corporate travel agencies and corporate travel departments. It’s interesting to see that adoption on the business side has happened as fast as it has.
Conversely, businesses and corporate travel departments remain averse to alternative lodging, like Airbnb. I think that the reason is because when it comes to lodging, there’s a concept called duty of care, in which the employer is responsible for the well-being of the business traveler, and as such, they feel more comfortable having them lodge at a traditional hotel that they have more connectivity to or more experience with, as opposed to a rental on an Airbnb-type site.
That is interesting. One might conclude that it probably bodes well for traditional hotels. At least they are maintaining a strong market opportunity on the corporate side, despite losses to Airbnb on the consumer side.
Absolutely. It’s also a wake-up call to hotels that it’s time for them to innovate or they will hurt from lack of business. Eventually Airbnb and their competition will realize that business travel is the way of the future. They will participate in the GDSs and they will get their services up to the level that corporate travel managers expect from regular, traditional hotel chains. It’s going to happen. It’s just a matter of time. The traditional hotel chains need to do something to compete, whether it’s a sub-brand or a new way of treating the booking or what have you. Over the next 5 years or so, we’re going to see a change.
Travel media, including USA Today, SKIFT and others, homed in on some key points of the survey data, particularly American Airlines overwhelming popularity among business travelers. What do you think most contributed to AA’s high ranking among this audience?
We’ve been running ExpertFlyer now for 11 years, and in that time, we have definitely seen that although travelers don’t necessarily always love their frequent flyer programs, American’s Advantage program was always the least disliked. We’ve seen that Advantage has always looked at their frequent flyers almost as partners, not a liability to be managed as some other airlines might. If you go onto the frequent flyer boards, like Mile Point, FlyerTalk or Traveling Better, you’ll always see that people will have a visceral reaction to other frequent flyer programs, but not so much to Advantage. I think the goodwill that Advantage has built over the last 25 or more years has led to that. Now, the flip side of that is, as I’ve said, it’s their game to lose. All they have to do is not screw up and they win by default, compared to what some of their competition might be doing.
AA recently announced changes that will happen later in the 2016 program year; they’re not as bad as people may have predicted, not as good as some might have hoped, somewhere in the middle, maybe, in terms of what the impact and changes will be. We’ll see what happens. As a point of comparison, I once spoke a few years ago to someone in the frequent flyer department of one of their competitors who point-blank said to me that they prefer that their elites not be able to use their elite benefits. When compared to something like that, I can understand why the elites of Advantage would be loyal to Advantage.
Assuming AA’s loyalty program was a major factor for business travelers choosing the airline, do you see competition shifting in 2016 when AA moves to a dollars spent vs. miles flown rewards model?
Not necessarily. In psychology, they say that the benefit of changing has to outweigh the cost of changing something. For someone who’s traditionally loyal to American Airlines to switch to, say, United or Delta, the benefit of doing so would have to greatly outweigh the cost of doing so. If you live in a hub city of American, say Dallas or Chicago or even New York, you’d be hard-pressed to change to begin with, especially considering, in the case of New York, that United pulled out of JFK entirely.
I think Advantage frequent flyers had it very good for a very long time, and the changes, although not necessarily desirable, aren’t the worst in the world. Again, it’s American’s game to lose. If they’re smart about it, if they make incremental changes that don’t show outright disrespect for their existing elite loyal customers, then they should be okay.
With oil prices at historic lows, one might conclude that ticket prices will decrease and hence the expectation from survey participants that they will be traveling more. What else do you see as a factor for greater business travel in 2016?
Just because the oil prices go down and airline profits go up, doesn’t necessarily mean that they’re going to pass it along to the consumer. Mainly because, if you look at the entire history of the airline industry, it really hasn’t made much money, if at all. With every good year that the airline industry has had, there’s been a bad year. Think about all the bankruptcies of airlines that exist and all the bankruptcies of airlines that don’t exist anymore. It’s a feast or famine industry, especially in the last 10-15 years or so. If I was an airline executive, I would hoard as much cash as possible in expectation that oil prices are going to shoot through the roof again.
That being said, the reason why prices have gone down a little bit is because the airlines are now adding more capacity because they’re making a higher profit and oil prices are low. If you add capacity, it holds ticket prices so they don’t go up too high or stay flat. It depends on the markets. In terms of travel trends for 2016, as long as the US economy holds, travel, especially business travel, should hold as well and increase through 2016.
At the recent New York Times Travel Show, Pauline Frommer warned about new basic fares from a number of airlines in 2016, indicating that inflexibility and draconian restrictions, such as not being able to pick your seat or change your flight will make these deals, deal-breakers. Does ExpertFlyer offer a way around these impediments?
Well, this new concept of bargain basement fares, which offers just a physical seat on the plane, is geared towards the most price-conscious of consumer and it’s interesting how the airlines market lack of choice as a feature. For some travelers, that’s fine. That’s what they want. It works for them, they know exactly what they’re going to take and they just want the cheapest way to get in the seat and that’s fine.
Ultimately, if the airlines don’t position it properly or try to use it as a way to lure people in, saying “This is the cheapest fare. Oh, but by the way…” then there’s going to be backlash. They have to be careful to walk that line between offering this really bargain basement fare for those who may want it, but not pretending that that’s a normal fare when doing price comparison. The airlines really don’t like their product to be commoditized. In other words, they don’t want everyone to think it’s the same even though they all equally get you from point A to point B safely. In that respect, it is a commodity. Where they can differentiate is with what they call the “hard part.” The seat, the Internet, the on-board experience. How nice it is. Do they give you a snack? Do they give you a soda? Things like that.
That’s where this unbundling comes in where everything that used to be included, like snacks, blankets, a soda, being able to get the seat that you want at the time you’re booking is now separate because they’re making too much money with this unbundling now. With all that being said, that’s why a service like ExpertFlyer is very useful because it gives that transparency that some airlines want to take away from their customers. We show all the published fares, we show what their rules are, what their restrictions are, and what their prices are, very simply, in an unbiased manner. In this way, you are empowered to know what the story is before you go to the airline website and book a ticket. We’re not trying to take away the booking experience; we don’t want to do that. We don’t want to be a travel agent. We feel that, especially nowadays, having a source of unbiased information, especially with fares and seats, is so important to consumers.
In the event that there are one or two people out there that really don’t understand how ExpertFlyer works, walk through an example, a simple example, of how one would use ExpertFlyer.
One of our most popular services is called Seat Alerts, where basically, we’ll let you know when a more desirable seat becomes available versus the one that you may already have. So let’s say you’re stuck in the middle seat for whatever reason. We can keep an eye on the seat map for your flight and let you know when an aisle seat or a window seat becomes available. Say you’re with a traveling companion and you couldn’t get two seats together. We’ll let you know when two seats together become available. We can do that for you very easily, because you don’t have the time to do it yourself.
The other popular feature that we have is Award and Upgrade Searching and Alerting. As part of our pro service, we allow you to very easily search for award and upgrade inventory from 70 or so different airlines. It’s not meant to replace the pricing on airline websites. We don’t want to replace the fact that you have to go to an airline website to book your award ticket or process your upgrade. The idea is that we can quickly show you, “Okay, this flight has award inventory and this one doesn’t, and there’s three left on this flight, or one on this flight,” but more importantly, we have alerting. Such that, let’s say, as is common nowadays, there are no awards available, or there are no upgrades available. You can tell ExpertFlyer, using our Flight Alerts feature, to keep an eye on a particular flight or flights, and let you know when an award opens up, or an upgrade opens up.
Basically, it’s services and data in a more transparent way that you won’t find on any other website. It’s meant to go beyond just what the cheap ticket is made to be. It’s “how do I get there better?” How do I plan it better using transparency of data that traditionally only travel agents have been able to have access to in a way that empowers me, the frequent flyer?
Are Seat Alerts free?
Yes. We have a free version which allows you to have one active seat alert at a time, using the any seat, any window, or any aisle options. You can use our more advanced options or have multiple seat alerts active at one time for 99 cents per alert, which is nothing compared to the value that you get for it. If you want more features and more alerts, we have our Basic and Premium services. If you just wanted the simple case of getting out of the middle seat on your next flight, sign up for our free service and create a simple Seat Alert for free. The app is available for iOS and Android devices.
Any final comments on what to expect from air travel in 2016?
I think we’re going to see more airlines competing for the front of the cabin passengers. They put a lot of effort into making their business, first, and now business first, two separate things, and now premium economy products better. As a matter of fact, we heard an announcement from American Airlines not too long ago that they’re going to be introducing a separate premium economy cabin on some of their international flights, which is a relative first. Usually, it’s more of a section within economy. This is going to be interesting to watch. Hopefully, some of that trickles down to the back of the bus, where airlines realize that their economy passengers should be valued too and again, like I said before, compete on the hard product, not just make people feel like they’re in a cattle car on the train.
There used to be six major US airlines not too long ago. Now we’re down to four. There’s less competition. They’re making money; they’re making a profit even if they don’t try because the cost of oil is low. Like everything, it goes up and down. The party is not going to last forever. Those airlines that laid the groundwork now to treat their customers as partners and not as burdens, will reap benefits when things get tougher again and oil prices go up in the future. To the flying customers, I say, vote with your wallet. Send the message to the airlines that you want to be treated well no matter where you sit on the plane, and understand that the cheapest ticket doesn’t necessarily offer the most value. Don’t be afraid to vote with your wallet and to make your voices heard with the airlines.
As airlines continue to struggle with effective ways to remain profitable, their biggest challenge remains how to maintain customer satisfaction from millions of passengers, including the business traveler who is the backbone of the airline industry. In a recent survey conducted among 1,500 business travelers, ExpertFlyer.com and View from the Wing blog asked customers and readers to offer their thoughts about the state of the industry in 2015 and their travel plans for the New Year. Based on the survey’s results and anticipated travel plans for 2016, travelers in general could see a decrease in the number of available seats, which doesn’t signal relief from higher airfares.
(Click infographic to enlarge)
Among the key survey highlights
43% said they traveled at least 15 times in 2015 and 83% said they would travel as much or more in 2016
79% percent earned more than 100K frequent flyer miles over the past 12 months; 60% said they earned the majority of points by flying, while 39% earned more miles through credit card purchases. 15% of survey participants admitted to padding their expense reports at least once
15% said they participated in one or more activities they would not otherwise do at home, including: participated in an extramarital affair, experimented with recreational drugs, and even pretended to be someone else
25% said they now use ride share services, such as Uber or Lyft, rather than a traditional taxi (17%)
40% said their companies did not allow stays at non-traditional living accommodations, such as Airbnb
“Our survey among ExpertFlyer customers and View from the Wing readers really focused in on the true business traveler who is frequently on the road and has a firm opinion about the travel industry and its impact on them,” explains Chris Lopinto, president and co-founder of ExpertFlyer.com. “The survey offers some insight into the mindset of the business traveler, what they thought about their experiences in 2015 and more importantly, their thoughts for the year ahead.”
According to View from the Wing author Gary Leff, “Paying attention to the habits and trends among the people who travel the most gives us insight into what to expect industry-wide, and more importantly, we can follow their lead and make our own travel better too.”
Full Business Travel Survey results are available here. To read our Consumer Travel Survey, click here.