The Southwest Airlines gates of National Airport are almost completely without flying customers, showing the impact COVID-19 is having on air travel.
You know them. You may even be one.
They used to fly solo, often toting briefcases instead of daypacks, and filled the front of the plane, taking full advantage of perks like ample upgrades and free cocktails.
Now these same business travelers are showing up with their families as leisure travelers clad in shorts instead of business suits. As vacationers, they are ready to take trips despite concerns about the coronavirus pandemic.
That’s forcing airlines to treat leisure passengers with more respect simply because there are no longer business travelers – the airfare fat cats – anymore to help fill planes.
When it comes to a recovery in the airline industry, “we’ve said from the beginning that leisure was going to lead the way, mainly because businesses are still really trying to figure out what it’s going to look like when things normalize,” Paul Jacobson, Delta Air Lines’ chief financial officer, told analysts on an investment firm conference call last month.
To hook more back-of-the-plane passengers, airlines are adding more domestic Sunbelt cities and Mexico and Caribbean routes, offering deep fare discounts, rejiggering incentives and relaxing booking rules.
No-change fees woo wary vacationers
The latest proof that airlines are serious about wooing leisure travelers came in August when United, American, Delta, Alaska and Hawaiian airlines banished change fees on all but the cheapest no-frills tickets, a move that pressures Southwest Airlines, which hasn’t had them.
Business travelers were more likely to book costly unrestricted tickets that allowed them to switch travel dates without penalty. Leisure travelers were locked in, knowing a $200 change fee could be more than the price of their ticket.
“One of the biggest impediments to leisure travel is the change fee,” said Peter Greenberg, host of the “Eye on Travel” radio show.
Airlines are trying to appeal to more leisure passengers, including adding routes to vacation destinations like those in Florida. Here’s the pier in Fort Myers at sunset. (Photo: BobPalosaari, Getty Images/iStockphoto)
American Airlines ditched another rule that penalized leisure flyers. It said it will allow passengers to fly standby without an extra fee, taking an earlier flight if empty seats are available.
It’s yet to see if the changes make a difference in bookings. Airlines are flying their planes an average of about a third full with the industry collectively losing about $5 billion a month, said Nicholas Calio, CEO of the trade group Airlines for America.
Virtually all have been cutting fares based on the dearth of passengers. From there, though, major airlines are taking different approaches when it comes to bringing in more leisure traffic.
New routes, perks abound
With business travel off 95%, American Airlines is focusing on leisure destinations in Florida, Texas and Arizona, Vasu Raja, the airline’s chief revenue officer, told another investment conference last month.
“The customer mix is changing,” Raja said, with more customers under age 40, more traveling for leisure or a mix of leisure and business and lacking the kind of loyalty to the airline that would make them eligible for perks like class upgrades.
American is beefing up service to Mexican-resort destinations and adding seasonal service from Dallas-Fort Worth and Phoenix to La Paz and Loreto, Mexico, starting in December, said spokesman Andrea Koos. In an unusual move, American is giving “bonus” frequent-flyer miles to passengers who redeem their existing miles for free trips instead of just letting them earn miles for paid travel.
Delta’s Jacobson said leisure customers these days are traveling on shorter notice, often booking a week to 10 days ahead of time to try to avoid cities that they surmise will be hot spots for the coronavirus.
In its effort to hook vacationers, United Airlines introduced an “Explore Destinations” interactive tool recently on its website that allows leisure passengers to see the lowest fares for cities across the country to many cities in a single view. They can decide where to vacation based on the best deal or sort by specific interests, like cities known for their brewpubs, national parks or snorkeling.
Some “90% of customers who book on United.com are now leisure travelers, and we’re seeing that these customers are more open about the destinations that they would like to visit,” said United spokeswoman Christine Salamone.
Major airlines’ attempts to make life better for leisure travelers could complicate plans for discounters and other air carriers that have long made vacationers a mainstay.
Those airlines are coping mainly by making changes to their route networks. Southwest, long a favorite of leisure travelers, has focused on vacation destinations in adding new cities. After initiating flights to Hawaii last year, it announced service to Cozumel, Mexico, in March and flights to Steamboat Springs, Colorado, in time for ski season; Miami and Palm Springs, California,
JetBlue has been shaking up its route network in response to the fall-off in business travel, announcing last month it is adding routes to warm-weather leisure destinations in Florida, Latin American and the Caribbean. The flights begin just as the snow starts to fall in parts of the U.S. – November and December.
Similarly, Alaska Airlines plans to start service between Los Angeles and Palm Springs, California, to including nonstops from L.A. for those headed to the sunny resorts of Cancun, Mexico, and the wintry skiing near Reno, Nevada.
The new flights, said Brett Catlin, Alaska’s managing director of capacity planning and alliances, are “for those ready to fly the coop.”
Isn’t everyone at this point?
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