Angry Kansans and A Buyer’s Market in Travel
Some interesting stuff out there in the middle of America this week.
I was the only one speaking who wasn’t running for political office.
Everyone was zipping across Ohio, the battleground state, but the most interesting thing was that I sparked a little controversy in Wichita, Kansas.
You see, Wichita likes to call itself the “Air Capital of the World” because it has Boeing, Cessna, and a lot of the aircraft subcontracting manufacturers are there.
Well, I gave a speech during the Kansas Tourism Conference meeting.
I told them, “It’s OK to call yourself the ‘Air Capital of the World,’ but that’s only if you can get here. Because your air service sucks!” It’s true, and it’s indicative of what’s going all across America as airlines are cutting capacity, pulling back on frequency, as much as 16 percent across the board.
The folks in Wichita, at least some folks, thought that I was saying their airport sucks.
No, I like Wichita. It’s one of the most livable cities in America, and I go at least twice a year. Most of you haven’t been there, and I encourage you to go. But you still have to get there!
Isn’t it interesting that the largest airport in Kansas is in another state? That’s right, it’s in Kansas City, Missouri. That’s how bad it is.
Later in the week, I was in Akron, Ohio, where they have a similar issue in cities like Akron, Toledo, and Cleveland, where services are being cut across the board.
What people don’t realize is that you’re probably wearing something, owning something, or looking at something that was made in a place you’ve never been. It was made somewhere in the middle of this country, whether it’s Kansas, Alabama or Wyoming. People live there, they have their manufacturing plants there, they have to move their goods and services, and they have to travel in order to do that.
BAILING OUT OUR TRAVEL INFRASTRUCTURE
It’s not just about leisure travel, if people can’t get out to do that business, what happens to our economy? It’s amazing to me in this fast-moving era of bailing out financial institutions, we haven’t looked closely at bailing out, or at least repairing our travel and tourism infrastructure. Whoever becomes president needs to look at this as a national economic imperative.
We all know how bad the fuel was this summer, up to $4.34 a gallon in some places. Even though now it’s down as low as $2.34 a gallon, what about those airline fuel surcharges that the airlines put in this summer? They’re still there? But the cost of fuel isn’t, at least relatively speaking. So shouldn’t those fuel surcharges be eliminated, or at least reduced.
Speaking of surcharges, a lot of airlines issued third-quarter earnings last week, and it was pretty dismal. US Air, Airtran, Alaska Air all had a quarterly loss. Southwest lost money that quarter for the first time in 17 years. United Airlines had a $779 million loss. How can I be overdrawn if I still have checks? Some of these airlines are apparently operating on nothing but fumes. It’s going to be a tougher first quarter. If they can get through their second quarter, we’ll actually have somewhere to go.
I probably took nine or 10 flights last week alone and not a single one of them was full. That was not the case a month ago. In fact, in the last three years, I hadn’t been on a flight that wasn’t completely full. But that opens up a lot of opportunity for fare discounting as well as redeeming your frequent-flier points. It’s a weird situation in this country coming up before the election.
IT’S A BUYER’S MARKET
My prediction is this: you’re going to see tremendous volatility with the airline business as we’re seeing with the stock market. It will probably stabilize—at least it won’t get worse, and then we’ll dig out of it. but there’s not doubt about it, it’s a buyer’s market out there for travelers, especially overseas.
As airlines have to continue to operate those routes whether one person flies or a whole plane flies, because otherwise they’re going to lose the routes. So you’re going to see tremendous airfare sales between now and December 17, and some are even extending to March 1. So watch those ads because now is the time to strike.
That also means that if you haven’t been able to redeem your frequent-flier miles, airline are going be a little more lenient in releasing those miles.
Last but not least, there’s tremendous discounting in the cruise ship business right now. It’s a very slow period this time of year. I’ve seen one company advertising on seven-day cruise in the Caribbean leaving November 2.
A month ago, a mid-level cabin with a balcony was about $1,100 per person. Two weeks ago, the same cabin was $680. Last week, it was $549.
Now, here comes the wild one, an inside middle cabin as of Saturday was $249. I can’t even get breakfast for a week for $249!
Now you’re understanding the desperation and intensity of cruise ship pricing.
An unsold cruise ship cabin represents lost revenue—if they can’t get you in the cabin, you can’t spend money onboard. And that’s how they get their money.
By Peter Greenberg for Peter Greenberg Worldwide Radio…
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