Now may not seem like the best time to fly. Uncomfortable sardine-like rides, humiliating security checks, endless delays, and recent high-profile plane crashes may dissuade potential fliers. However, current trends across the airline industry are about to bring out more options and lower prices. With a little bit of planning and flexibility, these changes will improve the lot of many customers of the “friendly skies” across the world.
The wave of mergers is finally stopping.
The last ten years have seen a wave of major airline mergers, especially in the United States: US Airways-America West, Delta-Northwest, United-Continental, Southwest-AirTran, and the ongoing American-US Airways. American, United, and Delta each have joint business agreements with airlines flying to Europe and Asia, allowing them to coordinate schedules and fares. Groups of European Airlines: British Airways/Iberia, Air France/KLM; and Lufthansa/Austrian/Swiss, are managed as a single airline and have price-fixing power, even though they appear separate to customer. For a while, governments softened their antitrust enforcement in order to enable airlines to stay alive amidst increased price of jet fuel and the Great Recession. But now that many airlines have seen their financial performance improve, this global antitrust leniency is about to end. While these mergers have hurt customers through increased airfares, they have also given passengers better schedules and access to more international destinations. As mergers come to a halt, so will these mostly harmful, but sometimes helpful effects on customers.
Low-cost carriers are entering new markets.
Low-cost carriers such as Frontier Airlines and Ryanair, offering no-frills service at discounted prices, once existed only on a few short routes in Europe and the U.S. However, the game is quickly changing as Southwest opens up routes to Mexico and Scandinavian carriers such as Norwegian and Wow Air offer sub-$200 one-way fares from the U.S. to Europe. Low-costs are also becoming more popular in Asia and Brazil, appealing to the rising middle classes there. All travelers should welcome these additions, whether they fly on these low-costs or not. Even those willing to pay slightly more for improved service and frequent flier benefits should see increased pressure on established legacy airlines to lower their prices.
Legacy airlines are charging fees the same way as low-costs.
Established legacy airlines are emulating the successful models of low-cost airlines. While lowering their base fares, airlines charge for everything from food to advance seat assignments to checked bags and often do not offer refunds or frequent-flier miles on their lowest fares. Those traveling without checked bags and who do not mind tight seats should welcome the lower fares, while those who want these benefits might end up paying more than before. As the gap in low-cost and legacy carriers’ fare structures closes, the two types of airlines are still very different. Low-cost airlines are targeted towards leisure travelers with networks focused on massive tourist destinations, usually on seasonal or weekend-only bases. Low-costs are absent on most longhaul routes between major world cities, focusing instead on shorthaul routes and a small amount of longhaul leisure routes using “beach fleets.” Also, low-costs in Europe especially are often based at secondary airports far from the city, increasing travel cost and time. Legacy airlines are still the superior choice for business travelers due to their more frequent schedules, coverage of routes between major cities, frequent-flier programs, and first and business class cabins.
Premium economy cabins are giving customers an additional choice.
Passengers in economy class have more reasons than ever to feel jealous. While legroom has shrunk and seat recline has become a new battleground in coach, first class customers are experiencing better-than-ever restaurant-quality meals and flat-bed seats. However, these changes are the signs not of a growing class divide, but of more varied options for customers. In between the most bare-bones economy cabins and the most luxurious premium cabins, airlines now have intermediate premium economy offerings. These cabins, originally introduced by Taiwan’s EVA Air, are becoming the norm on most international airlines. Carriers previously without the cabin, such as Lufthansa and Singapore Airlines, are now adding it. Premium economy generally consists of a small separate cabin of wider seats with more legroom and recline, as well as shorter check-in lines and higher-quality meals sometimes. Some airlines do not offer a separate cabin but have several rows of seats with additional legroom, free for their top-tier frequent fliers and available to other customers for a small extra fee. This trend should help customers by offering them a greater variety of options to suit diverse budgets and tastes.
Improved business class is replacing first class on most international routes.
While domestic first class usually means a meal and a wider seat, international first and business class are a completely different experience. Seats reclining fully into flat beds, offering maximum comfort for both working and relaxing, have become the norm on most major airlines in business class. Because new business class seats are superior to many old first class seats, most airlines are cutting or severely trimming it. First class is surviving only on a few routes with sufficient demand, mostly between large markets such as New York, Los Angeles, London, Frankfurt, Hong Kong, Dubai, Singapore, and Sydney. There, airlines are competing for the most outlandish offerings. Emirates Airline offers an onboard shower, Asiana Airlines and Thai Airways’s seats have sliding doors on the outside of the suite, and Lufthansa adds to the ground experience by having a separate first class terminal and driving passengers to their flights in luxury cars. Though full-fare prices for these cabins can cost over $10,000, frequent flier miles offer a way to experience this luxury at much lower price tags.
Frequent flier programs are changing their earning and spending structures.
Though all their complex fine print may seem daunting at first, frequent flier programs offer free flight tickets, upgrades to higher classes of service, access to VIP lounges, and other great benefits to loyal customers. Unfortunately, airlines devalue their mileage currencies with little or no forewarning, which has even been the subject of class-action lawsuits. Delta and United have also recently switched to a system of awarding miles to customers based on the money they spend, not the distance they fly. Despite this, earning miles through credit card signup bonuses has become easier, with some cards offering bonuses large enough for a free round-trip ticket from North America to Europe! Most frequent-flier program experts recommend redeeming miles for longhaul flights in premium cabins and using the miles right after accumulating them, since airlines can devalue them at a moment’s notice.
Airlines are focusing more on flights out of hubs and less on point-to-point routes.
Southerners in the U.S. like to say that after death, someone going to either Heaven or Hell will have to change planes in Atlanta to get there. This hub-and-spoke system is gradually erasing almost all point-to-point routes. In the U.S., where major airlines each have over five hubs, mergers have led to the removal of flights from unprofitable hubs such as Memphis, St. Louis, and Cleveland, and, according to prediction from aviation analysts, Phoenix may be next on the chopping block. Less populous countries cannot sustain a hub network of flights out of more than one city; British Airways has acquired the nickname “London Airways,” and Japanese airlines have eliminated nearly all of their non-Tokyo flights. This is bad news for fliers based in cities losing flights but good for others, who will see greater frequencies and better connecting opportunities through strengthened hubs. Customers originating in or going to smaller cities will likely need to transit in a hub on the way to anywhere else.
Young fleets are offering modern amenities.
Airlines are switching to modern, more fuel-efficient aircraft to save costs. These new airplane models, such as the Airbus A380 and Boeing 777-300ER, come equipped notably with updated entertainment systems. The most radical improvements come on the Boeing 787 Dreamliner. Now that Boeing has fixed the major issues initially plaguing it, customers can enjoy the improved air pressure and larger windows of the aircraft. Tighter seat configurations in economy are a main drawback, but fliers can purchase upgrades to seats with extra legroom or higher travel classes.
Middle Eastern airlines continue to expand and seize key markets.
Four Middle Eastern airlines: Emirates Airline in Dubai, Etihad Airways in Abu Dhabi, Qatar Airways in Doha, and Turkish Airlines in Istanbul, are expanding at a very rapid rate. Each has been adding about three new American destinations per year, providing opportunities for connections to India, the Middle East, Africa, and Southeast Asia. While European and Asian airlines are furious to see these new entrants claw at their business, the increased offerings are excellent for customers. Those flying these airlines will see affordable top-notch service on modern planes, while those flying other airlines will see lower fares due to the increased competition.
10. Third-party sites are simplifying travel planning.
Expedia, Kayak, and Hipmunk are some of the travel sites that have revolutionized the booking process by eliminating the need for travel agents and enabling fliers to search the Web themselves to find the lowest fares and make their own bookings. Now, a new generation of startups is going one step further to help customers. Yore Oyster, Zyppos, and Flightfox are using their teams’ expertise to piece together complex itineraries beyond the scope of automated system, such as round-the-world trips stopping in all seven wonders of the world. Some companies use their teams’ collective brains; others crowdsource and have their experts compete to optimize the customer’s wishes. For a minimal fee, customers can outsource their travel planning to specialized online travel agents and go without hassle to enjoy their destinations.
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