Domestic and international airfares have taken a deep dive this summer. CBS news recently reported that vacation airfares have dropped by 17% compared to one year ago. Domestic airfares for vacation travelers have seen a big drop but international airfares have fallen to levels I have never seen before. Flights from the U.S. to Europe have dropped from an average RT price of $1500 one year ago to around $500 -$750 in July to many cities in Europe. Competition from the super low price airlines of Spirit, Frontier and Allegiant have put a lot of pressure on the major airlines of Delta, American, United and Southwest to lower their fares. This may be the best time this decade to fly. CLICK HERE to read the CBS article.
Business Class airfares around the world are also falling as airlines try to sell seats they have historically given as upgrades –
I was searching business class airfares to Europe and Asia recently and found airlines offering some amazing deals on business class over the pond. Normally a business class airfare will run 3 times more than the price of a coach class ticket. Coach class tickets that historically cost $1200 to $1500 to Europe and Asia would normally have a business class ticket for around $4500 to $6000. We are now seeing the airlines lowering those business class seats almost in half. On Friday I found a business class ticket from Chicago to Beijing for $2800RT. WOW! I also recently found a business class seat from Washington to Germany and Greece for $1850 RT on Turkish Airlines. WOW! Airlines are hoping that instead of giving away these seats as free upgrades to their elite frequent flyer members that if they lower the price enough that people will buy the seats instead. I really think this will make more people consider buying a business class seat with these lower prices.
United Airlines adds fingerprint Authentication to accessing Mileage Plus
One of my favorite features of the United Airlines app is being able to use my thumbprint to open my app instead of having to type in one more blasted password. Recently United Airlines added this feature to Android apps. Several months ago it first became available on iPhone apps. I hope more and more apps jump on the fingerprint bandwagon as remembering all my different passwords is like having my wisdom teeth pulled out.
Uber to merge operations in China to slow the hemorrhaging of money –
Uber and its largest competitor have called a truce and decided to merge forces in China to avoid the financial bloodbath they have both been taking fighting for the ride-sharing consumer in China. Didi Chuxing will soon take over Uber China and operate it as a separate brand in China. Uber will receive a 20 percent stake in Didi Chuxing and a seat on their board of directors for the trade. I think you will start seeing more and more changes to Uber in the months ahead as it can’t continue to sustain the multi-billion dollar losses each year.
Marriott and Hilton report that corporate travel slowed down in 2nd quarter –
The two major hotel chains have recently revised their revenue forecasts and have acknowledged that business travel is softening and that they will not be able to raise corporate hotel rates as aggressively as they have in the past because of the weakening corporate demand. Despite the softer market the two hotel chains still hope to be able to increase their average room rates from 2 to 4% in the coming months. Hilton reports they are filling almost 79% of their rooms each night, while system wide occupancy at Marriott is about 77%.
As American, Delta and United cut capacity this fall Southwest puts the pedal to the metal –
Airlines have seen a dramatic decline in airfares this year as business travel slows, terrorism raises it ugly head around the globe and economic uncertainty worries everyone. American, Delta and United Airlines have all determined that the best way to increase airfare prices is by cutting the supply of seats. Southwest Airlines, however, is staying true to their 5% growth plan in 2016 in hopes they can capture some market share the others are sure to give away when cutting flights. Southwest stockholders are not happy with this move as they have seen the stock price fall by over double digits in the last few months as the profit margins slip from the lower prices. The good news is that if supply stays high then airfares are sure to stay low. That is good news for travelers.