I love this time of year. It is the new beginning for many of us. I personally look back at the previous year for about five minutes then it is all about the future. What is going to happen next year? We hope that growth and prosperity will rule the airwaves and the nations of the world. But there will be a few additional things that will happen in our industry. This is what I think:
- American Airlines and US Airways will merge: American Airlines will come out of bankruptcy and will start talking to US Airways about merging. Before the end of the year they will combine forces and take on Delta and United. Then the fun begins. Or is that pain?
- United Airlines will grow, Delta Air Lines will shrink, the new AA/US will remain flat: In 2012 the new United Airlines will start flex their muscles since the merger, and see growth in passenger traffic; Delta will have some competitive issues (more below); and American and US will just be getting started and will feel some of the aftereffects of bankruptcy.
- Sabre will make peace: I think that since the bankruptcy proceedings, we have had a view into the operations at American Airlines and soon there will be peace between the airlines and the GDS’s. The real issue left to be answered is who will pay for the cost of distribution?
- Corporations will see their costs rise: Corporate travel departments will start to see increases in distribution costs. And really it will be a flow through from their TMC’s. Using a GDS costs more, TMC’s cannot absorb the costs, corporate travel departments bear the additional costs.
- Strikes will threaten the airlines: Last year at GBTA there were pilots outside of the convention center sharing publicly with all of us their lack of contracts and desire for more compensation. It made me think that as the airlines get bigger, the power of the unions and employees gets bigger, and the threat of work stoppage and massive headaches will be present.
- No more PJ’s on airplanes: The dress codes for airlines will start – and the more and more frequent sightings of pajamas on airlines will stop. Sir/Madam, you have been denied boarding because your pants should only be worn in your bedroom.
- Southwest will start charging for bags: The competitive advantage they think they have will be overcome by the tempting thought of all those additional revenues. There is nothing like more revenue in the airline business.
- Tony D’Astolfo will rise again: The surprise (at least to me) departure of Tony from Rearden is not the ending of the wit, smile, perspective and intelligence of Tony from our industry. He will rise again. He is in fact the Honey Badger of the travel industry.
- Southwest takes over Airtran in Atlanta and the wars begin: This will be interesting. But, it will also be bloody. The question in my mind will be who will Delta focus on? United and American and US airlines will be watching the hometown war. Can Delta win again?
- Lowest Logical Airfares will rise again: There has been a lot of press lately about the fact that travelers are dropping the concept of lowest logical airfares and in fact focused on other things – what I say is bull – corporations care about doing effective business at the lowest cost – and that is what travel managers will be focused on providing.
- Merge the associations, take two: Time to get the associations to talk to each other again, and to merge. A larger voice for our industry is a good thing – government’s all over the world will be more likely to listen, travel managers will NOT have to make difficult choices, and marketing and sales expenses to are managed better. GBTA and ACTE, go have a coffee together.
- Tripit will continue to piss off travel managers: Everyone client I speak to tells me this time and time again. So will something happen to appease them?
- Do you have to relieve yourself on an airplane? Bring your credit card because you are about to be charged to use the toilets. Swipe your card for the right to use the facilities. I am going to go out on a limb and say $2 per usage.
- Car Rentals will get more into the ancillary fee game: I think ground transportation companies have to figure out how to get into the game of more fees for their rentals. The problem is for me I have no idea what more they can charge for. Maybe if there is a little dirt on the car they charge for a car wash? Who knows but get ready to pay more.
- Hotel Rates will go up moderately in most places: The economy is just not good enough yet to drive large price increases. They want to get more from your pocket – but they have to balance that with filling the rooms. Maybe they fill the room cheaply and you have to pay for little things. Like a key.
So there you have it – do you have others? Feel free to share! Best wishes to everyone for a great 2012 and let’s hope not all of these predictions come true!
