The Business Travel Briefing:
The 2019 Outlook
What will 2019 look like on the road? If you can predict the outcome of the government shutdown and Brexit, you'd know more. But Amazon is headed to the airport, Southwest is headed to Hawaii, the international discounters are on the edge and some really big airports will open.
Every Day Is a Winding Road. The Shutdown Adds Nasty New Curves.
It's nearly impossible to discuss 2019 travel trends with the partial government shutdown staring us in the face. When the stalemate reaches Friday, January 11, it will be the longest government closure in history--and "essential" workers like TSA screeners and Customs agents will miss their first paychecks. They've worked without pay since before Christmas and the longer the shutdown drags on, the more our travel experience will deteriorate. It's not just longer airport checkpoint lines to worry about as increasing numbers of TSA agents call in sick because they will not or cannot work without pay. Air traffic controllers aren't being paid, either, and they'll be less interested in manning their stressful posts without pay. (Some TSA agents and controllers have already resigned, leaving for other jobs, say the unions representing them.) Customs lines at international ports of entry will begin to lengthen, too, although smart travelers already rely on automated solutions and Global Entry. Even that won't be immune to the effects of a shutdown. Interviews for renewals of Global Entry credentials (and with them TSA PreCheck privileges) are being cancelled, some travelers say. And while the State Department says passport applications continue to be processed, no one knows for sure. Why? State and Homeland Security Web sites have stopped being updated, so there's no current information available. "Another week or so and things will really start getting ugly," one normally sanguine airline executive told me via E-mail on Wednesday (January 9). "Every day the government is down is another day travel will be harder to manage." One other depressing note: While the government is shut down, the FAA has suspended aircraft inspections. So, you know, good luck with that ...
Will 2019 Be the Year Southwest Flies to Hawaii? It Better Be ...
has planned to fly to Hawaii from the mainland for years. It even announced its initial route network last year: nonstops from Oakland, San Diego, Sacramento and San Jose to the four top Hawaii destinations: Honolulu, Maui, Kauai and Kona on the Big Island. But the flights have yet to materialize and there's still no firm launch date--or any real confirmation that Southwest would also try some inter-Island flying. What's the delay? ETOPS certification, the key to allow Southwest's fleet of twin-engine Boeing 737s to fly longish nonstop routes between the West Coast and the islands. Certification usually takes about upwards of 18 months and it's clear that the FAA, which handles the certification, is crossing and dotting the appropriate letters. (It doesn't help that the FAA has been shut down along with other "non-essential" parts of the government since before Christmas.) So if you're been hording Rapid Rewards points in anticipation of a Southwest freebie to the Pacific, 2019 could finally be your year. If the 800-pound gorilla of discounters is winging across the Pacific starting this year, lots of questions will be asked.
has sniffed around the transatlantic market for several years. Much like the Switzerland Strategy
deployed by Alaska Airlines
, however, JetBlue has stayed in its Americas lane and partnered with an array of international carriers instead. But 2019 might be the year JetBlue finally also adds Europe to its route map. Why? Planes. JetBlue has promised to inform Airbus this year whether it will take delivery of any long-range variants of the A321. That aircraft, with a range of about 4,000 miles, could fly from JetBlue's New York and Boston hubs to London and Paris, to name just the two most heavily traveled routes between the United States and Europe. (Flights from Fort Lauderdale, JetBlue's Florida focus city, would be too far for the A321LR, however.)
A New U.S. Airport, But the Big--and We Mean BIG--News Is Elsewhere
It's not every year--in fact, there are almost no years--when we can discuss the opening of a new airport in the United States. The debut of Paine Field
in Everett, north of Seattle, is an opportunity for Alaska Airlines to shore up its local control of the burgeoning Seattle-Tacoma
market against the incursion by Delta Air Lines. At the moment, Alaska is slated to be the major carrier
at Paine and United Airlines will offer a smattering of flights, too. The opening, originally planned for last fall, is now set for February 11. But the government shutdown may delay the premiere for an undetermined period. Stay tuned.
already has two busy aerodromes, but there apparently won't be anything quite like the Istanbul New Airport
. The sprawling operation
, officially inaugurated in October, initially will have 114 gates and the ability to handle 90 million passengers. There's space to accommodate 200 million flyers and four terminals when construction is complete in 2028. Designed to replace Ataturk Airport
, built in 1953, Istanbul New was supposed to be running by now. Turkish authorities even told international airlines to be ready to move from Ataturk on January 1. But that was delayed in mid-December due to construction delays and ferocious autumn storms. The rescheduled date for an operational transition is now March. Estimated to cost at least $12 billion to build so far, Istanbul New Airport had better be worth it. The Turkish government admits 52 workers died during construction, but opposition leaders say the number is closer to 400.
has its own huge new airport due this year. Daxing International
, about 30 miles southeast of Tiananmen Square, is planned to handle 100 million passengers a year. And, naturally, high-speed rail and subway connections to central Beijing and surrounding areas are being built simultaneously. The Chinese government is requiring all Chinese flag carriers to choose to fly to either Daxing or the existing Beijing Capital
airport. International airlines are free to fly to both. How the service patterns will develop will be part of the story to watch this year.
New Hotels? You Want New Hotels? Here's Where to Look
Hoping for rate relief in 2019? Experts think your chances are slim. Average U.S. nightly occupancy this year is expected to reach 67 percent, the fifth consecutive year of growth. When hotels fill more rooms, they're less interested in discounting--or running frequent guest plan promotions to shore up occupancy rates. That growth in occupancy will occur even though new hotels are being built at a record pace. The top markets for new hotels? According to one lodging consultant, New York City has 170 projects in the pipeline with nearly 30,000 new rooms. Los Angeles is next with 24,000 new rooms in development. Dallas (19,000) and Houston (16,000) are next and the surprisingly vibrant Nashville market, with more than 100 new properties and 15,000 new rooms, rounds out the top five.
International Discounters Rearrange Deck Chairs, Then Burn Them...
It's a small miracle that we're even still talking about the future of international discounters such as Norwegian
and Wow Air
. A good case could be made that both should have died or been merged into submission by the end of 2018. (In fact, several smaller ones like Primera
did disappear last year and Hong Kong Airlines
has abandoned its North American expansion.) This year isn't likely to be salubrious, either. After a failed merger attempt with Icelandair
, Wow has laid off staff, returned jets to lenders and slashed its North American route network. Nonstops from Los Angeles, San Francisco, Vancouver, Cincinnati, Cleveland, Dallas/Fort Worth and New York/Kennedy have all been dumped. The only thing keeping Wow in the air is a pending investment from Indigo Partners, the firm that owns Frontier Airlines. Norwegian, meanwhile, continues to rearrange its financial deck chairs, confound analysts who predicted its imminent demise and play cat-and-mouse with potential suitors such as Lufthansa
and IAG Group, parent company of British Airways
. However, Norwegian has mostly abandoned its expansion at secondary Northeast airports using all-coach Boeing 737s and sharply increased premium class fares on its 787 routes. But let's not mince words: The future of the international discount segment almost surely rests on the price of jet fuel in 2019. When oil prices were surging to the $100-a-barrel mark last year, their fates seemed sealed. The late collapse--West Texas Intermediate, the U.S. standard, is back around $50--has afforded some breathing room. And Brent crude, which most closely tracks jet fuel prices--is at least $10 a barrel below where it traded in January, 2018
Business Travel News You'll Need to Know This Year
Will you be shopping at a bricks-and-mortar Amazon.com
as you pass through an airport this year? Could be. Development officials for several airports say the online giant has been sniffing around their facility and asking about available space. Amazon last year opened several so-called Go stores in major metropolitan areas. Unattended operations require you to scan your smartphone and Amazon account information as you enter. Cameras identify your purchases and your Amazon account is billed as you exit. Could Amazon's Go shops work at airports? Why not? We seem to accept whatever Amazon invents.
and home-technology integration
are buzz phrases you're likely to hear about throughout the year. At least three airlines--Delta, American
--already have rolled out biometric technology at some airports. That permits facial recognition to manage flight boarding and ID checks, for example. Meanwhile, major hotel chains are now testing guestroom integration of familiar home tech such as Alexa and Google Assistant. Hotel executives say as travelers quickly integrate the technology into their homes, they'll expect similar systems in guestrooms. In other words, hoteliers may finally be giving us a consistent way to turn room lights on and off.
Oh, Yeah, About That Brexit Thing ...
If not for the impact of the U.S. government shutdown, the screaming headline dominating the travel landscape just now would be the clusterfark that is Brexit. With only weeks remaining before March 29, when the United Kingdom is scheduled to leave the European Union, the situation is a muddy, muddled mess. What's it mean for us travelers? Unknown. Britain has signed separate deals with the United States and Canada to keep flights going across the Atlantic, but even that won't guarantee much. London is already hemorrhaging cash: An Ernst & Young study this week said major firms have moved $1 trillion out of the British banking system and to the EC in anticipation of a disruptive "no deal" Brexit on March 29. Meanwhile, EC regulators have thrown a monkey wrench at IAG, parent company of British Airways, Iberia of Spain, Aer Lingus of Ireland and several smaller carriers. The regulators say IAG's post-Brexit structure won't meet EC ownership rules and that raises the prospect of immediate flight groundings.