The Consequences of Eliminating Airline Change Fees

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Very recently, we announced that both American Airlines and United Airlines were making significant changes to their policies surrounding change and cancelation fees. Put more simply, they’re doing away with them entirely. 

But why? The reason is very simple: More money, and more money right now

Even with all of the optimistic news we share about the airline industry making some much-needed recoveries, they still have an extremely long way to go. As of right now, passenger capacity still remains at a dismal 30%. 

So, how do you possibly incentivize Americans to travel in the day and age where it is largely deemed unsafe to do so by several health authorities? You raise the bar even further with an extreme move.

More specifically, you acknowledge that a tradeoff will have to be made. You sacrifice revenue in exchange for helping the average passenger save money. If fliers know that their tickets can be canceled or changed without having to pay any additional fees, they are much more likely to bite the bullet and fully commit to booking their flights. 

Make no mistake about it, this is a long-term cash play. By losing out on money in the short-term, they are betting on making money in the future.  You may not consider this to be a big deal, but this nickel-and-diming is a major obstacle for would-be flyers. 

This is just one of many actions you will see many other major American aviation companies taking, if not others in several other tourism-heavy countries. 

What do YOU think about this upcoming change? Does it make you more likely to fly, or does it do absolutely nothing to persuade you? Let us know by replying to the newsletter!

Alaska Airlines: The Fourth Aviation Company to Eliminate Change Fees

Joining American Airlines, Delta, and United is Alaska Airlines, who is now officially the third US-based airline to announce a permanent elimination of its change fees on both domestic AND international flights. 

Previously, the change fee was priced at $125. Now, it is $0.

This is just one of many changes being implemented by Alaska Airlines to improve the overall customer experience. They’ve also extended Elite status for their customers throughout the entirety of 2021, giving them more VIP perks and benefits as frequent travelers.

And despite suspending 75 people for non-compliance in wearing face masks, they maintain a 99.9% compliance rate over 1 million passengers. Not too bad, if you ask me!

Yesterday, Costa Rica Opened Its Doors to Select American Tourists

Costa Rica is officially back in business for tourists hailing from the United States! Well… not all of them, as you have to be from one of the 11 states they have pre-approved. 

Those states are as follows: Connecticut, Maine, Maryland, New Hampshire, New Jersey, New York, Vermont, Virginia, and Washington DC

Colorado, Pennsylvania, and Massachusetts will be added to this “safe list” on September 15th.

Considering that Costa Rica pulls in $1.7 billion every year through tourism alone, and nearly 2 million visitors within that same time period, they’ve spent the past few months allowing as many travelers as safely possible. Long before this recent announcement, Costa Rica has opened up their borders to tourists from countries such as Singapore, Japan, Canada, the UK, and the entire European Union.

As with any other tourism-reliant country, all visitors must present a negative COVID-19 test within 48 hours of landing in the country and complete a health form prior to arrival. 

How Costly Is A Canceled Cruise Because of One Positive COVID-19 Case?

With several cruises being canceled due to at least one passenger or staff member being infected with the coronavirus, you have to wonder how much money is lost when the entire ship has to be docked for 14 days minimum… all while keeping all ship inhabitants on lockdown until they are released at the port. 

One story may have the answer to that question. 

The Wilderness Adventurer, a ship used by cruise company UnCruise, was set to embark on a 10-week voyage of sailings all across the Pacific Northwest and Alaska. This was a very recent cruise that started in early August. Multiple millions of dollars were invested into ensuring this trip was a 5-star experience for its passengers. 

Yet just 3 days into the trip, one passenger tested positive for COVID-19. He was oddly tested negative prior to leaving his home, but upon arriving at the airport in Juneau, the second test he took proved otherwise. 

Despite all 27 crew members and 35 other passengers testing negative, the ship had to return to port and cancel the entire journey. Ironically enough, that same test determining the passenger to be infected with COVID-19 was actually a FALSE positive. 

Just imagine… millions of dollars down the drain because of one individual. 

Let me know what YOU think about this event by replying to the newsletter: Is it reasonable and fair to cancel an ENTIRE weeks-long cruise trip just because of one single COVID-19 individual on the cruise boat? 

World’s Largest Airline Internet Provider Sells Out For $400 Million

Just a brief yet very interesting story…

You may have never heard of the company Gogo, but they are one of the world’s largest providers of in-flight Internet service for 21 different airlines. Out of the world’s top 20 airlines, nine of them are on Gogo’s client list and over 3,000 airplanes use their service in some capacity. 

Sadly, they had to sell off their commercial aviation units for $400 million to Intelsat, a satellite operator. The best part of their business had to be let go so they could put a dent in the $1.2 billion of debt they have on their balance sheet. Not to mention having to lay off 143 workers due to COVID-19’s obvious impact on the aviation industry. 

What a shame. While I haven’t personally used WiFi on a plane due to its sometimes-annoying unreliability, but I know of many people who rely on it to remain productive and connected with their colleagues. 

Brazil Is in a Recession, All Thanks to COVID-19

Brazil has not been immune to the effects of COVID-19, especially not from a perspective of basic economics. 

Quarter on quarter, gross domestic product has shrunken by an astronomical 9.7%, and it is 11.4% lower compared to last year’s quarter. Just like the United States, millions have been forced into unemployment and over 120,000 Brazilians have died because of the coronavirus. 

Here’s the really scary part: Out of all the nine recessions suffered by the Brazilian economy in the past four decades, the Q2 2020 losses alone have dwarfed the losses COMBINED from the nine recessions I just mentioned. 

On the bright side, several Brazilian economists are projecting a 3% growth rate for next year. They claim the worst of the economic damage has been done, but a lot of that will be predicated on how well they can stop the transmission of COVID-19. 

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