Welcome to Travel Again’s Weekly Travel Roundup, covering the headwinds and tailwinds shaping the business of travel. Please welcome our hosts, Mike McCormick and Ed Silver.
How are you doing, Mike? Good to see you.
Good to see you, Ed.
We are at season four, episode three. My goodness, we continue to move through the season.
Very nice.
Yep. Time flies.
Time flies.
So, Mike, we are just in the middle of a lot of massive foundational change in the industry. There is so much to cover. My goodness, it is hard to pick the articles this time.
Yeah, but certain things stand out. I think they are more about what they represent in terms of everything that is going on. Clearly, today we probably will not touch as much on the war activity and the impact that it is having. I think that is still shaking out, but there are certainly a lot of business trends in travel that we need to talk about, and I think they play into our guest today for sure. As always, the industry, in so many ways, begins and ends with the airlines, so this is a very appropriate set of topics for today. But anyway, do you want to go to the news, man?
Let us bust right into it. The first article for review: sweeping corporate layoffs start to make their mark on meetings. Mike, the long-term repercussions from the recent record-breaking wave of layoffs are unclear, but industry insiders are already seeing initial impacts. The numbers, Mike, are staggering. Amazon announced 16,000 layoffs in late January, followed by 14,000 cuts in October, combined its biggest layoff ever. UPS will cut 30,000 more jobs after cutting 48,000 in 2025, along with announcements from other Fortune 100 companies, including Meta, Dow, Tyson Foods, Nike, Verizon, and more. What is going on here, Mike?
Well, I think it is a number of things, right? You have a broader economic impact. You have the impact of AI. You have companies, certainly market-leading companies, making decisions about what they are calling right-sizing their staff or their employees. It is always concerning for travel, of course, because I have not seen this yet. I was quoting the article, but I don’t see this as an all-out situation where we are seeing massive cuts in travel, per se. But to the point of CFOs, companies tend in this environment to go back and take a look at the money they are investing in business travel and in meetings and say, “Look, okay, internal meetings, can we do those more efficiently? Or maybe, rather than have that big gathering that we were planning before, we might do some regional things or some smaller things as a way to manage our money a little better.”
There might be edicts reducing the required travel spending during this calendar year as part of this overall approach. You never know. But a lot of it tends to come back to how we can make sure that we are allocating the money for travel in places where we are seeing direct client impact, sales generation, revenue generation, whatever it is. That seems to be usually the tone in this environment, not an all-out slashing of budgets. Those come in the form of more draconian measures. As we have seen in the past, the problem with those decisions, if made that way, is that they actually have a real, detrimental impact on your business. It is bad for business on the top line, for sure.
Yeah.
So, the good news is, I think, over time there has been education about the value of travel, the value of business travel, the value of meetings, and the significant returns they generate. But again, you have to spend your money wisely and spend it within the parameters you have. So that is what is at play here. I think these are the normal cyclical things that happen. It is not unusual. It is not shocking in any way. It should not, at this stage, have a significant, dramatic impact on the industry from this alone. But we will see. Right now, stay tuned.
One to keep an eye on, for sure. Mike, our next article is about Uber. Uber acquires parking app SpotHero, moves beyond ride-hailing delivery. Why would they make this move? It seems unusual in some ways, and maybe not in others.
Yeah. It is an interesting and, I think, smart strategic pickup for them. SpotHero is clearly the leader. They have good tech. They have aggregated a ton of parking spaces into their network. It is a good product, and it fits. So, with Uber, it is a continued extension of being all things in ground transportation, expanding their scope.
I think it makes sense for all involved here because, for SpotHero, it gets them into a much broader customer base, increases brand awareness, and so on. Again, for Uber they are moving beyond the curve. They are getting to parking as part of their total offering. There were no signals that it was coming or that it was happening. This has not been discussed at all, and we tend, in the industry and, I think, in general, not to pay as close attention to this sector. But clearly, I think it is a really interesting and smart move in this environment.
Yep.
I think Dara is one of the smartest CEOs out there. He is definitely switched on there.
All right, next article. Mike, Airbnb outlines plans to add AI features for search, trip planning, and hosting. Airbnb is preparing to add features powered by large language models to its app to help users search for listings, plan trips, and help hosts manage their properties, said CEO Brian Chesky on Friday during the company’s fourth-quarter earnings call. Mike, I think you could pull that quote from every single company’s quarterly earnings call, so why did you want to highlight this one today?
Well, because Airbnb is moving, Brian has been really active, out there talking about their expansion, bringing hotels into their whole ecosystem, and indicating they have big plans for the company, with their role well beyond where they are today.
I think this was kind of part of a number of appearances he made. He has been on record saying, very aggressively, that they are expanding beyond the rental market into hotels and beyond, and spending money to really amp up their AI agent capabilities as well. So, again, for travel and the industry, this is an interesting player trying to move very aggressively into, effectively, the OTA space.
I think it is interesting, and it makes the market more competitive. Certainly, if you are Booking or Expedia, you take notice. If you are the hotel brands, you take notice, because it gets back to the friend-or-foe discussion. They do not want to create another monster, another way they are losing direct distribution to a third party. But at the same time, if it provides more competition and puts pressure on the others, making them more competitive in terms of the cost of distributing through them, then that is a good thing.
Yeah.
But it is one they are carefully evaluating right now.
Okay.
Yep.
Next article, Mike. Navan and Booking.com enhance direct connection to expand inventory and savings for business travelers. This is direct from Business Wire. Tell us about this one and why it is important, because we see a lot of these deals in the industry.
Well, this is one where, again, strange bedfellows, right? In a way, you kind of go, wait, okay, Navan corporate, Booking.com leisure. On the surface, the partnership makes sense. Clearly, for Navan, it is all about inventory and bringing in more rates, properties, and content across their entire ecosystem. On the surface, it makes sense.
The point I am making, and we have talked about this before, is that sometimes these relationships, at the start, one of two things happens. It either ends up being a bit of a non-event in terms of not getting as much traction as they thought, or, if it does get traction, then a few years down the road, you have the other problem. Then it starts to become, well, who is really in control here? Negotiations, renegotiations, positioning. Then does Navan stay with that relationship? Do they build up enough demand and usage of those properties where they say, “We are not going to go through a third party anymore. Are we going to continue by going directly for those relationships”?
We have seen it before. A lot of times it can start out well. They are certainly two huge players with deep resources to make something like this work. So it is just interesting to watch. The point is that, down the road, a lot of times these kinds of relationships do come apart at the seams. We have seen it with OTAs a number of times, and it is natural. A lot of times, too, because the people who put those deals in place are not there anymore three, four, five years down the road. Then, it is other people negotiating or renegotiating their position at that point.
Anyway, it is an interesting one. Certainly, again, two major players coming together. For the industry right now, we are seeing a lot of this. All of this, to me, if you put it together, points back to what we have been saying. The big players, this is a big-money game right now. Resources devoted to tech, development, AI, and scale matter hugely in travel in this market.
You are looking at real big players, and then some niche players; new technology builds on one end. Anything in the middle is a tough place to be because keeping up with the big players with resources is hard. You have to have a lot of capital and a long view to do it. But also, on the other end, trying to be nimble and keep up with a new entrant, a new player coming into the marketplace, and as you know, from a tech perspective, things are moving at a rapid pace in a way that we have never seen.
Yep. Absolutely. All right, those are some good articles for today, Mike. That is all the news we have. We will be right back with our guest.
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Again, the days of airlines working together are long gone. It used to be that if somebody canceled over here, they would help walk you over and get you onto another airline. Those days are long gone. So, again, it is a great product, a good plug-in, and it is good for business development. For partnerships, it is an easy plug-in. They can white-label the product for your company, for your offering, for your host user group, whatever it is, very easily and get it up and running for you.
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Mike, now on to our guest. The airline industry has always been cyclical, but right now it feels less like a cycle and more like a structural shift. Premium demand is holding. Domestic yields are under pressure. Labor costs are permanently higher. Distribution economics are being renegotiated in real time, and at the same time, AI and new tech layers are quietly reshaping how travel is sold and serviced.
So the big question is this, Mike: Are airlines stabilizing, or are they simply catching their breath before the next disruption? There is no one better to help us unpack that than Brett Snyder, the founder and CEO of Cranky Flyer, an industry analyst, and the man behind the annual Cranky Flyer Awards. This is his third appearance with us, which makes him our unofficial Cranky Airlines State of the Union correspondent. Please join me in welcoming Brett Snyder to the stage. Hello, Brett.
Hi, guys. Thanks for having me back.
Hey, good to have you, man.
Welcome back. Welcome back.
Yeah.
So, we will get to your insight on the awards, but let us dive in. I have to do the opening big-picture question. If you were to summarize the airline industry right now in one sentence, what would it be? Where are we? What is the state of the union?
The state of the union is strong. How about that? The state of the world is not good, but the state of airlines is actually pretty okay right now.
Yeah. I was going to say that is the interesting thing, right? Have they finally figured it out? More control and more discipline around scheduling and demand, being more thoughtful about it, or is it all of the above, market dynamics? In general, the airlines seem to have been the healthiest they have probably ever been, right?
Maybe as a group. Of course, there are exceptions. There are different airlines in different positions. Certainly, the legacies are in a very good position, where even a laggard like American is not hemorrhaging as it might have been during other times. But Delta and United are just absolutely crushing it. Southwest is obviously in the middle of a major transition. They are making big financial progress. How that goes in the long run, we will see. Alaska is still digesting its Hawaiian acquisition, but it is still posting good numbers. It needs to do better. It knows that. But it is really the ULCC world where more of the uncertainty lies.
Yep. Yep. Before we leave Southwest, I just have to ask, any comments or thoughts? It has been much publicized, the changes they made, or had to make, kind of with a gun to their head, obviously. But they made them, and, as you said, financially, they have seen the benefits. But do they just become yet another airline where their differentiators are effectively somewhat gone? What does it mean for Southwest longer term?
Yeah, well, that is the big question. Some of the changes they made, they were going to make anyway, and they make sense. Assigned seating, extra legroom, these are the kinds of things that people have wanted for a long time, especially people who are A-Listers or elite status holders on the airline. They want a tangible improvement in the experience they can count on, and they get it.
But they did go a lot further, right? They got rid of free checked bags and all that. In my mind, the hard part about that is not that they really needed to keep free checked bags. It is that they have gotten rid of any differentiator, as you said. So now they are very much the same, or not as good, if you think about not having a first class or not having an intercontinental network or something like that.
And so that is what remains to be seen. But when you talk to Southwest, they say, “Well, look, our differentiators are people.” While I will admit that, in general, I think Southwest has really good people and does a good job on that front, I think that is pretty disingenuous to make that your differentiator. I think the real differentiator is, hey, where you live in St. Louis, who are you going to fly? It is the network.
Right.
Their network is fantastic in any former airline hub. This is where Southwest wins. I wish they would just come out and say that pretty clearly, but they will not. But for people in those places, if they check a lot of bags and that annoys them, or if they do not like basic economy and all the different things Southwest has put in place, that could be an issue for them. But what are you going to do? You are going to fly.
Right, right, right.
So, stepping back, we are well past the pandemic. As you said, you generally have a healthy industry, which gives them the ability to take a longer view and keep investing in or reinvesting in aircraft and routes. Interestingly enough, I never thought I would see the day when United and American would heat up in Chicago, and they are competing and adding service again. It was like, what the…
Going after each other. It is like, what?
Yeah. But are we in a place where they can just stay the course and effectively enjoy this newfound stability and profitability, or does it have a shelf life and they will eventually go back into a down cycle? It almost seems too good to be true.
Well, the history of this industry suggests it will never stay the same. Maybe if you are a new executive in this industry, or even an old one, saying, “We will never lose money again,” that does not work. It is always the external shocks that bite this industry. Look at fuel prices right now. Keep watching. This little adventure in Iran is going to cause some real issues on the cost side.
Now, the difference between now and the past is that, thanks to consolidation, you have fewer players, so they can modulate capacity more easily. If the costs go up a ton, then they can cut back on flying. It is the old supply-and-demand curve, right? Reduce your supply, and you will be able to charge more to fill the rest of your seats and maintain profit.
Demand is very healthy right now. Who knows? There is a lot going on in the economy, and I imagine you do not want to get into a political discussion here, but there is a lot that could take it one way or another. Talk to economists about what is happening. It is all very uncertain. This industry is always uncertain. If I were running an airline, I might try to enjoy it, but I wouldn’t be able to because I would be worrying about the next thing.
So let us talk a little bit about the demand side. Leaving aside significant events like Iran and the Middle East and their impact, even just looking at demand here in the States and North America, Delta, United, and, to a lesser extent, American have really been enjoying the benefits of premium travel, right? The front of the cabin is getting filled. Yields are great. That has clearly been part of riding the wave of success.
You can make the argument, okay, that is great. But meanwhile, as the cost of living keeps going up, families, I mean, a lot of the surveying that is getting done is suggesting that the outlook in the back of the cabin, where all the volume and demand in terms of the number of people is, is going to be hurt because people and families do not have the budgets. It is like, I have to make the mortgage or the rent payments. I have to feed the family. I have just lost a lot of my disposable income to cover those costs in a way I had not anticipated.
If that really starts to take a bite out of the back of the plane, can they keep making it up in the front of the cabin, in a sense? That seems concerning to me, given some of the underpinnings of what we will see over the next 12 to 18 months.
Well, and it seems like the cost of both cabins has risen a lot as well.
Now, that is…
Yeah, look, I think we already see that this is one of the reasons the ULCCs are not doing well, and why they are trying to run more upmarket and go premium, to tap into that premium revenue.
But when you look at the economy, it has that increasingly K-shaped look to it, where the rich get richer and they will keep buying their flatbeds and doing all this stuff, and the middle class loses its purchasing power. If you are a United or a Delta right now, who are best positioned for it, they can still take the lion’s share of that part of the economy that is going to keep doing well. If you are not positioned for that as well, it could hurt you.
But people always want to travel. You say they cannot afford it, but people find a way. Now, they may find a way to…
That is…
Or maybe they say, “I am not going to Disney because that is a trillion dollars, so I am going to go somewhere else instead and sit on the beach, and then I feel better about it.” There are many ways people can work within their budgets. But one thing that is always clear is that people want to travel. So it is just a matter of the decisions they make to do that.
But we have seen that Las Vegas is down. They have been struggling to return to where they were and to increase demand. Hawaii has had some issues. Hotel prices are so high there that it makes the trip much more expensive for people. These are things that the airlines have to work around. But the smart airlines are constantly looking at this and trying to adjust to meet demand where it is and figure it out.
Then, sometimes you have airlines like Frontier, which has spent several years now trying to find those places where demand is and has not found it, or has not found it in a way that gets it to a good enough financial result. So the best thing that can happen to Frontier right now is for Spirit to finally go out of business. Again, it is back to the old supply-and-demand curve. When things go down, you want to be the last man standing, but you need some capacity to come out, and that is just how it has to work.
So let us shift gears and talk a little bit about your annual Cranky Flyer Awards.
Yes, the Cranky Network Awards for Network Planning. We do.
Give everyone a minute on the awards themselves and what you do. What were any favorite moments from your…
Sure. We started this in the depths of the pandemic as a way to award the best in airline network planning, route planning, schedule planning, all these guys that we were watching during the pandemic, which was nothing short of herculean. They were basically rebuilding the airline every day. It was absolute chaos. We thought, these guys deserve a break, so let us just go have a funny show. The awards are based on something real, but it is more about getting everyone together.
The first year we did it, it was virtual, so not in person. But we just had the fifth one in person. Sixth overall, I believe. No, fourth, whatever. But now we do it every year in February and get everyone together.
I had one person there describe it to me by saying that when she tells other people what it is, she says, “Well, they get up there and make jokes that are funny to about 400 people in the world, and about 150 of them are in the room.” So it is very much an inward-looking awards show that aims to treat the network planners to a little bit of fun amid the tough job they have.
I appreciate that. Just being an outsider to that world, I think it is great because there are so many little pockets across the industry of unsung folks who are very much in that world, and in revenue management as well. Ultimately, in their own way, they are trying to do the right things for their companies, but they are also a really important part of new routes getting developed. The discipline and skill involved in all of that are significant. I just think it is great that you do it.
To your point, that is a really funny way of putting it, but it is one of those things I always talk about when working in this industry. When you are working in various parts of the travel business, inevitably, you go to a cocktail function or something, and somebody says, “What do you do?” and you say, “Oh, I work for United Airlines,” and then they react, but it is hard to communicate what that actually means and why those roles matter. People do not really understand the importance of those roles.
Yeah, that is true. The other thing, too, is the people who work around this part of the industry, all these people in network planning, have a giant target on their backs. Airports want to talk to them. Consultants want to talk to them. Most of the events they go to are basically speed-dating, where you sit there, the airports roll in, you talk to everyone, and they give you their spiel.
So we wanted to create something that was about them. We do not even have name tags, because normally someone will see at a conference, oh, it is the blue badge or whatever, and…
Chase that badge, yeah.
Yeah. And we are like, okay, none of this. This is not how this works. So, yeah, it is a good event, and I think they deserve a break and a little fun.
That is good for you.
So, we talked a little bit about the environmental risk, but anything to add in terms of looking out over the next 12 to 18 months? What are the key risk factors for the airlines?
Whatever the government is going to do tomorrow. I mean, that is blunt, but true. In one sense, you go and invade Venezuela, and America jumps in and says, “We are going to go back to Caracas again.” So it could be positive. I do not know that it is going to turn out the way they hope, but it could be positive.
But then you have what is going on in Iran, and you have effectively shut down the Middle East for who knows how long. Then that turns into higher fuel prices. It turns into companies getting more conservative, worried about the global outlook. So I think that is the biggest thing to watch, just what will our government do next? That is the number one thing. Everything else is kind of hanging in the balance on that.
Of course, there are people watching the AI bubble and what is going to happen there, and what will China do, and will they invade Taiwan? Geopolitical risks are such a big part of it. But, yeah, that is kind of the one thing to watch.
Yeah. I guess if you are sitting in those seats, they are probably spending a good bit of time doing a bunch of scenario planning around what-ifs because, to your point, in those situations, there is no warning. They are finding out at the same time we are. You get up in the morning and turn on the news, and, oh, we just invaded here or did this or did that. It is not like they are getting a 30-day head start on figuring it out or putting plans in place.
No, but their job is to read the tea leaves, right? I think that is something we have seen. At United, they have been really good at reading the tea leaves during the pandemic. I think they did a really good job of that: not retiring fleets, preparing for the return, and figuring that it was going to be structurally different, ordering new aircraft when they could get a really good deal on them.
I think the airlines that can read the tea leaves better will end up in a better place on the other side. But, yeah, we do not know. Congress does not even know half this stuff until it happens. So, yeah, that is the issue. It is all about trying your best to guess and hoping you guess right.
Yeah. Well, for our wrap-up question for season four, we are asking everybody, is there any area in travel, media, tech, anywhere, where you find it really compelling, where you look at something and go, man, there is an opportunity for reinvention here or reengineering? Anything come to mind for you?
Media, huh? That is a…
Yeah.
Well, yeah. I think there is so much uncertainty as it relates to travel right now that, to me, that is sort of a wait-and-see. Maybe that is a stupid cop-out, but I just would not really know.
Media, I have a lot of interesting concerns around, with the consolidation at the top. Now we have Paramount and Warner coming together. I do wonder whether there will be an opportunity in the media arising from this continued consolidation. I do not know, but the media has been a tough space for a long time. But I would love to see something, because I think the media has been problematic in many ways. So maybe consolidation finally creates an opportunity for someone else to do something.
You are right about that. A lot of times, you do see that in industries. When you get a lot of consolidation, then inevitably new things spring up, right? New people.
Yep.
Yeah. On the other hand, you get the airline industry consolidating, and there is no room for anyone else. I mean, now the airlines are all banks, not airlines, and the reason they can do that is their reach. That is why, if you are a startup, you cannot…
Yeah.
So it has created a wild moat around the big players in the industry. They can lose money on every flight and still make a boatload of money in the end because it is all part of the ecosystem.
Yeah.
So it can go either way, but those are always things I am thinking about.
Thinking about, yeah. Well, as always, Brett, thanks for coming on. Thanks for your insight, and keep doing what you are doing. I think it brings value, so keep…
Yeah, and a unique voice in the industry. Very appreciated, Brett. Thank you, Brett, for joining us. Brett Snyder is the founder and CEO of Cranky Flyer. Thanks again for joining us, Brett.
Yeah, thanks, guys. Number three. Two more until my jacket. I am waiting.
There you go, baby. It is coming soon. All right. Thank you, Brett.
All right, Mike, what do you think? What are your takeaways from today?
Well, again, he always has some good grounded insight, right? I think he is right on point about the factors hitting the industry right now. As we said, the whole industry hangs on the airlines at the end of the day.
And so they are the bellwether, for sure.
Yeah.
Their stability has been good for the industry overall, but, again, you can only control what you can control, right? As he said, I think he painted a good picture in terms of the fact that the industry has done a lot, not everything, but certainly a lot of what they can do to get their own shops in order, respectively.
Yeah.
And now it is really kind of waiting…
Wait and see what is going to drop next, yeah.
Yeah.
All right, Mike, thank you very much. That is our show. If you have a challenge in your business, reach out to Travel Again Advisory to see how we can help clarify your business strategy and outcomes. Mike, we will see you back here again for our next episode.
See you.