Rapid Response: Wild summer travel tales from Boeing to CrowdStrike, with The Points Guy, Brian Kelly
Aug 13, 2024
auto_awesome
Brian Kelly, known as The Points Guy, shares his expertise in the travel industry, discussing the chaos of this summer's travel season. He reveals how Boeing's safety issues are shifting flying habits and examines the impact of social media on passenger anxiety. Brian also discusses Delta's strategic responses and Southwest's pivot away from open seating. Listeners will uncover insider tips on hidden airline deals and the potential effects of consumer behavior on airline pricing and safety.
Despite heightened public anxiety over Boeing aircraft safety, air travel remains statistically safer than road transportation due to professional oversight.
The airline industry faces challenges adapting to changing traveler preferences, as profit margins are squeezed by a shift from business to budget-friendly leisure travel.
Deep dives
Record Air Travel Amid Safety Concerns
Air travel volume has reached historic highs in 2023, despite public apprehension surrounding Boeing aircraft, particularly the 737 MAX 9. Although statistically, flying remains extraordinarily safe with no reported crashes, the rise in anxiety is fueled by social media, which amplifies every incident. People often overlook the fact that air travel, overseen by trained professionals, is much safer than common road transportation where safety protocols are less stringent. Recommendations to avoid certain Boeing models are made, not necessarily for safety, but to mitigate the risk of canceled flights due to ongoing corporate governance issues.
Shifts in the Airline Industry's Revenue Model
Airlines are struggling to turn a profit despite packing their planes, primarily due to a shift from high-margin business travel to budget-friendly leisure travel. While fares have decreased post-pandemic, making air travel more accessible, the airline industry's profit margins remain slim because ticket prices do not compensate for operational costs. Additionally, traveler loyalty has shifted, with more leisure travelers opting for business class, which does not provide the same level of revenue as before. These changes indicate that airline models need to adapt to a changing market, which includes re-evaluating relationships with co-branded credit cards that significantly contribute to profits.
Technological Vulnerabilities and the Future of Travel
Technology outages have exposed significant vulnerabilities within airline operations, with the recent CrowdStrike outage particularly affecting Delta Airlines. Despite advancements in technology, the meltdown highlighted a lack of adequate backup systems for crew scheduling, causing major disruptions for passengers. The response from airlines during these crises is crucial; failing to communicate effectively can lead to frustration and financial losses for travelers. As the industry faces increasing pressure to maintain performance amid growing travel volumes, clearer consumer guidelines and robust emergency protocols will be essential to restore confidence in air travel.
Is this the craziest non-pandemic summer travel season ever? The Points Guy’s Brian Kelly joins Rapid Response to talk about how Boeing’s safety issues are impacting flying habits, the CrowdStrike outage and Delta’s response, Southwest’s major pivot, and more. Plus: the airline industry's best-kept secrets and insider deals right now.