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It’s the beginning of another year in travel and as a lot of people seem to be making predictions on what we may see happen over the next 12 months I’ve decided to jump on the bandwagon and play at Nostradamus (only I’ll try to be more specific so it will be obvious if I’m right or wrong).
My Predictions For 2019
1. American Airlines Will Finally Offer Premium Economy Awards
American Airlines started offering is Premium Economy cabin for sale in April 2017 but, almost two years on, the airline still doesn’t allow flyers to redeem miles for its intermediate cabin. Contrast that with United Airlines who introduced Premium Economy at the beginning of December 2018 and is already offering Premium Economy awards to its flyers.
2019 will be the year when someone in the upper echelons of American Airlines management tells the AAdvantage team that the airline now offers a Premium Economy product (I assume they have no idea as why else wouldn’t we have awards available already?)
There will be positives and negatives to this move with the positives being led by the fact that we should finally be able to use AAdvantage Miles to book Premium Economy awards on partner airlines (Qantas, Cathay Pacific etc..) and the negatives being led by something I’ll mention in the next prediction.
2. American Airlines Will Devalue Its Award Chart
This is something I’ve been expecting to happen for a while and will go hand in hand with the introduction of Premium Economy awards.
If you take a look at the American Airlines AAdvantage award chart as it stands right now it’s fun to try to figure out what American will charge for its Premium Economy awards as, in some cases, the airline doesn’t have much room for manoeuvre.
Clearly there’s quite a bit of room to insert a Premium Economy award to the South Pacific but how will a Premium Economy award fit in to the chart for South America 1?
I can see American raising the cost of Business Class awards across the board to make more room for the Premium Economy awards and I wouldn’t be surprised if we saw some significant increases….even to the point where American’s awards cost more than United’s.
3. Chase Will Improve The Earning Rates On Its Sapphire Reserve Card & Increase The Annual Fee
There’s a mini arms race going on in the premium credit card market and I think Chase may feel the need to improve its Sapphire Reserve offering if it wants to keep the card relevant and in people’s wallets.
The first shots in this arms race were fired back in August 2016 when the Platinum Card from American Express began to offer 5 points/dollar spent on airfare directly with the airlines (it probably wasn’t a coincidence that this announcement came around the same time that Chase announced the Sapphire Reserve card).
Now, more recently, we’ve seen Citi revamp its Prestige Card so that it now also offers 5 points/dollar spent on airfare directly with airlines and, just to make sure it trumps the Platinum Card, Citi made sure the Prestige card also now offers 5 points/dollar spent at restaurants worldwide.
With the Sapphire Reserve card offering 3 points/dollar on all travel and 3 points/dollar on dining it’s still a very good card to hold (I still love it) but it’s no longer the best card to use on airfare and its no longer the best card to use for dining so Chase will almost certainly have to respond.
While I expect Chase to improve the earnings on the Sapphire Reserve card I also expect it to increase the annual fee.
The Reserve card offers the best travel rebate at $300/year but now also comes with the lowest Annual fee (the Citi Prestige will cost $495 from later this year and the Platinum Card from American Express will cost an eye-watering $595/year from February) so I can Chase increasing the fee on the Sapphire Reserve to $495/year.
4. British Airways’ New Business Class Seat Will Match Its Sister Airline
British Airways will be unveiling a new Business Class seat when it takes delivery of its new Airbus A350 aircraft later this year and the good news is that the seat cannot help but be better than the outdated disappointment that’s installed on BA’s long-haul fleet right now.
BA has been pretty tight-lipped about what we can expect from its new Business Class seat but, based on one or two hints that have come from the airline, I expect to see something very similar to the Iberia Business Class seat when the big unveil happens in a few months time.
This won’t be terrible news by any means but it will continue to prove that there isn’t very much innovation going on at Waterside and, as this seat isn’t exactly revolutionary (in the way that Qatar’s Qsuites are), we can expect BA to remain behind the curve in the years ahead.
5. British Airways Will Devalue Avios
This is another one of the things I’ve been expecting to happen for at least a year and I fully expect it to happen in 2019.
BA hasn’t changed its award charts for some time and my understanding is that we would have seen a devaluation by now had there not been some considerable technical issues in implementing the desired “enhancements” (don’t forget that BA’s IT department is the textbook definition of incompetent).
I expect BA to introduce some version of dynamic award pricing in 2019 whereby the number of Avios needed for an award will be linked to the cash fare for the same flight and, if this is rolled out to short-haul fares as well as long-haul fares, it will essentially be the end of Avios as currency to use on British Airways – they’ll still be useful for short-haul partner awards.
6. United Airlines & American Airlines Will Add Basic Economy Awards
Delta started issuing Basic Economy awards towards the end of 2018 so, as United and American love nothing more than copying whatever negative moves Delta makes (they don’t seem capable of matching any of the positive moves), we can expect to see the remaining legacy carriers introduce their own version of Basic Economy awards in 2019 – American may well do this at the same time it introduces Premium Economy awards and devalues its award chart.
7. Norwegian Will Be Sold
I’ve never flown with Norwegian but I love the airline dearly so I really hope I’m wrong with this prediction.
Norwegian is the low-cost airline that is the bane of all the transatlantic legacy carriers and it’s a very large part of why we haven’t seen any serious increases in transatlantic airfares….but I can’t see it carrying on like it has been for much longer.
It’s no secret that Norwegian has been haemorrhaging cash for quite some time and although it’s not in as bad a shape as WOW (the Icelandic low-cost carrier) there’s only so much risk I suspect the airline’s backers are willing to take.
IAG (the parent company of BA, Iberia, Aer Lingus etc..) has been circling Norwegian for at least a year and, should the low-cost carrier’s fortunes not improve significantly, I expect the airline to be sold…probably to a legacy carrier/group like IAG or Lufthansa.
That’s it. That’s a roundup of my predictions for 2019
Any thoughts? Does anyone have any predictions of their own to add?