This week, Gunnar and Kyle (who both coincidentally wore fresh Lululemon gear on the pod, courtesy of new $75 credits) spend some extra time digging into the ongoing government shutdown and what it means for travelers heading to airports today, tomorrow, next week and beyond. But the big topic of the day is diving into the premium travel boom, as airlines install fancier seats, build new airport lounges, and generally cater to the upper crust. Gunnar and Kyle debate whether or not that’s good news for budget travel. Plus, they enjoy an Alaska Airlines executive’s recent jab at his competitors and chat about United’s exciting new routes.
This week, Gunnar and Kyle (who both coincidentally wore fresh Lululemon gear on the pod, courtesy of new $75 credits) spend some extra time digging into the ongoing government shutdown and what it means for travelers heading to airports today, tomorrow, next week and beyond. But the big topic of the day is diving into the premium travel boom, as airlines install fancier seats, build new airport lounges, and generally cater to the upper crust. Gunnar and Kyle debate whether or not that’s good news for budget travel. Plus, they enjoy an Alaska Airlines executive’s recent jab at his competitors and chat about United’s exciting new routes.
This week’s episode is brought to you by Bilt. Earn points on rent and around your neighborhood by visiting joinbilt.com/thrifty. Make sure to use our link so they know we sent you!
00:00 - Gunnar and Kyle discover they’re both wearing their $75 Lululemon Amex Platinum credits
01:36 - An Alaska Airlines executive provides some reality TV drama to the airline industry by poking his competitors on Reddit
08:08 - Something Hot: Breaking down all of United’s new routes for 2026
13:00 - Something Cold: The federal government shutdown, how it’s affecting travel, and how to protect yourself
23:40 - A word from our sponsor: Bilt Rewards! Earn points on rent and make your entire neighborhood more rewarding with Bilt. Head to joinbilt.com/thrifty so they know we sent you!
24:45 - Behind the premium travel boom: What it means, why it’s happening, and whether that’s good or bad news for everyday travelers
51:00 - Listener Question: Do Alaska Airlines credit cards make sense if you don’t live near an Alaska hub?
54:38 - On the spot: Our favorite podcasts (besides this one!)
Produced and edited by Sylvia Thomas
Show music: “All That” by Benjamin Tissot
Yo, welcome to the show. I am a travel writer for Thrifty traveler.com, a flight deal analyst for Thrifty Traveler Premium, and the host of this humble program, gunner Olson. Here with our Fearless Executive editor, the overseer of all Thrifty Traveler content. It's Kyle Potter. Kyle, what's up? I was about to be really JE jealous that you got three titles, but you made up for it with some hyperbole there.
So, uh, yeah, I'm good. Kyle, do you notice anything different about me today? No, I am wearing my $75 Lululemon credit that I got with the Amex Platinum card. How's it look? It looks almost as good as my $87 Lululemon shirt that I'm wearing from the shirt I purchased with my $75 Lululemon credit. Hey, Lulu, if you need some brand ambassadors, a couple of medium good looking Midwestern guys who host a travel podcast, we've got you, I've got a, I've got open spot in my brand ambassador calendar for this month.
How, how
full is your brand ambassador calendar through the rest of the, the fiscal year. Getting fuller, getting fuller now as, as long as Lulu drops you a line. All right, uh, in these beautiful shirts today we are going to discuss an Alaska airline executive's not so subtle shot at his competitors. We're gonna talk a little bit about the government shutdown and how to protect yourself against some disruptions, and we're going in depth about the premium travel boom, Kyle, and what that means for you, whether you're a premium traveler.
Or not. We've got all that and more. Welcome back to the Thrifty Traveler Podcast.
All right, we're back and we're getting into the find something Out topic today and. Kyle, Brett Catlin, Alaska Airlines, VP of Loyalty Alliances and sales fielded a bunch of questions in the Alaska Airlines subreddit Last week. He tackled everything from award pricing to partner award availability and elite upgrades.
Really informative stuff. It was a fun read to go through all of his answers, uh, but all my reality TV adult brain could think about was the drama. Kyle, there's so much drama in this love that smooth brain content. Okay. The first little bit of drama that I loved, he was talking about the pricing logic they use for award tickets.
Uh, he says, quote, what we have done is allow all seats to be purchased with points. That means higher price points may appear in the market, but the trade off is that previously there was no redemption option at all for those seats, he says. We're not in the business of giving out monopoly points like some of our competitors.
Ooh, who's he referring to there, Kyle? Oh, you know, I think, uh, Mr. Catlin would make the case that he's referring to everyone, but it's Delta. I mean, come on. Delta is basically synonymous with treating their Sky Miles program like Monopoly points, and I think in particular for Alaska here, Delta and Alaska have been at each other's throats for the better part of a decade now.
And so. Now that Alaska is building out an international network, launching flights to London and Rome and Tokyo and Seoul, really hot on Delta's heels, who has spent the last, at least couple of years expanding its international presence, trying to poach Alaska customers that to this point haven't been able to fly Alaska long haul.
There's no question that, uh, that Brett Catlin stopped himself from, you know, specifically mentioning Atlanta here. The, the battle for Seattle is very real, and it's gonna be very exciting times, as we've talked about on the show before, for people looking for flight deals from that market. I, I do think he, he made another interesting point that other quote that you read out about, um, you know, allow seats to be purchased with points even at higher price points.
Um. Because I do think that that is maybe the biggest pain point for the average traveler. This idea of blackout dates or there just not being award availability at all, and that the only thing that is worse, whether you're flying, you're trying to use Alaska miles, or you're trying to use delta sky miles or whatever.
The only thing that's worse than seeing a, you know, a ticket for 400,000 miles or 500,000 miles or a hundred thousand miles in economy. Searching for a flight from, you know, Chicago to Rome, or Seattle to Hong Kong or wherever, and have that come up blank. Because then it's not just that, oh, this costs a lot, it's that, oh, these miles are actually worthless for the things that I want to do.
So I, I think every airline in the country needs to thread the needle a little bit better about, you know, giving people the option to redeem miles, even if it is at a higher rate. But this is the way the industry is trending, and I don't think it's a bad thing. Yeah, that's a more great, smart industry analysis, but I want more drama, Kyle.
There's still more drama out there. All right, let's Live Island. Brett Catlin, if you're listening, come on the pod. You can, uh, we'll, we'll give you a free license to, uh, take a crap on all your competitors. You know where to find us. We are. We're both love Island fans, Kyle. So we're gonna love Island parlance.
This the second piece of drama. So after pulling Delta for a chat, he set his sights on the rest of the villa, maybe a special shot at who Delta is coupled up with. He says, quote, one of our key design principles was avoiding a coupon book, style card or something that only works for one type of consumer.
We didn't wanna be a me too product differentiation was critical. Who's he talking about with coupon book style cards, Kyle? Well, you know, three, four months ago I would've said just American Express and Delta. But now I think it's clear that Chase is copying the same coupon book mentality too. And this is.
Really, really smart of Alaska and of Capital One, two, and that, you know, to this point, you, they have skipped this coupon book mentality that requires you to track monthly and quarterly and biannual and annual benefits that expire if you don't use them, you know, by the day that they are set to go.
Bye-bye. And in doing so, it means that there is less dollar figure value to the card, but it also makes it much easier to look at a $395 annual fee, for example, and say, you know what? I can make this work because it's very easy for me to do so. And so I think this is increasingly becoming the way that, um, you know, these banks and airlines are going to be able to offer something that is, you know.
Gives you more than just that $95 a year entry level card without going the ultra premium route. Because as you get into that territory of 600, 700, $900 a year, the only way to make that math work is to offer that series of convoluted credits. So kudos to Alaska for skipping that altogether. Yeah, and you know what kudos to, uh, Catlan for, first of all, doing this a MA, it was really cool and informative, but also it.
Made it very clear that he is one of us. He is a points and Miles sicko. He loves programs like World of Hyatt. He admitted that in his, uh, in his a MA as well. And he knows what he likes about programs and what he doesn't like about programs. So, Brett Catlin, one of us. Thanks for, uh, answering questions online for a few hours.
The other day we're, we're definitely gonna put the gif of Tobias FK from Arrested Development saying there are dozens of us raising the corn dog in the air. We did a full writeup of the, uh, the a MA, uh, including some, some. Uh, maybe announcements of multifactor authentication coming to Alaska. And, uh, a lot of talk about, um, first class upgrades from the main cabin and the fact that 60% of Alaska elites get first class upgrades, which is, uh.
Pretty amazing stat as well. But I wanna move on to something hot and something cold. And if you can't figure out what this format means, I can't help you, Kyle. Something hot, something good, something cold is something bad. We've been doing this for 32 weeks now. I think I've got it down. Thank you though, gunner.
And we'll start as always with something hot. So Kyle. United like no other airline, makes a huge deal about its new summer route announcements every year. And that's usually because these routes are actually usually very fun and exciting. Um, over the past couple years, we've gotten fun ones like the Azores, uh, Greenland, and Mongolia.
This year's roster doesn't have that many exotic ones, at least not as exotic as that. But with the additions this year. United will now fly 46 transatlantic routes next summer, which is wild. It's a lot. It's a lot. It's almost four dozen if my math maths out. That does check out. Alright, I'm gonna list out the new routes and destinations and then I need you to pick, uh, one you're gonna love and when you're gonna leave.
Cool. Okay. The new destinations are all served from Newark, Bari, Italy, split, Croatia, Santiago de Compo, Deela, Spain, and Glasgow, Scotland. The other new routes, not necessarily new destinations, are Washington Dulles to Revic to compete with Iceland Air on that route, uh, Newark to Seoul, South Korea. And then they're adding another frequency from Newark to Tel Aviv.
Which is now three times a day on that Newark to Tel Aviv route. Uh, and just to round it out, they had to make cuts to Newark, to Frankfurt and Newark to Athens, which are down. Both now to just once a day instead of twice a day. Kyle, one to love and one to leave. Well, before I do this, how many times did you practice pronouncing Santiago de Compostela in a mirror before coming in the studio this morning?
It doesn't matter how many times I practiced it, 'cause I nailed it. Right? So if it was three days worth of practice all weekend, tormenting my family, I'll call your mom and I'll see what she has to say about that. I'm, I'm actually gonna ignore your prompt of loved one and leave one and just. Point out that, to your point, United does such a great job at doing cool stuff with these new routes of giving people new ways to get to destinations that they've either heard of or in some cases not heard of.
And they, they do a couple of, uh, a couple of ways that they went about this that stand out is clearly the appetite for Italy is in some ways bottomless. I mean, we've seen every US airline. Launch new nonstop routes to Italy, not just to Rome and Milan and Venice, but also to Sicily and to Naples, and now Pia, this nonstop route to Bari on the southeast coast of Italy kind of.
Kind of came out of nowhere. Um, I do wonder if we're kind of scraping the bottom of the barrel now of what nonstop routes US Airlines can actually make work within Italy. Um, I don't know how much more juice there is left to squeeze for the US Airlines, but this is gonna be an interesting test case. And then, you know, with Glasgow and Santiago de Compostela, um, they're.
Doing both of these routes on a narrow body, 7 37 max, which some passengers might scoff at, but they do this because it's just a cheap way to try something out. They get to try out whether people would rather fly nonstop to Glasgow versus flying to Edinburgh and drive two plus hours to the west to get to Glasgow or you know, with Santiago de Compostela in northern Spain.
This one was kind of a head scratcher when we first saw it, and then. I think you looked up the path of the solar eclipse in 2026 and Santiago's, right smack dab in the middle of it. And this is a clear play to just try something fun, cater towards the people who want to see the solar eclipse and be the one and only airline, not just in the US but anywhere that flies nonstop between the US and this city in Spain to make that happen.
It's, it's pretty cool. Yeah, there. I, I think all these are interesting for one reason or another. Of course, the path of totality, the eclipse going right near Santiago de Campo style makes that one very attractive. I also love that split Croatia route, especially. Given the fact that you can pair that with the Newark to Dubrovnik United route and you can do a little open jaw itinerary and hit both cities, fly into one fly outta the other.
Uh, a lot of really cool, exciting, uh, announcements here from United. So if you were gonna do that, if you were gonna fly into Dubrovnik and fly out a split or vice versa, what you know, for anybody who wants to do that, what would you work in between? I would go, I mean, go to Dubrovnik, the go, spend some time in the city walls there.
That's touristy thing, but it's well worth it. And then I'd take the ferry up to Hvar. Hvar is such a cool island. I had an unbelievable trip there a few years ago. Uh, and then go spend a little bit of time in, in split proper as well before flying out of the split airport, which is easy breezy. Same with dub brunick.
I mean, it's, it's pretty amazing that you can fly long haul to there from the United States to and from the United States to both, to both cities. That's pretty incredible. Yeah, that's an awesome trip. Someone please make that work so I don't have to time to pivot to something cold, Kyle. As you're listening to this, the federal government has been shut down for more than two weeks.
With the caveat that things may have changed since we recorded this, but since it began, we've seen tens of thousands of flight delays including ground stops at airports like Nashville and Burbank due to air traffic controller shortages. A reminder that federal employees like air traffic controllers and TSA agents are working unpaid during the shutdown right now.
So frequent sick call outs are common. On Monday morning, DOT Secretary Sean Duffy told reporters quote. We will slow you down. We will cancel flights. We want to make sure that when you travel, you travel safely. So this, the last shutdown in 2019 lasted more than 30 days. So we might still have a few weeks of mounting travel complications ahead of us, Kyle, and.
No matter what happens here, we wanted to take a few minutes to lay out some of the best ways to protect yourself when dealing with flight disruptions and disruptive times like this. So with delays in cancellations already rearing their heads, if you're flying in the next few weeks like we are. What do you recommend?
People do hope for the best, but prepare for the worst. Um, there's no telling what's gonna happen, and I think importantly, this could all change within moments if Congress and the Trump administration decide, enough is enough, let's make this happen. They cut a deal. All of the doubt that's currently lingering over air travel, you know, dissipates pretty quickly.
But you know, we're now two weeks in no sign that a deal is anywhere close to imminent. I would say just the opposite, that, you know, Democrats and Republicans in Congress are pretty dug in, uh, to the point that, you know, we've now seen the Department of Homeland Secretary Christie Nome record a video to be played in airports that just explicitly blames.
Democrats for the prospect of delays at airport security and TSA agents. This could get really ugly the longer this drags on, and that's what we saw in late 2018 and 2019, which. Was the longest federal government shutdown at 35 days, the longer that that dragged on, the bigger the problems got. That's when, you know, once we got to that kind of three week mark, we started to see pretty substantial sick outs of TSA workers who had been working unpaid and are very lowly paid and underappreciated to begin with.
And you know, this time around we've started to see some pretty. Bad warning signs less so on the TSA side to this point, and more so with air traffic control of towers in, um, Burbank and then in Nashville going completely unstaffed and more broadly, just they're clearly not being enough of an already pretty understaffed workforce of air traffic controllers to keep the entire national system moving.
And so it's, it's tough to tell people what to do here because. This is, this could get really ugly, but we just don't know when or how or why. Of course, it's, it's gonna depend on where you're flying in and out of and the times of day and things like that. But I guess let's zoom out a little bit and just give people broadly, if you know that, you know, things could be impacted, what are some tips that you give to people about, um, planning around flight disruptions?
I mean, the first one is, is really evergreen book, the first flight of the day. And if you're not booked on the first departure of the morning, change your flight now to it because that is the single best thing you can do in normal times. And definitely in times like these, when there is so much doubt, the likelihood that you're playing is gonna get off the ground on time is just substantially higher.
If you take that first flight of the day before. The air traffic control system starts to struggle and has to slow things down to keep flights moving. I mean, you know, we're, we're off on our company retreat in, in just about a week, and I'm a little bit terrified that we have a 3:00 PM departure. I'm really wishing that that was more like seven or 8:00 AM much as I like the idea of, uh, getting a couple extra hours of sleep.
I would trade that in a heartbeat for the, uh, the greater odds that we would get to our, our final destination on time. Definitely book the first flight of the day, get up in the morning. It's the easiest travel tip that I can give to people. Get up in the morning. Uh, what else, what do you think people should look at in terms of protecting themselves here?
You know, in, in, in normal situations when we talk about the prospect of delays and cancellations, I mean, think about all of the airline meltdowns that we've seen over the past three or four years, right? And in those situations we can say, go book that airline instead, protect yourself, at least book a backup flight, whatever, because there's a safe haven to go to.
But when the problem is not an airline, it's the entire air travel system. There, there might not be a solution here, and so really the only solution is to know your rights and know that when an airline cancels or significantly delays your flight, no matter the reason, if it's for weather, if it's for labor issues, if there's a mechanical issue, if your plane or if there is widespread air traffic control delays, if the airline cancels or significantly delays your flight.
You are entitled to a full refund. You can cancel your entire reservation and just say, you know what? This trip is clearly not gonna work. Cancel the entire reservation and get your money back. Not a credit that might expire in a year or less, but the money back to your credit card. Yeah, absolutely.
Really good advice. Know your rights. Um, one other thing I, I would wanna point out, or a few other things I wanna point out. One, um, watch for travel waivers. If this gets really nasty, the airlines might decide like, Hey, we're gonna issue one of these travel waivers where they'll let you change out of the current day or time that you're flying to another flight and they'll waive the change fees, which almost don't exist anymore.
And then also the. Price difference in those flights so you can just kind of get out of trouble. It's a, they issue these over the course of like a day or two when winter weather comes, when they can predict bad weather. They do this as well, but if they, if they know that things are gonna get really bad at air traffic control in, say, the New York City area where things always get bad with air traffic control, they might just, if you issue a three day waiver and say like, let's just relieve the stress on Monday, Tuesday, Wednesday, and we'll, you know, put some people onto some flights earlier or later.
That kind of thing. We haven't seen this yet from any of the major airlines, but again, as this drags on, I think this could become a big relief fo for the airlines to say clearly we're not gonna be able to operate our schedules, uh, on the schedules that we published. And the way to kind of solve that is to allow people to change without paying change fees or fair differences.
And, you know. Move it back as much as a week or maybe more. I don't know. We'll, we'll have to see, but I wouldn't be surprised to see airlines do this. So, you know, as your trip is drawing closer, just google the name of your airline and waivers and see what's out there and just keep your eyes peeled. When they issue these waivers, they're, they're usually pretty transparent about it.
They put a big banner off the top of their website if they're actually not that hard to find. Um, it's airlines doing good, uh, and you can take advantage of it when it happens. Another tip. If you have a stash of points and miles, I would, and maybe in times like these, recommend booking a backup flight, whether it's on another airline or out of another airport.
If you live in a place where that's, uh, a luxury of yours. Um, if you can book a refundable flight and points of miles are the best way to book refundable flights without having to pay that kind of highest tier, uh, fair when you're booking with cash, um, this is maybe a good time to do it. Just make sure you don't lose track of it and end up paying for a flight that you no show on.
You saying that from experience? No, I'm not, but I'm just saying that from a, a potential experience, I could see myself losing track of a refundable flight that I booked, um, which is, you know, just another, uh, tool in your tool belt that you could use to avoid delays and cancellations. And then last one for me.
Get yourself some lounge access if you don't have it already. This is kind of what lounge access is for, uh, if it's an airline lounge access. Even better when, when, you know the bleep hits the fan. Kyle, I'm always the first one. I'm the first one in line at the lounge. Uh, you know, I'm, I, I wanna be there to talk to an agent who can actually help you.
Airlines tend to put really good agents in the lounges to help the flyers that they tend to care about most. So getting yourself in there isn't just about having a comfy seat and a free drink. It's about being able to have access to some of the best agents at the company who can help you out when there's a jam, who can put you on a different flight, who can.
Give you, in some cases better, more up-to-date information on the prospect of when your flight may actually begin boarding rather than being stuck at the gate. Yeah, I mean these are the times when lounge access is truly invaluable, is just to make the disruption better, and hopefully in many cases a little bit shorter.
Absolutely. And then a final tip, Kyle, I know you share this sentiment as well, but pack a little bit of patience and please don't take this out on the wrong people. The person at your gate did not cancel your flight, right? The gate agents did not cancel your flight. I think a lot of times we see videos and things of tensions running really high and sometimes.
Those are, those are more outliers than normal, but I think people just tend to get really frustrated with airline employees who have no control over your situation and would really love for you to get on that plane and get out of their lives forever. So please don't take it out on the wrong people.
Kindness is a superpower. Um, I, I think that's true throughout all of travel, throughout all of life really. But especially when things are going wrong, just being kind to the people who in many cases are empowered to help actually help you there gonna. Be more far more likely to help you if you ask with a smile and you're kind and you're courteous and you're not lashing out at a person who had played absolutely zero role in what's currently going wrong with the bleep hitting the fan.
It is not your airline agent's fault. It is not the desk agent's fault. It's not the flight attendant's fault. It's certainly not the pilot's fault either. None of these people are. At fault for whatever is going to go wrong over the course of the next few days or weeks, or however long this go, this goes on.
But all of them can make your day a little bit better. Yeah. And you know, if you're gonna melt down at an airport, someone's gonna film it nowadays, so you're gonna be on the internet forever melting down over something that nobody can control. Don't go viral for the wrong reasons. That's a great advice to end on.
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Make sure you use our URL so they know we sent you back to the show. All right. Welcome back. It's time for the extra mile where we dig a little deeper into a topic. And this week we wanted to look at this premium travel boom and what it means for the future. And at the end, Kyle and I are gonna debate because we have different ideas of what the outcomes might be.
It's gonna get ugly for every day travelers. If you're watching on YouTube, we're gonna arm wrestle too. This table's too long for an arm wrestle. I also don't like my chances. Um, so premium travel, boom. This basically means the airlines have not been shy about the fact that they're catering to the more premium traveler, more premium seats in airplanes, more live flats, and more of the kind of economy pluses of the world.
Extra legroom seats, uh, they're talking about more premium lounges. The lounge kind of wars all over. Airports, all over North America have been very obvious. More premium credit cards and even small things like. Upgrading the champagne on board, upgrading the coffee on board, uh, better pillows and blankets in business class.
Um, these are all signs of what we in the office have been calling just the premium travel boom, Kyle and all the executives are bragging about it to their investors. So it's not something that, that we're imagining. Uh, we know that the executives love this and, and are very excited about it, and so do their investors.
Why, why are airlines going premium like this? This is really the through line of so much of what we've talked about for the last, now seven months on this show, and it really has turned into the beating heart of. The travel industry of a whole as a whole, you know, every airline worth salt has introduced a new business and or first class seat within the last two years.
They're talking about upgrading dining, but it goes beyond that to, you know, the ecosystems of credit cards and the fact that Amex and Chase and City and Alaska have all introduced. Uh, uh, a new or a more expensive premium travel credit card Delta is talking about, well, is reserve the top card or should we go above that?
Every airline and every bank is building more and more lounges. Premium travel is where all the money is because. That is where all the money is. That is how airlines are making money. It is undeniable and it is, I think we need to step back and appreciate such a huge change because for the better part of the last four decades, price was all that mattered.
If you could cut travelers a better deal on a flight, you could get their business. I mean, that is what has given rise to low cost carriers in the United States and abroad like Spirit and Frontier and Ryanair and EasyJet overseas. And clearly that just isn't working the same way that it used to. And in order to make things work now, airlines feel.
The entire industry has to reorient around premium travel. I mean, think about how much it says that of all airlines, Southwest is talking about opening airport lounges that is just not part of Southwest. The DNA spirit is marketing. Its first class cabins, so is frontier. Those are not spirit and frontier behaviors.
The entire industry is changing. Yeah, it's um. It's, it's a really interesting change, something that we've charted, uh, very clearly@thriftytraveler.com and on this here show, and I, I don't want to pretend like we're naive about this. There is a little bit of Spider-Man meme going on where it's the airlines pointing at us and the consumers saying, we're doing this 'cause this is what you want.
Us pointing at the airlines and consumers saying, we're writing about this 'cause it's what you guys want. And the consumers pointing at both of us being like, you're giving me no option but to be in the premium cabin. So we do play some role in this, but you know, we're, we write and talk about this stuff because it is fun and exciting too.
And, uh, people wanna, you know, travel better. Right now it's very clear that there is a demand for this. Um, Spider-Man meme aside, but I think let's start with the credit cards of this all because I, I do think this is probably the biggest. Driver of all of this, this may, the economic engine behind this premium travel boom is that these cards are competing for your money and getting more expensive, right?
They reinforce one another. You can't have one without the other. You can't have a premium travel credit card without a connection to travel, be it through a co-branded airline credit card, or you know, something like an American Express Platinum or Chase Sapphire Reserve, which is clearly built around travel, but you also.
Increasingly don't have an airline without the credit card either or the hotel chain to a lesser extent. Um, and, and that is a byproduct of the fact that running an airline is actually really hard. There's a reason why we don't do it. We would certainly go bankrupt if, if Gunner and Kyle started an airline, but.
Most airlines, even the most successful ones in the United States would be bankrupt or close to it without these credit card programs, because it is so insanely expensive to run an airline to the point that most of them don't make much, if any money at all. Actually selling tickets on planes and fueling those planes and paying pilots and flight attendants and flying across the country in a metal tube at 33,000.
There's the, the most important metric here. We're gonna get a little bit nerdy on the finance side. Um, and then I promise we're gonna zoom right back out, is just profit margin. How much money do you make on what you're spending? And the profit margins of running and operating an airline are razor thin.
It's typically for a really good airline in the United States, it's something like 10%. For some, it's closer to 1% or 2% and some it's negative. For the low cost carriers, it's negative. Um, but to have a successful, um, mileage program and credit card revenue coming from American Express to Delta or Chase to United, that's more like 50%.
Maybe 60, maybe even 70%. So airlines have turned to these credit card programs in order to make better money and in order to make better money to lure in the wealthier Americans who are gonna run up higher charges on their credit cards and pay higher annual fees, and also fly with them more. They need the premium travel.
So you can't have one without the other. You cannot divorce the two. On the point of the profit margin, I think what the airlines have have been very clear about when they're talking to investors is that the best profit margins are coming at the front of the plane for them right now. And then we've seen so much investment there, and that's a lot of part of this premium travel boom as well.
Um. They're focusing on first class, they're focusing on business class, they're focusing on premium economy, and most importantly, they're focusing on this like barely better tier of economy Plus, or Comfort Plus, as Delta Flyers know it as the airlines invest in and add more extra leg room and more comfortable, more business class seats.
What they're doing is they're actually. Lowering the cost of these seats to travelers. They're making premium a little more accessible, which is a good thing if you wanna just buy the best seat on the plane. It's helping people get into those front cabins a little bit more often. Uh, it's. Less of a good thing for elites, people with status who used to count on those free upgrades.
Uh, the airlines have done a very simple calculus, which is, uh, why give these upgrades away for free when we can make people pay for them, even if it's not so much. Um, but this is, I think. You know, one of the more interesting trends over the last few years we're, we're seeing the, especially domestic first class seats are as cheap as ever.
I mean, in the two hundreds, three hundreds round trip, sometimes in, in the us, which is like main cabin prices on a lot of these, uh, especially on some, you know, regional airlines and things like that. But, um, what's happening in the front of the plane has been really interesting to me. Yeah, I, I mean, Delta is the poster child of this, but they're not alone in that.
You know, I think, uh. Two decades ago and even less, you know, they were only selling like under 15% of their first class seats because they were just upgrading travelers with elite status for free. And now that has basically completely reversed to the point where somewhere in the neighborhood of 80% of first class seats are being sold either to people who are just paying for that upfront or.
Paying a, a cheap upgrade. Um, and Delta and American and United have, have all gotten much better at offloading those upgrades. As you know, that flight is seven to 14 days or whatever away at a cheaper price to get somebody to say yes and actually pay it, rather than having that seat go for free to somebody who is on the upgrade list.
It, it is, it has been a big transformation, but again, it, it reinforces how all of these pieces fit together of trying to. Cater to people who have money and want to spend it. And, um, it's, it's undeniable that this is where every airline is spending all of its time and resources. I mean, when's the last time we, we heard from an airline talk about how, how great.
Sales of economy seats are, or what they're doing in the economy cabin to make that better for people. I mean, there's just really been not a whole lot, if any, innovation in economy seats flying in the United States. I would say just the opposite. It's just continually gotten worse as legroom gets a little bit tighter and tighter.
They're either pushing you into basic economy or they're pushing you to the front of the plane. And, uh, everybody in the middle, uh, is seemingly forgotten in all of this. Um, another area of investment, Kyle has been in airport lounges, and we've seen this and covered this. And this is something you and I both love to track, is just to see what credit cards, what airlines are.
Investing in these airport spaces, uh, in a time where people are investing in literal spaces, less and less, uh, the airline industry hasn't gotten that memo. They want more spaces for premium customers to go sit in and dine in and, uh, experience and interact with their product in as the lounges get more popular.
Are they just gonna continue to get busier? Do we have an end in sight for, uh, when lounge crowding could come back down to a realistic level? No, I don't think, you know, we, we talked about this with Jason on the show, um, a couple of months ago. I just don't think that there are enough levers to pull. To actually reduce crowding in airport lounges, given what the clear appetite is.
I mean, we're now, you know, basically a month away from American Express reintroducing their platinum card at a $900 annual fee. And the response to that, not just from existing card holders who are like, yeah, I want $75 a quarter for Lululemon pants and a hundred dollars to go out. Um, to a resi restaurant once a quarter, but even from new people who are getting the card, because they, they see it now and they say that's a better deal than it used to be for me, so I'm gonna get it.
That is going to result in more and more people going to airport lounges to Delta Sky Clubs, to Amex Centurian lounges, which, you know, the crowding issues at those centurian lounges are already pretty awful to begin with. It's only going to get worse. There is not enough real estate in airports for airlines and banks to either expand their existing lounges or build new ones fast enough to satisfy the demand.
So we're gonna continue to see banks and airlines tweak access policies and introduce time limits and introduce, you know, maybe even more limits to how often each year a cardholder can get into an airport lounge. But it's all going to be in the name of. Trying to keep things status quo. I don't think that there's any version of this where any of these companies are actually going to be able to meaningfully reduce crowding at airport lounges.
It's just too popular because you can't have premium travel without an airport lounge. Those two things are synonymous. There's a reason why every single, uh, credit card knew or um, reintroduced that has come out within the last decade. Always has some form of lounge access tied to it. Yeah, these, these lounges need more space and that's the only thing you can't have at airports.
Airports of course, notoriously cheap places to build new construction. Yeah, of course. Or, or eat and drink and be merry. Right? So it's just, you know, there's, there is nowhere for these places to go. I think what Amex. Is doing. And what Delta tried with this, uh, Amex is calling it their sidecar concept, which is essentially just a grab and go version of their lounge.
Uh, it's like, come get your food and your drink and then, and then get outta here please. 'cause we don't have a, we don't have a seat for you. Um, I think that's really interesting. I think that's smart. I, you know, it. It, uh, it does count as a full lounge visit, uh, in some cases in the, in Delta Sky Club's kinda, uh, grab and go section case.
So maybe people don't wanna use it on that, but uh, that is a kind of a good way to at least keep people moving so you don't have, uh, people like me. Showing up to the airport with their positioning flight and sitting in a lounge for seven and a half hours. And if you're mad about airport, airport lounge crowding, blame gunner.
It is. I am the problem. It's me. Um, alright, Kyle, let's, let's have a little debate here. And I think we have differing ideas of what this premium travel boom means for everyday travelers. And I'll go first and let you tell me why I'm a dumb dumb at the end. Cool. Sounds great. Awesome. Can't wait. All right.
So my, I'm gonna argue that the premium travel boom is actually better for the budget traveler for your everyday traveler who doesn't care about that first class seat or that business class seat. I think with the industry shifting their focus to the Uber premium passenger, um. I think the investment into premium travel and airlines kinda outrunning each other to see who can get most premium has also coincided with the best run of basic economy flight deals we've ever seen.
If you wanna fly. You know, to Europe in the two hundreds, three hundreds round trip, there's never been a better time than the last year when the airlines have really kind of upped their game and started, you know, jumping over each other to be who's most premium, uh, to book these kinda lowest basic economy faires.
The cheapest flight or the cheapest seats on the plane are getting cheaper right now. I'm gonna throw you a bone here, even if you don't want to book that cheapest basic economy, fair basic economy and main cabin rates are tied together. So the further down that basic economy rates tumble, a standard main cabin ticket is going to fall down with that as well, it's still gonna be, you know, $80 more for a domestic round trip flight, 200, $230 for a trip to Europe.
But they're tied together so they, they move together in kind of the same spectrum. That's a critical point. You're welcome. You are a good friend, but a terrible debater. Uh, my next point, airlines are throttling back partner award space, which used to be and is I still some cases the best way to book, especially the front of the plane using points in miles.
Um. Economy awards are actually getting cheaper in some cases and easier to use. We've seen both Emirates and Virgin cut the number of points it takes to fly in the economy cabin. They did raise surcharges a little bit. Thanks for catching yourself there. I was gonna shive you with that one. I'm also a terrible debater.
Um, so, you know, it is getting cheaper in some cases to fly economy using points and miles. Um, and then. The last point is with more premium seeding and premium options, those avenues are getting cheaper too. So if you are a basic economy traveler or an everyday traveler. You can, if you want to join in on this premium boom once a year maybe, or once every few years because, you know, those first class upgrades are a lot cheaper than they used to be.
And the kind of premium travel world is more accessible to a regular traveler than ever, especially with, you know, the onset, the boom of points and miles as well. So those are my reasons. I think the regular Janes and Joe's have a, a really good. Travel landscape to work with right now because of this premium boom.
Why am I wrong? Kyle Potter? I, it's not that I think you're wrong right now, it's that I think that there's a short, near term. Win for for many people, whether you want to fly a premium cabin with your points or at a cheaper cash rate, or you're an economy flyer and you can benefit from there just being less demand for economy seats as a lot of the travel public shifts towards thinking about premium travel.
But in the long term, I'm worried about how this actually plays out airlines. Make decisions and place bets that take years to pay off. And a lot of what we're seeing in how travel is evolving right now is, is really to me, the, the result of bets that airlines made coming out of the worst of the pandemic and even before it.
So. Delta and United clearly made their focus on premium travel, everything that we're talking about right now, and that the population of wealthy people who want to spend more money on a premium travel experience is a bigger than it was pre pandemic and B wealthier than they were pre pandemic as well.
And that this group of people of premium travel focused travelers. Is ultimately going to make them more run money in the long, in the short run. But in the long run, if the economy softens or we enter a downturn or even something like a recession, that that group of people is going to be more sticky.
They're going to continue traveling. And I think that's a big piece of what we're seeing right now and how the entire travel industry is kind of reorienting around premium travel at the same time. Almost every other airline in the United States made the opposite bet that revenge travel was gonna last forever.
That there was a bottomless appetite for flights to, into get people into Naples, Florida and not Naples, Italy. And that as much as they could grow fast, they would continue to grow their profits as well. And clearly that is not what is happening right now. That is not what's working the, a lot of what we're seeing with the struggles of Spirit and Frontier.
And Southwest is a result of there just being too much capacity because these airlines went too far, making the wrong bet about what was gonna move the needle. And now everybody is talking about premium travel. Every airline is adding more premium seats, whether they're first class recliners or extra legroom seats, or the fanciest business class seats to the point where, you know, every, all the big major US airlines like Delta and United are ordering planes that have more of that footprint dedicated to live flat.
Business class, an extra leg room seating than they ever have in the past. And I think that that works right now. But as you start to play that out, I am scared about what that means for budget travel, not tomorrow, but five years from now, because we don't know what travel demand is gonna look like five years from now.
But two things can be true at once. The demand for premium travel is bigger than ever. I think that's undeniable. That's the reason why Delta and United are so financially stable right now, and the others are really not, and that that demand is more lucrative than economy. But at the same time, I do still think that there is a vast appetite for budget travel, and you know, it might not be as big as Spirit and Frontier and Southwest American Airlines and Sun Country can collectively serve.
But it's still there. But as the entire airline industry gravitates toward premium travel at the expense of economy capacity, what does that look like five years from now? Is there going to be enough supply of economy seats to fill the demand of what it looks like five years from now, or are we. I'm just worried that there's an overcorrection.
Yeah. To your point. Again, terrible debater, but to your point, the, the health of the low cost carriers is also a huge concern here. I'm terrified of what domestic airfare in particular looks like if spirit fails or if Southwest isn't the powerhouse that it has been for the last couple of decades. Yeah, I mean, you look at the low cost carriers and.
One of the most profitable ones is, uh, based here in Minneapolis, sun Country. And they're not profitable because they're flying tons and tons of passengers at, at really good fairs. They're profitable because they're flying packages for Amazon and they're flying soccer players for the MLS. Their charters and their cargo are what are making them money.
Um. So that, that doesn't necessarily bode well for having a ton more budget seats in the market, like you said. So that's another really good point. Also, the, uh, Naples, Florida, not Naples, Italy. That's podcasting gold, my man. That was a beautiful line. Nice job. Did you come up with that? Yeah, maybe. I don't know.
I think, I think I blacked out. I like your points. I see your points. Uh. I do worry long-term if the airlines continue to cater towards these recession proof travelers. The, the richest ones, the people in the front, uh, that, you know, the lack of investment in the back is going to at some point mean that there are just fewer and fewer seats flying.
And if, uh, these big airlines really push out these low-cost competitors, I am worried about that, at least in the short term. I, I still think the next. You know, one to three years of budget flying is gonna be really, really good. Uh, just because we've seen this unbelievable run of good fares. And, uh, I think people are, people still want those.
And, uh, the airlines at some point, they're going to, they're gonna have to snap back, I think, a little bit. They can't just, you can't just fill a plane with premium select seats and, uh, premium economy seats and just run those. Honestly, they probably could. That they're, they're gonna make enough money on those business class and premium economy and comfort or extra leg room seats to the point where they really don't necessarily need an economy cap.
They're still always going to have one. Right. But I, the root of my fear is, is that as that capacity shrinks, that's only going to give the airlines more power to do exactly what they do. What they want to do, what they're built to do, which is follow this, the laws of supply and demand and start charging people more because the demand is out, out exceeding the supply.
Good points. Okay, we'll leave it up to the listeners to see who, who was victorious in the debate. Uh. I have a sneaking suspicion that they're gonna choose you, but I'm not gonna, I'm not gonna stuff the ballot box either way. One last thing on the premium travel boom that I think we should talk about. A point that our, our boss, Jared made when we were discussing this all as a team, um, he, he's just, he, he was basically looking at this kind of economic boom cycle that we've been experiencing for the last, like 15 plus years.
Essentially. Uh, he's wondering if demand for premium travel. If the demand for premium travel would evaporate at the end of such a boom, um. Transitioning more airline seats to premium is kind of risky. And it, he says that it, it felt like people forgot what happened in 2008. Like how, how long can this last, um, you know, what, what happens, uh, when an economic contraction inevitably happens and, but the airlines have put all of their eggs in the rich people basket.
What happens then, Kyle? It depends on how big that contraction is and whether, you know, the premium travel. Premium travelers that airlines are increasingly courting really do pull back. Substantially. Because if, if it does, you know, then in the long term there's probably a win here. At least for, you know, the sickos, like you and I, who are trying to redeem miles to fly life flat business class, or first class.
Because as that demand starts to. Drop airlines can again turn back to award availability and their mileage programs as a way to fill seats. Something that they have had in many cases or for much of the last four or five years, the luxury of not really having to think about because the premium travel demand between.
People flying on corporate accounts and just wealthy Americans who are looking to travel more and they wanna pay more for nice experiences. Those people, they're just a big enough group. But I, I think. You know, Delta and United and the other airlines who are moving towards this premium strategy are, aren't just making decisions about what the e economy looks like today.
They're forecasting out and making sure that they can protect themselves for if and when that looks like, and that they can say, all right, you know, if, uh. If we do enter a recession, we still know that there's gonna be enough people for us to make this premium heavy strategy work. Which again, brings us back to, you know, as they're ordering these planes today and last year, that get delivered at the end of the decade, and the seat maps really skew much more heavily towards premium at the expense of room at the back of the plane.
What does that mean for budget travelers who just care about the cheapest, fair, or stretching their points of miles further? Um, clearly an inflection point in the premium travel boom, and that's kind of why we wanted to talk about it today. But I think we did it justice. I would really be interested to hear what you all think out there.
podcast@thriftytraveler.com. If you have some fun ideas to throw our way. Uh. Jeffrey Olson is our listener question of the week, no relation. He hit us up at podcast@thriftytraveler.com with an interesting question. So he says, quote, my son recently moved to college and I needed to find a hobby. After years of driving carpools with my wife and sitting at endless sporting events, our friends recommended getting into the world of points and miles along with your podcast, to put it simply, I love the points game and all your tips, Jeffrey, first of all.
The, the move of finally getting your kids out of the house and then inviting a couple of children like us into your ears every week is a crazy move, but I respect it. Jeffrey. We appreciate your unearned trust. Uh, I'll paraphrase. Uh. Jeffrey says that his family has recently, between him and his wife, opened an Amex Gold, an Amex Platinum, a Delta Platinum, A CSP, and a Venture X.
They're looking for yet another card because they got a big landscaping expense coming up. His question is quote, even though we live here in Minneapolis, I'm curious if you think the current signup bonus for Alaska Atmos is worth it for us. MSP residents, he said they like to travel a few times a year, uh, and the Alaska Airlines stuff has really peaked.
His curiosity, Kyle, is the Atmos card or cards worth it for travelers who aren't at that Alaska hub in Seattle? Absolutely. Um, I, and I think there's a couple of, of easy ways to make that work. If you're talking about the new Premium Atmos summit card, um, that earns three x points per dollar on all international purchases that.
Immediately becomes not just a way to earn a great signup bonus on that big landscaping expense, but your number one go-to card anytime you're abroad to earn three x points per dollar, which is unheard of, absolutely unheard of. And that alone really makes that card a keeper for the long run. But beyond that, even if it's not that card, if it's the entry level Atmos card.
Being able to earn a big signup bonus with, you know, spending that you're gonna do in one fell swoop and then pay it off right when the statement closes. Alaska miles go a long way. Alaska Atmos rewards points as we're now forced to call 'em, are great no matter where you live. Um, and the example that I love to use is, um, you can fly from.
Minneapolis to Chicago, to London, flying American Airlines all the way, or Minneapolis to Dublin on Air Lingus, and then onward to London or anywhere else in Western Europe in business class for 45,000 points per passenger and like $20 in taxes and fees each. The list of great ways to redeem Alaska Points goes on and on and on.
There's a reason why it was like one of the number one picks in our draft, um, early on in the podcast. It's one of the best airline programs as a whole, and at the very, very least, it's worth taking a flyer on with a, with a credit card bonus. If you can do that, spending responsibly, and maybe you're gonna see it.
I need to make Alaska just part of my everyday strategy. Or maybe it's a one and done, but I, I am confident you're gonna find great ways to put those points to use. Yeah. Jeffrey, hope we got to you before, uh, you paid for that landscaping invoice. Um, definitely pick up one of these cards. We've had several members of our team pick them up and, uh, just the perks alone are really, really great.
And then of course, those points and that earning three x abroad is, is insane. Um. If you want us to answer your question, email us at podcast@thriftytraveler.com. And your question might be featured in next week's show and to close the show. As always, it's on the spot and I'm putting Kyle on the spot this week.
You ready? Let's do it. Okay, Kyle, what's your favorite podcast? Not this one. Ooh. Um, it's actually pretty easy. My favorite podcast is re watchable from the Ringer. That's, uh, I, I walk a lot around my lake, uh, near my house, and that is my number one podcast by far for my walks. I. I love listening to old episodes of some of my favorite movies and then getting kind of keyed into different little things of, of movies I either haven't watched or movies I haven't watched in a long time.
I mean, the cycle of listening to one of those, um, episodes about a movie like Lost in Translation and then going back home and watching the movie later that night or something, it's just a constant vicious cycle in my life. Um, that's my favorite by far. That's good. I also, I, I wrote down three, um, I have two ringer shouts on here too.
The watch, uh, the TV podcast, Chris Ryan and Andy Greenwald, one of the first podcasts I ever loved, what really got me into tv. Uh, those two are awesome. Love that show very, very much. I love the press box from the Ringer. Uh, Brian Curtis, David Shoemaker, and Joel Anderson, host that one. It's a media focused one that's just kind of for my, my media nerd.
Uh, in me. They, they have a. Great segment called The Overworked Twitter Joke of the Week, which I love. And they also have, uh, guess the strain pun headline, where they make fun of headline writers around the world. It's a great one too. And I think. The very best podcast in the world right now is Pablo Tore, finds Out.
Uh, he's a former ESPN journalist who started this podcast that's like part journalism and part just like hanging out with his friends. And he like unveils his reporting findings in front of like a panel of friends. Uh, when he does these big stories, he's broken a ton of big stories over the last year and he's on a, a real heater right now, but I love Pablo Tore finds out so.
That was a self-serving on the spot because I wanted to get my list out there. If you've listened to any of those shows, you can hear some influence in our, our rundowns too, by the way. No comment. All right. That's gonna be it. Thank you so much for listening to the Thrifty Traveler Podcast. If you could rate us five stars on your podcast platform of choice and like, and subscribe to the show on YouTube, uh, send this episode to somebody that you know who needs a vacation.
If you have feedback for us, send me a note at podcast@thriftytraveler.com. We would love to hear from you there. Kyle, tell us about the Thi Traveler podcast team. This episode was produced by your favorite host, who as soon as we wrap up here, is gonna check whether he pitted out his $75 Lululemon shirt.
Oh, he's doing it now. Oh, all right. Just a little. Well, Lululemon is doing work today. Anyway, his name is Gunner Olson. Uh, it was produced and edited by Sylvia Thomas. Our theme music is by Benjamin Tcell. See you next week. See ya.