It’s official, 2017 is over so it’s time to look back and see how you all did with your predictions. A year ago, I reviewed 2016 predictions and asked for your thoughts on 2017. There were a ton of entries last year, so I’ve picked the most popular themes to address here. If you had a prediction you think I shouldn’t have left out because it turned out so well, then start bragging in the comments section!
The Alaska/Virgin America Merger
Ty – Alaska/Virgin start to build up outside of the west coast. Expect more flights from Seattle/LA/SF/Portland to secondary markets in the outer Midwest and east coast (i.e. SFO-CVG or SEA-PIT).
Zack Rules – Alaska will announce plans for a dedicated premium fleet on the JFK-LAX/SFO route, will sell it’s Love gates for $125m+ to Southwest and trade it’s LGA/DCA slots for more JFK slots and gates in SFO/LAX.
Kurt – AS sells its gates at Love Field to Allegiant (to piss off Delta even more), and starts the following routes: SEA–PIT, SEA–CLE, and SFO–ATL.
Scott Wiederhold – AS/VX decide to keep the Airbus and Boeing fleets, and implement a special sub-fleet to fly select trans-con routes (LAX/SFO/SEA-JFK) with some sort of lie-flat product.
INDHNL – Alaska decides to kill the Virgin brand, but keeps the Airbus (for now) and installs a lie flat product for the premium transcon markets.
Evan – AS keeps DAL gates but rebalances flights with new frequencies to the west coast and cuts to the east.
Trevor – Alaska will announce they will trash the airbuses acquired as part of virgin’s fleet once the leases are up, and while carrying some of the features of the virgin brand, will rebrand all as Alaska.
Rebecca – Alaska will publicly commit to an all-Boeing future, once the Virgin planes hit retirement age. They’ll also announce an updated cabin design, to be placed on the MAX order. (Maybe a new FA uniform too? Basically, incorporating the sexy loyalty-creating parts of the Virgin brand before they inevitably trash it.)
Jim – JetBlue will expand its Mint class to many more flights, and Alaska will introduce some sort of premium transcon service similar to Virgin’s.
Seanny – Despite all of the talk about competition with Delta, Alaska/Virgin America’s real focus will be to build up hubs other than Seattle. Southwest will be the biggest target for its direct Intra-California and Western US flights, such as Sacramento-San Diego, already scheduled to begin in March.
Zhuo – Alaska Airlines drops the “Virgin” brand in the merged airline but modifies product offerings to be more “edgy” in order to retain/attract VX customers.
Axelsarkiss – AS/VX will have a fairly successful merger process (in other words, no major issues) and the Virgin brand will disappear, being at most some sort of branded service offered by AS.
Seby – Virgin/Alaska merger is plagued by competing visions from each side. They get their act together by summer.
Stephen – Alaska/Virgin America announces plans to phase out the Virgin America Brand and the A320 fleet. Going forward the combined airline will be called Alaska with an all Boeing 737 fleet.
At this time last year, the Alaska/Virgin America merger had just been announced, so it was clearly top of mind for many of you. How did you do? Well, many predicted that there would be a new premium transcon option. Nope. Alaska went the other way on that one. Most of you were right, however, that that Virgin brand would be phased out. On the other hand, the end of the Airbus has yet to be announced. I think we all still assume it’ll happen some time.
There were a couple of calls for Pittsburgh service. Nice work there. Evan had a great and correct call on what would happen in Dallas. And Seanny was dead-on that growth has focused on competing with Southwest in California. I’m guessing we’ll see a lot more predictions here this year.
Joe P – Southwest will stick to their guns on two free checked bags and no change fees, but will finally introduce a premium economy of sorts…and by premium economy, I mean a little more leg room, free beverages and an upgraded snack.
Ted – LUV starts to charge for checked bags.
Scott Wiederhold – WN finally starts charging for bags. They take the same approach all other airlines, starting with a simple 2nd bag fee, touting the fact that some high percentage of their customers only check 1 bag.
PF – Southwest’s domestic bag policy does not change.
Paul A – Southwest has a major I.T. Meltdown that snarls flights.
Evan – Southwest IT failure causes the company significant embarrassment and inconveniences many.
IO – southwest announces a ceo transition after labor continues to harp on the operational issues (IT, late/cancellations) which in turn affects financials and gets the attention of wall street.
Matt P – WN introduces $75 fee for 2nd suitcase but continues to say “bag(s) fly free”
MeanMeosh – I’m sticking to this one for the 2nd year in a row – Southwest introduces and extra legroom section, available for an extra fee. Bags continue to fly free.
Apparently a lot of you are really convinced that Southwest will add a bag fee. That may be the case someday, but it wasn’t this year. PF nailed that one. There really wasn’t any kind of significant change in the Southwest product, and certainly nothing exciting like an extra legroom section.
Weakness in the Middle East
Jonathan – One of the ME3 airlines changes CEOs. Increasing cost pressures and competition lead to the actual bosses firing one of the CEOs or said CEO “resigning”.
malbarda – At least one of M3 will announce a complete merger/takeover with one of the Europeans (KLM/AirFrance/ALITALIA, Lufthansa/SAS or IAG)
KN – The ME3 won’t be able to support the huge aircraft orders, leading to serious financial struggle across the board
John – Etihad (or Emirates) gets to change the CEO
Seby – ME3 are forced to cancel aircraft orders due to rising oil prices and lower profits/instability.
HH – Stagnant oil prices in the $50 to $60 range will hurt the ME3 hard in 2017. Expect slower growth and layoffs to expand.
Glad you gave it another shot this year, Jonathan, because you got this one right. Etihad has a new CEO. There hasn’t been any kind of merger with a European airline, but there are troubles on the horizon with these guys.
Trump and the Middle East Carriers
Joe P – The Trump Administration will put more pressure on the ME3 as well as other international carriers like Norwegian to align with a more nationalist policy. This won’t change the airlines’ route strategy, but may force the carriers to hire more American employees.
Roger Cohen – Despite all the “America First” rhetoric, the Norwegian and ME3 battles fizzle out. Not because of politics, but because the international demand shrinks and issues lose their sex appeal. Good riddance to those “if there wasn’t a fight, I’d start one” faux wars ginned up by former DL CEO Richard Anderson.
Nick – ME3 Rush to add new US routes in fears of the new administration cracking down on their expansion. Those fears are unfounded as the new administration will take no action.
Simon – the new US administration will threaten to withdraw from open skies/other similar agreements. Rest of the world won’t blink.
Philippe B – Rather then throw out the Norwegian airport access, Trump will throw the baby with the bathwater by actually throwing out the entire US-EU open skies agreement. Economic nationalism is the card here.
Some wondered if the Trump Administration would be tougher on the Middle East airlines. Nope. Not at all. This hasn’t fizzled out, however. The US carriers are still fighting the Middle East carriers in Washington. We just aren’t any closer to any kind of resolution.
Privatizing Air Traffic Control
BJ – Trump will announce plans to privatise US ATC.
Zack Rules – ATC is privatized but most management is retained, allowing FAA’s old problems to continue. NextGen gets a new name and scope significantly reduced.
Roger Cohen – The election seemingly parted the seas for ATC “corporatization” with 1) its Congressional rabbi and early-Trump supporter Bill Shuster (R-PA) surviving a bitter primary, 2) Senate Commerce chair John Thune (who initially jumped off the Trump bus post-*Access Hollywood *tape) warming to privatizing and 3) Congressional Democrats marginalized. It may only take one bad ORD snowstorm to ingnite enough passengers griping on social media for former airline CEO/POTUS to tweet “FAA incompetent. Sad. I will fix pronto.” But I’m betting the leather-helmet and goggles FAA middle managers/AOPA hang on for another year — maybe another study.
Raj – The new administration will privatize ATC
Remember when the push to privatize seemed to have a head of steam? Well, so much for that. This, like the last one, hasn’t gone anywhere. There are rumblings that it may happen in 2018, however.
Merger Mania in the US
Ted – There will be talk between Spirit and Frontier, but no marriage.
CJ – Spirit and Frontier merge after months of rumors and speculation
Chicago Chris – Merger fever continues with Spirit/Frontier flirting, but a deal comes through among RJs (maybe Mesa or CommutAir get acquired by Trans State or SkyWest)
KN – B6 and HA wil merge, giving it a better chance to fight AS/VX
Thor – LCC’s merger(s). Spirit & Frontier / Allegiant & Frontier / Spirit & Allegiant
Mike – JetBlue buys or merges with another carrier (my guess is Frontier or Hawaiian).
DesertGhost – There will be some consolidation in the regional space (not counting Republic consolidating its flying onto one certificate).
Zhuo – Hawaiian and JetBlue expand their cooperation through expanded codesharing, or even start merging discussions.
tvmccabe – HA and B6 will expand commercial agreements, leading to codesharing.
tvmccabe – B6 will continue to its search for a merger partner and find one.
There was a lot of hope (or fear) that we’d see closer cooperation and possibly mergers within the US. We didn’t. JetBlue didn’t merge with anyone, nor did Spirit or Frontier. Will next year be the year?
The End for Big Planes
Jonathan – Boeing announces a timeframe to end production of the 747. At least two new cargo operators sign on to take planes before the line closes. The USAF also announces firm plans for 747-8 orders to replace Air Force One and the E-4s.
malbarda – Airbus will announce an end date for the A380 production line.
Ty – Airbus will aggressively market the A380 to the US big 3, likely with cut-rate pricing. There will be lots of media speculation, but no purchase.
Thor – Airbus near collapse as A380 formally dies, A350 orders slow and A400M continues to hemorrhages money all due to engine issues, mfg process, market saturation and politics.
Doug Swalen – EK continues to suffer from overcapacity woes with its A380 fleet and a downturn in travel. As a result Airbus cuts production again on the A380 which gives EK the cover to delay more orders instead of taking on more capacity or, worse, cancelling planes which could push Airbus to bite the bullet and kill the program. The A380 production line will survive 2017. Barely.
Jonas – Airbus will put on the aggressive make-up (and some nice lingerie) to try to sell (used) A380s at dirt-cheap prices (potential takers being DL, HAL, GIA (Hajj), some random LCC (Jeju? Vanilla?)).
Plenty of people thought the A380 and 747 lines would see their demise announced. But nay, not yet. There’s no doubt that demand has dried up for both airplanes. So far, there’s little reason to believe a ton more orders will pour in. It’s just a matter of when these lines end, unless Papa Emirates decides to have a change of heart and prop up the A380 for longer.
Jonathan – Basic Economy fares will continue to spread at airlines that already have them. However, continued bad publicity and disappointing revenue gains will mean that no US airline introduces Basic Economy fares.
Daniel – Either American or Delta will follow United’s lead in not allowing carry-on baggage for basic economy fares.
PF – United’s basic economy product is phased out.
Itami – UA’s new basic economy fare rolls out and despite a few isolated operational hiccups, is successful. When AA launches their version, they copy UA in charging for overhead space
MeanMeosh – AA and DL join UA’s race to the bottom and eliminate EQMs and hand baggage for Basic Economy fares. However, due to severe backlash from business customers forced to purchase the fares, all three are forced to backtrack.
It’s true, American did follow through with the same “no carry on” policy that United pushed. While United did have to pull back from its aggressive rollout, things seem to have settled down, and Basic Economy doesn’t look to be going away anytime soon. In fact, Delta has been pushing globally while American has gone down into the Caribbean and Mexico.
PF – Oil prices increase. Airlines react by slowing growth, deliveries, and try to avoid staff reductions.
Nick – Oil Price increases cause airlines to drop “long thin” 787 routes, SFO/CTU, NRT/SAN, AUS/LHR etc.
Jim – Low oil prices and the completion of the AS/VX merger will usher in an era of profitability for the US airlines.
Stephen – Oil prices rise significantly, forcing airlines all over the world to scale back growth plans and cut some routes.
Oil was mostly a non-factor this year, though in the last couple of months, prices have started to march higher. This hasn’t caused the cancellation of any significant routes, but this may be more of a story for 2018 if the price continues to move north.
HH – United will order the c-series and finally add a 100 to 120 seater to the mainline fleet.
Cody C – United orders the C-series or Embrear E-2s.
Mike – The C-Series picks up significant orders from major North American carriers (almost doubling the back log).
Evan – C-series garners another blue chip order; CS500 launch rumors increase but no announcement is made.
There were no big C-Series orders this year (unless you count Egyptair?), and United hasn’t bothered doing anything in that size range. The big news on the C-Series was around those import tariffs and the Airbus acquisition. Nobody guessed that one!
Joe P – Continued pressure from LCCs in both the US and Europe will make legacy carriers rethink their hub and spoke structure, and begin to launch more unique, nonstop routes. British Airways has taken the lead with this in some regards like this service to Austin, but I would expect American to join in on this fun as well to potentially some cities that aren’t their hubs but have a strong enough base for a Dreamliner (i.e. St. Louis or Kansas City to London, as well as Los Angeles or Dallas to Ho Chi Minh City or Delhi).
Richard – Norwegian will attempt to fly from Secondary US cities to Europe and fail miserably
CJ – Norwegian fails on flight to Stewart Airport
Raj – A lot of new flying by european LCCs across the pond (even to smaller US destinations), with legacies being forced to respond
Chicago Chris – Norwegian announces codeshare with Ryan Air and Spirit
Axelsarkiss – DY will continue to expand with some success, and will sign an agreement with someone (FR?) to provide more feed to their flights in Europe. Wouldn’t be surprised to see something similar (B6?) stateside.
Ty – Norwegian will announce a code sharing agreement with a US LCC (first guess – JetBlue) to increase feed on its transatlantic network.
Chicago Chris – Delta announces Ireland-based subsidiary to compete on long-haul transatlantic flights. IAGs attempt at a discounter starts and fails.
There were a bunch of predictions around the European LCCs. While there has been huge expansion over the Atlantic, it hasn’t caused any big bust yet. Chicago Chris and Axelsarkiss were pretty good at calling a Norwegian effort to get more passengers through a partnership. The first partner was easyJet, but in theory there will be more. It wasn’t as many as Norwegian probably hoped this year. Chicago Chris killed it here, also predicting IAG would start a discounter. LEVEL did come into existence, but it hasn’t failed…yet.
Delta, Tokyo, and Korean
Mike Power – DL and KE finally announce “stronger trans-pac relationship” whereby DL moves PDX-NRT to PDX-ICN and announces BOS-ICN but isn’t started whereas KE announces MSP-ICN and it does start.
Zhuo – Delta and Korean Air make progress towards a TPAC JV.
Barton – DL will launch a TPAC JV with Korean and will announce the end to NRT-Asia flying. DL will comment that the JV is a better bet than spending the CapEx to either replace the planes flying NRT-Asia or to launch longer and thinner routes from SEA to Asia.
Adrian in NZ – DL will pull more and more out of NRT, deferring to ICN, where their codeshare partner KE is.
Richard – Delta begins winding down the Narita hub
Lots of good calls on this one. Delta and Korean announced their joint venture, and the Narita hub is all but toast. This may have been the most successful set of predictions of all.
American and Its Hubs
Jim – American will significantly cut its CLT hub. Perhaps PHX as well.
DesertGhost – PHX won’t shrink much more than it has.
Stephen – AA/US de-emphasizes a hub – I think it will be JFK
Mathew – AA will start process of moving some transatlantic routes from PHL to CLT. PHL will be the de-emphasized AA hub going forward.
Scott Wiederhold – AA continues its downsizing of PHX. Similar to San Jose, Reno, and St. Louis, this year there’s a decent reduction in flights, but we’ll be promised that PHX is still an important hub in the AA system.
American’s hubs all held their own this year… except for JFK. (Good call, Stephen.) American has started to move JFK flights down to Philly (like Zurich) in order to strengthen that one further.
Raj – United will continue to see huge operational improvements in 2017
tvmccabe – UA will continue to improve substantially. UA will substantially expand seat share domestically by up-guaging and adding seats in narrow bodies and high density domestic 777’s, while adding few domestic departures. UA will also accelerate strategic deployment on 787’s in international markets. All actions will lower seat mile costs and raise RPM’s.
There’s no doubt about it. United has substantially improved its operation in 2017, and we should all be very happy about that. As for the seat share, well, United has done some upgauging, but it has also gone downmarket, adding a lot of small 50 seater markets. That one isn’t as clear as the operational gain.
The Demise of airberlin
Cody C – AirBerlin goes belly up and its remaining parts that haven’t already been parsed out go to Lufthansa/Eurowings, the new TUI airline they are setting up, and one of the major euro LCC’s that wants to grab more of the german market
Jonas – After killing AirBerlin together and fileting its parts, there is a closer relationship between LH and EY in some form or other.
Cody C just crushed this one. That’s pretty much what happened, except that the TUI option fell apart. And this didn’t result in Lufthansa and Etihad getting closer. Etihad just walked away from airberlin.
Alitalia Is Still Here
Cody C – Alitalia goes bankrupt and emerges as another “new” Alitalia.
Mike Power – AZ enters into limited relationship with LH on intra-Europe and North Africa flights; makes noise about leaving SkyTeam but stays; talks about but never actually sets up another airline “ItalyWings” with EY and LH to operate TATL flights outside of the DL/AF-KL JV
Alitalia did indeed go bankrupt, but the final outcome here is a question for 2018. Right now, it sits in limbo.
Mike Power – DL wins the AV lottery and AV announces that its leaving Star Alliance
I like the prediction, but no, United won this one. It took a long time and the legal battles have only recently stopped. But Avianca isn’t going anywhere.
Qatar’s Buying Spree
Thor – Qatar Airways continues buying (as they did with AIG & LANTAM) OneWorld Alliance Partners and now into North America (American Airlines) and Asia (JAL or Cathay). Their way to secure world connections and counter government changes.
Excellent work, Thor. Qatar tried to buy into American, but it was pushed back. It did, however, get a stake in Cathay Pacific. The strategy here seems about right.
BA to Nashville
INDHNL – British Airways announces LHR-BNA with the 787.
This may not have been a huge industry-shattering prediction, but I had to include it for being completely and totally correct. Nice work, INDHNL.
Mike – There’s an accident or major incident at a US based 121 airline.
TC99 – G4 will have a major accident that will force the FAA/NTSB to ground them due to deficient maintenance of their planes.
Kilroy – A military or terrorist organization will down a commercial airliner, but not with a bomb (with bullets, missiles, etc), and not necessarily “intentionally” (deliberate use misleading quotes). This may happen anywhere, but smart money is on the Eastern Med/Caucasus/Ukraine/ME/Russia áreas.
I’m happy to see that none of these came to fruition. Let’s hope 2018 looks the same.
Now, on to 2018. Put your predictions in the comment section, and remember, you only get 3. If you put more than 3, all of yours will be ignored in next year’s roundup.