American Airlines’ decision to enter Chapter 11 or protected bankruptcy probably did not take too many people by surprise.
But so soon after placing an order for the single largest number of new aircraft in aviation history, which may have puzzled a few industry observers, and despite holding US$4.1 billion in cash, which I am told is more than any other American carrier entering this form of financial protection?
In reality the airline is among the last of several major United States legacy carriers to invoke similar measures which are intended to restructure their business.
It must be of special concern to our tourism policymakers when such a large percentage of our second-largest market arrives on one of their flights through the hubs of New York, Miami, Dallas/Fort Worth, and more recently the reinstated Puerto Rico service.
The company has been very proactive in assuring existing customers, especially its frequent flyers, that everything will operate as normal and there is no reason why this should not happen, as it has in so many other cases.
Clearly this makes sense, as the last thing an airline wants to do is alienate their most frequent (and profitable) clientele.
The travelling public, though, who have amassed frequent flyer miles through the AAdvantage programme, will be more concerned about losing their miles or possibly seeing a reduction in their value.
This may galvanize them to redeem the miles sooner rather than later.
And that is where there is a tremendous opportunity for Barbados, if we seize the moment. To make redemption even more appealing, our tourism planners could make some agreement with the carrier to lower the normal mileage requirement.
As I have said many times, one of the particular benefits is that the mileage required is the same whether flying from one of the gateways or connecting from the Pacific Coast, midwest or south – in fact, any city served by the airline throughout the continental United States.
What sort of numbers are we talking about?
In 2010, more than five million one-way awards were claimed on American and nearly another million on their partner airlines. That’s equivalent to more than three million return flights.
Just imagine – if we are only able to convert one per cent of that number, it would add another 30 000 long-stay visitors each year.
And the potential benefits are not solely restricted to the United States.
Currently, from October 15 to May 15, American offers a reduced mileage requirement for flights from Europe to the Caribbean, called MileSaver.
This enables travellers to use just 40 000 miles and fly from various European cities, including London, connecting through one of the four American hubs to Barbados.
It also provides an alternative to escape some of the massive taxes and additional charges. On direct flights for instance with Virgin, taxes and extras alone amount to a minimum £281.60 (BDS$866) on the lowest online bookable fare, while using miles with AA, they are £169 (BDS$520).
If we are a destination that really wants to give the very best value and choice to our cherished visitors, then this could prove one of the options.