Several issues and trends are likely to make news and impact airline travel as 2017 unfolds.

The big three U.S. airlines will continue to diversify their products in 2017. Domestic airlines, especially regional and low-cost carriers, will continue to grapple with the nationwide pilot shortage. Alaska and Virgin America had their merger approved, and the entire industry will look to see what impact the incoming Trump administration will have on matters related to airline competition as well as the recently started commercial airline service between the U.S. and Cuba.

In 2016, the major U.S. carriers moved in earnest with announcements and rollouts of new fare classes and cabins as they fought to compete with low-cost carriers on one hand and entice business and high-end leisure customers on the other.

As a result, April will mark the beginning of United flights featuring its basic-economy fare. Like Delta, which began the fare class in 2012, flyers will trade discounted prices for tickets in the back of the plane that can't be changed. But United has taken the product a step further by forbidding carry-ons that can't fit under a seat. It remains to be seen if Delta and American, which has said it will unveil its own basic economy plan in 2017, will follow suit.

Analyst Bob Mann of R.W. Mann and Co. said he guesses Delta has already concluded that basic economy isn't cannibalizing its higher-priced corporate business.

As such, he said, Delta is unlikely to follow United's basic economy lead when it comes to strict carry-on rules. That, in turn, could force United to roll back the policy.

Next year will also see expansions and upgrades of higher-end services on U.S. carriers. American, which debuted its international premium-economy service on two routes in November, will expand the offering, which bridges the large gap between international business- and economy-class service.

Delta, meanwhile, plans to bring its Delta Premium to select international routes in 2017, and United has hinted that it will announce plans for international premium economy as well.

JetBlue will join the expansion and upgrades of higher-end services by offering lie-flat Mint cabins on select transcontinental flights out of Fort Lauderdale and San Diego.
JetBlue will join the expansion and upgrades of higher-end services by offering lie-flat Mint cabins on select transcontinental flights out of Fort Lauderdale and San Diego.

Next year is also scheduled to mark the rollout of United's Polaris international business-class cabins and Delta's all-suite Delta One business-class cabins. In addition, JetBlue will begin offering its lie-flat Mint cabin on select transcontinental flights out of Fort Lauderdale and San Diego.

The pilot shortage

While airlines work to broaden their offerings, they'll also have to keep an eye on the U.S. pilot shortage that in 2016 sent the regional carrier Republic into bankruptcy, caused the closure of the small SeaPort Airlines and forced other regional airlines to reduce routes.

Throughout the past year, regional airlines sought to address the crisis with substantial pay raises and signing bonuses. For example, Piedmont, PSA and Envoy, the wholly owned regional affiliates of American, raised first-year pay by between 32% and 56%, according to data provided by Dan Akins, founder of the consulting firm Flightpath Economics. SkyWest, the largest regional airline in the U.S., raised its first-year pilot pay in 2016 by 22%.

Despite the increases, Akins predicts that the pilot shortage will increase next year amid growing demand among a widening variety of air service operators. As a result, more regional airlines will go into bankruptcy, while route reductions will mean that more small communities will lose commercial air service entirely. Pilot supply will also become an increasing concern for ultra-low-cost carriers Allegiant, Frontier and Spirit, according to Akins.

"The first carrier to truly break the mold and train their own pilots on the carrier's dime will be the change needed to begin to produce a sustainable supply of air crews for the future," he said.

The Trump administration

This coming year will bring the $4 billion merger of Alaska Airlines and Virgin America following the deal's Dec. 6
antitrust approval by the Obama administration. Airline industry observers will be watching to see if Alaska decides to do away with the Virgin America name or maintain it as a second brand, as CEO Brad Tilden said in June was a possibility.

And with approval of the merger having been predicated on Alaska giving up key codesharing routes with American, Mann said he'll be watching to see whether the Seattle-based carrier looks toward organic growth of its national network or whether it instead expands anew its smaller codesharing partnership with Delta.

Other regulatory issues look likely to be left to the Trump administration to decide.

Though the president-elect spoke little of airlines during his campaign, his protectionist views have caused some industry executives around the world to express concern. But those views will also present opportunities for certain carriers in 2017.

The Trump administration, for example, could receive with more sympathy the request of United, American and Delta for a clampdown on the U.S. expansion of the Gulf carriers Etihad, Emirates and Qatar, which the U.S. legacy carriers accuse of accepting illegal government subsidies.

Meanwhile, if Trump converts his tough posturing on Cuba into action, 2017 could bring tighter restrictions, or even a full cessation, of the commercial airline service between the U.S. and its island neighbor.

"I expect that the Trump administration will increase enforcement," John Kavulich, president of the U.S.-Cuba Trade and Economic Council said, referencing the 12 categories of travel under which Americans are permitted to visit Cuba. "I don't expect he will decrease the frequencies. But by increasing enforcement, the result, unilaterally by the airlines, may be to decrease frequency."

Robert Silk is a senior editor for Travel Weekly, covering aviation.

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