Here's How to Travel the World at 90% Off

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WSJ Your Money Briefing 8 min 2 speakers 8 chapters transcribed 2 months ago
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What is the main topic discussed in this episode?

J.R. Whelan 0:05
Here's your Money Briefing. I'm J.R. Whalen at The Wall Street Journal in New York.

How can airline employees get nearly free standby tickets and who benefits?

J.R. Whelan 0:09
How'd you like to have a nearly free airline ticket to wherever you want to go, whenever you want to go, for you, for your sibling, for your parents? We'll have a Wall Street Journal columnist come on the line with us in a few moments to explain how to do that, though you may have to change your profession. First, some money in market news you should know.

What recent housing and retirement rule updates frame this episode’s news intro?

J.R. Whelan 0:26
We told you earlier this week that existing home sales fell 1.7% in June. Well, the news was better for new homes. The Commerce Department says sales of newly built single-family homes increased 7% in June from the prior month. Now, keep in mind, while this news is good for the housing market, new home sales are a fairly small percentage of all U.S. home sales. About 90% of homes purchased were previously owned. And the Labor Department is finishing up a set of rules that would permit small businesses to band together to create joint 401k retirement plans for workers. Now, you've heard us discuss this before. The idea was first proposed back in October. Under the current rule, different types of businesses could create a joint plan as long as they're located in the same state or metropolitan area.
J.R. Whelan 1:12
The proposed rule would allow similar companies located across the country to band together. Currently, these arrangements, which are known as multiple employer plans, are currently limited to employers with an affiliation or connection, such as a common owner or being members of an industry trade group. In 2018, approximately 85% of workers at private sector companies with 100 or more workers were offered a retirement plan. That compares with only 53% for such establishments with fewer than 100 workers.
J.R. Whelan 1:51
How often have you had your fill of the stresses of life and you just want to pick up and go somewhere like Paris or Rome? Well, your job responsibilities, your personal finances might not allow you to just pick up and go unless it is you work for an airline. And the perks don't end there. Middle seat columnist Scott McCartney is on the line with us. He's got some details. So, Scott, most airlines let their employees fly standby for free and their competitor staffers for close to free.

How long have employee standby (non‑revenue) travel perks existed in aviation?

J.R. Whelan 2:19
How long has this been going on?
Scott McCartney 2:20
You know, as far back as anyone can remember, the early days of aviation. Back then, airplanes weren't very full. There were empty seats. There were a lot of reasons why airlines needed to move employees around and things like that. And so it just became a perk of the job, an incentive to get people to come into the industry. And once they get addicted to it, they're unlikely to leave, even if wages are low or work is stressful and hard. It was a great perk for people. And it's just grown. It's just persisted. There are more than 200 airlines around the world who fly their They're competitors for, you know, basically 10 percent of a fare. It's just unheard of in the business world.
J.R. Whelan 3:09
You know, you mentioned moving employees around. There seems to be some business reason here for the perk. It allows employees to experience the levels of service and also it allows some employees to commute if they if they need to.
Scott McCartney 3:22
A lot of people do commute. It can be a controversial thing in terms of getting the required rest before you start work. But, you know, pilots can live just about anywhere and fly into what crew base they're flying out of or wherever they need to pick up the first flight of their trip. It's quite common in the business. When an airline closes a hub or moves people or moves flights, rather than paying to relocate their employees from one part of the country to another, they just let them commute.

Why do airlines offer free or near‑free travel to employees and competitors?

J.R. Whelan 3:54
Now, these employee standby tickets are known as non-revenue. Can these people be bumped if the plane fills up with passengers paying market price for tickets?
Scott McCartney 4:04
Yeah, they can. They're typically the last to board because you're clearing paying customers off the standby list or employees who have priority because they need to. You know, they're moving pilots around for a flight or that kind of thing.

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