invisible

Just outside of the box thinking. What would be result on profitability of the airline if all CPUs and and instruments are replaced with miles, miles+cash and cash only upgrades?

In other words, you won't get any 'free' upgrades. However upgrades are available from any fare class and you have to pay for it, using any above mentioned options.

The amount of you pay depends on status - it is most expensive for GM and then gradually decreases with increased elite status. So 1K for example would need 1/3 of number of miles comparing to GM.

Any thoughts why this approach is wrong?

mahasamatman

It would make status pretty much meaningless. Though I have always advocated getting rid of CPU and bringing back the e-500s, making everything instrument or miles-based.

Baze

Only sounds like it would benefit United and not the people flying United. As far as upgrades go. Don't like it.

sbm12

Only if the main value you find in status is the upgrades. That's not the case for me so such a change would have minimal impact on me.

Such a change would leave the program rather similar to those of the rest of the world.

JetAway

Since TODS and other types of paid upgrades and discounted premium fares seem to be the future for most airlines, this idea has some merit. I particularly like the idea of a sliding scale for cash upgrades, based on status, and available at the current upgrade windows.

mahasamatman

Not the main benefit, but the only benefit (at least for 1K). Without that, there's no difference between Platinum and 1K.

invisible

Why, explain please

Not really.

See, if I understand correctly the trend towards which airlines and FFPs are going now, it is pretty much following: it does not matter how many miles you fly. It matters only how may you pay (us) for it. New earning scheme is showing exactly this.

In exchange, an airline offers discount to FFs with upgrades - your status (i.e. the amount of cash you paid to us) will determine how much (less) you are going to pay for the particular upgrade.

What is will give to an airline:
- increase bottom line, cash matters, miles don't.
- reducing liability assets in form of passenger miles
- ability to offer new premium products - properly designated Premium Economy would be one significant change
- replace of domestic F with international C class with the same level of comfort/service
- ability of use bigger planes on the same routes: if SFO-EWR was serviced by 737/57/67 now it is possible to put 777/787 there due to increased demand

sbm12

Sure there is. Might not be differences that you value, but there are differences between each of the tiers.

http://www.united.com/web/en-US/cont...r/default.aspx

But that's not the way status will be earnt in the new scheme. :-:

And it is not clear how you are deriving increased demand and a need to up-gauge aircraft based on offering fewer complimentary upgrades.

mahasamatman

The mileage bonus and credit card rebate that only half the members can take advantage of are hardly differentiators worth a 33% increase in qualification requirements.

PV_Premier

i'm actually rather enjoying the relatively high frequency of competitive F fares domestically. i recently paid $410 one way for SMF-JFK in discount F on DL, and would continue to happily pay that at the time of booking if that fare is offered consistently. two benefits to me -- i'm confirmed in F at the time of booking, AND i can fly 50% less frequently and still earn the same EQMs that I would earn if flying on a coach fare that usually sells for $200-250 one way.

i'd be good with a $$ or miles based sliding scale based on status and segment length if the chart was published and consistently used. the problem i have w/ the current "TOD/UFC" system on UA is that it is a reverse sliding scale (best offers seem to go to those w/ lower or no status) and it's inconsistent (people are routinely reporting $79 for IAH-LGA when i'm seeing the same offer for STL-ORD).

sbm12

Like I said, you might not find value in them, but there are differences.

Adrock1976

I think it greatly depends on where you are located. With HNL as my home airport, I RARELY don't clear a CPU...which is great for me. If I was based in SFO or ORD...it might be a very different story. YMMV.

Also, as others have said, upgrades is only one benefit. While it is great for me, others would say SDC, free re-deposit of award miles, or no change fees means the most to them.

harryhood

I'm not sure CPU's are reductions in profitability. If you assume the airlines in general (and UA in particular) are good enough at forecasting demand for F seats on domestic flights, and that they can know with a fair amount of reliability exactly how many passengers will buy tickets up front (vs buying Y and waiting for CPU), CPU's could be viewed as freeing up coach class space that might otherwise go unsold. And because CPU's often process close to departure date, the fares UA can get for Y seats are higher.

In other words, CPU's move elites up front to seats that would go empty and then let people who would not buy F seats buy into Y at higher Y prices.

Maybe a flawed theory (which ignores the effects of TOD or close-in buy-ups, to be sure), but one that has some merit.

Baze

The OP is also suggesting get rid of RPU's and GPU's also which your scenario has no effect on.

PushingTin

I think it is eventually going to go to an online auction for the upgrades on the day of travel, maybe even at the gate. Miles, cash or a mix. Under the new way of getting miles based on fares, it would benefit the elites because they'll have more miles. It would also help sop up all the miles out there.