tom911

http://www.businesstravelnews.com/Mo...irlines&a=mgmt

Additional details in the linked article.

Darlox

Wow... naively, I'm going to speculate that PQDs may have taken a larger chunk out of the corporate elite ranks than they projected. If this was just operational problems causing HVF flight, they could loosen the status match terms, but would want to keep the status period annual, and/or keep the re-match period static. Otherwise, you're matching in a potentially-large number of people who could become long-term deadweight after their qualification period -- a strategy directly opposed to where MP has been heading.

By implementing this as they have, it could imply that they culled the ranks a bit too sharply, and now are trying to find a way to target re-acquisition of long-term elites, in the hopes that status will drive revenue from corporate sources.

Interesting...

JBord

Hmmm...I don't know that this correlates to PQD's or loss of elites. UA would rather have fewer elites but still fill their planes, at least that's what I've taken from the last few years. Maybe there is some indirect correlation. But this would indicate to me that they haven't had success winning, or winning back, corporate contracts and they're sweetening the deal.

hockey7711

Great, more pax who don't know where the FC lav is located!

UA-NYC

They're doing this in tandem with bumping people up to higher status levels even if they were fairly far short of PQM...quite interesting

teeceedee

There were a lot of people saying that PQD requirements weren't going to affect elite numbers. I don't know if it's causation here, but this does imply something changed.

I was looking forward to Feb 1st too, if anything to see if there were any significant changes

Darlox

That was my initial reaction too, but the specific changes they've made don't make much sense in that context. Given that it's a 180-day CHALLENGE match, it doesn't seem likely that this would factor heavily into the acquisition or renewal of corporate contracts. This would more impact staff mix within existing contracts. (Status freebies and upgrade certs, not challenges, would have a bigger impact on acquisition.)

The 12->22 month term expansion is really what makes me think that there's something going on here other than straight-up corporate sales. That goes counter to basically every MP strategy change that has been implemented in the last 2 years. It could be that corporate sales just won a conference room battle to "work around" the current rules, but I just don't see that having happened if those rules weren't directly impacting corporate sales' ability to do their job!

channa

It's definitely a change of direction to show lenience in this area. Perhaps they realized that the changes are not as attractive.

MileagePlus has long been the golden goose for United. When they added PQDs, they hampered the program, and with revenue-based earnings, they practically killed it for a lot of people -- customers they're clearly interested in based on the fact that they're extending their status even if they failed to requalify with PQDs, even by a significant margin.

Meanwhile, DL has the superior product these days, with a similar program, and to some extent, better award availability with no partner premium and SWUs that are unrestricted. If someone is going to play the mileage game, Delta is a much stronger contender than they ever were. MileagePlus no longer carries the same weight as it did years ago, or even just a year ago.

Combine the operational and technology mess that is United, and maybe they realize now that pushing away Premiers is going to make it very costly to recover them down the road, especially once they've become accustomed to another carrier and become vested in their program.

If they did realize this, it's too bad they imposed these changes on the former head of MP, leading to his departure, before they realized this.

Darlox

Let's not go TOO crazy here... I'm seriously digging DL's product, and they've gotten about 60% of my Int'l business over the last 12 months. But SkyPesos is still SkyPesos. The 2015 changes look like they may be improving the situation somewhat, but they have quite a distance to go yet... Unrestricted SWUs help, but partner awards are only valuable if you actually WANT to fly their partners!

If PQDs are a problem, we ought to see that shake out short-term in corporate flight to AA. It's still too early in the merger to tell whether or not that's actually going to happen, because the noise in the numbers is huge right now.

It's also possible that only UA's implementation of PQDs will be a problem. There's certainly not as much chatter over on the Delta board of people being grace-renewed after missing the PQM/PQD requirements. Also, the MQD waiver all the way up to Diamond means that DL doesn't have the "1K disconnect" that UA has implemented. For corporate travelers on mainly Int'l hauls, that can still be huge...

raehl311

Or somebody did some math and figured out having corp clients have elite status simply caused them to buy more tickets on UA, so it's worth giving the status to them.

Or pegging mileage earnings to ticket price plus revoking elite benefits for award travel purchased for others changed the dynamic enough that this made financial sense.

Giving out elite status doesn't really cost United much except the increased RDM. RPUs just change the order of who gets CPUs; GPUs might arguably drive more revenue through higher fare purchases to use C seats that would have otherwise gone to non-revs, and UA "loses" ancillary revenue like E+ or bag fees or SDC fees that they don't get if they're not selling the tickets in the first place.


And elites who don't fly don't really cost UA much of anything... so it's really just a matter of whether over those extra 10 months of elite status UA loses revenue because flyers don't buy more tickets to keep status, or gain revenue because flyers keep buying tickets because they have status....

CO_Nonrev_elite

I think United is just losing valued customers in general. I think they thought that adding PQD would make people spend more to get status, but generally many people didn't think it was worth it before and REALLY don't think it's worth it now.

Now United is trying to keep them, but letting them keep status doesn't fix the problems that United has.

kevinsac

We may never know ... but I agree with those who speculate they have realized some of their planning in past years has gone astray from reality.

cyborg

deleted

LA_Traveler

I was chatting with GS customer a couple weeks ago about Delta and UA. He has over 9M BIS miles with UA, and was telling me that Delta is actively calling and trying to recruit UA GS customers. What's interesting is that he said that the Delta rep he was talking to on the phone stated that Delta status matched over 15000 UA 1Ks in 2014. Not that UA cares about its 1K ranks these days, but perhaps there are some losses in the GS ranks as well. This might explain some of the recent GS benefits enhancements such as access to LH FCT on certain types of tickets.

JBord

I think this is it. They're trying to get the corporate clients back. It's actually similar to how pmUA acquired and retained customers. When people HVF's leave because of your operational issues (which is why corp customers left, it wasn't anything related to MP), you give them lots of extra benefits. That's why I and I assume others loved the old MP program and put up with a certain amount of ops issues.

Lots of good theories in this thread, but I still can't make any connection to PQD's. I see how those would cause non-business travelers to drop, but I just can't imagine it affected a significant % of business travelers. Maybe I'm wrong, but it doesn't seem logical to me and I haven't seen any stats that support it.