Originally Posted by
sbm12
And CO can do a limited version of the same by restricting the ZE inventory on specific segments. When I buy a TPA-ONT H-Up that includes the IAD-LAX/SFO/SAN segment that UA probably would rather sell for more money to someone else. Under CO's system I'd probably stay in Y on that segment - at least until much closer to departure - than with the UA system.
I'm not completely convinced that the CO approach ruins revenue. It mostly covers domestic markets where paid premium levels probably aren't as high. Rather than just getting minimal whY fares CO is driving incrementally higher revenue from some passengers who otherwise wouldn't be able to cover the F fare under their company's travel policies.
Well there are extreme examples in all scenarios. Just like when I bought a CO ticket $155 all in SMF-MEM RT B-Up and was immediately seated in F. They weren't exactly expecting to make up the difference with their first class drink charges (though we did buy one with a chit).
I think looking at it overall, most people booking an H-Up in that TPA-ONT market are probably booking TPA-DEN-ONT which was probably UA's intent.
As for CO's approach, I disagree with your assessment that it "covers domestic markets where paid premium levels probably aren't as high." The problem with the approach, IMO, is that it covers every domestic market. In fact, based on a
current thread on the CO board, there appears to be somewhat of an expectation that a customer on a B-Up
will get their upgrade.
That is not necessarily the case, as it's not something CO can uniformly deliver. It is also a side-effect of their approach.
Anyhow, with a larger subset of customers paying for C or F, it's going to be interesting to see how this one plays out. The fact that CO is issuing CR1s may be an indicator of how they foresee the revenue spread.