FlyerTalk Forums - View Single Post - Speculation: elite inflation in 2012 due to Elite Maximizer?
Old Dec 15, 2011 | 2:33 pm
  #39  
nova08
 
Join Date: May 2009
Location: PHL
Posts: 2,842
Originally Posted by tanlines
OK, I'll bite....

My crystal ball says EMs: a) are here to stay, b) will count towards MM, and c) will count towards elite status at any level.

As long as they're priced correctly, the net revenue generated by an EM purchase is >>> to the airline than having that person "earn" the same amount of PQMs by actually flying for them..

Consider two "end of year" scenarios...

Buy 4 Transcon mileage runs at $250 each. Airline "earns" $1000 for your purchases MINUS the costs associated with your actually being transported on those flights, and you get enough PQMs to requalify. Net profit to the airline is clearly << than the $1000 paid.

However, for someone buying the equivalent amount of EMs, the airline immediately a) "earns" the full amount immediately upon payment, b) has no transportation costs associated with your buying them, c) has no future 'liability' that might results from not being able to transport you timley on all of those flights (e.g., oversells, MX, compen$ation, etc.), AND d) still has your 4 MR seats available to sell to someone ELSE for additional (and perhaps even higher incremental) revenue.


The whole concept of EM sales is just plain crazy... A transportation company actually getting a subset of customers to pay for NOT actually being transported!!!

When priced correctly, EMs are a windfall of cash for the airline from the few people that are willing to "pay the going rate" to get them....

No matter how small, the revenue is still net-positive on the balance sheet, and thus EM sales aren't likely to be ending anytime soon...

Say it with me... "WINDFALL!"
B. ) doubt it. If premium cabin EQM bonuses don't count towards MM then I find it hard to believe EM's will count
...
C.) while UA incurs no liability for those specific EQM's you still are flying. You have to have a flight planned in order to receive the EM offer. And I don't think many people will buy the flight buy EM and the refund the ticket
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