Originally Posted by
pbuntrock
I believe that the airlines are yet again making huge mistakes. They are always looking at current conditions and making short term mistakes; look at US and the $1 coke fiasco. Sure planes are full now with consolidation and reduced capacity. But we are clearly headed in to an increased fuel cost environment; higher ticket prices. This could mean a 10% to 20% fare increase. The business has always been cyclical, your best customer carry you through the lean times.
For leisure travelers and Kayakers travel is truly optional. As soon as prices rise they stay home, not move to another airline. Your elites even at 25k to 50k often have to travel for business even with price increases. So, do you lock in your good customer or roll the dice and look at just the next quarter? I expect early next year as prices rise; lots of promotions to keep your elites even at a low level. It would have been much cheaper just to treat people well in the first place.
I going to have a big laugh when yet again an arrogant management team and a bunch of newly minted MBA’s screws up a business.
Your observations about trends may be right, but that doesn't translate into the smart thing being to keep giving the same benefits to silvers. They do need to keep their good customers, and apparently they decided the cut for valuable benefits is higher than that level.
Leisure travelers barely make airlines any profit, and they've become fungible. They want the high-dollar-value passenger to choose UA because they are sure to get a better seat than an airline that has given it away already to a silver elite.
Also, I would say that airline management is actually a bunch of the smarter business groups out there -- not many of your "newly minted MBAs". They are just in a bad industry.
The way most people are thinking about loyalty is so far behind the industry, I think. UA, just as an example among others, clearly is moving towards (or wants to move towards) revenue based rewards. They are trying to pull everyone, kicking and screaming, to accept a new incentive system. Just wait until they institute a ticket-spend-based miles/loyalty accrual. (Oh wait, they did that already)
A couple thousand miles flown does not simply equal loyalty (or financial value for the airline) any more because of how cheap fares are. [Aside from the link that people who fly more than say, 50,000 miles correlate more with high value and loyalty out of habit and convenience.]
Vote with your dollars, but I'm guessing that as a silver, your dollars are not as valuable, or irreplaceable as you think...