Originally Posted by
entropy
...the danger for UA, is that there is a very limited # of people willing to pay $1000 for a mid-haul domestic ticket. And the dirty secret they never want to admit is that you NEED the lower fare passengers to fill most of the seats, that base level of VFR demand is what keeps the planes there for those high yield passengers. Lose that base level of traffic, and the frequencies you want to support don't work.
I don't think that's a "dirty secret," it's a basic tenet of yield management. If it weren't for low-yield passengers there literally could not be a mainline airline, so I'm always amused at the high-cpm / OPM flyers posting about how happy they are that "kettles," etc. are being run off. Without them you'd either have an airline of CR2s with 1+1 F seating charging $10,000 per transcon ticket, or you'd have no airline at all.
All those people crowing, "United doesn't need your business!" to people spending less than $10,000 or $15,000 per year are 100% dead wrong.
As for Frontier, if the United slimmed & dark A320 I had to fly transcon last week is any sign of the times, Frontier offers a more comfortable, more reliable product with better service at a lower price, so I think United ought to be worried.