Originally Posted by
physioprof
My understanding is that 12-14cpm is barely above break-even for a commercial airline.
Sure, but the pricing model of airlines makes CASM irrelevant in determining the profitability of individual customers. Given UA is filling plenty of its seats with kayakers/kettles paying <8cpm (and sometimes much less), I'd say a 12-14cpm flier doing 100k+ miles BIS every year is nevertheless pretty valuable to UA's bottom line. If a lot of these 12-14cpm 1Ks leave, that's a lot of yield that UA is giving up if they can only find kayakers/kettles to fill the empty seats left behind.
So while no one would disagree that UA should probably pay more attention to HVFs than 12-14cpm fliers (although I'm not sure UA has done a good job at that either), I wouldn't be at all surprised if UA's financial underperformance is in part due to spurning previously-loyal customers in the 12-14cpm revenue range.