Old Mar 17, 17, 10:27 pm
Join Date: Feb 2008
Programs: 6 year GS, now MM Jeff-ugee, *wood LTPlt, VX Gold, SkyPeso PLT
Posts: 6,081
Originally Posted by minnyfly View Post
I remember it being something like 80%. But whatever it exactly was, elite customers are not the bread and butter of any airline. They're the cherry on top.
I made a lot of money buying Delta and VX when Jeff was in charge with similar ideas. Come back Jeff, come back. Give me another similar investment opportunity.

Originally Posted by minnyfly View Post
You've only seen it once? How often to do you fly DL anyway
80-100K+ MQM, but then I'm buying my tickets, perhaps passes get a different view of things.

Originally Posted by AirbusFan2B View Post
Given UA's weak financial performance vs DL, does anyone think UA's business model with 'selling' upgrades might be backfiring?
It has for me. Pay UA $580 RT SFO-SEA (often cheaper, they are the low price leader tat this point, get offered an upgrade for $49 bucks, no meal. Pay Delta $580 RT SFO-SEA, get upgraded, get a nice meal. Advantage Delta.

Originally Posted by AirbusFan2B View Post
Incorrect. Delta has stated publicly that 5 percent of its customers account for 26 percent of its revenue. Believe it's similar on UA. UA is actively in the process of pissing off 5% of its customers (its top elites.) Beware, UA. Some city pairs have real competition, e.g. ORD-LAX & SFO-NYC.
AA has said that 50% of its revenue comes from 13% of its elite fliers. https://qz.com/533501/half-of-americ...its-customers/

Here is a cite on the 5% are 26% of DL's revenue. http://fortune.com/2015/11/17/secret...-elite-status/

I don't know a recent figure for UA (they have lost so much high value traffic they are now MUM on these type of figures) but historically United was the MOST dependent on a core of FFers. In 1997 they said that 9% of their traffic represented 44% of their revenue.

Think about that 9% of the bodies are 44% of the revenue. And elites are more important than that: it costs the same CASM (cost per seat mile) to fly super elite guy weighing 250 lbs with his bags and paying 45 c/mi as it takes to fly kayaker weighing 250 lbs with his bags and paying 8 c/mi.

United is in the dumps because those able to/willing to pay more don't want to put up with United. In contrast this is why Delta is doing so well, and why VX survived.

Originally Posted by YadiMolina View Post
I don't think of airlines in a similar fashion because of the order of magnitude of spending. I spend $1000 a year on BestBuy. I spend $20,000 a year (of my company's money) on United. I don't expect an upgrade, but I am interested in a perk.
$20,000 is "bread and butter" not special. But people - unless they are flying a gazillion miles - paying $30,000-40,000- $50,000+/year are the profit margin. Absent them, the major airlines would not be profitable.

Last edited by WineCountryUA; Mar 18, 17 at 12:44 am Reason: Discuss the issues, not the poster
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