Originally Posted by
findark
I don't want to single you out on this, and I understand your point, but especially from the perspective of a UA stockholder, I think it's important not to lose sight of that. Many other industries make do with no loyalty program at all, and manage to keep customers by offering a quality product at a favorable price compared to the competition.
....
Loyalty programs can be helpful in driving some decisions, but I hope nobody is suffering an inferior schedule, worse product, etc. in return for some perceived loyalty benefits.
There are few consumer products where someone spends $10-20-30-50+K/year on multiple purchases and has multiple options on each purchase. Closest I can think of is Groceries. But it is not in any way of the same magnitude. In addition, Mileage programs have one other feature making the situation different,
benefits go to the flyer, who is usually the person selecting the purchase, but often the person paying is their employer/company.
If United always offered the best combo of price, fight time, and product, then they would not need a mileage program. But, other than out of two fortress hubs (IAH and EWR) at any one time most people have multiple options. Before the advent of AA's program, people would buy each leg on whatever airlines, the idea behind AA's program was that by rewarding loyalty, people would still fly AA
even when it was not absolutely the best combo of price/schedule/product. As a result AA would get more business, and particularly from business travelers who were not flying on "excursion" fares (as they were called back then).
To the extent that United cuts back its "benefits" well then with each purchase it gets easier to stray. Going somewhere, well Delta has a nicer aircraft and a slightly better time, discount F, so I buy. Oh well better experience, so I buy again and then I figure "oh, and they give upgrades, and if I get to DM I get lounge access. Well since United does not give upgrades, well then perhaps I ought to switch my travel to Delta and get those benefits....
Originally Posted by
5khours
Just my $0.02.
5. The problem with the TODs is that they allow UA to maximize revenue on any given flight, but IMHO they have a long term adverse effect on retention of their best customers which I think UA has underestimated and which I think UA can not accurately measure.
The modeling is not difficult, but you would have to want to do it. Pick a random sample of elites current/former and ask them what their travel patterns are, and who they are flying, and what they think of each airline. If they answer you are flying them less, ask a series of detailed questions as to why.
I in fact got one of these detailed surveys (and got paid to take it) from Starwood the other day. I'm lifetime PLT, and my stays dropped last year, clearly they wanted to know why. It was well designed to look at (a) if they had actually lost business, (b) to whom, and (c) why.
Then you compare the former, and currents and determine how much they dropped in spending and why, and compare it to the new elites you got (and sample them too...).
Under Jeff United did not want to ask these type of questions, as they did not feel they needed to, they just KNEW that no-one would leave as they had to fly United.
Originally Posted by
sinoflyer
I'm interjecting to offer my POV that this is a discussion unique to FT, and that our views are clouded because many of us overlook the fact that we are only a subset of a small subset of the traveling public at large.
Many of us can't seem to grasp, or are reluctant to accept, the reality that many "HVF"s don't fly regularly, aren't "elite" nor do they seek it, but nevertheless pay high average fares because they are compelled to do so for whatever reason, not the least of which company business. Their choice of airline/flight is based on the convenience of a nonstop or schedule, not the bourbon in the beverage cart or what's playing on IFE. And if they don't have to fly, they'd be doing something else instead of obsessing over the UG list at the 100/96/72...24 hour windows. Just using the theoretical 5/95% split (and as reminder, we FTers represent only a subset of that 5%), there are more than enough high-fare-paying "kettles" to draw incremental revenue to offset the comparably handful of "elites" going somewhere else. The truth is, the airlines hardly notice that you're gone.
The idea that there are lots of people paying high fares that just pick random airlines is contrary to everything the airlines have said for years. I posted the quotes above, all of the big US carriers have said that a massive part of their revenue comes from a relatively small number of frequent travelers.
https://www.flyertalk.com/forum/28051886-post73.html
And while their are some companies that via corporate deals make picking another airline impossible, most don't. And my experience as a lawyer, with lots of domestic travel for many years, is that I nearly never run into someone who is not tied into a particular airline program. Some fly two airlines, but I can count on my hands the number who were truly agnostic.