Old Apr 19, 17, 5:44 am
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Originally Posted by spin88 View Post
This is why the "just cut price and it will all be fine" folks don't understand the situation. United has basically the highest costs of any airline. Lots of brand new planes, new higher wage rates, and high landing fees at certain hubs.

United just announced its 1Q results, it made only, $196M after special items (see http://www.flyertalk.com/forum/28193033-post9.html and entire thread). That was down more than 2/3 from its 1Q 2016 performance, due to costs being 6% higher. ( see http://www.flyertalk.com/forum/28194084-post11.html). With $7.174B in Passenger revenue, if United cut prices by 2.8% it would have lost money.

United will price cut, because if there is less demand, lower fare buckets will stay open longer, making United cheaper. United may also lower fare buckets, but I expect discounting to be the result of less demand, not changing fare structures.

IMHO United would be better to spend extra $$$ on a customer service improvement plan, with firm guarantees for passengers, something United can tout. This appears to be what United is doing with its April 30 "roll-out".
United has a big credibility gap to overcome.

I am interested to see what is announced on April 30th, but have little faith that it will mean firm guarantees, with the possible exception of a firm guarantee to not drag bloody bodies off their planes anymore.

The lack of consistency with all things United does not lend itself to executing any cohesive customer engagement strategy.
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