FlyerTalk Forums - View Single Post - Wild speculation on UA's new strategy for Polaris, Upgrades and Award Space
Old Feb 16, 2019, 6:12 pm
  #67  
BeanTownBoy
 
Join Date: Nov 2006
Location: BOS
Programs: UA 1K (2MM); AA LT Gold (1.9 MM); SQ; WN; DL; "Bonvoy Ambassador""
Posts: 398
@fellow Ft'ers: this is an excellent discussion--it is much more than snark or bomb throwing. Thank you! I think this all adds up to UAL's strategic prediction of what it takes to maximize profit, not just revenue or goodwill. A couple of observations: UAL has exited the first class international market. Therefore, they have determined that they are not going after the ultra high dollar customer (who can't do NetJets or own or have a fractional share of their own bird). That also means that they can reduce the labor necessary for a bespoke/high touch soft product and add more J seats than the space required for F. The actual dollar cost of catering for first class food and champagne/wine/drinks is negligible for paying first class customers. Heck, even bringing back real caviar for international first class customers has to be less than $100 per pax. Polaris was supposed to be a game changer for J, but once implemented, it was too tempting to shave the costs, especially when extrapolated at scale (e.g., if we can save $40 per pax per seat, then that results in an additional $X million to the bottom line and a bonus/promotion/pat on the back to the one who suggested it). Last, the implementation of dynamic pricing (with respect to tickets, awards and upgrades) helps go after the last extra dollar. If sporting events can adjust the price by opponent, day and individual seat, then airlines can certainly do it. Last, IMHO I suspect that there is an ongoing experiment to see how much can be shaved or reduced before travelers with discretion will book another airline (especially if you have a corporate contract with UA then it is going to take a lot to get the ordinary staff who have to comply with travel policy to switch to another airline). I welcome others' thoughts/experiences (as if I had to invite FT'ers to weigh in!).

Last edited by BeanTownBoy; Feb 16, 2019 at 6:18 pm
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