FlyerTalk Forums - View Single Post - 2020 MP changes — Will you switch loyalty programs? What program will you switch to?
Old Oct 17, 2019 | 10:21 am
  #203  
porciuscato
All eyes on you!
10 Years on Site
 
Join Date: Jul 2013
Programs: DYKWIA; But I'm a "Diamond Guest" Delta Diamond, UA 2MM
Posts: 2,375
Originally Posted by JimInOhio
Am I reading this right... 44,000 miles, 15 segments, and only $1,059 spend? If true, I can see why UA wants you to "go away".
That's based on the fallacy, which I see repeated throughout this thread--that people on low fares represent a "loss" for United. The reality is they fill seats that would otherwise be empty. As long as the marginal revenue for that seat exceeds the marginal cost (i.e. the fuel cost for an extra 180lbs, the cost of printing the ticket, serving the extra soft drink, etc.), it makes sense to sell him that seat. And I'm pretty certain United always prices seats above marginal cost.

When this guy takes his $1059 elsewhere, that will be $1059 of incremental revenue that United doesn't have.
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