Originally Posted by
j2simpso
If the economy keeps doing well and the load factors remain as they are the execs will look like geniuses implementing these new branded fares. If on the other hand we enter a recession and air travel tapers off they’ll sure regret shooing off their “bottom feeder” elites through reduction of benefits and increased earn requirements. Can UA make more marginal revenue by charging their lower and mid tier elites more for the same fare? Absolutely! But what they gain in short term revenue they’ll lose in long term loyalty. Many of us international travellers choose UA because it offers the lowest fares of the legacy, the best schedule, and good perks. When they start introducing complications for that like Economy Light (now Basic Economy) and new fare classes that in effect box in us k fare travellers those benefits erode.
I am not referring to those travelers. There are plenty of us that do 10-20k a year on our own dime (or with OPM). Personally I work for myself and make my own travel decisions. Some of what they do does in fact impact me - I have started buying F for some flights where before I might not have. That being said, I do it on whatever carrier makes sense. To me, there is no difference between UA/DL/AA first. In fact, on some of the international routes the non-US carriers are WAY better.
So take someone like me on which they make money and then make it so that I am airline agnostic. They have effectively made themselves a commodity for all but the biggest spenders. This is where it gets stupid IMHO - big spenders are likely less inclined to remain loyal to an airline. Why? that has been my experience when I buy F. I don't care who it is - just get me there and treat me well.
The economics of air travel is that fundamentally the product is a commodity. Sure there are levels of comfort one can purchase (F9 can downright torture) but I think the elasticity of that comfort is low for most but the travelers who fly $20k+ a year. Most travelers book at the lowest available fare and use upgrades to move up. Some book at higher levels, but I can't imagine that person cares too much about who they fly.
So, either I am way wrong about the economics of air travel (which is possible) or UA is doing something extremely stupid and short sighted. Maybe the average air traveler will continue to fly whoever they fly no matter what. Maybe hub captive people will just accept everything the airlines force on them because they have no choice (in there mind). I don't know - but at some point this has to begin to look like a netflix-esque decision.