Quick heads up before getting started: for issues arising for specific travel waivers on UA please see → →
https://www.flyertalk.com/forum/unit...ch-2020-a.html ; for a more general discussion of the Corona Virus please see → →
https://www.flyertalk.com/forum/chin...ona-virus.html (also note there's a wiki in this thread linking to other relevant threads too).
That out of the way here's my question: from a UA customer perspective, what is the tangible fallout to be expected beyond flight cancelations from the current big picture issues UA is facing?
For example, if UA effectively suspends its China services for a quarter would one expect to see more widebodies deployed on domestic turns - especially if doing so helps mitigate the lost capacity from the ongoing 737MAX groundings and delayed deliveries?
FWIW here's my take, much of it stemming from a central philosophy I have:
the person who holds power in a relationship is the person who holds the power to walk away.
1. If demand falls, UA will have to increase its attractiveness. Whether that's cheaper fares, more miles, better upgrades, I do not know. But this strikes me as being different than management's stance during 2017/18/19 where you saw UA adopting a less customer-friendly stance (rising thresholds for PQDs/PQPs), dynamic award pricing, pushback against Chase, etc. Big picture take away: if UA all of sudden finds it needing customers MORE than customers needing UA, the power dynamic shifts in favor of the customer meaning UA's going to have to offer more, not less.
2. If businesses curtail travel to Asia (or just in general) and/or if road warriors are hesitant to travel, the now-determined-by-revenue-premier population will plummet.Not only are less road-warriors traveling, but those who still are may be doing so on cheaper fares due to less demand - see the prior point. The take away here for me is by directly linking Premier Qualification to spend - and more spend for 2020 when compared to 2019 - UA will have raised the bar for requaling whilst the bottom falls out due to demand and pricing falling.
3. UA's gotta do something with those widebodies. My kneejerk reaction is they'll be assigned to routes who can use the extra lift (e.g. central Asia, Europe, t-cons, etc.) and then you'll see a trickle-down effect across the network. One silver lining from this is - assuming domestic demand stays strong - the lost planned capacity from the MAX groundings and delayed deliveries is no longer (as large?) an issue.
4. Dynamic award pricing will be interesting to watch. Very curious to see how M+ handles award pricing now across the M+ ecosystem: 5k domestic awards, "specials" awards based on destinations, PN/PZ availability, STWL pricing, and so on. Point is UA built in all these things to leverage what they forecasted to be increasing demand to extract more miles/points/PQPs from us. However, if the bottom falls out on demand for a sustained period of time (i.e. 1 or more quarters) then the tables turn in our favor.
5. Over the past five years UA's encouraged once-loyal customers to become free agents...and free agents those customers became. The most telling example I see of this is UA (trying...snicker) to push back against Chase's CSR and raising PQPs-née-PQDs in 2019 when DL and AA did not. Any inertia felt by once loyal customers UA could capitalize on was
squandered expended in a short-sighted killing of the golden goose. Now if demand comes roaring back, UA will have bet right but if it remains depressed, UA will have to work all the harder to woo back the customers they pushed into free-agency...ties into point number 1 about UA needing to increase their attractiveness.
6. BOHICA. Self-explanatory. I hope they don't cut too deeply into the PL lounges.
7. Doubt Premier Qualification Requirements will increase for 2021 - they may even drop. Self-explanatory. Ties back into points 1, 2, and 5.
...there are undoubtedly others too but if I had to distill what I currently see down to a one-liner it would be: decreased demand coupled with excess capacity will lead to more distressed inventory (read: upgrades and awards) and probably year-end "challenges" to help round up the premier / GS numbers.
Curious to see what others think.