Originally Posted by
cfischer
Of course now UA needs to follow DL's lead, no question. However, I sure hope they will not be as incredibly irresponsible and stupid to do more than extending status.
Originally Posted by
rankourabu
As a byproduct of this, in late 2021 and all of 2022, everyone will be elite....
Originally Posted by
villox
I predict travel will not come back strong enough even in 2021 to make a difference in how many elites there are even if they did roll over.
The concept of monetary velocity "V" is useful to try to think about the impact on the elite experience.
Consider "elite velocity" which is the number of times an elite member is in a position to use an elite benefit - say to score CPU or request to redeem PlusPoints for an upgrade.
If UA made every single American a GS through 2021, but no one flew, the elite velocity would be zero (0) and even though a wide array of elites exist and are eligible for a CPU, none of them are in a position to actually use the benefit. It would like if the US Treasury deposited $1,000,000 in every American's checking account but people were too afraid to spend the funds. The base money supply will have shot up but (hyper)inflation will not have taken hold as those newly created dollars are being saved/hoarded and not chasing the same amount of goods and services meaning prices remain stable. This is how I read DL's logic here: demand is shot and even if the elite ranks swell on paper but the actual number of medallion members flying is low, there won't be an erosion of benefits.
If UA accurately forecasts demand not rebounding to late 2019 levels until after 2021 then they should juice the elite ranks to drive business on the margin to themselves. The low demand implies people are flying less and therefore the large paper uptick in elites won't actually result in harder benefits (e.g. upgrades) due to a low elite velocity. Now if UA, or DL, get it wrong and demand roars back, they'll be issues as there won't be the limiting effect of low elite velocity and you'll have a very large pool of premiers/medallions going after the same number of benefits.
Originally Posted by
mahasamatman
Or maybe addressing elite status is about number 1,000 on the priority list?
It's always easy to quarterback from the armchair but I'd argue UA's comms on this subject have lagged behind their industry peers. Their initial communication in early March was tone-deaf and a simple "we're focused on other issues right now but we are actively reviewing ideas to help our loyal premiers retain their status...bla...bla...bla..." was certainly doable as evidenced by other major loyalty schemes doing just that.
Originally Posted by
cfischer
Hopefully, UA will be coming up smarter ways to get folks back on their planes once this is all over; something that does not create a monster problem 2 years down the road.
If you were in charge of M+, how would you respond in a smarter way?
(FWIW uptread I suggested a [ x ] PQP promo would allow UA to discount the premier thresholds while maintaining the published levels and could be extended again in 2021 if needed. Don't know if that will work now seeing as DL was the first to move here.)
Originally Posted by
narvik
Would it have been so difficult for UA to be the leader here?
UA leadership's philosophy rests upon the cornerstone idea of "customers need us more than we need customers". This illusion can be papered over only as long as demand is strong. When demand fails the illusion cannot be maintained and now leadership is having to grapple with the idea of "what do we do if customers are actively lining up to fly us?".