Originally Posted by
Brattflyer
Is UA's strategy really working or will it come back to bite them at the next business turn down? Will their loyal customers come back when the fares go down. Who's buying these high priced fares a month in advance? Is there anyone else who's been priced off UA?
Long term, flat/lower domestic capacity will mean higher domestic fares on UA (which end up being uncompetitive as a function of fuller planes), and fewer loyal customers/elite members from domestic travel.
Just as an anecdotal example, the Chicago suburb where I live is incredibly inconvenient to MDW, but many of my friends usually fly WN because it is so much cheaper than UA/AA. I don't mind paying 25% extra to fly UA because of the perks I get as 1K (and the fact that ORD is more convenient), but even myself have flown WN when UA was 4x the price.
I guess it really boils down to UA's strategy for developing new elite customers. Perhaps the idea is that new elites will come from customers with primarily international travel, and that excess domestic capacity just isn't worth the cost.