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The Waning EUA: Why CO Now Needs E+

 
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Old Jan 25, 2010 | 1:23 pm
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I am all for this too. It will also make the sharing of benefits on UA & CO in Y much more fair. I for one am not too happy about CO elites getting E+ and us UA elites getting CO "Premium" seats At 6'3" I can not take CO in Y.
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Old Jan 25, 2010 | 1:37 pm
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Excellent Post!

Another reason I could see adding E+ would be to differentiate from NW/Delta, especially going over the pond. I could already envision the NYC CO vs Delta Billboards now.
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Old Jan 25, 2010 | 1:42 pm
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I can certainly appreciate OP elites concern of Continental selling, what at first glance, appear to be cheap upgrades to non-elites before offering the same option to elites. Granted I have mainly been flying off peak, but I am 6/6 on EUA upgrades so far this month (I'm sure I just jinxed myself - thank you). The program may be adjusting, but abandoning Continental to United, etc. seems like an extreme reaction predicated on things, in addition, to this change. Maybe this is the last straw for some. It has been my perception after a year of lurking here on FT that IAH based Plats, basically, get a 50% upgrade percentage anyway and, for the most part, I can book a reclining exit row seat - the same seat as E+, based on my recent United transcon flying experience. The M fare option for Plats becomes very relevant to those that need to fly F. Gold and Silver status, for EUA's, is being marginalized, no doubt. Most airlines are trying to figure out how to generate additional revenue and F is an asset Continental will, and should, exploit. Most certainly it will be at the expense of some unhappy elites...honestly, I don't see E+ happening on Conti...seems like a huge expense at a time when they are trying hard to generate additional revenue - totally counter-productive...
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Old Jan 25, 2010 | 1:58 pm
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Thumbs down 2010 Upgrades: 0/6

Completely agree, J. Edward.

So far this year, I've flown 6 mainline domestic flights with NO upgrades.
Granted, the fare class was 4 in L and 2 in N class, but I would have thought that at least 1 upgrade would have happened.

In 2009 15 of my 32 upgrades were on L class fares.
Of my non-upgrades last year 7 of the 11 were in L class.
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Old Jan 25, 2010 | 1:59 pm
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Originally Posted by J.Edward

Bottom line: the EUA, as we knew it, is being fundamentally changed to better reward those who're willing to pay the airline more with the net result being incremental revenue and falling average upgrade across the system.
Yes - this is what we are seeing. CO gets more revenue by offering a $69 upgrade to a non-elite on a $200 ticket in favor of an elite upgrade with no extra revenue. The current system is - if we can get a non-elite to pay something for an upgrade (regardless of what they paid for their ticket) we get more revenue. Give it to an elite - no extra revenue.

I still do not see CO adding E+ without taking out FC seats.
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Old Jan 25, 2010 | 2:13 pm
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Originally Posted by cova
Yes - this is what we are seeing. CO gets more revenue by offering a $69 upgrade to a non-elite on a $200 ticket in favor of an elite upgrade with no extra revenue. The current system is - if we can get a non-elite to pay something for an upgrade (regardless of what they paid for their ticket) we get more revenue. Give it to an elite - no extra revenue.

I still do not see CO adding E+ without taking out FC seats.
My point was, Continental is not selling ALL F seats to non-elites for $69. They are selling $69 upgrades to non-elites at the expense of some Silver, and probably Gold, elites inside the T-1 window, for better or for worse...
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Old Jan 25, 2010 | 2:15 pm
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Originally Posted by nova08
The big question is how much is CO making by selling more buy-ups vs. how many paxs may move to other carriers because of the devalued EUA. If CO makes $x from buy ups and loses $y because paxs begin to see more value in other programs and switch to UA, DL, or AA; x better be more than y.

I know it is not that simple, but it has to be taken into consideration.
and some of that will be offset when those who fly other Carriers will hear that with CO you can UP your Elcheapo coach tkt and fly CO instead

After all the talk over all the yrs,Im unfortunately convinced that net net yr after yr its more or less a Zero net loss for every Carrier. As people will leave AA and go to BB and there will be those leaving BB and go to CC and those leaving CC and go to AA etc etc
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Old Jan 25, 2010 | 3:11 pm
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Just a thought. Sometimes a company will take drastic actions to increase short-term revenue at the expense of long-term revenue, because they anticipate there won't be a long-term. I'm not saying CO is another Skybus Airlines; I'm just saying maybe something is coming that makes CO care less about how loyal its elites will feel a year from now.
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Old Jan 25, 2010 | 4:39 pm
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Talked to a CO FA friend today. She can confirm on most of her flights F has had a significant number of non-elites(with CO elites in Y). She was laughing today because most of them don't even know how to get the tray table out. I told her what was going on with CO offering paid upgrades vs elites.

I just hope AA doesn't go down this path. EXP is way to good to screw up let's hope
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Old Jan 25, 2010 | 5:18 pm
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Originally Posted by 7182713
honestly, I don't see E+ happening on Conti...seems like a huge expense at a time when they are trying hard to generate additional revenue - totally counter-productive...
How is E+ an expense? As J.Edward points out, unless you're selling those last 6 seats, you're not losing any revenue, yet you're able to upsell on every flight.

Meanwhile, you're also saving fuel/weight on each flight since you're carrying around fewer seats.


Originally Posted by 7182713
My point was, Continental is not selling ALL F seats to non-elites for $69. They are selling $69 upgrades to non-elites at the expense of some Silver, and probably Gold, elites inside the T-1 window, for better or for worse...
I don't think this is isolated to just Golds and Silvers. Many Platinums are complaining in this thread and seem to be a victim of it.
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Old Jan 25, 2010 | 6:06 pm
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Originally Posted by channa
How is E+ an expense? As J.Edward points out, unless you're selling those last 6 seats, you're not losing any revenue, yet you're able to upsell on every flight.

Meanwhile, you're also saving fuel/weight on each flight since you're carrying around fewer seats.

Having to change configs on all the aircraft is the expense I was referring too...The argument for E+ in this thread is as a consolation prize to elites for not getting F - no additional revenue in this case..I understand others may buy up this inventory, but this isn't the reason posters want E+...


I don't think this is isolated to just Golds and Silvers. Many Platinums are complaining in this thread and seem to be a victim of it.
As a Plat I don't get every upgrade anyway...as I said, it seems like IAH-based Plats are 50%...simply giving people the easy option to use miles will reduce EUA %'s this year...I think $69 is too cheap to sell the upgrade to a non-elite, don't get me wrong, but E+ wouldn't change the game for me at all irrespective of the fact that I'm IAH-based and really don't have a choice...I flew United this past weekend - nothing great...E- was the exact same and E+ was a Conti exit row - I'll book M fares for F, roll the dice other times and, worse case, live with the exit row...100K here I come...all leisure I might add...
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Old Jan 25, 2010 | 6:28 pm
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Originally Posted by craz
..While I must do what's best in order to stay out of their horrible no-leg room coach seats.
Amen. Exactly why I went to UA MP two (2) 1K cycles ago.
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Old Jan 25, 2010 | 6:49 pm
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E+ & CO

What they should do is follow Uniteds example and offer priority boarding / security / E+ for the fees. I would be willing to pay more $$$ when traveling with my family to go thru security faster or E+ for the 6 hour flight . I paid for the B6 EML seats. CO needs to find more revenue so thats a reasonable way to do it . I would pay 50$ for the E+ seat instead of 15000 miles for first class. (although airlines seem to be giving away miles these days ) .
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Old Jan 25, 2010 | 7:51 pm
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Originally Posted by 7182713
I think $69 is too cheap to sell the upgrade to a non-elite, ...
But that $69 "upgrade" is actually just the fare difference in the price of the ticket the non-elite purchased and the price of an F seat, right? If so, the cheapness of the upgrade is offset somewhat by the more expensive actual fare paid.

CO is basically splitting the transaction into two parts. It is a psychology game that they are winning in many cases. Someone who might not spend the $400 initially will spend the $300 and then spend the extra $100 later. When that upgrade number appears so cheap the customer forgets that they already paid a decent chunk of cash to get most of the way there.

I'd love to see an E+ cabin but I don't think that it is coming. It would have a cost against CO in terms of seats available for sale. Even if it is only 6 seats per 73x that is 6 seats they cannot sell. With a consolidated LF of ~80% these days losing those seats is tough. There are too many flights/routes that are sold out too much of the time to give them up.

Unless you think the E+ section will drive enough revenue to offset that loss it doesn't make sense. What is the break-even point on E+ that would need to be realized? Something in the $5-600/flight range, I'd think. Do you think there is a chance to sell 10 or so $50 upgrades per flight to non-elites?
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Old Jan 25, 2010 | 7:58 pm
  #30  
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Originally Posted by channa
How is E+ an expense? As J.Edward points out, unless you're selling those last 6 seats, you're not losing any revenue, yet you're able to upsell on every flight.

Meanwhile, you're also saving fuel/weight on each flight since you're carrying around fewer seats.
Exactly. I feel like the initial resistance from Management was based on the failure of More Room Throughout Coach at AA and they never recognized that the two models are so fundamentally different, despite some surface similarities. It wouldn't surprise me if they never even did any real analysis back then.
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