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Quantitative Effect of New Elite Rules

 
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Old Sep 18, 2003 | 5:58 pm
  #1  
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Quantitative Effect of New Elite Rules

Does anybody, e.g. a lurking travel agent,programmer, that guy who wrote the CO award travel availability script, have a means to calculate the cost to the average CO elite of the new CO elite rules?

In other words, what is the mean/median price difference on domestic (or overseas) flights between Q, S, T, L fares and H, K, B, V fares?

Look, before you flame me, I am not trying to apologize or justify the CO decision, I just want to know what it will cost me (or you) to stay with CO, and try to value the perceived benefit (future value).

It would seem like someone should be able to sample the top 10 of the top 250 most travelled routes in the US (www.airliners.net)on CO/NW/DL, calculate the mean/median fare in the Q-bucket on CO/NW/DL, and then do the same for the mean/median fare in the K bucket.

Let's say the difference is 10%? Maybe it's 20% Who knows? All I am saying is that I usually pay around 6 cents each for elite miles and so Gold costs me $3k annually. Thus, if the effect of the new rules is to raise my cost to $3300 per year by forcing me out of the Q-bucket and up into the K-bucket, and in the process of all this, half of CO elites no longer qualify and my EUA chances double, doesn't that seem like a logical thing for me to do (outside of the nasty way that CO implemented this)?

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Old Sep 18, 2003 | 6:37 pm
  #2  
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by IAATM:
Let's say the difference is 10%? Maybe it's 20% Who knows? All I am saying is that I usually pay around 6 cents each for elite miles and so Gold costs me $3k annually. Thus, if the effect of the new rules is to raise my cost to $3300 per year by forcing me out of the Q-bucket and up into the K-bucket, and in the process of all this, half of CO elites no longer qualify and my EUA chances double, doesn't that seem like a logical thing for me to do (outside of the nasty way that CO implemented this)?

</font>
I don't have the numbers for you and I understand what you are thinking but you can do some thought experiments.

They will not lose half the golds you are hoping to just becoming silver but lose a number of them as customers. If the remaining Golds only contribute 10% more, CO still cannot afford you because they will be in a worse position than they are in now if they lose just 5% of the Golds as customers (losing just one customer requires 10 remaining customers to spend 10% more to break even). You can change the percentage to anything reasonable and you will have the same problem.

In addition, not so frequent flyers who have done a few business trips on BFs or full fares will compete with you for their low-fare vacation trips and may even trump you by becoming plats.

So the reality is that without significant additional spending you are not likely to better your chances because the change is expresly designed to favor big spenders. If you can indeed benefit with such a small increase, then it cannot be for too long because CO simply cannot afford you and further changes will make it more expensive.

But the biggest problem is that you cannot compute this with any degree of confidence since the fares are so seasonal. For example, if you fly transatlantic in summer, even the cheap fare basis tickets will be pretty high but accumulate only half the miles. Even a small increment on that to get full credit will be a very high cost indeed.
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Old Sep 18, 2003 | 7:53 pm
  #3  
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Here's an attempt, based on my flying habits:

Routing # Trips Fare Diff(e.g.,V-S)

DEN-IAH 20 $3000
DEN-ROC 5 $ 780
DEN-MAF 4 $ 0
DEN-TUL 4 $ 250 (approx)
DEN-OKC 4 $ 250 (approx)
DEN-MSY 2 $ 110
SIN or DPS MR 1 $ 0

Grand Total $4390


Hmmmmmmm...

Maybe an extra MR DEN-DPS (22k miles for $900) instead of DEN-IAH using "V"

[This message has been edited by Bonehead (edited 09-18-2003).]
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