SEA_Tigger

Seems simple, doesn't it?

But you have to ask yourself why that Silver pays Y. I doubt they do it out of a sense of altruism for CO. If they did, they'd fly F and give even more money to CO, as well as enjoy Business First comfort rather than Economy discomfort.

More likely, they require maximum flexibility because their schedule is in flux. They may need to change their return date or even their return city. They may have found out the day before they need to be in EWR. And that assumes they normally fly CO. They may be a UA MP member, but are flying CO only because they need to get to EWR in the late afternoon, and CO can fly them non-stop (as opposed to a connection in DEN or ORD on UA, getting them in early evening) and so CO is getting their business that one time.

The Gold might normally shuttle between LAX and EWR once a month, on a predetermined schedule. So they can schedule early enough to take advantage of Q fares. They may not even care about First Class. For them, an Exit Row might be "comfortable" enough and they want to save a couple hundred bucks instead of buying H and getting a chance at an upgrade.

Who is more loyal to CO?

In dollars, Passenger A for sure.

In frequency, Passenger B is the more loyal.

And does Passenger A fly CO outside of those five Y trips between EWR-LAX? Would they choose CO for a leisure trip - a trip they would not pay Y for? Is $7,500 all the revenue CO gets from that Silver?

The Gold flies more, and therefore might be biased to pick CO for other business - and leisure - flights. They are familiar with the product and, if sitting in an Exit Row, consider it "good enough". Perhaps on their leisure trips they will spend H or K to get Business First, where Passenger A - if they even bother to select CO for leisure travel - would not have enough miles to upgrade to Business First, or might not consider it worth the money (since their business travel might be paid for by their company or client). So perhaps the Gold, over the course of a year, spends more in aggregate than the Silver does.

PremEx

and...

Again, intention is one thing. And their intention is bad enough, IMHO. But result and reality is another.

Let me put it this way...THEY WILL BE LOSING FULL FARE FAT DADDY GOTTA LOVE 'EM FLYERS, TOO.

Why? Because they seem to be under the mistaken assumption (which leads to the wrong "intention" and just one of many of possible mistaken assumptions) that their customers are either all high-fare, or all low-fare.

Most customers are not and fly on a mix of fares. If they don't get full elite credit for their low fare flights...bye, bye to both.

In other words YOU are the elite. Your fare is not the elite. That's how it should be. And THEY set the fares. They do. Not me. If their web site gives me a fare and it's acceptable to me, I shouldn't have to worry if it will qualify for 100% elite bonus qualification...don't you think?

It should be really this simple: If you buy it from us and it's a published fare...it qualifies. All of it. Yes, we give Full Fare flyers some bonus EQMs. They get an advantage. But we don't screw our good, valued and loyal customers that come to us and happen upon a low fare that we set and offered up on a plate (and perhaps even advertised)!

That's the way it was until yesterday.

They may also be under the mistaken assumption that these low fare flyers might actually be persuaded to go out and "buy-up" to a higher fare just to get the 100% elite qualifying miles. I don't think that's going to happen nearly enough to make up for the loss of business that will result from those that walk.

And that doesn't even address that fact that Continental can't even afford to lose the all low-fare frequent flyer!!

I'm The Consumer. I shouldn't have to give a rat's bum about the "logic" behind their intentions! Don't they get that? Cause and effect?

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

FWAAA

The other day, Gordo was reported to say that 36% of CO's pax pay full fare; of course that is not true, but maybe Gordo actually believes that 36% of his pax are the chosen ones.

If so, he's in for a surprise.

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

dbaker

Do you have a source that proves that he's incorrect?

JAWS_II

I've been at CO's highest elite level for 10+ years. I only made it on miles a couple of times. About 5 - 10% of my flights were in the $1,000 - $2,000 range. With over 100 segments every year, this change will drop me from Plat to Silver or even out of the elite category because I fly almost exclusively sub-V fares. So, it looks like WN, NWA, AA, or UA, here I come. Yeah, I have to admit that I am spoiled by elite benefits, but I've been kicked in the a$$ before and got up to live another day.

Now, I hate a good a$$ kicking as much as anyone else, but I've been known to kick-a$$ back. So, I guess I'll just "kick-a$$" my dollars on over to someone else.

------------------
"The Eyes of Texas Are Upon You"

NJDavid

Yes, you can tell Gordo was lying because....

drumroll...

His lips were moving.

Apoligize for them all you like, but don't even try to claim that Gordo can be trusted to tell the truth.

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

FWAAA

No, I don't. The only evidence is the consensus of the FlyerTalk members who posted to these threads in response to the 36% news:

www.flyertalk.com/forum/Forum20/HTML/007142.html

www.flyertalk.com/forum/Forum20/HTML/008972-3.html

Hard to believe that CO would have lost money last year and so far this year if 36% of its passengers really did pay full fare. Of course, it might depend on the definition of "full fare."

Here was Gordo's latest "36% pay full fare" pronouncement:

http://biz.yahoo.com/djus/030915/1537001047_1.html

johnsmith

I just want to hit this statement up one more time b/c it was the crux of the conversation I had with Keller's executive office today...I could care less about fare codes--I buy what they are selling when I need to fly somewhere. I'm actually Gordo's dream customer b/c lots of times I find out the day before that I need to go somewhere. In those cases, I buy a Y class ticket, often well over $1 for every mile I fly (ie an $850 ticket for a 350 mile roundtrip).
BUT--Sometimes I know in advance where and when I am going. In those cases, I buy what they are selling me through my travel agent--and its often a discounted ticket. I don't have an option to buy something more expensive b/c that would be absolutely unethical to my client.
Since CO hasn't given me (or my client) any reason to justify paying more to move from a Q fare to a K fare, I can't buy it whether its $3 or $300 more. My clients and my company have no interest in subsidizing my FF habit.
So...I could care less about booking class and since I have to worry that I'm going to get screwed and not qualify for top tier status, I'm certainly not directing my expensive travel to CO. My expensive travel is my leverage with the airlines to treat me well--
I'm not going to give CO all my travel to find out at the end of the year my combination of tickets run through their algorithm left me short of qualifying for top tier. Instead, I'll give AA all my travel so at least I can predict where I'll wind up!

thezipper

Well... I do alot of work as a government subcontractor, in my last 5 years I've only flown (1) Y fare. Most of them are lower fares. I may not spend as much as you do on airfare, but for example I've got a new contract and will spend $30K over the next 6 months on airfare. If CO feels that my $30K is not worth it, to them I'll take it to UA/AA, plain and simple. I'm sure they will find my $30K "desireable"

-------------------------------------------
Don't feed the trolls

JaredH

This board just gets worse and worse.

Why do people who don't have a desire to fly CO continue to post after post filled with whining and complaints? Why?

It is only fair that those who pay the most get the most.

What surprises me is that some of the most conservative members of this board (and we have had these arguments before) are making an argument that is antipathetic to free enterprise and market principles. Do you view elite status or benefits, or indeed first class service, as an entitlement?

How can you justify demanding an entitlement from a private business when many of you do not support programs like TANF (so-called welfare) or food stamps?

And how curious that the very same posters who union bash and trumpet their conservative credentials are now crying for the government to intervene against the economic decision of a private business. I won't use the "h" word, but is on my tongue.

I agree with dbaker and nugget (and others) that this change will be good for CO.

Remember that airlines are a volume business and even a small shift in yield can have a huge effect on the bottom line. If CO can entice just a few people per flight to pay a few dollars (perhaps as little as $50 or $100) more it will realize substantial revenues over the breadth of its operations.

You can see this by looking at the number of passengers CO carries and the number of flights it operates, against its financial results. With around 2000 flights a day, a shift of just $500 more per flight would bring in more that $350,000,000 a year.

If elites who earn status by flying exclusively (or almost exclusively) on low fares leave, so what. The US aviation market has proven that there is an almost unlimited demand for airline seats at cheap prices. In other words, and I say this without malice or ill will, you are dime a dozen, dos por nickel. Get over it!

As for the potential high fares that CO might lose if any of the people affected by this change actually fly on high fares more than once in a blue moon, I think that the changes CO is making to maintain its position as one of few remaining premium, full service domestic carriers will take care of that by attracting new business. Remember that CO is the only airline that has managed to grow revenue per seat mile this summer.

To conclude: if you are really unhappy, follow the free market and bail. Otherwise, stay with CO and be happy. Please stop the incessant whining. This really isn't an issue that deserves passionate protest and there are bigger things to worry about.

jh

fenstere

I tend to purchase refundable tickets, so I am advantaged by Continental's new policy. However, it isn't going to increase my travel on Continental. (I am CO Platinum and have flown 2 segments this year.) Here's why:

- Apart from the occasional BusinessFirst-configured 757's, Continental has an embarrassing transcontinental aircraft fleet. The first class seats on its transcontinental (i.e., EWR-LAX/SFO) planes are worse than United or American's first class seats on flights of 500 miles, and incomparable to the premium seats in their 767-777 transcontinental fleets. Also, it is virtually unthinkable to imagine what five+ hours in a coach seat on any of Continental's aircraft might be like (as compared to E+ at United or MRTC at American).

- The "72-Hour Rule" on international upgrades limits flexibility too severely. Like many people whose companies are willing to pay for full-fare tickets, I often have to change my personal travel plans on a minute's notice to accommodate last-minute business events. Hence, I cannot afford to gamble with locking myself into a particular flight. The "72-Hour Rule" therefore drives away people for whom time and flexibility are important factors. I would venture that such people tend to buy lots of refundable tickets for work trips. There is a wide range of people willing to spend between $1,000 and $5,000 (chosen as the price of full-fare Y, which is a relatively easy upgrade on CO) on a high-quality transoceanic premium class seat (using upgrades or otherwise), but CO's 72-Hour Rule excludes most all of them.

In summary, higher relative status in a frequent flier program isn't very useful when the underlying program doesn't provide the benefits desired to even its most valued customers.

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

JeremyZ

dbaker, I think you're missing a nuance here.

If I'm goin' to buy a puppy from a big litter, and one has a bald spot and another is coughing, and another is crosseyed, I'm just going to pick a different one that looks normal. Why get the ones that are messed up and go through that stress?

I view this new CO policy as a bald spot or kennel cough. Domestic air travel is so generally equivalent among the big carriers, why pick an airline that causes incrementally more hassle? I view no assigned seats on WN as incremental hassle, a (perceived) bad safety record at Airtran as an incremental negative, the general crappiness of AA planes as an incremental negative. So, I avoid those airlines when all else is equal. CO's new policy adds incremental hassle for the "total" customer - even if it benefits him at certain times.

I think NJDavid said it much more eloquently, but the idea that CO only wants part of my business leaves a *very* bad taste. For those of us who get to choose both our business and leisure airlines, I'd be surprised if there was a huge subset that retains loyalty to CO for business while taking leisure dollars elsewhere. The memory/experience of dealing with the new system for leisure does not simply disappear when booking a high-fare ticket.

I'll probably just start flying UA so I don't have to think about dealing with the complexities of the new system. Yeah, I'll get to concern myself with numbers/costs of 500-milers, but it's still less hassle than dealing with the balding, crosseyed puppy that CO has become.

venk

I agree and it is because of posts like this that is so ridiculous in logic and content. Where do I start?

Nothing makes free enterprise work more than consumers making informed decision amongst competing enterprises that do not collude and where consumers have a choice. Now in such a system, in a buyer's market, consumers have the power to demand products and services for their money. If their demands are not met by their current vendor, they choose someone else. The changes that CO made has upset the consumers because they feel they are not getting the value for their money not because they feel they are entitled. This is always the way the markets have worked and it is quite natural. The only difference in the days of the Internet is that the demands and anger of consumers is publicly visible. This is quite natural when free markets work. Basic Econ 101 stuff.

Intelligent does not start with a "h".
In any free enterprise system there needs to be checks and balances against enterprises abusing the system otherwise you only have Enrons (a Houston company, of course). Anti-trust is a required component of checks and balances because free markets only work if there is free and fair competition. What people are asking government to do is to enforce those very anti-trust rules because this change appears to be in direct violation of conditions established to encourage competition.

No one disagrees with that but that is only half the story.
Any business also has customer acquisition costs and customer churn costs. So if the effort to raise average yield by $50 results in sufficient loss of customers, the effect can be worse. Angry customers are not the way to raise average yields in a buyer's market. So CO has made a stupid business decision in many people's minds.

And this is where CO and everyone who drinks too much of their Koolaid is missing the boat. The bulk of that volume business that you speak of is made up of people who fly both high-fares and low-fares. CO risks losing a large portion of these people.

You mean the worst coach seats in the industry with no laptop power and an extensive RJ fleet is the way to attract high fare buyers or do you think the small fraction of FC seats available is going to attract the high-rollers in sufficient numbers to keep CO alive?
yes, with differentiating benefits that compensated for its weaknesses, the very benefits that are being slowly taken away.
One man's indignation is another man's whining. One could very well say, if you are happy with CO, just keep flying it. Stop making incessant apologies for it. But I won't.

Nevsky

"When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation."

In addition many of us have been loyal customers of CO for many years and have accumulated sometimes millions of frequent flyer miles, which some of us hoped could be used for such things as upgrades and which are now harder and even more expensive to procure.

Even though CO has been far from perfect, breaking up is hard to do, but if I am shown the door of poor customer relations, I will take my exit.

sllevin

In those famous words...

"...whatcho' talkin' about, Willis?"

Many elites who are only silver will not be elite at all.

Assuming that there are an equal number of people who are not silver under the current system but will make silver under the new system isn't justified by any analysis I've seen.

Steve