blueeyes_austin

The flawed logic behind the Continentalistas is that there is a pool of full-fare passengers just waiting to jump onto their lovely airline once the riff-raff elites are cleared up.

Houston, we have a problem.

What value does Continental give a high dollar flyer that other airlines do not? What in these enhancements change this value proposition?

If I buy a Y ticket on AA, guess what, I am likely sitting up front. At the very least I won't be stuck in the hell of CO's back cabin.

If you think Continental has a service advantage, then you really have been drinking the COOL Aid!

Any miles I accumulate are, to put it charitably, worth half of what they are on other carriers.

So, WHY CONTINENTAL? To my eye, these changes do NOTHING to bring in new business, serve to drive away old customers, and are highly likely to lead to a decrease in revenue and profit while increasing the revenue and profit of CAL's competitors.

RustyC

Count me in with those who think the original poster here has a deck chair on the Titanic. This move will cause a lot of people to decide to jump ship entirely, when those people might have stayed on under something like a restacking of the upgrade priority or some other less radical move.

Of course CO could do what DL did and just blame external events or a bad economy or something like that for the runoff. It's not like they have a good way to measure it or want to reflect badly on the management.

CO actually has farther to fall than DL, as it has a worse coach product (if you're not on an RJ, that is) and problems with OnePass award availability.

NJDavid

What I disagree with is the concept of Dis-incenting loyalty.

If I buy 20 least expensive tickets today for my December travel, and give my chosen airline my loyalty, I expect them to appreciate the no-charge loan I just placed into their pocket.

CO's screwey plan is that any old shlep can come by on December 1st, also buy the cheapest ticket available at that time, and be treated better than me. Why? Because he can't plan ahead? Because his 1 ticket cost $50 more than one of my 20?

Ok, So they gain his business for that day, and lose mine for a lifetime.

And, guess what, that same poor shlep couldn't care less about CO, as he'll buy anyone's ticket at the last minute. He's off on BA next time, AA the time after that. CO just dumped their loyal customer who buys bulk and in advance for a "whim" purchaser.

You do the math.

On second thought, don't...I'm going to sleep and I don't want to have to think about your proof of how 2+2=9.

venk

You could have said the same thing about just allowing the NW/CO/DL alliance without any conditions but clearly there were enough valid concerns that certain conditions were placed on allowing that alliance. In the system that has been established in this country, alliances between any of the competing major airline is considered anti-competitive because of the potential for a number of such alliances to effectively reduce the number of competing entities.

Of course, not sure if anyone has claimed otherwise or why that is relevant. But there is some reaction to the way CO orchestrated the media announcements for this particular change. Not a big deal but an indication of the manipulative culture at CO.

Depends on what you want to hear. For so many to complain, it is of enormous signifance to any company. CO can dismiss it off as overheated rhetoric but I doubt it. They do seem to be backpeddling a bit by making two succesive changes to their policy for booking on continental.com to give back some of the changes. So it cannot be just overheated rhetoric in their minds. It may be the sound of fax machines at UA and AA though.

To be precise, CO has instituted changes that increases customer churn with very little to increase acquisition of high-fare customers other than the obvious that those who remain are higher-fare customers but that is quite different from acquiring more of these or making them more loyal to offset the losses from departing ones.

The same "top service" that was not giving any price flexibility earlier is not going to give that to CO now with these changes just because they drove some people out of their customer lists. In domestic flights, there is very little that differentiates CO to command a premium price.

Amongst the very group that constitute the deeply discount fares on some flights are people that also pay high-fares during other times. As I have said before, "I pay high fares to an airline that treats me well on my low fares". You are continuing to cling to the fallacy that the people in those discount seats are always the low-margin kind and so not to be catered to.

It is only if you fly full Y (or F) do you get the double points. Just a few trips at those fares are not going to cut it. To be a plat, you need to fly 45 full Y segments to make it on points. That is almost a segment every week for a year on Y fares. The problem is there aren't enough people doing it in full Y let alone doing it every week.

That is a really a stretch assuming an average of 4 segments on every trip. Most high-fare flyers pay high fares for non-stop flights not for always connecting on every flight.

From my post:

Thanks for reading it so carefully

That is called a "head-in-the-sand" attitude. A typical business traveler that makes up the median has to fly on the lowest fare available at the time of booking for business or pleasure because of corporate rules. Except for some very few jobs, most of them have varying number of advance warnings of trips leading to quite a mix of fares. A deviation from this is the exception than the rule.

A curious characteristic of an apologist is that he does not kow of any other way to be.

dbaker

Okay, so when you buy a last-minute ticket, you're happy to ride in the back if some plat bought his cheap ticket a few months ago and gets the upgrade?

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

NJUPINTHEAIR

If you purchase a Y class on CO, you are sitting up front, and not in Coach. Second, if you are a Gold Elite in CO, you get Double miles anyway, so the inflation of redeeming miles on CO is rectified by the inflation of earning them. However, I have been able to score standard rewards on VS Upper Class in July, and Standard First Class awards to HI on CO's partners during Christmas.

So,if you frequently surf the fares/available awards, you do not have to book the inflated reward point prices.

sllevin

If we take the 36% revenue from full-fare as a guideline, apply the load factor, you're looking at 20% of travelers on full fare.

Refine that down to the group that are not already hitting silver+, and unless you place significantly unreasonable assumptions on the balance, there's no way that covers all the silvers -- none of which, for the most part, will requalify.

If we accept what you appear to propose, then CO is chasing people who have flown them very little (not enough to make silver). THAT would be even more insane than the current plan appears to be.

Steve

NJDavid

In life, when you buy a last minute ticket to anything (Train, Theater, Concert) you get what's left...anywhere...everywhere. There's never a reward for poor planning.

And (oh boy, I love this one) If you bought a last minute ticket, and expect to sit in first, you should have bought a first class ticket. What - do you think you're entitled to more than you bought?

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

dbaker

So the answer to my earlier question is, "none," right?

NJUPINTHEAIR

venk:

Your math is off. It may be true that one would need to fly 45 Segments at a full Y to earn CO Plt, but I know of know one who flys all their trips 1 way!!!!

So, your observation that it would require nearly 1 segment each week for a year is seriously flawed.

In reality, all that requires is for one to fly on Full Y 23 times in 1 year, if each trip consists of TWO (2) segments. That is far less than being on the road every weeke for an entire year, and I have not event touched upon those trips that would reqire even 1 connection!! So, one could travel on a full Y for FOUR segments as a R/T and thereby earn 8 points towards the necessary 90 for qualifying for Platinum.

venk

I don't know about David but if I had to buy a ticket at last minute and all the seats in coach were assigned to deep discount non-elite flyers who had booked earlier and I got a midle seat in the back, I wouldn't find entitled to a window or aisle. Otherwise, they will have to start filling seats at the end based on fare paid. The same logic applies to the upgrade.

Of course, I would have a few choice words for an airline that extorted ridiculous amounts of money because it was last minute. It is twisted logic that says because we accept this extortion, we accept an airline trying to justify that extortion by giving upgrades. That is an unsustainable business model.

venk

Math is right but you are interpreting it differently. One does not fly evenly, that is the average number. I use segments because you can combine them any way you like for round trips, non-stop or connecting.

That is one round-trip every other week and every one of them only in Y fare. I think people are still too full of CO Kool Aid if they think that represents a typical business traveller (which is different from saying there are some examples of people who do that).

sllevin

You're correct in stating that I am extrapolating, based on my analysis of CO's financial statements.

However, my initial point remains:

"There will be the same number of elite members. There will be the same number of first class seats. There will be the same number of upgrades."

...is a statement with no basis in fact. Only one of those statements could be proven if you had inside knowledge of CO's plan of operations, and the other two are SWAGs.

Steve

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

ClueByFour

Doing as Barton mentiones below, along with a "value pricing" type fare setup for Y, would probably result in a working (from a financial standpoint) major, if for no other reason that the value proposition would be perfectly clear from the start (with no games and no changing rules in midstream--sorry Gordo) provided that the service level in the front two cabins was clearly above and beyond what you could get from the "other" majors who continue to make relatively easy/cheap upgrades available.

The two keys are:

1. A strong and easy to understand value proposition.

and

2. Consistant and high levels of service for those who choose/can/steal to partake in the larger spend for the middle or front cabin.

It's so sane, in fact, that it will never happen.

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

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

RustyC

I think the point about corporate flyers getting a mix of fares is a good one, as companies are really pushing hard to avoid the high ones. Companies hate FF programs encouraging employees to spend more on fares than necessary (I knew someone in a place where I used to work who was an expert waiting until the right time to book miles-laden but expensive trips). What if CO/NW/DL looks like a standout there? Could it be boycotted or made a choice only of last resort? The corporate customers would have a lot of clout.