PMMMDL

You are absolutely spot on with your observation....

But you will have a hard time convincing many FTers of this. Many here are convinced that every traveller carefully compares all aspects of each airline's FF program, and reviews each change carefully.

Most Frequent Flyers, even top tier, don't know the details of their own program, much less the details of competing programs.

thepla

If this is so true why did a group of people, right here on FT, start a saveskymiles.com???? I'll bet some of the DL people here that always stick up for whatever DL does was part of the group complaining about sLUT issues before.

I agree at first there is a relatively small group here that do start the ball rolling but the general public does catch on.

Just like elites stopping sLUT upgrades (Didn't DL also try to give less than 100% EQM for sLUT fares?) and general elite members finding out without FT they will catch on with change fees, can't get any awards without double / triple or whatever DL tries to get.

Most elites do have friends, believe it or not that do not fly DL, and in conversations discuss using PMU or miles, etc. After a few minutes of a conversation with a UA or AA elite they do find out that AA and UA SWU are WAY better, or AA and CO allow for upgrades on any fare with a co-pay, usually for way less money than "M" fares.

What is going to happen when there are less FC seats, whether RJ or so many PM ad DM elites that PM are on waitlist and are number 25. Once those free upgrades start to go from near 100% to 80% to 65%.... DL may just find out their loyalist are not so loyal anymore.

It may not happen overnight but just like sLUT upgrades the rest do start to find out and time will tell if the same effect that started saveskymiles.com happens again. Of course it may be too late at that time.

pbarnette

That was a whole different era. It was an era when the fantasists were still running the airlines. They cared about market share and prestige and were willing to trade profitability for it. I'd like to think they have learned their lesson. My guess? It is too late and the generous SWUs at AA and UA will either go away or become a lot more restrictive within 2 years.

Oh, I could be wrong, but I doubt it. In the meantime, I encourage those that can to take advantage of AA's and UA's current inability to understand simple economics to cash in while they can. One question, though, can SWUs be invalidated under Chapter 11?

thepla

Were DL's PMU's invalidated under chapter 11???

I do not remember AA going into Chapter 11, seems DL did with their PMU's compared to AA's VIP.

thepla

So you're saying they learned their lesson and you would be an advocate to not having sLUT fares eligible for free upgrades and 100% EQM.

Remember this is a different era and they should not care about market share (they are proving you correct here) and look at only profitability. I'm sure their bean counters have figured out they have lost at least one paid FC to a seat that was given free to an elite member.

raehl311

Hopefully their bean counters are better than that. Losing one paid F seat is preferable to losing 20 regular bookings if you don't offer upgrades.

Free upgrades drive business. There is no way I'm going to buy an F seat. But because of free upgrades, I will concentrate all my travel on one airline. That's worth a lot of money to the airline.

Whether it's worth so much money that it wouldn't be more cost effective to toss the F seats and have single-class service, well.... Southwest doesn't think so.

BravoZulu

Inflation affects everyone, albeit not equally. If the MQM giveaway creates more GMs out of FOs, or more PMs out of GMs, the rationale for a DM makes more sense: keep up the competition for the highest tier. The marketing approach is simple: keep us loyal and keep us moving up the ladder. Notice that the spiffs are better for the lower rungs to move up a rung than for the higher rungs to move even higher? Once at the highest tier, they thought that that had your undying loyalty. Unfortunately, once 75K became eminently achievable, DL faced the reality of losing some of the high revenue flyers as they had the opportunity to diversify their portfolio without loss of status. The DM level and the rollover concept just may keep the high flyers on board. PMs (nee GMs) will be competing with DMs (nee PMs or EPs) for fewer upgrades; fare classes will begin to matter more.

I do not believe that there will be that many new FOs minted with the mid-year MQM giveaway or even a decision to match this round of AA/UA EQM giveaways. The competition needed something to match DL's DM initiative. I will be surprised (pleasantly) if DL matches this time. I just see the Medallion population spread across four tiers rather than three, but the size of the population will not grow by much. The bottom end will have no greater an opportunity to upgrade than they have today (and perhaps worse) because the inventory is going down.

Most of the flyers still board planes after the Medallions; they still make up the majority of DL flyers, but they just do not fly often. For most of them it's the convenience of the airport, schedule and cost of the ticket, not the SM program. Furthermore, there is evidence enough that many Medallions do not even register for the promotions. If it were not for those who are committed (or those like us who ought to be committed for the things that we do to maintain our awareness), many of our cohorts would not be benefitting from these offers. How many of you actually have a cluster that rely upon your insights?

Competition for upgrades and the reduced capacity will push "Y" fares and increase revenue, but it only affects the minority of flyers; i.e., still not that much on the bottom line.

It's time to let go of the past. Just don't compare this round of fine tuning the SM program with the days of Uncle Leo and the devaluation with sLUT fares. He thought that were freight with little discretion. The new team has to earn back our faith, trust and confidence and I, for one, see movement in that direction (my apologies to the NWA contingent).

All that said, this FT community is fundamentally different than the general flying public; think of us as a public interest group with a constant eye on the decisionmakers. We are outliers (and we even have some who are outliers among the outliers). The rest of the population just goes along for the ride and voices opinions periodically (in other arenas it is every 2 to 4 years). If there is enough of an outrage following an issue that affects everyone (whether being stranded on an airplane for 7 hours or, as we can see, healthcare), then more will pay attention for a little longer; unfortunately, most of them have a short memory span. We are different because even minor changes have real day-to-day effects and, ultimately, affects our decisionmaking; that is why we play on this turf.

For some of us, I am sure that this is a hobby that takes up considerable time; for me, it's just a game with rules to be learned ... and followed ... and exploited, periodically. I don't get as passionate about this as most of you (probably because I have other hobbies and little spare time). In the end, at a time when every airline needs to fill every seat to survive, they have to remain competitive. The products are not that dissimilar. Perhaps it will be different when the economy turns around and there is more inventory to sell. For those of you on the bubble, plan well and keep the adding maching close. I hope to get to see you up front if ever I get there.

pbarnette

Advocate it? No. I ENJOY taking advantage of the stupidity of the airlines, and will be flying in J in a couple of weeks for $1100 + my PMUs. This is my reward for flying 75k miles on ST airlines, which happened to be cheaper AND more convenient than other airlines. And I would have flown these flights anyway. They get no incremental revenue, yet "reward" me for my loyalty. I love it, but it doesn't mean I don't think it is a suicidal "business" plan.

I am simply trying to prepare myself (and warn others) for what I see as the coming reality. It simply makes no sense to sell F seats for $200, just because someone flies 75k miles per year, of which almost 10k can be earned while paying $400 (of which a quarter is taxes) to fly to Europe. It makes even less sense to sell Int'l J seats for $1000, just because someone flies 100k miles per year. If that is all they are getting, then they should be cutting the size of the cabin or dropping your J and F prices. At some point the airlines will figure this out (I think).

raehl311

I've always been a bit mystified by the economics of transoceanic air travel. A business seat takes up the space of about two coach seats. If you factor in all costs (i.e. customer service, meals, etc), it probably costs about double to fly a business traveler than it does a coach traveler.

Yet business fares are routinely 4-6x coach fares.

So here is my question:

Why not rip out all the coach seats and fly planes full of business class at 3x coach fare?

Your business seats will be cheaper than anyone else's business seats and thus your plane should be full. And you'll be making 3x coach fare revenue on 2x coach seat space.

thepointsguy

That would make sense in a fantasy world where there are tons of people actually paying for full J. We all know J cabins are a mix of some actual full fare business travelers, some paid cheap biz, award travel and non-revs. Lately I'm sure they've been filled with more of the latter than the paid.

Recent examples of this have all failed (Silverjet, Maxjet). And I don't believe the BA venture Openskies is doing all too well.

halliegrandpa

Very interesting logic, and I agree with you! However, it would not happen with all business class seats planes because:

1) There are people that would not even pay $100 extra to fly business instead of coach.
2) Businesses nowadays would not let their employees fly BE on a given airline even if it is cheaper than coach on another. I speak from experience because I found a business class seat cheaper than a coach seat on DL/BW from the company AMEX travel, and they did not let me!
3) I believe there is an airline (I forgot the name for the moment) that
already tried that and it was not very successful!

Stripe

For the record...

AA announced the Spring promo on March 17.
CO matched it on March 20.
DL and NW matched it on March 23.

By that calendar CO should have matched today and NW and DL will match on Tuesday. I doubt you'll see any announcements over the holiday weekend.

thepla

You're a pretty lucky guy to find an $1100 fare that is upgradeable (I'm assuming over the pond). That is actually a typical fare for Y/B in the NW years; when DL added M it seems the typical fare more than doubled overnight, even in off-season.

Your thoughts about getting free upgrades for the benefit of 100K are logical and I agree. BUT in this case they added 66% to the threshold to get top tier and stated "best in class"; that is where I feel insulted and one of the reasons I'm back on AA.

AA and CO actually do it way better, for anyone flying -- not elite members, have a co-pay. For Y/B/M no co-pay, just miles, for lower fares CO has a staggered co-pay based on how close you get to Y/B (not sure of M), AA has a straight $350 each way except Y/B which no co-pay.

I for one would not have any issues paying an extra $700 round trip to BC; with DL sure you may find a break once in a while where it is less than $700 but most of the time it is double to triple from lowest fare to M (stated here M is normally only a few bucks away from I.

AA used to have space available VIP's in 1998, 1999, and 2000 booked directly into C. In those days it was only points and truly elite. My opinion those people deserve a bennie like that. When they started to add 100K EQM and than 100 EQS they did start to limit a few class codes and the booking class (not "C" anymore).

Since they were doing this in 1998 and forward and of the three airlines in question (DL, NW, and AA) they were the only ones not go to through BK... maybe, just maybe, this process is not the big loser that DL's bean counters believe it will be.

My prediction is after a year or so they will give this bennie (assuming they are still around), just like they gave the sLUT fares back.

They are jumping over a dollar to pick up a dime... unless they are truly trying to incorporate the SW model and give much of nothing but keep fares down for general public and not really give anything to elite members except for first on board.

pmaddock

I can only hope that the memory from the sting of the SOS effort keeps them at bay. It seems to me though that they are toying with the edges to see how we'll react. They've eroded the companion upgrade and the miles upgrade but it seems that we raised enough of a stink that they pulled back on the redemption fee - at least somewhat.

In my case though I can say if they mess with low end fare EUA and/or anything like a 50% EQM again it will certainly be a deal breaker. Without the EUA the value of loyalty is severely dimmed. After all even WN offers an A+ level with security lane and early boarding benefits. I left CO back in 2005 over their 50% EQM - I'll do it again if pushed too far.

raehl311

The only reason I have right now to stick it out with DL is the upgrades and the network. But if you lose the upgrades, then I end up just flying Southwest were Southwest flies and Delta when it's the only way to get somewhere.

My attempts to switch to UA/AA/CO have thus far been thwarted by them not being even close to price-competitive with DL out of MSP. Although I expect that will change when the economy rebounds.