OK, Lets say that 10% (which seems over optimistic just reading these responses) pays full fare all the time. That means your willing to sacrifice the other 90%? Why, is that 10% going to jump to 20%? No, it won't thats a fact.

I still don't get it. Isn't the point that FFs reward USAir with the full fare biz trips when they get caught in a last second trip? Yea, of course, we are going to fly discounted fares as much as possible because paying more doesn't get more. An to suggest that "First Class" is anything special on USAir for a domestic flight is a joke in itself. FLYING FIRST CLASS ON USAIR IS ABOUT AS PRESTIGIOUS AS HAVING THE HONOR OF RIDING SHOTGUN IN A TAXI. Give me a break, do you think anyone is going to pay for this? Have you ever paid for a first class ticket (which is really the same as saying full fare coach)?

First things first, nobody pays for full fare coach or "first class" for their personal travel. If you do, your stupid, period. Secondly, companies and travel agents are conciously steering away from USAir due to the bankrupcty, thats standard procedure. Lastly, the glory days of business travel are done, gone, and forgotten. Nobody and no company is going to pay full fare if they don't have to for a "first class" seat and some miles. Give me a break.

Lastly, lets look at motivation. I can get miles on any airline right? And, to boot, I can still get miles for discounted fares, AND fly standby on every other domestic airline right? And, I can accrue status segments and miles on every other domestic airline with discount fares right? And, I don't risk further and more drastic "policy changes" or even worse, totally sticking me with a defunct ticket if they suddenly file chapter 7 if I go with more secure airlines right?

I guess I don't get the big picture. They would rather retain 10% of there FF base and tell the other 90% to take there money somewhere else? They would rather forego the occassional (yes, occassional, when I have to) full fares because you can't combine with other flights into anything of any significance?

Tell me again how it is better to have an empty seat than a revenue producing seat...I just can't grasp that yet. Fuel, please, I don't believe that, there is more bird **** on the wings that would cause more fuel consumption that the handful of low fare FFs.

Somebody educate me on how this is supposed to generate more full fare tix than they get now. Somebody...please?

Two responses:

a) If I were Mr. Baldanza, I would be proud of myself for actually being honest as to what the business was thinking as it made this decision.

b) If I were Mr. Baldanza's boss, or in charge of communications for US, I would be livid and figure out a way to get him fired.

My guess is that a subordinate of his checks/responds to his e-mail or he already had a canned reply created.

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Subject: Re: Regarding New Policies
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Two questions for USAir:

Why do they think this would make people buy a $1,200 ticket when they could fly for $200?

Why not reward those people that do buy the $1200 ticket without taking something away from those that buy the $200 tickets?

I believe there is a very important issue about policy changes for non-refundable tickets that is not receiving enough attention. The new policy says that if you cancel a trip using a NR fare, you must cancel the reservation prior to departure and rebook the reservation at that time, using the value of the old ticket and paying the $100 change fee.

This is strikingly different from the past, where you could cancel a trip and when you knew when you wanted to take a new trip, you could then rebook and pay the fee.

So if you do not know when you are rescheduling, you will have to rebook immediately and pay the $100 and then likely rebook again when your plans are set and pay another $100. If you don't you lose the full value of the original ticket.

So when they say they are not raising fares, technically that is correct, but in many cases they are significantly raising fees.

And this policy is much more severe than Southwest, to whom they are comparing policies and fares.

Most of the public doesn�t care about status miles only miles in the bank for future free travel. Of course they ALWAYS are looking for the $200 fare and a free voucher when they do fly. Almost everybody else that flies, I�m in this category, want something for the inconvenience of having to sleep away from home and put up with the nonsense of travel. In the category that I�m in referring to it only makes sense to pay the least amount possible and pay those $100 change fees to accommodate schedules and maybe get home a day earlier. The category I�m talking about would think it to be unethical to pay more for a ticket than is absolutely necessary would never fly an airline with the new idea of acquiring status miles. I guess this means everybody only pays $200 to fly US Air and the rest of the plane will go empty. I�ll bet US Air�s equivalent to AA�s Netsaver will include every destination they have starting January 1.

It occurs to me that US will get exactly what they are "buying." Fewer frequent flyers...and a lot more competition with SouthWest. A better program would give elite miles to those who purchase occasional (timeframe TBD) non-leisure fares for their business use.

I do not fly US, but would completely change my choice of airline for discretionary travel if elite status was not a consideration.

At risk of getting academic, US Airways' new policy and the attitude of Mr. Baldanza's response indicate a complete lack of understanding of fundemental product positioning theory.

Let's focus on the idea of product differentiation. What does USAirways do, DIFFERENTLY and BETTER than the other airlines, to EARN itself our business.

1. They have strong 'fortress' positions at their hubs. This position allow them to differentiate by the sheer convenience of non-stop flights.

2. They have a loyal cadre of Dividend Miles members who go out of their way to fly US in order to maintain the limited but valuable perks associated with elite status. (One could say that the cost of switching to another program is relatively high ... emotionally and logistically).

Hmmm.. That is a short list.

Now let's look at the competition. The competition has differentiated itself from USAirways as follows.

1. AA, UA, and Midwest Express offer much greater seat pitch.

2. AA, UA, DL, CO, NW, AS offer a wider array of Frequent Flyer award redemption opportunities.

3. JetBlue, Airtran, Southwest, America West and National are almost always much cheaper for the last minute traveller.

4. None of the other major airlines are as close to liquidation as US giving them some advantage in the 'peace of mind' arena.

5. Nearly all the other airlines offer a more flexible, customer-centric approach to handling schedule changes and elite mileage accrual.

So, WHY would USAirways enact a series of policy changes that differentiates them IN A NEGATIVE WAY from their competition? If Mr. Baldanza was serious about his comments to reward the higher-yield passenger, well then give us the specifics on how USAirways will change to do so!

As it is right now, these tactics do not apper to be a strategy at all. In fact, I believe that the chagnes USAirways has made over the last several days, if not reversed, will become the material for well-used case study on how NOT to position an airline for competitive success.

Us Airways new name: Dead Airline Walking.

[This message has been edited by Ken hAAmer (edited 08-31-2002).]

Yeah, compared to what we get in explanations from the manure factory at CO, Mr. Baldanza at least does better on candor, I grudgingly admit.

But then, does he think he can beat Southwest at its own game? Better to find an edge somewhere else or try to change the game.

[This message has been edited by RustyC (edited 08-29-2002).]

This the most clearly stated (if not pithy) summary of my thoughts on this matter. I had thought to submit the ridiculous reply that I received from US, however I see now that it is unnecessary.

Next, I will search for an alternative airline from my home base of RDU...anybody, Beuhler?


[This message has been edited by Shaunnc (edited 08-30-2002).]

The thing is, the programs are vastly different. I, for one, am not interested in rewards that are useless unless I utilize them in 1 year and are only good for domestic travel. The miles systems of other airlines can get you virtually anywhere in the world and give you plenty of time to build up miles for what you want. WN's program is only good for the regular domestic flyer who is only interested in domestic tickets. The value of the program is all in what a person's flying habits and what kind of awards they are looking for. I am sure that many of US's customers would prefer something like WN's program but many of them will also leave for a carrier that has an international schedule.

I'm still in shock about the 'just dumb' move by US. I know the issues the airlines face. I too run a large business and face similar issues each day.

However, I learned along time ago that your best customers need to be taken care of. Taken care of fairly, but taken care of.

The funny thing that never seems to creap into the financial converstion when talking about ailine profitability is this. When do most people pay for services rendered?

Think about it for a minute. Do you pay for your hotel room in advance? Do you pay the lawn sevice in advance? No!

However, some business need advance warning to schedule services and accomodations based on the costly variables that are involved. Agreed!

However, lets look at a conservative cash flow fact for a mid-size airline. If the airline had 1,000 flights a day, with maybe 90 passengers on each flight, 70% were booked 21-30 days in advance and the average ticket was $250. That is advance monies of $15,750,000. Now, consider that an airline could collect this amount each day for 21 days before it acually performed a service. Lets see $15,750,000 @ 21 days thats $330,750,000.

I wonder what kind of interest rate that would demand? 5%,7%,10%? Will just using 5% would bring $16,500,000 in interest for 30 days.

Hummmmmm. Something is terribly wrong!

US Air will find that they have made a grave mistake at a VERY vulnerable time for the airline industry.
I fly Delta Airlines to the tune of 150,000 miles per year Alaska at about 20,000 per year and SouthWest (yes Southwest) at about 20,000 per year. What we all need to be concerned with at this point is making sure that the airlines that we prefer do not try and take the same action, write them! US Air is basically telling you that it is a privilege to pay the hire fair in order to get the "perks". He is failing to say that it really is directly opposite. The reason they started the FF programs was to attract loyal customers. What US Air is doing now is showing us that they feel they have captured a large enough market share, to demand that all FF subscribers pay more for a service that initially was to attract them in the first place! We as business travelers make up virtually the entire airline industry. US Air said it, if you do not like it go somewhere else. For all US Air travelers, that is exactly what you need to do. Remember the reason for the discounted fares is to get you on the plane, if they don't have you on the plane they don't make money, plane and simple.

Am I the only one who has this image in his head.

This marketing guru at USAir is an industry dinosaur with about 30 years of "experience" kicking his feet back thinking..."This is exactly how I have it all planned out, sure there will be some uproar, but they are so stupid that they will be back begging for us again."

This guy somehow has the perception that this is sellers market and that his supply is far less than demand and that somehow people just HAVE to fly USAir.

The other thing that bothers me is the undertone that somehow the FFs are doing something sleazy here. Almost has the flavor as if we are stealing from USAir. This guy wants us to feel like scumballs for GIVING HIM MONEY. Isn't there something fundamentally flawed here? Are we not simply purchasing the fares that are offered?

I also don't "get" how upgrades cost anything at all (other than the small cost of the preferred desks). Look, upgrades are only good if somebody doesn't PURCHASE the first class seat right? So, if nobody does, then at flight time what economic difference does it make if I sit in coach or FC?

Here are the facts. First and foremost, the FFs are not the scumballs here nor are the employees at USAir. The real sleaze is in the executive level at USAir (don't believe it, as some FA's or gate/ticket agents, they will tell you also). Here's what they have done.

1. Screwed over the employees (asked them to take salary cuts and then recently gave out $6,000,000 in bonuses to upper management).

2. Screwed over the stockholders and pensioners (remember all the "hang in there we aren't going to file bankrupcty" emails so people didn't dump their already massively devalued stocks? By the way, U was delisted from the NYSE and now is OTC worth basically nothing).

3. Screwed over their suppliers and lessors for billions of $$ (all outstanding debts are uncollectable).

4. Screwed over customers with this last batch of crap.

I don't know what they call that in airline lingo but in baseball (I know a bad example also) they call it a grand slam.

These "executives" are really ethical aren't they? Congratulations on a job well done.