Redundant

Redundant

:rolleyes: Smug? pot-kettle-black

A new low? I don't think so!!! In my opinion that award went to UNITED a couple weeks ago, with their announcement that they will start charging customers for checking a second bag, which I think is absurd. They are the ones who started this craziness. Not only will they charge for a second suitcase, they are the ONLY airline that charges extra for a coach seat and have the nerve to call it an UPGRADE!

While I'm not happy about only getting the miles flown, instead of the 500 minimum, the reality of the situation is that the miles flown is all you deserve, the difference that we've been given and come to expect over the years was A GIFT. Now that times are hard, all the airlines are looking for ways to curb costs and build revenue. And, I would definitely prefer to get only the miles flown, as opposed to raising prices (again-not that it won't happen) or paying to check a second suitcase. However, as an offset to changing the minimum number of miles, it would be nice if they lowered the qualifications for the top tier elite levels to 50K and 75K like most of the other airlines. At least, that would make the change more palatable.

Southwest did much the same (charging extra for a coach seat) with its Business Select fares starting November 8, 2007.

Do those people in Tempe get paid for making just any kind of decisions, or are they expected to make good ones? In my world, if I pulled off this kind plan, I'd be shown a stack of customer letters & thrown out the door.

Although my short-hop miles are not a lot, I do fly from the west coast to places like BDL, MDT & PVD, and the 500 mile minimum is a little offset for what is usually a nuisance connection at BWI or PHL. I also get that odd PHX-LAS 225 mile connection sometimes, depending upon where I fly in from.

I'm writing a letter to US, but I'm not going to boil over just yet. Personally, I think the UA 2nd bag charge is much more justified and appropriate- if the carriers need to dig up a little more revenue, I'd rather they do it by bumping fares in selective ways like that. (I have NEVER flown w/ 2 bags in 25 years, and can live cleanly & presentable from a carry-on for 10 days).

Unless US wants to drive away top fliers and have no first class like SW, they had better give some thought to where those DM passengers will go. Just when I thought US was getting a tiny bit better, they come with this.

While it might be new for US it isn't for other FFPs. Many have actual mileage without minimums, AND further reduced to 70% or 50% or worse in the discounted fare classes. The worst though is nil mileage earning. Some FTers have learnt that the hard way - imagine flying LHR-AKL and getting zero mileage credit for it!

Plenty of data to back this up. When United declared bankruptcy several years ago, they had to open up all of their books and the only program that was still in the black was their FF program. The Economist had an in depth article on this last year and looked at how airlines value miles and the cost/profit from a global perspective. Most airlines place no liability on mileage balances under the minimum award ticket (25000 miles). For every 25k in each account, the airlines put a cost/liability of anywhere from $20 to $40. This is the cost associated to fly a person on a FF ticket. Since most of the cost are fixed (gate agents, pilots, baggage handlers. . .) the true cost is what the passenger burns up in extra fuel and food/drink served on board. You also need to take into account the vast majority of seats of award tickets are capacity controlled so using sophisticated computer models using past bookings, airlines can predict how full their flights will be and offer awards based upon how many seats they will sell and that is why allocations for award seats vary by airline and route and time of day. Most award seats are seats that the airline would not have sold so they are not loosing revenue from people paying for their tickets. Did you ever wonder why award inventory increases dramatically the last few days before a flight departs?

According to the Economist, the airline industry in 2006, sold roughly $10,000,000,000 worth of miles to third parties (credit cards, hotel chains, car companies. . . . .) and redeemed $2,500,000,000 in award seats(using the formula mentioned above). That left a profit of roughly $7,500,000,000!

If you want to get an idea of how much money just the credit card companies pay the airlines for miles, just look at Citibank that pays on average $300,000,000 to American Airlines each year. That is a ton of money for not flying one passenger.

Another piece to look at is the valuation investors put on mileage programs. Air Canada sold a stake in their program for a sizable amount last year and some people estimate that American and United could sell their programs for $5,000,000,000 or more.

All of this points to how profitable FF programs are. Do you still think this sounds like BS?

I haven't read the entire thread or the ones on the UA/US boards - FT is operating very slowly for me today, but here's my $0.02:

(1) As far as I can tell by reading the boards, people generally like United's E+ cabin. Elites get it included in the price of their ticket; non-elites can buy up for a reasonable fee. United usually speaks positively of it in their investor comments - they seem to have priced it such that the public has reacted positively to it (whether buying individual E+ segments or buying enough tickets to become a Premier member). And it actually is a seat that provides additional legroom over what other airlines give you in coach - it's not a case where they are making you buy up from a 28" seat to a 31" seat or something like that.

(2) The US Airways move surprises me, because I always thought those short hauls were their bread-and-butter. They operate extensively in the Northeast where cities are closer together. They get high revenues per mile on a bunch of these routes. Why they would actively seek to discourage pax to fly them is a mystery to me. The only conclusion I can reach is that airlines are finding that carrying fewer human pax opens up more availability for cargo. Maybe cargo is more profitable per pound carried? I don't know.

I'm seeing a LOT of airline customer service policies that seemed aimed directly at discouraging humans from using that airline. I almost wonder if loads are TOO high for optimal profit. Although this one is strange because it seeks to discourage everyone from flying, not just the guy on the S fare. At least WN's policy is crafted in a way that reward the business fare. I guess US could be seeking to migrate strategy overall and jettison some of these short routes.

Another USAir horror story
 

I have to fly frequently between Burlington, VT and Philadelphia and the advance-purchase fares are generally over $600. This is more expensive than many flights to Europe at this time of year, let alone across the country. Other flyers like me from the small cities they serve are propping up this airline financially and now this! Turning the screws on your best customers.

It looks like I'll be driving the 2+ hours to EWR to fly Continental. Oh, and I just heard that AirTran will be soon offering service from BTV to BWI. Goodbye USAir. I won't miss you or the god-awful customer "service" at the Philadelphia airport.

Hardly BS
 

I've read the same reports that estimate the value of American's Advantage program at $5 billion. As of today, the market cap of the airline is $3.8 billion, making their mileage program worth more than the entire airline.

The market cap of UA is $4.3 billion. I've never read anywhere that investors place the same value on UA MP that they do on the AA program, but let's say for the sake of discussion it's only worth three-fourths as much -- Mileage Plus is still worth at least as much as the entire airline.

Dupe thread ... sorry

Us Airways mileage minimum
 

I hear a lot of people talk about the cost per mile. Here is the way I figure it. I fly short trips all the time from Scranton to Baltimore. I figure i will lose around 100000 miles this year with the new implementation. I will spend 20 to 30 thousand in the cost of tickets excluding taxes and fees. if I defect they will lose this money. If I stayed and they gave me the miles, it would get me maybe $5000 in free tickets max. But most of the time they are giving away free seats any way and it really doe not cost them anything. If 1000 people defect with the same cost, they would lose 2 to 3 million dollars minus maybe 50000 that they may save. Does not sound like good economics to me.

Goodbye US! :td:

You very well might be onto something. I don't know how to migrate a quote from one thread to another, but SWABrian said as much over on the RR board when justifying their new baggage charge. His attention was on space down in the hold, and not humans, of course. But it was the first time I've seen offical mention of the importance of cargo, and the zero-sum game.