FlyingProf

It seems clear that UACO is moving toward consolidating the tiers (and benefits) for 100K flyers, though could be this is a finger in the wind ...

There is much speculation about just what losing these high-mileage passengers might mean ...

Many argue that most passengers really don't have the flex to move to another airline or alliance -- but they do have a choice about pushing their mileage to move to the 100K level ...

So -- the question is, just how much revenue do these mileage runs represent? On the one hand, most MR are done at the lowest cost possible -- on the other, this means they are filling what otherwise might be empty seats, so the marginal cost of carrying MR passengers is very low.

Anyone reading FlyerTalk would assume there must be a stunning number of MR's each year. But do we have any evidence of just how many and at what value to the company?

I'll get the ball rolling and say that I probably pump about 5000 a year into MR's to keep at the 1K level ... that's not much, but maybe I'm an outlier?

It seems to me this is the money UACO would instantly lose with a devaluation of 1K/Platinum benefits ... I for one would simply reach 50K and let it go at that.

belynch

1K / $0.

WineCountryUA

Have never done a true MR, have occasionally done an indirect routing -- at little additional revenue for UA.

aacharya

For $5,000, I could make 1K on MRs alone. ($250 t-cons through IAH net 6K miles - with 20 of them, I would hit 120K).

Last year, I did one MR (defined as almost no time at destination) for $250.

But I also made two extra trips and padded time at the destination to keep CO Gold.

todorovic

An interesting topic. I definitely think that the number of captives is smaller than the airlines would like us to believe and will probably go down even further with more employers simply going with the cheapest option for business travel. However, fliers working for such companies usually have some discretionary elbow room to select a bit pricier option and that is what most frequent fliers do to maintain loyalty to a given airline. If the (perceived) benefits decline I think that most people would either switch loyalties or just go with the cheapest price especially if they are taking some heat at work for going with more expensive options.

When it comes to leisure travelers, if the benefits go down to the point where the cost/benefit ratio doesn't make sense any more most of them will switch to other airlines or forgo loyalty altogether and use the cash to pay for the things no longer provided by the FF status.

fragment54

My roommate and I are seriously weighing AA right now and we are Houston based. It would suck to have a layover in Dallas, but UACO has not been impressive recently.

GTHCGTH

I'd argue the profit margin on a ticket which represents very low revenue per mile is extremely low and the type of business which the airline least prefers. The inventory for low price tickets is fairly limited and static, and I don't buy the argument that it would "go empty" as these price tickets target the ultra price sensitive, airline preference insensitive, leisure travelers that the inventory for those fare classes would rarely, rarely, ever go unsold.

Compound that with additional costs that an elite status flier would bring (double mileage issuance, payments to lounges on international runs, increased benefits and compensation during IRROPS, and not to mention indirect cost impact of decreased revenue per high level status flier ), I would argue that a 1k doing a mileage run is some of the worst possible business for the airline.

At the end of the day, the essence of the run is the traveler taking advantage of a pricing inefficiency in at such a rate that the benefits > cost. It's a zero sum game, and if the customer is winning, the business is not as profitable.

From an airline perspective, I would be OK with my passengers not mileage running (and inflating the population of higher level elite status) and forgo that incremental top-line boost and miniscule, if at all, bottom line increase.

cestmoi123

Heck, for $7k, you could make 1k without ever leaving your house. CO Mileage Maximizer.

mkasperzak

While I do more travel than I probably need to in order to maintain my 1K status to the tune of $1500, I also spend about $1000 a year on non-essential travel to maintain my status.

FlyingProf

Whoops .. I confess to my own typo -- my extra spend is 1000, not 5000 ... though probably a bit more if you factor in times I took UA even though there were cheaper option on equivalent (legacy) carriers, or even more luxe carriers in Asia or Europe.

goalie

From my spreadsheet (includes my last flight (so far) booked thru Sept)

Projected FLIGHT EQM's: 76,144
YTD Flight EQM's: 65,567
YTD Bonus EQM's: 16,063*
YTD Total EQM'S: 81,630
Projected Total EQM's: 95,899**
YTD Flight Equity Segments: 38.0
YTD Bonus Equity Segments: 4.0
YTD Total Equity Segments: 42.0
Projected Total Equity Segments: 49.0

Total ticket costs: $4,458.90
Net ticket costs: $479.90


* Includes COS & SFO-ORD DEQM Promo

** Includes flights booked but not flown & DEQM's not yet posted

aacharya

What's a net ticket cost? Cost of the ticket subtracting miles earned?

mduell

$450 to make 1K
$125 to make 1P

CMK10

$0.00. I don't believe in them anymore and will only travel for what I consider a legitimate purpose. Though I do love cramming into extra segments/miles when I can.

mahasamatman

Fares minus bump vouchers and SkyKits.