bmvaughn

2005, 2006, 2007 all had paid DEQM. I expect future DEQM promos to be near year end, and require a fee to take advantage of them.

LinBros

There's a hard cost to DEQM promotions because of the incremental RDMs that are awarded.

Simple example. Let's say UA matches AA and I fly 25K miles on discounted economy fares during the DEQM promo and 50K miles on discounted economy fares the rest of 2012. I'm using discounted economy fares to eliminate any complications with class of service bonuses.

Without the DEQM boost my total EQMs would be 75K and my total RDMs would be 25K+(25K*1.25)+(25K*1.5) = 93,750.

With the DEQM boost my total EQMs would be 100K and my total RDMs would be 12,500+(12,500*1.25)+(25K*1.5)+(25K*1.75)=109,375 which is an extra 15,625 RDMs (+16.7%).

Plus in this example the 6 SWUs and the extra Regional UGs.

But the deciding factor will be whether UACO believe that the AA DEQM promo will steal share especially among the higher fare paying crowd who just might bee tempted by the higher quantity of SWUs with less restrictions.

luv2ctheworld

They can always just give EQM and no RDM in the promo... but more importantly, they can use it as a "consolation" prize for the Gold and Platinum (1P/1P+) who saw their 100% RDM get cut by 25-50%.

C'mon, throw'em a bone!

escapefromphl

I don't think an instrument (SWU) which requires the customer to buy a more expensive fare for the chance to occupy an unfilled business/first seat is an expense for United.

jiburi

After already 6 days after AA's announcement I am doubting this will take place.

With the pending account merger and craziness with million miler calculation on the merged account, I am doubting UA/CO could risk having additional "DEQM" event until million miler balance is finalized.

Just a thought.....

Jiburi

fivesixseven

Yes, you might be right.

LinBros

And you're probably wrong! While the account consoldiation issue is there, the programming for DEQMs is already in place for the CA/IL/TX residents for ORD-LAX/SFO/SNA. Removing the route and residency restrictions would be a simple task if financially/strategically UA wants to match.

fivesixseven

Yes, you might be right too.

PBAudit

Here are my guess/predictions;

1) If Delta matches, then United will immediately match. United cannot afford to be the only one left not offering DEQM. Note- there is much less (i.e. no) speculation on the Delta about DL matching AA. Because of rollover EQM’s, the idea of DEQM’s is not as exciting. Likelihood – Low.

2) If AA promotion is pulling away “significant” traffic from United (and Delta). Since January is a slow month with plenty of excess capacity, incremental traffic that normally would go to UA (or DL) will not be “made up” later on (i.e. backfilled by other travelers). Given years of traffic history, United expects a certain $ from January 2012. I’m sure they are watching their January bookings and comparing against their historic/expected level of bookings. If bookings are down significantly, then this will lead to a DEQM match. Likelihood – Moderate.

3) The delays in responding will also lead to a short term decline in January bookings. As other have posted, they have been holding off making January plans, awaiting United response. In the short term, this will depress bookings, but some of this will be made up as time goes by (i.e. wait until the last day to lock in the advance purchase fare). Likelihood – Moderate (short term)/Low (longer term).

4) If American extends their DEQM through the end of February. Withstanding one month of depressed earnings may be OK, but two months will not. Most public companies will try to avoid surprising analysts with lower quarterly earnings. BTW, my guess is that American will extend their promotion to the end of February as demand is as low (if not lower) than January. If the DEQM promotion brings in significant incremental revenue, then it would make sense to extend it another month. AA is trying to build/maintain loyalty and getting more frequent flyers to try/fly American is a smart move while going through the initial Bankruptcy phases. Likelihood – Moderate/High.

NOTE - If United matches, they may wait until after Christmas (or make them eligible for DEQM after Dec 26th). United can “back fill” those tickets taken up by AA DEQM’s during the next few days, as the planes will be full. There is no financial reason to offer DEQM’s for the busiest days around Christmas.

LinBros

Would be easy to simply match now but only make DEQMs apply to future ticketing (or to tickets issued on/after the date that AA launched their DEQM promo). That would significantly insulate UA from revenue dilution on existing tickets for next week when flights are already extremely full and fares are quite high.

MarkedMan

Ah, but this penalizes those who already have significant travel booked in Jan (with a DEQM I will be almost plat by Jan end). Heck, if I have some B/Y/D business on UA (which I do) and they pulled that kind of stunt on me I would be almost tempted to get a status match and switch my flights to AA.

Waiting until next Monday makes good sense for sure.

ozstamps

As they have ran DEQM many times network wide, the programming and bug testing will have already be neatly in place.

I doubt the abject mess they are making of the Million Miler program will be connected to any decisions on this.

Is Smisek and Yo Yo penny-pinching cohorts get their way we'll probably have a HEQM promo.

HALF EQM .......................

LinBros

But only for residents of Australia

frankmu

Looks like the Points Guy got a tip, the promo will be double awards?

nova08

I received an error as well. If he has the terms correct that is a weak promo if you ask me. Only double RDM's and fare class restrictions. It is probably cheaper to buy the lowest fare available and buy the RDM's.