Go Back  FlyerTalk Forums > Miles&Points > Airlines and Mileage Programs > United Airlines | MileagePlus
Reload this Page >

United CFO Rainey Implies Certain Elites were "Over Entitled".

United CFO Rainey Implies Certain Elites were "Over Entitled".

Old Jun 13, 2013, 8:50 am
  #1651  
 
Join Date: Aug 2007
Location: Chicago: ORD, MDW
Programs: United Million Mile Flyer, Hilton Silver, Marriott Gold, DL, AA WN
Posts: 514
After reading and posting to this thread for a while now, I am pretty pessimistic. It seems to me that the current management and state of affairs at CO dba UA are not going to change any time soon.

I think that we are just going to have to wait until management decides on its own to move on to bigger and better positions elsewhere (but who would hire them?) or the combination of Board, shareholders, employees, over-privileged elites, frequent flyers, ordinary travelers and corporations that do business with or supply UA just begin major protests and work slow downs. Unfortunately, I do not see this happening anytime soon.

United's rush to the bottom is not unique. For instance, AA just announced that they are soon going to squeeze more seats on their 737 and MD 80.

Visionary leadership seems to be lacking across the board these days in government, industry, education, church, and in society.

I guess what I am saying is that it looks like we had better get used to the new normal!
Karl-MDW is offline  
Old Jun 13, 2013, 9:21 am
  #1652  
 
Join Date: Jun 2005
Posts: 4,645
Originally Posted by Karl-MDW
I guess what I am saying is that it looks like we had better get used to the new normal!
I agree with you. For me, the new normal means:

1. Never pay a fare premium to be loyal to a specific airline again, and

2. Never choose a less desirable routing to be loyal to a specific airline again, and

3. Never fly more than I have to (or want to) for the sake of achieving status

What this means, in the end, is that I minimize my air travel spend and I eliminate preference for a given airline based on anything other than the fundamental value proposition in place at a given moment in time.

It's fine. I can live this way. In fact, there are plenty of benefits to living this way. But, I don't see how it benefits anyone in the airline business.
FlyWorld is offline  
Old Jun 13, 2013, 9:27 am
  #1653  
 
Join Date: May 2013
Posts: 3,362
Originally Posted by mitchmu
It's fine. I can live this way. In fact, there are plenty of benefits to living this way. But, I don't see how it benefits anyone in the airline business.
I think #2 benefits the airline business. Regardless, this mind-set is now the reality in the domestic market and I think you're aligning with the vast majority of other domestic travelers. Airlines that can win customers on these criteria will be successful in the domestic market.
fly18725 is offline  
Old Jun 13, 2013, 9:31 am
  #1654  
 
Join Date: Jun 2005
Posts: 4,645
Originally Posted by fly18725
I think #2 benefits the airline business. Regardless, this mind-set is now the reality in the domestic market and I think you're aligning with the vast majority of other domestic travelers. Airlines that can win customers on these criteria will be successful in the domestic market.
But, as a result, my spend on UA is a fraction of what it used to be.

So, how does this benefit them?
FlyWorld is offline  
Old Jun 13, 2013, 10:16 am
  #1655  
 
Join Date: May 2013
Posts: 3,362
Originally Posted by mitchmu
But, as a result, my spend on UA is a fraction of what it used to be.

So, how does this benefit them?
They have other passengers besides you.

If they offer more desirable routings and better schedules at competitive prices, they should be able to attract more customers, possibly at the expense of other carriers who are less competitive in particular cities or routes.
fly18725 is offline  
Old Jun 13, 2013, 3:15 pm
  #1656  
 
Join Date: Jan 2005
Location: ORD
Programs: 1K, MM, Marriott Plat
Posts: 427
Originally Posted by fly18725
If they offer ... at competitive prices, they should be able to attract more customers
Agreed but not seeing the prices anywhere near competitive out of ORD. I have a trip to LGA in August and Delta is $115 less. Am I missing something or do they only compete on price from non-hub airports?
seagar is offline  
Old Jun 13, 2013, 3:59 pm
  #1657  
FlyerTalk Evangelist
 
Join Date: Jul 1999
Location: ORD/MDW
Programs: BA/AA/AS/B6/WN/ UA/HH/MR and more like 'em but most felicitously & importantly MUCCI
Posts: 19,725
Originally Posted by fly18725
They have other passengers besides you.

If they offer more desirable routings and better schedules at competitive prices, they should be able to attract more customers, possibly at the expense of other carriers who are less competitive in particular cities or routes.
It's much more costly to replace a customer than retain one. One of UA's principle strategic problems, I think, is the presumption that there is a bottomless supply of customers and there is no cost to churning the base.

Anyone who works in a giant array of other service sectors, from hotels to banking to telecom, will tell you this is an insane operating principle.
BearX220 is offline  
Old Jun 13, 2013, 4:08 pm
  #1658  
 
Join Date: May 2013
Posts: 3,362
Originally Posted by BearX220
It's much more costly to replace a customer than retain one. One of UA's principle strategic problems, I think, is the presumption that there is a bottomless supply of customers and there is no cost to churning the base.

Anyone who works in a giant array of other service sectors, from hotels to banking to telecom, will tell you this is an insane operating principle.
How much should an airline spend to retain a domestic customer?
fly18725 is offline  
Old Jun 13, 2013, 5:26 pm
  #1659  
FlyerTalk Evangelist
 
Join Date: Apr 2008
Location: LGA/JFK/EWR
Programs: UA 1K1.75MM, Hyatt Globalist, abandoned Marriott LTT (RIP SPG), Hertz PC
Posts: 21,177
Originally Posted by seagar
Agreed but not seeing the prices anywhere near competitive out of ORD. I have a trip to LGA in August and Delta is $115 less. Am I missing something or do they only compete on price from non-hub airports?
Tons of competition on the route - UA is aggressively downgauging their capacity. And their LGA experience is worse than AA or DL. Probably the only route I fly where I still see empty seats.
UA-NYC is offline  
Old Jun 13, 2013, 5:35 pm
  #1660  
 
Join Date: Apr 2008
Posts: 2,359
Originally Posted by BearX220

It's much more costly to replace a customer than retain one. One of UA's principle strategic problems, I think, is the presumption that there is a bottomless supply of customers and there is no cost to churning the base.

Anyone who works in a giant array of other service sectors, from hotels to banking to telecom, will tell you this is an insane operating principle.
-
You are absolutely correct. However, how can we get Smisek and Rainey to understand this? There minds are shut closed and their motto is "don't confuse me with the facts."

In the meantime, the exodus of passengers continues.
-
dgcpaphd is offline  
Old Jun 13, 2013, 7:31 pm
  #1661  
FlyerTalk Evangelist
 
Join Date: Jul 1999
Location: ORD/MDW
Programs: BA/AA/AS/B6/WN/ UA/HH/MR and more like 'em but most felicitously & importantly MUCCI
Posts: 19,725
Originally Posted by fly18725
How much should an airline spend to retain a domestic customer?
Depends, of course. Retention investment ought to be tied to individual customer spend and projected lifetime value. But the irony here lies with how little retention can cost. Blankets and Cokes in a cold gate area during a late-night delay. Slipping you a better seat assignment if it opens up. Executing little things right, like PDBs. On up to better irrops response (for higher value customers at least) and better GPU/RPU utility.

UA seems to believe none of these kinds of things matter. They also seem willing to trade high-value customers for low-spend, zero-loyalty ones, which is incomprehensible to me as it means lower PRASM even when load factors stay constant.
BearX220 is offline  
Old Jun 13, 2013, 8:17 pm
  #1662  
 
Join Date: Mar 2010
Location: Chicago, IL
Programs: UA 1K 3MM , Marriott Amb, Hyatt D, HH D, Hertz PC
Posts: 852
Originally Posted by BearX220
Depends, of course. Retention investment ought to be tied to individual customer spend and projected lifetime value. But the irony here lies with how little retention can cost. Blankets and Cokes in a cold gate area during a late-night delay. Slipping you a better seat assignment if it opens up. Executing little things right, like PDBs. On up to better irrops response (for higher value customers at least) and better GPU/RPU utility.

UA seems to believe none of these kinds of things matter. They also seem willing to trade high-value customers for low-spend, zero-loyalty ones, which is incomprehensible to me as it means lower PRASM even when load factors stay constant.
+1000. There are intangibles (rule exception for higher value customers, other things you mention) that the arrogant, one dimensional, unimaginative UA management either doesn't understand or chooses to ignore as critical to success in this very specialized business.
jchiguy1 is online now  
Old Jun 13, 2013, 8:17 pm
  #1663  
FlyerTalk Evangelist
 
Join Date: Jan 2012
Location: Northern Calif./Eastern Ida.
Programs: Amethyst Premier Plutonium Medallion
Posts: 20,751
Originally Posted by UA-NYC
Tons of competition on the route - UA is aggressively downgauging their capacity. And their LGA experience is worse than AA or DL. Probably the only route I fly where I still see empty seats.
agreed. until recently i flew out of EWR, HPN, and LGA a ton. i was never upgraded out of EWR or on HPN E170 flights. LGA was usually a slam dunk, and i am only a gold. that, my friends, is telling.
PV_Premier is offline  
Old Jun 14, 2013, 5:31 am
  #1664  
 
Join Date: Aug 2007
Location: Chicago: ORD, MDW
Programs: United Million Mile Flyer, Hilton Silver, Marriott Gold, DL, AA WN
Posts: 514
Originally Posted by UA-NYC
Tons of competition on the route - UA is aggressively downgauging their capacity. And their LGA experience is worse than AA or DL. Probably the only route I fly where I still see empty seats.
ORD is now, once again, my main UA hub. I find that for flights with any advance purchase, DL and AA usually have lower fares.

Now, in the new normal, the only things that keep me flying UA are:
-to burn miles
-to sit in Economy Plus
-to board in the Group 2 herd - which lacking decent status (having recently put all my eggs in the UA basket) on other airlines means boarding last.
-I still have some pangs of "loyalty" and a certain familiarity even with the new CO dba UA.

But, now, in the new normal, I am more willing to agree with mitchmu:

1. Never pay a fare premium to be loyal to a specific airline again, and

2. Never choose a less desirable routing to be loyal to a specific airline again, and

3. Never fly more than I have to (or want to) for the sake of achieving status

Reality sets in. In many respects, the new normal means that the fun-filled days of playing the frequent flyer game are over. Flying is just transportation. The glory days of the 50s & 60s were replaced by deregulation. That helped bring on the world of the Frequent Flyer Program - and everything that Randy Peterson recognized made popular. The financial realities of today mean that flying is just transportation.

The new normal is becoming status based on spending - not on how many miles sitting on planes earns.

Planes are the inter city bus of today. As more and more people get used to flying low cost carriers, the majors are becoming LCCs - at least in service & amenities. Status - and sitting up front - are going to be for flyers who spend big bucks - not us "over entitled elites". Period.

Last edited by Karl-MDW; Jun 14, 2013 at 5:42 am
Karl-MDW is offline  
Old Jun 16, 2013, 10:39 pm
  #1665  
 
Join Date: Sep 2001
Location: Washington, DC
Programs: UA Plat MM, AA Gold, Hyatt Explorist, Hilton Gold, IHG Plat, Marriott Titanium Elite
Posts: 5,015
And never do a true "mileage run" - a trip with no benefits or purpose other than to achieve a higher level of FF status. That's becoming sillier and sillier every day, at least IMHO.
DCBob is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.