United CFO Rainey Implies Certain Elites were "Over Entitled".
May 19, 2012, 9:19 pm
#241
Join Date: Oct 2009
Programs: UA 1K 1MM
Posts: 455
I need to keep repeating two points.
They want business travelers.
They are giving the analyst community no indication that their actions might have any negative implications on the number of business travelers that will choose to use their services.
As I read this thread I am pretty darn certain that they have miscalculated. There are clearly business travelers that are upset and are voting with their feet and their wallets. And I further believe that their are powerful people in many corporations who are whispering in the ears of their travel departments telling them to drop United. It is this feedback loop that either will prove to be the death of this management team, or if I'm wrong, will eventually force me to move to another airline.
They want business travelers.
They are giving the analyst community no indication that their actions might have any negative implications on the number of business travelers that will choose to use their services.
As I read this thread I am pretty darn certain that they have miscalculated. There are clearly business travelers that are upset and are voting with their feet and their wallets. And I further believe that their are powerful people in many corporations who are whispering in the ears of their travel departments telling them to drop United. It is this feedback loop that either will prove to be the death of this management team, or if I'm wrong, will eventually force me to move to another airline.
May 19, 2012, 9:19 pm
#242
Join Date: Jul 2010
Location: MKE
Programs: DL-MM-Diamond HH-Diamond
Posts: 3,218
Wow!!
May 19, 2012, 9:22 pm
#243
Join Date: Jun 2011
Location: Colorado
Programs: United MM (formerly 1K), Marriott Lifetime Gold
Posts: 551
The interest in this thread is amazing
over 13,000 views in 12 hours. That has to be close to a record? I hope Rainey is taking notes that his wish appears to be coming true.
May 19, 2012, 9:27 pm
#244
FlyerTalk Evangelist
Join Date: Mar 2000
Posts: 17,425
As a lifetime 1K (from the CO side) and a sometimes investor in the airline industry, I've read the comments in this thread with great interest. A few observations:
1. Flying an airline should be an economic decision, not an emotional one. There's too much emotion here. If you can get a "better deal" flying UA, you should fly them. If another airline will give you more bang for your buck, you should fly them. And just because an airline USED to give you good value, doesn't mean you should stick with them.
2. From a business perspective, "old UA" was poorly run. It may have done some things right, but the number one thing a business has to do right is make money. UA management was bad at that. That's why they're gone, and things are changing.
3. The "over-entiled" comments by new CFO Rainey were incredibly stupid. Did he not realize that the investment conference was webcast? They all are. Frequent flyers would obviously hear that remark and become angry. This was an unforced error. If I were Smisek, I would take him to the woodshed for this. First thing I'd do is make him read the comments here.
4. While management can't public say it, there ARE over-entitled frequent flyers in the MileagePlus program. There are also under-entitled ones. The reality is that the way the legacy frequent flyer programs are structured, you tend to over-reward very-loyal-but-low-paying customers at the expense of less-loyal-but-high-paying customers. Being smart, CO management has realized this for years and has tried creative solutions to deal with it. So far, though, they've been unwilling to "blow up" the established system, and have instead tried to tinker with it.
5. But tinkering can go too far. Selling last-minute upgrades is definitely "too far." The key to keep your customers happy is to treat them fairly. The airline publishes rules on how upgrades are supposed to work (lately, these rules have gotten too complicated, but that's a topic for another day). Your customers learn the rules and accept them: like everyone knows that a silver will likely get upgraded after a gold. But when you start selling upgrades to the highest bidder, you're disregarding your own rules, and your customers (rightfully) start feeling cheated. You're not giving them what you promised. This is a shameful practice and should be stopped immediately.
6. The whole upgrade system needs to be re-engineered: there are too many elites and too few seats. Honestly, I think it would be smart to guarantee all golds and above an economy plus seat with a free sandwich and an alcoholic drink. UA could easily provide this, and it's a reasonable expectation. I think most elite customers would be happy enough. Domestic first class could be made better and become a product you have to buy (either with money or miles in most cases). The current system -- where you constantly make most of your best customers unhappy becaue you've offered them something that you're not really willing to provide -- is a bad system. I know why management is fearful of changing it, but it needs to be changed.
1. Flying an airline should be an economic decision, not an emotional one. There's too much emotion here. If you can get a "better deal" flying UA, you should fly them. If another airline will give you more bang for your buck, you should fly them. And just because an airline USED to give you good value, doesn't mean you should stick with them.
2. From a business perspective, "old UA" was poorly run. It may have done some things right, but the number one thing a business has to do right is make money. UA management was bad at that. That's why they're gone, and things are changing.
3. The "over-entiled" comments by new CFO Rainey were incredibly stupid. Did he not realize that the investment conference was webcast? They all are. Frequent flyers would obviously hear that remark and become angry. This was an unforced error. If I were Smisek, I would take him to the woodshed for this. First thing I'd do is make him read the comments here.
4. While management can't public say it, there ARE over-entitled frequent flyers in the MileagePlus program. There are also under-entitled ones. The reality is that the way the legacy frequent flyer programs are structured, you tend to over-reward very-loyal-but-low-paying customers at the expense of less-loyal-but-high-paying customers. Being smart, CO management has realized this for years and has tried creative solutions to deal with it. So far, though, they've been unwilling to "blow up" the established system, and have instead tried to tinker with it.
5. But tinkering can go too far. Selling last-minute upgrades is definitely "too far." The key to keep your customers happy is to treat them fairly. The airline publishes rules on how upgrades are supposed to work (lately, these rules have gotten too complicated, but that's a topic for another day). Your customers learn the rules and accept them: like everyone knows that a silver will likely get upgraded after a gold. But when you start selling upgrades to the highest bidder, you're disregarding your own rules, and your customers (rightfully) start feeling cheated. You're not giving them what you promised. This is a shameful practice and should be stopped immediately.
6. The whole upgrade system needs to be re-engineered: there are too many elites and too few seats. Honestly, I think it would be smart to guarantee all golds and above an economy plus seat with a free sandwich and an alcoholic drink. UA could easily provide this, and it's a reasonable expectation. I think most elite customers would be happy enough. Domestic first class could be made better and become a product you have to buy (either with money or miles in most cases). The current system -- where you constantly make most of your best customers unhappy becaue you've offered them something that you're not really willing to provide -- is a bad system. I know why management is fearful of changing it, but it needs to be changed.
May 19, 2012, 9:33 pm
#245
Join Date: Mar 2010
Location: Chicago, IL
Programs: UA 1K 3MM , Marriott Amb, Hyatt D, HH D, Hertz PC
Posts: 851
Rainey's comments, no matter what the context, are upsetting to this 19 year 1K. Since he vaiues individual transactions over loyalty I guess he'll be thrilled if I take my 40+ round trips a year on Q+ fares and give them to anybody other than UA.
May 19, 2012, 9:35 pm
#246
Join Date: Dec 2007
Location: Las Vegas
Programs: DL Platinum, AA Lifetime Gold, Hilton Diamond, Marriott Platinum, Radisson Premium
Posts: 6,638
I think it's gone faster than the PSS Thread. Note that the other thread thats generated so much interest is the AA match thread. Hint hint.
May 19, 2012, 9:41 pm
#247
Join Date: Apr 2007
Location: SFO
Programs: UA Silver
Posts: 1,155
3. The "over-entiled" comments by new CFO Rainey were incredibly stupid. Did he not realize that the investment conference was webcast? They all are. Frequent flyers would obviously hear that remark and become angry. This was an unforced error. If I were Smisek, I would take him to the woodshed for this. First thing I'd do is make him read the comments here.
4. While management can't public say it, there ARE over-entitled frequent flyers in the MileagePlus program. There are also under-entitled ones. The reality is that the way the legacy frequent flyer programs are structured, you tend to over-reward very-loyal-but-low-paying customers at the expense of less-loyal-but-high-paying customers. Being smart, CO management has realized this for years and has tried creative solutions to deal with it. So far, though, they've been unwilling to "blow up" the established system, and have instead tried to tinker with it.
I would consider those frequent flyers who are angered by this comment stupid, as this is the truth, and one shouldn't be angered by truth. If I run a business, I may not even want to do business with stupid customers. After all, we live to be happy, not just to make money, and doing business with stupid customers doesn't make me happy.
May 19, 2012, 9:41 pm
#248
Join Date: Aug 2005
Location: NYC
Programs: AA EXP, B6 Mosaic, UA Platinum, others
Posts: 1,270
If United wants to be a reasonably functional airline with a total POS loyalty program, they're should be aware that Delta has a 3 year head start on that position in the marketplace.
I think the future is considerably less generous loyalty programs from Airlines (potentially other travel companies too). But, United needs to realize that if they take away loyalty, customers are going to choose on price (which is a punishing game they often lose), frequency (again, a costly game to play), and quality of experience (bad seats, no wifi, pay-per-view IFE, and lousy food aren't going to win there either).
Loyalty programs covered over a multitude of sins in the past. Without that magic bullet, they're going to have to get a lot better at running an airline. And that's not easy.
I think the future is considerably less generous loyalty programs from Airlines (potentially other travel companies too). But, United needs to realize that if they take away loyalty, customers are going to choose on price (which is a punishing game they often lose), frequency (again, a costly game to play), and quality of experience (bad seats, no wifi, pay-per-view IFE, and lousy food aren't going to win there either).
Loyalty programs covered over a multitude of sins in the past. Without that magic bullet, they're going to have to get a lot better at running an airline. And that's not easy.
May 19, 2012, 9:42 pm
#249
Join Date: Sep 2010
Location: San Francisco Bay Area
Posts: 5,825
And today is Saturday... When most of us are not on our free high speed internet at work. (I am an over entitled employee too I guess...)
May 19, 2012, 9:44 pm
#250
Join Date: Dec 2007
Location: Las Vegas
Programs: DL Platinum, AA Lifetime Gold, Hilton Diamond, Marriott Platinum, Radisson Premium
Posts: 6,638
If United wants to be a reasonably functional airline with a total POS loyalty program, they're should be aware that Delta has a 3 year head start on that position in the marketplace.
I think the future is considerably less generous loyalty programs from Airlines (potentially other travel companies too). But, United needs to realize that if they take away loyalty, customers are going to choose on price (which is a punishing game they often lose), frequency (again, a costly game to play), and quality of experience (bad seats, no wifi, pay-per-view IFE, and lousy food aren't going to win there either).
Loyalty programs covered over a multitude of sins in the past. Without that magic bullet, they're going to have to get a lot better at running an airline. And that's not easy.
I think the future is considerably less generous loyalty programs from Airlines (potentially other travel companies too). But, United needs to realize that if they take away loyalty, customers are going to choose on price (which is a punishing game they often lose), frequency (again, a costly game to play), and quality of experience (bad seats, no wifi, pay-per-view IFE, and lousy food aren't going to win there either).
Loyalty programs covered over a multitude of sins in the past. Without that magic bullet, they're going to have to get a lot better at running an airline. And that's not easy.
UA is choosing to most of this in the form of upgrades...
May 19, 2012, 9:46 pm
#251
Join Date: Feb 2005
Posts: 251
It's quite arguable whether that comment was stupid, especially since it is true, as you acknowledged.
I would consider those frequent flyers who are angered by this comment stupid, as this is the truth, and one shouldn't be angered by truth. If I run a business, I may not even want to do business with stupid customers. After all, we live to be happy, not just to make money, and doing business with stupid customers doesn't make me happy.
I would consider those frequent flyers who are angered by this comment stupid, as this is the truth, and one shouldn't be angered by truth. If I run a business, I may not even want to do business with stupid customers. After all, we live to be happy, not just to make money, and doing business with stupid customers doesn't make me happy.
Any business that blames as opposed to covets customers won't be around long.
May 19, 2012, 9:48 pm
#252
Join Date: Nov 2010
Programs: 1K on UA, Platinum on CO
Posts: 336
Based on what data? As I recall BOTH airlines came in to the merger with lots of cash and lots of debt. So if UA was poorly run - so was CO.
May 19, 2012, 9:49 pm
#253
Join Date: Sep 2010
Location: San Francisco Bay Area
Posts: 5,825
From a financial perspective, Rainey made a number of positive references to Delta, and how UA is working to achieve the same results on key metrics as Delta.
May 19, 2012, 9:50 pm
#254
Join Date: Apr 2007
Location: SFO
Programs: UA Silver
Posts: 1,155
This thread is for the "over entitled" comment, and it is surprising to see the number of people annoyed by it. Are there over entitled flyers? I think everyone's answer is yes. So? What is wrong with it? Just because UA's upgrade policy is bad doesn't mean their honest comment should be bashed.
May 19, 2012, 9:52 pm
#255
Join Date: Mar 2012
Posts: 15
Good for him
It's amazing how important some people think they are.
Rewards programs were created to say thank you. Instead they've created a bunch of entitled crybabies.
It's amazing how important some people think they are.
Rewards programs were created to say thank you. Instead they've created a bunch of entitled crybabies.