United CFO Rainey Implies Certain Elites were "Over Entitled".
May 21, 2012, 7:14 pm
#797
Join Date: Mar 2010
Location: Orygun
Posts: 462
So I listened to the entire presentation today. For the most part, the deck and narrative are straight party line. Nothing different than the message over the past 18 months really at the shareholder/analysts dog and pony shows.
What was different was the over-entitled comment but also the comment about "change management." What the heck does he mean by the latter?
Am I not getting on board with UA's desired behavior to use on line tools when I can't change a flight on line, have to call and be on hold for over an hour on the "elite" line and then the call takes a half hour to field because the CSR needs to call the "help desk." I had several on these in late March and early April. Does this guy have any connection to reality?
Who the heck put this dude in front of the public? Someone send him to a presentation training seminar at least! Good grief...the ex CFO gets the last laugh I guess. Hope is enjoying Apple!
What was different was the over-entitled comment but also the comment about "change management." What the heck does he mean by the latter?
Am I not getting on board with UA's desired behavior to use on line tools when I can't change a flight on line, have to call and be on hold for over an hour on the "elite" line and then the call takes a half hour to field because the CSR needs to call the "help desk." I had several on these in late March and early April. Does this guy have any connection to reality?
Who the heck put this dude in front of the public? Someone send him to a presentation training seminar at least! Good grief...the ex CFO gets the last laugh I guess. Hope is enjoying Apple!
May 21, 2012, 7:18 pm
#798
Join Date: Apr 2004
Programs: UA 1K 3.01MM Hyatt Globalist (Lifetime) AA ExPlat (real), Lifetime UniClub (not from the 2MM).
Posts: 173
I could demand anything I wanted, but United still had to issue them. If that was the issue, there was a simple solution - stop doing it.
May 21, 2012, 7:22 pm
#799
Join Date: Jun 2004
Location: What I write is my opinion alone..don't read into it anything not written.
Posts: 9,686
The difference is E+. UA adds that as a perk for some, and a buy up option for others. It is a separate transaction, not included for the non-statused flyer. Including it in the price would not genrate siginificant more business from the Kayaker, but offering it as a buy up can.
To bundle it in may generate more sales for those "in the know" who don't shop cheapest priced carrier but buy on other things, like services, until UA sells out of that price point, now making UA higher priced, driving Kayakers to the competition until price points are equalized. By keeing it separate, it has the ability to generate additional revenue. Be it at the cheapest price point or the highest coach fare, unbundeling it alows UA to sell it for incrimental revenue.
May 21, 2012, 7:26 pm
#800
Join Date: Jun 2005
Posts: 4,645
As to your other points, we can cut out a lot of the issues you're concerned about and focus narrowly on the upgrade question, then we can break that into parts, then we can methodically work to understand how each part works.
That's it.
There is no need for anyone to change anything or make policy commitments, and so forth. That's bigger than Shannon.
But, we need to know what we're dealing with so we can make informed choices about how and where to spend our money.
I think this echoes what I've heard a lot of others asking for.
Now, if the real truth is as bad as we think it is based on the deductions we made from what we've seen, experienced, shared, posted, etc. then we'd certainly be asking for a change, but I have no illusion that Shannon would listen to our request then rush back to Houston to implement it. I understand that path is long and hard and not a straight line. With the current crew of Texas Meatheads in charge, my guess is that such a request would be summarily dismissed as the ranting of an over-entitled 1K anyway.
When I was GS, I actually offered to pay cash to top up my spend to stay in the program. Refused.
For some reason, they don't want our money. No matter how much we spend, it doesn't hit the right metrics for them. The only money that seems to matter is $29 from a kettle or $14 extra for an aisle seat. But, $20K or even $40K for that matter straight from a top flier isn't worth anything to them.
Why? I have absolutely no idea.
Would be awesome to have a flat tax system too.
Last edited by FlyWorld; May 21, 2012 at 8:01 pm Reason: merge
May 21, 2012, 7:35 pm
#801
Join Date: Sep 2002
Location: Hoboken, NJ; Pembroke Pines, FL
Programs: CO Gold, SPG Gold
Posts: 2,939
You missed the point. Does buying full Y get me into E+ US-ICN? Nope. It doesn't work on international, which was my point.
A gold could by a $1200 fare and fly in E+, but a silver could pay full Y at $5800 and not get E+ until check in unless they pay an extra $150 each way on top of that.
You'd think that extra $4600 would more than cover the E+ fee.
Just to add: if you have one of those golds flying on those $200 transcons, that one Y fare at $5800 could easily top in one trip what a 50k flyer pays all year. Not always, but it does show how ridiculous it is NOT to give full Y fares E+ access internationally or domestically if it doesn't clear.
A gold could by a $1200 fare and fly in E+, but a silver could pay full Y at $5800 and not get E+ until check in unless they pay an extra $150 each way on top of that.
You'd think that extra $4600 would more than cover the E+ fee.
Just to add: if you have one of those golds flying on those $200 transcons, that one Y fare at $5800 could easily top in one trip what a 50k flyer pays all year. Not always, but it does show how ridiculous it is NOT to give full Y fares E+ access internationally or domestically if it doesn't clear.
No, seriously, I do think that free E+ for Y/B travel does make sense and could be implemented. Do you think the Y/B fliers wouldn't pay for E+? After all, UA shouldn't leave money on the table.
This was the problem with AA's MRTC program - no differentiation between customers who valued the extra seat pitch and those who didn't. There's also the fact that bundled services make a slightly less compelling value proposition. Somehow it seems like a better deal to get lower airfare and then pay extra for a seat than to be *forced* to pay more for a seat with extra legroom.
Same with meals.
Maybe one day we'll see E+ on a 787 have 8 across seating? They might really be able to monetize that - particularly if you could sell 2-4-2 and couples could "buy" window/aisle pairs.
Last edited by iluv2fly; May 21, 2012 at 7:54 pm Reason: merge
May 21, 2012, 8:03 pm
#802
A FlyerTalk Posting Legend
Join Date: Sep 2002
Location: LAX/TPE
Programs: United 1K, JAL Sapphire, SPG Lifetime Platinum, National Executive Elite, Hertz PC, Avis PC
Posts: 42,211
I would be scared to death of posting to this group from a high-level management position. United would, in my opinion, be much better with someone who could field issues and have conversations with us without being seen as a person in authority to make those changes. Shannon cannot come out and say "What if..." and have anything but an explosively-polarized exchange. An exchange with her held accountable, by all.....
Whether Rainey said these things deliberately or by accident/meaning something else, it's obvious these folks can't say BOO without everyone here grabbing their pitchforks and vats of burning tar...in essence, our reaction is dictating the terms of the conversation. As a social media person myself, responsible for an apparel brand, if my customers were attacking my brand and product like this, I'd be running every punctuation mark past the legal team before each post and personal message.
May 21, 2012, 8:06 pm
#803
FlyerTalk Evangelist
Join Date: Jan 2005
Location: BWI
Programs: AA Gold, HH Diamond, National Emerald Executive, TSA Disparager Gold
Posts: 15,180
So not counting people who are tied to UA by contract, sales as a whole are suplply and demand. Without collusion, it is impossible to have every airline price each seat at exactly the same price, but more often than not, given (2) similarly convienent origin and destination tickets on 2 similar airlines, the prices SHOULD be about equal (The cheaper carrier will fill up quicker until prices are equalized.)
The difference is E+. UA adds that as a perk for some, and a buy up option for others. It is a separate transaction, not included for the non-statused flyer. Including it in the price would not genrate siginificant more business from the Kayaker, but offering it as a buy up can.
To bundle it in may generate more sales for those "in the know" who don't shop cheapest priced carrier but buy on other things, like services, until UA sells out of that price point, now making UA higher priced, driving Kayakers to the competition until price points are equalized. By keeing it separate, it has the ability to generate additional revenue. Be it at the cheapest price point or the highest coach fare, unbundeling it alows UA to sell it for incrimental revenue.
The difference is E+. UA adds that as a perk for some, and a buy up option for others. It is a separate transaction, not included for the non-statused flyer. Including it in the price would not genrate siginificant more business from the Kayaker, but offering it as a buy up can.
To bundle it in may generate more sales for those "in the know" who don't shop cheapest priced carrier but buy on other things, like services, until UA sells out of that price point, now making UA higher priced, driving Kayakers to the competition until price points are equalized. By keeing it separate, it has the ability to generate additional revenue. Be it at the cheapest price point or the highest coach fare, unbundeling it alows UA to sell it for incrimental revenue.
Or I just book my ticket elsewhere and tell UA to shove the whole $6100. I can get into C for that for crying out loud if I didn't have to expense Y, and UA's going to quibble over $300 "incremental" revenue when it already got over $4600 MORE than person on the S fare?
Geez, UA makes Ebenezeer Scrooge look generous.
One could take OZ, get the nearly the same 34" pitch on a 747 and better service and IFE and pocket the $300 and then some.
Or hell, had I been permitted to book it (damn FAA), I could have had UA in F domestically and SQ or OZ in C for $5k. Does UA even realize how uncompetitive they can be with this?
Your company is supposed to be like the others and pay for E+ for those international flights.
No, seriously, I do think that free E+ for Y/B travel does make sense and could be implemented. Do you think the Y/B fliers wouldn't pay for E+? After all, UA shouldn't leave money on the table.
No, seriously, I do think that free E+ for Y/B travel does make sense and could be implemented. Do you think the Y/B fliers wouldn't pay for E+? After all, UA shouldn't leave money on the table.
At that price, I was well within getting into C and that's what I ultimately ended up doing - if I'm going to have to pay the difference to E+, I'm just going to find a similar fare in C and get UA to fork out more for me.
I really tried to avoid UA on a TPAC. I couldn't get around FAA for a decent C fare on a codeshare since I was paying the difference from Y. That left me with UA unfortunately.
Whether Rainey said these things deliberately or by accident/meaning something else, it's obvious these folks can't say BOO without everyone here grabbing their pitchforks and vats of burning tar...in essence, our reaction is dictating the terms of the conversation. As a social media person myself, responsible for an apparel brand, if my customers were attacking my brand and product like this, I'd be running every punctuation mark past the legal team before each post and personal message.
Last edited by iluv2fly; May 21, 2012 at 8:53 pm Reason: merge
May 21, 2012, 8:13 pm
#804
A FlyerTalk Posting Legend
Join Date: Sep 2002
Location: LAX/TPE
Programs: United 1K, JAL Sapphire, SPG Lifetime Platinum, National Executive Elite, Hertz PC, Avis PC
Posts: 42,211
The UA CFO said a lot of things that Elites do not like but as CFO but his audience is supposed to be investors. He could have done a better job by using "code words" and other techniques to avoid annoying passengers but for investors, it is all about getting more money out of passengers while providing less service.
Investors are not your friend. They have nothing but contempt for passengers, employees and even aircraft. It is all about ROI.
All they want to hear is that passengers are paying as much as possible while being provided as little service as possible. They cheer when fares rise, elite programs are cut back and capacity cut.
For labor, they want to get as much work as possible for as little pay as possible. Nothing is better for investors than layoffs. The bigger the mass layoff the better.
Investors hate new planes and maintenance. Fuel costs are pushing aircraft into retirement but equity investors hate capex. That is why many growth companies talk about EBITDA, so capex can be charged to the Tooth Fairy, to paraphrase Warren Buffett.
Heavy maintenance has been farmed out to questionable facilities. SHARES is worse than Apollo, but it is cheaper and still CO owned, so it is great - for investors.
Investors have objectives different than everyone else, often in direct opposition. MBAs and consultants are geared to push companies, often to their doom, toward the interests of investors. Some of that will be balanced by the need to offer a competitive product and driving away too many elites will be damaging. At the same time, most of us know that there are too many elites and some need to be pruned.
I think that many of the UA issues will eventually be resolved and GS and 1K will be treated better than they are now. Some of it is the SHARES limitations which need to be fixed and probably will be.
Post Texas Air CO was a 2nd tier carrier and depended on Kettles to survive. With consolidation, the new UA needs to balance moving Kettles with retaining elites. Some elites will stay because of the routes and fares. Among the elites that have a choice, UA apparently thinks they are spending too much to try to retain them.
Investors are not your friend. They have nothing but contempt for passengers, employees and even aircraft. It is all about ROI.
All they want to hear is that passengers are paying as much as possible while being provided as little service as possible. They cheer when fares rise, elite programs are cut back and capacity cut.
For labor, they want to get as much work as possible for as little pay as possible. Nothing is better for investors than layoffs. The bigger the mass layoff the better.
Investors hate new planes and maintenance. Fuel costs are pushing aircraft into retirement but equity investors hate capex. That is why many growth companies talk about EBITDA, so capex can be charged to the Tooth Fairy, to paraphrase Warren Buffett.
Heavy maintenance has been farmed out to questionable facilities. SHARES is worse than Apollo, but it is cheaper and still CO owned, so it is great - for investors.
Investors have objectives different than everyone else, often in direct opposition. MBAs and consultants are geared to push companies, often to their doom, toward the interests of investors. Some of that will be balanced by the need to offer a competitive product and driving away too many elites will be damaging. At the same time, most of us know that there are too many elites and some need to be pruned.
I think that many of the UA issues will eventually be resolved and GS and 1K will be treated better than they are now. Some of it is the SHARES limitations which need to be fixed and probably will be.
Post Texas Air CO was a 2nd tier carrier and depended on Kettles to survive. With consolidation, the new UA needs to balance moving Kettles with retaining elites. Some elites will stay because of the routes and fares. Among the elites that have a choice, UA apparently thinks they are spending too much to try to retain them.
Southwest's management team has had it right for many years. Their philosophy puts shareholders last - employees come first so they can take care of the customers, then customers come next, then shareholders who benefit from lots of loyal, happy customers.
A savvy investor wants to see long term revenue growth, not a company just angling to hit arbitrary numbers quarter by quarter. So when you speak of investors who are our 'enemy', you speak of institutions and hedge funds and other investors who hold and trade large blocks of shares based on the numbers game....the best way to counter them is for customers like us to hold shares and vote in our own interest. A better product with happy, trained and empowered employees will result in a better experience for customers who might be willing to spend a little more to fly UA vs a competitor.
There is nothing to stop any one Flyertalker or a large group of Flyertalk members from buying up stock (currently on the cheap) and showing up at investor conferences and annual meetings to voice our concerns and suggestions and even putting forth shareholder proposals to be considered by all....just something to keep in mind. If you feel strongly enough about this airline and the direction it's taking, become an owner and help promote change.
May 21, 2012, 8:20 pm
#805
Join Date: Feb 2008
Location: ORD
Programs: Newly minted AA EXP Plat., disatisfied UA 1K, Marriott Silver & Hilton Gold
Posts: 704
Frankly with UA's lineup, there best move is to clam up and prepare for as orderly of a shut down/re-organization as they can. They don't have the management expertise (across the board, President, CFO, PR, Marketing, Customer Service - you name the department, they don't have a star player) to save the sinking ship. These guys/gals just need to get their golden parachutes setup, bonuses, etc., and wait it out until they can deploy them. There really is nothing this team can do to fix this mess. You can tell when you hire an idiot for a CFO and then let him talk to the public. Who did that? I assume another idiot. None of these guys/gals are capable of leading a real company...
May 21, 2012, 8:28 pm
#806
FlyerTalk Evangelist
Join Date: Nov 2001
Location: Wanting First. Buying First.
Programs: Lifetime Executive Diamond Platinum VIP with Braniff, Eastern, Midway, National & Pan Am
Posts: 17,492
I know many of your are incensed, and perhaps legitimately so.
Then again, I believe this was an honest statement of the business model at CO, namely that high-end frequent flyers are not worth the company's energy if they are buying a lot of cheap seats and require a costly and unwieldy infrastructure to manage them.
Then again, I believe this was an honest statement of the business model at CO, namely that high-end frequent flyers are not worth the company's energy if they are buying a lot of cheap seats and require a costly and unwieldy infrastructure to manage them.
What people should be incensed about, and legitimately so, is the CFO's defense of the SHARES system. That suggests an executive leadership team that is either being deliberately dishonest and misleading analysts or an executive leadership team that is truly clueless and out of touch with the FUBAR nature of their airline's operation.
May 21, 2012, 8:32 pm
#807
Join Date: Feb 2005
Posts: 251
Frankly with UA's lineup, there best move is to clam up and prepare for as orderly of a shut down/re-organization as they can. They don't have the management expertise (across the board, President, CFO, PR, Marketing, Customer Service - you name the department, they don't have a star player) to save the sinking ship. These guys/gals just need to get their golden parachutes setup, bonuses, etc., and wait it out until they can deploy them. There really is nothing this team can do to fix this mess. You can tell when you hire an idiot for a CFO and then let him talk to the public. Who did that? I assume another idiot. None of these guys/gals are capable of leading a real company...
May 21, 2012, 8:49 pm
#808
Join Date: Dec 2007
Location: Las Vegas
Programs: DL Platinum, AA Lifetime Gold, Hilton Diamond, Marriott Platinum, Radisson Premium
Posts: 6,638
Frankly with UA's lineup, there best move is to clam up and prepare for as orderly of a shut down/re-organization as they can. They don't have the management expertise (across the board, President, CFO, PR, Marketing, Customer Service - you name the department, they don't have a star player) to save the sinking ship. These guys/gals just need to get their golden parachutes setup, bonuses, etc., and wait it out until they can deploy them. There really is nothing this team can do to fix this mess. You can tell when you hire an idiot for a CFO and then let him talk to the public. Who did that? I assume another idiot. None of these guys/gals are capable of leading a real company...
May 21, 2012, 8:55 pm
#809
Join Date: Nov 2007
Location: Washington DC
Programs: Former 1k, Lifetime UA Gold, Starwood Gold; Avis Preferred; Hertz Gold
Posts: 1,732
May 21, 2012, 8:57 pm
#810
Join Date: Nov 2010
Location: DEN
Programs: 2012 Plat-2013 Plat-2014 Silver-2015 GM
Posts: 818
Frankly with UA's lineup, there best move is to clam up and prepare for as orderly of a shut down/re-organization as they can. They don't have the management expertise (across the board, President, CFO, PR, Marketing, Customer Service - you name the department, they don't have a star player) to save the sinking ship. These guys/gals just need to get their golden parachutes setup, bonuses, etc., and wait it out until they can deploy them. There really is nothing this team can do to fix this mess. You can tell when you hire an idiot for a CFO and then let him talk to the public. Who did that? I assume another idiot. None of these guys/gals are capable of leading a real company...
Nail, meet Hammer!
Newbies at running a large corporation. The BOD should be nervous.