United CFO Rainey Implies Certain Elites were "Over Entitled".
#886
Moderator, Omni, Omni/PR, Omni/Games, FlyerTalk Posting Legend
Join Date: Oct 2004
Location: Between DCA and IAD
Programs: UA 1K MM; Hilton Diamond
Posts: 67,138
I have no doubt that the generous, over-rewarding MileagePlus program has created lots of over-entitled elites.
When two airlines merge, there has to be changes to either or both programs. And it's not like there are negative changes only -- UA flyers get intra-asia CPU, more generous SDC policy, better award flexibility etc. I don't see why the new program is constantly being complained.
When two airlines merge, there has to be changes to either or both programs. And it's not like there are negative changes only -- UA flyers get intra-asia CPU, more generous SDC policy, better award flexibility etc. I don't see why the new program is constantly being complained.
On the "improvements," intra-Asia CPU are of questionable value at best (and a downgrade in the eyes of many PMUA flyers to see a 737 replace a 777 / 747). I'll call that a wash.
The SDC policy is more generous in timeframe (24 hours from time of original flight & desired new fligth vs. 3 hours from time of desired new flight), but more restrictive in terms of fare class availability (PMUA only required H regardless of what the ticket was booked in). However, given UA allows a buy-up to the appropriate fare with no change fee as part of SDC, that latter point isn't as big a deal as one would imagine. A net positive, I agree.
I think the reason pax are complaining is that many of them have lost appreciable benefits under the new program (loss of bonus RDM for all but 1Ks, loss of E+ advance seating for 2Ps, loss of 4 RPUs for 1Ks, loss of dedicated reservations & CS for 1Ks, loss of MM benefits like RPUs with the only gain being spousal status, etc.).
These are real reductions, be they financially necessary or not. Obviously, people are going to complain about losing things they had previously. That doesn't even begin to start on all the other issues people have experienced unrelated to loss of benefits.
So yes, I can see why people are complaining.
#887
Join Date: Apr 2004
Programs: UA 1K 3.01MM Hyatt Globalist (Lifetime) AA ExPlat (real), Lifetime UniClub (not from the 2MM).
Posts: 173
Bingo! Rather than try to get $20 more for 9C, why not try to get $200 more for a seat you would not have sold? United could actually make real money by noticing that I routinely fly LAX to ORD and if I have not flown it for a bit, and if they have some open seats, for this weekend, drop me an email offering me a round trip for 75% of the average price I pay for that route. As has been said many times, but still not really understood by Smi/J is that the goal of MP should be to generate revenue they would not have received, at a price above the marginal cost of providing the service (fuel, drinks and food, etc.).
#888
Join Date: Jan 2006
Location: Arlington, VA
Programs: UA 1K, AA PLT, SPG PLT
Posts: 1,612
It's a bit scary to think that they'll basically classify folks in a few buckets based on how 'easy' they are to sell stuff to...but I bet that they will start doing this.
Oh, Ma & Pa Kettle spent $200 for an upgrade on a trip in February, ask them for this upcoming trip, but bump it up to $250. And if they reject, the next time it asks, it might request $200 again...and so on for each individual passenger/group/etc.
There is so much data out there and the way that CFO Rainey talks about it, I would already bet that they've been looking at this data from a non-automated standpoint to see the price points that they can start charging folks to undersell elites on almost everything.
-jeremy
#890
Join Date: Mar 2012
Location: Chicago, IL
Programs: AAdvantage, MileagePlus(ick)
Posts: 296
I don't believe MP was "over-rewarding." @:-)
I think the reason pax are complaining is that many of them have lost appreciable benefits under the new program (loss of bonus RDM for all but 1Ks, loss of E+ advance seating for 2Ps, loss of 4 RPUs for 1Ks, loss of dedicated reservations & CS for 1Ks, loss of MM benefits like RPUs with the only gain being spousal status, etc.).
These are real reductions, be they financially necessary or not. Obviously, people are going to complain about losing things they had previously. That doesn't even begin to start on all the other issues people have experienced unrelated to loss of benefits.
So yes, I can see why people are complaining.
I think the reason pax are complaining is that many of them have lost appreciable benefits under the new program (loss of bonus RDM for all but 1Ks, loss of E+ advance seating for 2Ps, loss of 4 RPUs for 1Ks, loss of dedicated reservations & CS for 1Ks, loss of MM benefits like RPUs with the only gain being spousal status, etc.).
These are real reductions, be they financially necessary or not. Obviously, people are going to complain about losing things they had previously. That doesn't even begin to start on all the other issues people have experienced unrelated to loss of benefits.
So yes, I can see why people are complaining.
Essentially, UA is not doing what they are pledging...regardless of if they INTEND to do what they say or not within a year or so from now.
There is the serious sense that they are being disingenuous NOW.
On top of that, we have the nebulous new policies, and most of the staff don't even know what those are part of the time.
IRROPS are up, MX are up (so it feels that way) and the system they have to deal with those is more difficult, less helpful to us and the staff.
Clearly, it is a rudderless ship.
I already saw this movie. The girl miraculously lives floating on a door, the boyfriend dies.
#891
Join Date: Apr 2004
Programs: UA 1K 3.01MM Hyatt Globalist (Lifetime) AA ExPlat (real), Lifetime UniClub (not from the 2MM).
Posts: 173
TSA has had Priority lanes at nearly every airport that I have visited.
1K res --- Every time I call the old UA 1K # my call is answered almost immediately.
Last edited by majortom; May 22, 2012 at 12:59 pm
#894
Join Date: Feb 2007
Programs: Plenty
Posts: 227
It is business, nothing more.
I have three take aways from all of the recent enhancements, er, changes.
1) It is what it is. I am not married to United. This is a business relationship, nothing more. United is making decisions which are not favorable to me. As a response, I have already begun to change spending patterns. Given that it is now crystal clear in which direction the the current management team is taking United, I will accelerate this shift.
2) Logic and rationality still has its place. Given that I am beholden to one of the strongest United hubs and that I fly to destinations well served by *A, I will retain my 1K status (just about). Going forward, this will include less BIS on UA metal, and definitely less income/mile credited to United. Why - because it is rational for me to do so. The declining value of United's offerings to me is resulting in a shift of spending to other carriers which value my spending more. If United's CFO would have taken a behavioral economics class, he could have foreseen this value-optimization response behavior (if he took such a class, he should ask for his money back).
3) United's management in my view is not even half as smart as they think they are. Make of this what you will... But here's a basic example. I control the travel budget of a small consulting firm. I also make decisions about family and extended family travel. This amounts to more than $ 100,000 annually in air travel. I have done so for nearly a decade, and will do so going forward (spend is going up, incidentally). Think about this in terms of customer life time spend - now we are not talking about peanuts. United used to receive about 70% of this spend (and has all the data to figure this out), going forward it will receive much less.
I am not a GS, I do not and never will spend $ 16,000 on a C fare to Sydney. But multiply my spending shift with 1,000s if not 10,000s of customers doing the same, and soon you are talking real money. Good luck with starting a p.....g match with a customer segment which has proven to deliver a large, sustained, and predictable revenue stream.
1) It is what it is. I am not married to United. This is a business relationship, nothing more. United is making decisions which are not favorable to me. As a response, I have already begun to change spending patterns. Given that it is now crystal clear in which direction the the current management team is taking United, I will accelerate this shift.
2) Logic and rationality still has its place. Given that I am beholden to one of the strongest United hubs and that I fly to destinations well served by *A, I will retain my 1K status (just about). Going forward, this will include less BIS on UA metal, and definitely less income/mile credited to United. Why - because it is rational for me to do so. The declining value of United's offerings to me is resulting in a shift of spending to other carriers which value my spending more. If United's CFO would have taken a behavioral economics class, he could have foreseen this value-optimization response behavior (if he took such a class, he should ask for his money back).
3) United's management in my view is not even half as smart as they think they are. Make of this what you will... But here's a basic example. I control the travel budget of a small consulting firm. I also make decisions about family and extended family travel. This amounts to more than $ 100,000 annually in air travel. I have done so for nearly a decade, and will do so going forward (spend is going up, incidentally). Think about this in terms of customer life time spend - now we are not talking about peanuts. United used to receive about 70% of this spend (and has all the data to figure this out), going forward it will receive much less.
I am not a GS, I do not and never will spend $ 16,000 on a C fare to Sydney. But multiply my spending shift with 1,000s if not 10,000s of customers doing the same, and soon you are talking real money. Good luck with starting a p.....g match with a customer segment which has proven to deliver a large, sustained, and predictable revenue stream.
#895
FlyerTalk Evangelist
Join Date: Mar 2002
Location: SPI
Programs: AA Gold, UA LT Plat, Mar LTT
Posts: 18,147
My take about how one can PROVE they weren't talking about Silvers is "easier".
The mere fact that they've taken elite levels off the flight manifest is this proof. Who, other than HIGH LEVEL elites, was served by the FA's having that data???
NO ONE!!! @:-)
The HouCrew did that little bit of UA "cleansing" pretty early on, wouldn't you agree??
Dave
#896
Join Date: Oct 2004
Location: PDX
Posts: 2,284
I am not a GS, I do not and never will spend $ 16,000 on a C fare to Sydney. But multiply my spending shift with 1,000s if not 10,000s of customers doing the same, and soon you are talking real money. Good luck with starting a p.....g match with a customer segment which has proven to deliver a large, sustained, and predictable revenue stream.
"While UA was pulling up the sofa cushions looking for the nickels and dimes (TODs), they overlooked the cash sitting right out in the open on the coffee table."
#897
A FlyerTalk Posting Legend
Join Date: Jun 2005
Posts: 57,604
My point is that individualized offers (which may be inversely related to loyalty) are the wave of the future, as much as we may hate them. I just hope that excludes upgrades and actual airfares. Asking UA not to use the treasure trove of info to get each person to spend more is useless. Harrahs, Google, FB and others won't stop. Letter writing, 1K voice and other communications is near useless. Only your feet may get results, although I bet you will be tempted back with special individualized bonus offers.
The GUP is an instrument that I have EARNED by purchasing travel on UA to the tune of 100k+ miles per year. If UA didn't provide inducements such as GPU/RPU/CPU then I would spend my money elsewhere. Either I would find a provider who provided the services and amenities that were attractive enough to earn my business or I would go with the lowest cost provider for each trip. So the GPU does provided economic benefit to UA by attracting frequent flyers like me to repeatedly purchase their service in lieu of other providers.
.................
If GPUs are costing UA too much then they should amend the program and eliminate that benefit. Then those of use who value that benefit could decide if losing it is enough of a downgrade to search for another provider. I would appreciate the honesty in that move relative to selling the upgrade out from under me for less than the difference that I paid on a W fare.
.................
If GPUs are costing UA too much then they should amend the program and eliminate that benefit. Then those of use who value that benefit could decide if losing it is enough of a downgrade to search for another provider. I would appreciate the honesty in that move relative to selling the upgrade out from under me for less than the difference that I paid on a W fare.
#898
Join Date: Jun 2004
Posts: 102
Zabes64, your post was very, very good. Thank you!!!
My take about how one can PROVE they weren't talking about Silvers is "easier".
The mere fact that they've taken elite levels off the flight manifest is this proof. Who, other than HIGH LEVEL elites, was served by the FA's having that data???
NO ONE!!! @:-)
The HouCrew did that little bit of UA "cleansing" pretty early on, wouldn't you agree??
Dave
My take about how one can PROVE they weren't talking about Silvers is "easier".
The mere fact that they've taken elite levels off the flight manifest is this proof. Who, other than HIGH LEVEL elites, was served by the FA's having that data???
NO ONE!!! @:-)
The HouCrew did that little bit of UA "cleansing" pretty early on, wouldn't you agree??
Dave
#899
Join Date: Apr 2010
Location: Pikes Peak COS
Programs: 3 Month Delta Plat, UA PP 2.4mm, Marriott Lifetime Titanium, HH Lifetime Diamond, National EE
Posts: 426
Zabes64, your post was very, very good. Thank you!!!
My take about how one can PROVE they weren't talking about Silvers is "easier".
The mere fact that they've taken elite levels off the flight manifest is this proof. Who, other than HIGH LEVEL elites, was served by the FA's having that data???
NO ONE!!! @:-)
The HouCrew did that little bit of UA "cleansing" pretty early on, wouldn't you agree??
Dave
My take about how one can PROVE they weren't talking about Silvers is "easier".
The mere fact that they've taken elite levels off the flight manifest is this proof. Who, other than HIGH LEVEL elites, was served by the FA's having that data???
NO ONE!!! @:-)
The HouCrew did that little bit of UA "cleansing" pretty early on, wouldn't you agree??
Dave
#900
A FlyerTalk Posting Legend
Join Date: Jun 2005
Posts: 57,604
All this makes me wonder if UA really doesn't have a solid set of numbers on the longer term impact of cutting elite benefits. Without that data they'd likely just squeeze in areas where the costs are greatest. Maybe they're just pushing certain levers here and there and will assess the impact over the longer term. This would fit with UA Insiders reports that some of the upcoming changes might not be implemented for up to a year(!). Maybe UA is simply standing back and watching as we all squirm under the new rules and waiting see what happens. It will take them a while to clearly see long term trends and only then will they consider adjusting. It seems to fit with most of the attitude and actions from the new UA so far.
The more I read about the circumstances for people moving cumulatively substantial amounts of business away from UA, it makes me think that the current era of the airline will be looked back on as:
"While UA was pulling up the sofa cushions looking for the nickels and dimes (TODs), they overlooked the cash sitting right out in the open on the coffee table."
"While UA was pulling up the sofa cushions looking for the nickels and dimes (TODs), they overlooked the cash sitting right out in the open on the coffee table."
Last edited by halls120; May 22, 2012 at 2:32 pm