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

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

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Old May 22, 2012, 11:27 am
  #886  
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Originally Posted by blug
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.
I don't believe MP was "over-rewarding." @:-)

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.
exerda is offline  
Old May 22, 2012, 11:38 am
  #887  
 
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Originally Posted by 5khours
I own a company that manages loyalty programs for over 300 businesses. The trick is not to rip people off for what they are already buying but to induce them to buy things they are not currently buying. These guys really don't have a clue.
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.).
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Old May 22, 2012, 12:04 pm
  #888  
 
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Originally Posted by majortom
generate revenue they would not have received, at a price above the marginal cost of providing the service (fuel, drinks and food, etc.).
At the ~30minute mark of the presentation, Rainey mentions just this.

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
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Old May 22, 2012, 12:05 pm
  #889  
 
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Originally Posted by LilAbner
Actually, RPU's for 1K qualifier's have been reduced from 8 (one per quarter for flying plus 10K) to 4 (one @75K & another @ 100K).
Wait, do we get two each at 75K and 100K, or one, as you state? If one, it is 8 to 2.
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Old May 22, 2012, 12:06 pm
  #890  
 
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Originally Posted by exerda
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 would add that there seems to be a serious observation of the difference in "what they say" and "what the experiences are."

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.
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Old May 22, 2012, 12:10 pm
  #891  
 
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Originally Posted by LilAbner
1K/GS boarding lane just means get there a little early & stand in the Priority lane and more times than not I have had the g/a move the rope in that lane for me if I show up late --- Not something to complain about, imho.
Nope. Under the new boarding scheme, everyone with Premier Access boards on the blue carpet. That means that both lanes tend to be full. Before, I only had to worry about First, 1K and GS members, now it is half the plane.

TSA has had Priority lanes at nearly every airport that I have visited.
In many airports, United used to have separate 1K lines for the security theatre. Now the lines are for all Premier Access, again making them much less useful.

1K res --- Every time I call the old UA 1K # my call is answered almost immediately.
By agents who are nowhere near as skilled or willing to help as the old 1K Desk agents were.

Last edited by majortom; May 22, 2012 at 12:59 pm
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Old May 22, 2012, 12:10 pm
  #892  
 
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Originally Posted by JBEagle1000G
I already saw this movie. The girl miraculously lives floating on a door, the boyfriend dies.
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Old May 22, 2012, 12:20 pm
  #893  
 
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Originally Posted by JBEagle1000G

Clearly, it is a rudderless ship.
I already saw this movie. The girl miraculously lives floating on a door, the boyfriend dies.
I second ^

These all would make good t-shirts....
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Old May 22, 2012, 12:27 pm
  #894  
 
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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.
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Old May 22, 2012, 12:33 pm
  #895  
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Originally Posted by zabes64
I truly BELIEVE that they were NOT talking about Silvers and here is why: Silvers do not fly that much, their benefits were not that much
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
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Old May 22, 2012, 12:44 pm
  #896  
 
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Originally Posted by travelcomments
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.
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."
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Old May 22, 2012, 12:48 pm
  #897  
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Originally Posted by njcommodore
Priceless. 57 pages of "UA hates 1Ks" when the quote was directed to silvers and maybe even MRs, but certainly not the traditional 1Ks. ......Trust me folks, the sky is NOT falling.
given that I've found that 1K now is worth far less than it was before the merger, I would respectfully disagree.

Originally Posted by iquitos
Rainey: "More members in MP than there are citizens of France" Not a good idea to fortuitously insult that many customers who think the have a "special relationship" with your company.
Mr. Rainey may be a financial whiz kid, but when it comes to communications, he is a failure.

Originally Posted by dkc715
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.
So far, that isn't happening. I have been a frequent user of UFC before the merger, so I ought to be a prime target. I have spent far more than the average MR'er, because I value the space in C or F on a transcon, TATL or TPAC, and I have yet to receive a ToD offer, or a pre-T-24 UG offer. It's as if they want me to move to the competition, which at this point, is what I am doing. AA is happy to accept my e500 purchases and give me an upgrade.

Originally Posted by viaIAH
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.
thank you for stating so clearly what I wish United understood.
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Old May 22, 2012, 12:53 pm
  #898  
 
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Originally Posted by bseller
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
If this is true, it's astonishing to me. What possible motive would drive a business to deprive their front-line staff of knowledge about their most loyal customers?
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Old May 22, 2012, 12:55 pm
  #899  
 
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Originally Posted by bseller
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
Now I "glanced" at a manifest yesterday. I was listed as 1K, but not as a MM. There was a GS and a 1K in first, both of us noted in the manifest.
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Old May 22, 2012, 1:12 pm
  #900  
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Originally Posted by PHLGovFlyer
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.
And in the meantime, how many loyal customers do they lose? I have to wonder just whether they are thinking long term.

Originally Posted by DCEsquire
I'm finding out how this operates right now. IAD-DXB flight and almost 20 open seats in C. Wonder if I will get a TOD offer or it will go to kettle.
PLEASE let me know how this turns out. I'm on the fence on a TPAC, and before I pull the trigger i'd like to know the outcome.

Originally Posted by AeroWesty
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."
Couldn't have said it better.

Last edited by halls120; May 22, 2012 at 2:32 pm
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