United CFO Rainey Implies Certain Elites were "Over Entitled".
May 19, 2012, 12:27 pm
#91
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The last iteration of PMCO (before the merger) was the rebranding of Frank Lorenzo's Texas International Airlines with PeoplExpress, one of the first LCC's.
Lorenzo's brutal tactics left CO decimated with perhaps the worst reputation any U.S. airline ever had for poor service.
When Gordon Bethune took over as CEO in the mid-90's, no self-respecting business traveler would fly the airline, so free upgrades were instituted as a desperation measure.
Things improved a lot at CO (then went downhill more recently), but at its core, CO was always run as a hybrid between a full service carrier and an LCC.
Last edited by TWA Fan 1; May 19, 2012 at 12:33 pm
May 19, 2012, 12:28 pm
#92
Join Date: Sep 2010
Location: San Francisco Bay Area
Posts: 5,825
My flying strategy is rapidly and radically changing. It reflects the reality too that FF programs/strategies are also changing including a shrinking availability for UG's on ALL CARRIERS! Currently I use all three major US carriers and look for the best fare that snags an UG with miles or is a "special" buy up. I now never count on an automatic UG. I think this guy at CO is the business wonk who is stating the current reality.
Which, as you say, seems like an attractive and viable option for many travelers.
May 19, 2012, 12:31 pm
#93
Join Date: May 2001
Location: Since the BoSox and ChiSox won it, now it is the Cubs turn to take the Series. Go Cubs Go!
Posts: 3,685
Your description just nailed me and my relationship with Delta Skymiles.
Personally, I think high-mileage and low-fare paying customer do bring lots of incremental revenue to an airline by using up excess (cheap) seat capacity and forcing others to buy higher fare buckets. I've seen the contrary case argued often at FT. In one sense, it does not matter to us, the flyers. There will ALWAYS be an airline who values high mileage customers. We are airline customers, not stockholders.
No need to help a airline see the mistake of its business decisions when it is so much easier to walk over to the competition.
I think you all get that United 1K's and GS's are being hosed.
I am surprised that United mid-tiers are not equally upset. Only a 50% bonus on redeemable miles for United 50k flyers, and 75% bonus for 75k flyers. It's still 100% for the equivalent at Delta or American.
Why waste time hoping United will change? Just choose between American and Delta, and be done with it!
Personally, I think high-mileage and low-fare paying customer do bring lots of incremental revenue to an airline by using up excess (cheap) seat capacity and forcing others to buy higher fare buckets. I've seen the contrary case argued often at FT. In one sense, it does not matter to us, the flyers. There will ALWAYS be an airline who values high mileage customers. We are airline customers, not stockholders.
No need to help a airline see the mistake of its business decisions when it is so much easier to walk over to the competition.
I think you all get that United 1K's and GS's are being hosed.
I am surprised that United mid-tiers are not equally upset. Only a 50% bonus on redeemable miles for United 50k flyers, and 75% bonus for 75k flyers. It's still 100% for the equivalent at Delta or American.
Why waste time hoping United will change? Just choose between American and Delta, and be done with it!
May 19, 2012, 12:32 pm
#94
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Some people will justify anything. If the new United should throw out E+ and upgrade benefits completely, I am sure you will be there to justify it.
The 1k that achieves his/her status solely on those $300 roundtrip transcons (if you can find them) is probably an Urban myth or, at the very least, a negligibly small minority.
I am not a really big spender, but from this day on my $10,000 to $15,000 in air-travel spending per year is going to AA. Glad I did the status match.
UA does not want my business. Fine, it is going away.
The 1k that achieves his/her status solely on those $300 roundtrip transcons (if you can find them) is probably an Urban myth or, at the very least, a negligibly small minority.
I am not a really big spender, but from this day on my $10,000 to $15,000 in air-travel spending per year is going to AA. Glad I did the status match.
UA does not want my business. Fine, it is going away.
I'm just trying to understand it.
As far as the $300 transcon, last week, I flew JFK-ONT for $302 round trip on DL. As a DL SM Silver I was upgraded on 2 of the 4 segments.
May 19, 2012, 12:32 pm
#95
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i was 1k for years, living in houston (and happy not to be a CO elite, which i tested with a status match) despite slightly higher fares and constant connections. now i'm living elsewhere, premier plat, and am not sure there's any value in retaining that. why bother?
i'm grateful to now have the luxury of choosing who i fly strictly on price. the truth has set me free.
thank you for your candor, cfo rainey. (who i'm guessing may be out of a gig soon. perhaps the truth will set HIM free as well. we can only hope.
)
May 19, 2012, 12:36 pm
#96
Join Date: Sep 2011
Location: SEA
Programs: AS MVP Gold75K
Posts: 850
may be an overstatement but with the CFO's talk,
with UA Insider's explanation of upgrades, http://www.flyertalk.com/forum/18590619-post1532.html
the discussion chinatradermr had with Senior VP of Sales, http://www.flyertalk.com/forum/18585613-post236.html
the desired relationship of the new UA with it customers and elites is becoming clear.
While there had been much speculation, these instance are all painting a much clear situation -- a Brave New World.
with UA Insider's explanation of upgrades, http://www.flyertalk.com/forum/18590619-post1532.html
the discussion chinatradermr had with Senior VP of Sales, http://www.flyertalk.com/forum/18585613-post236.html
the desired relationship of the new UA with it customers and elites is becoming clear.
While there had been much speculation, these instance are all painting a much clear situation -- a Brave New World.
I think that UA's service is similar to that of other U.S.-based airlines (except for AS, which has slightly better on-board service in my experience), but their attitude towards elites is much worse.
Obviously not using a teleprompter...
Starts at about 11:50...
"...Additionally, we also changed our Mileage Plus program, some of the benefits that, uh, accrued to the members. Uh, we, uh, we had certain groups in this group were over entitled if you will. Uh, and now, uh, we have realigned the benefits of that program with what the, the, the customers and, and, program, um, um, the participants are actually providing to the airline, and, and this is a good change going forward..."
Starts at about 11:50...
"...Additionally, we also changed our Mileage Plus program, some of the benefits that, uh, accrued to the members. Uh, we, uh, we had certain groups in this group were over entitled if you will. Uh, and now, uh, we have realigned the benefits of that program with what the, the, the customers and, and, program, um, um, the participants are actually providing to the airline, and, and this is a good change going forward..."
That said, I am unhappy (as many of you are) about the upgrade policy and other devaluations.
May 19, 2012, 12:38 pm
#97
Join Date: Jul 2002
Posts: 3,642
It will be interesting when DL and UA both migrate their FF systems to be monetary based rather than mileage base. Whether overtly (UA) or covertly (DL), the focus of both is rebalancing FF benefits to reward $IS rather than strictly BIS. I can hear the screams of collusion already.
Also, one of the most profound statements in the previous posts has to be:
"1K BIS is not to be sniffed at"
You won't find me sniffing that seat for sure!!
Also, one of the most profound statements in the previous posts has to be:
"1K BIS is not to be sniffed at"
You won't find me sniffing that seat for sure!!
May 19, 2012, 12:44 pm
#99
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My word rhymes with tool!
UA is making all these assumptions while they're the ones losing the most $.
UA is making all these assumptions while they're the ones losing the most $.
Last edited by iluv2fly; May 19, 2012 at 4:11 pm Reason: merge/edit
May 19, 2012, 12:44 pm
#100
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I am not an apologist for UA, but a charitable reading of the "over entitled" comment, in context, suggests that he might have meant "over compensated." He says that in the context of what the customers are providing to the airline.
I think he's pretty clear, they knew what they were doing (cutting elite bonii for Gold/Plat, cutting promised lifetime benefits for MMs), and did it because they think loyal flyers are 'entitled' leaches. Eliminating special service for Plats and 1Ks because some of them might be "cockroach plats/1Ks". They'll reap what they sow.
May 19, 2012, 12:48 pm
#101
Join Date: Aug 2011
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I fail to see how someone flying 25K a year was "over entitled" to get more than one free checked bag when someone with a credit card with a $395 annual fee gets a Club membership valued at $475 AND two free checked bags.
Honestly, as a silver never expecting to get upgrades, the bags and E+ were the two things I cared about most.
Honestly, as a silver never expecting to get upgrades, the bags and E+ were the two things I cared about most.
May 19, 2012, 12:53 pm
#102
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May 19, 2012, 12:55 pm
#103
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CO was "over entitled" to its customer service awards
CO was "over entitled" to its customer service awards
May 19, 2012, 1:01 pm
#104
Join Date: Oct 2009
Programs: UA 1K 1MM
Posts: 455
I listened to the whole presentation and Q & A and found it fascinating.
I was particularly interested when someone asked him about UA's recent revenue underperformance relative to Delta. He specifically mentioned three factors: Asia, where UA's China exposure has hurt them relative to DL's Japan exposure. A decision to not overbook as much (since stopped). And the transition to Orion, where there were some teething pains. Specifically, zero mention of any fallout from any Shares transition or policy changes. Even the thought of customers choosing another airline was not considered. He also said that he thought the underperformance should have just about run its course.
I think there is some hope that the things will get interesting sooner rather than later IF he is wrong and their revenue performance continues to suffer.
I was particularly interested when someone asked him about UA's recent revenue underperformance relative to Delta. He specifically mentioned three factors: Asia, where UA's China exposure has hurt them relative to DL's Japan exposure. A decision to not overbook as much (since stopped). And the transition to Orion, where there were some teething pains. Specifically, zero mention of any fallout from any Shares transition or policy changes. Even the thought of customers choosing another airline was not considered. He also said that he thought the underperformance should have just about run its course.
I think there is some hope that the things will get interesting sooner rather than later IF he is wrong and their revenue performance continues to suffer.
May 19, 2012, 1:04 pm
#105
Join Date: Dec 2011
Location: NYC
Posts: 1,393
Is there any precedent of airlines offering matches to MM status?
If I were AA, I would definitely offer some form of status match and challenge; say 100k within a year for UA MM Elites.
If I were AA, I would definitely offer some form of status match and challenge; say 100k within a year for UA MM Elites.