Go Back  FlyerTalk Forums > Miles&Points > Airlines and Mileage Programs > United Airlines | MileagePlus
Reload this Page >

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

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

Old Jun 12, 2012, 4:34 pm
  #1321  
 
Join Date: Oct 2007
Location: Dubai / NYC
Programs: EK-IO, UA-1K2MM, ETIHAD-GOLD, SPG-PLAT LIFETIME, JUMEIRAH SERIUS GOLD
Posts: 5,220
Originally Posted by pigx5
I think GS does want upgrades.
And whoever UA lost them to is already giving them that. WE ALL like upgrades but to win back the high revenue passengers which are the only ones UA cares about, then SERVICE is the only thing that will get them back. AA already gave a lot of us 8 upgrades, so what? UA can throw us 10, then AA Will come back with 12 and on and on. Does not make anyone any money. UA needs to figure out how many high spend customers it lost (if any)? The next step is figuring out how to get them back.
chinatraderjmr is offline  
Old Jun 12, 2012, 4:53 pm
  #1322  
 
Join Date: Nov 2010
Location: ORF
Posts: 1,740
Originally Posted by LarkSFO
Service / exceptional treatment would be their #1 priority, right?
Yep
gegarrenton is offline  
Old Jun 12, 2012, 5:01 pm
  #1323  
A FlyerTalk Posting Legend
 
Join Date: Jun 2005
Posts: 58,906
Originally Posted by LarkSFO
I thought GS is customers who buy full fare C / F most of the time?
The one GS I know never buys full fare C or F. She does buy a lot of international tickets within 2 weeks of departure, which means a lot of YBM fares.
halls120 is online now  
Old Jun 12, 2012, 5:16 pm
  #1324  
 
Join Date: May 2003
Location: Redwood City, CA USA (SFO/SJC)
Programs: 1K 2010, 1P in 2011, Plat for 2012,13,14,15 & 2016. Gold in 17 & 18, Plat since
Posts: 8,828
DEQM is not coming; long term it doesn't improve RASM

Originally Posted by LASUA1K
I see a DEQM for United shortly! They will have to do something to win back passengers.
Think about that. What good would DEQM do? The upper-level elites, those who spend lots of $$$, aren't going to come back or stick around because of DEQM; they don't need extra EQMs to meet the 100k requirement. And they already see their expected benefits not coming through as it is; they're not going to be happy with further dilution of benefits.

DEQM is going to heavily inflate the ranks of 1P, Plat & 1K, with people who are not going to increase the RASM. If you just want more passengers, fine, but a better way to do that would be to simply reduce fares, since you have no real or implied continuing obligations to GMs (and 2Ps for that matter).

United needs to find a way to keep the real BIS (butt-in-seat) flyers from moving on. Those who have relatively inflexible travel needs and thus contribute to a higher RASM. Toss in a DEQM promo and you get the opposite. A lot of mileage-running by people buying cheap fares, with little high-revenue potential down the road.

The new United is, bit by bit, making it tougher to game the system. If things become desperate, yes, maybe DEQM could come back, as a way of getting those who have defected to AA maybe. But I'm really not expecting that to happen. I'm expecting that United will no longer be able to extract a fare premium like they used to.
Mike Jacoubowsky is offline  
Old Jun 12, 2012, 5:58 pm
  #1325  
 
Join Date: Apr 2005
Location: DEN
Programs: Free checked in bag on UA & DL. Free icecream at Marriott checkin.
Posts: 2,862
Originally Posted by Mike Jacoubowsky
I'm expecting that United will no longer be able to extract a fare premium like they used to.
^
Well said. In the quest for the so called MBA speak of "money left on the table", they have shot themselves in the foot. Previously I was able to justify $50-$100 fare difference just because of the service one got as 1K (forget the unlimited free upgrades, that is recent stuff). These days the experience is very pedestrian with United, so why pay the premium? Plus their penchant for Barbie and Jungle jets, makes it an easy decision when it comes to evaluating the premium aspect of it.

Yo, Bean counters - Apart from the "fabulous route network" and "the 787" how do you plan to justify the premium? As I am able to book on other carriers for my TATL/TPAC with less than stellar route network and 787, IMO you do not have a justification!
TravellingMan is offline  
Old Jun 12, 2012, 6:33 pm
  #1326  
 
Join Date: May 2009
Location: PHL
Posts: 2,842
Originally Posted by Mike Jacoubowsky
The new United is, bit by bit, making it tougher to game the system. If things become desperate, yes, maybe DEQM could come back, as a way of getting those who have defected to AA maybe. But I'm really not expecting that to happen. I'm expecting that United will no longer be able to extract a fare premium like they used to.
I don't think it is UA, the industry is in a better situation (from a business perspective) than it was 2-3 years ago when a bulk of the DEQM promo's were offered. We have seen the merger trend continue with capacity slashed so the airlines can continue to raise fares, rather than drop fares or offer promo's just to fill seats.
nova08 is offline  
Old Jun 12, 2012, 6:44 pm
  #1327  
 
Join Date: May 2003
Location: Redwood City, CA USA (SFO/SJC)
Programs: 1K 2010, 1P in 2011, Plat for 2012,13,14,15 & 2016. Gold in 17 & 18, Plat since
Posts: 8,828
Originally Posted by nova08
I don't think it is UA, the industry is in a better situation (from a business perspective) than it was 2-3 years ago when a bulk of the DEQM promo's were offered. We have seen the merger trend continue with capacity slashed so the airlines can continue to raise fares, rather than drop fares or offer promo's just to fill seats.
The industry is certainly in a better position, with better-managed inventory, recession supposedly over, and lower fuel prices.

But, United would still like to take passengers away from DL & AA, and vice versa. If they can make enough marginal revenue from all the add-ons they can sell to the Kayakers, there is the potential for profit across the food chain. Growth for the sake of growth was killing the industry, but well-managed growth will still allow opportunities to grab market share and enhance the bottom line.

The cheapest advertised fares may actually be profitable if they can sell enough a la carte benefits.
Mike Jacoubowsky is offline  
Old Jun 12, 2012, 6:48 pm
  #1328  
 
Join Date: Nov 2007
Location: Washington DC
Programs: Former 1k, Lifetime UA Gold, Starwood Gold; Avis Preferred; Hertz Gold
Posts: 1,732
Originally Posted by TravellingMan
^

Yo, Bean counters - Apart from the "fabulous route network" and "the 787" how do you plan to justify the premium?
This will make you laugh but it speaks volumes. According to S&P that has a 30 dollar price target on the stock.

CORPORATE STRATEGY. United tries to generate a revenue premium to the rest of the U.S. airline industry
by utilizing a market segmentation strategy intended to optimize margins and costs by offering the right
service to the right customer at the right time. United offers three classes of service on its mainline flights;
offers premium transcontinental service connecting New York with San Francisco and Los Angeles; and
operates United Express, its regional service, which includes a premium service on many aircraft. UAL's
frequent flyer program, Mileage Plus, has more than 58 million enrolled members, while Continental's loyalty program, called OnePass, has 41 million enrolled members. The program is designed to help the company attract and retain high value customers. In 2010, award redemptions on United represented 7.5% of
United's total revenue passenger miles, vs. 8.3% in 2009. OnePass redemptions represented 5.7% of Continental's revenue passenger miles, vs. 5.9% in 2009.
DCEsquire is offline  
Old Jun 12, 2012, 6:55 pm
  #1329  
 
Join Date: Sep 2010
Location: San Francisco Bay Area
Posts: 5,825
Originally Posted by DCEsquire
This will make you laugh but it speaks volumes. According to S&P that has a 30 dollar price target on the stock.

CORPORATE STRATEGY. United tries to generate a revenue premium to the rest of the U.S. airline industry
by utilizing a market segmentation strategy intended to optimize margins and costs by offering the right
service to the right customer at the right time. United offers three classes of service on its mainline flights;
offers premium transcontinental service connecting New York with San Francisco and Los Angeles; and
operates United Express, its regional service, which includes a premium service on many aircraft. UAL's
frequent flyer program, Mileage Plus, has more than 58 million enrolled members, while Continental's loyalty program, called OnePass, has 41 million enrolled members. The program is designed to help the company attract and retain high value customers. In 2010, award redemptions on United represented 7.5% of
United's total revenue passenger miles, vs. 8.3% in 2009. OnePass redemptions represented 5.7% of Continental's revenue passenger miles, vs. 5.9% in 2009.
99 Million MP members now? Wow.

That is an awful lot of people to extract revenue from, one a la carte item at a time...
LarkSFO is offline  
Old Jun 12, 2012, 7:01 pm
  #1330  
 
Join Date: Nov 2005
Location: SFO and OAK
Programs: FAF, Hyatt <>, SPG PLT
Posts: 2,240
Originally Posted by LarkSFO
99 Million MP members now? Wow.

That is an awful lot of people to extract revenue from, one a la carte item at a time...
Not to fear. United management is paring that 99MM down daily.
Beerman92 is offline  
Old Jun 12, 2012, 7:11 pm
  #1331  
 
Join Date: Nov 2007
Location: Washington DC
Programs: Former 1k, Lifetime UA Gold, Starwood Gold; Avis Preferred; Hertz Gold
Posts: 1,732
Originally Posted by LarkSFO
99 Million MP members now? Wow.

That is an awful lot of people to extract revenue from, one a la carte item at a time...
A couple points that struck me. I think S&P is being truthful, but you have to read between the lines. This may come off as being cynical, but I don't think it's far off the mark given the posts on this board.

S&P "United tries to generate a revenue premium to the rest of the U.S. airline industry by utilizing a market segmentation strategy intended to optimize margins and costs by offering the right service to the right customer at the right time."

Translation: "If we know we can get extra $ from a TOD we will generate a revenue premium rather than give the upgrade to an over entitled elite who expects it as a freebie"

S&P " Mileage Plus, has more than 58 million enrolled members, while Continental's loyalty program, called OnePass, has 41 million enrolled members. The program is designed to help the company attract and retain high value customers."

Translation: "United has 99 million people they can nickle and dime. The program is designed to help the company attract and retain high value customers. High value customers are those that will either pay the highest fare for the lowest level of service or those that will pay fees just to avoid the lowest quality of service. High value customers are not necessarily over entitled elites who fly repeatedly with us".


Sorry, but I really think this is the message they are giving Wall Street. And I think S&P is telling us as much if you appreciate the coded language.

Companies obviously try to communicate different messages to their customers than they communicate to Wall Street. It's much more important to understand what they are saying to Wall Street and what The Street is communicating back.

Of course that's what started this firestorm and this thread. So I would keep an eye toward what the dialog is between the two. I have some access to these conversations through financial contacts would strongly encourage others that do to post what they hear and know in this thread.
DCEsquire is offline  
Old Jun 12, 2012, 7:11 pm
  #1332  
FlyerTalk Evangelist
 
Join Date: Mar 2010
Location: DAY
Programs: UA 1K 1MM; Marriott LT Titanium; Amex MR; Chase UR; Hertz PC; Global Entry
Posts: 10,275
Not 99 million. I am sure there are a fair number of people that had membership in both.
goodeats21 is offline  
Old Jun 12, 2012, 7:18 pm
  #1333  
 
Join Date: May 2003
Location: Redwood City, CA USA (SFO/SJC)
Programs: 1K 2010, 1P in 2011, Plat for 2012,13,14,15 & 2016. Gold in 17 & 18, Plat since
Posts: 8,828
Originally Posted by LarkSFO
99 Million MP members now? Wow.

That is an awful lot of people to extract revenue from, one a la carte item at a time...
That's all members, which means anyone who has a FF#, and there's likely to be pretty substantial overlap.

Consider that member count is little more than a customer list. It includes those who have a MileagePlus or OnePass credit card but have never even flown either airline.
Mike Jacoubowsky is offline  
Old Jun 12, 2012, 7:24 pm
  #1334  
Moderator: United Airlines
 
Join Date: Jun 2007
Location: SFO
Programs: UA LT Plat 2MM, Hyatt Discoverist, Marriott LT Gold, Hilton Silver, IHG Plat
Posts: 67,683
Originally Posted by goodeats21
Not 99 million. I am sure there are a fair number of people that had membership in both.
beleive UA has stated the new program is larger than the population of France which is roughly 65-66 million (depending on how you count). Considering that level of specificity of France, as the 21st largest world population, probably would be safe to use 65-70 million although I belive I have seen in print another estimate of 75-80 million. But definitively no way 99 million.
WineCountryUA is offline  
Old Jun 12, 2012, 8:16 pm
  #1335  
Suspended
 
Join Date: Aug 2003
Location: SEA
Posts: 12,485
Originally Posted by TravellingMan
Yo, Bean counters - Apart from the "fabulous route network" and "the 787" how do you plan to justify the premium? As I am able to book on other carriers for my TATL/TPAC with less than stellar route network and 787, IMO you do not have a justification!
Actually, the fabulous route network is what generates the revenue premium for any airline...
sxf24 is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.