United CFO Rainey Implies Certain Elites were "Over Entitled".
May 19, 2012, 1:35 pm
#121
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What I find funny is that when the new rules came out, 1K's were happy! Silvers and Golds got shafted but 1K's told us how great UA is! If the 1K flyers (which I was until 3 years ago) had joined forces with the Silvers, who got the major shaft! Now it's too late. UA is laughing at us!0
Don't blame 1Ks. We are in the same boat as you
May 19, 2012, 1:36 pm
#122
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Because the elites are 'hooked' into the program, and they are the ones who are going to be shelling out the extra $100 or $500 for the upgradeable fare, or for the fare that's not cost-competitive with Southwest. For many of us the loyalty benefits entice us to spend substantially more per flight than a 'bargain shopper' who's always going to choose the lowest fare for a given route, even if we're not booking into C or F.
May 19, 2012, 1:36 pm
#123
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Because the elites are 'hooked' into the program, and they are the ones who are going to be shelling out the extra $100 or $500 for the upgradeable fare, or for the fare that's not cost-competitive with Southwest. For many of us the loyalty benefits entice us to spend substantially more per flight than a 'bargain shopper' who's always going to choose the lowest fare for a given route, even if we're not booking into C or F.
I think Rainey was telling his audience (all money people) that the way the current MP is configured, the bottom line is not benefiting the program, in other words that, given all the perks and benefits, elites are costing the company more than they bring in.
I'm not really sure how that is truly determined, but, in the end, it's more a statement of an approach or business model than an actual hard study of the data.
Again, for those of us who suffered through the last few years of PMCO, it's really nothing new...
May 19, 2012, 1:40 pm
#125
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Even if we agree that the basic objective for any frequent flyer is spending the least money possible to attain the greatest benefits, one thing is clear, they have to fly UA, or one of its partners.
A true kettle is not loyal and thus fickle.
So it's not entirely clear if the departure of an elite would result in that seat automatically filled by a kettle.
Most likely, given the reduction in capacity, and, yes, because of the cheap fares, it would be. But removing loyalty and counting on commodity-driven customers creates an additional risk factor.
May 19, 2012, 1:40 pm
#126
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Maybe last year, but the ranks of those that still believe that poppycock are dwindling. Do you still believe in Santa as well?
Santa Smisek brought us a lump of coal. And without pillows in F, its sure uncomfortable to sit on!
Originally Posted by SFO777
Because the elites are 'hooked' into the program, and they are the ones who are going to be shelling out the extra $100 or $500 for the upgradeable fare, or for the fare that's not cost-competitive with Southwest. For many of us the loyalty benefits entice us to spend substantially more per flight than a 'bargain shopper' who's always going to choose the lowest fare for a given route, even if we're not booking into C or F.
May 19, 2012, 1:41 pm
#127
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This thread will go viral here on FT and I can see Rainey's e-mail and voice mail "clogged up" by sales and marketing people saying...."... man!!...nice job....Bozo!!"
Maybe UA can capture some revenue here similar to restaurants do as a "corking fee" for customers bringing their own bottle of wine to consume. Charge a service fee for using your own device!
To summarize the forecast at UA these days for elites....."Rainey....with a chance of $mi$ek!"
Maybe UA can capture some revenue here similar to restaurants do as a "corking fee" for customers bringing their own bottle of wine to consume. Charge a service fee for using your own device!
To summarize the forecast at UA these days for elites....."Rainey....with a chance of $mi$ek!"
May 19, 2012, 1:42 pm
#128
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The on-time performance has a direct correlation to profitability and loyalty and UA needs to focus on improvement in this area.
Fine, if they don't want $300 tickets to contribute to 1K status, then don't allow EQM accumulation on <W/V fares, whatever.
Incidentally, he shovels it on in Slide 16 "Benefits of SHARES" :
- aircraft redeployment, network optimization(?)
- Shortened time-tomarket for ancillary products/services (? FALSE)
- Dynamic ancillary pricing (ToD, Bull...)
- Simple loyalty program with BETTER elite differentiation (huh?)
follows on to say growing high margin business like our "Leading loyalty program".
Working together culture (see F/As, ALPA Strike)
Direct, Open & Honest communcation (bald face lie)
Dignity and Respect ("Over entitled", bald face lie).
So, Rainey is a liar. $misek is a liar. Frankly, the airline ought to be sued for lying to their investors.
Incidentally, he shovels it on in Slide 16 "Benefits of SHARES" :
- aircraft redeployment, network optimization(?)
- Shortened time-tomarket for ancillary products/services (? FALSE)
- Dynamic ancillary pricing (ToD, Bull...)
- Simple loyalty program with BETTER elite differentiation (huh?)
follows on to say growing high margin business like our "Leading loyalty program".
Working together culture (see F/As, ALPA Strike)
Direct, Open & Honest communcation (bald face lie)
Dignity and Respect ("Over entitled", bald face lie).
So, Rainey is a liar. $misek is a liar. Frankly, the airline ought to be sued for lying to their investors.
Last edited by iluv2fly; May 19, 2012 at 4:17 pm Reason: unnecessary
May 19, 2012, 1:43 pm
#129
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This is probably an important slide from the airline management standpoint - though we should all bear in mind that their standpoint is in many ways in opposition to the customer standpoint. After all, the customer-vendor relationship isn't all collaboration and roses. It can, at times, be adversarial. This is probably one of those times. 
This is probably a part of shares we don't see much. Does SHARES support swapping equipment at the last minute? Is it better at having a generic equipment type and seatmap for the first 200 days with finalization in the last 100 days?
This is because it's built in-house so they can add-on things like more dynamic pricing on E+. Let's say they wanted to have E+ pricing be variable based on inventory - that is, as more people bought it it would get more expensive. This can be programmed in more quickly and easily if it is in-house vs. a vendor system.
We may not like it, but some folks in another thread were talking about how Smisek loves how he can price E+ differently based on more dynamic variables like segment origin and destination. They also obviously love the ability to sell upgrades.
I'd guess that the "better" part is the part we don't like - that they can differentiate benefits based on fare class and elite level. They obviously like upgrading elites traveling on full-fares at a higher priority than higher level elites on low fares. Along these lines I was upgraded on a Y fare BOS-EWR a few days ago as a gold. I'm sure the upgrade would have gone to a 1K at sUA. I am personally kind of glad I got some benefit from paying $600 one way for 35 minutes in the air.
- aircraft redeployment, network optimization(?)
- Shortened time-to market for ancillary products/services (? FALSE)
- Dynamic ancillary pricing (ToD, Bull...)
- Simple loyalty program with BETTER elite differentiation (huh?)
Last edited by lensman; May 19, 2012 at 2:05 pm Reason: typo I->It
May 19, 2012, 1:45 pm
#130
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I agree with most of the posters in this thread - that if they don't want 1k's buying the cheap fares, don't offer them at close in times booking times.
In my case, it would be a benefit if they took away cheap fares, and I may get a higher % of Upgrades.
I am required to purchase the lowest economy fare by my company (P, A, and all the buy up fares don't count), and a majority of my tickets are purchased within 7 days or less of travel. (30% are within 24 hours of travel). It's a mix of Intl, and domestic travel.
You would think I would be in the Y, B, or M buckets with instant ups - and would probably be GS by now - Nope!
Most tickets end up in E, sometimes Q and V, and on occasion an H or an M but that's less than 10% of the time. (don't know why, but i have only seen a U fare 1 time last year). Mind you, these fares are not cheap either - just cheap fare buckets. Nothing domestically under 475 all year.
So I buy last minute compared to Leisure travelers, don't get the instant up benefit of YBM fares, By the time it's ticketed, we are usually within the 96 hour 1k window for upgrades if domestic - so I am always on the battlefield for them, and am 21/86 segments on upgrades this year.
Yep - i'm over entitled...
Hey United - Shares programmers can't "fix" attitude problems!
This is probably the last straw.
In my case, it would be a benefit if they took away cheap fares, and I may get a higher % of Upgrades.
I am required to purchase the lowest economy fare by my company (P, A, and all the buy up fares don't count), and a majority of my tickets are purchased within 7 days or less of travel. (30% are within 24 hours of travel). It's a mix of Intl, and domestic travel.
You would think I would be in the Y, B, or M buckets with instant ups - and would probably be GS by now - Nope!
Most tickets end up in E, sometimes Q and V, and on occasion an H or an M but that's less than 10% of the time. (don't know why, but i have only seen a U fare 1 time last year). Mind you, these fares are not cheap either - just cheap fare buckets. Nothing domestically under 475 all year.
So I buy last minute compared to Leisure travelers, don't get the instant up benefit of YBM fares, By the time it's ticketed, we are usually within the 96 hour 1k window for upgrades if domestic - so I am always on the battlefield for them, and am 21/86 segments on upgrades this year.
Yep - i'm over entitled...
Hey United - Shares programmers can't "fix" attitude problems!
This is probably the last straw.
May 19, 2012, 1:46 pm
#131
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"We have certain groups in this (Mileage Plus) program that were over entitled..." according to United's CFO John Rainey, as per his presentation at the BofA Transportation Conference held on May 17th. The entire webcast is available on United's investor relations website, and he makes the comment 11- 12 minutes into the presentation. Since the CFO is a PMCO guy, I imagine he is referring to PMUA fliers. Mr. Rainey also raves about Shares.
So, I guess we have the answer to all of the complaints enumerated by Premiers, 1Ks, GS, MM, etc. We were simply over entitled, not loyal!! Our new airline.
So, I guess we have the answer to all of the complaints enumerated by Premiers, 1Ks, GS, MM, etc. We were simply over entitled, not loyal!! Our new airline.
Last edited by FlyingNut724; May 19, 2012 at 1:51 pm
May 19, 2012, 1:49 pm
#132
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Having been EXP for 3 yrs, I've only missed an upgrade due tO F selling out. I had a 100% success rate out of SFO last year.
AA doesnt do buy ups of any kind, TODs, nor fare class shenanigans. They do upgradeY/B first, but its within each status level at the windows. Everything else in priority goes by date of UPG request- not check in time or fare class.
Its simple and its rewarding. This is a benefit I did not appreciate as much until I started flying COdbaUA
Originally Posted by GadgetFreak
Popcorn.
I do see my upgrade percentage on AA decreasing though.
I do see my upgrade percentage on AA decreasing though.
AA doesnt do buy ups of any kind, TODs, nor fare class shenanigans. They do upgradeY/B first, but its within each status level at the windows. Everything else in priority goes by date of UPG request- not check in time or fare class.
Its simple and its rewarding. This is a benefit I did not appreciate as much until I started flying COdbaUA
May 19, 2012, 1:50 pm
#133
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"Consolidation has been an unalloyed good for this industry"
"Everything we do at United is with the mindset of creating economic value"
....
"Global wifi installation starting in August - yes, we're late to market but we're excited about our offering"
"Fundamentally, we are a customer service business"
Q&A
"Hindsight is 20/20, but, we underestimated peoples capacity to absorb change"
....
"Everything we do at United is with the mindset of creating economic value"
....
"Global wifi installation starting in August - yes, we're late to market but we're excited about our offering"
"Fundamentally, we are a customer service business"
Q&A
"Hindsight is 20/20, but, we underestimated peoples capacity to absorb change"
....
Everything else in the presentation was about as far away from CS as one could get - customers are a commodity from whom COdbaUA is looking to extract maximum value.
But then the smile at 'gee, we really expected them to roll over and take it..."
May 19, 2012, 1:50 pm
#134
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WN has only the most basic elite program and they have been the most profitable airline in the United States for three decades.
As I wrote earlier, UA would just as soon sell those seats to a casual traveler who expects no perks in return for his/her business.
May 19, 2012, 1:52 pm
#135
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This is a management choice and the attitude adjustments are going to be pushed down from above equally both to pmCO and pmUA.
Attitude-wise, the main differentiation I could see for pmUA elites interacting with pmCO front-line is:
1. At EWR, all passengers are treated with equal indifference. (with apologies to the occasional NICE EWR-based ground staff)
2. At IAH, you got the usual southern charm from the ground staff. This charm is generally based on how you treat them - though of course since they are customer-service front-line there's a floor to their attitude.