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

"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.

:td:

Do you have a link to this

I wonder if he feels $3,000,000 a year makes him " over entitled"

Completely explains why I am no longer a UA flyer and am glad to have switched over to AA. Good riddance.

http://ir.unitedcontinentalholdings....&p=irol-IRHome

If this doesn't work, just go under investor relations under www.unitedcontinentalholdings.com

On another note, I missed my first upgrade (JFK-LAX) in 18 months last week. And barely made another one (ORD-LGA). Obviously a meaningless data point given in the grand scheme but it will be interesting to see if the number of people switching is really significant and a trend develops. I actually hope so, even if it means I miss a few upgrades.

But Jeff was entitled to that $14.7m in a quarter with a huge loss when only 2 years prior he said he wouldn't take a salary unless the airline was profitable.

Telling their true feelings about their most valuable customer is worth something :D

Do you think he is refering to Mr. Pillows? No seriously I'm on the IAH air train going to 'B' and don't like the message being given. Does this mean there are more "changes we will like" coming !?:mad:

I just listened to the first 15 min and had to stop. EXACTLY what I've been saying. They LOVE SHARES and are doing exactly what there business plan is. "over entitled". I love that line. Did he write it while sitting on his corp jet?

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3)

Insulting loyal customers. Stay classy.

I wonder why he would say this out loud -- i'm sure some audience members were UA elites.

What he said was just a glitch :D

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3)

It's bewildering why the guy said that stuff... why would anyone insult their customers like that?

Yep. A freudian slip--- exposing the attitude of sCO management that elites are a burden to the airline

Have to agree. Even if you are thinking it, there's no way that should be verbalized. The last thing any company should ever do is alienate a customer base.

Wow. But based on what has happened in the last few months, is it really all that surprising from this group?

Loved the intro... "John made two comments to me. One, he viewed himself more of a financial guy than an airline guy..." Ya think?

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..."

This is an extremely foolish statement by the new United CFO, and it will anger many elites when they hear it. It also helps to explain the large number of UA elites status matching to AA. One of the keys to successful business is to retain exisitng customers and keep your best customers happy.

Because they don't matter any longer? No doubt I was in the over entitled group as a 1MM, and UA corporate has been successful in getting me to move all my business to AA. They don't seem as entitlement-focused over there.

Another is guerilla marketing. I think AA scored a coup over UA while they weren't paying attention.

Disgusting attitude from CO exectutives towards their customers who are loyal!

I can't believe he still has a job after this speech!

As I suspect United will remove the webcast link, does anyone know how to attach the 30 second comment to this link? It is about 11 minutes and 40 second into the webcast.

At least he did not call us Muppets... :rolleyes:


SunLover

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3)

So that 2K I was going to spend on a Q fare to London next year? Its going somewhere else. You
Don't insult customers- let alone those who are frequent customers

I know many of your are incensed, and perhaps legitimately so.

Then again, I believe this was an honest statement of the business model at CO, namely that high-end frequent flyers are not worth the company's energy if they are buying a lot of cheap seats and require a costly and unwieldy infrastructure to manage them.

Why would UaCo be excited about a 1K who achieves his status on the least expensive fares and then expects constant perks such as free upgrades, a dedicated CS line, and semi-official exemptions from fees and rules?

UaCo would just as soon fill those same seats with equally cheap kettles who expect nothing in return and might even occasionally spend some hard cash (even if only ToD's) to sit in FC. If a kettle needs to change a ticket, or do SDC, he or she is paying for it at full dollar value. If they want to sit in E+, they're paying for it, etc.

I'm not saying the CO approach is right, but that's their business model.

Clear insight into what current management is discussing and/or implementing in their senior leadership meetings.

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3)

UA was "over entitled" to the 2K I was about to spend for a flight to London in Y.

So what is exactly the point of having an elite program then? What's the incentive to fly 100K miles?

Someone PLEASE make up t-shirts and luggage tags that say

Ex "Overentitled" United Customer

So we can wear and display them at the airport. I'll buy 10. Let's also buy that domain name ex-overentitledUAcustomer.com and start listing our names.

Theses guys are so insulated in their nickle and diming world they forgot they are running a business that needs return customers.

They have the best network and the 787 is coming soon! :rolleyes:

No prompter, sure. But I think what's most instructive in that excerpt, and perhaps the crux of the entire issue, is the following phrase (I removed the pauses for ease of comprehension):

"...we have realigned the benefits...the participants are actually providing to the airline, and, and this is a good change going forward..."

It's not about what benefits the program provides to the customer, it's about what benefits the customer provides to the program.

That's the key right there.

If a 1k is achieving his status on $300 round trip transcons and then expecting routine upgrades, dedicated CS (1K line), exemption for change fees and rules, the customer is providing no benefit to the program, quite the contrary, in fact.

No surprise.

Even not saying it, CO's behavior has made it clear they don't give a rats patootie about Elites. After all, United spent a decent amount of effort to stroke the egos of elites so they felt nice, squishy and LOYAL to united, directing spend there. Being realistic, what % of elites are flying on L fares 100k a year to get 1K? No more than 10% I'd guess. We do know that CO considers the SWU expense to be unacceptably high.... (but they control R class, so you can't get it if they think they'll sell the seat, so the real cost is almost nothing.).

And to add insult to injury, he touts all the great benefits of CO's SHARES system which is in many regards much less advanced than the system United used before the merger.

I had to stop around the same time - when he started equating "upgrades" with "defects" (twice, for effect). I now understand a bit more about the mindset of the arrogant and ignorant kids who began by dismantling CO and now are doing the same to UA.

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3)

He couldn't be more disconnected from reality. No reputable business should ever label/insult customers.

The new culture sucks. Loyalty is being *discouraged*

With less competition, the FF program model for the industry is less important.
This is the new reality we are dealing with now.

No, but the benefits of SHARES are features that here on FT are seen as its problems.

It was specifically designed to be hard to use, to provide the field employee with the least flexibility.

All of that is intentional, it allows the company to keep a tight rein on the value of the product, partially by limiting its functionality at the field level.

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3)

Um, no. This is the new reality on UNITED. Look at the DL and AA forum and ask what their upgrade rates are.

Im sick and tired of people calling UNITED management (COdbaUA to be more precise) decisions "the new normal" et al when its solely United thats hosing their elites in such a way

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3)

I saw a commercial for Delta earlier this morning that took a vague jab at COdbaUA. I'm paraphrasing here but it was something like "We're one of the world's largest airlines... We decided that wasn't enough. Delta. Keep climbing."

But yes. We're getting satellite wifi next century too!

The bigger point is that while internally discussing such things as "over entitled elites" (you don't think he just invented that phrase in the spur of the moment, do you) externally Smisek is saying here come changes you we know you will like.

Born liars.....

The majority of Elite customers are business travelers - and the majority of business travelers are required by policy to book the lowest available airfare.

If UA is unhappy about Elite customers purchasing low fares, they have an existing avenue to change that - stop offering such low fares and/or increase the price or push the lowest fares out past 21 days when business travelers are unlikely to be booking...or push the lowest fares to a Delta-esque E Class scheme where companies would normally exempt their employees from purchasing due to the inflexible rules.

It makes no sense for executives to sit there and whine about a situation they created....and honestly, the number of 1Ks and Platinums who get their status flying (generally non-existent) $300 transcon fares or hyper-segment mileage runs is a tiny fraction of the overall population, not even something that would register on UA's radar.

If UA wants to restrict its best benefits for high-spending flyers, don't they already do that? The Global Services program gives high-spenders first crack at upgrades and other exclusive benefits.

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3)

Exactly. Its deception.

Exactly!
 

That's exactly my feeling, too. We're seeing the slow dismantling of FF programs, and it's just getting started.

UA publishes the fares and people buy them. If they're not happy with people buying $300 transcons, they should stop offering them.

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3)

I'd agree if other airlines were doing this. They're not. Sure there's occasional cutbacks of things like checked bag benefits but DL, AA, and US do much better on upgrades for the top tier than UA does

Delta made money last quarter. Somehow they can offer more seats in F, a more generous upgrade policy, more IFE, better on-time rates and make more money than the penny pinchers at UA. Shocking