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UA mistake award redemption rates for China travel [UA says will void tickets]

UA mistake award redemption rates for China travel [UA says will void tickets]

Old Jul 16, 12, 2:23 pm
  #526  
 
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Originally Posted by Colin View Post
My official prediction of the ultimate resolution:

1. If you had sufficient miles for the correct award price, then the only accommodation UA will grant to you is a fee-free cancel & redeposit.
2. If you did not have sufficient miles to pay the correct award price & the ticket was issued, UA will permit the first such booking for each member to stand. All subsequent bookings of this nature will be cancelled with a full refund.

That would be extremely unfair for the people who actually had enough miles i.e. their better customers, so I doubt #1 happens. I would be so pissed if some shmuck with 600 miles got a free first class ticket and I lose mine because I actually had enough miles to pay for it. I can see the one flight part of it, but the reality is they either have the right to cancel all of them or none of them. The could start offering compromises but they're between a rock and a hard place.
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Old Jul 16, 12, 2:23 pm
  #527  
 
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Originally Posted by mabramovich View Post
I deserve to fly to Hong Kong for 4 miles.
^
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Old Jul 16, 12, 2:25 pm
  #528  
 
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Originally Posted by mabramovich View Post
I deserve to fly to Hong Kong for 4 miles.
Sounds like a good name for a Facebook group.
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Old Jul 16, 12, 2:28 pm
  #529  
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Exclamation ...and now a note from your Moderators:

The topic of this thread is "UA mistake award redemption rates for China travel," not personal commentary on other posters.

Thanks & Safe Travels,

J.Edward
UA Forum Co Moderator
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Old Jul 16, 12, 2:28 pm
  #530  
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Originally Posted by HumbleBee View Post
Any idea what kind of scale we're talking about? 10,000 tickets?
I guessed 2000 tickets yesterday, but that might be conservative since most folks undoubtedly booked multiple pax/itineraries.

I still think each ticket is "worth" about $5000 to UA in lost revenue (that might be a tad high, though -- without discounts, I think you can buy an EWR-HKG BF ticket for about $6800). So my ballpark bet was that this would be a $10 million mistake if honored.

And that, my friends, is the problem here. $10 million would actually be "material" to UAL's earnings (although less so if the cost were spread out over the next 12 months).
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Old Jul 16, 12, 2:29 pm
  #531  
 
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Originally Posted by OptionsCLE View Post
they are WELL aware of the error and aren't very happy about it.
you don't say....
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Old Jul 16, 12, 2:32 pm
  #532  
 
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Originally Posted by davidbridgman View Post
I believe the law in the regard is indeed that state law can offer more protection than federal law, but not less. You're right, but it's not relevant to this situation.
Not necessarily so, depending on the regulatory framework, state law can supplement federal remedies, in other cases, federal law completely preempts.
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Old Jul 16, 12, 2:38 pm
  #533  
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I'm sure UA is trying to find a way to get out of it (any reasonable business would, if they weren't I'd say they were failing their duty).

I don't think calling is going to hurt anyone here at this point, the cardinal rule about not calling the airlines is moot once the deal is discovered by the airline (which this clearly was). Y'all hold an electronic ticket in their databases, they know who you are and what your itineraries are.

United isn't losing 6k-$10k of revenue per ticket booked here; how many of the people who posted here would actually BUY these tickets with cash money? The question then becomes what the lost revenue is on those seats on the realistic notion that they will not all be sold for cash. Is it 2-5 million total? Either way, just add it to tab for "savings" from switching to SHARES.
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Old Jul 16, 12, 2:41 pm
  #534  
 
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Originally Posted by iahphx View Post
I guessed 2000 tickets yesterday, but that might be conservative since most folks undoubtedly booked multiple pax/itineraries.

I still think each ticket is "worth" about $5000 to UA in lost revenue (that might be a tad high, though -- without discounts, I think you can buy an EWR-HKG BF ticket for about $6800). So my ballpark bet was that this would be a $10 million mistake if honored.

And that, my friends, is the problem here. $10 million would actually be "material" to UAL's earnings (although less so if the cost were spread out over the next 12 months).
That would also mean any regular award booked is a loss of revenue in tune of that amount. And it's certainly ain't since people wouldn't otherwise spend the money on a full fare ticket and UA itself sells the miles for around 2 cents/each - so about 2,5k lost revenue for a 120k mile ticket at best, and probably less then half that since the capacity control is way tigher with awards and seeing no revenue at all when the seat go empty has to be factored in too.

I don't know how standard awards play into this, but just with regular awards people would get bottlenecked pretty quick on the popular routes helping to gauge actual interest.
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Old Jul 16, 12, 2:41 pm
  #535  
 
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Originally Posted by entropy View Post
I'm sure UA is trying to find a way to get out of it (any reasonable business would, if they weren't I'd say they were failing their duty).

I don't think calling is going to hurt anyone here at this point, the cardinal rule about not calling the airlines is moot once the deal is discovered by the airline (which this clearly was). Y'all hold an electronic ticket in their databases, they know who you are and what your itineraries are.

United isn't losing 6k-$10k of revenue per ticket booked here; how many of the people who posted here would actually BUY these tickets with cash money? The question then becomes what the lost revenue is on those seats on the realistic notion that they will not all be sold for cash. Is it 2-5 million total? Either way, just add it to tab for "savings" from switching to SHARES.
sorry for my ignorance...but what is SHARES? some program to manage the ff awards?
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Old Jul 16, 12, 2:42 pm
  #536  
 
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Originally Posted by 787fan View Post

Closer to $5 mil is my guess. It's a poor mistake, but it won't break the bank either. A few hundred thousand TODs should make up the difference.
It depends on how you do the accounting. My guess is that Mileage Plus bean counters are summing up the MILES that were (not) used to book the tickets, and then applying their internal CPM to those miles. Perhaps the IM folks will apply a different metric based on 'opportunity cost' of not being able to sell those seats.

My point is that there are probably a dozen ways to account for this. And none of them probably look very good.
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Old Jul 16, 12, 2:42 pm
  #537  
 
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Originally Posted by iahphx View Post
I still think each ticket is "worth" about $5000 to UA in lost revenue (that might be a tad high, though -- without discounts, I think you can buy an EWR-HKG BF ticket for about $6800). So my ballpark bet was that this would be a $10 million mistake if honored.

And that, my friends, is the problem here. $10 million would actually be "material" to UAL's earnings (although less so if the cost were spread out over the next 12 months).
Nah ... you're forgetting two key points ...

1) The vast majority of these travelers wouldn't have ever spent that $6,800 ... if this deal didn't exist, they wouldn't have made the trip at all, and
2) UA flies far more capacity on most HKG routes than they need for passenger traffic (because of high cargo loads) ... the vast majority of the seats on UA metal flights would be empty, or full of non-revs.

Yes, there would be some revenue hit as these itineraries touch other carriers and other routes (in some cases), but I'm guessing that those will be the minority. In most cases, there would be very little true revenue impact.
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Old Jul 16, 12, 2:43 pm
  #538  
 
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Originally Posted by entropy View Post
United isn't losing 6k-$10k of revenue per ticket booked here; how many of the people who posted here would actually BUY these tickets with cash money? The question then becomes what the lost revenue is on those seats on the realistic notion that they will not all be sold for cash. Is it 2-5 million total? Either way, just add it to tab for "savings" from switching to SHARES.
This is fine if all the redemptions were on UA metal, but since partner airlines are involved and UA will have to pay those airlines for all of the redemptions, there's a tangible and quantifiable loss for each of those tickets.
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Old Jul 16, 12, 2:46 pm
  #539  
 
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Originally Posted by Antipode View Post
This is fine if all the redemptions were on UA metal, but since partner airlines are involved and UA will have to pay those airlines for all of the redemptions, there's a tangible and quantifiable loss for each of those tickets.
Just spitballin' here... what if UA offers to honor tickets on its own metal to HKG?
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Old Jul 16, 12, 2:46 pm
  #540  
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Originally Posted by Antipode View Post
This is fine if all the redemptions were on UA metal, but since partner airlines are involved and UA will have to pay those airlines for all of the redemptions, there's a tangible and quantifiable loss for each of those tickets.
But likely not $5K+ there.
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