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

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, 5:33 pm
  #616  
FlyerTalk Evangelist
 
Join Date: Mar 2000
Posts: 16,528
Originally Posted by HCSmooth66 View Post
This is how I'd calculate the cost to United:

Average Revenue Tickets x Full Revenue Price. The real $$ loss would be the number of revenue seats that would have been filled that now have us free loaders in them. Then add whatever cost there would be to pay partner airlines for their seats.

Beyond that, you could argue that a small percentage of people getting these 4 mile flights would have paid full price in miles to fly the same itinerary as they'd already been planning it. These people would not only get their virtually free 1st class flight, or whatever class was booked, but would still have 150,000 miles more in their accounts to pay for other award tickets. This category would seem to have a negligible real cost, I would think, relative to the first category.
I dunno, you could speculate any way your want, but I still think $5000 x 2000 tickets ($10 million) is probably a good ballpark "real" cost. And that was a lost revenue assumption.

Which, of course, is the problem here. I suspect UA would PREFER to honor these reservations instead of endure another episode of bad publicity. But $10 million is a lot of moola, even for the world's largest airline.
iahphx is offline  
Old Jul 16, 12, 5:34 pm
  #617  
 
Join Date: Mar 2007
Location: YHU
Posts: 77
Originally Posted by newballs View Post
Just don't release anything before UA makes a decision, or you are helping them doing sampling and analysis.
If they want they could even implement a demographic analysis to allocate tailored countermeasures.
Dennis_PEK is offline  
Old Jul 16, 12, 5:36 pm
  #618  
 
Join Date: Oct 2008
Programs: AF/KL Gold, AC, US
Posts: 882
Thanks

Last edited by thyeri; Jul 16, 12 at 6:18 pm
thyeri is offline  
Old Jul 16, 12, 5:37 pm
  #619  
 
Join Date: Oct 2005
Location: SFO/SJC
Programs: AMEX PLT, Plat AMB, SPG/MR Gold
Posts: 1,530
Originally Posted by iahphx View Post
I dunno, you could speculate any way your want, but I still think $5000 x 2000 tickets ($10 million) is probably a good ballpark "real" cost. And that was a lost revenue assumption.

Which, of course, is the problem here. I suspect UA would PREFER to honor these reservations instead of endure another episode of bad publicity. But $10 million is a lot of moola, even for the world's largest airline.
I would assume the UA SFO-SYD jumbo C mistake would have cost many multiples of this amount, back when DOT did not regulate and UA could have cancelled. Different management though.

14,400 C tickets selling for 1,440. You could claim a loss there as well and that deal was alive for 50x longer...3 days? I forget.
patchan8984 is offline  
Old Jul 16, 12, 5:39 pm
  #620  
 
Join Date: Apr 2007
Programs: Marriott Plat
Posts: 113
Originally Posted by cmn.jcs View Post
Done.

Did the survey. I know three 3 I boked were in F for a total of about $38,000. While I may be way off I'd guess about several hundred people got in for about the same. Some got 5 so math points to this being a million dollar deal.
MY HNK are
This reservation was ticketed and confirmed on Sun., Jul. 15, 2012 at 1:47p.m. Central Time.

Think I got in towards the very end. No miles deducted yet. Have hotel booked and ready togo, fingers crossed.
jwchef1975 is offline  
Old Jul 16, 12, 5:40 pm
  #621  
 
Join Date: Jul 2010
Location: SFO, SJC
Programs: UA Gold, Hilton HHonors Gold, Marriott Gold, SPG Gold
Posts: 197
Originally Posted by Antipode View Post
They can get actual numbers from their own system instead of relying on a survey in which probably only a very small fraction will respond. They aren't going to use this at all.
Or maybe they don't, given their rather sloppy IT performance. Who knows?

It's a mess. At least, it takes some time for UA to sort this all out.
newballs is offline  
Old Jul 16, 12, 5:40 pm
  #622  
 
Join Date: Oct 2002
Location: Raleigh, NC, US
Posts: 74
Originally Posted by JC1120 View Post
A contract of carriage provision that reserves the right to cancel such ticketed purchases or reserves the right to raise the fare cannot legalize the practice described above. The Enforcement Office would consider any contract of carriage provision that attempts to relieve a carrier of the prohibition against post-purchase price increase to be an unfair and deceptive practice in violation of 49 U.S.C. 41712.

Any lawyers here (not looking for idle speculation) know what fine UA might have to pay if the DOT rules that these bookings fall under their purview and UA still chooses not to honor them?

The stated maximum is $25K per violation or 3X revenue involved, whichever is higher, but obviously they can settle for less. I really have no idea what a standard compromise would be here. There are consent orders for violations floating around but I haven't taken the time to read all of them. Of the few I skimmed, the DOT was not buying any "we didn't mean to" or "it was an honest mistake" type defenses, although they were all compromises so mercy may have been reflected in the penalty.
davidbridgman is offline  
Old Jul 16, 12, 5:43 pm
  #623  
FlyerTalk Evangelist
 
Join Date: Mar 2005
Programs: ua mm, starriott LTPP, ihg plat, hh gold.
Posts: 12,902
Originally Posted by angelicboris View Post
I filled out the survey but did not provide my email.
+1
karenkay is offline  
Old Jul 16, 12, 5:46 pm
  #624  
 
Join Date: Feb 2011
Programs: Delta Gold Medallion
Posts: 448
I find question 2 of the survey confusing so haven't completed it yet.
apk123 is offline  
Old Jul 16, 12, 6:06 pm
  #625  
 
Join Date: Feb 2010
Location: Vancouver, Canada
Programs: Hilton G/SPG G/IHG RA/Accor P/Aeroplan Elite/CZ S
Posts: 73
2000 even 10000 is a too conservative estimation because this was just a rough number you can get in English world(Say,like FT). Other non-english speakers could hardly see and do your survey. This loophole was discovered and posted on a non-english forum at least 4 hours before first posted in FT. Use your imagimation...
cdegt is offline  
Old Jul 16, 12, 6:07 pm
  #626  
 
Join Date: Nov 2007
Location: Chicago
Programs: UA GS 1MM, CM PP
Posts: 685
Traveling HKG-ORD, legitimately, in three hours. Will report any observations, though I doubt I'll see anything of note. C and F cabins are not completely full. C is actually relatively light compared to my historical observations. Award availability had been very open the three days prior, btw, so I gather not many last minute bookings on this flight.
1015-1k is offline  
Old Jul 16, 12, 6:07 pm
  #627  
 
Join Date: Jun 2009
Posts: 426
Originally Posted by cdegt View Post
2000 even 10000 is a too conservative estimation because this was just a rough number you can get in English world(Say,like FT). Other non-english speakers could hardly see and do your survey. This loophole was discovered and posted on a non-english forum at least 4 hours before first posted in FT. Use your imagimation...
Bingo. Definitely talking 5 figures here.
ramblers63 is offline  
Old Jul 16, 12, 6:08 pm
  #628  
 
Join Date: Jul 2005
Location: SJU
Programs: DL diamond, Hyatt Globalist, Hilton Diamond, AA EXP, Marriott Gold, Hertz Plat, Avis President
Posts: 1,462
Those who say they are definitely going to cancel all the tickets are ridiculous. At the end of the day it will be a numbers game with some sort of formula like this (and only UA will know the definitive number):

The way they will decide is a formula similar to this

1. Actual cost of accommodating each passenger (food/drink, baggage, fuel etc) + estimate of those who got in on the deal who would have purchased a ticket on United (either with full miles or paid in any class) + lost revenue from displacing paid customers on flights that have historically been fully booked + cost to partner carriers = cost of honoring mistake

2. then they will calculate cost of not honoring the deal: legal costs + possible DOT fines/increased scrutiny and regulation + bad PR + customer irritation = cost of not honoring mistake

if 1 is much greater than 2 then they will cancel the trips. My guess is the cost is closer to even and they will honor most trips or perhaps cancel trips on partner carriers only
chewy3 is offline  
Old Jul 16, 12, 6:10 pm
  #629  
 
Join Date: Jun 2009
Posts: 426
Originally Posted by chewy3 View Post
Those who say they are definitely going to cancel all the tickets are ridiculous.
They are definitely going to cancel all the tickets.
ramblers63 is offline  
Old Jul 16, 12, 6:14 pm
  #630  
 
Join Date: Jun 2011
Posts: 721
Originally Posted by ramblers63 View Post
They are definitely going to cancel all the tickets.
Now the question is when. People are on the plane and some have already traveled....
flyer31 is offline  

Thread Tools
Search this Thread
Search Engine: