kmfdm91

This is exactly right...

I don't know what I'm missing (I'm in the business of consulting and IT), but from this thread and the 'UA trying to win back customers' thread...they both say the same thing:

We at UA are great. We KNOW that the business flyers are coming back and we know that doing what we do is what people want.

No how, no why, no explanations, and most importantly - no numbers/metrics.

I know this is the mentality of PMCO, but this is just asisine...that is unless for some reason people in high spending companies ARE getting word from UA and benefits, but I haven't heard of any reports.

Am I dense, or is this the perception of what's going on as well?

-jeremy

AZjohns

Personally, already have sadly.

bocastephen

This was never the mentality of PMCO - quite the contrary, as a slightly smaller carrier, PMCO went out of its way to deliver best in class products and service that continually beat out Delta, AA and United....at least until Larry K was dismissed by a greedy BoD.

Our current situation is a product of disorganization, lack of planning, no strategy, bad execution coupled with the arrogance that resulted from cramming two totally dissimilar organizations into one gigantic whole that now thinks it rules the airline universe based on size and route coverage alone - hence the 'take it or leave it' attitude many on the TA side of the house felt before it was lathered on customers.

richk_30

Airlines increase capacity to deal with the increase in leisure travelers, but my understanding is that business travel remains relatively flat during the year (with increases/decreases based upon the domestic or global economy). Certainly in my industry, there's no fall off due to it being summer.

Are there any stats to back up business travel numbers and fluctuations based upon the time of year?

PHLstudent

With the fleet wide roll out of Wifi (300 planes by Year end) won't that most likly increase ancillary revenues year over year just by having Wifi for purchase available? Or was the year over year implying Same product sales?

ibuyyoufly

+1 Totally agree

On the same hand, he's got great reason to be a little more comfortable today. The stock is at a 52 week high, plus some. That's his primary job. Keeping the shareholders happy. That fact buys him more time, and he knows it.

Lets see how his Exec VP's run the airline here on out. They are the people on the hot seats for company financial performance.

y2k1jetta

I personally think SMI/J is out of touch with what makes a great airline. Most kettles don't care much about boarding groups based upon experience. 2 folks besides me in the seating area, we chatted, I asked the why they are flying UA,sure small sample size, and the response was price, no other factor. The could care less. One said with so many elites on each flight, she has no reservations about being late, fees, dependability, if there was,group 1 wouldn't be 50 people. LOL.

FlyWorld

The conclusion I drew from a recent conversation with a member of the executive team is exactly that.

NathanJ

Honestly I think that is most consumers. They buy based on price, not brand loyalty.

-Nathan

fastair

I believe, because he was referring to YoY growth vs an absolute RASM number. Summer vs summer, given poor performance the previous few months negatively impacted revenue compared to the same seasonal period a year earlier before we were poisoned with Shares and CO theory of not having spare aircraft.

bocastephen

Which basically tells the loyal customer, your loyalty means nothing - if you want benefits, buy them at time of sale or check-in.

Isn't Delta taking a similar approach by connecting fares and MQM and FFP accounts to "customize" the entire FFP experience for the customer based on their revenue input? I'm no fan of what I've read about the Delta approach, but at least Delta is not going to the Kettles and selling bits and pieces of Diamond Medallion benefits for a few bucks here and there.

If this is really UA's future approach - why even maintain the Elite tiers of the program? Just sell packaged bundles or a la carte selections of benefits for domestic and international itineraries that cover everything from baggage allowances, IFE, onboard meals, lounge access, upgrades, etc. Everyone is a nobody until they take a $300 ticket and make it $400 with package A, or $600 with an upgrade to F that includes package A and a bigger seat. Fly 10k miles a year or 300K miles, it doesn't matter - it's all about revenue per ticket, not per year.

I wonder if your future meeting with the other executive will yield confirmation of this or something different.

FlyWorld

Yes, that is exactly what they are telling the loyal customer. We've talked about the "transactional mentality" here on FT for along time now. I believe this is how they really are thinking.

I think Delta's approach is smart. Tie benefits to some measure of spend/yield. I've got no problem with that. Encourages the right kind of loyalty.

kmfdm91

Sorry, I should have mentioned part of this...but it's all good to hear.

I never flew PMCO before the merger was announced. That said, I do remember people having relatively good things to say about the airline and of course the mention of free meals in coach on long flights, just as other airlines started charging for everything...

However, as you mention - it seems like things changed and the only thing I know about PMCO was after the merger was announced and Jeffy Jeff was in charge. I still recall reading threads about things going wrong on trips, people writing in and getting a shrug of the shoulders - exactly my experiences.

And, yes I agree with your analysis about what's going on with the current airline, but as I stated initially...what exactly is UA trying to do to win back both managed and unmanaged customers?

-jeremy

spin88

I took the same thing you did, I think "unmanaged" must be UA speak for HVFers who are not on corporate accounts.

What I found most interesting is that on the 4Q call in Jan, UA said their plan to get folks back is to have the sales force go tell accounts about the improved OT performance and the network. Obviously, this strategy in essence gives up on "unmanaged" HVFers who are not reached by the corporate account sales staff.

Also as an "unmanaged GS" I guess I see it differently (or have different expectations), I see UA being oh so very proud of hitting 80% OT (i.e. w/i 14 min of schedule), which just happens to be lower than DL, AS, US, and WN's OT percentage. Its "next to last" and barely beat out AA. Yes, better, but Like I am not happy with the low level of on-board service, I'm not happy with next to last OT performance either. Not sure how "next to last" is an effective way of winning folks back.

FYI, at the same conference, Parker told everyone that the AA/US merger would yield benefits, not by cutting costs, but by increasing revenues. It is about the clearest sign I have heard that they don't intend to cut back on service/elite levels.

Yes, the only difference is that SW does not serve the major city to major city routes direct like UA (or DL or AA) do... I agree, for a fare premium, they have to offer something more than simply network and reliability, or there are other options (DL, US/AA). Jeff does not seem to recognize this.

I think that most/all "ancillary" revenue (which includes bag fees) is not counted in PRASM. Jeff promised a 9% y/y increase, but wireless sales could account for this level of increase, and ancillary fees are only a small part of the revenue profile (e.g. in 4Q, Passenger revenue was $7,533M, "other, ex-cargo" was $926M). No amount of extra fees will make up for bad passenger revenue.

Actually, business travel tends to be the most consistent. Notably, at the same conference, DL's CEO said that DL's "corporate sales" were up 8% y/y.

Its total, I expect wifi is a big part of the projected increase in "other" revenue.

Stock is not up compared to DL, its only up as the sector is up on falling oil prices. The market will judge Jeff on how the stock performances compared to DL, SW (and US/AA once that stock is combined). But clearly it gives Jeff some breathing room.

pinerd

That's probably true. But I've also noticed this year that even though I am a Gold now vs Silver the last few years... my upgrade waiting list status is getting worse and worse. Seems to point to more elites?