spin88

Yes, and no one here (I think) complains about UA selling F/J seats.

BUT, and its a big BUT, there are only so many folks who pay for F, CO has very few of them, UA had a lot more.

Those who pay for F/J expect to get a F/J experience. They don't expect a Jeff-wich for breakfast, and a burrito rap thing for dinner. They expect some decent wine, good coffee, some real ETOH, a "premium" experience, not something that would make walmart embarrassed. The UA product is devalued so much in soft product as to, I assume hurt true F/J sales. I certainly can remember at least 20 times post 3/3 I heard passengers in F/J saying they got ripped off, would not fly UA again.

Then what happens to the rest of the F seats is the key point. You show as DL PM in your profile, well I've been flying DL, and on DL, if you are looking at buying a basically full fare ticket, sometimes DL will offer a P/A on some flights for about $200 more. Hey, I'm ok with that. Are you?

What DL does not do is not upgrade folks and then try to sell the upgrade to all comers at rapidly decreasing (reverse auction) prices as you get closer to Time of Departure. Only those seats that can't be sold for a fw bucks get given as upgrades. As UA noted, its upsells to F are up 40% Y/Y in 1Q.

When folks who give a lot of money to UA stop being upgraded, its appropriate for them to complain, and then look for another carrier when as here UA intends to simply try to sell even more F seats as TODs.

5khours

I think the best customers are the ones who are generating the most profit for UA. Maybe they pay for F, maybe they don't.

channa

CO, the corporation, still exists, but was renamed recently, on 3/28/2013.

entropy

I've been saying this a lot lately... the F/J soft product (both in'tl and domestic) has been degraded over the last 2 years. They are serving slop that is barely worthy of being reheated at a 7-11. You don't have to be 'fancy' to be good for the F/J crowd. A nice (not soggy) unheated Turkey Club would be better than the junk they're serving and still be classy, or a rotation of salads with protein (chicken, etc) on top, with non-disgusting dressings.

AAExPlat

Yes. Except there are very few of them. And in order to get those customers, you will need to provide F worthy service. Not constantly water down the mediocre service you have.

Beyond that, the customers you want are those paying higher than average fares in coach and incentivize them to give you as much volume as they can. The reason is that these elites fill your cabins at solid yields, which means you can price the cheapest seats less aggressively, and allows you to raise fares at the top end. When the volume at above average yields id fleeing, then the bottom falls out. That is what is happening at UA and that is why they have revenue problems.

The folks they pissed off are the 1ks, Plats, Golds and Silvers who gave them lots of volume at often average to above average yields. Once they left, the GS's may still have been around, but UA lost the ability to price more of a premium. Even after cutting lots of capacity, they are still not keeping up with DL and AA on yield.

Bingo.

Very true.

True. Of course it is not only the food. It's the seat, the service, the IRROPS recovery, the lounge access, etc. And UA falls short in virtually every category for me personally.

The only good news for me about all this is that I have been picking up some (relatively) insanely cheap fares as of late on UA since they are pricing way lower than AA and DL on the routes I fly most often.

Darlox

I'm not sure I buy this argument as-is, but then again, I'm not running an airline either... (And as a disclaimer, I think I AM one of the flyers who pays above-average fares. At least, in my flying patterns, my average CPM for flights in the back cabin is somewhere in the neighborhood of 10. Anyhow, I'm not one of the ones out there taking MRs every weekend for kicks...)

My point is that they should be wanting to incentivize customers paying average fares, because that's where you're really going to get reliable volume, in return for loyalty perks. At the low end, the vacationers and casual travelers are capricious and difficult to retain. At the high end, your elite benefits become meaningless because the high-yield customers are already paying for them directly.

I think they're failing because they ARE trying to winnow benefits down to above-average-fare travelers, and the amount of collateral damage is colossal.

I buy expensive nonstops and close-in fares when I travel for business. And I make elite pretty handily on that alone.

But when I travel for leisure, or on behalf of non-profit Boards that I volunteer for, I buy cheap fares. So I probably "average" out to somewhere in the middle if they look at my annual spend-per-mile. Well below the road warriors, but well above the vacationers.

Would UA prefer that I book my leisure travel on DL or AA, thereby being "above average" in my annual spend, but only giving them 75% of my business?? What's wrong with being average, I ask you?

halls120

You conveniently ignore the DL/NW merger, where management had a labor agreement in place for pilots almost immediately. Compared to that experience, the UA/CO merger is a failure. Every day that the two subsidiaries operate as two separate carriers is testament to that failure.

Physician, heal thyself.

1KPath

...or as the Jesuits at my medical school taught..."Cura te ipsum"

cesco.g

What essentially LH did with great success after taking over Swiss (LX), preserving Swiss' loyal - and somewhat different - customerbase.

TravellingMan

IMO most of European mergers - LH-LX, AF-KL, preserved their individual identities due to the country by country negotiated bilateral landing rights they possessed.

entropy

We would have all been better off if they had done the 'merger without a merger' that Kellner et al were discussing. Network synergy, full FF reciprocity, etc. It would've been great. Now we have pissed off customers on both sides (but mostly pmUA), pissed off employees, and a mess of an airline.

spin88

A merger made too much sense. After DL merged with NW, CO could not stand on its own, and UA (which had a much better network) was also at a disadvantage in getting corporate contracts. A "merger w/o a merger" would not have allowed the kind of route planning, cost savings, and corporate contracts that DL was getting, and both would have been at a disadvantage.

The merger had to happen. UA could have stood alone for a while, but CO could not, its network was too small, and Glenn wanted to cash out. Also no regulator would have allowed CO to merge with AA (the compete too directly in Texas and the midsouth, at LAX, and in NYC) or likely (due to overlap in EWR and PHL) US. There was only one real tie up for CO, UA.

The problem was not doing a merger, its how it was carried out by Jeff, et al.

AAExPlat

You might have misread me...I agree 100% with you. What you call average is what I call "average to above average"....

IAH-OIL-TRASH

Numerically, or as percentage of business capacity? And you source of data if the latter?

In your crusade to criticize everything UA does, or what CO has done to it, I don't really think you really realize how much the downfall is due mostly to Smisek, not his predecessors at CO. I flew both CO and UA in business pre- merger, and (especially under the latter part of Bethune's tenure) there was little difference between the two.

As for comparing airline results this quarter, you need to be a little careful on comps. Delta is a few year post-merger, as is US. Southwest keeps chugging. American is in the throes of bankruptcy and UA is just one year into merger.

AA's results are just as miserable as UA's are. Big changes are in salaries/benefits, up double digits at UA, down double at AA. Maybe some bankruptcy benefit to AA's bottom line? UA PRASM up higher percentage (I can't remember)..

It'll be interesting down the road when all the legacy carriers are a bit farther from their respective mergers/bankruptcies. At that point, it'll be easier to make comparisons.

chicoflyer#1

GA pays "ATC/FAA tax" for every gallon of fuel purchased in the US, whether they use ATC services, public airports or not.