villox

I question your analysis on this. United is not saying they value YOUR business and HALF what they did the prior year. They are saying they value your business at half of what they do someone who spends twice as much! Why do you equate qualifying standards for the particular elite level with the cost of the entire flight? Are they not also providing you transportation for this money? Remember, THAT is what United is actually selling - the rest is supposed to be gravy.

You say that they'd rather have a one-off person in that seat, but their program sure isn't designed that way. You book all those tickets with them, and United is saying is yes, for those 100,000 miles of $300 transcons, you may have priority (and free!) checked baggage. Priority security. Free E+ at booking. You can be ahead of all silvers and get free upgrades. They'll give you a 50% bonus on your miles, which means you also get 150,000 RDM (enough for a free First Class ticket anywhere in the world, something that others pay more for than the entirety of what you spent on all of your tickets!), along with all the other gold benefits (Flying with Lufthansa in cheap Y? Enjoy the free lounges!)

I wonder how much YOU value the incremental difference between Gold and 1K? If you think it's worth thousands of dollars, can you not understand why United would want to start charging more for it?

penner42

Yep. Given that I never expect an upgrade, it seems like $499 annual E+ combined with the Explorer card is a much better option than going for Gold. I did use my Gold status once this year to get free checked bags greater than 50lbs for 5 bowlers (roundtrip)... so that's $1000 in bag fees saved. But it was more for convenience of not having to rearrange stuff, we probably could have gotten everything into 50lb bags. Also, I feel like checked bag fees should count towards PQD. That's just pure profit for UA (minus using a little more gas, but still).

The reduced award change fees are also nice, especially in light of the new fee structure announced.

I doubt I'll requalify for Gold this year, but I will likely make Silver. Dunno about next year, either, but I guess I'll just shift spending to my UA card and not worry about PQD for one more year.

bse118

There's a another element here - as a UA elite I'm often willing to pay a small premium to fly UA on my leisure trips, because A) I value my benefits B) I believe I'm more likely to have a 'good' trip on UA than as a kettle elsewhere and C) because collecting RDMs on UA makes sense for me. So for maybe 5-10 domestic trips a year I'm willing to give UA, say, $50 bucks more per ticket. Insignificant on an individual flyer basis, but multiplied over the ranks of elites it adds up. This is exactly the type of behavior rewards programs were originally intended to induce, and UA risks losing it in flyers like me (if I didn't have the requisite CC spend). As it stands, because of my CC spend, I'm not sweating this much for the time being.

BearX220

Exactly - but this creates a big opportunity for some other airline to do something more for customers whose gross spend falls between $1,000 and $15,000 per year. UA has just enlarged the "consideration pool" of frequent flyers seeing what else is out there.

In the meantime, I don't see anything in the PQD scheme that generates more revenue for the airline. It's very expensive to replace one $8,000 per year flyer with eight $1,000 per year ones, even if the latter are buying TOD upgrades out from under the 1Ks left in the herd.

IAH-OIL-TRASH

The latter, obviously. They're getting 40cpm vs 10cpm for the former, and they have 250k seat-miles left to sell at only 4cpm to make up the difference. Easy.

Mileage-runners occupy a lot of seat-miles at low cost to get their status. UA wants to put more value (and give more benefits) to people who pay more per mile.

wpr8e

You have stipulated it perfectly. The fact is Rainey was correct, too many passengers who don't pay enough in revenue to justify their benefits. Truth hurts

bocastephen

So here is a perfect example of UA being penny-wise and pound foolish.

I have two clients who live in Singapore and who visit the USA a few times a year with fairly frequent US domestic travel on UA. They only fly paid J or F internationally and hold status on SQ, while also holding 1K on UA. So last year they made a mistake due to travel changes and missed the minimum segment requirement on UA to maintain 1K and were dropped to - the big bagel.

Looking at their travel patterns, I convinced them to shift some of the TPAC travel to UA in paid J or paid F and I would work with our sales rep to restore their 1K as a courtesy in view of their historical travel record and potential spend (far exceeding 10K/yr and probably exceeding 30K). The sales rep goes off and escalates and comes back with an offer of - Gold. That's it. Not even Platinum. The only other option was to keep the general member status and 'work their way back to 1K'. I couldn't even present that offer with a straight face.

So, the end result is thus - all TPAC travel remains at SQ, all mileage earning will no longer be balanced between SQ and UA, but exclusively to SQ going forward, and when they arrive in the US for domestic travel, guess what - they're going 'kayak' the cheapest coach ticket they can find online. UA's likely earnings from this couple went from 30K+ a year to - ta da - the big bagel.

And to think I almost convinced them Global First on UA with the new seats was comparable to the J cabin on SQ and would be a good option because it was cheaper (I can upgrade my customers from full J fares to a F seat). Shame on me for even trying.

villox

If they are buying full fare J and F, why do they care so much about status? For the extra RDM and for award redemptions fee waivers?

nsx

You should see an Edit button at the lower right.

A 50% decrease in elite status earning for cheap fare customers like you and me is the new normal. I saw about a 70% decrease in my Companion Pass earning ability two years ago when Southwest replaced its FF program. Southwest still allows tier status (A-list) to be earned on segment count alone or on revenue alone, but that might change. If it does, I'll be cut more than 50% on those earnings too. Right now I have 90% of the segments needed for A-list preferred renewal but only 40% of the revenue-based points needed to renew.

That's a cruder way to accomplish the same thing. Why would the airline want to employ a crude tool when a more precise one is available?


The fact that airlines don't often account for is that many customers are not 100% road warriors or 100% leisure travelers. The road warrior occasionally buys vacation tickets and the leisure traveler may have an occasional business trip. Both types of customers either promote the airline or steer friends and family away from it. A good loyalty program encourages those out-of-pattern trips to be bought from the same airline.

IMHO Southwest made a big mistake when it decided to lock travel funds to one passenger. I explained to the CEO, to his face, that his best customers often directed friends and family to Southwest based on funds resuability. I my friend needed to cancel, I could use the funds and reimburse him. That made the Southwest discount ticket in effect unrestricted. It was a huge advantage over the competition.

I explained to the CEO that with the new policy I would no longer be able to recommend Southwest over other airlines unless the traveler had a reasonable chance to fly again within the one-year time limit on funds expiration. The policy went into effect anyway. It's all about booking revenue now no matter the effect on future business.

Fortunately Southwest's new FF program provides, for now, an escape hatch. If I book tickets for my family members with points, any cancellations go right back into my FF account. The points are NOT locked to one traveler. So now I never buy revenue tickets for any family members except myself. Most FTers do the same. I fail to see how this benefits Southwest. In the long run I believe that locking travel funds will cost Southwest money if it has not already done so.

PV_Premier

the problem for a FF like myself is that it never ends. i am just fine not being a 1K, in fact i am not one right now and have never been one. i might make it this year, i might not. don't know yet.

the issue is that i have to either FUNDAMENTALLY CHANGE my purchasing or flying habits even to requalify for gold, much less to requalify for 1K.

in the current system my 100k miles this year =1k
next year my 100k miles = gold if i spend the same
however i can't fly 50k miles and still = gold, instead = silver ~ useless

the equations above do not make sense for someone in my shoes. it is better to find a program that delivers more tangible benefits at lower levels, or to just kayak.

i am not stupid and i fully understand that this fundamental change is exactly what UA and DL want to instill in me the consumer, but it is too much too quick to ask me and other FF like myself to swallow that level of change between now and Jan 1 2014, and not be left with a bitter taste.

if i sit my a** in UA's Y seats for 100k miles again next year, the benefits i will achieve at the price i am willing to pay is not worth it for me as a customer. i cannot pay 100% or even 50% more on my average out of pocket trip than what i currently pay. and the benefits of only earning gold are not good enough to justify booking literally every trip on UA despite inconveniences of timing, routing, etc. (hell, next weekend i have to fly SMF-LAX-DEN-LNK just to get on UA metal at a reasonable price).

as i said before, it is fine that UA is making it clear how they want to handle accounts like mine. i am just not buying into it.

Frederik123

Hmm, I didn't get it (yet). Why was 'kayak' in first place no option for your clients on domestic routes? Due to 1k status? Without the 1k status, it makes even more sense to buy a paid F-tix.

BearX220

I want to validate your emotions. I've been called out in this thread for expressing similar ones, maybe a shade too colorfully -- I don't respond well to smug condescension about how I'm not spending enough to deserve any serious attention from United Airlines (although I spend much less with State Farm, among other companies in my life, and get personal attention on demand).

But there has not been one single solitary morsel of good news for me from United since the merger broke out - except the removal of foreign transaction fees from the UA-cobranded Chase cards, which really came from Chase - and the combined weight of all the clawbacks and dilutions and obfuscations and sneak attacks has crushed any enthusiasm for this company. And that's before I think about their abject inefficiency and operational misery.

I can't come up with another company I deal with regularly for which I have more disdain.

Dish Network? Dropped them years ago. Chase? I'm a card customer only, I bailed on the appalling checking, etc. side of the business years ago for a credit union. Mini Cooper / BMW? They tried to screw me when the car caught fire, but I got through that with State Farm's help and sold that little charcoal briquette on tires. Verizon? Horrible billing, but you can always get a human at a retail center to help and they're operationally the best we can get in the US. American Express? I keep them at arm's length. Dell? Stopped buying 'em. Comcast? Never hired 'em.

And of all the above bad companies, only United seems to operate as if customer service and competitive considerations are utterly immaterial. I hate what the US domestic air system has degenerated into in general, but I now can't think of any company in my sphere I dislike more.

spin88

Related story. Ms. Spin88 works for a small company that has partners in China, and investors from China. For some reason (perhaps she is only one capable of doing so )) it has fallen to Ms. Spin88 to make sure folks trips go well, and at times she just books for folks, F or J over, F domestic 90% of the time. Probably, $100-150K per year.

Who does she book? Used to be CX or SQ or (mostly) UA transpac, then UA domestic 90% of the time. Now? Never UA... Why recommend anyone fly UA, and get the blow back...

mgcsinc

Hypothesis: Biggest impact will be to dispose of a ton of TYBNMY (this year but not most years), accidental Silvers -- folks who happen fly a TATL and three transcons (two for leisure, one to go to a conference for work) from the West Coast and wake up one morning and suddenly they have status. These people will end up just being Bronze.

bocastephen

As UA 1K, they were upgraded almost every flight within the US and had an enhanced ability to use reward miles without fees and get access to the premier line when needed.

The status on UA was for award travel benefits and benefits when traveling wholly within the US on domestic flights which only occurred a few times a year. They are not paying for F class on a US airline domestic flight - that's like paying a Four Seasons rate for a Motel 6 room. If they are only getting a Motel 6 room, that's all they want to pay and I can't blame them.

I've personally flown UA's new F seat on both the 777 and 747 and I actually loved it - and thought it was a smart way to go on the TPAC flights. Oh well.