How to attract premium travelers back to UA.
 

I sent this to customer care this afternoon. Please feel free to discuss/debate, but keep it professional (as always)!

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In view of the company's continuing deteriorating financial performance, I would like to make four specific suggestions for attracting premium travelers back to United (those who give you the highest yield):

1. The premium cabin product is lacking. Food quality was good under Continental, it is now dismal. Premium cabin passengers should board ahead of Group 1.

2. Pricing for premium cabins should be consistent and predictable. Please have affordable, advance-booking P fares and please release upgrade and award saver inventory far out so that people can plan their trips accordingly. People don't like upgrade lottery. I usually fly premium cabins and am willing to pay extra for it but I want it confirmed at the time of ticketing. Twice this year I took my business to DL and AA. In the first instance, they were able to confirm an upgrade seat on a flight to Europe. UA does not release upgrade inventory early. In the second instance, P fare in first on AA was about 40% lower than on UA.

3. Change MP so that miles are earned in relation to dollars spent, not in relation to miles traveled.

4. Please upgrade the United Clubs. Maybe follow Qantas example on their domestic network within Australia and have a separate class of business lounges for passengers travelling in premium cabins domestically.

If you can attract premium travelers back to UA, everyone else will benefit from it. Profits will go up and with it employee morale will go up. This will eventually convert in higher passenger satisfaction even in the economy cabins.

You should also consider this: you need to empower your employees at the local level to make decisions/exceptions to rules when such exceptions make good business sense to take care of passengers. I had a bad experience recently at the EWR UC with a conference room reservation and nobody could resolve the matter for me. Too many decisions now are made by the computer, and your agents are nothing than a human equivalent of the IT interface.

Please empower your people and you will be surprised to see how far they can take you.

2. Sorry to sound flippant, but upgraders are not premium travelers.

Here's my idea to attract premium travelers...

Agree with your point 1.
2. Be nice
3. Be on time
4. Be predictable.

Well, I certainly agree with your points 2, 3, and 4.

Please allow me to clarify:

My definition of premium traveler (in addition to the obvious full-F-fare passenger) is someone who is willing to either (i) pay the discounted P fare to fly first, (ii) pay a higher-bucket Y fare to have easier access to upgrade space, or (iii) pay the co-pay and mileage award to get a C/F upgrade international. The target market here is people whose employers reimburse only coach, but who can afford to pay the supplement up to F in one of the ways mentioned. I think there is a lot of money for UA to make in that market segment.

So, all that will suit you will it ? Or were you thinking of the general populace? I can safely say that I would say no to 1,2,3,4. I think your points all seem to have an element of me, me, me. Which is fine but don't expect people to agree with them.

Actually - it's a pretty good list, and I especially like the straightforwardness and lack of vitriol ! (yes, I would change some items to suit my own priorities) Now, the question becomes: how to make your voice, and many others like it, heard? Perhaps copy each of the board of directors on it for a start (and the CEO of course)

I also would be in great favor of reasonably priced business class seats ("reasonable" is under $3500 TATL), but do understand the balancing act that UA has to play in order to allow folks to get upgrades on occasion. I've been pretty lucky finding confirmable upgrade space to Europe, but usually only far in advance.

I hope you were joking when you said no to 1? You don't want better food in F???

along with the product is not just the food, but the consistency of the rest of the package. these days with UA, you never know if you are going to have DTV, AVOD, wifi, etc and whether any of it will work. at least lie flat is becoming a continuously kept promise on intl, but there's still too much inconsistency in the way that premium cabins are delivered. i would argue that the food is actually the most consistent -- albeit consistently bad.

How to attract premium travelers back to UA.
 

Take out the slimline seats in Y

For me, the biggest improvement UA could make is to upgrade their fleet with newer and bigger aircrafts since most of my BIS are on international routes. I've flown the premium cabin on 787 and I am not impressed. I don't mind stuck in E+ on domestic flights and I have no interest in AA or DL. But on international trips, UA aren't in the same league with many foreign carriers that I've spent my $$$ on.

United does not likely consider P fare purchasers to be a "premium" traveler.

Anything that will cost UA is about guaranteed to not be done.

For #3, You already get more miles if you pay more. Full Y and B get bonus and premium cabins get COS bonus. If you make so Joe Kettle only get 300 miles for their round trip to Hawaii they won't be flying your airline and UA can't afford to lose any passengers. And they have made it quite clear it is these once a year passengers they can nickel and dime are the passengers they want.

They are working on the clubs. Maybe not the food but at least they are slowly updating the aesthetics.

Premium cabins are packed as is - how exactly your newly attracted premium travelers will be accommodated? They already reduced upgraded and award space - its not like planes are flying with half empty cabins...
Without expanding UA's goal now is to generate more $ from existing capacity and cut costs..

1. Completely agree with you here.

2. This is highly route dependent. UA does release upgrade space (R) and P space early on some routes. For example: In January I booked P fares for flights in September. At the same time I booked confirmed upgrade space for flights in September. In March I booked confirmed upgraded flights to HKG and back for flights in May. In December I booked confirmed upgraded flights to BKK and back via HKG for flights in March, so the space is out there!

3. Not sure I agree with this as it is somewhat already being done via CC spend.

4. They are working on this so I expect to see improvement. I don't think your reference to Qantas really works though. There are almost as many people in the greater NY area as there are in the whole country of AU. Most of the UA clubs outside the US were they are mainly serving premium pax (F and Biz) are similar to the competition. HKG and GRU come to mind. The new club at LHR looks to be very nice as well but obviously haven't been so can't comment more than the pictures from the press release.

I also completely agree with empowering people at the local level to resolve customer issues. It seems UA is trying to centralize this in order to have better control and pick who gets what, but employees should have additional tools to work with when a simple issue arises. I believe the tools are there, because I've seen them used for me before, so I hope the real issue is training. People just don't know what they can or can't do.

Exactly - they throw the P fares out ther so they can reduce the amount of CPU seats. Of course, this hasn't necessarily worked out in the big picture.

$3,500?!?! Don't you know UA has now set the value of these seats at $1,500? ;)

Yes, I know! (assuming that you're referring to the recent "sale" (aka price match) :)

I guess my reasoning is this: I generally will pay something like $1000-1400 for an upgradable coach seat SFO<->LHR, and then upgrade for $550 each way (all of this when I'm feeling flush, that is). So I currently pay about $2100-2500 for C (occasionally higher to boost my upgrade priority)

There are usually a Lot of upgraders on these flights. Somewhere there's a price between the $5500 "list" price (P) and what I currently pay that would fill the seats with higher fares on average (I think!)

Perhaps on domestic flights. The international food choices (TATL at least) are reasonably good. I've compared them within the last 6 months to both BA and VS - not that different (although wines are on the other two are certainly better!)

i would argue this is in line with the value of the product. what UA needs to do is either (a) lower the prices of P to sell those seats outright given their current value, or (b) increase the value proposition of the product to command the fares they are currently charging ($5000+). i'd give NZ the $5000 for a confirmed J seat because the product kicks @**. UA, not so much.

the prices that really make me cringe are for P fares on the premium TCON products for all airlines. give me a break, $3000 round trip SFO-JFK??? i hope that when B6 starts flying their Mint product in earnest they put some downward pressure on prices and things level out around $1500-2000, but i'm probably dreaming.

Here in Australia we have seen all the same mistakes that are constantly made by bad airline managements, whether it's SMI/J at UA or Alan Joyce at Qantas or a hundred others in the past. Only when these blunders are reversed will the premium flyers return.

-Blunder #1: Bad industrial relations. Airlines with a divide between management and employees are always lousy places to fly. Do you notice how the bad airline-managers always blame someone else - often the staff and unions - for their own mistakes?

- Blunder #2: - Bad IT - think of SHARES or the web page of any failed airline

- Blunder #3: Bad resource deployment: follows on from bad IT and a misplaced desire to work the resources harder - results in stranded pax with no substitute aircraft at IRROPS, crew in the wrong place, and a deteriorating unacceptable on-time record

- Blunder #4: Failed grandiose schemes: Like the grandiose QF/EK plan [following the failed QF/MH and QF/NH plans] perhaps the UA/CO merger was a grandiose idea but just not a viable proposition

and Blunder #5, not yet tried by SMI/J but will doubtless come: Setting up an LCC to compete with your mainline flights. Think of Ted at UA, JetStar at Qantas and a dozen other failures [JQ still looks good on paper, but only because most of its costs are charged to mainline Qantas]

To get the HVF's back SMI/J and SHARES must go

Premium cabins full? Open seats each way in Biz this week SFO-SYD Sunday/Friday. On a 772.

This is delusional and some people seems to think that only F and J are HVF. They are wales. People who fly Y,B, P,M, H are HVF when they book one of these fares for a meeting within the next two weeks. These are the bulk of those leaving forcing too many sales in R,S,T, and Q. There just are not enough F and Js to make the world go round.

I think United management has made some progress to recognise high value flyers, through the GS program, lie flat beds and investment in new aircraft.

My suggestions to bring passengers back after myself being GS for 7 or so years would be:

1 Ongoing innovation on the business/first product. After the new lie flat beds, innovation largely stalled, whereas one notices BA and VS has continued to make ongoing efforts to relaunch their offering

2 Car service to final destinations, perhaps only for F and GS, but some sort of improvement to the current product, (say only for full fare passengers initially)

3 Technology - the new app and website is a huge improvement over legacy UA technology, but is still patchy when it comes to overall delivery

4 On board - food and beverage options remain lacking when compared to EU and Asian carriers, and barely comparable to US competition

Y/B/M, absolutely. P, not so much. P fares often sell for 10 cpm. That's definitely below what UA would like to make on its premium cabin seats. Y/B/M on the other hand are often 30 cpm or higher.

Yup, I just booked an H fare yesterday to fly SFO to MSP on Monday. Only seat I could get was 36B on an A320. And was only flight from SFO-MSP on Monday (even looking at connections) that met company guidelines for fare paid. But even the ones that didn't meet the guidelines are all full.

What I want is a feeling that the airline actually cares about their passengers and their product instead of projecting the image that all they care about is how much they can swindle out of us and prod us like we are a bunch of cattle. There are competitors and choices and United is losing. This isn't like Comcast where you can't get internet anywhere and are stuck paying even after they give you a big F U. I feel like United is trying to give us the big F U and daring us to go elsewhere and loyal HVFers are actually leaving in droves. What you say may sound good to Wall Street investors but we hear you loud and clear and all that it seems to me is that loyalty doesn't matter and it's all about the dollars and cents. In the end it is about dollars and cents but I worked for a Vice President of a very successful publicly traded company where we always made our numbers and his mantra to us was "Take care of the customer and your employees and everything else will take care of itself." United is too focused on spreadsheets, formulas, and algorithms and they just need to get back to basics and focus on the customer and the product and ensuring that they can deliver the best experience possible at the best price. They need to compete to win us back because they aren't Comcast where crappy service isn't penalized because you can't go anywhere else. We have a choice and we are voting with our wallets.

United has smaller planes because of "capacity discipline" but while they cut back on seats and the product the competition is adding capacity from a much better product. You can't cut yourself to growth. It only gets you so far. If I were an investor I would be running away from UAL. It looks like it's already happening based on the latest drop.

I always thought United rewarded the GS flyers well. I am a 1K and I feel like I don't matter that much. If you are anything less you are really getting creamed. But while not a GS I still spent over $100k on United in the last 3 years. This year I am already at $15k and am on track to do over $45k. I get the feeling like United doesn't care as much about my business. Of course I have felt the same from some of the Hotel chains I used to be loyal too and I've switched my loyalty as well. I am holding out for United to change course and show they care about the product and others like myself but things are looking pretty bleak based on the direction I see things going.

Counterpoint

1 Get me where I want to go without a megalong connection in 3 segments or fewer - doing a good job on that now with UA> DL>>AA for me

2 After Lieflat in F, I don't care about other enhancements

3 IFE - Meh - strip out or charge others

4 Food Meh - strip out or charge others

5 Car service - Meh - you aren't going to do better job than people already doing this..you fly, I drive

5 Short availability in Y domestic, F long haul - all three doing good job

Well, all this aside, if UA is going to have so many RJs, how do they expect premium traffic to increase if RJs offer an uncompetitive F service?

I like these and its down to a personal choice, but car service and better food does make a difference to me: one thing less to worry about, and once you are used to it on other carriers such as VS, it does seem to become an integral part of being able to work better as its seamless. Food - I see both an expanded high quality food and beverage service as important as a quick express dine service so can sleep. GS service I saw as mixed when coming to irregular operations, which in the past had been a strong point with real personal service when making challenging connections in hub cities..

After so many years GS, I do not believe one misses anything of significance being a 1K..

How to attract premium travelers back to UA.
 

I think premium travelers are generally aware of competitors offerings and will usually choose the best offering all things being equal.

UA's business class seating, especially on PMUA planes, is a joke. They need to remove these sardine cans and go to 4 across, everyone has aisle access. This is becoming the industry standard now. They need to upgrade the entertainment to include more movies and tv shows on demand, they need to include music on demand as part of their entertainment offering. The food in C on UA is not bad and service is generally ok but a soup course should be added and menus should be nicer than what's currently offered.

They need to get rid of Global First. There is a finite market for paid F and UA can't compete. I'm not naïve enough to think Dom and caviar will ever come back to UA. Just can the FC and focus on making a great business class product.

The lounges are horrible. If I'm a premium pax flying transpacific C class and I walk into the SFO UC at noon I am disgusted. Every seat taken, dirty toilets, frat party quality drinks, and no food. I'd rather sit at an empty gate than a UC. They need to upgrade the food, fix the furnishings, pay for more cleaners and get rid of the cheap booze. The little things matter to people who have a choice of which carrier to fly in C.

They should cut upgrade space and reduce the number of C seats on most planes. To have a premium product there needs to be exclusivity. People who pay for C should sit in C and there should be a limited number of upgrades every flight. I've been on numerous flights on SQ, CX, OZ, even DL and AA where there are empty seats in C. This never has happened to me on UA because they cheapen the product by allowing so many upgrades. It may seem absurd that occasionally having empty seats is a good thing, but I think it is.

Focus on comfort and quality and premium travelers will return.

Be Connected!
WiFi Lord! Transcons with no wifi you are killing me UA. Correction Virgin is killing you with there LA/SFO-IAD/NYC/BOS Nerd Birds!

Agree 100%

Ma and Pa Kettle do not fly for miles, they fly for price. That is why Spirit, Allegiant and Sun Country are making record profits. If UA is $500 RT and Allegiant is $495 - most Kettles will choose Allegiant or fly WN for $700 because they believe WN is always the lowest price and you can check your bags for free.

And kettles love to pack everything including the kitchen sink. :)

For me the biggest issue as a domestic 1K was the lack of upgrades. I buy flights a week or two out, usually in the Q->H fare range. Not the most expensive but not cheap. I dont like their policies that have me sitting in coach when I've flown more and spent more than 90% of those in F. I'm not sending $20K+ to UA to sit in coach 70% of the time, if it was 30% of the time, that may be different.

if i'm paying $400/yr for a UC membership, a great first step would be to have chairs [plural] that look like this in UCs replaced (this is at SFO T3).

http://i.imgur.com/95ZBECx.jpg


if i had a chair like this in my basement, it'd go in the garbage. if i ran a retail operation and had a chair like this in my business, i'd be fired.

it's a systemic problem (and perhaps a 'culture' problem) that's definitely not limited to chairs in SFO.

Well, if people weren't such slobs it would look better. I can only wonder if the people who make these messes have houses that look the same or only do it in the club because it is not their furniture. But why throw in the garbage? Just clean them once in a while. Much cheaper than buying new all the time.

Jeff's upgrade policies really hit the "middle class" at UA. He's a lawyer (nothing wrong with lawyers) and a very smart guy, but got paid $10m and has never worked a ticket counter or probably even flown coach. He doesn't get that transactions aren't done individually.

Getting a $50 upgrade from ma and pa kettle is $50 more than giving a 1k an upgrade. So the business traveler (to make 1k you have to put all your travel on one airline) took their expensive business travel with them and left (myself included). Jeff has been trading dimes for dollars.

You can't run an airline via spreadsheet. I've voted with my feet, if it gets better I might be back. But that would require transparency, especially when it comes to upgrades and fare availability.

I agree with that 100%

Great suggestions, espcially about SFO UC. I dont even bother sitting there. But I must respectfully disagree on these two. I would say improve FC, not can it. Also no need to cut C seats but again improve the product. Of the 747s C class I flew this year, almost all the seats were sold, very few upgrades.

For intl flights only upgrades inside t-24 show up on the list (changed maybe a year or so ago to this). I'm sure there are no shortage of overall upgrades.

OP, missing from your list was direct routes. Maybe my home airport is unusual, but it seems lately I cannot get direct United routes, but can get a direct route from an alternative mainstream carrier. Traveling every week I value my personal time, so United looses more revenue.

They will .... to one of the carriers you have listed above.

If not for free upgrades and mileage deals why take the risk of paying for UA service on routes other airlines fly? Why wage $4000 on the experiment if UA can offer a decent biz product? Preying on the segment of the dumb, patriotic rich doesn't smell like a very viable business model.

The whole game does however change and flying UA makes a lot of sense if you can buy M or D and have a very high chance to ride C or F ... and this is still how UA runs. They do attract business class customers buy baiting them with the decoy of F upgrades.