luckypierre

IMO, your remark raises the larger question of the chief purpose of FF marketing campaigns. I concur with your observation that, at least originally, they were intended to influence the discretionary dollar being spent, not the OPM corporate traveler who, due to corporate contracts, travel patterns, employer/customer relationships, etc was bound to a particular route/airline and relatively indifferent to money spent on travel. This RDM decision has focused my attention on that discretionary spend and the outcome is not favorable for UA (not that current management seems particularly concerned about individual traveler's decisions). In contrast, the handful of times I have flown Delta over the past two years, they seem to understand that if we force discretionary reviews due to negative changes in loyalty programs, it will be in our best interest to bolster the underlying service. UA implements similar decisions within the context of a mediocre product with continuing decline in standards.

RealFan

I know we're talking about UA MP here but all they did was copy DAL to the last comma as it concerns this revenue program. Do you think that DAL is wrong in its analysis? I assume that if they see a dramatic decrease in revenue, they will reinstate a program which addresses that middle group you allude to above.

rankourabu

a) From the middle group's perspective: Delta has a decent product. SkyMiles has been a bust for a while now for this group anyway, and Delta managed just fine.
United has a pretty bad product. MP managed to keep some folks around and suffer all the other shortcomings

b) wont happen. Even if they are wrong. I cant imagine a retreat of that scope.

LaserSailor

I think they both have it right. Not surprising given the data they have. I see no difference in DL and UA domestic, but I do think they will rarify the top!tiers with a big increase in PQD next year. If you are squeaking by at 10,002 now, diversify in 2015.

emcampbe

To UA, I don't think it matter who is footing the bill in the end. Benefits go to the specific person traveling - and the new rules of the game are that more benefits are going to the travelers who are associated with higher spend, not the one who flies the most miles. And that goes whether its an executive at a Fortune 100, a small business owner, leisure traveler trapped at a high-cost airport, or an "average joe" splurging on a once-in-a-lifetime vacation.

The change to MP won't, IMO, change how they price these kinds of tickets and the balancing load in general - they will still offer lower fares on flights where they have excess capacity, and higher fares on those that they think they will sell out. To those who care a lot about miles, yes, it will make adding stops for a lower fare less rewarding. However, those (on FT and off) who care more about miles than fare, in general, are a minority and few and far between - far fewer than reading FT would lead one to believe. Many travelers, especially those traveling for leisure, and those based in North America where, in general, price takes absolute precedence over everything else including service and convenience, will still choose whatever itinerary is cheaper. And there is no difference for those who care about status, as the calculation for PQM remains the same as today.

Yes, non-UA metal could be beneficial in some circumstances for RDM. However, anything bought on 016 stock will still be under the revenue system. And we don't know if the distance-based calculation will stay the same for partners as it is today. It might...but time will tell.

And why, from UAs point of view, should someone flying, say EWR-IAD-IAH for a lower cost than the nonstop EWR-IAH, earn more than the guy taking the nonstop? Especially when UAs cost are higher for the connecting passenger, and profits lower.

Airlines were the first ones to have loyalty programs, but most other company/industry programs since have been based on revenue, and for good reason. My points at Marriott, are based on revenue. When I shop at the grocery store, if I buy a product on sale, I get fewer points then when I buy it at full price. The airlines basically trained passengers to expect more rewards than they could afford to give indefinitely, and are now scaling back. It's not really that surprising when you think about it. Hope you enjoyed it while it lasted.

Its the people who are bringing in more revenue who are more important, whoever it is. It's not that you are not giving anything to those who bring in medium or less revenue, but I think its fair to give them less rewards if that's the case.

For me personally, I'll probably be on the slightly lower side in terms of RDM with this change - I'd guess around 20% less RDM. But I understand why the change is being made, and I really don't have a problem with it.

Sez_Who

Agree with the first part, not so much for the second part.

It is only accurate to say that more benefits go to those with higher spend when you are looking at RDM’s only. Status is still generally BIS-based, not $$$ except for the min spend, and there is no indication that this will be changing any time in the near future.

While everyone is different here on FT, status is far more important to some than how many award miles are earned. But of course, status is only important if you are BIS enough to enjoy the benefits associated with your tier.

luckypierre

The difference between Delta and United is Delta worked on insuring the operational details of its organization were improved before putting further pressure on the frequent flyer program, while United chose to move forward on squeezing the program without fixing the serious organizational issues post merger.

FWIW, it appears that Mr Doug Parker is opting for the Delta strategy before beginning any major overhaul of the combined FF programs.

LarkSFO

What evidence of this have you seen?

I thought that USdbaAA () was focused on merger related issues (not operational) before they address major changes to AAdvantage?

luckypierre

I view merger items as a subset of operational details of the airline.

Here's a remark he made at an international travel conference

"During an onstage appearance at the GBTA convention, Parker was asked whether American would follow Delta and United in moving to frequent-flyer program based on revenue accrued instead of miles flown. Such a move was "not even on the plate right now," he said. "We have to get the two frequent-flyer programs merged first. If it makes sense to make that innovation, we may do that, but to try to change the program now would be foolish."

September 2014-tentative agreement with combined flight attendants AA

September 2014-tentative agreement with flight attendants UA, 4 years after the merger

Blutak

I pay for tickets in GB Pounds: will the number of miles vary according to the exchange rate? If so, then this would be another retrograde step as the number of miles appears to be given only for dollars. (e.g., 2 months ago the rate was £1 = $1.66, today the rate is £1 = $1.58 so I would receive fewer miles for the same fare)
Apologies if this has been mentioned before, but I do not have the time to search 2200 posts, unfortunately

LarkSFO

I don't disagree with the points you are making, but I also don't believe they are operational issues in the traditional definition of the word.

Operational: On time rate, completion rate, baggage handling

Not: Negotiating a merged union contract

dnwaldmann

I contend that there was NO free lunch. How much did you spend to get those "free" tickets?

From my viewpoint there are two things happening with this change.

1. Redistribution of awards. Ostensibly, this is to even things up, or make them more fair. In their opinion - right or wrong as it may be.
2. Revaluation of awards. There IS NO SUCH THING as a free lunch. Awards are able to be provided based on fares. If the fares are high enough, they can afford to provide more/better awards. They could provide even cheaper fares if there was no award program.

An award program is delayed gratification that requires some degree of loyalty to cash in. It also requires up front cash from the one that will ultimately benefit from it. Otherwise the business will not survive in the long run. The extreme complexity of trying to please all the people all the time is where awards programs fall down, kind of like the US Income Tax system...

mduell

I'd guess it's based on the NUC rate at the time of purchase, since that's whats written on the ticket.

luxuslover

Probably also asked before: does anyone know how Star Alliance non UA Tickets are treated? Saw earlier the assumption here the miles remain but what about the current status bonus miles?

elg26

So I am Gold now...but will drop to Silver next year.

I will be purchasing a J ticket for EWR-HKG for an April 2015 trip.

So even though I am paying for the transaction now to UA (while Im Gold), I am only going get the Silver 7x credit...instead of 8x for Gold.

This system does not seem fair... Im giving UA a significant amount of $ now...7 months in advance...

Is there any way around it (besides becoming Gold for next year)?