bocastephen

You are incorrect. We have a multitude of corporate clients - every single request we get has an airline or alliance requirement attached. While we're obligated to offer lower cost alternatives, most of our client employees get their way with their requested carrier or alliance. Don't assume the non FT customer community could care less...they care a lot. A missing FFN in a PNR is one of the issues our junior agents get yelled at most frequently by customers.

Are the people on FB and Twitter howling mad about the change just FTers using other platforms to vent their unhappiness?

Don't assume the FT community is an isolated micro-organism - it's a vocal, participatory representation of the much wider customer base that makes up the majority of people you see at the airport.

UAgeek71

What a fun read through 91 pages...


The OPM thing, as others have said is a red herring.


I am sure there are people who fly on OPM who don't have caps and strict controls in place. I would imagine that group is a very small sample percentage of people overall who fly on OPM.


Where I work, we have little to no choice, with very tight controls on booking the lowest economy fare. We have strict deadlines on purchase by dates. The travel system we are required to use, will not allow us to book on our own cards to capture bonuses. We do have some small flexibility in that we can purchase a non stop fare even if a connection is available at a somewhat lower far -as even my company understands time is money. Even that however is capped at around 250 dollars, so I can't spend 1000 extra dollars on a non stop for example. We can NEVER book domestic tickets in any UP fare (P, HUP etc), even if that fare was cheaper than a standard economy fare. The system simply will not allow a fare that ends up with a seat in F domestically. No way around that.

For International, I am able (based on my position in the company) to book into C, but with severe restrictions of about a 400 dollar gap on lowest available fare across multiple carriers, so if AC is 400 cheaper than UA, I have to go on AC no matter the connection times, etc. If I want to stay and earn on UA, I can certainly fly in economy, but if C/D/J/P are more than a competitor, I can not stay on UA in Business - so they leave it up to me.

In addition to all that, we have deals in place with several carriers, so that the fare my company pays is typically 7-10% under the same fare / flight combo online on .com

My company does understand the benefits (albeit small) that we gain with status, such as irrops, bag fees etc, so they do allow us the small window of flexibility as stated above, but that is all they allow. It only makes sense.



It's the system I have to work with, and I'm not complaining, but just showing the facts to debunk that I can spend at will on OPM.


Why would any company allow employees to spend excessively on business travel expenses to justify personal benefits? That doesn't make a lot of fiscal sense in anyone's books - but it seems that is what UA is wagering on with this change, is the hope that some people who fly will attempt to spend more. It will backfire for them for people like me.


Even as a 1k, with the 11x bonus, this is a devaluation for sure.


What would be nice is a range of other bonuses or benefits that come with status to offset all the devaluations that they have hit us with. Something like 1k's on paid C/D/J/P could get to use GFL for example would be an awesome new benefit in my book!


I don't like the changes at all, and I'm not sure it will ultimately work for UA. It seems, as others have said, there are too many holes in the logic and too many risky gambles they are making on the customers habits and spending patterns.

Too bad they can't do better than simply copy the competition...


We all knew the programs are headed this way, but I myself did not see this with UA until they made a turnaround on service, and flight experience, and where performance was trending upwards instead of the downward spiral they are on.

Tchiowa

There is a limit on how many passengers are willing to pay the price for business class. Thus there must be a limit on how many seats you have for them. There have been attempts at "all business class" flights, but there weren't enough passengers.

The issue is not "revenue". It's profit. Let's make up some numbers to see. Let's say there is a fixed cost of $100,000 for the airline to fly a plane from A to B. Let's say there is an incremental cost of $500 per passenger. If you have 50 business class pasengers paying $3,000 per ticket you have covered the fixed cost plus the incremental cost for those passengers plus made $500 profit per passenger. Now for coach all you have to do is to cover the $500 incremental cost per passenger. So you can sell them a seat for $550 and make $50 per passenger.

chitownflyer

And UA would be foolish to drive away your loyalty, but the RDM earnings devaluation copied a la SkyPesos increases the likelyhood for UA to loose your business. There are not a lot of flyers whom spend $10,000 to $20,000 yearly. Airlines need these type of customers.

Tchiowa

The company I was with for about 25 years had a slightly different policy All international is business class regardless of your position. All domestic is coach. They were interested in cheap, but not cheapEST. Had to be Star Alliance. No flyiing Pakistani Air or Aeroflot to save money. Within those guidelines I could book what I wanted.

I don't see that as what they are doing. Even flying OPM as I do, I'm not going to book an $8,000 fare on the same flight I can get a $6,000 fare. I don't think they expect anyone to do that.

It seems to me that they are saying that they are going to raise the benefits for the people on the $6,000 fare to help keep them as customers. In doing so they either have to reduce the benefits elsewhere or raise costs. They chose to reduce the benefits for the guy paying $1,000 on the same flight.

bocastephen

This never happens. It looks nice on paper, but it's not realistic, even for SQ.

goriajk

No More LAX-SFO-RNO-SFO -LAX on the weekends - it doesn't matter anyhow, I lost My Premier Silver on February 1st - good luck to those business folk who can stick it to the boss and get the rewards. I'm taking Amtrak :-). Joe G

PaulInTheSky

Only, and only, under the assumption of UA/DL are not increasing the cost of RDM purchase. If all they are after is liability, then rest assured they will increase the RDM price too. Think about that, if I can just pay to get RDMs now at 3.3RDM and redeem for expensive flights, comparing the RDMs you can get from 20cpm at 1K level, who the heck would fly to get miles? Better yet, who will even purchase the flights outright?

Kacee

UA has recently cut price of RDM; they're now available for 2.1 cpm through Award Accelerator. Which is still more than they're objectively worth.

The real issue here is availability. Have you searched UA award availability lately? It sucks. The only reason I'm collecting UA miles is for premium cabin redemptions on OZ, TG, BR, NH, and/or TK.

vandrei

This, of course, neglects the effect of the CC churners.

Regardless of what UA does, the RDM pie will increase in size, and RDM will be devalued.

BearX220

Thanks for this scintillating analysis, but there are some customers on the spend spectrum between "business travellers like you," whom I'm sure are very important as well as diplomatic and gracious, and "riff raff" or "blogger types who aren't really loyal." This change will likely do nothing to repel the disloyal "blogger types" -- what repels them is anything but the lowest fare. But it seems it will do mighty damage to the broad middle of profitable mid-spend flyers, whom UA rather desperately needs. They aren't "riff raff," although you and the airline seem to think so. Their defections have already knocked the wind out of UA PRASM. More to come.

If you think you can fly the airline to profit with 16 full-fare plutocrats up front and nothing but Priceliners down the back, try it yourself.

LarkSFO

Except you completely misunderstood my post.

I was not even speaking of or referring to First Class (nor was Kacee, the poster I responded to, I don't think).

My post was talking about the variation of pricing between the lowest priced Y (economy) fare and the highest priced Y fare, and the potential economic value of passengers buying these varied fares.

Is a .10 cpm flyer who is filling an otherwise empty seat of greater economic value than a .25 cpm flyer?

Call me skeptical.


You did not just say 'essence of the unwritten compact' with a straight face, did you?

What is that even supposed to mean?

There is no essence, no unwritten, and no compact except the terms (the contract) you accept when you join MP.

And, UA is unilaterally redefining the terms of the contract, which is within their rights.

You can already predict what I am going to say next. If you don't like it, ....

I am glad you retain your sense of humor. Good one!

Silver Fox

So, my award miles this year are 53,680, all TATL, and using an exchange rate of 1.65 USD to 1.00 GBP, under the new scheme I would get 72,104 miles. I am not a big spender, only get E+ due to 1K status, company has a very strict economy only basis regardless of status within the company. I am not gloating, just stating a fact.

GUWonder

C. $6,600 YTD spending, after taxes are stripped out from your ticket charges, gave you that figure as 1k? What was the YTD spend inclusive of taxes and how many ticketed PNRs for that travel?

The reason I'm curious about this is that most of those UA elite accounts I looked at for UK-US economy class travel seem to be poised for a reduction under this scheme

TIA.

skycrab

For myself and my partner, we fly from LHR around 10 times a year to USA/Canada at an average cost of £750 ($1235) a ticket.

That's $12,350 in spend (probably less as there are some horrific UK imposed taxes)
This will give us each 135,850 RDM for the year at 1K (Platinum at present, 1K later in year, so calculating as 1K)

Under the current program, we're flying on average 11K per flight round trip, so that's 110,000 miles + 110,000 bonus miles as 1K = 220,000

This is a de-valuation of 38.25% and we're spending in excess of $10,000 each.
Yes we have a UA credit card, which will "help" but its helping us now, so it's not really a "booster"

I'm going to take a guess: UA are testing the waters with what is definite: a change to a spend based program, without releasing further details to see what the reaction is.

I should hope the rewards for spending (as a couple) nearly $25,000 in a year and making the GS/1K/Platinum levels are enhanced to retain that level of spend.