UA CFO Rainey on Bloomberg: Global First "Effectively the Same" as J
Sep 8, 2014, 12:08 pm
#256
Join Date: Apr 2010
Location: 5280 feet
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Posts: 674
This is starting to sound deliberate.
They don't like the extra effort/cost involved in having a legit GlobalFirst product.
What did SMI/J say? Diminished returns?
If they make First Class suck enough, ticket sales will go down, and they can claim, "oh look, nobody's buying F. We better get rid of it since it doesn't sell."
Well why does it not sell?
Because you won't make it a worthwhile product?
I've seen similar things at companies I've worked at before.
They downplay a product or service, with the express interest of getting rid of it either because it costs them too much to put forth a competitive effort. Or even because of something so petty as individuals at the company simply having a personal disdain for the product's mere existence.
They don't like the extra effort/cost involved in having a legit GlobalFirst product.
What did SMI/J say? Diminished returns?
If they make First Class suck enough, ticket sales will go down, and they can claim, "oh look, nobody's buying F. We better get rid of it since it doesn't sell."
Well why does it not sell?
Because you won't make it a worthwhile product?
I've seen similar things at companies I've worked at before.
They downplay a product or service, with the express interest of getting rid of it either because it costs them too much to put forth a competitive effort. Or even because of something so petty as individuals at the company simply having a personal disdain for the product's mere existence.
Sep 8, 2014, 1:20 pm
#257
Join Date: Oct 2012
Location: NYC
Programs: AADULtArer
Posts: 5,693
UA doesn't have an F product worth paying for, period, while the C product is good enough. Buying F when its cheaper than C doesn't really count.
Once you have lie-flat in C, you eliminate 90% of the business case for F for the vast majority of customers. Sure, you have the token snob here or there that expounds on how nice the 'privacy' is. You're on a common carrier, not a private jet. And of course, the F&B on carriers with real F is much better, but if I'm on a 7 hour TATL o/n, I don't really need a 2 hour luxury meal, I'd rather just sleep.
Once you have lie-flat in C, you eliminate 90% of the business case for F for the vast majority of customers. Sure, you have the token snob here or there that expounds on how nice the 'privacy' is. You're on a common carrier, not a private jet. And of course, the F&B on carriers with real F is much better, but if I'm on a 7 hour TATL o/n, I don't really need a 2 hour luxury meal, I'd rather just sleep.
Exactly. I just did EWR pek in C and had the FA wake me for meals, other than that it was a 12 hour snooze test. GF would have been a total waste, either paid or upgraded. Getting rid of it is indeed the industry trend.
Sep 8, 2014, 5:03 pm
#258
Join Date: Feb 2003
Posts: 4,115
GF gives UA a buffer on that metric right now. If that buffer goes away, IMO they need a better product if they don't want to lose (more) GS pax & high-$$ traffic.
Sep 8, 2014, 5:19 pm
#259
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If you paid $4000 P/Z fare, BF is totally fine for IAD-PEK.
However, if it's $9000-$19000 C/D/J fare, I would want to upgrade to GF.
Sep 8, 2014, 5:44 pm
#260
Join Date: Jan 2004
Location: Short Hills, NJ
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I flew SYD-SFO (enroute to EWR) in GF on an upgrade a few months ago. Felt totally ripped off even though it did not cost me a dime. Just focus on not letting the BF get too shabby and I will be happy. In the gap at the start of next year before UA goes to $ based points, I am going to give Delta a try (they are starting $ based on Jan 1).
Sep 8, 2014, 5:58 pm
#261
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All you have to do is stand between GF and UA 2-4-2 business class on a 777 and there is a huge difference. When you look back from GF and see four men in the 4 across - it looks like 4 men in a king sized bed. UA GF is a decent seat - although not as good as some other international carriers.
The BF product, from CO, is good, but the density only gives you a small cubby hole for your feet. Again - not similar to GF.
What Rainey should be saying is that UA does not have the demand to justify a separate First product, but that UA is planning to introduce a new business class with all seats having aisle access (similar to AA's new J products).
The BF product, from CO, is good, but the density only gives you a small cubby hole for your feet. Again - not similar to GF.
What Rainey should be saying is that UA does not have the demand to justify a separate First product, but that UA is planning to introduce a new business class with all seats having aisle access (similar to AA's new J products).
Sep 8, 2014, 7:01 pm
#262
Join Date: Apr 2013
Location: IAH
Programs: aa, ua 1k
Posts: 44
I agree with you that UA probably doesn't sell a lot of these seats, particularly on routes that are more leisurely in nature. That being said, sales in general are very hard and every sale matters, particularly at an airline that has profitability issues. Being able to price discriminate customer sales matters to overall company revenue at any company and there are people that will buy GF if it's available and if the product is properly presented. Having the CFO undermining that sales process is not good for business.
Sep 8, 2014, 7:18 pm
#263
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DL knew they couldn’t sell enough intl F seats to make a product competitive with some others but they sure have been selling their BE cabin, one reason DL is so profitable. Seats may be pricier than UA but you get a lot more. Worth it to some, not to others.
Sep 8, 2014, 7:57 pm
#264
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And similar to what DL started years ago. It was a little freaky at first but when the 2-cabin arrangement was deployed, it actually worked. They dumped intl F and replaced their biz cabins with 1-2-1 all-aisle lie-flats. Now they are adding intl wi-fi.
DL knew they couldn’t sell enough intl F seats to make a product competitive with some others but they sure have been selling their BE cabin, one reason DL is so profitable. Seats may be pricier than UA but you get a lot more. Worth it to some, not to others.
DL knew they couldn’t sell enough intl F seats to make a product competitive with some others but they sure have been selling their BE cabin, one reason DL is so profitable. Seats may be pricier than UA but you get a lot more. Worth it to some, not to others.
Sep 8, 2014, 9:39 pm
#265
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Except that, you know, it is perfectly endemic of UA's continued underperformance relative to its peers :-:
Sep 8, 2014, 10:29 pm
#266
Join Date: Sep 2009
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Well to be accurate. Most people are perfectly happy with Y.
Last edited by FlyinHawaiian; Sep 9, 2014 at 5:58 am
Sep 9, 2014, 12:22 am
#267
Join Date: Oct 2012
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When you look back from GF and see four men in the 4 across - it looks like 4 men in a king sized bed.
Nothing wrong with that choice, just saying...
Sep 9, 2014, 5:26 am
#268
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I hope he's a better CFO than PR flack.
Sep 9, 2014, 7:29 am
#269
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