PN9 & R0: UA opening upgrades only to Global Services, message to other elites?
Aug 21, 2015, 2:57 pm
#46
FlyerTalk Evangelist
Join Date: Sep 2003
Location: Honolulu Harbor
Programs: UA 1K
Posts: 15,026
Yeah, but we take up more space and pay a lot less (generally) per seat-mile. The value to UA of an average GS customer (well, the value of OPM usually represented by a GS customer) vs an average 1K customer is hardly debatable.
Aug 21, 2015, 3:05 pm
#47
Join Date: Aug 2003
Location: Northern California
Programs: I want to be free! Free!
Posts: 3,455
So why not make the metric spend per mile? No doubt there are plenty of 1Ks who bring more to the bottom line than GS's in their city.
Aug 21, 2015, 3:16 pm
#48
Moderator: Hyatt Gold Passport & Star Alliance
Join Date: May 1998
Location: London, UK
Programs: UA-1K 3MM/HY- LT Globalist/BA-GGL/GfL
Posts: 12,090
We also need to factor in the nominated partner of the GS member who is more likely to use the GS upgrades if paying on their own dime.
Aug 21, 2015, 3:18 pm
#49
Original Poster
Join Date: May 2005
Programs: Million Miler, 1K - Basically spend a lot of time on planes
Posts: 2,202
This is actually not even close to being true. United is getting trounced in revenue, the only reason they are making a profit is that fuel prices have imploded. If you run United's numbers based on last years fuel prices, they are barely making anything. They are being severely punished in margins compared to the others.
Aug 21, 2015, 3:20 pm
#50
Original Poster
Join Date: May 2005
Programs: Million Miler, 1K - Basically spend a lot of time on planes
Posts: 2,202
There are far more comped GS members than GS members that hit the revenue margins.
Aug 21, 2015, 3:30 pm
#51
FlyerTalk Evangelist
Join Date: Jul 1999
Location: Ewa Beach, Hawaii
Posts: 10,909
This is actually not even close to being true. United is getting trounced in revenue, the only reason they are making a profit is that fuel prices have imploded. If you run United's numbers based on last years fuel prices, they are barely making anything. They are being severely punished in margins compared to the others.
Aug 21, 2015, 3:50 pm
#52
Original Poster
Join Date: May 2005
Programs: Million Miler, 1K - Basically spend a lot of time on planes
Posts: 2,202
$5.7 Billion in 2013 in ancillary revenue (basically pure profit) means they are barely making anything? So they are losing that much money everywhere else that they are barely making any profit at all? And that was more than twice as much as the #2 airline in ancillary revenue. If that is even close to true Then the whole airline industry is on the verge of collapse.
Therefore, they lost revenue in other places that is being made up for by the ancillary revenue.
Aug 21, 2015, 4:09 pm
#53
Join Date: Aug 2001
Location: SFO/SJC
Programs: UA 1K & 2MM, Bonvoy Titanium & LTP, HH Gold, Accor Silver, Hertz PC, Avis PC
Posts: 2,350
This is a bit terrifying to me. Has UA truly warped your expectations this much?
Everything is relative. Of course GS are still spending more than you. But you are DEFINITELY a top revenue/profit driver for UA compared to most of their passengers! The question is: How broad or narrow an amount does an airline want to consider. UA clearly continues to narrow their consideration; so much so that you consider your 25K spend to not be worth that much to them.
Other airlines would be much happier to have that $25K that UA is. I'm just a Gold on DL (after 8 years of elite UA) but enjoying 60% upgrade rate, top reliability, amazing customer service and free booze on every flight just to name a few.
Everything is relative.
Everything is relative. Of course GS are still spending more than you. But you are DEFINITELY a top revenue/profit driver for UA compared to most of their passengers! The question is: How broad or narrow an amount does an airline want to consider. UA clearly continues to narrow their consideration; so much so that you consider your 25K spend to not be worth that much to them.
Other airlines would be much happier to have that $25K that UA is. I'm just a Gold on DL (after 8 years of elite UA) but enjoying 60% upgrade rate, top reliability, amazing customer service and free booze on every flight just to name a few.
Everything is relative.
I'm fully willing to concede that my specific travel patterns (destinations, times, etc) may be a significant factor in my experience. Then again, I'm SFO based.
Aug 21, 2015, 4:14 pm
#54
FlyerTalk Evangelist
Join Date: Jul 1999
Location: Ewa Beach, Hawaii
Posts: 10,909
You need to look at the entire pie. If you take all the revenue in, and deduct all the costs, they made the profit that you mentioned. If you were to charge fuel at the price it cost last year, United would only make a slight profit.
Therefore, they lost revenue in other places that is being made up for by the ancillary revenue.
Therefore, they lost revenue in other places that is being made up for by the ancillary revenue.
But we are drifting beyond the scope of this thread so I will stop here.
Aug 21, 2015, 4:35 pm
#55
Join Date: Jun 2002
Location: Potomac MD
Programs: UA MP 1K
Posts: 7,182
Many of my upgrades don't clear immediately, but most ultimately do. I have 3 international trips all involving IAD-FRA coming up. The outbound all cleared early, most on booking. The returns are all waitlisted but there are few seats in C occcupied. I expect that the upgrades will clear. At times they haven't--but this is the game of upgrade roulette. I don't get mad at UA. On a domestic flight IAD-SFO, the return cleared on booking (with an RPU). The outbound looked more hazardous, but it cleared today, about two weeks before the flight.
Aug 21, 2015, 5:09 pm
#56
Join Date: May 2011
Programs: UA GS, UA 2MM, HH LT Diamond, Bonvoy Titanium
Posts: 1,803
I sat next to a GS in F a couple of weeks ago who asked me "Do you know if United has wi-fi on their planes?" I was surprised (to say the least) but your statement perhaps makes sense of it.
Aug 21, 2015, 5:37 pm
#57
Join Date: Feb 2009
Location: SEA
Programs: UA SP, DL SM MM, AS 75K, SPG Platinum, Hyatt Diamond.
Posts: 2,596
The valuation of hundreds of high spenders at the cost of thousands of 12K-20K spenders will be the undoing of United when the next economic downturn occurs. They simply won't be filling planes with kettles and GS members. And all those overentitled 1K cheepos as they are so often characterized here by GS members have gone to OAL's where their business and "paltry" spend is appreciated.
As I said, if they are only making a minimal profit because of the ancillary revenue, this does not bode well for the airline industry when the next downturn in the economy happens as all those kettles that provide most of the ancillary revenue will be gone. And if the airline that has alienated their elites the most and they have gone, then bye-bye airline or yet another government backed bankruptcy to stay viable.
But we are drifting beyond the scope of this thread so I will stop here.
But we are drifting beyond the scope of this thread so I will stop here.
Of the GS people I've talked to standing in line to board, I would estimate less than half are frequent fliers.
Last edited by WineCountryUA; Aug 22, 2015 at 1:27 am Reason: merging consecutive posts by same member -- please use multi-quote
Aug 21, 2015, 6:05 pm
#59
Join Date: Feb 2009
Location: SEA
Programs: UA SP, DL SM MM, AS 75K, SPG Platinum, Hyatt Diamond.
Posts: 2,596
At your request you are so colored. I've not had a single CPU in over a year. GPUs and RPUs clear for me but only because I don't book in W unless the R inventory is confirmed at the time of booking.