mduell

https://www.united.com/web/en-US/con.../upgrades.aspx
Complimentary Premier® Upgrades are space-available, complimentary upgrades on select United- and United Express®-operated flights.

That's what space-available means in this biz, they haven't sold it by departure time.

CCIE_Flyer

I think for some folks, a domestic F upgrade is a validation of worth; so there's a powerful emotional undercurrent at play in these such discussions, outside of the product's actual value.

IAH-OIL-TRASH

With the first phrase, I thought you had pointed out a rational observation. I now realize you meant something else. I believe you meant "UA will go to extreme lengths to reduce F seats for CPUs".

What HAS changed is right-sizing of F cabins, some reduced frequencies, and introduction of reasonable P fares. I, for one, am buying more of the P fares because they're so cheap, knowing that I might have gotten an upgrade. Then there are flights where I know have to buy a P fare, not only because the price is right, but also because UA isn't flying 24 F-seated 752s to the Hawaii anymore and the upgrade situation has changed - and not because of ToDs. Anyone watching F cabins fill can see ToDs ARE NOT the prime culprit for fewer CPUs. If one clings to past ease of upgrades and believe capacity change and P fares have nothing to do with lack of upgrades, one is doomed to barking at the moon.

There are certainly ToD, but one must recognize the way things are. The guaranteed way to sit up front is buy it or find R space in advance. Everything else is riskier because airlines don't see much point in giving away F seats for "free", or even flying with more F seats than the route(s) demand(s)..

CCIE_Flyer

Looking at this from another perspective, if GAs are able to bark out up-sells at boarding, then surely F inventory is being retained right up 'til the last that could be used to accommodate paid J/F IRROPS victims. This has long been a point of contention with me (and no doubt many others). If you've ever forked over a five-figure sum of money or a substantial accumulation of points for a single journey, only to, due to IRROPS, find yourself sitting in Y for a significant period of time (e.g. DEN->IAD or vice versa), all the while with F fully occupied with self-styled HVFs and non-revs, you know how serious of a problem this at one point became.

spin88

pmUA used to sell a lot of full fare domestic F. pmCO sold basically none. At the time of the merger UA was filling about 1/2 of its domestic First Cabins with relatively high fares, CO was selling theirs for a few hundred max over Y, with lots of A/P fares. Very very different business models, having a lot to do with the very different markets they were in.

My guess is that the UA business model - higher fares for those who bought, and giving away upgrades to high value elites was a higher overall yield. But the CO management had - as one exec admitted to me a year later, never seen people paying what people where paying to fly UA, and they did not know how to handle them.

The merged airline went with the CO model of heavily discounted F and TODs. I can see it today for my return flight from SEA that just booked. UA will sell me F for $379, VX wants $499, DL wants $479.

Kacee

Yup. I first started flying CO circa 2010 when I discovered P fares SFO-PTY in the $800-1000 range. Then discovered SFO-EWR on the 752 w/lie flats for $1600 RT (at a time when UA ps into JFK was $3400 minimum). It was excellent value . . . food was good and the IAH crews were excellent.

halls120

That addresses CPU availability. What about instruments? Isn't this new "we're going to aggressively sell first class up until boarding" inconsistent with the upgrade windows featured on the mileage plus website?

cerealmarketer

The DL business model turned out to be a lot closer to the CO one - built on aggressively discounting first to move up the paid load percentages. They're incredibly specific about it in their investor day presentation each year.

The old UA and AA models were ripe for disruption and not sustainable.

LIH

I definitely used to fall into this camp where I was paying a lot to fly F on UA maybe 35% of the time and then relying on reasonable success on upgrades pre-merger to probably keep me up front ~80% of the time in the average year (including back in the 500-mile-upgrade days). Now, because P/A fares are so affordable (sometimes even Z fares) I book 99% of my trips on those discount fares from the get-go. I have tracked my spend for the last 12 years and I can tell you I was much more profitable on a CPM (BIS) then than I am now. To the tune of 20%+ less on average. As noted elsewhere in this thread though, my revenue stream is now a lot more even/predictable perhaps, which could be easier for them to model.

Artpen100

Same here. I have never gotten a complementary upgrade. I might have, but those are the same flights where F or a buyup was so cheap, I paid and locked it in. Now that I have been 1K and had a chance to compare the usefulness of GPUs to miles and co-pay, I think I can say that the only benefit I really use is the Star Gold club access. But I have not chased status - I buy the best route at the best price, on whatever airline. It is just that UA has the routes I have needed.

SF1K

What has been your comparison on GPU to miles and copay? Have you analyzed some costs as well? That's the only thing that possibly has me striving for 1K - then again I haven't used a GPU on an international trip for myself in several years.

LAXOGG

Same here. We routinely paid $3,000 for our Transcon business meeting. P fares are now about 1/3.

TCD

The calculation is more complicated than that though, because you're assuming that you would still be allowed to buy those high expense flights. I think that in many businesses post 2008 expenses approvals have become tighter across all spend categories. A lot of folks who got those $3k flights nodded through in the old days might have problems now.

spin88

Delta was never in hubs where they could charge the kind of fares that UA and to a lesser extent AA could. They did not have a pacific network and hotlanta, Salt Lake and Cincinnati were not hotbeds of premium travel. Delta's LAX and JFK operations were a joke. Delta had so little premium travel that they put all Y "Song" on JFK-SFO/LAX.

I agree that they (a) followed CO into the "A/P" discount fares, but they also (b) as of 2011-12 started more TCON routes where fares are higher, and worked hard to build out JFK/LAX, and now SEA. Delta now gets a much larger share (ex-JFK/LAX) of the higher value TCON traffic, my guess is they are now #2 in the market after AA, but may have closed on AA at this point. And I fly Delta a lot now, and yes, they do a lot of A/P in connecting markets, but they have also IMHE tried to maintain in the last few years more pricing power over F in higher yielding markets.

Whether the model was sustainable by United post 2011 (when they did VERY well) is unknowable. Jeff and his management team took a meat ax to the product, the FF program, and to special handeling for elites, while the Opp performance fell off a cliff. Any willingness to pay more to fly United went away, and Delta/Virgin America, and for a while American picked up that high value traffic.

The lead into the AP 6/2016 piece: "United Airlines CEO Oscar Munoz knows that his airline has alienated some of its most loyal fliers" http://bigstory.ap.org/article/435fe...ness-travelers Summarizes what happened from 2012-2016.

cerealmarketer

In NYC Delta lowballed the corporate contracts on the prime transcon routes at shops that paid for transcon / 4+ hour first class. I remember them coming in under even the AA AAirpass special discount on JFK-LAX/SFO for last seat availability in biz.

Basically, they started from a low base, and like JetBlue, were willing to undercut the trunk legacies AA and UA where they were making too much margin.

And now with Mint in place advance purchase fares on those once prime routes are under pressure for everyone.

Also recall DL was willing to run losses (and may well still be not much more than breakeven) in NYC, while for UA and AA it was a profit center.

Time and again in the airline industry, outsized margins don't last.