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Wild speculation on UA's new strategy for Polaris, Upgrades and Award Space

Wild speculation on UA's new strategy for Polaris, Upgrades and Award Space

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Old Feb 6, 19, 5:18 pm
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Wild speculation on UA's new strategy for Polaris, Upgrades and Award Space

I lurk here on FT a lot, and there are quite a few active threads right now regarding various problems, oddities, and dissatisfaction with UA's seat availability and pricing, particularly on premium cabin Int'l routes. Now, a month into 2019, I look at my upcoming travel (business and personal) and note that not very much of it at all, is on UA. So I started digging deeper into the why of that, out of a lot of curiosity, and went back to re-search for flights. My travel patterns alone obviously don't point to a trend in UA's business overall, but there are certainly a few patterns that seem to be emerging:

1) UA is no longer trying to compete (or even match) Business Class fares from most cities, at least to Asia. I have upcoming travel in late-winter & spring to TPE and SIN (separate trips). The former is on BR. The latter is on AC+SQ. For any dates within 2 weeks of either trip, UA is consistently $600-$2000 more expensive than other *A partners, and that's even in cases where UA is a connection and the other airline is nonstop. That also includes options on NH, which is in a JV partnership with UA for TPAC... My travel patterns this time of year have been relatively consistent for the last 3-4 years, and this is the first time in that timeframe where UA wasn't either price-matched or cheaper than the alternatives.

2) For leisure travel, to Asia and South America, award ticket availability heavily favors partners. For most Asian destinations, the only Business Class seats available are "Everyday" awards, priced at 175,000 points each-way. However, there's plenty of partner J space available at 80-90k! UA jacked the price of partner awards from 70k-80k to discourage partner redemptions... but then has jiggered its own award space in such a way that partner redemptions are the only reasonably-priced options! This seems to fly pretty hard into the face of their originally-stated goal of encouraging people to stay on UA metal. (And it's not like we're talking about full planes... for plenty of dates only 3-4 weeks away in Feb/March, there's lots of flights with P9 / I0.)

3) The criteria for making 1K (and thus earning GPUs) has continued to tighten. We're past the Jan 31 cutoff for the new program year, and this year's threshold is $15k PQD. In theory, this tightening should be winnowing away the ranks of 1Ks, thus making the category more exclusive, and thus making the GPUs less of a drain on UA's inventory. And yet, even aside from the PZ0 availability "error" currently occurring, upgrade space is scarcer than ever, meaning they're issuing fewer GPUs even as they make them all but impossible to actually use.

It's difficult to fathom what strategy is in play here, that I can look <2 weeks out and see mid-week SFO-TPE sitting at Z9/P6, and yet cash-on-the-barrel, connecting flights from West Coast gateways like SEA, LAX or YVR are anywhere from $400-$1000 less expensive on AC, BR or NH. AND there's no upgrade space (PZ0), and no award space available for <175k points.

Are corporate sales and Polaris so strong that they're actually selling all of these tickets close-in at exorbitant prices?? Are they just removing all advance availability and close-in or battlefield upgrading people who chose to waitlist, rather than releasing the inventory in advance? Or has someone in Revenue Mgmt just gotten approval to try something new, and we'll have to see if this bites them in the butt, in a few quarters...?

I guess I'm in the minority in that I'm a small business traveler, so I'll never benefit from a corporate contract. But I have to imagine that if I'm buying J tix on other airlines because of this stuff, others have to be doing the same...? At this rate, I'll be lucky to make Gold on UA next year, much less 1k, if their pricing continues to be so out-of-whack, and I can never confirm an upgrade! (Not that I guess it matters... thank goodness for MM status??) Strange to be in a position where I'm no longer actively booking-away from UA, as I did in past years due to merger issues, service quality, etc... and finally when I wouldn't mind flying UA, they've implemented some (to me) incomprehensible strategy that makes it excessively expensive, unpalatable, or both, to actually book on them! I'm literally at a loss to figure out why, unless my travel patterns are just completely out of whack, vis-a-vis their target market.
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Old Feb 6, 19, 7:14 pm
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Originally Posted by Darlox View Post
1) UA is no longer trying to compete (or even match) Business Class fares from most cities, at least to Asia. I have upcoming travel in late-winter & spring to TPE and SIN (separate trips). The former is on BR. The latter is on AC+SQ. For any dates within 2 weeks of either trip, UA is consistently $600-$2000 more expensive than other *A partners, and that's even in cases where UA is a connection and the other airline is nonstop. That also includes options on NH, which is in a JV partnership with UA for TPAC... My travel patterns this time of year have been relatively consistent for the last 3-4 years, and this is the first time in that timeframe where UA wasn't either price-matched or cheaper than the alternatives.
Ditto for Europe. BA is $1000 cheaper for SFO-LHR (used to be the opposite). Admittedly UA has a better product now. And of course on the US side the demand is far higher for UA (people want UA miles) than BA.

Originally Posted by Darlox View Post
2) For leisure travel, to Asia and South America, award ticket availability heavily favors partners. For most Asian destinations, the only Business Class seats available are "Everyday" awards, priced at 175,000 points each-way. However, there's plenty of partner J space available at 80-90k! UA jacked the price of partner awards from 70k-80k to discourage partner redemptions... but then has jiggered its own award space in such a way that partner redemptions are the only reasonably-priced options! This seems to fly pretty hard into the face of their originally-stated goal of encouraging people to stay on UA metal. (And it's not like we're talking about full planes... for plenty of dates only 3-4 weeks away in Feb/March, there's lots of flights with P9 / I0.)
Concur. The old Continental used to throttle *A partner awards but UA discontinued that process after the merger. Maybe it is cheaper to pay the partners than to give up a seat that will likely be sold at a nice profit.

Originally Posted by Darlox View Post
Are corporate sales and Polaris so strong that they're actually selling all of these tickets close-in at exorbitant prices?? Are they just removing all advance availability and close-in or battlefield upgrading people who chose to waitlist, rather than releasing the inventory in advance? Or has someone in Revenue Mgmt just gotten approval to try something new, and we'll have to see if this bites them in the butt, in a few quarters...?
Yes - they sell many tickets to corporate customers for last minute travel. You must have missed the leaked sign from UA's operations at SFO, which showed the annual revenue from UA's top corporate accounts. Many corporate customers book business trips within that 2 week timeframe - I've seen flights where I can't find an aisle seat because they have all been presold and preassigned. It makes sense for UA to hold back a significant number of seats in order to accommodate these customers, rather than those using miles.

Originally Posted by Darlox View Post
I guess I'm in the minority in that I'm a small business traveler, so I'll never benefit from a corporate contract. But I have to imagine that if I'm buying J tix on other airlines because of this stuff, others have to be doing the same...? At this rate, I'll be lucky to make Gold on UA next year, much less 1k, if their pricing continues to be so out-of-whack, and I can never confirm an upgrade! (Not that I guess it matters... thank goodness for MM status??) Strange to be in a position where I'm no longer actively booking-away from UA, as I did in past years due to merger issues, service quality, etc... and finally when I wouldn't mind flying UA, they've implemented some (to me) incomprehensible strategy that makes it excessively expensive, unpalatable, or both, to actually book on them! I'm literally at a loss to figure out why, unless my travel patterns are just completely out of whack, vis-a-vis their target market.
I am sure there are many customers that have similar patterns, but I have to think there is some logic to inventory management as UA is still able to fill planes at a profit even with higher prices and a product that is sometimes inferior. No doubt the corporate contracts are a big driver.
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Old Feb 6, 19, 8:00 pm
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Originally Posted by Darlox View Post
1) UA is no longer trying to compete (or even match) Business Class fares from most cities, at least to Asia. I have upcoming travel in late-winter & spring to TPE and SIN (separate trips). The former is on BR. The latter is on AC+SQ. For any dates within 2 weeks of either trip, UA is consistently $600-$2000 more expensive than other *A partners, and that's even in cases where UA is a connection and the other airline is nonstop. That also includes options on NH, which is in a JV partnership with UA for TPAC... My travel patterns this time of year have been relatively consistent for the last 3-4 years, and this is the first time in that timeframe where UA wasn't either price-matched or cheaper than the alternatives.
I frequently fly to Europe for work as I work for a large corporation. Depending on the situation, I can attest to pricing not really mattering for Polaris seating. I've seen others book this and had this booked for me multiple times, even though *A partners may be cheaper.
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Old Feb 6, 19, 8:10 pm
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Originally Posted by Darlox View Post
(And it's not like we're talking about full planes... for plenty of dates only 3-4 weeks away in Feb/March, there's lots of flights with P9 / I0.)
I don't think you're adequately considering all the revenue/inventory management levers here. The flight can be P9 but if there's no P fares with APs under 28 days you can't actually book it so it doesn't matter. Also 9 seats isn't a lot when you're still a month out.

Originally Posted by Darlox View Post
Are corporate sales and Polaris so strong that they're actually selling all of these tickets close-in at exorbitant prices?
Yes, they are close in, and they come with substantial discounts off list (40% easy).

Originally Posted by Boraxo View Post
Concur. The old Continental used to throttle *A partner awards but UA discontinued that process after the merger.
United is still throttling plenty of partner award availability when booking flights together. Tons of divorced segment limitations.
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Old Feb 6, 19, 8:18 pm
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Originally Posted by mduell View Post
Also 9 seats isn't a lot when you're still a month out.
P9 doesn't mean 9 seats. It means at least 9. In fact, with P9, it's almost guaranteed that there are at least twice that many actual Business Class seats open.
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Old Feb 6, 19, 8:56 pm
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Originally Posted by mahasamatman View Post
P9 doesn't mean 9 seats. It means at least 9. In fact, with P9, it's almost guaranteed that there are at least twice that many actual Business Class seats open.
It does mean at least 9, but it also doesn't necessarily mean any more than 9.

And it certainly doesn't mean at least 18, regardless of there being an eligible P fare currently published.
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Old Feb 6, 19, 9:13 pm
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Is it possible that there is a significant preference for some consumers to fly UA internationally as opposed to partners, especially after the introduction of Polaris?

That would explain just about everything- they can charge a premium because they get it.

Another possibility is they make more money selling TOD upgrades than upgrading FF'ers.
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Old Feb 7, 19, 12:53 am
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Originally Posted by Boraxo View Post
Concur. The old Continental used to throttle *A partner awards but UA discontinued that process after the merger. Maybe it is cheaper to pay the partners than to give up a seat that will likely be sold at a nice profit.
.
PMUA did starnet blocking.
PMCO did no such thing.
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Old Feb 7, 19, 1:07 am
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Originally Posted by Boraxo View Post
Ditto for Europe. BA is $1000 cheaper for SFO-LHR (used to be the opposite). Admittedly UA has a better product now. And of course on the US side the demand is far higher for UA (people want UA miles) than BA.
I'm planning a TATL for early summer, and PE fares on BA are in the $900 range, while UA is charging $1200 for the same thing. Care to guess which one I'm choosing?
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Old Feb 7, 19, 2:05 am
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Originally Posted by ctownflyer View Post
PMUA did starnet blocking.
PMCO did no such thing.
You're right - my memory is shot!

Wonder how long it will take UA to fix the "glitch" blocking SQ, TAP and Thai award bookings?
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Old Feb 7, 19, 7:07 am
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Originally Posted by Darlox View Post
I
3) The criteria for making 1K (and thus earning GPUs) has continued to tighten. We're past the Jan 31 cutoff for the new program year, and this year's threshold is $15k PQD. In theory, this tightening should be winnowing away the ranks of 1Ks, thus making the category more exclusive, and thus making the GPUs less of a drain on UA's inventory. And yet, even aside from the PZ0 availability "error" currently occurring, upgrade space is scarcer than ever, meaning they're issuing fewer GPUs even as they make them all but impossible to actually use.
Minor point on this - very few new GPUs have been issued under the new 1K criteria, as not many people have already accrued 100k PQM and $15k PQD in the first 40 days of 2019. The GPUs are nearly all based on the 2019 criteria.
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Old Feb 7, 19, 8:45 am
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The pricing problem mainly seems to be in the first part of 2019. I've found $2.8K RT TATL discount business for two flights in May and June and while doing a little early research even found PZ on flights for dates that are pretty set in stone for the fall. (Per my usual practice, when I find that, I book it. Worst case is a change fee.) For the spring, I've been booking more BA, even though I am not keen on connecting at LHR due to the short initial flight. They do have more upgrade space, though.

What UA revenue management is doing eludes me (I know they pay a lot of money to do it - I am also familiar enough with it to question whether it is working optimally). On international, they seem to be doing contradictory things - trying to charge more and advertising Polaris while degrading the experience, putting in more J seats while taking away PZ and loyalty benefits. Maybe they think they have found a way to get more money for a lesser product, but count me skeptical.
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Old Feb 7, 19, 9:16 am
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It's odd for sure.

So far this year, I have only flown and booked E tickets with GPU applied (and cleared, luckily), and award tickets.
P fare pricing, as of yet, is out of reach for me.

I'll likely make 1k again, but with lower PQM/GPU earnings.
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Old Feb 7, 19, 9:22 am
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Originally Posted by Darlox View Post
At this rate, I'll be lucky to make Gold on UA next year, much less 1k, if their pricing continues to be so out-of-whack, and I can never confirm an upgrade! (Not that I guess it matters... thank goodness for MM status??) Strange to be in a position where I'm no longer actively booking-away from UA, as I did in past years due to merger issues, service quality, etc... and finally when I wouldn't mind flying UA, they've implemented some (to me) incomprehensible strategy that makes it excessively expensive, unpalatable, or both, to actually book on them! I'm literally at a loss to figure out why, unless my travel patterns are just completely out of whack, vis-a-vis their target market.
For me, making Gold won't be luck, but a distinct strategy to stop as close to it as possible. I Kayak'd a while post-Smisek, then came back, and like you, was pleasantly surprised. UA's not like it used to be pre-merger, but it's not like it was in the Smisek era, either. They aren't great, but not-the-worst major combined with above-average ff program made it worth it again.

Increasing 1K PQD, reducing the P bonus to 1.5 while continuing to ratchet fares, incomprehensible faring strategies like LAX-BOS that I've pointed out elsewhere, and eviscerating PZ is too much. It's time to spread the dollars again.

However, it's important to note that UA is doing well, and I am a "self-managed" nobody. The reality is I will miss the old 1K more than the new 1K will miss me.
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Old Feb 7, 19, 9:26 am
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Even when booking through United.com sometimes the partner flights are better priced. Especially to India (I know these two flights sell briskly in J and for good reason). Sure, there is the JVs, but still I smile when I see this. Almost seems like an encouragement to fly partners. Oh well...

Probably will end up just like last year: grab whatever flight to make $15K and then spend the rest on AC, LH, LX. And go to SU and MU when *A is just too expensive for my company's blood. Better MU in J than any plane in Y when going TPAC.
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