spin88

What you suggest makes perfect sense. @:-) But it is NOT what United is doing. United has cut $15 off the fare bracket and then sent that fare over so that at any price point the BE fare is what shows.

So some business traveler, buying a midprice (or expensive ticket) gets offered a BE fare, while Delta/AA is only offering regular fares. S/he notes the attempted up charge and thinks UA is cheap and low class and figures out Delta and UA are selling something very different, or worse, s/he buys it, correctly assuming no ticket at a mid-price point - and the same that DL/AA are offering - has these kinds of restrictions, and then is POed biggly at the airport when they find what United has done.

JBord

Yep. While I know you're aware of this, others reading this for the first time may not realize that this was UA's stated goal all along...they stated they intend to make a lot of money from these fares, not give them away for less money.

One might argue that they never intend to actually compete with the BE fares, or at least very rarely. They just want to appear to compete with them until all the separate fees are added up.

saltydog75

My post was based on the assumption that E- would offer enough of a savings over E that it would actually result in less overall carry-on baggage. If the difference isn't very much, you're right - there's no incentive to buy it and therefore it's the same amount of baggage and it's now the E- folks who have to check.

Clearly E- has to be at least $25 less than E (cost of checking a bag), right? So the challenge is how much of a discount beyond that is needed to incentivize E- enough that enough people will opt for it that the carry-ons fit exactly in the allotted space (or less). I say that's $25. If the E- ticket is $50 less than E, first off I get to advertise a really low fare, and second even once people realize they have to add $25 to check a bag, they're still $25 ahead.

But perhaps my mistake is assuming the pricing is logical. :-)

emcampbe

You missed my point. UA can still directly match price on non-peak flights, which is when they want to do this best, anyway. ULCCs can take those pax on peak day flights, while UA can still offer the 'basic' option on peak flights, without coming down to the price level of the ULCCs. IMO, I don't think they should be making 'basic' fares available off the higher buckets - maybe they should only allow it on, say, T or lower fares.

On the other hand, if those paying the basic fare at peak times are spending $30 less (on a roundtrip), but then paying $50 for a roller bag (also roundtrip) that would have otherwise been brought into the cabin - then UA still wins.

UA always offers regular fares alongside the basic fare, and they are very clear on what isn't included. I'd say anyone buying the fare, at least off the UA website, has only themselves to blame if they are surprised that they can't bring a carry on aboard. Just because UA has an option, doesn't mean one needs to take it. I, for example, will not buy BE because even though I rarely make changes, I don't want a no-changes ever provision, and I can't remember the last time I bought a ticket that was below $200.

saltydog75

That seems very myopic to me. Total revenue is what matters, not "how much do you get from this new ticket type". When you "give them away for less money", you get:

1) Better on-time performance (no more bag management = faster wheels up)
2) Happier E customers (no worrying about getting overhead space)
3) Happier FAs (no carrying heavy bags to and fro)
4) Happier E- customers (feel like they're getting a real deal)

All of that makes you money. Better on-time performance might mean cruise speed is a little slower and you're saving on fuel. Happier customers are free publicity, and the best kind. Happier FAs translate into happier fliers. It all contributes to repeat business and the overall perception of the brand. Thinking about only how much you're making from E- misses the point entirely. Frustrates me how much airlines treat everything like a commodity rather than an experience. It's not a cost to get from point A to point B in a space x by y by z. Nothing involving end customers works that way. It's all about the overall experience. To me, E- is about solving the problem with way too many carryons, which creates a better experience for everyone. Give whatever discounts are necessary to limit carryons to what will fit, people will have a better flying experience, and that will make you money - if you just have the vision to do it rather than thinking with blinders on in a short-term way.

spin88

No I did not miss your point, it simply had little to do with what United is doing.

If what united was doing was "matching" the ULCC's it would have offered a BE that matched (or as Delta does near matched) Spirit, and had a sufficent discount for BE that its regular fare matched Delta and AA's fares.

Instead, United is offereing BE off EVERY flight, and (a) not maching the ULCC's (or Delta matching them), and (b) therefore requiring every traveler to up-fare to a regular economy, even with a base fare of $370 in an M bucket (see example cited above for 5/25).

BE is not a "discount fare" offered on certain flights as Delta does it, it is offered on EVERY fare, requiring people to up-pay on every flight.

People will are paying real money to fly (not $55 o/w) will either see what UA is doing, and not be happy about having to pay more, or worse will miss it - and I'm sorry, lots of people will miss this - and be very unhappy.

But the bottom line is that in a competitive market, on this day, outside of the lowest fares this is what is being offered:

Delta $163 (1:32 p, 3:30p, 5:30 p) regular fare, no BE offered.
United $171 (3p) a BE fare, with a +$15 up-charge to regular economy
AA $185 (2:30 p) regular fare

United offereing less (BE) is trying to charge more than Delta, and is then trying to get an upcharge from every passenger.

This is going to be really bad for NPS and brand reputation. As someone (not Lincoln) said: ""You can fool all of the people some of the time and some of the people all of the time, but you cannot fool all of the people all of the time."

findark

It's meaningless to choose a date at random, apply current inventory, and draw conclusions about market positioning. Carriers match fares much more closely than that, so you're almost certainly seeing tighter inventory on the UA flight.

Now, you might correctly say they're foolish to demand a higher fare, but I think you need to keep separate inventory management and fare filing. On a micro-scale they're handled by different algorithms and different people.

I picked another day at random.. and guess what? NK offers $40 one-ways and you know who the only carrier is to match them? UA (with an N fare). The rest of the day's flights are interspersed in a varying order.


The patently absurd thing UA is doing is selling N fares that are matched to high fares. They're simply not competing with NK or taking people home to visit grandma when they're selling an E or M basis. The market for those fares is simply not going to defect to a ULCC, and it's just an insult to the brand and optics to peddle an N fare up that high, especially for a $5 differential.

spin88

None of this has anything to do with the real world.

1) Any impact on OT is contingent on enough people getting BE that it acutally inpacts the flights (not all) that had a bag delay. IMHE they don't happen often, so not really in the aggregate likely to have much impact.
(2) I think you are just wrong. Every single person flying in E will feel that "United charged by an extra $15 to bring a bag and select a seat on a relatively expensive ticket. They are such bate and switch operators, next thing you know United will be charging you to use the loo" Put another way, on every ticket I buy on United, even at higher fare buckets, I have to pay another $30. That is not implementing a BE fare when lower priced tickets are available, its hitting EVERY SINGLE PERSON with unbundling, here of (a) seat selection and (b) carry on bags. Even elites get this "pay more or get messed over by United" deal.
(3) The FAs don't carry bags. And the person who paid $171 for his ticket and had no clue that it was a BE fare, will be unpleasant to the GA/FA, etc. IMHE passengers take out their frustration on the staff...
(4) well the true E- customer is not going to pay United $85 to fly w/o a carry on, when they can pay Delta $64 and take their carry on, or $55 to Spirit and not take a carry on. These fare appeal to a certain set, who are comparison shopping. Unless UA is competitive, it is not picking up ULCC traffic, it is simply convincing those who fly it that it is a ULCC with poor service and high prices.

emcampbe

And you're extrapolating data from a single flight on each carrier on a single day. Even on FT people realize that isn't necessarily reflective of the general market pricing.

DL, AA and UA, based on different factors, offer varying fares for the same route at a similar time. Even with regular fares, a DL, AA, and UA flight on the same route at the same time can sometimes have [very] different lowest fares available.

On the other hand, different carriers have different products, even within regular fares. People on this board often decry that UA copies DL on everything exactly. But now its not ok when they don't. UAs concept of a basic fare is apparently different than DLs (and AAs), inherently, there's not really anything wrong with that. Different strategy for a basic fare level. Maybe it will continue like this, with the different carriers offering their basic fares differently. If the stragtegy isn't working for UA, I'm sure they'll adjust. Or maybe DL likes some of the idea that UA uses, and they'll start to implememnt it. And people can choose the product they want - its that simple.

spin88

I 100% agree with what you say in bold, and that is my key point. I pulled, and listed "mid-priced" fares to show how this works in practice, it was an example of how doing it the way UA is doing it, works in practice vs. DL/AA, etc.

And more broadly, if United is not going to match prices (and perhaps on 5/25 they are not due to inventory) then the whole BE concept is a mismatch at that time. If your "BE" fare is $85 when Delta's is $64, and everyone gets offered a $15 upsell - what UA is doing on 5/25 - then optically it just looks like you are trying to trick people.

spin88

No. I am showing that how UA is doing BE fares is VERY different, and using this day (picked by another poster) as an example.

I fly Delta, and I never have seen a BE fare, because I am not every looking at days when that low bucket exists. But the way UA does it, if they expand this, I will ON EVERY SINGLE FLIGHT face a choice of paying more (on top of an already high fare bucket) or getting messed over by the BE rules. Its United's approach to this that leaves a bad taste in my mouth (this is not offering BE fares to compete, its trying to sub rosa unbundle bags and seat assignments) Hunter Keay must be jumping for joy.

p.s. and I am quite surprised this is how UA is trying to do this. I never imagined that United would so actively rub an up-charge into its passengers noises like this. It just damages the brand, and will likely turn people off to flying "the rip-off airline"

Kacee

Interestingly, I see that currently the BE fares are only available MSP-ORD with a two-week advance purchase. Has that previously been noted?

jsloan

Well, today is April 4, and the first BE flights are April 18...

Or are you saying that they've removed the BE fares from the table for non-AP base fares?

JBord

I agree with you. But UA stated a specific dollar amount tied to the new BE fares a few months back when they were announced. It may be posted somewhere in this thread, all I remember was that it was a large sum, and I think about 1/3 of the projected revenue growth.

In my opinion, this is just a thinly veiled price increase, but no one can technically call it that, since airfare pricing is not very transparent, and on the surface it appears that it's a discount. I truly believe UA's hope was to make the rules so strict and set the pricing in a way that very very few people would ever buy this fare.

If they happen to achieve any of those things you list, coincidentally, then fine, but not part of UA's plan.

minnyfly

There's a problem with your anecdotal experiences. You are not the typical Delta customer. Become a hub captive with them. Be a leisure passenger. You'll see E fares as commonplace, and they simply replaced the lowest fare levels, making every normal fare more expensive.

What UA is doing with their BE fares is very similar. The only difference I noticed at first was UA is trying for a larger price break, and in exchange you get even fewer perks.

The bottom line is this. Everything you're accusing UA of doing, DL did first. E fares on DL were nothing more than a way to increase revenue by creating more upsells. DL is the king of getting you to pay more for less. UA and AA have now copied it sadly.