spin88

While I think the bean counters in Sears Tower think that people will be "forced" to fly UA more, I think they don't really understand consumer behavior. The reality is that most frequent travelers have so much travel they do, and set places they need to go. And it is not like most travelers can decide to just fly a more expensive ticket, or take some extra work trips to get to a set spending level.

Some travelers (but I think a small minority of elite mileage members) may fly several airlines and perhaps those can be enticed to concentrate their flying. E.g. Last year I had just under 70K qualifying miles and $21K spending on Delta, 34K qualifying miles in my UA account, with $7500 in spending (all but about 1200 miles of that was other *A carriers), 35K in my Alaska account (with about $8K in spending) and then a few scattered flights on SWA. But for people who currently split their flying, UA would need to offer some strong reason to want to concentrate the flying with UA. United has done nothing to win back fliers, and if anything MP is a substantially less rewarding program at this point. I am a good example, I live in SFO, but 1K status offers me basically nothing of value at this point, and certainly offers me lower quality service than Delta offers (which is why I fly Delta, certainly it is not for skypesos...)

What many travelers can do is when some event or change causes them to want to switch airlines they can switch. Being told "get lost, we don't really care about you" is a powerful motivator, especially when the benefits of MP are so little at this point, compared to the past. So I think the main impact of this is going to be to encourage MP members to either (a) switch to another carrier, or (b) just give up on the entire status thing with UA and fly whatever works best. And the number of people who benefit from this (those flying on segments, because they are in cities where they need to connect all the time, yet fly on relatively higher fares) seems much smaller than those who loose from this. Particularly at competitive hub cities, United just lost a lot of competitive edge by making it's mileage program clearly inferior to DL, AS, and AA.

I can see no set of circumstances where the combo of those just giving up on holding UA status (or e.g. as I do, figure than *A gold benefits are the only really useful thing) or switching to OALs will not swamp the few segment fliers UA picks up.

I don't think this was some strategic move, rather it was a cost saving move. People are not stupid. When UA offers that $1000 fare, while flying on OAL will be $800, they are going to be far less interested in paying the extra $200 to try to keep a lower status with faded benefits. Put another way, the traffic that UA is most likely to lose from making itself less competitive is those fares where it is less competitive, i.e. those it makes the most money on.

The reality is that if UA offered some other value proposition (better service, better product, better reputation (e.g. what Delta offers) this might be doable, but weakening MP further when you are a lagging airline just seems really self-destructive. A turn back to the Smisked days, something that someone from a third rate university like Hunter Keay suggested UA do.

I agree with your point, the "segments" are likely to be slightly shorter on those connecting on average as the first spoke-hub flight would be to a close hub in most cases. However, I think the bigger issue is that those short flights have a much higher CASM and the entire trip while more miles in many cases and with the higher CASM of the two flights, tend to be cheaper. To give an e.g. Assume a 350 mile short leg, and a 2000 long leg. The fare for the direct might be $600 due to less competition, but the connecting flight might only be $500. And the operating costs of the second flight are the same (lets assume $300) while that of the first flight would be less, but more per mile (lets assume $150). The result is that the connecting passenger makes UA $50, while the direct (hub) passenger makes UA $300.

Yet this change disadvantages the hub/major city flier (who I think we can all agree is usually more profitable) and may (for some) advantage the segment flier. Yet, that segment flier, with lots of connections is not the most valuable traffic in most cases.

Again the numbers of "high value" (high yield) segement fliers - those who "win" under this change - is much smaller, and more expensive to service for UA than the much larger number of elite fliers in hub and major cities (with a lower cost to service on mostly direct flights) who loose under these changes.

The only explanation that I can see for these changes is that UA really believes (as it did in 2011-2013) that people just have to fly UA, so UA can do what it wants and business will not move away from United. I would have thought the experience of 2012-14 would have disabused Untied of this view, but it appears it has not.

And this is the nub of the competitive problem. OALs offer better service and product and as importantly make an effort to make the passanger feel that their business is wanted. I am reminded of this every single time I fly Delta, 90% of the time the GA or FA (if in F) says "Mr. Spin, thank you for your business and for being a PLT/Gold". I can't recall the last time that UA thanked me for my business, and these changes suggest that UA is not interested in my business.

AeRoSpaceman

100% agree with your evaluation. I was going to write something almost to this point about connecting passengers and hub captives.

Kacee

Previously, I concentrated spend on UA to meet PQD thresholds. Done with that.

In 2019, I spent something like $15k flying CX TPAC while still qualifying for 1K. With the new 1K requirements, I had the option of either (a) switching some CX spend to UA (and accepting an inferior product) to clear $24k, or (b) dropping UA in favor of OW Emerald, continuing to fly CX TPAC, and enjoying the CX F lounges at HKG as an added bonus. Guess which way I'm going?

VegasGambler

A first class lounge is better than a club lounge? Shocking.
A more fair comparison would be to a Polaris lounge (yes, the CX F lounges are still better than the Polaris lounges, but not by the same wide margin.

Anyone who is not happy with UA service is not going to be happy with AA. The airline (not FF program) is worse in every respect. Their phone and gate agents are downright rude and terrible. They have more delays than anyone because their mechanics don't like AA and invent fake maintenance issues to intentionally delay flights (AA actually took the union to court over this!)

Between DL, UA, and AA, you have:

DL: worst FF program, best airline
UA: middle airline, middle FF program
AA: best FF program, worst airline

I don't think that these changes really change those rankings.

I got comped EXP status on AA and I still won't fly them. All the status in the world is useless if the airline sucks. I'll make occasional use of OWE on some partner flights (ie, I'll attach the AAdvantage number to my AS award flights on OW carriers and use the first class lounges when flying business). On the other hand, I'd switch to DL in a second if I wasn't based in SFO.

The grass is always greener... until you actually get to the other side.

kevflyer

CX all the way

Silver Fox

The grass is always greener....it's just that the cow .... is in different places

Kacee

The comparison is 100% valid in this context, since as a UA 1K I'm limited to the UC (or similar) at HKG, while as an EXP flying CX I can access the superb CX F lounges. Since I transit HKG over a dozen times a year, this is a meaningful advantage for me. (And btw, the CX J lounge at SFO is IMO better than Polaris lounge SFO, so it's a win on both ends.)
My primary domestic destinations are NYC and PHX. AA into JFK is better for my purposes than UA into EWR, and I can fly AA OAK-PHX without having to cross the bay. So far in about a dozen flights, I've had no issues with AA ops or service. I even got a tarmac transfer at JFK (never received one of those from UA in over 1.2 MM).

My basic point is that UA encouraged me to look at the alternatives when it raised the spend threshold this year while further gutting the MP program, and for me, it turns out that AA is a better alternative. This is why smart businesses never give good customers a reason to check out the competition.

Silver Fox

This. As I have probably said upthread I just did this where I would not even look at alternatives. But <sarcasm on> United has all the data and knows exactly what it is doing and I will be replaced by someone else <sarcasm off>.

VegasGambler

This is fair. For your travel pattern I'd choose CX as well. This has nothing to do with AA though. You're basically just noting that top Asian airlines and lounges are better than US airlines (and I agree) When I was flying UA out of NRT I skipped the UA Club and went to the NH lounge. The real issue is that there is no *A partner based in HKG.

But for international travel that is served by a *A partner, I don't think that this comparison is a good one. Note that the new changes actually allow you to fly a partner without the 016-ticket requirement and still count it towards status. This brings cheap TK business class fares (with a requirement that they be ticketed by TK) into play. I passed on one of these last year because there was no way to count it for UA status (no PQD anyway). Same with SAS -- UA won't ticket their TATL flights because they want to force you onto UA or LH. No more.. I can now fly SAS through CPH when I go to HEL (far superior PE product, which is all my employer will pay for) and count it towards status. And of course SQ has tons of cheap PE fares as well.

Some domestic road warriors have pointed out that the changes will allow them to qualify for 1k, when they previously couldn't (due to the PQM requirement going away)

I guess the point is that these changes are going to be helpful for some people and harmful for others. If I were frequently flying premium cabin to HKG I'd be using CX too (though, I'd be crediting to AS, not AA. Lounge access is nice but free flights are nicer, and the PP lounge in HKG is fine)

I find this a little hard to believe. You come across as a savvy enough traveler to consider all your options -- you don't need UA "encouragement" to do this.

halls120

Over the past 2 years I've been thanked several times for being a *A Gold while on LH Group flights. I've been thanked Zero times while on UA flights. Speaks volumes, IMHO.

While UA didn't encourage me to look elsewhere - a job location shift did - the result is the same in my case. I laugh every time I think of Smisek's statement about having flown the competition, and as a result, he thought UA was doing just fine.

narvik

One area I can't fault UA on: been thanked as 1K numerous times in the past.

narvik

It's becoming absurd: I am currently enjoying booking away from United and at the same time getting more PQPs for doing so.
Looks like I may qualify for 1K in 2021 after all [unexpectedly], yet spending the least amount of money with them in years, and also gaining HU top tier status as a [tiny] bonus.

Likely total spend with UA for 2020: about $5000 (instead of usual 12k to 18k), but still getting 1K.....only just.

Silver Fox

If you don't mind me asking, how will you get 1K with that? I think I have this straight, and then I think I don't.

narvik

Book cheapo *A flights credited to United.

VegasGambler

It's got to be partner flights.

For people who travel internationally, there is no longer a motivation to spend with UA vs *A partners.

Fares that give 3 PQP per dollar spent seem fairly common (particularly in PE). Much higher rates will be available on particularly good J and PE fare sales. Add that to the fact that UA tends to be relatively expensive, and "good" partner fares often have the restriction that they must be ticketed by the partner, and you could easily end up in a situation where booking on a partner gives you a lower fare, a better product, and more PQP than booking with UA. win-win-win