But that does not consider that FFP should generally be cost neutral or profitable.

Having less 'frequent flyers' will probably not save money. The assumption is that money is saved assumes we will generally fly the same for less FF benefits but as shown in the poll many FF will modify their flying behavior is response including patronizing other airlines, flying less, paying less. I will be surprised if this move ends up really saving money for United.

Some people who travel for business are subject to the Fly America act.

I think a lot of the bean counters see every free bag an elite gets as "lost" revenue. Likewise with every lounge an elite uses, every E+ seat an elite takes without paying an extra fee, etc. Of course, what is much harder for them to see is the fact that I'd consistently book UA, often without even checking competitor fares, and without regard for the fact that the soft product is worse than the competition. And I'd also take two trips to Hawaii instead of one, and take my wife along too, with both of us on revenue tickets, and without having checked prices at HA, AS, WN, etc. All of that stops next year. The former is very easy to calculate but for the latter, if you calculated the amount of additional money I paid to fly UA when I could have flown a competitor, I wouldn't be surprised if it was actually more costly. I actually don't really know however, as I didn't even check competitor prices.

Doesn't matter if they made GS "Most" years and now is complaining about not being able to muster 1K, there has to be some wholesale changes in flying patterns

It’s not clear to be that high spend/low travel people are motivated a lot by program benefits. First off, they have to pay attention to program changes. I’m sure some people will migrate, but it will be a drift rather than a flood.

MP is already profitable. UA's goal is to increase profitability by cutting the costs of FFP benefits.
By their own calculation, UA will not have fewer frequent flyers. They will have the same number or more, but they will fly less frequently. UA will thus be required to provide fewer benefits, and thus incur lower program costs.
Exactly. And not just these items, but award fee waivers, redeemed instruments, etc. I'm sure there's a spreadsheet somewhere that shows exactly how much UA expects to save in costs / gain in revenue from these changes.

Which is why they are really pushing the CC offers onto unsuspecting dilettantes who think that they will get enough miles to go to Tahiti in biz, based on all of the hype in the shallow media and effective but deceptive marketing, but will sadly find themselves holding wheelbarrows of Papiermarks, with little aspirational to spend them on, once the dynamic pricing scheme is fully implemented.

I think that the biggest blow of all will be these upcoming changes devaluing the MP currency.

^Welcome back!

If they have more elites flying less then likely means increase in lower levels - silver and gold and decrease in platinum and 1K. This will equate to people flying less and spending less with UA. So while UA will save money on its FF program, they will in return lose revenue from selling tickets. The latter might outweigh the former.


I too, and many others have done so repeatedly over the years. This was the entire essence of FF programs - to force such loyalty to the extent that if united sells certain fares at less competitive rate, or with less competitive product, elites will still shell out money, particularly on certain elite heavy routes. The assumption that with the new program all these people will continue to blindly patronize UA is likely flawed. It may be that their modeling suggests the current platinum and 1K pool will be replaced by a different crop willing to spend even more but I can't imagine where the new breed of Platinum and 1K will come from (current silver and gold?, Other Airlines [why???]?, Mars?)

United have made various statements about the changes to MileagePlus that, in total, help us put together a pretty good picture of why they are doing what they are doing. It's now very clear that UA is trying to better align MP status with overall profitability generated by any given passenger. Going out on a limb... it wouldn't surprise me if their data mining and analysis showed some 1K passengers accounted for 10 times the annual profit of other 1K passengers. We all know how that can happen when comparing a small number of long haul (yet still cheap) flights with a whole bunch of short (and yet expensive) flights. Has UA decided to "clean up" this disparity to some extent?

That's one problem but here's another potential problem UA may have uncovered: Has handing out GPUs unintentionally discouraged some passengers from booking J fares? If the airline is handing out GPUs to people who don't board all that many flights in a year, they could be giving up revenue and earnings with a program that was intended to enhance revenue and earnings. We don't know the answers to those questions but they are legitimate questions in light of their recent statements. And, frankly, I've read many posts here from MP members talking about looking high and low for cheap W fares which they can get instant upgrades on.

Basically, MP status is now based on annual revenue from a passenger. The exception is you get a 33% discount if you take more than XX flights per year (54 in the case of 1K). That's the bone they throw to "loyal" passengers choosing UA a whole bunch in any given year.

MP Currency-today's S&H Greenstamps. I remember my Mom needing a shoebox to hold all the Greenstamp booklets necessary to redeem for a toaster. That was in the last days of the Greenstamp era. We're now approaching that point with collectible miles.

I don't think that's the way UA figures it, as they assume there's a higher revenue passenger standing in line behind the higher cost MP member they're firing. Time will tell. In the event of a significant economic downturn, the changes are likely to hurt them. But airlines are notorious for failing to plan for the next down cycle.

I don't think it's a lack of planning. I think Kirby and Munoz and the rest of the execs all know it'll hurt them in a downturn. But their relationship with UA, like UA's relationship with its customers, is also transactional. They're motivated about propping up the stock prices so they can collect their RSU and hitting EPS targets so they can get bonuses, all of which are calculated quarterly and on projections mostly for the next 1-2 quarters, and at most a year ahead.

If UA's founders were still alive and expected to be around for another 30-50 years, I think the program would be structured differently. Founders generally see a company differently than someone brought in to run it who has no emotional attachment to it, and tend to plan farther into the future beyond just what's going to maximize their next payment/bonus/RSU grant.

If you're saying they don't care more than two to four quarters out, then we are saying the same thing.

I'm not sure I follow... I clearly explained that my spend has nothing to do with me, but yet you still take a shot at me for my post?

You imply its those of lesser status (i.e those who spend less than you) are crowding the gates, so any program changes by UA to cut down on who you perceive is crowding you is a good thing. You lead off with a dollar amount as if that validates what follows. Your words, not mine. None of which has anything to do with the topic of this thread.