whitethunder

I really hope they do not do any waivers etc, it will really thin the heard and serve UA right for going to this new PQP garbage.

jupper

Based on a lot of the discussions here already, mostly that a lot of consequences seem to not have been taken into account - we'll see in late Q3 or early Q4 what UA does when they have a better picture on the effects, not on the herd, but their bottom line. I think it won't be waivers, but incentives to spend more PQP...

jp12687

right but that is why they MIGHT do something.

currently there are a lot of 1k and GSers who fly UA to Asia. Don’t even look at other carriers.

if I’m not GS I open up my business to look elsewhere. I’m sure I’m not the only one

glbltvlr

You aren't looking at the other side of the equation: UA believes that the Polaris product is superior to that offered by their competitors. That's certainly an arguable point, but UA will be testing that before they make any substantial changes to MP.

JimInOhio

I could see UA offering PQP bonuses on flights to China once things normalize and flights resume. In fact, I think there's a good chance they will. OTOH, the amount of revenue UA generates from GS/1K members on flights to China can't be all that much in the big scheme of things. "Pacific" revenue is something like 10% of UA's total operating revenue, as pointed upthread by WineCountryUSA and China might be half of that. Now we're down to ~5% of UA's revenue and what percentage of that is generated by GS/1K members? We're in the low single digits at this point.

zombietooth

I think that UA might try to incent new purchases with bonuses after the virus burns out, but I don't see them lowering status requirements because everything they do now is an effort to make their numbers look better for Wall St. They believe that they have the superior J product and network and that customers will come back for just that reason.

There could be long-term damage to travel budgets from this, however:
My brother-in-law is an executive for a F500 company, and he just told me that there currently discussions about reducing all employee travel and using videoconferencing and other virtual interaction assets instead, primarily to reduce risk to employees and exposure to liability, etc. They are thinking that they can tout this move as "decreasing their carbon footprint" and use it in a marketing campaign.

LimeySD

GS will be accommodated on a case-by-case basis. Large corporate accounts will likely be appeased. Unless this triggers a global recession don't expect sweeping changes to re-qualification.

SS255

Once companies move in this direction and they see how business can be conducted this way, they don't move back. Or, at least they don't move back by the following quarter.

drewguy

Though if UA sees the herd thinning it will just tell itself "oh, Coronavirus" not "whoops, maybe we got a bit tight".

jsloan

So, here's the thing.

Most people have been looking at this from the traveler's perspective -- that UA should extend status as a courtesy to people who would otherwise have traveled but didn't. That's entirely the wrong POV to figure out what UA will actually do. (It might tell you what they should do, from an ethics point of view, but that's different).

The actual thing that would cause UA to act would be if they started to see negative trends in the long-term bookings. In other words, UA isn't going to introduce a big promotion because it would be useful to customers, but they will do it if they find that their bottom line is going to be affected.

If they do have a promotion, it's much more likely to be of the "bonus PQP" type than a decrease in requirements or a free year of continued status or whatever, because, again, the problem they're trying to fix won't be "not enough 1Ks," but rather "not enough revenue."

Also, keep in mind that UA is looking for people who are wiling to spend a lot of money for plane tickets anyway. They may well be of the opinion that people who want to retain status can buy more expensive tickets when they do travel. (I won't be doing this, but they've been trying to fire me for years ) It's a lot easier to make up a spending deficit than a distance deficit, because it takes more time to fly a longer distance, but it doesn't take any more time to buy a more expensive fare.

Dublin_rfk

I've seen an huge increase my PQP due to increased Asian travel as my compatriots don't seem to want to go anywhere near China and because I'm holding off until the last minute purchasing my flights to see it any bonus offers arise.

glbltvlr

That wasn't an option at the Fortune 50 company I worked for, nor I suspect at most companies. We had to book international travel 3 weeks in advance. Anything less required SVP approval and waiting for bonus offers wouldn't have been accepted.

bocastephen

Thinking you have the superior J product and network and customers will come back just for that reasons is demented - unless they want to qualify this by saying "at SFO, IAH, ORD, and EWR, United has the superior J product of the other US carriers, only on nonstop overwater routes, where we have the best network among the US carriers, but ONLY from those specific airports". That's more spin than a Bloomberg tweet. If we ignore the differences in mileage programs and alliances, Delta's new J product makes Polaris look like AC Rouge up front.

As to the transition in your second point, this has been going on for years as a cycle - every time the economy begins to ebb, travel is cut, new ways to interact are found, and when the economy flows again, the prior level of travel does not come back - it's a slow death by a thousand cuts to the entire concept of global business travel. Global supply chains are on the move again, sales and other types of meetings are moving towards video conferences, even large group conferences are going virtual.

The virus is just amplifying and compressing this change - when, or if, it goes away, business travel will not return to its prior level - and the longer it lasts, the smaller and slower the rebound. If Kirby doesn't realize this, he has no business leading a global airline, however I suspect his contingency plan is right out of Baldanza's post 9/11 playbook - slash, slash, slash the product and benefits, start charging for anything and everything, dump out as much of the low margin business as possible, and restrict access to premium services and membership only to the smaller group of remaining people who pay near, or full price for their tickets - everyone else can go straight to you-know-where.

spin88

This is a good way to get fired in a lot of organizations.

That said, I do wonder what it will do to fares, will airlines try to hold the line, just fly with lower load factors, or will we see a fall in pricing (including in J) or some kind of discount/rebate to try to suck up a larger share of what traffic still exists.

on this bubble now, have a trip I can go/skip to a wedding in Europe in early April. I am wondering if the usual fare patterns will continue, or we will see some discounting go one...

ani90

I would also hold off till the last minute in this day and age. I don't think the OP was saying he was holding off on purchasing till the last minute but rather holding off on making a decision to travel till the last minute - there is a subtle but important difference I think.