SWU changes - where´s the problem ???
 

I red so many posts about the SWU changes and I wondered why there were so many complaints. Let me just give you an example how easy it is to become a 1k (most of you might know this):

A return from SFO-FRA costs about 450$ incl. tax and you will receive 11,000 miles for the RT flight. Just do 10 in a year and you:

- will be Prem after 2.5 RT´s (earned 27,500 miles), from know on seating will be in Y+ and more comfortable

- will be PremEx after the next 2.5 RT´s (earned 34,375 miles inkl. 25% bonus)

- will be 1k after 5 more flights (earned 110,000 miles inkl 100% bonus).

This is a total of 172,875 miles !!! Enough for 2 Business RT´s to Europe (worth 8,000 $ each). All that for about 4,500 $ !!! If you add the six SWU´s and you would upgrade your next 3 el cheapo mileage runs SFO-FRA that would be another difference of 7,500 $ for each flight...

If you look at the mileage run forum many people do things like that and - thats my personal opinion - it´s nice for them. But you have to understand the UA: Why should they still allow people to upgrade such fares when they are loosing money. Nobody would pay for premium travel anymore and you can´t make money with that many upgraded people in C (all the non-1k´s could even buy the SWU´s on eby for 250-300$). Receiving the top-tier status of an FFP-programm should be based on revenue like SQ and LX does. For those travelling on the expensive Y and C fares (the "real" top customers) the new rules aren´t that bad.

IMO that´s the only way to avoid bancruptcy. LH for example gives on UPG voucher to their SEN´s (150,000 miles required for german members) after 50,000 miles flown. You need two for one transatlantic upgrade !!! I was once on a PAID domestic flight in F and I was the last one asked for his orders because I´m not a 1k (just *Gold). I assume that all the others in the cabin were upgraded. This is an absurd policy.

For those thinking of switching their business to AA because of the VIPOW´s allowing upgrades on every fare I´m sure they will also change their rules very soon...

Some of you might hate me http://www.flyertalk.com/forum/wink.gif but this was just my personal opinion concerning the SWU´s changes.

(edited for spelling)

[This message has been edited by Tirreg (edited 01-31-2003).]

LH for example gives on UPG voucher to their SEN´s (150,000 miles required for german members) after 50,000 miles flown.

well, for any non-german-member (I am swiss) it is only 100'000 status miles needed to become a Senator. And once reached, that miles&more status is good for 2 years+ (UA only 1 year+).

and, as a Frequent Flier or Senator I only have to fly 13'334 paid first class or 20'000 paid business class miles with any Star-carrier to be credited the 50'000 miles&more status miles needed for that upgrade voucher (2 needed for a transatlantic upgrade).

Contrary to the UA upgrade vouchers (or to upgrades with Mileage Plus miles) miles&more vouchers/miles are good for LH upgrades on any paid fare.

[This message has been edited by Rudi (edited 01-31-2003).]

Yes, true !!! But 13,334 PAID First Class miles (that´s FRA-SIN-FRA) or 20,000 PAID Business Class miles (2 X FRA-SFO-FRA) makes LH earn a lot of money. Most people in F or C on LH planes pay for their trip, that´s why LH isn´t in trouble. I don´t have anything against upgrades - I only say this can´t be the way earn money.

[This message has been edited by Tirreg (edited 01-31-2003).]

paid first class trips (earning status factor 375%) to earn the status miles with miles&more can be done entirely with money given to UA: on UA 2-class short flights with 3'750 minimum status miles credited to miles&more for each such 'shorty'. LH then only earns some little money from UA for the miles they credit.

But Rudi, the key is that those miles are earned on PAID F and C tickets which at least generate a sizeable profit for United. The problem is when those same benefits are received through flying exclusively on loss-leader fares.

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But this also works they other way round: Flying on a cheap LH fare an earning UA miles which do also count as status miles. But as I said as a full fare First Class passenger and *Gold (LH SEN) you´re the last one to choose your meal after all those upgraded 1k`s.

SWU changes - where´s the problem ??? : The biggest proble is the way UA implemented the changes. The SWU changes were not announced, they were "discovered" by an alert customer. The changed SWUs were ones that were earned in 2002. At no time in 2002 did UA indicate they would make changes to the SWUs; to the contrary they indicated there would be no changes. This is not the first time they have done this. Since they "got away with it" last year, it seems they decided to do it again this year.
Well, I for one, will not be affected by the changes they make next year.

But how should they announce it ? Maybe they found out that there are to many 1k´s who do not generate the expected revenue. I don´t know any programm which announced changes one year before. Increasing of mileage levels, cutting of benfits is a common practice.

I think many forget that UA's problem is not the money they lose on upgrades of cheap fares, that is a mere pittance in the bucket. The problem is that they have the highest cost structure in the industry. The fleet, poperty, wages, etc, have been financed by an unsustainable debt loads. There is no way that their current revenue model can finace their debt.

This is exactly correct. I have real doubts as to whether this will generate any additional revenue in the balance. In my case it will most likelu cost them thousands in revenue, if not 10s of thousands. I may keep flying them although I may not. What is clear to me is that the main reason I made sure I got to 1K, which cost about 3000-4000 on top of the business trips I took that cost another 10-15K was to get the SWUs. I will be VERY unlikely to do that this year, if I fly UA at all.

I agree. The changes are good for UA and for the 1-k's that really support the airline.

Pay $8,500 for business RT to London from LAX. $1,500 to NYC in coach, but cannot get upgraded as the business section is full!! Perhaps with people upgrading $400 tickets? This way the availability of upgrades will be enhanced for those paying more that the cheapo of the most leisure rates. I would like to see further restrictions for SWU's. No use by anyone not flying with the named person. That would get rid of the SWU eBay/FT "sales" and allow people that earned the SWU's to use them before they expire! In this case the SWU are not even earned but a gift.
The comment about UA not warning people that the "gift" would be slightly different are not being realistic. Read FT a couple of months ago. The UA Forum was filled with speculation that there would not be any SWU this time!
No one likes to see "their" benefits reduced, but it happens every year. The FF programs are constantly being eroded. Now with most airlines in the red, many in bankrupcy, we surely should expect some further erosion.
Tirreg makes some good arguments, that I will not repeat.
It might be useful for others to read other airline forums to see what is happening industry wide!!

I agree. The changes are good for UA and for the 1-k's that really support the airline.

Pay $8,500 for business RT to London from LAX. $1,500 to NYC in coach, but cannot get upgraded as the business section is full!! Perhaps with people upgrading $400 tickets? This way the availability of upgrades will be enhanced for those paying more that the cheapo of the most leisure rates. I would like to see further restrictions for SWU's. No use by anyone not flying with the named person. That would get rid of the SWU eBay/FT "sales" and allow people that earned the SWU's to use them before they expire! In this case the SWU are not even earned but a gift.
The comment about UA not warning people that the "gift" would be slightly different are not being realistic. Read FT a couple of months ago. The UA Forum was filled with speculation that there would not be any SWU this time!
No one likes to see "their" benefits reduced, but it happens every year. The FF programs are constantly being eroded. Now with most airlines in the red, many in bankrupcy, we surely should expect some further erosion.
Tirreg makes some good arguments, that I will not repeat.
It might be useful for others to read other airline forums to see what is happening industry wide!!

The simple fact is that they can't sell all of such business seats for $8500. That tells me that they are charging too much for them - which leads to empty C seats if they don't go to MP awards and upgrades, NRSAs, etc.

Perhaps the pricing model is the problem - and not the best customers who are allowed into upgraded seats that would otherwise be vacant.

As I stated in an earlier post, "It's easier to give than to take away." I think that what UA should have done was continue giving out 6 SWAs that were unrestricted (or were usable with most fare types). But, then implemented a system that would have truly rewarded their high revenue flier.

We know that HK49s get issued based on actual miles flown (on UA metal, subject to a minimum). How about UA issue an additional SWA for each $20K threshold paid on tickets? The $20K is arbitrary, but I think you see what I mean. The SWA could even be something else, like an non-capacity-controlled SWA.

This way, UA doesn't alienate their existing 1K base. And at the same time, they create opportunities for high revenue fliers.

I assume that the 1K population is diminished in 2003 from 2002 because of "economic" factors. So, the extra SWAs wouldn't make upgrading opportunities that much more different than it already is.

and on AA major changes almost always occur with six months' notice. anything less is a lawsuit waiting to happen.

and I'm tired of hearing about how "easy" it is to be a "cockroach" 1K/PM/EXP/whatever. If that's really the problem, fine, don't chop the benefits, chop the roster of names on whom you bestow them. expert avek has opined that UA was shocked, shocked(!) to see that the old SWU's were being transferred and used too often. Bull-- if that's really the problem then address it directly with non-transferability rules or somesuch.

DL didn't anger most of its PM's because it put in the dollar-based MQM system, it angered them to the point of leaving because it simultaneously destroyed the benefits of being PM... sending the message that EVEN IF you cough up for a ton of super-profitable tickets, we'll still not cut you any slack. Too bad-- people with that much money to spend simply don't have to accept being treated that way.