From a passenger point of view, when we see changes to mileage programs that reduce our ability to earn (actual or eqm) and burn we get angry.

From an airline perspective when they make changes they see it as a necessity to keep flying and remain profitable. DL,CO did the wrong thing and so far UA,AA and NW seem to have done the right thing.

DL is not in bankruptcy and UA is, how is UA able to keep us so happy and not cut benefits? Can they calculate in $$$ what defections from other MP will bring them? or what defections to other MP would loose them?

Im glad they chose to enhance, but I guess if the party (air)line is "we have to cut to save," HOW (not why), in UA's situation did they not do this?

Two very common yet simple phrases come to mind here:

"It can take years to gain a customer, but only one wrong move to lose one."

"80/20 principle: 20% of your customers provide 80% of your business."

UA is currently in a situation where it NEEDS its current customers, as well as earn new ones. Pissing off their current loyal comrades and sending them to the competition will only worsen their situation. That said, the new MP "enhancements" have not really changed--rather they have not taken away any perks. MP has basically implemented some common sense (WOW!) and have catered a bit more to their top flyers. Keep feeding those 1Ks, MMs, and UGSs cookies, and they're going to keep coming back for more.

I think UA learned a lot in 2003 about the spending habits of their customers. The H+ SWU and Sweetspots, while a benefit to some (as well as a detriment), were pretty much testing instruments to help dispell any myths about how their customer base will react to their program. I think they learned lots from these "tests" and adapted their 2004 program accordingly.

Don't put too much on Gordo, he is still straddling the fence on this one. The fact that tix booked on CO.com still will qualify for full EQM all of next year (originally it was only until July if memory serves me correctly) shows IMHO that Gordo is still hedging his bets.

He chose a big smooch up to (now departing) Uncle Leo. Uncle Richie ruined the CO/NW/DL party by keeping their system essentially the same.

As for UA, remember some genius (I wouldn't be surprised if Tilden signed off on this one) listened to a McKinsey weenie at the end of '02 when they advised UA it would be a great idea to stick it to the 1K's with H+ fare SWU's. i.e. Turn 'em into a revenue generator as opposed to a reward.

While these new SWU's are not as odious as the trash that DL pushes on their own PM's, this was definitely a move towards Leo-ville.

But *Surprise*, marketing data (probably - this is my and alot of other's guess) showed that UA 1K folks were leaving for AA by 2Q. Hence, we all received Chrissy Everett and her Sweet Spots in our mailboxs by June/July in what must be one of the weakest covers for a "We're Sorry" campaign ever.

UA figured out that it needed to keep it's program essentially the same, it was not a situation of being 'able' to. If anything, Don Carty made sure MP was not going to become SkyPiles.

[This message has been edited by CoMooter (edited Dec 10, 2003).]

Go take a look the DL forum and the number of disgruntled SkyPiles Medallion members. I am a new customer of United's after being a 2 year Silver Medallion member (flew exclusively on DL for the last 3 years). IMHO, it's obvious that the airlines who are drastically changing their programs are losing customers. The ones who are not are gaining customers.

Delta Flyertalkers are so excited about their plan they started this and 4 BILLION DL miles are signed up in protest:

www.SaveSkyMiles.com

(All credit card donations I will gladly pass on. )

United are simply giving away SOFT CURRENCY - i.e. miles in return for HARD CURRENCY - i.e. your greenbacks.

For a company in Chapter 11 that seems very smart to me.

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~ Glen ~ sipping bubbly from a UA 747-400 exit row 15 near you SOON!

This month's InsideFlyer magazine posed the theory that DL and CO had given away their elite status so much in recent years that their elite member size swelled and the mileage program couldn't support the benefits they were supposedly offering, particulary in terms of upgrades (when's the last time a CO silver got an upgrade on an EWR transcon?).

The theory goes on to say that the punitive program changes were designed to "thin the ranks" to get back to a point where the mileage program works.

I don't know. Maybe that's a spin. Personally, I think CO did this as a revenue generator (to depend on higher fares). Both theories could hold when examining why CO started HoKeY (which I'm still bitter about).

I just hope that UA and AA don't find themselves in the same boat (and especially not at the same time).

It seems like the newer staff hired at UA "gets it" in terms of how to make the Mileage Plus program exciting.

Someone out there surely knows more about this than I do, but AFAIK frequent flyer miles that can be redeemed for awards generate a balance sheet liability. I don't think upgrades do. Because UA is still trying to generate cash flow, trading cash for liabilities (albeit much lower liabilities than the cash geneated) can make sense. At the same time, these incentive programs and MP liberalizations generate good will that retain flyers and, perhaps, attract more from airlines cutting back. Seems like sound decision-making.