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-   -   2011 Mileage Plus and OnePass elite program developments (https://www.flyertalk.com/forum/united-mileage-plus-pre-merger/1148667-2011-mileage-plus-onepass-elite-program-developments.html)

JT_BOS Nov 17, 2010 1:13 pm


Originally Posted by airzim (Post 15173943)
Sorry I disagree. Offering someone a $79 upsell (again assuming all Elites have been accommodated) frees up a seat in coach which allows you to accommodate another passenger on the plane. The alternative was either upgrade someone for free, or have the First seat go empty and spill the revenue. Trust me, the airline is not going to let a seat go empty if it has the opportunity to sell it.

I can tell you there are people who claim upsell can happen before all elite upgrades have been processed. I am one of them. I have seen something that convinced me.

Also, a $79 upsell cheapens the F product, doesn't it? Why would anyone pays for much higher fares, if/when there is a good chance of getting the upsell at $79?

MikeORD Nov 17, 2010 1:16 pm

Real elites
 

Originally Posted by LarkSFO (Post 15157568)
I anticipate these changes being truly, really beneficial to UA's real elites: the people that spend money and add to UA's bottom line.

So, I guess my 100 segments a year out of ORD don't make me a "real elite"? On the average, elite travelers based out of SFO, LAX, and others in the West will earn many more EQM for their domestic ticket, while taking more out of that bottom line, than the average traveler based out of most other cities. In simple terms, most places are pretty far away from SFO when compared with other cities of origin. Assuming any destination is fair game for me on any given week, a lot of those places are less than 1,000 EQM from ORD and not usually any cheaper than they would be from the West Coast.

E+ was starting to look alluring, agian, with all the CRJ's and EMB's I've found myself on lately, but 120 EQS is a bridge too far. And with many last-minute tickets on elite-rich flights, I haven't had much luck with E+, anyway. As a current 2P and PLT, I'll be making a run at EXP, in the coming year.

AAir_head Nov 17, 2010 1:20 pm


Originally Posted by JT_BOS (Post 15175038)
I can tell you there are people who claim upsell can happen before all elite upgrades have been processed. I am one of them. I have seen something that convinced me.

Also, a $79 upsell cheapens the F product, doesn't it? Why would anyone pays for much higher fares, if/when there is a good chance of getting the upsell at $79?

Agreed on both points. As a once (and future) 1P, I have and will take the upsell if it compares favorably to what it would cost if I had bought e-500s and rolled the dice on clearing from the upgrade waitlist. I know it's UDU now and e-500s are no more, but if it's important to me to be in F on some particular flight the logic still holds (for domestic, anyway).

cheers!

UA-NYC Nov 17, 2010 1:22 pm


Originally Posted by Vermando (Post 15174799)
It's an unprofitable industry whose major players continually go bankrupt. I don't think their track record and inane to their rationality appeals makes them immune from criticism from their customers.

Substantively, your analysis is wrong for the reasons everyone here is giving. The important metric is not maximizing the revenue for every flight or seat, but the profit per customer.

If a customer will steer tens of thousands of dollars of high margin business to you instead of your competitor (because someone else is paying for it) in exchange for flying him and his wife first class domestically a few times a year, you'd be stupid to sell the domestic F seats to someone else for an extra $50. Or at least, you'd need to be sure you're calculating your lost margin on the other flights in making your comparison.

Bottom-line - a per customer profitability view is superior to a per flight or per seat view. CO has moved recently to the latter, and it is now pulling UA with it. FFers are sticky enough in their loyalty that in the short-term this will likely be profitable; the long-run effects are less certain, and we're certainly in our right to indicate what its effect on our buying patterns will be.

+1 - couldn't have put it any better myself. Keep selling $79 upgrades out from under the feet of elites (or even just because you can) and before you know it, you'll have a lot fewer loyal flyers

mrswirl Nov 17, 2010 1:22 pm


Originally Posted by HeadInTheClouds (Post 15172554)
Honestly, this has to be one of the easiest calculations for UA to make. I think simply by the fact that they made this change, it's easy to conclude that segment qualifiers generate less cash on balance. The total average revenue of those at 100 segments is simply less than the total average revenue of those at 100,000 miles, probably considerably so. If it weren't, this change wouldn't have been considered.

I certainly understand folks being upset if in that range, but arguing the math here seems to be searching for outlying examples to disprove a very simple calculation that's already been made based on actual figures. And of course, there will always be some examples of high revenue segment flyers who are dinged here - unfortunately, no system can possibly be perfect.


I think you're math is off here. Nobody knows what UA's profit margin is for any given flight- all we can consider in order to make a valid comparison is revenue generated.

Let's consider the following hypothetical:
An international flyer who takes 5 trips a year LGA-SIN. That's roughly 100K EQMs. Say the average economy fare is $2000*. Total revenue collected then would be $10K.

Now consider a domestic segment flyer who takes 50 round trips which equals exactly 100 EQS. His average economy fare is $500*. Total revenue would be $25K.

Given these two scenarios, the EQS flyer generates $15K MORE revenue but under the new rules is now considered "less elite" than the EQM flyer.

I simply don't agree that these are "outlier" examples either. My 2010 spend for 104 segments is just north of $20K and now I'm being asked to fly 20% more next year to achieve the same status. That's just not fair IMHO.


*these numbers are approximate but in my experience constitutes a fairly accurate representation of fare prices.

violist Nov 17, 2010 1:35 pm


My speculation is that since most of the shorter segments
are UX (and therefore operated by companies that UA
subcontracts to), that the profit margins for UA are much
smaller on these flights.
I can't see that. Longhauls appear to me to be way less
profitable than short hops. I don't think my numbers are
extreme, and I pay a minimum of 20c a mile on my shorthaul
travels in coach. And I can't see that UA would be ceding
its IAD-BOS and IAD-NYC business to UX if it weren't
cost-effective to do so.


I'm sorry, but now that UDU exist, aren't CR1's becoming
useless?
Not at all. They represent a way for 1K/GS to be upgraded
reliably on elite-heavy and PS routes, at their option
(assuming that they continue to work - my last two CR1s didn't
work, in that UDU was available to the end, and the instruments
weren't returned afterward). They allow family and friends to
be upgraded on other PNRs than the owners'.

When I signed on to Glenn Must Go, this wasn't what I hoped for,
even though I'm not suffering so badly as some of these folks.

SFOSpiff Nov 17, 2010 1:39 pm


Originally Posted by dliesse (Post 15174726)
People say airline seats have become commodities. THEY DON'T HAVE TO BE! If one airline would actually give a reason for people to prefer it, people would. But it seems that they all just want to offer a flying Greyhound service than a product they can be proud of.

Unfortunately, this is what most people want. They care about price - nothing more. To some extent I can see their point; I do prefer comfortable air travel, even if I have to pay my own money for C or F, but I mostly care about a good seat. IFE comes second, and I don't care about the free booze.

Most of the travelling public only cares about the fares. Loyalty, freebies, etc. are meaningless if you have to pay $100 more per flight.

I wish it was the case that an airline could survive on product and loyalty alone, but look at the failure of MAXJet, SilverJet, EOS, etc. There's just not enough of a market for people who will pay for a reliably better product. I'm surprised that BA's OpenSkies has survived this long but it's probably its ties to BA, via Executive Club, that are helping it along.


Originally Posted by UA-NYC (Post 15175180)
+1 - couldn't have put it any better myself. Keep selling $79 upgrades out from under the feet of elites (or even just because you can) and before you know it, you'll have a lot fewer loyal flyers

Which means that a higher percentage of occupied F seats will be from $79 copays, and viola - higher profits. We lost our elites? Ah, no big deal, there's other suckers.

I can't believe that airlines are this short-sighted. You know what would be a higher profit margin in the short term? Sell a bunch of tickets and when the passengers congregate in the boarding area, beat them up, sell their stuff, and rent out the plane to a sports team. Lots of profit there but it won't last long.

SAT Lawyer Nov 17, 2010 2:17 pm

CR-1s appear to be a sacred cow to most 1Ks. I'd imagine that just about all of them are getting more domestic upgrades per year under the UDU system than they were getting prior to its institution. In a way, it's a shame that UA can't offer 1Ks the option of opting out of the UDU system altogether in exchange for being provided with eight CR-1s. I bet next to none of them would sacrifice unlimited theoretical domestic upgrades for a net of four one-way confirmed ones, notwithstanding how much tribute is paid to CR-1s around these parts.

magiciansampras Nov 17, 2010 2:23 pm


Originally Posted by SAT Lawyer (Post 15175946)
CR-1s appear to be a sacred cow to most 1Ks. I'd imagine that just about all of them are getting more domestic upgrades per year under the UDU system than they were getting prior to its institution. In a way, it's a shame that UA can't offer 1Ks the option of opting out of the UDU system altogether in exchange for being provided with eight CR-1s. I bet next to none of them would sacrifice unlimited theoretical domestic upgrades for a net of four one-way confirmed ones, notwithstanding how much tribute is paid to CR-1s around these parts.

Not on ps flights.

pigx5 Nov 17, 2010 2:28 pm


Originally Posted by SAT Lawyer (Post 15175946)
CR-1s appear to be a sacred cow to most 1Ks. I'd imagine that just about all of them are getting more domestic upgrades per year under the UDU system than they were getting prior to its institution. In a way, it's a shame that UA can't offer 1Ks the option of opting out of the UDU system altogether in exchange for being provided with eight CR-1s. I bet next to none of them would sacrifice unlimited theoretical domestic upgrades for a net of four one-way confirmed ones, notwithstanding how much tribute is paid to CR-1s around these parts.


CR-1 is just a funeral bell which is the beginning of the elegy of the old United
1K benefits.
You will see more in the future.

SFOSpiff Nov 17, 2010 2:30 pm


Originally Posted by SAT Lawyer (Post 15175946)
CR-1s appear to be a sacred cow to most 1Ks. I'd imagine that just about all of them are getting more domestic upgrades per year under the UDU system than they were getting prior to its institution. In a way, it's a shame that UA can't offer 1Ks the option of opting out of the UDU system altogether in exchange for being provided with eight CR-1s. I bet next to none of them would sacrifice unlimited theoretical domestic upgrades for a net of four one-way confirmed ones, notwithstanding how much tribute is paid to CR-1s around these parts.

I wasn't a 1K when UDU was introduced, but I imagine I would have been less upset then than I am now. At least when UA tried to do away with CR-1's last year, it was because UDU was (mostly) taking its place.

But in this case, I've been given nothing to replace it. I could have in theory earned 8 CR-1's next year by flying as little as 40k miles. Now I need to fly 75k to earn 2. That's a big loss. What hurts more is a) them calling it an "improved benefit" and b) knowing there is certainly more "improvement" to come.

I will admit there is an advantage that I only need EQM now, which I can earn on other carriers. I don't need to fly UA BIS miles until I have CR-1's in hand. And you can earn extra EQM by booking Y or higher, etc.

unavaca Nov 17, 2010 2:32 pm


Originally Posted by SFOSpiff (Post 15176131)
But in this case, I've been given nothing to replace it. I could have in theory earned 8 CR-1's next year by flying as little as 40k miles. Now I need to fly 75k to earn 2. That's a big loss.

That's a red herring. Sure, you can earn them for 40k, but even under the current system, you're not going to earn 8 more next year, as you'll have lost 1K status. Even if you were doing 40k via EQS, you're still 20 EQS short.

SFOSpiff Nov 17, 2010 2:38 pm


Originally Posted by unavaca (Post 15176170)
That's a red herring. Sure, you can earn them for 40k, but even under the current system, you're not going to earn 8 more next year, as you'll have lost 1K status. Even if you were doing 40k via EQS, you're still 20 EQS short.

No, I'd have 1K status. I just earned 1K last month and will keep it through all of 2011.

Under the 2010 rules, I'd earn 8 CR-1's in 2011 by flying 10k miles per quarter, or 40k total. I may or may not fly enough in 2011 to keep my 1K status for 2012 but that's not relevant.

Under the newly announced rules, I have to fly at least 75k miles in 2011 before I earn any CR-1's at all. That's a big loss.

as219 Nov 17, 2010 2:39 pm


Originally Posted by SAT Lawyer (Post 15175946)
CR-1s appear to be a sacred cow to most 1Ks. I'd imagine that just about all of them are getting more domestic upgrades per year under the UDU system than they were getting prior to its institution. In a way, it's a shame that UA can't offer 1Ks the option of opting out of the UDU system altogether in exchange for being provided with eight CR-1s. I bet next to none of them would sacrifice unlimited theoretical domestic upgrades for a net of four one-way confirmed ones, notwithstanding how much tribute is paid to CR-1s around these parts.

What you're suggesting isn't quite a fair deal, because pre-UDU there were also e500s. Yes, frankly, I would prefer e500s + 8 CR-1s to UDU with 4 CR-1s. I would rather be ugpraded on flights that matter as opposed to getting upgraded on every short hop or midcon that doesn't matter to me.

But this is irrelevant because the past isn't coming back. I get it, people like UDU. CR-1s are key for 1Ks, though, for two reasons. First, they allow us to upgrade friends and family. Second, they're the only (non-RDM) way to ugprade p.s. If UA were willing to put p.s. under the UDU regime, the loss of the CR-1s wouldn't sting as much; by letting 1Ks keep CR-1s, it made the exemption of p.s. from UDU more palatable. But we're now looking at the worst of both worlds, which is the problem.

I can certainly understand why CR-1s don't matter to some people based on their flying patterns, but the same could be said of SWUs by purely-domestic 1Ks.

I think much of the strong reaction on this board to these announced changes is because it's the first time we're learning anything of substance about how UACO is going to treat its elites going forward. I can't tell you how many times I've heard Smisek say in that on board merger video, that they'll be announcing changes in the future and "I think you're going to like them." So when the very first changes we learn about are a significant reduction in benefits, it leads one to wonder what other "enhancements" are coming down the pike. :td:

uastarflyer Nov 17, 2010 2:39 pm


Originally Posted by SAT Lawyer (Post 15175946)
CR-1s appear to be a sacred cow to most 1Ks. I'd imagine that just about all of them are getting more domestic upgrades per year under the UDU system than they were getting prior to its institution. In a way, it's a shame that UA can't offer 1Ks the option of opting out of the UDU system altogether in exchange for being provided with eight CR-1s. I bet next to none of them would sacrifice unlimited theoretical domestic upgrades for a net of four one-way confirmed ones, notwithstanding how much tribute is paid to CR-1s around these parts.

I'd opt out in a heartbeat for 8 CR1 and the oppty to earn up to 8 more per the current criteria.

I never liked UDU to begin with. I much preferred the 500-miler system.


Originally Posted by SFOSpiff
No, I'd have 1K status. I just earned 1K last month and will keep it through all of 2011.

Under the 2010 rules, I'd earn 8 CR-1's in 2011 by flying 10k miles per quarter, or 40k total. I may or may not fly enough in 2011 to keep my 1K status for 2012 but that's not relevant.

Under the newly announced rules, I have to fly at least 75k miles in 2011 before I earn any CR-1's at all. That's a big loss.

Exactly. +1

Tangible example. I'm flying a transpac in Jan and Hawaii in April. Now I won't have additional 2 CR1s to use for Hawaii. Up until 3 days ago I was planning on being able to use them.


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