2011 Mileage Plus and OnePass elite program developments
#646




Join Date: Apr 2005
Location: BOS
Programs: AS Titanium, UA MM, (status from credit cards don't count)
Posts: 770
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.
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?
#647
Join Date: Aug 2010
Location: ORD
Programs: AA EXP, UA Silver, Marriott Plat, SPG Plat 100, National Exec Elite, Hertz PC, AmEx Plat
Posts: 68
Real elites
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.
#648



Join Date: Dec 2006
Location: Maryland Eastern Shore
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Posts: 1,094
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?
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?
cheers!
#649
FlyerTalk Evangelist




Join Date: Apr 2008
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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.
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.
#650
Join Date: Sep 2007
Location: Colorado
Programs: UA Gold 1MM, Marriott Gold
Posts: 1,158
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 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.
#651
In memoriam
Join Date: Mar 2000
Location: IAD, BOS, PVD
Programs: UA, US, AS, Marriott, Radisson, Hilton
Posts: 7,203
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.
are UX (and therefore operated by companies that UA
subcontracts to), that the profit margins for UA are much
smaller on these flights.
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?
useless?
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.
#652
Join Date: Sep 2010
Location: SJC
Programs: UA 1K
Posts: 1,628
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.
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.
Last edited by FlyinHawaiian; Nov 17, 2010 at 2:40 pm Reason: multi-qoute
#653
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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.
#654
A FlyerTalk Posting Legend
Join Date: Jul 2003
Location: NYC (formerly BOS/DCA)
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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.
#655




Join Date: Aug 2006
Location: US
Programs: AA/UA/DL
Posts: 2,821
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.
#656
Join Date: Sep 2010
Location: SJC
Programs: UA 1K
Posts: 1,628
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.
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.
#657




Join Date: Jun 2007
Location: YVR SFO
Programs: UA G
Posts: 4,868
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.
#658
Join Date: Sep 2010
Location: SJC
Programs: UA 1K
Posts: 1,628
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.
#659




Join Date: Jul 2005
Location: SAN
Programs: UA 1MM/1K, HH Diamond
Posts: 7,297
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.
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.
#660
A FlyerTalk Posting Legend




Join Date: Aug 2003
Programs: UA 1K 1MM (finally!), IHG AMB-Spire, HH Diamond
Posts: 62,525
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 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.
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.
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.

