Go Back  FlyerTalk Forums > Miles&Points > Discontinued Programs/Partners > US Airways | Dividend Miles (Pre-Consolidation with American Airlines)
Reload this Page >

US/AA merger- MASTER DISCUSSION THREAD/incl 'when will US leave STAR'

View Poll Results: Is an American Airlines/US Airways merger good for the traveling public?
Yes
84
28.19%
No
214
71.81%
Voters: 298. You may not vote on this poll

Old Nov 12, 2013, 2:24 pm
FlyerTalk Forums Expert How-Tos and Guides
Last edit by: aztimm
Note:

There is an existing thread in the AA forum that may be useful to US and AA Flyertalkers:
US-AA Merger: Just the Facts thread

As facts become posted, that should be the place to look.

Merger discussion, speculation, and other questions can be directed here, or the similar thread in the AA forum:
MERGER: US and AA 9 Dec 2013 and implications for AA flyers (new)

AA - US Merger Agreement / Announcement / DOJ Action Discussion (consolidated, and now closed to new posts)
Print Wikipost

US/AA merger- MASTER DISCUSSION THREAD/incl 'when will US leave STAR'

 
Old Nov 17, 2013, 5:51 pm
  #2251  
 
Join Date: Apr 2006
Location: High Point, NC
Programs: None
Posts: 9,171
Originally Posted by McFlyPHL
Frankly, the total distance/segments flown really don't matter. What matters is the absolute margin from a given passenger over a given time period (defined by the airline as a year).
You are correct that margin would be the best standard from US' standpoint, but whether miles, segments, or spend none of those provides margin - revenue from vs cost of a passenger. It's in the cost of a passenger that miles/segments matters. The best method of measuring cost unfortunately has the cost vary across every flight every day so cost per trip vs revenue per trip is the next best, using averages for trip cost and revenue per trip.

But miles/segments absolutely do matter on the cost side of the ledger. With inaccurate cost input, margin output is meaningless nonsense. The more miles/segments flown for a given spend, the greater the cost in general (whether mainline or Express is an important distinction).

There's just no way to argue that miles/segments don't matter under the current scheme.

Jim
BoeingBoy is offline  
Old Nov 17, 2013, 6:39 pm
  #2252  
FlyerTalk Evangelist
 
Join Date: Oct 2011
Location: Anywhere I need to be.
Programs: OW Emerald, *A Gold, NEXUS, GE, ABTC/APEC, South Korea SES, eIACS, PP, Hyatt Diamond
Posts: 16,046
Originally Posted by BoeingBoy
You said the same as before - qualify on total annual spend - segments/miles don't matter. Which is precisely my point - miles/segments do matter. A low fare purchaser could have more spend than a premium purchaser who doesn't fly as many segments/miles while costing US more. That isn't the behavior US necessarily wants to reward. They'd prefer the high spend few segments/miles customer - spend as little as possible on that customer (few segments/miles) while taking in the most revenue. And that's where trip spend comes in - how much does the customer spend per trip vs how much is spent on that customer per trip. From US' perspective the flyer with the biggest difference is the best customer.



No losers means ignoring spend per trip - it's just a different twist on what exists now. $15k for 100k miles/120 segments is easy to accomplish - $125/segment is all it takes. It doesn't weed out the low fare/high miles/segments flyer who may be a barely above breakeven customer.

Jim
Barely *above* breakeven means profitable...
AA_EXP09 is offline  
Old Nov 17, 2013, 6:53 pm
  #2253  
 
Join Date: Sep 2009
Location: PDX
Programs: AA Plat + SPG Plat
Posts: 235
Thumbs up

Originally Posted by AA_EXP09
Barely *above* breakeven means profitable...
+1
coastalguy is offline  
Old Nov 17, 2013, 7:13 pm
  #2254  
Suspended
 
Join Date: Mar 2012
Programs: US CP ; LH FTL ; *G
Posts: 1,630
Originally Posted by McFlyPHL
. . . "spend runs" . . .
US already has it - it's call BuyUp.

UA also has it - UA's version is called premier/elite accelerator - buy PQMs at 10-20cpm.
burlax is offline  
Old Nov 17, 2013, 8:09 pm
  #2255  
 
Join Date: Apr 2006
Location: High Point, NC
Programs: None
Posts: 9,171
Originally Posted by AA_EXP09
Barely *above* breakeven means profitable...
Absolutely but more profitable is better than barely profitable, in least in corporate boardrooms and wall st.

Jim
BoeingBoy is offline  
Old Nov 17, 2013, 9:30 pm
  #2256  
 
Join Date: Dec 2008
Location: WAS, LAX
Programs: AS 100K
Posts: 1,330
Originally Posted by Fanjet
Isn't that what the new "Delta 360" program is? And they really aren't that unpublished. Only the details on what the exact qualifiers are for that level. However, at UA, someone with 4 MM status becomes lifetime GS. The benefits are pretty much clear though.
Very interesting - I was not aware! Thanks for the info.
flyingmusicianlax is offline  
Old Nov 17, 2013, 10:07 pm
  #2257  
 
Join Date: Mar 2012
Location: Miami BCH., FLorida
Programs: AA:EXP, GLD:A.Argen., Etihad; Turk SIL:UA, VS; HOT.GLD:ClubC, Loews, SPG; PL:Ritz, Hil, IHG, BtW., R
Posts: 261
I am sure AA with giv eyou 100K exectuive platinum status, which has some great benefits (8 Systemwide upgrades from any published fare, leaves UA in the dust) + most of the people that are both UA 100K and AA EXP note that they have a mych higher ratier (something like 76 % versus 95% upgrade success.) I have noticed this many times. They will give you EXP the first year and then you will have to see if you like it, but having 8 SWU's can make a mileage run very comfortable (you can go 2 continents one way with only one SWU, versus 2 if you used miles & $ and were not top tier). It's a very solid program. FOr your companions, the 500 mile stickers NEVER expire, as long as you are some form of elite with them (UA used to have a one year expiration, I don't know what it is theses days as I left them or any thought of really using them so long ago many things have probably changed. I would sugest mild level in *G and do a cople mileage runs using the SWU's to do it all in buiness (oten quoted is LHR-LAX-China and raturn for 2 SWU and a 20K miles) or FRA-DFW-GRU and return for again 20+ miles and never have not gotten an upgrade on both 5,000 mile + segment for one SWU. It's pretty generous I think. A ticket like that properly planned is about 1,000 but if you are like me it works out to more like 2,000 as you need to buy a connecting MIA-DFW-FRA to get it started and ended (even that is a nice 12K bumo.) You moight find you only need to do one mileage run (back to back tickets) to have *AG and OW emerald. Life has not ended as you, it just takes a little accomidating and adjusting to the new system. SOunds to me like you could leverage the Emerage Exp. to 1K *AG and have the best of both worlds, something I simply can't afford as this is more a hobby than a business for me.
rodsren is offline  
Old Nov 17, 2013, 11:17 pm
  #2258  
Moderator: American AAdvantage & Marriott Bonvoy
 
Join Date: Oct 2002
Location: PHX
Programs: American ExPlat; Marriott/SPG Lifetime Plat; Hyatt Globalist
Posts: 8,114
Originally Posted by discoseal
I'm thinking about buying a US ticket on 01/09. Any chance they'd still be in *A by then?
Well, the answer would vary, depending on the date convention you're using. (Your profile doesn't say where you're from, so it's not easy to deduce.)

01/09 = Jan. 9 (which is what I would assume as an American) -- Definitely still in Star Alliance.

01/09 = Sept. 1 -- Highly, highly unlikely US is still in Star Alliance.
AZ Travels the World is offline  
Old Nov 18, 2013, 1:19 am
  #2259  
 
Join Date: Apr 2004
Location: BOS
Programs: Marriott LTG, HHonors Diamond, Nat'l Exec
Posts: 3,580
Originally Posted by BoeingBoy
I've said it several times over the last several years - eventually the legacies will reward the profitability of a passenger. The systems probably can't do it now, but whether miles/segment or spend both are just very rough proxies for profitability.
You could probably just correlate fare class to margin. The cheapest fare classes just would never be offered on non-competitive, non-stop flights. AA already *sort* of has that kind of system in place with EQPs, though the way they have it structured is a bit bizarre.

They'll have to walk a bit of a perceptual tightrope, though; I think margin-based systems can be palatable if they're cast as "fast tracks" or "accelerators," but if they start to look like "partial credit," there's going to be backlash.

As others have mentioned, a huge number of business travelers are required to book the lowest available fare; airlines create a loyalty issue when they offer low fares but then tell those buying them that they're not good enough to earn miles or elite status. It reads as the airline punishing a loyal customer for something entirely outside the customer's control. In a sense, offering deep discount fares to business travelers works against the interests of both the airline and the passenger; the latter usually isn't too concerned about what the precise fare is, but needs to book the cheapest one offered.

Last edited by dtremit; Nov 18, 2013 at 1:30 am
dtremit is offline  
Old Nov 18, 2013, 7:08 am
  #2260  
 
Join Date: Feb 2006
Location: Boston, MA
Programs: US CP; Starwood Platinum
Posts: 74
Originally Posted by dtremit
You could probably just correlate fare class to margin. The cheapest fare classes just would never be offered on non-competitive, non-stop flights. AA already *sort* of has that kind of system in place with EQPs, though the way they have it structured is a bit bizarre.

They'll have to walk a bit of a perceptual tightrope, though; I think margin-based systems can be palatable if they're cast as "fast tracks" or "accelerators," but if they start to look like "partial credit," there's going to be backlash.

As others have mentioned, a huge number of business travelers are required to book the lowest available fare; airlines create a loyalty issue when they offer low fares but then tell those buying them that they're not good enough to earn miles or elite status. It reads as the airline punishing a loyal customer for something entirely outside the customer's control. In a sense, offering deep discount fares to business travelers works against the interests of both the airline and the passenger; the latter usually isn't too concerned about what the precise fare is, but needs to book the cheapest one offered.
Go to sleep, D**. Flyertalk only keeps you awake.
02143 is offline  
Old Nov 18, 2013, 7:37 am
  #2261  
 
Join Date: Jan 2005
Location: Vancouver, Canada
Programs: United MileagePlus Silver, Nexus, Global Entry
Posts: 8,798
US - Things I'll miss...

Last week I took my last flight on US Airways. As we taxied to the gate in YVR and I deleted the US app from my phone I thought about the things I'll miss -

- Star Alliance status miles at good fares
- The PHX hub - Nice to able to avoid SFO, IAH & ORD
- The club at DCA
- Staff that had gotten noticeably friendlier over the past couple of years
- Buy-on-board duty-free on flights to Canada
- Being able to check arriving / connecting flight status online onboard for free

So long US, I'll miss ya...

Last edited by gglave; Nov 18, 2013 at 7:45 am
gglave is offline  
Old Nov 18, 2013, 8:19 am
  #2262  
 
Join Date: Apr 2006
Location: High Point, NC
Programs: None
Posts: 9,171
dtremit,

You're right to a degree - fare class could be a rough proxy for margin or profitability. Fare classes are something that I don't get involved with but only read about. On monopoly/short-haul routes are there different fare classes offered or do the same fare classes just provide a larger margin or neither? If the first is used so that a given fare class provides the same margin for any flight it would work, but if the latter fare class become less of an indicator of margin. The legacy carriers certainly have enough fare classes (presumably just the way the industry developed) but WN somehow finds a way to be profitable (35-40 years straight) with only 4 fare classes if one disregards sale/introductory fares.

As you know, quite a few non-U.S. carriers give reduced/no miles for lower fare classes. Presumably that's to provide a rough correlation between fare class and margin. And presumably FFs that frequent those carriers have adapted to the loosely margin-based rewarding for flights. It could be a difference in corporate culture where companies outside the U.S. allow their people to purchase higher fare classes.

Jim
BoeingBoy is offline  
Old Nov 18, 2013, 8:48 am
  #2263  
 
Join Date: Apr 2006
Location: High Point, NC
Programs: None
Posts: 9,171
Well, you won't have to miss all that right off the bat if ever:

US - it will stay as a subsidiary of AMR until a single ops cert is issued by the FAA, most likely a year or more. But there will be changes as US/AA mesh operations before integration.

PHX hub - retained for minimum of 3 years per the agreement with DOJ.

DCA Club - probably kept until gates are all together though likely to be AA club as long as 2 concourses are in use.

Staff - most will still be around although some may be working at a different station.

Free flight status onboard - I'd be surprised if AA doesn't already have that but Go-Go is certain to allow access to AA web site for free.

Jim
BoeingBoy is offline  
Old Nov 18, 2013, 9:06 am
  #2264  
 
Join Date: Apr 2004
Location: BOS
Programs: Marriott LTG, HHonors Diamond, Nat'l Exec
Posts: 3,580
BoeingBoy -- OP is an AC elite, so barring some unforeseen developments, AA isn't likely to be of much help to him

gglave -- at least you'll miss the merger craziness! Hopefully UA will treat you well, too -- DEN is a nice alternative to PHX, at least.
dtremit is offline  
Old Nov 18, 2013, 9:13 am
  #2265  
 
Join Date: Apr 2006
Location: High Point, NC
Programs: None
Posts: 9,171
Thanks dtremit.

Jim
BoeingBoy is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.