23 Responses

  1. Kyle
    Kyle at |

    Well, I found the comment offensive. I don’t think it’s professional or appropriate to insult your customers in that manner.

    That being said, I wonder what they mean by “greater elite differentiation.”

    All I’ve seen post-3/3 is more equalizing among the elites.. “All elites are equal” mentality.

    Have they done anything to greater differentiate the elites?

  2. Carl
    Carl at |

    I am not offended by his comments, he just verbalized their actions which seemed pretty transparent in terms of their strategy.

    But i concur with Gary’s argument that from a business perspective, loyalty programs drive business at the margins. It will take some persuasion for me to really believe this current strategy actually accomplishes that. Ultimately, i believe it will drive more marginal revenue to their competitors.

  3. Biggles209
    Biggles209 at |

    I’m curious: low revenue and GS?

  4. Kyle
    Kyle at |

    Once he isn’t a GS maybe he’ll get the memo that the new airline stinks.

  5. Carl
    Carl at |

    Regarding Global Services, the way i read the UA upgrade confirmation priority, even they are below a Silver who is on a Y/B fare. So I would be curious about how this is working in practice for them as well.

  6. Michael R.
    Michael R. at |

    @Carl – GS trumps all. The Y/B fare affects 1Ks and below.

  7. Carl
    Carl at |

    @Michael – From their website, I would think GS would be in #3 group below, assuming a non Y/B/M fare or upgrade instrument:

    The following is the order of priority, within five days, on flights that are eligible for Complimentary Premier Upgrades:

    1. Premier members on eligible Y- and B-class fares, as well as Premier 1K members on M-class fares: Instant upgrades that weren’t confirmed in advance, sorted by fare class, then Premier status

    2. All travelers on waitlisted Global Premier Upgrades, Regional Premier Upgrades, and MileagePlus Upgrade Awards: Sorted by Premier status of the redeeming account, then fare class and time of request

    3. All remaining Premier members using Complimentary Premier Upgrades**: Sorted by Premier status, then fare class and award travel***

  8. Golfingboy
    Golfingboy at |

    @Michael R. – This is based on my understanding when I talked with some GSes and how the program works. I am not a GS and I have never seen how GS upgrades work in person, so I can be flat out wrong.

    I believe GS need PN space for their CPU to clear inside the window, so they do trump all elites on B fare and 1Ks on M fare once inside 120 hours. However, elites on Y fare clears into JN, which has more inventory since it will almost always match the # of F inventory left, while PN is a little more restrictive.

    In that sense, elites on Y fares will trump GS. Remember, Y fares cost more than discounted F fares, so when someone actually pays a full Y ticket it makes sense to give them top priority. Government fare is an entirely different issue and I do agree with many that the instant upgrade scheme for YCA fares should be eliminated.

    Bottom line, elites on Y fare books directly into any available F seat, B/M fares are capacity controlled and books into PN, so those trying to upgrade into JN inventory will have priority over those trying to upgrade into PN inventory.

  9. Kyle
    Kyle at |

    Many GS’s that I’ve talked to have said that they are frequently not getting upgrades FWIW…

  10. Noah Kimmel
    Noah Kimmel at |

    I understand moving from miles flown to revenue…After all, how do you reward the person that took one round trip to china more than the person who goes EWR-IAD every week for 3 months…

    But, what is the cost vs benefit? Is it worth alienating a vocal few who get more than they may deserve, but are also loyal and share your brand with their peers?

    this might be useful: http://ourpax.com/uncategorized/ffps-stop-rewarding-the-wrong-customer-get-the-experience-right/

  11. Carl
    Carl at |

    @Noah – yeah, i like that chart, which basically makes others’ point that a loyalty program should not necessarily nurture high yield captive customers, but low yield self-paying customers who drive revenue at the margins. The equilibrium point is probably somewhere in the middle.

    I would also argue that even those passengers that achieve elite status thru bumps and similar type discounts are extremely valuable. It allows the airline to oversell even more seats at even higher margins, and reduces compensation for involuntarily denied boarding and its associated costs.

  12. Levi Flight
    Levi Flight at |

    I have heard a number of people argue recently that the CEO should just think about the bottom line and that’s all. I call bulls*^%. the better companies have why to they do something beyond making the moat money out of their customers. I buy from companies who are investment more than financially in their product. They live it. UA and CO, back in the day, cared about the customer, about their staff and about the value of being an airline. This seems to be lost. We now seem to be seeing an us (investor/ s. Management) against the rest. Often happens when bean counters take over a product focused company. Don’t see this as being good for the company in the long run.

  13. Carl
    Carl at |

    Thanks for your thoughts Seth and for clarifying the GS procedure. Do you see AA moving toward a Y/B upgrade ahead of EXP? Delta is similar to UA in that it upgrades Y fares for silver/gold/plat medallions ahead of discounted fares for Diamonds. Yet, it does not seem to draw near the scrutiny as UA. Curious to see where the industry is heading.

  14. Andrew
    Andrew at |

    Seth, despite your comments above about your perspective as Global Services, you still don’t seem to have addressed the issue I’m having trouble understanding: You state that you are a low-revenue, high volume customer…yet you have GS status (which implies to me that you aren’t low revenue at all)…how can you claim you fall into that low rev, high volume group with GS status?

  15. Kris Ziel
    Kris Ziel at |

    As a Premier Gold I find it surprising that GS aren’t getting upgrades. On my last trip, 5 of 7 upgrades came through.
    Short of GS and maybe 1K, I don’t get why there is complaining that people who pay to upgrade are in the front of the line. If you paid for a ticket in coach, you are entitled to nothing better. Allegedly premiers are unable to buy the upgrades to first, which is a problem, but putting paid in front of comped doesn’t seem unreasonable.

  16. Carl
    Carl at |

    Seth, you cite it as low revenue, high volume against the company. What about people who fly a wide variety of fare types, depending on how far in advance they are able to book, how certain they are in their plans, etc? I’d like to be loyal to the airline and treated well each time I fly, and not have each transaction evaluated separately. Hello, Mr. Carl, today you are high revenue and we will go out of our way for you. Tomorrow, Mr Carl, get at the end of the line, you’re a low value customer today. I am not my fare on each flight.

    You don’t earn my expensive tickets if you don’t treat me well when I travel on your best available fare.

    Also, and I don’t know how UA tracks this, but I get access to no corporate discount program, so while some companies (and the gov’t) may negotiate hefty discounts off of high fare classes, I may pay as much but fly in a lower fare class. I don’t know how they track this, but certainly in prioritization I am disadvantaged against flyers traveling on corporate discount fares.

  17. Taylor
    Taylor at |

    I understand United’s strategy and the idea that a high-volume pax isn’t necessarily a high-revenue pax.

    That said, I’m not sure if coming out and announcing it so bluntly is a good call. While it may not bother the high-earning pax, the ones that have status due to high-volume flying on discounted Y fares may feel a bit put off.

    So while this viewpoint makes sense from a strictly business standpoint, it’s probably not a good idea to alienate a part of your FF base, especially when they still may be feeling a bit raw from the merger itself.

  18. Beerman92
    Beerman92 at |

    United also apparently thinks that PassPlus Secure customers were over entitled. They reduced every benefit (except the club membership) and raised fares in the newest rollout of the program. If they don’t want these customers they should have just cancelled the program.

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