Some UNITED TRAVEL OPTIONS going away on March 2!!!

Discussion in 'United Airlines | MileagePlus' started by Lufthansa Flyer, Feb 14, 2012.  |  Print Topic

  1. Lufthansa Flyer
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    Lufthansa Flyer Gold Member

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    Haven't seen that news from UA until tonight.....

    My wife just forwarded an email to me she received from United stating that effective March 2, 2012 United will no longer be offering Premier Baggage or the Economy Plus annual purchase option. They will also stop selling United Club day passes as well.

    I have an image of the email posted on my blog if you would like to see it.
     
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  2. MSPeconomist
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    MSPeconomist Gold Member

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    I'm surprised that UA is no lnger willing to sell this stuff at any price. Maybe they plan to sell elite status instead?
     
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  3. genemk2

    genemk2 Gold Member

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    Well, you can probably buy United Club Day Passes, but it would be at the full $50 at the door, instead of the $39 online discount. And instead of the E+ Annual Option/Premier Baggage Annual Option, you would have to buy E+/Bags on each flight, which may translate into more revenue (i.e. more expensive)?
     
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  4. Lufthansa Flyer
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    Lufthansa Flyer Gold Member

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    Right, its the subscription to Y+ thats going away (at least in its current form). Its a good value for someone who can't quite get to 1p. I would think they'd keep the cash cows alive!
     
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  5. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    If I buy one-time passes now, how long are they valid?
     
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  6. TAHKUCT
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    TAHKUCT Gold Member

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    I bought 5 passes over a year ago and they were valid exactly for 12 months. I could not extend them what so ever and had few of them expired, :( It was to late to share them once I have realized that they have an expiration date.
     
  7. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    I guess, given that I still have three passes from Chase that came with my OnePass card that expire some time this year (I think), I'll probably pass.
     
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  8. AZjohn

    AZjohn Silver Member

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    WOW... This sounds so unlike our newUA :confused:
    Wonder what was behind this (not charging for something)???
     
  9. genemk2

    genemk2 Gold Member

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    Maybe they think that they will make more $ when the people that would have bought the yearly option ($500 per year) opt instead to buy a few one-at-a-time E+ upgrades ($50 for transcon, $120 for TPAC, $100 for TATL). Or maybe they'll roll something else out later on.

    Of course, this is just me speculating. Worth about as much as the website real-estate it's displayed on.
     
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  10. Seacarl
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    Seacarl Gold Member

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    I guess it means that the United website is going away and United-only programs are going away.

    I wouldn't be surprised to see some of these packages come back on the Continental side. I suppose it could be tied to (or bundled with) the credit cards. But I'd expect that these annual subscriptions should be profitable. Ancillary revenue upfront plus an incentive to book UA over SWA even at a higher fare...
     
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  11. EWR764
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    EWR764 Silver Member

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    Perhaps it's a ploy to push people to the credit cards. A branded CC is likely more profitable than selling the options on a standalone basis.
     
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  12. Silver Springer

    Silver Springer Gold Member

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    Boy is United promoting the Explorer Card. When you go through O'Hare it is on the walls, escalators and everywhere you look....
     
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  13. Wandering Aramean
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    Wandering Aramean Gold Member

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    I have to wonder about this. The annual fee on the CC is much lower than the annual fee on the Options pieces. And they have to split the annual feel with Chase in some manner. How are they possibly making more that way??
     
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  14. genemk2

    genemk2 Gold Member

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    Doesn't Chase have to buy miles from United that eventually get given to the cardholders?
     
  15. one year from date of purchase
     
  16. can buy Priority club & get into most clubs for base price of membership -now $48,00 for 15 months than 10 times
    any club for $27.00 each time.
     
  17. Wandering Aramean
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    Wandering Aramean Gold Member

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    Yes, but at a much lower price point, I'd bet. Plus there is no guarantee that the customer is going to use the card for charges so there is no guarantee of the income while the Options sales are straight cash to UA.
     
  18. genemk2

    genemk2 Gold Member

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    Yeah, maybe we're all reading too much into this, and it's just because of the IT switch that they pulled the plug, until they find a way to resell or sell similar product on the new system?
     
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  19. Seacarl
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    Seacarl Gold Member

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    Plus sCO doesn't have Economy Plus on most of their fleet yet. Right now when you buy it, it's only on sUA.

    Profitability of credit card customers is probably measured across an average customer base with earnings from merchant fees and interest charges. Perhaps those are shared in a manner that makes the customer valuable to UA for much more than the annual credit card fee. Also I expect that while airlines may sell miles for 2c each, they may treat the expense as much much lower since miles expire, saver awards are inventory managed, and customers may use them in inefficient ways

    Having said that, I find it hard to believe that it's not a great business model to charge $400 for a subscription to Economy Plus
     
  20. Tom
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    Tom Silver Member

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    The question as to the value of the average cc customer is to Chase (when you take into account the merchant fees they make off of all the transactions) is a good one, although when I think about the size of annual sign-up bonuses / first-year no annual fees, my guess is that the average must be fairly substantial. Then you have to get in to what the arrangement / split between Chase and UA is.

    All that said the "money straight into UA's pocket" seems like it would be more, but I'm not sure how surprised I would be if the CC wasn't far off.
     
  21. unavaca
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    unavaca Gold Member

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    I suspect this is just the end of the marketing names of the underlying products. The new UA will have new names for effectively the same things, sold through the CO marketing system that's hanging around.
     
  22. Wandering Aramean
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    Wandering Aramean Gold Member

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    Surely the CC companies aren't paying that much though. The common wisdom suggests that CC companies are buying the points at a fraction of a penny each. Even if it is a relatively large fraction of a penny it is still relatively less money to UA than the same customer just buying the Options outright.
    I would be quite surprised if the average CC customer generated $500 annually into UA versus the direct path. At a penny/point (which I think is high but it makes the math easy) that's $25K in charges the first year (assumes a 25K sign-up bonus) and $50K in charges in future years.
     
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  23. EWR764
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    EWR764 Silver Member

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    I have to believe there is a deeper sharing arrangement between Chase and UA that goes beyond splitting the annual fee and the bulk purchase of miles.

    E+ is on nearly 100 sCO birds at the moment, with more ships being converted every day.
     
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  24. desamo

    desamo Gold Member

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    Frankly, I'd buy them on eBay -- they're given out with the Chase credit card, so you can find them at a fraction of United's price. Unlike the US Airways ones, the cardholder's name's not imprinted.
     
  25. Seacarl
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    Seacarl Gold Member

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    Right, but they don't have the inventory to sell Y+ annual memberships until they are close to done. It's one thing to tell an Elite that it's a free benefit available on select aircraft. It's another to sell Y+ for cash, even membership, without inviting trouble whether from regulators or lawyers.
     
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