United will be sobriety i___i friendly in Economy Class worldwide

Discussion in 'United Airlines | MileagePlus' started by HeathrowGuy, Dec 20, 2013.  |  Print Topic

  1. HeathrowGuy
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    HeathrowGuy Gold Member

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    United Airlines has never won a race to the bottom in its corporate lifetime. Customers in United's key markets typically enjoy greater competitive choices than captive passengers at other airlines, and thus good service has been a prominent feature in every successful time period of the United story.

    In this regard, Delta laughs every time United engages in a significant product degradation in an arrogant attempt to find an elusive financial stability. While Delta recently expanded complimentary alcoholic beverage offerings on longhaul flights, United defies the industry -- competitors and joint venture partners alike -- by removing complimentary beer and wine from Transpacific and intra-Asia flights effective January 1st.

    Marshal Jeff Jong Un is well advised to immediately change course away from this disgraceful path to permanent inferiority for what should be the world's leading airline.
     
  2. Gtitan
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    Gtitan Gold Member

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    I still hold out hope that UA will reintroduce TED. RARRRRRR TED doesn't like amenity cuts.
     
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  3. Golfingboy
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    Golfingboy Gold Member

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    $2 Billion is the goal?

    Pray tell, how does AS continue to be wildly profitable while serving free microbrew and wine on QX flights? Even WN with free bags?

    Cuts=loss in revenue
    *Differentiation=revenue potential

    UA clearly does not understand how the service industry works.

    *Keep in mind, differentiation is not always about offering a different product, but being the front-runner of such product differentiation. UA was the front runner with E+ and flat seats in Biz, DL was with Wifi, etc. It is about differentiating yourself when it matters and once you have the customer hooked, the customer will stay with you even if the competition catches up. However, when you start cutting the things that differentiated you, then you are shooting yourself in the foot most of the time, particularly when it is not just one or two cuts, but many cuts.
     
    Last edited: Dec 20, 2013
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  4. MX

    MX Gold Member

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  5. HeathrowGuy
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    HeathrowGuy Gold Member

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    New United basically is Ted, isnt it!? It sure feels half-assed in too many ways...
     
  6. chitownflyer
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    chitownflyer Silver Member

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    RAR Indeed! Remember, TEDDY LOVES YOU!
     
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  7. mht_flyer
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    mht_flyer Gold Member

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    It will be interesting to see what direction the new AA goes.... With DL or UA
     
  8. KenInEscazu

    KenInEscazu Gold Member

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    Reminds me of a country trying to tax its way to a balanced budget.
     
  9. brodyf

    brodyf Gold Member

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    You can make a pizza so cheap no one will eat it!
     
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  10. Misplaced Texan
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    Misplaced Texan Gold Member

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    That really is the question.

    On the one hand, Doug has a track record of dropping comps a far as possible.

    On the other hand, the decisions made so far seem to indicate a pmAA or higher service standard and he has always seemed like the kind of guy who is willing to do whatever it takes to maximize profits and so will probably be a lot more willing than Jefd to go up-market if there's a compelling profit argument to doing so.

    Sent from a place using a fruit thing.
     
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  11. mattsteg
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    mattsteg Gold Member

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    I don't think either of them are against maximizing profits...it's the question of what their vision of how to do so is.
     
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  12. LETTERBOY
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    LETTERBOY Gold Member

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    It all depends on what the #s tell him. If they say he can make the most money by going "up-market" he'll do that. If they say he can make the most money by cutting and burning, he'll do that, too. And he won't be afraid to jump from one path to the other if the numbers dictate.
     
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  13. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Really? It reminds me of a country trying to reach a balanced budget by cutting benefits and services.
     
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  14. radonc1951

    radonc1951 Gold Member

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    I think that the airline industry of today is no different than the steamship lines of the late 19th and early 20th century. Today, airlines have to compete for most passengers on price of the ticket alone. The cheapest fare wins. This corresponds to the 3rd class passengers (AKA steerage) on steamships who were looking to get across the seas at the least expense possible. Then you have your premium passengers who pay for business and first class on airlines. The airlines cannot throw enough amenities their way because they are paying a hefty premium for the privilege of travel. This corresponds to the First and Second Class passengers on the steamship, who had luxury berthing and dining facilities as well as other amenities not afforded the steerage class passenger (who in fact were restricted on where they could go in the boat itself).

    I am certain that in the steamship days, third class passengers could pay for certain amenities while traveling and upgrade their experience somewhat (although I doubt many did). In the same way, Y class passengers can upgrade their experience by paying for it, whether it be seating location or pitch, entertainment or food. And I suspect the gulf between what an F passenger gets over what a basic no-frills Y one receives will only widen over time.

    I just wonder when the "redistributionists" will start making this a political issue :eek::D
     
    Last edited: Dec 24, 2013
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  15. Misplaced Texan
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    Yeah, I didn't make that observation very well at all.

    Here's my (very, very, very uninformed) perception of the two guys' styles from what I've read of their comments and what I've seen them do:
    • It seems like Jeff is more of a logical syllogism sort of guy. He thinks the profit equation is fairly straightforward and that you can control the two pieces mostly independently (I'm sure he "knows" that's not entirely true, but that knowledge may be intellectually abstract rather than instinctual). So on the one side he's working to tweak up ancillary revenues and optimize pricing and on the other he's trying to force down costs. To him you do those both well enough as independent processes you get maximum profits.
    • Parker strikes me as being a little more willing to embrace that there is uncertainty in what really drives the revenue side of the picture. So he's proven that he's willing to test some things as experiments and see how consumers respond. Pay for all drinks? Bookings and rev fell, so dump that one.
    So while I wouldn't really expect UA to do much other than what it's doing or make big changes, I really think that the new AA could make huge moves either way. And yes, they might bounce back and forth from top of the market to bottom some. Or offer wildly different products to different markets or market segments, or who knows what else.
     
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  16. Gargoyle
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    Gargoyle Milepoint Guide

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    Much better analogy, since UA is cutting benefits and services and hoping to fool their customers.
     
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  17. Wandering Aramean
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    Wandering Aramean Gold Member

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    http://www.fool.com/investing/gener...s-class-delta-zigs-united-and-american-z.aspx

    Higher density and capturing coach passenger fares leads to higher profits according to that analyst. Not too surprising, really, but also probably not what most here want to hear. Expect smaller F cabins (and fewer upgrades) as well as more people overall on board. At least DL is getting those passengers drunk on the long-haul flights to help medicate.

    I also think that, other than in the transcon market, AA is much more like DL than like UA.
     
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  18. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Analyst?

    The guy seems to be a writer for a stock picking website, not an airline industry analyst.

    Let's say I know nothing about the airline business and running an airline profitably. That's probably not far from the truth. But I have some pretty good insights into my own industry and in particular my own employer. When I look at Fool.com's analysis of that industry/company, I can only laugh. Maybe this guy is less of a hack than the writers who write those articles, but basically I only read fool.com (occasionally) for entertainment purpose.

    (amusing to see the guy is writing for seekingalpha as well)
     
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  19. Bill Hunt

    Bill Hunt Silver Member

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    Very informative article. Thanks for posting that.

    It will be interesting to see how each carrier's strategy pans out, over a few years.

    On our UA long-hauls, BC seems to always be full. I do not know about E+, but seldom hear the "E+ costs money folks. If you haven't paid for it, do not move up there... " announcements. We have also been unable to upgrade to FC, with anything but $ for a Global FC ticket, on most of the flights, even with GPU's, miles and 1K status. The ships seem to be full.
     
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  20. Wandering Aramean
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    Wandering Aramean Gold Member

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    We're all analysts in one for or another, right?

    I don't necessarily agree with all the conclusions but it is an interesting take on the market right now.

    But are they maximizing yield? It is a fine line they have to walk between short-term and long-term value propositions. Swapping seats out on the planes is relatively quick but also reasonably costly, especially on the premium cabin seats. Those cost a lot of cash and the amortization schedule means once you pick a model you have to commit to it for many years.
     
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  21. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    I didn't see anything that differed from what a random Flyertalk "analyst" might write. Well, okay, I didn't see mentions of Jeffy, Dougy, and $MI/J...
     
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  22. HeathrowGuy
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    HeathrowGuy Gold Member

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    LOL!
     
  23. zippypinhead

    zippypinhead Gold Member

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    Fixed it for you.:rolleyes:

    And, not to go Omni, but it's the only way to a balanced budget. And any political candidate that would tell the public that, wouldn't get a vote from his own mother.
     
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  24. chris_poland

    chris_poland Silver Member

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    Given a choice between 1" of pitch or free drinks in transpacific flights, I'll take the legroom please. :)
     
  25. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Don't Delta and AA now have E+ type seating on many aircraft, too? Not sure how they compare in price, but as a non-elite I'd be happy to pay for their leg room and have the drinks, too. E+ on the UA 747 isn't that terrific anyway. And I didn't particularly enjoy my domestic red eye on the 787. Leg room was fine in the bulkhead seat, but rubbing shoulders with my neighbor wasn't all that fun.
     

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