Many are up in arms over recent comments about certain MileagePlus elite members made by United Airlines CFO John Rainey at the Bank of America Merrill Lynch Global Transportation Conference last Thursday. I am yawning. While not very savvy, his statements were not at all a surprise.
We had certain groups in this program that were over-entitled if you will. And now we’ve re-aligned the benefits of that program with what the customers and program participants are actually providing to the program, it’s a good change going forward.
You can listen for yourself through this audio link.
Actions speak louder than words, and post-merger United has made very clear that it places a higher value on transactional loyalty than long-term loyalty. We have seen that mindset reflected in the way complimentary upgrades are processed, with full-fare elites trumping all others. That means a silver traveling on a B-fare will clear before a 1K traveling on a Q fare. And yet transactional loyalty doesn’t always win out: if that silver happens to be a government employee traveling on a YCA (specially negotiated government fare), the upgrade will also come before the 1K’s Q fare, even if the 1K spent more on his ticket.
United’s new policy is what it is–shortsighted when you look at loyalty the way Gary and I do, but something I will have to get used to if I ultimately stick with United Airlines.
By now, every United frequent flyer understands the mindset of the new United, so I just cannot get worked up over Rainey’s statement. But his thoughts were still imprudently expressed, like saying your wife looks fat in a dress–even if everyone knows it, you just don’t say it.
Frequently Flying notes that the following SHARES slide was displayed when Rainey made the statement:
That does not make me think of the ordering of complimentary elite upgrades. Instead, it brings to mind the more egregious practice of hawking upgrades to anyone willing to pay a small incremental amount before elites receive complimentary upgrades. This practice ultimately rubs me the wrong way more than awarding elite upgrades by fare class.
Think about it–the husband and wife who fly once a year to Hawaii on the airline with the cheapest ticket check-in for their United flight and see the opportunity to upgrade to first class for $199. Being a special trip, they opt to upgrade. Meanwhile, a Global Services member who has spent more than $25,000 on United tickets this year finds himself in an exit row behind the curtain. The couple enjoy the flight, but quickly forget the experience and cannot even remember what airline they flew last year when it comes time to book next year’s ticket. Or worse still, they do remember it was United, but see Hawaiian Airlines is $20 cheaper and go with that carrier instead. The disgruntled Global Services member, tired of missing upgrades on routes that used to be a sure-thing, switches to American Airlines.
My example is a bit extreme and not even the best one–I think Gary’s discussion of marginal buyers in the link above is an even better way to look at this–but you get my point. Transactional loyalty just does not always add up.
I want to make sure that this does not come across as an entitlement issue, like CFO Rainey claimed. We, United elites, are not entitled to upgrades, but when they become part and parcel of being a United top- and mid-tier elite for the last decade, suddenly altering the upgrade practice in an almost vindictive manner (“we’re tired of you freeloaders”) is bound to rub frequent flyers the wrong way and drive away business.
Time will tell whether United’s experiment will work, but the initial signs suggest an increasing amount of disgruntled passengers and a total disconnect from reality displayed by top United management. That concerns me more than a snide remark from a CFO.