Rdh3e
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UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 4:12 am

Slide 11 of yesterday's Citi Industrials Conference presentation details a 15pt drop in the number of flights where agents have to gate-check bags and a 2.8%pt improvement in D:00. This should further lead to customer satisfaction as on-time flights are the number one driver of satisfaction and should also improve the experience at the gate if it frees up more time for gate agents to respond to customer needs.

I don't recall operational improvement being part of the value proposition to investors originally, but this is certainly a nice bonus. Have any other carriers commented similarly?

Sidebar: It also shows on slide 5 that UA was #1 in on-time among the big 4 for the months of April and May combined. Granted this covers the Delta meltdown period, but we'll have to keep an eye on this going forward! Certainly a positive indicator.

http://ir.united.com/~/media/Files/U/Un ... erence.pdf
 
SonomaFlyer
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 4:16 am

Rather than relax the fees on checked bags, expect the legacies to find ways to increase fees on cabin luggage if they can should this turn out to be a trend. It makes sense that fewer issues with too many cabin bags will speed up boarding but the airlines will look at it from the revenue side to squeeze out the cabin bags or charge for the overhead if possible.
 
smi0006
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 5:04 am

SonomaFlyer wrote:
Rather than relax the fees on checked bags, expect the legacies to find ways to increase fees on cabin luggage if they can should this turn out to be a trend. It makes sense that fewer issues with too many cabin bags will speed up boarding but the airlines will look at it from the revenue side to squeeze out the cabin bags or charge for the overhead if possible.


It would be really interesting but hard to quantify the value in service improvement of removing the baggage fee, but clamping down on carrier - this would greatly reduce gate agent and flight attendant stress levels. Instead of constant arguments and battle around cabin baggage and closing lockers on time staff would be more relaxed and freed up to engage with pax. Whilst I know they are professionals and one negative interaction shouldn't flow on to the rest; don't discard the accumulative effect of confrontations with pax around luggage.
 
AA737-823
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 5:18 am

Well, file that info under the "DUH" category.
Fewer carry-ons equals fewer gate checks? WHO KNEW! Evidently, not the top brass at UA.

No matter to me; given the de facto fare increases that Basic Economy has brought to United tickets, I'm one more metric that is changing, as I vote with my dollars at Alaska Airlines.
Better treatment of elites, too.
 
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LAX772LR
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 6:10 am

SonomaFlyer wrote:
Rather than relax the fees on checked bags, expect the legacies to find ways to increase fees on cabin luggage if they can should this turn out to be a trend. It makes sense that fewer issues with too many cabin bags will speed up boarding but the airlines will look at it from the revenue side to squeeze out the cabin bags or charge for the overhead if possible.

I'll always contend that they got it ass-backwards with the baggage fees.

Everyone should've gotten a free checked bag, as the cargo hold is DESIGNED to hold everything and the kitchen sink... not the overheads.

They should've allowed a single underseat item free, then charged for overhead-sized bags. Elites, medicine, and infant-related materials exempt.
I myself, suspect a more prosaic motive... ~Thranduil
 
ericm2031
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 6:13 am

AA737-823 wrote:
Well, file that info under the "DUH" category.
Fewer carry-ons equals fewer gate checks? WHO KNEW! Evidently, not the top brass at UA.

No matter to me; given the de facto fare increases that Basic Economy has brought to United tickets, I'm one more metric that is changing, as I vote with my dollars at Alaska Airlines.
Better treatment of elites, too.


Just because they may never have brought it up blatantly, doesn't mean they didn't think about. Scott Kirby is an operations guy and definitely knew this would be an outcome.

And a 2.8% improvement in D:00 is not really meaningfully enough to pinpoint to 1 single thing.
 
MIflyer12
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 11:34 am

LAX772LR wrote:
I'll always contend that they got it ass-backwards with the baggage fees.

Everyone should've gotten a free checked bag, as the cargo hold is DESIGNED to hold everything and the kitchen sink... not the overheads.

They should've allowed a single underseat item free, then charged for overhead-sized bags. Elites, medicine, and infant-related materials exempt.


The labor and equipment for checked baggage handling isn't free - ticket counter to plane and out to carousel. They would have to study delays from last-minute back checks and slow boarding from full overheads vs. delays caused by extra checked bags.

But you can take this a step further, thinking like a 21C airline exec - Carriers should be charging for both checked bags and carry-ons!
 
AWACSooner
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 12:16 pm

Why do people fall for this "Econ -" scam? I can pull up time and time again where UA/DL/AA offer this "Econ -" for the same price on the same routes as WN/VA/AS and the latter are actually the same price, if not outright cheaper. They sell you this as a way " to keep fares low," but it's nothing but an excuse to jack up the price of what you were previously paying the same fare for!
 
airbazar
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 12:35 pm

MIflyer12 wrote:
The labor and equipment for checked baggage handling isn't free - ticket counter to plane and out to carousel. They would have to study delays from last-minute back checks and slow boarding from full overheads vs. delays caused by extra checked bags

But they're already paying for all of that anyway. Do ground handlers get paid per bag? No. Do airports charge airlines for the use of the carousels, per bag? No.
I'm not sure why we're still having this discussion. Baggage fees are not going away and while airlines like UA are acknowledging that too many carry-ons have negative operational effects, they know full well that the financial benefits far outweigh those negative effects.
 
FlyUSAir
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 12:59 pm

AWACSooner wrote:
Why do people fall for this "Econ -" scam? I can pull up time and time again where UA/DL/AA offer this "Econ -" for the same price on the same routes as WN/VA/AS and the latter are actually the same price, if not outright cheaper. They sell you this as a way " to keep fares low," but it's nothing but an excuse to jack up the price of what you were previously paying the same fare for!



This x1000. If you want to buy into this Econ - BS, buy a ticket on Spirit, Frontier, or Allegiant. They are just offering the same fares as before but now you get less.
A319/A320/A321/A333 712/732/733/734/735/737/738/752/753/762/763 C172 CR2/CR7/CR9 E145/E170/E175/E190
MD82/MD83/MD88/MD90 Q100/Q400
 
DaufuskieGuy
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 1:05 pm

LAX772LR wrote:
SonomaFlyer wrote:
Rather than relax the fees on checked bags, expect the legacies to find ways to increase fees on cabin luggage if they can should this turn out to be a trend. It makes sense that fewer issues with too many cabin bags will speed up boarding but the airlines will look at it from the revenue side to squeeze out the cabin bags or charge for the overhead if possible.

I'll always contend that they got it ass-backwards with the baggage fees.

Everyone should've gotten a free checked bag, as the cargo hold is DESIGNED to hold everything and the kitchen sink... not the overheads.

They should've allowed a single underseat item free, then charged for overhead-sized bags. Elites, medicine, and infant-related materials exempt.


absolutely - they encouraged pax to go with carry on luggage only which cut into baggage fee revenue and fouled up the boarding process. if they really want to be greedy they could charge for carry on and checked, which is where we're headed...
 
MIflyer12
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 1:37 pm

airbazar wrote:
MIflyer12 wrote:
The labor and equipment for checked baggage handling isn't free - ticket counter to plane and out to carousel. They would have to study delays from last-minute back checks and slow boarding from full overheads vs. delays caused by extra checked bags

But they're already paying for all of that anyway. Do ground handlers get paid per bag? No. Do airports charge airlines for the use of the carousels, per bag? No.
I'm not sure why we're still having this discussion. Baggage fees are not going away and while airlines like UA are acknowledging that too many carry-ons have negative operational effects, they know full well that the financial benefits far outweigh those negative effects.


Do you really think U.S. carriers have the ticketing staff, baggage handling staff, and equipment to double the number of checked bags? I don't.

Southwest's assertion that 'Bags fly free' may be true for customers but it isn't true for carriers. Checked baggage has all sorts of costs.
 
Cubsrule
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 2:26 pm

Rdh3e wrote:
Sidebar: It also shows on slide 5 that UA was #1 in on-time among the big 4 for the months of April and May combined. Granted this covers the Delta meltdown period, but we'll have to keep an eye on this going forward! Certainly a positive indicator.


Positive, but also misleading to compare to WN. UA's ontime number does not include many flights on routes where it competes with WN (DEN-SLC, SFO-BUR, STL-EWR. etc.). WN's does.
I can't decide whether I miss the tulip or the bowling shoe more
 
IAHWorldflyer
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 3:12 pm

I agree with others here that UA's Basic Economy fares are nothing but their previously lowest available fare for the route, but with more restrictions. I fly a partucular route on UA pretty frequently ( 8-10x per year) and the basic fares this year are exactly what the regular fares I bought last year were. Now to buy regular discount economy fares are always $40 more per r/t. It was nothing but a fare increase in disguise. It's only benefit is possibly more room in the overheads.
 
UALFAson
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 4:11 pm

Rdh3e wrote:
Slide 11 of yesterday's Citi Industrials Conference presentation details a 15pt drop in the number of flights where agents have to gate-check bags and a 2.8%pt improvement in D:00.


As with any data, the provider can manipulate it to say whatever they want, so you have to read the fine print. In this case, the "before" data comes from a mere 17 days, from April 1 - April 17, hardly what I would call sufficient to be baseline data. The "after" data starts on April 18 and, although no end date is provided, the presentation was given on June 13, so it's likely only covering 6-7 weeks. And all of this is coming from ONE city--MSP. This anecdotal data doesn't prove anything conclusively. The better question to ask is what is UA management's end game with this spin? I am wondering if they are trying to build an argument for EVERYONE to pay for carry on bags, regardless of fare (with elites, etc. exempt)?

Cubsrule wrote:
Positive, but also misleading to compare to WN. UA's ontime number does not include many flights on routes where it competes with WN (DEN-SLC, SFO-BUR, STL-EWR. etc.). WN's does.


That is not true. This data is for ALL flights systemwide, not just MSP. The graphic was shared on the company Intranet weeks before the investor conference and there it clearly states these are "nationwide" metrics.
"We hope you've enjoyed flying with us as much as we've enjoyed taking you for a ride."
 
Cubsrule
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 4:16 pm

UALFAson wrote:
Cubsrule wrote:
Positive, but also misleading to compare to WN. UA's ontime number does not include many flights on routes where it competes with WN (DEN-SLC, SFO-BUR, STL-EWR. etc.). WN's does.


That is not true. This data is for ALL flights systemwide, not just MSP. The graphic was shared on the company Intranet weeks before the investor conference and there it clearly states these are "nationwide" metrics.


No. Look at the slide again. It is mainline only.
I can't decide whether I miss the tulip or the bowling shoe more
 
Rdh3e
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 4:41 pm

UALFAson wrote:
This anecdotal data doesn't prove anything conclusively

Just a point of clarity, this is not anecdotal. It is data, real and observed. I think you mean to say "small sample size".

an·ec·do·tal
ˌanəkˈdōdl
adjective
(of an account) not necessarily true or reliable, because based on personal accounts rather than facts or research.
 
Hallmark806
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 4:46 pm

and what might be driving up your customer service improvements?
 
airbazar
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 5:18 pm

MIflyer12 wrote:
Do you really think U.S. carriers have the ticketing staff, baggage handling staff, and equipment to double the number of checked bags? I don't.

Isn't that why we're paying a checked bag fee? But the answer is mostly a resounding Yes because, this is not 1982.
I almost always have a checked bad and I can't remember the last time I needed a ticketing agent except for international flights where they are needed regardless of whether you have bags or not. Check-in online and drop off the bag either curb side or at bag drop. As for handling staff, it's the same 2, 3, whatever number of guys per plane, whether there are 20 bags or 50 bags per plane. Sure, increased work load may require hiring a few more heads but isn't that why we're paying for checked bags?
 
anstar
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 5:27 pm

MIflyer12 wrote:
LAX772LR wrote:
But you can take this a step further, thinking like a 21C airline exec - Carriers should be charging for both checked bags and carry-ons!

I believe WOW Air already do this and charge something like $25USD to bring a cabin bag onbaord.
 
weekendppl
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 6:02 pm

MIflyer12 wrote:
Checked baggage has all sorts of costs.

Because we breathe while onboard, that has all sorts of costs. Because we use the lavs, that has all sorts of costs. Unbundle everything. Start by charging passengers by the pound just like all the other freight. Then charge for everything else. Want to wait inside at the terminal? Add a fee. Want to turn on a reading light? Cha-ching! Ryanair here we come.

Running an airline has all sorts of costs. Get over it or get out of the business.
 
32andBelow
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 6:06 pm

weekendppl wrote:
MIflyer12 wrote:
Checked baggage has all sorts of costs.

Because we breathe while onboard, that has all sorts of costs. Because we use the lavs, that has all sorts of costs. Unbundle everything. Start by charging passengers by the pound just like all the other freight. Then charge for everything else. Want to wait inside at the terminal? Add a fee. Want to turn on a reading light? Cha-ching! Ryanair here we come.

Running an airline has all sorts of costs. Get over it or get out of the business.

We officially should stop making fun of RyanAir because their product is not even worse anymore and in some cases it is better.
 
airzona11
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 7:15 pm

I wonder what are lost more frequently... Gate checked bags or normal checked bags? I would hazard a guess gate checked.
 
UALFAson
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 7:33 pm

Rdh3e wrote:
UALFAson wrote:
This anecdotal data doesn't prove anything conclusively

Just a point of clarity, this is not anecdotal. It is data, real and observed. I think you mean to say "small sample size".

an·ec·do·tal
ˌanəkˈdōdl
adjective
(of an account) not necessarily true or reliable, because based on personal accounts rather than facts or research.


From Dictionary.com: 3. based on personal observation, case study reports, or random investigations rather than systematic scientific evaluation: anecdotal evidence.

I don't think 17 days' worth of flights in 1 city on an airline that carries 140 million passengers a year constitutes "systematic scientific evaluation," but fine, small sample size. Doesn't negate my point that macro conclusions cannot be legitimately drawn from this information, and I think the bigger question is what is UA trying to prove/accomplish by reporting this?

airzona11 wrote:
I wonder what are lost more frequently... Gate checked bags or normal checked bags? I would hazard a guess gate checked.

I have not seen any data (see discussion above), but I would imagine nowadays the difference, if any, is negligible. Many (most?) gate podiums now have bag tag printers installed, so gate-checked bags receive a printed tag with a trackable bar code on it, as opposed to the old handwritten paper ones that could become illegible, fall off, etc.
"We hope you've enjoyed flying with us as much as we've enjoyed taking you for a ride."
 
Rdh3e
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 7:42 pm

UALFAson wrote:
I don't think 17 days' worth of flights in 1 city on an airline that carries 140 million passengers a year constitutes "systematic scientific evaluation," but fine, small sample size. Doesn't negate my point that macro conclusions cannot be legitimately drawn from this information, and I think the bigger question is what is UA trying to prove/accomplish by reporting this?.

UA had nearly 900 flights to/from MSP in that period (4/1-17). Statistically speaking that is about a 90% confidence level sample size for sampling the whole network if you stipulate that MSP is operationally representative of the broader network. It may not be, but to say it's a small sample is kind of disingenuous.

As to why they are reporting it, why not? It's an interesting factoid about a product that is just in its infancy. It speaks to the value of the product beyond just the immediate revenue gains.
 
Aptivaboy
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 8:01 pm

We officially should stop making fun of RyanAir because their product is not even worse anymore and in some cases it is better.


Sadly, this is all too true!
 
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LAX772LR
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 8:28 pm

MIflyer12 wrote:
Do you really think U.S. carriers have the ticketing staff, baggage handling staff, and equipment to double the number of checked bags? I don't.

Yes I do.

Not sure why you don't, considering that that's what they did for decades on end, quite successfully.
I myself, suspect a more prosaic motive... ~Thranduil
 
Cubsrule
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 8:40 pm

LAX772LR wrote:
MIflyer12 wrote:
Do you really think U.S. carriers have the ticketing staff, baggage handling staff, and equipment to double the number of checked bags? I don't.

Yes I do.

Not sure why you don't, considering that that's what they did for decades on end, quite successfully.


Of note in the ticketing arena, self-tagging has drastically reduced staffing needs. At large stations with self-tagging, WN seems to have roughly doubled the number of bags checked per employee. It's a little bit more complicated for legacies because they segregate passengers into more groups for checkin, but I am confident that there is a non-trivial productivity gain there too. As for equipment, a lot of it does not vary that much. Virtually everyone takes two belt loaders to every 737 flight regardless of the number of checked bags.
I can't decide whether I miss the tulip or the bowling shoe more
 
tjh8402
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Re: UA CFO: Basic Economy is driving operational improvements

Thu Jun 15, 2017 11:22 pm

I've always thought airlines were better off with checked bags than carry one for this reason. I had heard that southwest's free checked bags wasn't just savy marketing, but an essential part of their quick turn model because lots of carry ones makes turns longer. I also though it indicative that the ULCC like NK and F9 charged more for carry on than checked. I figured there was a reason, and operational ease/impact seemed like a likely one.
 
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precure787
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 4:29 am

AWACSooner wrote:
Why do people fall for this "Econ -" scam? I can pull up time and time again where UA/DL/AA offer this "Econ -" for the same price on the same routes as WN/VA/AS and the latter are actually the same price, if not outright cheaper. They sell you this as a way " to keep fares low," but it's nothing but an excuse to jack up the price of what you were previously paying the same fare for!

People fall for the economy minus because they have cheaper airfare, but if you check your bag, you are paying for the standard economy airfare (assuming that there is a $25 difference between the standard and basic economies, and the checked baggage fee is $25).
Edward Zen/Precure 787
 
smi0006
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 10:30 am

airbazar wrote:
MIflyer12 wrote:
The labor and equipment for checked baggage handling isn't free - ticket counter to plane and out to carousel. They would have to study delays from last-minute back checks and slow boarding from full overheads vs. delays caused by extra checked bags

But they're already paying for all of that anyway. Do ground handlers get paid per bag? No. Do airports charge airlines for the use of the carousels, per bag? No.
I'm not sure why we're still having this discussion. Baggage fees are not going away and while airlines like UA are acknowledging that too many carry-ons have negative operational effects, they know full well that the financial benefits far outweigh those negative effects.


Actually airports generally do charge per bag through their sortation system. Gate check bags however avoid the sortation system. Not sure to what degree this would make a difference though. It would be unusual for an arrival port to charge, but departure ports sure do.
 
kalvado
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 12:20 pm

LAX772LR wrote:
MIflyer12 wrote:
Do you really think U.S. carriers have the ticketing staff, baggage handling staff, and equipment to double the number of checked bags? I don't.

Yes I do.

Not sure why you don't, considering that that's what they did for decades on end, quite successfully.

TSA bag screening system may become a bottleneck. And no, that one was not doing it for decades on end, quite successfully.
 
AWACSooner
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 12:25 pm

precure787 wrote:
People fall for the economy minus because they have cheaper airfare, but if you check your bag, you are paying for the standard economy airfare (assuming that there is a $25 difference between the standard and basic economies, and the checked baggage fee is $25).

I'm sorry, but no. Here is an illustration of the scam that economy minus is:
6 months ago, a hypothetical one-way ticket between XXX and YYY was $199, with a free carry-on, free seat-selection (not economy plus or towards the front of the economy cabin), and mileage credit.
Now, that same one way ticket on that EXACT SAME ROUTE between XXX and YYY is $199 in economy minus, but you don't get a carry-on, little to no mileage credit, and no seat assignment til check-in...want those same perks you had six months ago? Fork over another $25-50!

The 3 legacies have scammed the public into thinking they just saved a bunch of $$, when in reality, they're paying the SAME AMOUNT for less amenities...
 
kalvado
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 12:43 pm

AWACSooner wrote:
precure787 wrote:
People fall for the economy minus because they have cheaper airfare, but if you check your bag, you are paying for the standard economy airfare (assuming that there is a $25 difference between the standard and basic economies, and the checked baggage fee is $25).

I'm sorry, but no. Here is an illustration of the scam that economy minus is:
6 months ago, a hypothetical one-way ticket between XXX and YYY was $199, with a free carry-on, free seat-selection (not economy plus or towards the front of the economy cabin), and mileage credit.
Now, that same one way ticket on that EXACT SAME ROUTE between XXX and YYY is $199 in economy minus, but you don't get a carry-on, little to no mileage credit, and no seat assignment til check-in...want those same perks you had six months ago? Fork over another $25-50!

The 3 legacies have scammed the public into thinking they just saved a bunch of $$, when in reality, they're paying the SAME AMOUNT for less amenities...

Leaving ethics aside, airlines are businesses which need to turn out profit to their owners. Since the product is fairly expensive - and despite tickets being fairly cheap, it is still few days worth of paycheck for most - people can be expected to be very price sensitive. So keeping base price low to include least wealthy customers, but charging for everything to make some extra money from those who can afford it - aka FR model - is fully justified from business perspective. Wording that comes along with all that is just wording.
And as it was pointed out many times, airlines often had to run at breakeven or worse, which makes no sense from business perspective.
 
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exunited
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 12:47 pm

AWACSooner wrote:
precure787 wrote:
People fall for the economy minus because they have cheaper airfare, but if you check your bag, you are paying for the standard economy airfare (assuming that there is a $25 difference between the standard and basic economies, and the checked baggage fee is $25).

I'm sorry, but no. Here is an illustration of the scam that economy minus is:
6 months ago, a hypothetical one-way ticket between XXX and YYY was $199, with a free carry-on, free seat-selection (not economy plus or towards the front of the economy cabin), and mileage credit.
Now, that same one way ticket on that EXACT SAME ROUTE between XXX and YYY is $199 in economy minus, but you don't get a carry-on, little to no mileage credit, and no seat assignment til check-in...want those same perks you had six months ago? Fork over another $25-50!

The 3 legacies have scammed the public into thinking they just saved a bunch of $$, when in reality, they're paying the SAME AMOUNT for less amenities...


The real question is what does the hypothetical ULCC competition charge from XXX to YYY because if they charge $199 then 6 months ago the US3 were charging the same but giving you more than the competition (and incurring higher costs), perhaps their goal is to match the price and the service level and not give away stuff that the ULCC guys don't give away either.

The fact is that planes are completely full and that leads one to believe the airlines are not charging enough based on the demand. Air travel is and will continue to be a bargain. When it costs more to drive somewhere in gas than to but a plane ticket, that's a bargain.
 
cledaybuck
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 12:48 pm

UALFAson wrote:
I think the bigger question is what is UA trying to prove/accomplish by reporting this?
They are just trying to put a positive spin on what is a negative for customers. It's a fairly transparent PR move and nothing more.
 
kalvado
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 1:15 pm

Rdh3e wrote:
UALFAson wrote:
I don't think 17 days' worth of flights in 1 city on an airline that carries 140 million passengers a year constitutes "systematic scientific evaluation," but fine, small sample size. Doesn't negate my point that macro conclusions cannot be legitimately drawn from this information, and I think the bigger question is what is UA trying to prove/accomplish by reporting this?.

UA had nearly 900 flights to/from MSP in that period (4/1-17). Statistically speaking that is about a 90% confidence level sample size for sampling the whole network if you stipulate that MSP is operationally representative of the broader network. It may not be, but to say it's a small sample is kind of disingenuous.

As to why they are reporting it, why not? It's an interesting factoid about a product that is just in its infancy. It speaks to the value of the product beyond just the immediate revenue gains.

90% are great if you can assume all other prameters are more or less the same. but...
Weather can be a big thing for these data, and one significant thunderstorm in ORD or EWR can easily turn 3 weeks of data upside down.
Year to year is a bit more realistic comparison - but even then I remember one snowstorm leading to ops meltdown which made a significant change in yearly on-time performance.
And since airlines try to show most of delays as weather-related, removing delays declared as weather dependent would probably end up with data having statistical significance of 0.
 
Cubsrule
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 1:56 pm

kalvado wrote:
LAX772LR wrote:
MIflyer12 wrote:
Do you really think U.S. carriers have the ticketing staff, baggage handling staff, and equipment to double the number of checked bags? I don't.

Yes I do.

Not sure why you don't, considering that that's what they did for decades on end, quite successfully.

TSA bag screening system may become a bottleneck. And no, that one was not doing it for decades on end, quite successfully.


Maybe, but TSA and the airports installed inline screening at many airports pre-bag fees, so the infrastructure is there in many places.
I can't decide whether I miss the tulip or the bowling shoe more
 
AWACSooner
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 2:30 pm

kalvado wrote:
Leaving ethics aside, airlines are businesses which need to turn out profit to their owners. Since the product is fairly expensive - and despite tickets being fairly cheap, it is still few days worth of paycheck for most - people can be expected to be very price sensitive. So keeping base price low to include least wealthy customers, but charging for everything to make some extra money from those who can afford it - aka FR model - is fully justified from business perspective. Wording that comes along with all that is just wording.
And as it was pointed out many times, airlines often had to run at breakeven or worse, which makes no sense from business perspective.

But they sold it as a "price decrease," which is nothing less than blatant false advertising...and unethical as hell!
 
kalvado
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 3:19 pm

AWACSooner wrote:
kalvado wrote:
Leaving ethics aside, airlines are businesses which need to turn out profit to their owners. Since the product is fairly expensive - and despite tickets being fairly cheap, it is still few days worth of paycheck for most - people can be expected to be very price sensitive. So keeping base price low to include least wealthy customers, but charging for everything to make some extra money from those who can afford it - aka FR model - is fully justified from business perspective. Wording that comes along with all that is just wording.
And as it was pointed out many times, airlines often had to run at breakeven or worse, which makes no sense from business perspective.

But they sold it as a "price decrease," which is nothing less than blatant false advertising...and unethical as hell!

Because plain price increase would come with buckets of dirt poured over everyone.
I wouldn't even be surprised if there is indeed some decrease of E- ticket price on a barely noticeable scale. But going from old stlyle Y at $199 to new style E- at $198 is barely visible until specifically pointed out. But that is enough to avoid legal process...
 
Osubuckeyes
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 3:30 pm

exunited wrote:
The real question is what does the hypothetical ULCC competition charge from XXX to YYY because if they charge $199 then 6 months ago the US3 were charging the same but giving you more than the competition (and incurring higher costs), perhaps their goal is to match the price and the service level and not give away stuff that the ULCC guys don't give away either.



In my experience thus far with E- fares, DL specifically, has implemented E fares on routes that have little or no competition all together or no ULCC competition at all. It is the base fare now. $250 each way for PHX-DTW-SWF on an E fare... No thanks.
 
ordbosewr
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 4:50 pm

AA737-823 wrote:
No matter to me; given the de facto fare increases that Basic Economy has brought to United tickets


I am sure it is happening in specific markets, but for me as I have been searching for flights for my family I have not seen this. I tend to fly in the EWR-Florida markets and if anything the regular E fares have held steady (I feel they are high, but that was the case before basic economy pricing came to be).
 
Rdh3e
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 5:16 pm

ordbosewr wrote:
I am sure it is happening in specific markets, but for me as I have been searching for flights for my family I have not seen this. I tend to fly in the EWR-Florida markets and if anything the regular E fares have held steady (I feel they are high, but that was the case before basic economy pricing came to be).

EWR-Florida is extremely reasonably priced, dare Isay even low fare when purchasing with flexibility and advanced notice. I just priced a round trip in July EWR-FLL for $140 RT in basic, the buy up was $15 each way so $170 RT to be in regular economy. That is dirt cheap.
 
AWACSooner
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 5:53 pm

ordbosewr wrote:
I am sure it is happening in specific markets, but for me as I have been searching for flights for my family I have not seen this. I tend to fly in the EWR-Florida markets and if anything the regular E fares have held steady (I feel they are high, but that was the case before basic economy pricing came to be).

It is limited to certain markets on DL/AA...but UA has it on practically all their domestic routes.
 
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TWA772LR
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 6:02 pm

AWACSooner wrote:
Why do people fall for this "Econ -" scam? I can pull up time and time again where UA/DL/AA offer this "Econ -" for the same price on the same routes as WN/VA/AS and the latter are actually the same price, if not outright cheaper. They sell you this as a way " to keep fares low," but it's nothing but an excuse to jack up the price of what you were previously paying the same fare for!

Believe it or not, there are actual minimalist travelers, and it is a growing trend especially among millennials and younger gen X-ers.

I'm 24 and whenever I travel, I usually take a small backpack and small duffel bag (small roll-aboard if it is winter), and the backpack is only for souvenirs/incidentals so I utilize that only on the return leg. When I travel domestic, I use the Army backpack my brother got for me for Xmas one year; it's tough and *just* large enough for any trip shorter than a week (which I very rarely travel longer than a week anyway, international or domestic). And there are still people in my generation that travel with even less than that!

My roll-aboard is small enough for an overhead bin on a 737/A320-sized aircraft, and when I travel with the backpack, I put that under the seat in front of me as it's small enough to not rob me of too much foot room.
"It's not getting to the land of the nonrev that's the problem, it's getting back." ~~Captain Hector Barbossa
The thoughts and opinions shared under this username are mine and don't necessarily reflect those of my employer.
 
AWACSooner
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 6:12 pm

TWA772LR wrote:
Believe it or not, there are actual minimalist travelers, and it is a growing trend especially among millennials and younger gen X-ers.

I'm 24 and whenever I travel, I usually take a small backpack and small duffel bag (small roll-aboard if it is winter), and the backpack is only for souvenirs/incidentals so I utilize that only on the return leg. When I travel domestic, I use the Army backpack my brother got for me for Xmas one year; it's tough and *just* large enough for any trip shorter than a week (which I very rarely travel longer than a week anyway, international or domestic). And there are still people in my generation that travel with even less than that!

My roll-aboard is small enough for an overhead bin on a 737/A320-sized aircraft, and when I travel with the backpack, I put that under the seat in front of me as it's small enough to not rob me of too much foot room.

But now with economy minus, you won't even get access to the overhead bin...so it's still a net loss.
 
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TWA772LR
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 6:21 pm

AWACSooner wrote:
TWA772LR wrote:
Believe it or not, there are actual minimalist travelers, and it is a growing trend especially among millennials and younger gen X-ers.

I'm 24 and whenever I travel, I usually take a small backpack and small duffel bag (small roll-aboard if it is winter), and the backpack is only for souvenirs/incidentals so I utilize that only on the return leg. When I travel domestic, I use the Army backpack my brother got for me for Xmas one year; it's tough and *just* large enough for any trip shorter than a week (which I very rarely travel longer than a week anyway, international or domestic). And there are still people in my generation that travel with even less than that!

My roll-aboard is small enough for an overhead bin on a 737/A320-sized aircraft, and when I travel with the backpack, I put that under the seat in front of me as it's small enough to not rob me of too much foot room.

But now with economy minus, you won't even get access to the overhead bin...so it's still a net loss.

That doesn't affect me personally. Admittedly, I am not the average traveler in regards to the fact that I nonrev on my parents' passes. But the number of minimalist travelers is still growing, regardless.
"It's not getting to the land of the nonrev that's the problem, it's getting back." ~~Captain Hector Barbossa
The thoughts and opinions shared under this username are mine and don't necessarily reflect those of my employer.
 
tjh8402
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 6:54 pm

TWA772LR wrote:
AWACSooner wrote:
Why do people fall for this "Econ -" scam? I can pull up time and time again where UA/DL/AA offer this "Econ -" for the same price on the same routes as WN/VA/AS and the latter are actually the same price, if not outright cheaper. They sell you this as a way " to keep fares low," but it's nothing but an excuse to jack up the price of what you were previously paying the same fare for!

Believe it or not, there are actual minimalist travelers, and it is a growing trend especially among millennials and younger gen X-ers.

I'm 24 and whenever I travel, I usually take a small backpack and small duffel bag (small roll-aboard if it is winter), and the backpack is only for souvenirs/incidentals so I utilize that only on the return leg. When I travel domestic, I use the Army backpack my brother got for me for Xmas one year; it's tough and *just* large enough for any trip shorter than a week (which I very rarely travel longer than a week anyway, international or domestic). And there are still people in my generation that travel with even less than that!

My roll-aboard is small enough for an overhead bin on a 737/A320-sized aircraft, and when I travel with the backpack, I put that under the seat in front of me as it's small enough to not rob me of too much foot room.


My family is the same way. My mother and sister are frequent NK/F9/G4 users and they've mastered the art of traveling out of a backpack when visiting each other. They are happy to have the option to save $ by not bringing luggage and would be quite upset if their $60 RT tickets went away.
 
Rookie87
Posts: 131
Joined: Tue Sep 08, 2015 9:33 pm

Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 7:09 pm

AWACSooner wrote:
TWA772LR wrote:
Believe it or not, there are actual minimalist travelers, and it is a growing trend especially among millennials and younger gen X-ers.

I'm 24 and whenever I travel, I usually take a small backpack and small duffel bag (small roll-aboard if it is winter), and the backpack is only for souvenirs/incidentals so I utilize that only on the return leg. When I travel domestic, I use the Army backpack my brother got for me for Xmas one year; it's tough and *just* large enough for any trip shorter than a week (which I very rarely travel longer than a week anyway, international or domestic). And there are still people in my generation that travel with even less than that!

My roll-aboard is small enough for an overhead bin on a 737/A320-sized aircraft, and when I travel with the backpack, I put that under the seat in front of me as it's small enough to not rob me of too much foot room.

But now with economy minus, you won't even get access to the overhead bin...so it's still a net loss.


No it's not a net loss, once he gets on and there's room up there he can put his bag in the overhead bin. At least on AA it's ok to put your backpack up there if there's room

As someone mentioned before, the fact that a reduction in large carry on items resulted in better on time metrics is a big "DUH"
I wonder now how many basic economy tickets sold on a flight does it take to not have to gate check other customers' bags.
Last edited by Rookie87 on Fri Jun 16, 2017 7:14 pm, edited 1 time in total.
 
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jnev3289
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Re: UA CFO: Basic Economy is driving operational improvements

Fri Jun 16, 2017 7:12 pm

I think there are some who are missing the point of what others are saying. Even if you're a minimalist traveler it's a negative, or at the very least doesn't help or hurt you. While I don't believe it can be factually proven, many are stating that the E- fares are simply the base fares that previously included access to the overhead bins, but now you have to buy access to the overheads. So even if you don't use them, you're paying what previously would have given you access to them

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