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Home » Elite Status » United Airlines CFO Labels Certain MileagePlus Elites as "Entitled"
Elite StatusUnited AirlinesUpgrades

United Airlines CFO Labels Certain MileagePlus Elites as "Entitled"

Matthew Klint Posted onMay 20, 2012December 9, 2016 15 Comments

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:

united_shares_slide

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.

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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15 Comments

  1. Joe Nevin Reply
    May 20, 2012 at 1:37 pm

    I couldn’t have said it any better. You must have been reading my exact thoughts. We must all keep in mind that CEO’s get to run their airlines the way they choose and they get to define their customer service strategy. That doesn’t mean that CEO’s are smarter than customers (think RIM or JP Morgan/Chase or Ron Johnson @ the new JC Penny) so only time will tell. I personally think United is being penny-wise and pound-foolish. That is what is likely to happen when your CEO is a bean counter (finance guy) instead of focusing on putting customers first. The once-a-year vacation traveler is a dollar bill, not a “customer”.

  2. john olmstead Reply
    May 20, 2012 at 2:10 pm

    Jeff Spisek, the CEO, couldn’t run a lemonade stand. He has total disregard for his customers, employees and retirees. He is only concerned with lining his pockets with dollars and getting his lifetime free first class tickets. And, he has surrounded himself with those of the same ilk. United is doomed as long as this pinhead is in charge.

  3. J. M. N. Reply
    May 20, 2012 at 5:03 pm

    I wish UA would go back to the upgrade kits instead of the complimentary upgrades. As a million mile flyer I have spent my share of time in a middle seat in the back and like the upgrades from time to time, but if I pay $1400.00 to go First from coast to coast, I really do not like the thought of sitting next to another passenger who paid $200.00 and got a free upgrade. I think that really takes away from a product you are selling, but it is nice to shows those loyal to an airline that they are appreciated with systemwide or regional upgrades that they can confirm in advance.

  4. UAPremierGuy Reply
    May 20, 2012 at 7:10 pm

    Count me in the list of disgruntled and enraged people. Unlike you, I’m not yawning, I’m yelling. Yes, I know the comments come as no surprise, but as you stated, you just don’t say those things. For me, it really is the straw that broke the camel’s back. I’m at 91,000EQM, so will probably go forward and keep 1K status, but after that, I’m switching all my business to AA. This type of mentality can not, and should not be tolerated if you are an elite on UA. We truly need to vote with our feet and show UA that this type of behavior leads to reduced profitability and is incredibly short-sighted.

  5. Matthew Reply
    May 21, 2012 at 9:30 pm

    United responded today to the outrage over Rainey’s comment on FT with the following:

    Hi Everyone, we see there’s a lot of interest in our recent presentation at Bank of America. To clarify, the message that we’re investing in our Premier program and ensuring greater access to elite benefits at higher elite tiers is not a new one. An example of this is when our Premier tiers get access to Economy Plus seating. This change has materialized into a meaningfully better experience for our Gold members and above. In fact, in markets that have the highest proportion of Premier flyers, a higher percentage of Premier Platinum and Premier Gold members are getting access to Economy Plus (comparing February 2012 to April 2012, and comparing April 2011 to April 2012), while the percentage of Premier Silver members sitting in Economy Plus hasn’t decreased meaningfully. Some of those Premier Silver members may be choosing to purchase Economy Plus seating, but, in general, Economy Plus seating remains available at time of check-in.

    While John was not referring to upgrades, we know they remain a hot topic, especially with respect to selling upgrades. As discussed in other threads, our continued goal is to simply sell our First Class seats as close to their intended retail price as possible. The Y/B/M instant upgrade fares that we offer our Premier members, for example, are only a modest discount from our retail First Class fares, and the buy-ups we offer based on these fares are simply an extension of this. In the coming year, we will be adding more transparency to the upgrade process, and will also be making important improvements to the upgrade system itself. Please be assured, whether your concern is that we reward loyalty solely or that we also offer a higher level of benefits to those loyal members who also spend more, we are listening.

    Thanks as always for allowing us the clarify these points.

    Shannon Kelly
    Director, Customer Insights
    United Airlines

    Talk about digging a deeper hole…

    http://www.flyertalk.com/forum/18616330-post658.html

  6. Matthew Reply
    May 21, 2012 at 9:37 pm

    And the WSJ has picked this up as well–

    http://blogs.wsj.com/middleseat/2012/05/21/united-angers-frequent-fliers-by-calling-some-over-entitled/

  7. Herb Reply
    June 30, 2012 at 11:49 pm

    Shannon Kelly is dead wrong. I have been a loyal Silver member for 10 years. Now, the only way I get to sit in Economy Plus is by paying for it, which any passenger can do. If I wait until 24 hours before check-in, the overbooking of United’s aircraft ensures that all of the economy plus seats are gone.

  8. NowYouKnow Reply
    September 3, 2012 at 4:52 pm

    Does United still give upgrade preference to dead heading flight deck and cabin crew? That used to hack me off.

  9. Matthew Reply
    September 3, 2012 at 8:27 pm

    I believe they do.

  10. Jess Reply
    October 17, 2012 at 11:22 pm

    I stuck with United through September but hit my wall after ten straight trips in the back of the plane. I am not a a super-frequent traveler, but I have been 1k for the last ten years and probably spend $30,000 a year on flights. Altogether I’ve done 1.2 million miles on United, and as a 40 year old guy would probably have done 5 million over the course of my lifetime. Realizing, however, that United now values a once-a-year traveler’s $185 upgrade fee more than my $30,000 a year in business, I’m done. If I will be in the back nomatter what, I might as well buy the cheaper flight.

  11. Matthew Reply
    October 19, 2012 at 12:10 am

    @Jess: That’s terrible. I have not missed an upgrade in several months. Granted, I will move my flight schedule around to get business class and have used confirmed instruments on my last two trips, but I’ve received many complimentary transcon upgrades. What routes are you flying?

  12. Narelle Reply
    November 11, 2012 at 6:38 am

    I have been 1K for the last five years. No matter how many times I request to use my global upgrades, and ensure I book the right class,I get them on 1 out of 10 times that I request. They continually expire unused. For a couple of hundred dollars extra I would have been able to get business class on another airline but decided to stay with United. Last straw for me is the next trip I am taking, although many seats still available in business class fir the light to Frankfurt upgrade has not come through. Same thing happened on my last trip to Japan. At the airport they said, oops sorry we put it in the wrong category. Excuse me? That trip was another example where for a couple of hundred dollars could have got business class all the way to Singapore with another airline.

    Needed to book another trip for a flight to Morocco in a couple of weeks. Flying Delta. The business class airfare was similar in price to United economy airfare and have given up on getting upgrades. I am flying again with United to Chile at the end of the year – paid business class airfares. This was booked back in April. My last trip to Turkey in September,got delayed I. Newark for six hours so missed my connecting flight to Venice.

    I tend to be a loyal frequent flyer as status makes a difference with the amount of flying I do. But the trip to Singapore via Japan, together with my upcoming flight to Frankfurt being just a little bit cheaper than business class with other airlines and my upgrades expiring unused has resulted in me walking. If Delta matches the status, I will probably transfer allegiance – sad as I have been loyal to United since 1995, but this dies not see important to them.

  13. Tim1K Reply
    December 27, 2012 at 1:47 am

    It seems like things are getting a little worse now. MP is following the path of other FF programs. The annoying thing is that since UA had one of the oldest most tired fleets in the industry MP at least made things better by being able to use the Star Alliance fleet. Now that they are finally updating their haggard fleet, we have to jump through even more hoops. So in the end, newer planes and scrooge MP program is probably better than who it has been. I want to go over to Virgin but it is too limited. I wish Lufthansa group would just buy up a US carrier and come show the boys how to play.

  14. Global Services Flier Reply
    December 30, 2012 at 8:37 am

    I hate what has happened to United. I just had another bad experience and decided to write things up.

    My last four flights. 1) Booked on a domestic first class ticket. United messed up the meals and forced the entire planeload of customers to disembark and buy our own food in the terminal. 2) Booked on a first-class international flight, paid business plus a confirmed upgrade. Showed up just over an hour early, waited while two global services gate agents spent ten minutes chatting with another global services customer, and then, when the second agent returned to his counter, was told that because there were only 55 minutes left I could not board. I pointed out that it was his fault I was late, but he did not care. Was re-booked on a much worse aircraft later in the day. 3) Return flight on that same trip. United canceled the flight while I was en route to the airport, then told me I was bumped down two classes to a middle seat in economy on a later flight. I said that’s ridiculous and the agent asked, without irony, “what do you expect us to do, bump somebody?” 4) Lost luggage on a short domestic trip, hoping to get my bags overnight so I could make an appointment in the morning. They assured me that would happen, then missed their first, second, and third deadlines. I did not get my bags until almost three hours after the appointment–which I missed–began.

    I don’t think United’s elite status is worth anything anymore. The upgrades and reasonably good personal service (for unusually profitable customers, not everyone) made it worth riding in their worn out airplanes. But I no longer have any confidence that they will get me where I need anywhere near the hour and day on the ticket.

    Yes, “elite” customers do feel a sense of entitlement. But so does United: the company and its executives clearly think they are entitled to our money, and that of our employers, regardless of how they treat us.

  15. RK Reply
    July 24, 2013 at 12:38 pm

    I’m over-entitled. I expect not to be treated like a criminal, regardless of how often I fly or how much I spend. The airline clearly has a different idea.

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