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The most obvious example of this in daily life is through airlines, where the difference is pretty transparent and you get night-and-day better service by being

The most obvious example of this in daily life is through airlines, where the difference is pretty transparent and you get night-and-day better service by being a loyal customer. With top status with AA and UA (EXP and 1K), you connected to U.S.-based very senior phone agents right away, who always make sure to take care of any issue that arises. 50min delay on your AA flight? No problem, sir, we are rebooking you on Alaska so you don't miss your dinner meeting. (Real example from last weekend) Customers are put in different levels in the loyalty program, with the top level getting to pre-board the flight, getting free upgrades to any empty seat in business, getting many other extra perks that make flying a joy. You get a smile, a thank you, and a free drink when flying in the back. Within a status level, customers are oftentimes ranked by how much revenue they bring to the airline. (On AA, upgrades are ordered by Elite Qualifying Dollars the flyer has spent in the prior year) Contrast that with the experience the vast majority of people have flying the very same airlines: say the words United Airlines to your average flyer and it brings back memories of Dr. Dao, of cramped seats in the back middle row, of not being able to bring a carry-on because they're in basic economy, of having to gate-check your bags, etc. At the end of the day, frequent flyers bring the vast majority of profits to airlines, so it makes sense to focus all efforts on catering to them vs. the average person. The cheap seats have very low margins, oftentimes negative… so it just infeasible economically to give everyone good service.

skybrian 8y ago
I wonder about this. If they're giving you that level of service, aren't you paying too much? Who really wins here?
- Scoundreller 8y ago
  Frequent flyers are usually not footing the bill themselves. Giving them frequent flyer points or free lounge access is like a tax-free bonus to the employee and incentivizes them to convince their employer to not switch airlines.
- kenneth 8y ago
  The programs are full of loopholes. So yes, business flyers paying on company dime are footing the bill, but the clever travel hacker can often get a great deal in the process.
Scoundreller 8y ago
> The cheap seats have very low margins, oftentimes negative… so it just infeasible economically to give everyone good service. An empty seat costs the airline more than a paid ticket. They can’t exactly fly just 189/233rds of the plane.
- function_seven 8y ago
  Yes, but you can still be a negative margin flyer. They're just losing a smaller amount money than they would have if you weren't there at all.
- ubernostrum 8y ago
  An empty seat costs the airline more than a paid ticket. As stated, you seem to be implying that selling a ticket for 1 cent is better than flying an empty seat. But that's not guaranteed to be true. If they put someone in that seat at a ticket cost of 1 cent, does it cost more than 1 extra cent in fuel to move the now-increased weight of the aircraft? If there's a free soda or something offered, does the extra one they serve cost more than 1 cent? Does the extra time it takes to board that passenger cost more than 1 cent? Does the sum of all of those things cost more than 1 cent? There absolutely are circumstances in which flying the empty seat is better than selling that seat at the price the market would have borne. And we know this, because we know that airlines routinely fly planes that aren't full, instead of going to extreme lengths to auction off ever-cheaper tickets in hopes of getting someone in every seat on every flight. (and that's without getting into the fact that not all seats, tickets, aircraft and routes are equal in terms of what they cost to operate and how much money they can make, and all the other things that go into the arcane art of airline yield management)
  - Scoundreller 8y ago
    I’m running on the assumption that an airline only ever sells a paid ticket for at least its operational costs of that extra pax. The 1 cent paid ticket simply doesn’t (or shouldn’t) exist. But if the plane crashes, even the $2k last-minute 1st-class short-haul ticket will be a massive loss after all lawsuits are settled. If the marginal expense of a seat is $200, and you paid $1000, you may sit next to a discount flyer that paid only $250. And because of that, the flight may be net-profitable instead of net-loss.
wpietri 8y ago
Tangent: Are there other people here who just refuse to sign up for any of these programs? I have family members who are super into frequent flyer programs, credit card points, etc, etc. But I don't like the cognitive load they introduce, and I don't like having to figure out how much I'm being manipulated in any given interaction. I get that I'm missing out on goodies, but they're paying for those goodies somehow, so I figure I'm doing ok once I account for the cost of my time and for situations where they'd get me to pay more.
- dvtrn 8y ago
  Tangent: Are there other people here who just refuse to sign up for any of these programs? Right here. I was asked the other day if I had a rewards number at 7/11 and if I wanted to sign up for one, if I was "really sure" after I said no twice. 7/11. I buy coffee there getting off the train. It's a convenience store. This....is getting ridiculous IMO. Amazon is getting their tentacles wrapped around so much (mild sarc), but the retail experience out in the world lately is just as awful. I'm either bothered endlessly to "hey go get one more of those things it's only 2/$4" when I only want one, I'm asked to sign up for a rewards program, or calling support means I'm hounded for a "customer feedback survey" when all I wanted was a dang cup of coffee.
  - sizeofNaN 8y ago
    Or if you don't use the "program" they get away with charging 50% more. CVS and other drug stores are notorious for this. I bet the cards will be elided once facial recognition takes over.
  - sjg007 8y ago
    Rewards programs are basically the buy 9 coffees get the 10th free program. Grocery stores do gas rewards to favor certain purchases (presumably the more profitable ones or the ones they need to move) in lieu of discounting and then they also get to track everything you buy!
    - heurist 8y ago
lostlogin 8y ago
In my experiece the exact opposite is done by telecoms, insurance and banks. New customers are enticed with offers not available to existing customers, and great things are offered to them. Being a customer for decades doesn’t have rewards with that group of businesses.
- Gys 8y ago
  The typical client of telecoms, insurance and banks probably does not change much. So ones signed up, it does not make sense to spend money on them. Airlines might be different because each flight is bought separately. You want ff to keep coming back (to stay ff).
- tomjen3 8y ago
  I have been with my current bank since I was 3 months. I needed a loan to pay deposite for my first after college apartment -- nearly couldn't get it, had to provide a budget, etc even though it was a very reasonable amount. The thing I don't get is, do they expect me to ask them should the time come to get a loan for a house?
  - sjg007 8y ago
    Mortgages are tricky.. consumers either shop around for the best deal or they use a broker to do so (who may not work in your best interest per se)... Then the loans get bought and sold all the time and your servicer will change.. There are some perks with having a mortgage with your bank though..
- fhbdukfrh 8y ago
  This is so true. You can be a customer for over a decade but you still need to continually phone and threaten to change providers in order to get the same deal they offer people who switch every 6 months. I used to work at shaw on the data team, so I'm aware the problem is perverse incentives for selling to new clients over existing, but the cost of win-backs is so high (re-signing a previous subscriber) that you can usually streamline the affair by just asking for customer retention right at the start. The generally offer you the best deal they can right away because the goal now is to keep the subscriber in any form. Still a massive pain in the butt.
njarboe 8y ago
So if you aren't in the top tier, fly Southwest as much as you can. I do. All the same seats with minor differentiation possible. There are many reasons they have been the only airline to be profitable for decades, but having good service for everyone is definitelty one of the reasons.
- rb808 8y ago
  Ugh, with the stupid online checkin asap to get the lining up order, I prefer United Basic Economy over Southwest. I even prefer Ryanair over Southwest.
  - Zak 8y ago
    I haven't found this to be a problem. Worst case with Southwest, I get a bad position in line, leaving only seats I don't like. Any other airline could assign me a seat I don't like earlier in the process, and it's not always possible to change especially without paying extra.
- bdamm 8y ago
  Also, Southwest's no-questions-asked-no-limits policy on cancelling and rebooking tickets makes them my favorite. They recently put a limit of one year on the rebooked ticket, however. You can do this right up until boarding has already begun and there are no penalties. Nobody else does this. They're polite, they're generally well run, seats are reasonable, maintenance seems to be good, they have good routes, cheap tickets, good baggage policy, and don't fee you to death. On top of that, they have responsive customer service on the phone, or via DM Twitter, which is way better than sitting on the phone! Whatever they're doing is the right way and all other airlines should just copy them.
  - batiudrami 8y ago
    As a "normal" flyer, Southwest was the only airline I flew with in the US which didn't seem to make it its MO to have me be as miserable as possible through the entire experience. The budget pay-extra-for-everything airlines in Australia and SEA consistently provide a better experience than what I got from Delta, United or American.
Geekette 8y ago
Except that airlines still get the bulk of their revenue from economy class. The average margin may be higher per business/1st class ticket but the bulk of total sales and profit comes from economy. The airlines' discriminatory marketing actions are buffeted by disparate nature of their customer base (a group of strangers who'll typically never meet again after sharing a flight) as travellers don't have enough interest in and means of organizing. Otherwise, if economy class customers boycotted en masse, that airline would suffer more than if a handful of 1st class fliers did. United Airlines' scrambling after the Dr Dao debacle was driven by desire to stem the potential financial loss, not just PR crisis.
- sokoloff 8y ago
  > Except that airlines still get the bulk of their revenue from economy class. That's exactly backwards from anything I've ever read about airline economics. Do you have any references to support? https://kottke.org/17/03/the-economics-of-airline-classes https://kottke.org/17/03/the-economics-of-airline-classes suggests that on a given BA LHR<->IAD flight, the 122 economy seats total about $107K, the 40 premium economy seats about $106K, the 48 business class seats about $322K, and the 14 first class $122K. The 14 first class seats out-rev (and out-profit) the entire economy cabin.
  - Geekette 8y ago
    No references off head but I stumbled upon it while working on airline related project some years back. The key thing being proper cost accounting showed it wasn't lucrative as portrayed. Citations on premium class margins don't account for the higher costs of servicing such customers (ground/airborne food and entertainment, lounges, transportation, exclusive services, etc). While some may have a few planes with higher #s of premium seats, many fleets (especially N. American ones), are comprised of mainly economy class seats. This is obviously less true for newer airlines or those upgrading most/all of their fleets. The invention of more seating groups like premium economy (same cabin, almost no difference in service offered and cost to do so) has made one of the biggest differences to date. Sales also extend to business and 1st class seats - this and frequent flier upgrades show that premium tickets are often sold at less than full markup.
CrackpotGonzo 8y ago
I was lucky enough to fly Global Services on United through my old boss' account at my old company. Flew internationally a couple of times and the level of attention was insane. Get to airport and they walk you to the lounge, past security, and then come grab you when you're ready to pre-board (before everyone including military). My connecting flight was delayed by 20 minutes, cutting down my connection time to 50 minutes. No problem, concierge called me and let me know they had proactively booked me on the next available flight just in case. I would always buy economy seats and there wasn't a single time I wasn't upgraded to first. Whole experience was insane, wish I could qualify for GS ever in my life.
- kenneth 8y ago
  Global Services is insane. Qualification requirements are insane, too. It's invite-only, based on unpublished criteria. It's speculated that when based at a hub airport like SFO, it takes about $75k in annual spend on full-fare United first of business tickets. There are a few other ways to qualify: fly 4 million miles with United, marry a million-miler who has GS, pre-pay $250k towards airfare for your company, or $50k personally. As a lowly 1K who only spends the minimum $12k annually of my own dime (and earns around 125k UA PQM on top of 100k over at AA), I would never dream of qualifying for GS myself… but one can dream.
  - CrackpotGonzo 8y ago
    Yeah it's totally nuts. To be honest, I regret seeing the other side and knowing I'll never taste that again ;)
  - CPLX 8y ago
    > pre-pay $250k towards airfare for your company, or $50k personally I’ve never heard of the prepayment for GS option, and those numbers seem low. Do you have a source for that?
    - kenneth 8y ago
      Yes, it's called the PassPlus program [1]. I don't believe United publishes the status perks online, but you can see the full terms on the FlyerTalk thread wiki [2]. Investment Levels Individual Plans Minimum $25,000 - Complimentary Premier Gold $35,000 - Complimentary Premier Platinum $45,000 - Complimentary Premier 1K $50,000 - Complimentary Global Services Corporate Plans Minimum $50,000 - 1x Premier Gold, 1x Premier Silver, 4x United Club Annual Memberships $100,000 - 1x Premier Platinum, 2x Premier Gold, 3x United Club Annual Memberships $300,000 - 1x Premier 1K, 1x Premier Platinum, 3 Premier Gold, 6x United Club Annual Memberships (Looks like they've changed the corporate options since last I looked at it. I am sure that there is still a level of corporate spend that comes with GS memberships but it may more closer to $500k than $250k.) [1]: https://www.united.com/ual/en/us/fly/products/business/passplus/flex.html https://www.united.com/ual/en/us/fly/products/business/passp... [2]: https://www.flyertalk.com/forum/united-airlines-mileageplus/1642162-united-ua-pass-plus-secure-flex-benefits-value-questions-consolidated-4.html https://www.flyertalk.com/forum/united-airlines-mileageplus/...
forapurpose 8y ago
> it just infeasible economically to give everyone good service Sounds like their problem, not mine. I've experienced, again and again, needlessly obnoxious, abusive behavior from airline employees. Would it be economically infeasible for them to be polite and professional? As someone pointed out, Southwest provides pretty good service.
- vkou 8y ago
  > Would it be economically infeasible for them to be polite and professional? Maybe not infeasible, but irrelevant. 95% of flyers will use a shitty carrier to save $5, or to get on a flight that departs 30 minutes sooner.
rconti 8y ago
You're not wrong, but I feel like they're chasing diminishing returns. Every other segment of the economy has shown us that people are willing to pay a premium (20%? 50%?) to be treated like a human and get a better service/product. On airlines, you have to pay 100% more just to get a refundable fare. 300% for premium economy (a slightly wider seat with slightly more legroom). 500% for business class. It's insane, and it makes everyone hate airlines. Nobody gets upgraded out of goodwill because it's their honeymoon, not anymore. They're chasing the 0.01% of the flying public. Those perks are too valuable to just make ordinary people have a good experience. I think it's short sighted and it will bite them in the ass. No "normal" person can justify paying 3x as much to have a slightly more comfortable seat for 16 hours. But I CAN afford 20% more to have the latest laptop. Something about the business traveler spending someone else's money. But it feels shortsighted and I don't think it can last.
- kenneth 8y ago
  The price differences are not as stark as you say. Business class in particular has gotten quite cheap these days. In the past few months, I flew round-trip California to Beijing 3 times for $1,900 in business class. That's affordable to many people, and quite reasonable. There are a lot of perks even when you don't get an upgrade. The intangibles (being taken care of when issues arise — I've received amazing service, even when the issues were my fault) are invaluable.
  - PenguinCoder 8y ago
    Most people aren't flying international to begin with, and certainly not people trying to stay affordable. In that price range, 1900 per ticket is out of reach and certainly insane tonthink 'affordable' to an average customer of airline service.
    - gabriel-uribe 8y ago
      Agreed. I just paid $270 to get to China from California.
  - 8y ago
chx 8y ago
Yeah, the service... I have been on Air Canada more than once as an economy class passenger and when they are late, all you get is an empty apology, if that. More likely nothing. But this summer, I was flying back from Europe to the 40th birthday of my best friend (no pressure!). And the flight to Abbotsford was late (boo) so I walked to the desk and asked whether they could put me on the Vancover flight. And since I had a paid business ticket they did without blinking an eye. Which is funny because the YVR flight is much, much more expensive than YXX. Another funny: the business check in agent in Toronto thanked me for providing the airport code, she said she never checked anyone in before to YXX...
speby 8y ago
Makes sense. Limited $ to spend on staff and staff have limited time so you want to allocate your best people and talent to your top-producing customers. Although, what's interesting about this, is that they might do themselves a favor if they target customers who have the most potential to bring them more of their business if they give them even better treatment, as opposed to giving the best treatment to only your already-existing top customers. Attraction v. Retention
closeparen 8y ago
I’m not sure the thing being rewarded is loyalty. I take 3-4 personal trips a year; that’s nowhere near enough to earn status on any airline, even if I used the same one on 100% of my trips for a decade. (Eligibility thresholds are per year). Status mainly seems to be a minor perk built into any job requiring frequent travel.
jcadam 8y ago
I never buy "Basic Economy" anymore. The new Premium Economy classes (the ones with extra legroom) being offered by most airlines these days are pretty reasonably priced and SO worth the extra money. Even when my employer is sending me somewhere (and they only pay for basic economy - they don't care if I arrive at my destination exhausted, sore, and angry at the world), I'll purchase the upgrade myself.
Brockenstein 8y ago
Not to mention but high status flyers make up like 80% of the airline's revenue. Everyone else who flies once in a while, once every couple of years, who's trying to get the cheapest economy class ticket possible really doesn't amount to much individually. And it doesn't matter if you get mad and are never flying X airline again because you really don't make the airline enough money to worry about you. And someone else is never flying Y airline again and they'll fly X airline instead. When I worked for an airline I heard every combination of I'm not flying A Airline for B reason you can think of. They're all the same. Just luck of the draw who you have a crummy experience with.
norswap 8y ago
> frequent flyers bring the vast majority of profits to airlines I wouldn't say that's true at all. But even if the majority of profits comes from infrequent flyers, the cost of losing one of them may be multiple orders of magnitude less expensive than losing a frequent flyer.

skybrian 8y ago

I wonder about this. If they're giving you that level of service, aren't you paying too much? Who really wins here?

Scoundreller 8y ago
Frequent flyers are usually not footing the bill themselves. Giving them frequent flyer points or free lounge access is like a tax-free bonus to the employee and incentivizes them to convince their employer to not switch airlines.
kenneth 8y ago
The programs are full of loopholes. So yes, business flyers paying on company dime are footing the bill, but the clever travel hacker can often get a great deal in the process.

Scoundreller 8y ago

> The cheap seats have very low margins, oftentimes negative… so it just infeasible economically to give everyone good service. An empty seat costs the airline more than a paid ticket. They can’t exactly fly just 189/233rds of the plane.

function_seven 8y ago
Yes, but you can still be a negative margin flyer. They're just losing a smaller amount money than they would have if you weren't there at all.
ubernostrum 8y ago
An empty seat costs the airline more than a paid ticket. As stated, you seem to be implying that selling a ticket for 1 cent is better than flying an empty seat. But that's not guaranteed to be true. If they put someone in that seat at a ticket cost of 1 cent, does it cost more than 1 extra cent in fuel to move the now-increased weight of the aircraft? If there's a free soda or something offered, does the extra one they serve cost more than 1 cent? Does the extra time it takes to board that passenger cost more than 1 cent? Does the sum of all of those things cost more than 1 cent? There absolutely are circumstances in which flying the empty seat is better than selling that seat at the price the market would have borne. And we know this, because we know that airlines routinely fly planes that aren't full, instead of going to extreme lengths to auction off ever-cheaper tickets in hopes of getting someone in every seat on every flight. (and that's without getting into the fact that not all seats, tickets, aircraft and routes are equal in terms of what they cost to operate and how much money they can make, and all the other things that go into the arcane art of airline yield management)
- Scoundreller 8y ago
  I’m running on the assumption that an airline only ever sells a paid ticket for at least its operational costs of that extra pax. The 1 cent paid ticket simply doesn’t (or shouldn’t) exist. But if the plane crashes, even the $2k last-minute 1st-class short-haul ticket will be a massive loss after all lawsuits are settled. If the marginal expense of a seat is $200, and you paid $1000, you may sit next to a discount flyer that paid only $250. And because of that, the flight may be net-profitable instead of net-loss.

wpietri 8y ago

Tangent: Are there other people here who just refuse to sign up for any of these programs? I have family members who are super into frequent flyer programs, credit card points, etc, etc. But I don't like the cognitive load they introduce, and I don't like having to figure out how much I'm being manipulated in any given interaction. I get that I'm missing out on goodies, but they're paying for those goodies somehow, so I figure I'm doing ok once I account for the cost of my time and for situations where they'd get me to pay more.

dvtrn 8y ago
Tangent: Are there other people here who just refuse to sign up for any of these programs? Right here. I was asked the other day if I had a rewards number at 7/11 and if I wanted to sign up for one, if I was "really sure" after I said no twice. 7/11. I buy coffee there getting off the train. It's a convenience store. This....is getting ridiculous IMO. Amazon is getting their tentacles wrapped around so much (mild sarc), but the retail experience out in the world lately is just as awful. I'm either bothered endlessly to "hey go get one more of those things it's only 2/$4" when I only want one, I'm asked to sign up for a rewards program, or calling support means I'm hounded for a "customer feedback survey" when all I wanted was a dang cup of coffee.
- sizeofNaN 8y ago
  Or if you don't use the "program" they get away with charging 50% more. CVS and other drug stores are notorious for this. I bet the cards will be elided once facial recognition takes over.
- sjg007 8y ago
  Rewards programs are basically the buy 9 coffees get the 10th free program. Grocery stores do gas rewards to favor certain purchases (presumably the more profitable ones or the ones they need to move) in lieu of discounting and then they also get to track everything you buy!
  - heurist 8y ago

lostlogin 8y ago

In my experiece the exact opposite is done by telecoms, insurance and banks. New customers are enticed with offers not available to existing customers, and great things are offered to them. Being a customer for decades doesn’t have rewards with that group of businesses.

Gys 8y ago
The typical client of telecoms, insurance and banks probably does not change much. So ones signed up, it does not make sense to spend money on them. Airlines might be different because each flight is bought separately. You want ff to keep coming back (to stay ff).
tomjen3 8y ago
I have been with my current bank since I was 3 months. I needed a loan to pay deposite for my first after college apartment -- nearly couldn't get it, had to provide a budget, etc even though it was a very reasonable amount. The thing I don't get is, do they expect me to ask them should the time come to get a loan for a house?
- sjg007 8y ago
  Mortgages are tricky.. consumers either shop around for the best deal or they use a broker to do so (who may not work in your best interest per se)... Then the loans get bought and sold all the time and your servicer will change.. There are some perks with having a mortgage with your bank though..
fhbdukfrh 8y ago
This is so true. You can be a customer for over a decade but you still need to continually phone and threaten to change providers in order to get the same deal they offer people who switch every 6 months. I used to work at shaw on the data team, so I'm aware the problem is perverse incentives for selling to new clients over existing, but the cost of win-backs is so high (re-signing a previous subscriber) that you can usually streamline the affair by just asking for customer retention right at the start. The generally offer you the best deal they can right away because the goal now is to keep the subscriber in any form. Still a massive pain in the butt.

njarboe 8y ago

So if you aren't in the top tier, fly Southwest as much as you can. I do. All the same seats with minor differentiation possible. There are many reasons they have been the only airline to be profitable for decades, but having good service for everyone is definitelty one of the reasons.

rb808 8y ago
Ugh, with the stupid online checkin asap to get the lining up order, I prefer United Basic Economy over Southwest. I even prefer Ryanair over Southwest.
- Zak 8y ago
  I haven't found this to be a problem. Worst case with Southwest, I get a bad position in line, leaving only seats I don't like. Any other airline could assign me a seat I don't like earlier in the process, and it's not always possible to change especially without paying extra.
bdamm 8y ago
Also, Southwest's no-questions-asked-no-limits policy on cancelling and rebooking tickets makes them my favorite. They recently put a limit of one year on the rebooked ticket, however. You can do this right up until boarding has already begun and there are no penalties. Nobody else does this. They're polite, they're generally well run, seats are reasonable, maintenance seems to be good, they have good routes, cheap tickets, good baggage policy, and don't fee you to death. On top of that, they have responsive customer service on the phone, or via DM Twitter, which is way better than sitting on the phone! Whatever they're doing is the right way and all other airlines should just copy them.
- batiudrami 8y ago
  As a "normal" flyer, Southwest was the only airline I flew with in the US which didn't seem to make it its MO to have me be as miserable as possible through the entire experience. The budget pay-extra-for-everything airlines in Australia and SEA consistently provide a better experience than what I got from Delta, United or American.

Geekette 8y ago

Except that airlines still get the bulk of their revenue from economy class. The average margin may be higher per business/1st class ticket but the bulk of total sales and profit comes from economy. The airlines' discriminatory marketing actions are buffeted by disparate nature of their customer base (a group of strangers who'll typically never meet again after sharing a flight) as travellers don't have enough interest in and means of organizing. Otherwise, if economy class customers boycotted en masse, that airline would suffer more than if a handful of 1st class fliers did. United Airlines' scrambling after the Dr Dao debacle was driven by desire to stem the potential financial loss, not just PR crisis.

sokoloff 8y ago
> Except that airlines still get the bulk of their revenue from economy class. That's exactly backwards from anything I've ever read about airline economics. Do you have any references to support? https://kottke.org/17/03/the-economics-of-airline-classes https://kottke.org/17/03/the-economics-of-airline-classes suggests that on a given BA LHR<->IAD flight, the 122 economy seats total about $107K, the 40 premium economy seats about $106K, the 48 business class seats about $322K, and the 14 first class $122K. The 14 first class seats out-rev (and out-profit) the entire economy cabin.
- Geekette 8y ago
  No references off head but I stumbled upon it while working on airline related project some years back. The key thing being proper cost accounting showed it wasn't lucrative as portrayed. Citations on premium class margins don't account for the higher costs of servicing such customers (ground/airborne food and entertainment, lounges, transportation, exclusive services, etc). While some may have a few planes with higher #s of premium seats, many fleets (especially N. American ones), are comprised of mainly economy class seats. This is obviously less true for newer airlines or those upgrading most/all of their fleets. The invention of more seating groups like premium economy (same cabin, almost no difference in service offered and cost to do so) has made one of the biggest differences to date. Sales also extend to business and 1st class seats - this and frequent flier upgrades show that premium tickets are often sold at less than full markup.

CrackpotGonzo 8y ago

I was lucky enough to fly Global Services on United through my old boss' account at my old company. Flew internationally a couple of times and the level of attention was insane. Get to airport and they walk you to the lounge, past security, and then come grab you when you're ready to pre-board (before everyone including military). My connecting flight was delayed by 20 minutes, cutting down my connection time to 50 minutes. No problem, concierge called me and let me know they had proactively booked me on the next available flight just in case. I would always buy economy seats and there wasn't a single time I wasn't upgraded to first. Whole experience was insane, wish I could qualify for GS ever in my life.

kenneth 8y ago
Global Services is insane. Qualification requirements are insane, too. It's invite-only, based on unpublished criteria. It's speculated that when based at a hub airport like SFO, it takes about $75k in annual spend on full-fare United first of business tickets. There are a few other ways to qualify: fly 4 million miles with United, marry a million-miler who has GS, pre-pay $250k towards airfare for your company, or $50k personally. As a lowly 1K who only spends the minimum $12k annually of my own dime (and earns around 125k UA PQM on top of 100k over at AA), I would never dream of qualifying for GS myself… but one can dream.
- CrackpotGonzo 8y ago
  Yeah it's totally nuts. To be honest, I regret seeing the other side and knowing I'll never taste that again ;)
- CPLX 8y ago
  > pre-pay $250k towards airfare for your company, or $50k personally I’ve never heard of the prepayment for GS option, and those numbers seem low. Do you have a source for that?
  - kenneth 8y ago
    Yes, it's called the PassPlus program [1]. I don't believe United publishes the status perks online, but you can see the full terms on the FlyerTalk thread wiki [2]. Investment Levels Individual Plans Minimum $25,000 - Complimentary Premier Gold $35,000 - Complimentary Premier Platinum $45,000 - Complimentary Premier 1K $50,000 - Complimentary Global Services Corporate Plans Minimum $50,000 - 1x Premier Gold, 1x Premier Silver, 4x United Club Annual Memberships $100,000 - 1x Premier Platinum, 2x Premier Gold, 3x United Club Annual Memberships $300,000 - 1x Premier 1K, 1x Premier Platinum, 3 Premier Gold, 6x United Club Annual Memberships (Looks like they've changed the corporate options since last I looked at it. I am sure that there is still a level of corporate spend that comes with GS memberships but it may more closer to $500k than $250k.) [1]: https://www.united.com/ual/en/us/fly/products/business/passplus/flex.html https://www.united.com/ual/en/us/fly/products/business/passp... [2]: https://www.flyertalk.com/forum/united-airlines-mileageplus/1642162-united-ua-pass-plus-secure-flex-benefits-value-questions-consolidated-4.html https://www.flyertalk.com/forum/united-airlines-mileageplus/...

forapurpose 8y ago

> it just infeasible economically to give everyone good service Sounds like their problem, not mine. I've experienced, again and again, needlessly obnoxious, abusive behavior from airline employees. Would it be economically infeasible for them to be polite and professional? As someone pointed out, Southwest provides pretty good service.

vkou 8y ago
> Would it be economically infeasible for them to be polite and professional? Maybe not infeasible, but irrelevant. 95% of flyers will use a shitty carrier to save $5, or to get on a flight that departs 30 minutes sooner.

rconti 8y ago

You're not wrong, but I feel like they're chasing diminishing returns. Every other segment of the economy has shown us that people are willing to pay a premium (20%? 50%?) to be treated like a human and get a better service/product. On airlines, you have to pay 100% more just to get a refundable fare. 300% for premium economy (a slightly wider seat with slightly more legroom). 500% for business class. It's insane, and it makes everyone hate airlines. Nobody gets upgraded out of goodwill because it's their honeymoon, not anymore. They're chasing the 0.01% of the flying public. Those perks are too valuable to just make ordinary people have a good experience. I think it's short sighted and it will bite them in the ass. No "normal" person can justify paying 3x as much to have a slightly more comfortable seat for 16 hours. But I CAN afford 20% more to have the latest laptop. Something about the business traveler spending someone else's money. But it feels shortsighted and I don't think it can last.

kenneth 8y ago
The price differences are not as stark as you say. Business class in particular has gotten quite cheap these days. In the past few months, I flew round-trip California to Beijing 3 times for $1,900 in business class. That's affordable to many people, and quite reasonable. There are a lot of perks even when you don't get an upgrade. The intangibles (being taken care of when issues arise — I've received amazing service, even when the issues were my fault) are invaluable.
- PenguinCoder 8y ago
  Most people aren't flying international to begin with, and certainly not people trying to stay affordable. In that price range, 1900 per ticket is out of reach and certainly insane tonthink 'affordable' to an average customer of airline service.
  - gabriel-uribe 8y ago
    Agreed. I just paid $270 to get to China from California.
- 8y ago

chx 8y ago

Yeah, the service... I have been on Air Canada more than once as an economy class passenger and when they are late, all you get is an empty apology, if that. More likely nothing. But this summer, I was flying back from Europe to the 40th birthday of my best friend (no pressure!). And the flight to Abbotsford was late (boo) so I walked to the desk and asked whether they could put me on the Vancover flight. And since I had a paid business ticket they did without blinking an eye. Which is funny because the YVR flight is much, much more expensive than YXX. Another funny: the business check in agent in Toronto thanked me for providing the airport code, she said she never checked anyone in before to YXX...

speby 8y ago

Makes sense. Limited $ to spend on staff and staff have limited time so you want to allocate your best people and talent to your top-producing customers. Although, what's interesting about this, is that they might do themselves a favor if they target customers who have the most potential to bring them more of their business if they give them even better treatment, as opposed to giving the best treatment to only your already-existing top customers. Attraction v. Retention

closeparen 8y ago

I’m not sure the thing being rewarded is loyalty. I take 3-4 personal trips a year; that’s nowhere near enough to earn status on any airline, even if I used the same one on 100% of my trips for a decade. (Eligibility thresholds are per year). Status mainly seems to be a minor perk built into any job requiring frequent travel.

jcadam 8y ago

I never buy "Basic Economy" anymore. The new Premium Economy classes (the ones with extra legroom) being offered by most airlines these days are pretty reasonably priced and SO worth the extra money. Even when my employer is sending me somewhere (and they only pay for basic economy - they don't care if I arrive at my destination exhausted, sore, and angry at the world), I'll purchase the upgrade myself.

Brockenstein 8y ago

Not to mention but high status flyers make up like 80% of the airline's revenue. Everyone else who flies once in a while, once every couple of years, who's trying to get the cheapest economy class ticket possible really doesn't amount to much individually. And it doesn't matter if you get mad and are never flying X airline again because you really don't make the airline enough money to worry about you. And someone else is never flying Y airline again and they'll fly X airline instead. When I worked for an airline I heard every combination of I'm not flying A Airline for B reason you can think of. They're all the same. Just luck of the draw who you have a crummy experience with.

norswap 8y ago

> frequent flyers bring the vast majority of profits to airlines I wouldn't say that's true at all. But even if the majority of profits comes from infrequent flyers, the cost of losing one of them may be multiple orders of magnitude less expensive than losing a frequent flyer.