United Sells Economy Plus at Time of Booking

I noticed on One Mile at a Time yesterday that United has quietly started allowing people to upgrade to Economy Plus at the time of booking. Great idea. In fact, I almost thought about giving them a gold star, but not quite. While it’s a good idea, I have some issues with the way they’re doing this.

Don’t get me wrong, this is the right thing to do. If someone wants to pay more up front to sit in Economy Plus, why would United want to turn down that revenue opportunity? They shouldn’t, and they’ve now fixed that problem. BUT, looking at United’s page on the subject, I see that the pricing for the upgrade is the same regardless of whether you do it at the time of booking or at the airport. The value, however, isn’t the same, and United needs to make an adjustment to account for that, otherwise they’re leaving money on the table and possibly angering their elite customers.

Economy Plus is primarily meant as a bonus for elite members, supposedly the airline’s best customers. When they sold the upgrade at the time of check-in, most elites would have already been seated in Economy Plus so it wouldn’t be a big deal. But now, if someone upgrades at the time of booking, it could be taking a seat away from a valuable elite member. I don’t know how often the Economy Plus cabin fills up completely, but this would certainly make that more likely to occur.

So, if United wants to sell an upgrade at the time of booking, they should charge more for it than for an upgrade at the airport because the potential loss of value for the elite customer who gets stuck in Economy Minus is increased. Also, having an Economy Plus seat secured at the time of booking is of greater value to the purchasing customer, so the price should be higher.

Also, it’s a little disappointing to see that all classes of service pay the same amount for the upgrade. When United stopped giving people booking full fare tickets access to Economy Plus, I thought it was completely ridiculous. Now, I would have thought they might have reconsidered. If you paid that much money for a ticket, I think that access to Economy Plus is only fair. It should at least be discounted for the handful of non-elites who actually buy those fares, but it isn’t.

So . . . good idea, United, but you’re leaving money on the table and possibly angering your elite customers. Maybe some tweaking on the execution side would be a good idea.

23 Responses to United Sells Economy Plus at Time of Booking

  1. Pingback: EconWatch.com

  2. Nick says:

    The United upgrade article was pretty dam perfect and you hit it on head.

    I’m a resonably solid United flyer and fluctuate between 1k and Prem Exec and I have noticed what seems to be the general errosion over the years, between those who fly 100k/yr and those who fly 30k/yr, so this is just another chip off the ‘ol perks block’.
    This block is actually what makes you a loyal flyer, but its getting smaller by the day and one day the block ‘aint gonna be worth putting oneself out for.

    Nick
    Ps The Cranky Flyer is just what us flyers need to keep the airlines on their toes, a sort of Robin Hood of the aviation world – keep it going.

  3. jonathan reed says:

    I suspect that with United’s recent huge quarterly loss and the cost of fuel, United is re-appraising whether it shouldn’t kill economy plus and jam a few more seats into their planes. Making E+ available at the time of booking will show how much people are willing to pay for extra space. If the results are disappointing, United may conclude as American did many years ago that the public simply won’t pay for extra leg room.
    Yes, this move does devalue elite status with United. In my experience, E- is more packed than E+ so that E+ often offers more chance of an empty middle seat as well as more leg room. This may now change. United used to block the middle seat for elites in E+; that went by the wayside a year or two back.
    In addition, E+ at the time of booking is more valuable because not only does it guarantee you E+ but you can get a window or aisle. If E+ is sold at the time of the flight, often only middle seats are available and people are less inclined to pay for that, thereby increasing the chance that the elites who booked E+ at booking will have an empty middle seat.
    It is hard to say if the devaluation of elite status with United will hurt more than extra revenue they can get from selling E+ at the time of booking. But,not question, this is a devaluation of elite status.

  4. ML Harris says:

    First: F United. They are the worst. Of my five worst airline experiences, United stars in 3 (Al Italia – 1, Continental – 1). I had TWO flights canceled this weekend. If I had half of my hourly wage for every hour of mine they’ve wasted with bumps and cancels, I’d be able to fly first class to Europe on some other airline.

    Second: Checking in online, day before flight: all economy seats taken despite LT advance booking (thx Orbitz). Am asked if I’d like E+ seating before I get to see the seating map with no available seats. Not prompted a return to E+ option after looking at full map. Twice this happened on both canceled flights. Instead of boarding pass, I am given departure management cards. I think I wound up with a free premium economy upgrade on the second flight that was canceled. Of course, it was canceled and I got to fly American instead because they had overbooked EVERY ORD to DC Natl flight on Sunday they had (and they have em once an hour). At any rate, E+ feels like a way to milk revenue. If they are booked and you do the check in from home, you can wind up with E+ for E prices. Mmmmm.

    Can I reiterate: F United. With something barbed.

  5. Nick says:

    Mr Harris,

    You can reiterate all you want, and I’m glad that I have been of help in allowing you to vent your thoughts – better for the soul.

    Nick

  6. D. Clarus says:

    In other United news, I just received an email from them saying that they’re changing their base accrual policy. Now, flights that are shorter than 500 miles will only accrue the real number of miles flown, instead of accruing 500.
    http://www.united.com/page/article/0,6722,52718,00.html?jumpLink=%2Fprogramchanges

    Not a major change, I suppose, but an annoying one all the same. I’m also looking at the ever-reducing block of perks for having elite status and thinking that it’s coming close to not being worth it anymore.

  7. Feldspar says:

    This has been going on for quite some time. I purchased an EP upgrade at check in a year ago.

  8. United fumble execution? I thought that was the only thing they did reliably.

  9. CF says:

    Feldspar – Yes, Y+ upgrades at check in have been around for some time. I’m talking about now being able to upgrade at the time of booking.

  10. Jean says:

    Economy Plus is the ONLY reason I stay loyal to United and continue to fly enough miles to maintain my MP Premier status each year. If that loses its value for me, then I have no reason to continue to fly United. They are often more expensive than other airlines for the same route, and I often need to make connections rather than being able to fly non-stop to some of the places I go regularly. Their people are often not very nice (for which I can’t really blame them based on what I’ve read about the way United treats them), most all of the planes I’ve flown within the past few months have been totally or very close to totally full, and on TED there isn’t even an opportunity to get an upgrade since there is no first or business class. Economy Plus is the only good thing left on United. If I start not being able to get Economy Plus seats when I book my flights, or is they do away with it to put more seats on their planes, then I’M GONE!

  11. Bobber says:

    Very sad news, indeed. Not sure what sort of donkeys advise United on policies like this, but their advice sucks. E+ is a great distinguishing factor between United and all other transatlantic carriers. It partially compensates for the rapidly aging fleet that they have at their disposal – without it, United will struggle even more, as customer loyalty will soon be decimated. V. poor.

  12. PF says:

    My hunch is this is the first of many big changes if there is a merger with US and Mr. Parker gets to sit in the big chair.

  13. QRC says:

    Cranky, and many of the posters above, I think there’s a principal that’s overlooked. And I DO think it’s a great idea for UA to do this! In summary:

    US airlines give WAY too many people “elite” status, at the detriment to true elite fliers and profit.

    What do I mean? Even those who fly 100k on United, many are not very profitable pax from the airline point of view. For US airlines (AA included) you generally can get away with spending under USD$20k a year and still be a 1k. Not Global Services, but definitely 1k. If you were really economical you could probably do it for under 10k.

    Match that with long-haul non-US carriers who actually make money, take Cathay Pacific. First, the tiers are organized 30k, 60k and then 120k miles (instead of 25, 50 and 100). A resetting system means that once you hit 30k, you must go a full 60k to get to the next level (when starting out you don’t just plow through 30k and do another 30 to get to 60). This means you could do 205k in a year and still not have top status. Years are exactly 365 days, no extra time in the beginning once you hit status (status starts the DAY you hit 120k miles). And although 120k gets you their top status (Diamond), half of the fares they sell aren’t even valid for mileage accrual! If you want their cheap economy fares you aren’t getting any miles, period.

    On to miles and op-ups:
    On US airlines, miles are like candy. Elite pax get extra miles. If you pay full fare Y or J or whatever you get extra miles. Take Cathay Pacific. You get (again) ZERO miles for half the Y classes, and no elite bonus ever. It doesn’t matter if you fly them 500k a year. Also, there are NO upgrade coupons. Period. They just exist. No “systemwide upgrades.” This stinks from a short-term view…aka I can’t get in J or F. The reason is obvious…Cathay is a monopoly in HKG (SQ in Singapore has similarly tough miles standards). US has tons of competition. However, that doesn’t take from the fact that the whole flying experience is extremely hindered by zillions of 25k, 50k and even 100k “FFs” who have virtually unlimited miles and jam the J and F cabins full. But the benefit is a significantly enhanced J product and one that I am personally willing to pay more to use, instead of some freebee.

    Regarding operational upgrades, CX and SQ do not do them unless there actually is an operational issue…aka Y or J is full, and someone can’t get on the flight otherwise. Thus the elite pax move up a class and the person waiting outside gets to board the aircraft. In the US, no. FFs, if they haven’t already upgraded with their unlimited miles, get bumped up for being loyal. It sounds good on the surface…and I think I might take some flak here..but the seats are a joke (except that PS thing on United, their F and J are actually okay) service is average to bad, lounges are average to bad, food is bad.

    The above I think has a direct correlation with US carriers not being willing to milk more money out of the true FFs, and to weed out those who get 25k or 50k or even 100k a year on very discounted fares that aren’t even profitable for the airline. When I’m in Y, even though I’m at CX’s top level(diamond) with about 230k miles since last November alone, I have very little chance of upgrade…but I’m still a very happy camper because of the service they give me as their elite member (including basically whatever you want discretely from the front). But I know basically…if I WANT J or F, I better pay for it. Otherwise, unless a true operational issue happens (probably once in every 8 flights) I am in the back if that’s all I paid for. And I won’t get any miles if I paid a discount fare. So what happens? People pay more (again, monopoly, I know so there are no other options). But it helps CX for sure…our firm spends probably $150k USD per pax in travel annually for those who have reached DM, thx to extremely expensive J and F and the need for us to sleep on the plane. We put a price on those seats (instead of seeing them as things we should get for free) and then weigh the cost.

    Again, I’m using the narrow example of Cathay but (being an American guy who is in HK temporarily) there is definitely a LITTLE resentment of the overly generous US mileage programs, especially since the treatment is truly horrible when you get to the US, whether traveling on UA or AA. In HKG, AA “exec plats” who flew 100k miles in AA last year get admittance to Cathay F lounges due to Oneworld rules, truly comfortable places with top service and services (unlike some admirals lounges where they charge you for drinks!). A CX flyer could have done 200k miles in one year and still not get access to the same lounge (because of the way CX resets its mileage).

    However, what benefit does the CX flier get? I think a lot because it is assumed he flies the most on CX. Coach is a big improvement over the US guys. In flight entertainment actually exists, even on regional flights of an hour or two, even in Y. J and F have on demand (and now a lot of Y does too). So in a nutshell, my theory is if a few airlines in the US would go out of business and then they cut back mileage programs maybe revenue could be drawn out of J and F guys.

    Over-competition is clearly an issue in the US, and without the ability to collude…well then I guess everyone just kills themselves and “bends over backwards” giving pax miles and status. But that’s the thing…by being so “good” to pax by giving practically anyone elite status (I had Platinum on AA as a student a few years back, flying on fares as low as $200 coast to coast!). But I really think that basically giving away your J and F classes (because that’s what UA and AA do half the time) is actually more detrimental in the long run for an airline. In my path to getting that CX diamond status thing I estimate I have spent well over $100k USD this year on flights, possibly 200. Airlines cannot make money when those seats are going for free with people who spend $10k a year or less on them.

  14. ML Harris says:

    Thanks for the forum. I see UA and I see red. Happily, I’m moving to Chicago, so I won’t ever have to fly UA again (sarcasm off).

  15. Nick says:

    Jean my sentiments exactly

    Nick

  16. CF says:

    QRC – Thanks for the comment. There’s no question in my mind that frequent flier programs in the US are broken, but the airlines are too afraid to make drastic changes that will potentially push people away. It’s too bad, really. I also think it’s a good idea to sell access to these seats, but since UA has identified Y+ as a differentiator that is primarily for elite members of the program, they should value the potential displacement of those people at a higher level. In other words, great idea but they should charge more.

  17. Nick says:

    I hope that (UAL) United might be looking at some of the comments spawned here as I feel that the sentiments most probably run through countless thousands of loyal customers they have, but this loyalty will no doubt wane if they continue n this fashion. One respondent mentioned that invariably the flight costs are higher on United than on other, possibly as good airlines they are 100% right and United do not want this section of the paying public to jump ship, as this other ship might be a delightful surprise!.

    Thank you all for your contributions to this as they have been informative and thought provoking at the same time.

    Nick

  18. Liz says:

    You definitely hit the nail on the head. What perks are now available for their LOYAL customers? This week with the E+ being “given away” to anybody (many of us have to book at the last minute and the actual mileage component is driving me to book more on AS and their partners now. UA just doesn’t seem to “get it.”

  19. Bob says:

    I view this as a big takeaway from Elite members and people who purchase annual Economy Plus access. Economy Plus is a significant reason of why I fly exclusively with United if they service the route.

    I guess it’s time to be more loyal to my wallet and comfort on a per flight basis, than worrying about making elite status on a single airline and making use of their benefits.

  20. Jeff K says:

    Bob brought up a great point – those of us who purchase annual Economy Plus access are getting a screwed along with the Elites. I E+ access because I would probably never reach 1k/whatever (and because you couldn’t purchase at the time of booking).

    For me, E+ is *the* differentiator giving UA an edge over all other U.S. carriers.

    I hope they don’t really mess it up.

  21. woti says:

    Hey – I am happy with the E+ at the time of booking. I normally fly American BDL to ORD and their cheapest fare was almost $700. My E+ ticket with a confirmed seat? $330.

  22. Jim says:

    I just did my online checkin and did the upgrade to E+ for 39.00 so I’m a happy camper. I fly from Seattle to Chicago on a redeye so for that price, I think it’s a great deal.

  23. Nick says:

    @ Nick:

    I’m with you a 100% on this one Nick as I’m the same 1k-Prem Ex

    Nick

Leave a Reply

Please use your real name or nickname instead of your company name or keyword spam.