United Furthers Trend to Offer Elite Benefits to Everyone Else

Airport Experience, Frequent Flier Programs, United

Ah the life of an elite member on United. No fees, special lines, and free upgrades to Economy Plus. It may seem like a fair reward for devoting your business to United, but the airline continues to devalue elite benefits. Now, the difference between being Premier and being Joe Schmo is becoming blurred further by allowing anyone to buy access to elite lines starting at $25.

Dennis Cary, SVP, CMO, COO, and undoubtedly owner of some other TLAs as well, correctly says “When we asked our customers what travel services are most important to them, they told us that access to priority lines was something they value highly.” It’s absolutely true that they are considered valuable, and that’s why they’re reserved for elite members. Now, United is opening it up to “a limited number of customers each hour based on time of departure” and that has me shaking my head.

Sure, people want access to the priority lines, and that’s one reason why people strive for elite status. Now, United is saying that nothing is sacred, and anything elites can get, you can buy on your own. There are two reasons why I think this is a bad idea.
Anyone Can Get United Elite Benefits
First, you clog up the elite lines with even more people. It used to be that getting elite status wasn’t the easiest thing around, and upgrades were easier to get. Now, it’s really not that tough to become a Premier, and often half the plane is full of “elite” members. (I use the quotes because they aren’t so elite anymore.) Now you add even more people and you end up clogging up the line further. This is effectively United competing with CLEAR, but instead of an annual subscription, you pay per play. It just means more people will use the lines degrading the experience for the elite member.

Second and possibly more importantly, you make becoming an elite less worthwhile as well. Getting priority lines used to be a big deal for elites, and it made people strive for that status. Now if you can just pay for it when you travel, you can be much smarter about it. Chances are you aren’t always traveling at peak times, so you can save your payment for only those times when the regular lines are bad. The cost savings you can get by diversifying your flying to other airlines that are likely less costly will easily pay for the few times you need to pay for the elite line pass.

It’s entirely possible that regular passengers won’t find it worthwhile to buy up here, and if that’s the case, then the first case won’t happen. But we know elite passengers find it valuable, and if this makes it easier for them to break the bonds of loyalty, then it’s not a good move.

Bottom line: While I could previously not get any of these benefits without becoming elite, I now have no real reason to do so except to get fees waived.

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34 comments on “United Furthers Trend to Offer Elite Benefits to Everyone Else

  1. Nothing wrong with selling access to elite lines in itself – but $25 is far too cheap a price to do so. Maybe starting at $100 for minor airports off-peak and a lot more for major airports at peak times might be a better idea…

  2. It always puzzles me that people would actually strive to get elite status, going out of there way to spend money on an airline which they otherwise wouldn’t, just to get miles/points, access to a priority line or a lounge?

    If this was the case, shouldn’t the airlines (and I believe some, maybe even UA, have tried) ‘sell’ elite status at the start of the year for some price? This would be a lot easier for them and they get the money straight away, plus all the money when people do fly.

    My opinion is a lot of ‘elite’ passengers are not actually ‘elite’ from the airlines point of view when you look beneath the surface. Yes, they fly a lot and thus contribute significant revenue, but for the most part they are tied to specific airlines by corporate contracts with deep discounted fares.

    The passengers aren’t choosing United over American, but are flying who the company tells them (often based on cheapest deal available). Very few of them would be able to influence the corporate policy, yet the expectation is they be showered with perks as if they were personally writing the checks!

    Do you not think a lot of the controversy over loyalty and perks would diminish if the perks were only given to those paying significant fares for their flights?

  3. CF, I’m actually kinda surprised you’re against this given that you’re a fan of unbundling airline services.

    While it devalues the frequent flyer program, I’m not quite sure how much more so than any of the other devaluations.

    Given that a bunch of miles are on corporate contracts, I wonder how a company would react if they were offered a cheaper contract rate but with fares that do not earn miles. Perhaps they could still offer the company’s employees “elite like” benefits (e.g. Access to the priority line and auto upgrades, etc.) but they’d save the cost of free flights in the future. From the company’s perspective they have somewhat of a duty to minimize costs, and given that miles have more or less been an employee perk, but one that I doubt any rational employee would leave a company over.

    It used to be those free flights were (and are) essentially services that would have spoiled, but it seems more and more likely that given the higher load factors the airlines would do better just giving up the farce of free flights.

    I’m waiting for the first airline to either do away with their mileage program, or convert it into something that is more related to a customer’s profitability to the airline.

  4. Oh, the one comment I forgot, kudos to them for rate limiting this and making sure they actually have a product to deliver. Given the operational clusterfuck that I think United is, I’m actually amazed they did so.

  5. RJ, you bring up an intersting concept, selling Elite status up front for a given period of time, regardless of how many flights you actually take with said airline. In the a la carte model of air travel these days it’s a genius idea.

    Airlines could easily sell this for several thousand dollars. Undoubtedly some people would buy this and take only a couple flights getting very little benefit, or maximum profit to the airline. Only serious business travelers would buy this, not the leisure traveler or family that ponys up spare pocket change for a shorter line, etc. so the benefits wouldn’t really be devalued IMO. You’d keep airline loyalty since people would for sure book travel with the airline they have their status with. Just a win win win for the airlines.

    As for frequent flyers changing carriers over a move like this, I’m skeptical. I almost always book business travel based on shortest time, i.e. non-stop travel, which means I put a lot of miles on the dominant local carrier. Since time is money in business I think most corporate travel is similar. Nobody is going to spend tens of hundreds of layover hours in Atlanta, Chicago, Denver, Dallas, Detroit, etc. That’s a lot of wasted time out of spite.

  6. For me personally, elite status on airlines doesn’t seem to be worth it anymore. I used to be elite on Air Canada and Continental, but with a recent move to the UK and less business travel, I am not going to achieve either this year. This year I have spread my little travel around, taking my business to the best value (a combination of lower cost and appropriate schedule).

    For me, Elite had two benefits – lounges and priority boarding for overhead luggage space. With my move to the UK, most of my flights are trans-continental. There always seems to be lots of overhead room on those flights, unlike the Monday morning/Thursday afternoon consultant commuter runs within North America that I used to take.

    I thought about maybe doing a mileage run to get my status on Air Canada, but when I can buy access to airport lounges or just settle into one of the nice airport bars, and with no need to rush on board to get overhead luggage space, it just doesn’t seem to make any sense to spend the money for a benefit that I don’t seem to need anymore.

  7. CF, love the blog, but I can’t disagree with you more.
    My fundamental issue is the snobby nature of it. You’re holding the elite status to be something that makes one group better or worse than another.
    Now, I have no problem with snobbiness. I can be as much of a snob as the next fellow (by using words like “fellow”). My contention is that every Elite level person I’ve met is either filthy rich, or earns the miles on business trips that someone else pays for.

    This effectively puts Elite status benefits out of the hands of most people, and unfairly so. If I only fly twice a year, I should be able to enjoy the small perks if I’m willing to pay a small amount for it.

    What you as the real frequent flier get, is all of the perks. All of the time. For free. That’s what being an Elite level member should be about.
    (I say all of this, having been an Elite level member of Alaska and United multiple times over the last 10 years.)

  8. People seem to be missing the point of the Elite status, it’s meant to be for a few people, it’s why it’s called “Elite” and yes it’s not supposed to be something you can just buy for $25. I think united already sells the lounge access for $400 a year (red carpet I think they call it). United is becoming closer and closer to southwest, if that’s where they want to compete it’s their prerogative but people who can afford to travel for a bit more will switch to competing airlines as soon as they can.

    Take a look at Singapore airline PPS and Solitaire PPS benefits, can you imagine Singapore selling these privileges for a measly $25 ?

    I’ll quote my marketing professor who has 4-5 million miles on united. “United doesn’t understand customer service or customer life time value, all they care about is yield”. They want to get the most $ out of each customer without regard for customer loyalty.

    When I travel in the US I try to fly Virgin America, the miles I’d earn on United just aren’t worth it. If Virgin/Singapore/… started offering more routes out of SFO I’d switch in a second and so would a lot of other frequent fliers. Does that makes us snobs ? Sure when you are flying 2-3x a month you just don’t want to deal with all the hassles and you are willing to pay for it. I am not sure why it’s unfair to other travelers to treat people who give you the most $ different from the people who give you the least.

  9. I am one of those million mile flyers on United that finds himself crammed into the middle seat of the economy plus section. Not by choice, but because United changes my seat selection for reasons unknown to me. This has happened somewhat regularly to the point that there is no incentive to achieve elite status annually. This year I have split my travel among four airlines and saved about $4000 by making price rather than schedule the primary factor in selecting a flight. At least on United the designation elite has no meaning any more.

  10. They want to get the most $ out of each customer without regard for customer loyalty.

    asad, I have to take issue with you on this. I don’t think any of the airlines have properly structured rewards programs to reward those that actually earn them the most revenue. As I’ve said before, it’s a joke that someone buying $200 cross country tickets gets rewards based on miles flown when I often fly under 1000 miles on one day advance purchase tickets for $1000 or more. Who is earning the airline more money?

    I have no problems keeing elite status for the “elite,” airlines just need to do a better job of rewarding those that truly deserve it.

  11. I’m with A on this one.

    Using something regularly shouldn’t automatically give you some kind of better status – to work as it should, for both sides, the programme needs to be tied somehow to profitability.

    If I shop at Wal-mart/Kroger/Target every week, I don’t expect to get a frequent shopper checkout line (but there’s an idea, right?). Presumably, the small amount I contribute to the stores annual profits means it is not attractive to them to make the special aisle and give me a different color plastic bag.

    AAdvantage didn’t start to reward loyal customers; it started to differentiate American from all the other airlines and to give prospective customers a ‘reason’ to choose American. Once the other airliens copied, there was no differentiation and I guess this is when perks started cropping up, not to ‘reward’ as much as to try and further differentiate.

    Hard though it would be, if the airlines really want to reward their most profitable customers, they need to create a next-generation loyalty offering which needs to be tied back, as A says, to those earning them the most revenue.

    Today’s systems make this feasible, if not straightforward and these true ‘elites’ would undoubtedly appreciate a more tailored recognition and reward scheme – maybe invites to new product launches, small dinners hosted by the CEO every year, as well as things which make each trip run a bit more smoothly.

  12. $25 to stand in a supposedly shorter line? Are you kidding? On the other side of security you’re right back to the same ol’ same ol’ so why pay for the privilege of getting mistreated that much faster? By my own reckoning I’m not that important to the global economy or personally self-absorbed.

    Given the self check-in machines it also seems fairly counter-intuitive in most domestic travel situations.

    It seems United is simply confused about what it’s trying to offer. First they get ripped for presenting improvements to the front cabins and leaving coach short shrift. Now they get ripped for opening up some of those services to the masses. Which is it?

    Oh, and don’t forget to ask if a smile from the customer service representative comes with your purchase.

  13. Since one of Uniteds many underlying problems is actually creating cash flow (never a good sign for a business), I think any product that is 98% profit (like the priority line) that they can actually sell can’t really be a bad idea. What’s more, this monetarizes an elite benefit, which lets people know if they should be blowing extra money to get to Elite, which again, can’t be a bad thing. With a price on it, you have more information on whether the marginal cost is worth spending.

    Of course, now matter what United does, they will screw it up, so, in the long run, it doesn’t really matter.

  14. Take a look at singapore airline.
    “PPS Club membership will be yours when you accrue a PPS Value of S$25,000 within a period of 12 consecutive months.”
    “Solitaire PPS Club membership will be yours when you accrue a cumulative PPS Value of at least S$250,000 within five consecutive years of PPS Club membership.”

    So it’s not true that airlines don’t keep track of who brings them the most $, SA certainly does. You can’t really compare an airline with a grocery store, the profit margin is very different. But if you rent a car regularly you will get status on Avis,Heartz, …

    The fault here is not with the frequent fliers but rather with United, they don’t know who brings in the most $ and they can’t reward them appropriately. As others have noted when there is no reward people will look for alternatives, United loses more $ and they start to sell more of their privilages,… cycle continues until United goes bankrupt again.

  15. I love a good discussion where there’s not unanimous agreement . . .

    David – I assume you’re saying this tongue-in-cheek? There’s no way anyone is going to pay $100 for an off peak flight let alone a peak one.

    RJTame – We’ve definitely discussed the tremendous problem with the existing frequent flier programs on here before. There’s no question in my mind that the wrong people are being rewarded, but that doesn’t mean that a properly structured frequent flier program shouldn’t reward people for profitable behavior.

    While it’s true that many elite travelers are at the whim of the corporate travel departments at their companies, elite benefits are the kinds of things that get negotiated in the contract. Some companies can automatically give their employees elite status simply because they work there. So, if the elite benefits go away, then it’s easier for another airline to come in and try to steal the business, especially in a competitive place like Chicago where American has a viable alternative to United or in New York where several airlines compete.

    The idea of selling elite status is one that has been tried before. That’s kind of like Economy Plus Access where you can get Economy Plus for a year as well. But ultimately, we’re getting down to the way people buy fares. You can buy elite status for a year for $x or you can buy it via your fare for $y. Then you can decide if it’s worthwhile or not. Meanwhile, what ends up getting lost is any sort of special treatment for elite members, and I do believe they should have something.

    Nicholas – I am a fan of unbundling, but there are some things that should be reserved as exclusive rewards for being a good customer. Every business does it. Heck, if you go to your corner restaurant a lot and order a big fat meal, they’ll always make sure you get the best table, and maybe they’ll whip up something not on the menu for you because it makes you feel like a valued guest. The airlines need to have something to create loyalty, but of course, we agree that they aren’t getting the right people to be loyal now.

    A – It’s very true that the schedule is still going to trump all, but there are places that have multiple airlines competing for the business, and there are plenty of places that do business where they can’t get nonstop anyway. United is never going to win much business in New York since they’re basically non-existent, but Delta, American, and US Airways may fight for some of that tooth-and-nail. (And of course, I completely agree with you on the absurd reward structure comment.)

    Avleen – We’ll have to agree to disagree on this one. I really think that people who are road warriors, constantly living on the road and dealing with the pain of it, should be able to get some exclusive treatment. It may be snobby, but life on the road sucks. And the airline that can make it better will have a good shot at winning the business from that “fellow.” ;)

    asad – United has at least some idea because Global Services members (the highest of the high elites) are chosen based on how much revenue they give to the company. Now, you’d think someone who flies 10 times in First Class internationally would be a lot better person to reward than someone who flies 100 times in coach domestically on cheap seats, but they are getting closer with that program. That problem is that it’s a very small subset of the elite program in general, so it’s almost insignificant unless they roll out this methodology throughout. Unfortunately, United (like most airlines) is afraid to fire its customers. Sometimes that’s effectively what they need to do.

  16. CF – Thank you for bringing up the term Fire your customer. I love it, and something that we’ve unfortunately had to do in our business. (Telecommunications, not Airlines) I think the most controversial recent example of firing your customers is Sprint. While they flat out did this with some customers, and also encouraged others to leave (without actually firing them.) its always a tricky problem, especially in a business like the airlines where so much depends on share.

  17. First rule in business is it’s harder to find a new customer than keep and existing one. My wife was “fired” as a customer from United one year when they couldn’t find a gate for her plane at ORD and she missed her connection. Ok, that happens but then United made her wait until 10am the next morning when they could’ve transferred her ticket to NW and got her home that night.

    I had a similar experience where I was flying CO through IAH during a rare Texas ice storm. When I checked in for the first leg of the flight at DFW the Continental people said they were waiting for me and had transferred my ticket to AA, a direct flight home. The plane was full so I got to sit up front to boot.

    I’m sure that cost Continental a couple grand, but the next day I called my travel agent and switched my perferred carrier to CO. That has net them a fair amout of business over the past couple years.

    Seems simple right? Now why can’t we always get service like that from the airlines?

  18. A said:
    “Seems simple right? Now why can’t we always get service like that from the airlines?”

    Those of us who quit flying United do!

  19. Not all elite members get their status through corporate contracts. I live in the Northeast and for the last 5 years have worked for small start up companies. There are no corporate airline contracts-I book my own travel, use my own credit card, and get reimbursed when I finally turn in my expense reports. I am Platinum on US Airways and quite enjoy the shorter lines, free upgrades (frequently on many flights-not always on others), and advance seat selection. The best perk is being able to secure my seat when I book my ticket either 2 weeks in advance or the day before. Since they started charging everyone else for aisle and window seats at check in, I’ve never had a bad seat. Always the aisle in the emergency exit row.

    When I travel with my family I avoid all baggage charges, seat fees, etc. I chat with flight attendants frequently and they give me free drinks when I’m in coach (they love female road warriors who laugh at some of the stupid things the “Chairmen” do or demand).

    I never have to worry about my bag not getting on, at smaller airports (like MEM or ILM) I’ve arrived to find myself rerouted due to weather or issues because the staff takes care of their regulars.

    People always ask me why I don’t jump ship to United, but why would I? They wouldn’t treat me as well as US Airways and in BOS the US Airways terminal is much nicer with many more options and shorter lines.

    So….as a representative of the non-corporate elite, I’ll take what I can get on US Airways since the little extras make a difference to me. But this does solidify my decision to stick with US Airways and stay away from United (except to get the code share flights when necessary).

  20. CF – My comment on charging on $100 for elite lines was completely serious. The easiest way to ration demand for something in limited supply, is to charge a high price for it. Those elite lines cannot be allowed to have queues of non-trivial length.

    By charging $25, the incentive to be / gain elite status is devalued, since one can instead just pay $25 as and when you need it, rather than paying regularly. If not someone on a ultra-cheap ticket booked months in advance can pay $25 and get many of the benefits that a FF who booked 1 day in advance and is paying a much higher fare receives, then the FF program is diminished in value. If however gaining access to these benefits is demonstrably expensive, the FF program retains perceived value.

    Look at how many FF miles it costs to get a free flight on a route that people would want to fly – and compare to the cost of a ticket bought in advance. Work out how much a FF mile is worth – probably about $0.003 One can of course purchase FF miles, but the price for buying miles is much more than their value – maybe 4 times the value. This means that gaining miles via elite status – i.e. continually giving United your business – has a clear benefit instead of just buying access to miles when you need them. Similiar thing with elite lines – if people want access, make it available, but charge heavily for it.

    Yes, $100 is expensive, but if elite status is perceived as readily available to all – then it loses its cachet. Of course United could upgrade customer service generally for all customer segments, and they should award elite status purely based on profitability rather than just miles flown (e.g. award advance purchase coach fares with only 0.25 of miles flown) – but that’s a completely different story.

  21. Interesting discussion. Over here in the UK the only way you get to use the “Fast Track” security line is by holding a first or business class ticket. This is managed by the airport operator rather than individual airlines so I guess it’s a bit different, but at busy times it’s definitely a major perk and is part of the premium flying experience. Virgin Atlantic offers a drive through check in and fast track to its clubhouse for it’s premium customers at LHR, something I’m sure has lured business to them especially during the T5 debacle. In an industry where companies struggle to differentiate their offerings (charging for food, baggage, lounge access) surely there should be some services that are reserved for those that truly deserve it, the time-starved, stressed frequent flier who has entrusted their loyalty with a company through regular custom.

  22. David – You won’t hear any argument from me on any of your points except for that $100 fee. I think they shouldn’t sell it all. But yes, it needs to be kept more exclusive for sure. I just can’t imagine anyone paying $100 for the privilege, so it’s not worth selling.

  23. CF – I agree that very few people will purchase elite line access for $100. The purpose of putting it on sale is for an airline to be able to say ‘We heard you – we’re making it available’. Could people [e.g. your parents’ generation] who are relatively wealthy but fly infrequently and book a vacation 6 months in advance getting a cheap fare be persuaded to pay up for a more civilised airport experience ? Something like elite line access should be set up as a highly profitable product, not a mass market product.

  24. Why don’t they put lower level elite status on sale, and for the fools who earn it by travel, report the nominal value to the IRS on a 1099?

  25. well, as a Global Services Mileage Plus member, this should be no surprise in this economic climate. After all, United only sees me as the money I bring them every year and if I decrease my flying with them, GS membership goes away. Loyalty? Yeah… it is all about the money!! That said, I do enjoy the perks of GS!


  26. AC, i’m glad you get some great treatment from US Airways.
    But to be honest, it sounds like the treatment I get form Alaska all the time, regardless of my frequent flier status.
    I had been flying with them semi-regularly for a few months (every 3 or 4 weeks).
    One time, my flight was delayed, and I missed two connecting flights.
    They put me on the next flight to an airport 50 miles farther away. They upgraded me to first class to apologize for the delays (which were NOT their fault), and paid for a taxi to get me home.

    All airlines should be like this, all of the time. You shouldn’t have to be a high flier to get great treatment.
    This was my point, that is all :-)

  27. Avleen-I totally agree, you shouldn’t have to have an status to get good treatment but sadly I don’t find that as the norm on any airline. I just checked in for a United flight (booked through US Airways) and the customer service rep was rather rude when I asked her to add my FF mile number to the reservation (why it didn’t transfer I have no idea).

    On Alaska-once I was flying back from the West Coast and United and they had overbooked the flight. It was a red-eye and I was quite fine with window economy plus seat. They called my name and told me they could send me direct from SeaTac to Boston (avoiding the connection in SFO) but it would be the middle seat in the back row that didn’t recline. Um-no!!!

    I’ve never flown Alaska but they have virtually no presence in Boston. It’s USAirways, United or American really so I stick with US Air. I know most people hate them, but they treat me well.

    Respectful treatment should be the norm but sadly it just isn’t.

  28. I’m not sure how UA does its calculation for UGS but SQ’s SGD 25k requirement for PPS club is SGD 25k first/business class only. That is, racking $25k in econ seats is not going to get you anything despite the fact that you’re bringing in the same amount. I’m guessing this has to do more with profit margins and all that.

  29. Err, posted that too fast.

    I also wanted to comment that I’ve got a special place in my heart for US. UA managed to lose my bags in JFK during a Christmas trip 3 years ago and because I got transferred to a US flight (after the cancellation of a UA flight and thus the misplacement of said bags) to DC US was then responsible for tracking my bags. The people at … DC (forgot whether it was IAD or DCA) were very helpful and friendly.

    I’ve got another trip coming up starting in about a week’s time and by coincidence (well, it was the availability of T-fare seats for the Star Alliance NA airpass) the domestic US flights are mostly with US with 1 CO and 1 UA flights. I’ve applied all the lessons learned from travelling back home to the States the past few years and I hope that there really will be no drama this time around …

  30. I think the criteria for UA GS is $50K on first/biz per calendar year. That is my guess, based on my experience.

  31. There’s another problem with selling access to elite security lines; you add infrequent travelers, who are willing to pay an extra $25 to access a quicker line, but who don’t travel frequently enough to actually move through the line quickly and efficiently. By limiting access to people who actually fly all the time, at least you ensure that all the people in the priority line actually know how to comply with the TSA’s absurd (and probably safety-compromising, but that’s a different matter) rules and regulations, so that at least the line moves quickly. It’s not fair to allow clueless one-time-a-year travelers who can spring for an extra $25 to slow down the elite lines for the actual road warriors who have to deal with these lines weekly, but who at least know what to do to keep thing moving quickly (if stupidly).

  32. It’s the same at my home airport (ATL), but even so, it’s annoying to see people slow up the line.

    I guess if I were a GOOD American, in the spirit of Sam Adams and Thomas Paine, and the people who launched the Boston Tea Party… and not just a pathetic sheep… I would clog the line myself and complain about how stupid and counterproductive the TSA’s Security Theater is… but I am ashamed to say, I am just a sheep… and all I want to do to just get through that process as quickly as possible. Yes, intellectually, I know the TSA’s idiocy will probably cause us to lose a plane some day… and I honestly do pray to the Lord that won’t happen (while fearing that it probably willl), but my selfish, unpatriotic, self-centered goal is still just to pass through the Security Theater as quickly and easily as possible. Mea Culpa, Mea Culpa. I know that I owe my fellow passengers, and myself, altruistic civil disobedience… but I am no longer in the mood… I just want to get home as quickly as possible, so I put my liquids in 3 oz bottles, take off my shoes, smile while they X-Ray people’s 1/4 inch flip-flops, and just hope that George Washington and Thomas Jefferson will somehow forgive me, while I hurry home to my family.

  33. I enjoy my Elite Status, and I do make some effort to make sure I achieve it. I also am a blatant snob. I loved it when only snobby people like me got to enjoy elite status. But, I have to admit that I agree with the anti-snob Avleen – these benefits should be available to the occasional flyer that is willing to pony up the money. If someone only travels once or twice a year they should be able to buy an elite benny like Priority boarding. But…. United would be smart to maintain the value of this benny by capping the number they will sell at any given time. Meanwhile, I fly over 60 flights per year – and even if the benefit is just avoiding 60 $25.00 fees that is petty good. That works out to over $1500.

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