August 1999

On the first day in August 2008, I thought we'd take a look back nine years ago to August 1999. The airline industry was on the rise, hitting a stride that would carry it for only two more years.

In early August 1999, United unveiled plans for Economy Plus. The plan was simple. Rip out a row or two of seats and provide about 36 inches of pitch to the best customers: Mileage Plus status members and full fare coach passengers.

The full New York Times report from August 6, 1999 can be read here. And you can't help but think United was a little ahead of the game. Sure, the plan did not explicitly call for increased prices for the seating. But, they understood that business passengers were valuable, as the article notes, "Frequent business travelers make up about 9 percent of United's customers but account for 46 percent of its sales, not 36 percent. "

Today, as all carriers try to raise revenue, business passengers are the target. We have Southwest's Business Select and Virgin America's recently announced Main Cabin Select. This is about getting more money from the people (or their companies) that have it. And, although it didn't help keep United out of bankruptcy, they at least understood what the game was about.

United: Good Luck Flying on November 30th

Do you usually fly United Airlines home for Thanksgiving? Targeting a return date of Sunday, November 30? Think again.

Others have noted United's decree to return to the Saturday night stay. Now it appears they are also betting on peak travel days. With the hubub over Southwest's opening of its fall and winter schedule, I did a quick check on two markets for the Thanksgiving weekend. United has closed all low inventory for the November 30th travel date. I picked two United markets. NYC-CHI which has plenty of competition. And also PIT-CHI which has far less competition. See below:



United is priced at least 50% above the competition in both these markets.

So, two takeaways:

1. Jump on the competitor fares right now.
2. United is not afraid to be agressive. They are making a play to actually cover costs.

United and Continental Join Hands

News broke late yesterday that United and Continental had formed a cooperation agreement that would involve a code share and also Continental leaving the SkyTeam for the Star Alliance. (United's link and Continental's link).

Mark Ashley raises a few questions regarding the compatibility of the two mileage programs. Of course its a far way off, and Continental is rumored to be instituting its own charges, but here's my question: If I book a United and Continental code-share with one flight on United and one flight Continental, do I have to pay $15?

All Star Miles

United is auctioning a package to NYC to see the 2008 All-Star game in Yankee Stadium's final season. The package includes tickets to all the events, hotel accomodations, after party passes and First Class accomodations on United. The bidding is currently at an astronomical 701,000 miles. The kicker is the winner will be sitting in the Upper Deck for the All-Star game. I doubt the same lax attitude about seat hoppers will be present during the All-Star weeeknd. So, there you go, for nearly a 1,000,000 miles you get to barely see the All-Star game.

PS

Four years ago United launched PS service using 757s. At the time, the product's competitive advantage was the product itself: The reconfigured planes debuted with three cabins -- First, Business and Economy plus -- power outlets at every seats, and improved entertainment options. Since the launch, JetBlue has increased its New York - Los Angeles presence and Virgin America has come aboard with affordable business class with superb entertainment. Still, for the majority of business travelers flying on the company's dime and contracted price, United is the way to go.

Regardless, four years later, PS has developed a competitive advantage that stands stronger in today's climate than any product differentiation: fuel efficiency. Today's Wall Street Journal has an informative piece on the fuel's devastating impact to the bottom line. Essentially, the average airline ticket barely covers the fuel bill leaving little to cover other costs and no room for profits. The article contains a look at the New York-Los Angeles market and accompanying data table shows just how well PS might be doing for UAL. While AA using 72% of collected fares per filght to pay for the gas guzzling 767, UA is only paying 53% on its reconfigured 757s. It seems even its regular configuration out of EWR is also doing far better than AA's 767s.

Of course, United and all airlines would like to see this number much much lower. But, as fuel prices continue to rise, it is hard to imagine how AA will survive running key routes with such fuel inefficient planes. Even when they get rid of the MD-80s and A-300s, they still have to deal with the 767s.

*A: The Star Alliance Game

I recently cashed in 160k United Mileage Plus miles for a summer trip to Europe. This information is generally out there, most notably via a View From the Wing , but I thought I would share a few lessons learned:

1. As always it is best to start all Star Alliance searches using the global search tool at ANA.

2. UAL's starnet blocks most of the Lufthansa flights even though they would be available if you were dealing with Lufthansa directly. This really hurts as United's transatlantic options are not great and one of the real powerhouses of the Star Alliance is Lufthansa, both for its schedule and onboard service. Flyertalk suggests this Lufthansa embargo lasts for about 3 months prior to departure up to a week or two before travel.

3. Also generally known: Most of the United agents have no idea how to book award travel. They don't understand the routings so you need to know what you are talking about before you call. Also on multiple occasions agents missed available flights. When I asked them to recheck by flight number they were able to locate them.

4. You are able to hold award travel. Many agents told me I couldn't do this. But, I eventually found one that let me.

5. Always be sure to check Business Saver awards before you go with Economy Premium awards.