Last week I made a very brief mention of United, but then got side tracked retelling an unrelated poor customer service story. Today I am fully focussed on United and looking at the recent launch of what they call Premier Travel and Premier Travel Plus. Here is what how The Wall Street Journal described it:

“Premier Travel, which can be purchased online when booking or when checking in, lets you check two bags at no charge, use premium security and boarding lines, get a seat in United’s “Economy Plus’’ coach section with about five inches of extra legroom and earn a 25% mileage bonus. With Premier Travel Plus, you get double miles and access to United’s airport clubs in addition to the other benefits. For the shortest trips, Premier Travel starts at $47 each way and Premier Travel Plus starts at $84 each way. If you had to pay $40 or even $50 in baggage fees, for example, you might as well get the other perks. The options are available for both domestic and international trips.”

This reminds me a little of why insurance is so successful on airline websites – people generally don’t read the policy, but assume they are covered for everything and therefore buy it because they don’t understand it. That was not a typo. Just trying to sell one item like lounge access often looks quite expensive, but when you bundle them, especially with harder to measure items such as priority lines and extra frequent flyer points, I am sure the take up is going to be much greater than trying to sell multiple items than can be more discretly valued, and which often look like inferior value for money. Whether you charge extra for the bundle of benefits as an add on, or do it via upsell to a higher fare family as Froniter did quite well, at the end of the day, it is more money going into airline revenue, which has to be a good thing for the industry.

But what is more interesting in that WSJ piece is the comment from someone calling himself UAL Man:

“To be honest as an United Premier Executive this does make me question my constant patronage of United. As it is having status with United is becoming more and more hollow. One of the primary reasons chose to give my business to only two airlines is that having status on each saves time with priority services. In the few months I’ve noticed how Priority Security with United is becoming more and more of a joke. I’ve noticed priority screen lane lines growing. Adding more people to the priority category only serves to devalue its existence, and the benefits of loyalty. Despite the irritation, I’ll stick with United as my primary for now. The benefits of free extra leg room in Economy Plus are invaluable to someone who is over 6 ft. 3 in. and mostly legs. However, the moment that seats in Economy Plus become scarce for elite members is when I switch all of my business over to my secondary carrier.”

Almost everything has a trade-off, and this may be the trade off here. How much do you devalue what top tier frequent flyers receive as part of their status, and will the extra revenue from selling Premier Travel compensate for this decline? That is a much bigger question than I can answer here.

Advertisements