Meeting with Doug Parker Yesterday (11/5/10)

[usa1]

Ticket prices are equal to or even lower than they were 20 years ago, while everything around us has gone up

Accept our pay checks and they're down about 25% post BK ..... Guess who's paying to keep ticket prices down .... you and me!

 

[Itestwell]

Allow me to clarify a point or two...and thank you Chock Jockey for your retort to the angry and the bitter.....

First- we have no fundamental objection to the baggage fees in principle. Those are not the fees which SS255 was referring to as being non-competitive. The issue is that the company's reliance of the fees alone for their profit (or the appearance thereof) does not constitute sound business practice. We realize that baggage fees are here to stay-right or wrong, but every airline with few exceptions (such as Southwest) has them now.

The fees which we object to are those charged to Elite Flyers such as charging a Chairmans Preferred or Platinum member for a Choice Seat, or the aforementioned mileage redemption/redeposit fees. Virtually EVERY airline who charges extra for seats or mileage transactions waives them for their upper tier elites, WITH THE SOLE EXCEPTION of US AIRWAYS. When I asked the question regarding those fees, Doug's initial response showed he was making some erroneous assumptions about how that actually worked (a Chairmans member in the audience politely told him he was wrong on a couple of points). After he answered, I said, "so does this mean you would prefer to have my $15 to $20 today for the seat at the risk of losing my $15-$20K in business over the coming year?"

"Well when you put it that way, no" was his answer...but the actions do not reflect that answer. At the end of the discussion of this question, Doug agreed to take another look at that policy, and we expect him to do so. They have reversed some other poorly thought out decisions in the past, and there is no guaranty that they will reverse this one, but a promise to look into it further is good enough for now.

Regarding the potential loss of revenue from people who choose not to be nickel and dimed, we do have hard evidence of hundreds of former US elites who have moved on to other carriers and never looked back. We offered to provide that data, including annual spend of those who left (of course trusting the respondents to give accurate information), but at the time they chose to ignore the information offered. Therefore, I have commissioned another survey of the almost 1500 FFOCUS members and hope to have an up to date snapshot of the high tier flyers who belong to our group for US in the near future.

I want to emphasize again, we are VERY grateful to Doug and his team for hosting us last Friday. I had a rather detailed conversation afterward with Fern Fernandez in Customer Loyalty and Marketing afterward, and hope to follow up with hard data for him soon.

I will no longer comment on the appropriateness of our group bringing up the pilots' dispute... bottom line is the longer it goes on the more it hurts just about everyone.

Thanks--and if you have anything constructive to add we're all ears.

My BEST to you all.....

I see that you finally removed the circa 2003 pics from the FFOCUS homepage.

When shall we expect to see informative posts on the website regarding possible negative ELR/ E+ developments at CO/UA?

 

[AstroLounge]

Actually, the pilot labor issue is one reason why I (a frequent flyer) generally try to avoid LCC.

The extreme anger and lack of logic displayed by the East posters here has made me want to minimize my chances of being on the same plane with them.

PRETTY S-t-u-i-d Reason IF You ask Me (which You didn't, and nor do I care). EAST flies with EAST Crews and West stays with the West........so Your Point is ridiculous and has absolutely NO MERIT or Credibility. (This is EXACTLY WHY I stated..........."the labor issues at USAirways have absolutely NO BEARING on Any Customers.........it literally is NONE OF YOUR BUSINESS, Gladys Kravitz!). NADA! (The Pilots on either side of the equation don't need or want YOU fretting or concerning yourself over a Matter that doesn't pertain to You. Hopefully N-O-W You get it.........but I highly doubt it.)

 

[ebwgs]

PRETTY S-t-u-i-d Reason IF You ask Me (which You didn't, and nor do I care). EAST flies with EAST Crews and West stays with the West........so Your Point is ridiculous and has absolutely NO MERIT or Credibility. (This is EXACTLY WHY I stated..........."the labor issues at USAirways have absolutely NO BEARING on Any Customers.........it literally is NONE OF YOUR BUSINESS, Gladys Kravitz!). NADA! (The Pilots on either side of the equation don't need or want YOU fretting or concerning yourself over a Matter that doesn't pertain to You. Hopefully N-O-W You get it.........but I highly doubt it.)

This would have been an interesting post if it were not so untrue. To argue the the pilot dispute has no impact on fellow employees or customers (as you stated in a prior post) is delusional thinking. As a result of the pull down of flying out west our east flying has been "scoped out" if you will to keep the PHX operation going. You don't think that that's less flying for our east flight attendant and pilot groups, as well as the west groups? You don't believe that east flight attendants longing for a transfer out west and west vice-versa are not adversely affected by this dispute? Have you no awareness of passengers being delayed or canceled because they don't have the appropriate crew and metal to take them to their destination? How would you like to have bought your Choice Seat on east metal only to be thrown onto west metal that, yes, will get you to your destination, but the upgraded seat that you paid for was no longer available to you? I'd be pretty ticked off about that myself.

Fact is this pilot dispute affects every one in the company inside and out. It certainly has affected our contractual talks, and if a customer writes and says he avoids us because of the pilot dispute then like it or not if affects our bottom line. One thing is certain, once it is settled, we will be better off for it. If that is no clearer example of all of the competeting stakes involved in this dispute, CUSTOMERS, included then I don't know what is.

 

[Bear96]

PRETTY S-t-u-i-d Reason IF You ask Me (which You didn't, and nor do I care).

It may be stupid in your opinion, but lots of consumer choices are not govered purely by logic.

Similarly, logic does not seem to be governing a lot of the East pilots these days, but is a quality I prefer to see in the pilots I fly with.

So I will continue to take my 100K miles of annual business travel elsewhere whenever I can.

 

[ChockJockey]

I don't have the time to find this article right now but if I dig it up I will certainly post it..

This will do: What It Costs an Airline to Fly Your Luggage

 

[ChockJockey]

This will do: What It Costs an Airline to Fly Your Luggage

This clip has a lot of interesting information as well: The Bright Side of Baggage Fees

 

[Art at ISP]

Allow me to clarify one or two points:

First, our issue is NOT with the baggage fees. While fundamentally opposed to unbundling in general, baggage fees are one we can deal with in most cases.

Secondly, our major contention is that fares need to be realistically related to the actual cost of transportation. This is the only industry where pricing is set in most cases well below the cost of service, meaning it's set up to lose. In other industries this is illegal, and called "dumping". I don't know why these laws are not enforced in the airline industry, as I don't think they are restricted to "hard" goods.

Finally, our main point with regard to US specifically is that they should not charge their highest revenue customers for ANY seat in the coach cabin. No other airline charges ELITE travelers for such seating, and none plan to as far as we know. The gist of this argument with US is SPECIFICALLY about Choice Seats.

There are other ways to unbundle fares, such as the way Air Canada and AirTran do it. They are more transparent and the customer knows what he's paying up front.

It is interesting however that the entire US profit is roughly equal to the amount collected in baggage fees....which makes the profitability precarious at best.

I still say that US needs to treat both employees and customers as assets rather than liabilities as they do today.

My BEST to you all....

 

[Harry Callahan]

I still say that US needs to treat both employees and customers as assets rather than liabilities as they do today.

My BEST to you all....

+100. They need to learn this, but I'm not holding my breath.

 

[Diablo]

Allow me to clarify one or two points:

First, our issue is NOT with the baggage fees. While fundamentally opposed to unbundling in general, baggage fees are one we can deal with in most cases.

Secondly, our major contention is that fares need to be realistically related to the actual cost of transportation. This is the only industry where pricing is set in most cases well below the cost of service, meaning it's set up to lose. In other industries this is illegal, and called "dumping". I don't know why these laws are not enforced in the airline industry, as I don't think they are restricted to "hard" goods.

Finally, our main point with regard to US specifically is that they should not charge their highest revenue customers for ANY seat in the coach cabin. No other airline charges ELITE travelers for such seating, and none plan to as far as we know. The gist of this argument with US is SPECIFICALLY about Choice Seats.

There are other ways to unbundle fares, such as the way Air Canada and AirTran do it. They are more transparent and the customer knows what he's paying up front.

It is interesting however that the entire US profit is roughly equal to the amount collected in baggage fees....which makes the profitability precarious at best.

I still say that US needs to treat both employees and customers as assets rather than liabilities as they do today.

My BEST to you all....

First, most high mile fliers don't stay long enough to have extra bags that need checked.
Second, "dumping", basically refers to a country's actions against an others.
Finally, if the highest revenue customer is not charged for quote ANY unquote seat, how would that generate ANY revenue? And if you mean not charge for choice seating how would THAT generate revenue.
So, basically you just want to lobby for a group of fliers that feel they should get something for nothing. What you are lobbying for/against is hypocritical.
Alas, it is not interesting to me that US profit is roughly equal to bag fees. It could be ROUGHLY equal to many things or a percentage of things such as labor costs, not losing money hedging/not hedging, supposed savings from closing bases, ect, ect. Lets see if it's roughly there next year. Also quarterly profits are all over the place.

 

[Art at ISP]

Regarding the seats, they are a tool to reward loyalty. If you need the extra $15-$20 from someone who spends $20K or more a year with you, then you have a more serious problem. Again, it is not a competitive policy. NO other airline charges its elite customers for "choice" seats in coach.

The question posed to Doug was, "do you prefer to have my $15-$20 now over my $15K-$20K over this year?" His answer was, "when you put it that way, no." People have left over this and will continue to do so.

The core issue is that US places no value on loyalty, and at the end of the day that will cost them.

I won't even go into the employee side of things.

 

[Dont call me Shirley]

Regarding the seats, they are a tool to reward loyalty. If you need the extra $15-$20 from someone who spends $20K or more a year with you, then you have a more serious problem. Again, it is not a competitive policy. NO other airline charges its elite customers for "choice" seats in coach.

The question posed to Doug was, "do you prefer to have my $15-$20 now over my $15K-$20K over this year?" His answer was, "when you put it that way, no." People have left over this and will continue to do so.

The core issue is that US places no value on loyalty, and at the end of the day that will cost them.

I won't even go into the employee side of things.

spot on as always, Art!

 

[Diablo]

Regarding the seats, they are a tool to reward loyalty. If you need the extra $15-$20 from someone who spends $20K or more a year with you, then you have a more serious problem. Again, it is not a competitive policy. NO other airline charges its elite customers for "choice" seats in coach.

The question posed to Doug was, "do you prefer to have my $15-$20 now over my $15K-$20K over this year?" His answer was, "when you put it that way, no." People have left over this and will continue to do so.

The core issue is that US places no value on loyalty, and at the end of the day that will cost them.

I won't even go into the employee side of things.

I"ll tell you who gets my loyalty... the company that gets me where i'm going safely, on time, and without delays. Frequent fliers don't need the timing screwed. When I travel with my company I just tell them where I need to be and when. Our preferred method is us at this time. I tell them to look for certain seats depending on time of day. They don't care about 20 bucks for a charge.
My point is timing is most critical. (But I certainly don't like seeing FAA fines for maintenence failures.) Are you talking about charges when using your miles?

 

[A320 Driver]

As some of you may know, I have been on the Star Alliance MegaDO since Wednesday, visiting Houston, Phoenix and Seattle through this afternoon.
Yesterday, we flew from IAH to PHX where Doug Parker and senior manager met with my 150 or so fellow participants and me. I will say that I was surprised that Doug agreed to meet with what he must have known was going to be a hostile crowd (I had been warned by the event organizers not to be too tough on him), and he actually came up to me to say hello.

During the Q&A after the presentation Doug was asked about the policy of charging elites for Choice Seats (to his credit, he did agree to take a further look at that as he appeared to be misinformed about parts of that policy), and he was asked about the pilot integration. He didn't say much, except to say that it was still out of the company's hands.

You can read the blog entry on the meeting here: http://www.starmegado.com/2010/11/05/breakfast-with-doug-parker/

Interestingly enough, as Doug tells it, both the merger of DL and NW, and UA and CO are thanks to him...but we all know about that. He also mentioned that the company had record profits this year, but that they need to be prepared for another downturn in the industry. The total profit year to date, however, was roughly equal to the amount collected in baggage fees.... hmmmm....

The big thrill of the day for me however was our visit to Everett, including a landing in a charter 757 at PAE, and being among the first members of the public to actually get on board a 787 Dreamliner (test aircraft ZA003)...sorry Doug, that was just a bit more exciting.....