United Airlines

[jesmu84]

Video on airline costs.

<a href="https://www.youtube.com/v/6Oe8T3AvydU" target="_blank" rel="noopener noreferrer" class="bbc_link bbc_flash_disabled new_win">https://www.youtube.com/v/6Oe8T3AvydU</a>

[Tugg Speedman]

Here is how the industry will change.

https://jetsmarter.com/

Private jet service for as low as $5,000 (plus other fees)

OUR BUSINESS MODEL EXPLAINED

We do more than just private charters.

It’s our innovative shared flight services, advanced mobile technology, and members-only approach that set us apart. And the more members who join, the better our service gets.

First, we give members access to empty seats – what we call JetDeals – and establish fixed routes between major cities, called JetShuttles.

The initial flight availability from new JetDeals and JetShuttles then attracts new members.

When popular routes reach critical mass, we allow members to start creating on-demand SharedCharter flights.

The balance of SharedCharter seats are then offered as new JetShuttles and JetDeals, and the cycle repeats.

In effect, our members drive the creation of new routes and flight frequency. We then partner with additional aircraft operators to meet the increased demand of our growing community.

------------------

The point is technology is driving the cost of private jet travel down, way down.  this cuts out the most important commercial air customer, the high-end consumer and business traveler.  Should they leave for private planes (for the 14,000 airports that private planes can land on) this will destroy the commerical airlines, turning them into the old grayhound terminals.

[jesmu84]

Here is how the industry will change.

https://jetsmarter.com/

Private jet service for as low as $5,000 (plus other fees)

OUR BUSINESS MODEL EXPLAINED

We do more than just private charters.

It’s our innovative shared flight services, advanced mobile technology, and members-only approach that set us apart. And the more members who join, the better our service gets.

First, we give members access to empty seats – what we call JetDeals – and establish fixed routes between major cities, called JetShuttles.

The initial flight availability from new JetDeals and JetShuttles then attracts new members.

When popular routes reach critical mass, we allow members to start creating on-demand SharedCharter flights.

The balance of SharedCharter seats are then offered as new JetShuttles and JetDeals, and the cycle repeats.

In effect, our members drive the creation of new routes and flight frequency. We then partner with additional aircraft operators to meet the increased demand of our growing community.

------------------

The point is technology is driving the cost of private jet travel down, way down.  this cuts out the most important commercial air customer, the high-end consumer and business traveler.  Should they leave for private planes (for the 14,000 airports that private planes can land on) this will destroy the commerical airlines, turning them into the old grayhound terminals.

Um. What middle class family of 5 can afford a 5k flight?

[StillAWarrior]

http://onemileatatime.boardingarea.com/2017/04/11/united-denied-boarding-illegal/

The passenger wasn’t denied boarding — he had a confirmed seat, and was allowed to board and take that seat.

Later they come onboard and asked him to get off the plane. At that point that’s no longer being denied boarding, but rather being refused transport. United’s contract of carriage addresses both of these situations:

Here’s the contract of carriage regarding denied boarding compensation
Here’s the contract of carriage regarding refusal to transport

The contract of carriage lists a bunch of reasons that the airline can refuse transport to someone, though a flight being oversold after a passenger has boarded isn’t one of them. In looking at the Department of Transportation regulations, I don’t see anything that clarifies how they define “denied boarding.”

In light of that, it sure seems like this was a case of refusal to transport, rather than a case of denied boarding, since the passenger wasn’t denied boarding. If this was a refusal to transport case, then United had no legal grounds on which to refuse him transport, based on the contract of carriage.

If that’s the case, did United use police force to incorrectly enforce a contract?

When this story first emerged it sure seemed to me like United may have technically been within their rights to refuse this passenger transport, but even that isn’t looking likely at this point.

It would seem to me that once passengers have boarded, the only way to have them get off the plane is through a voluntary system, by offering compensation that they agree to. Without that, this isn’t a denied boarding case, but rather a refusal to transport case.

Did United Airlines Violate Its Own Contract By Forcing That Passenger Off The Plane?
A review of United's "Contract of Carriage" suggests that the airline carrier violated its own rules when it forcibly removed a passenger to make room for United employees.

https://thefederalist.com/2017/04/11/did-united-airlines-violate-its-own-contract-by-forcing-that-passenger-off-the-plane/

“On Sunday, April 9, after United Express Flight 3411 was fully boarded,” United CEO Oscar Munoz wrote, “United’s gate agents were approached by crewmembers that were told they needed to board the flight.”

“We sought volunteers and then followed our involuntary denial of boarding process (including offering up to $1,000 in compensation) and when we approached one of these passengers to explain apologetically that he was being denied boarding, he raised his voice and refused to comply with crew member instructions,” Munoz wrote.

That’s where the wheels start to come off the United bus. To understand why, you need only have a rudimentary understanding of the English language. In statement one, Munoz notes that the flight was fully boarded. In statement two, Munoz then declares that the man was only removed because United employees were following their “involuntary denial of boarding process.” How, exactly, does one follow a denial of boarding process after a flight is “fully boarded?”

Granted, I am only a common non-lawyer, non-airline employee, but I don’t understand how one can be denied boarding after a flight is fully boarded. It seems to me like the involuntary denial of boarding ship has probably sailed at that point, and the operation has instead advanced to the “forced disembarkation” stage of airline crisis management.

But that’s not all. United’s ticket contract also lists criteria for selecting passengers to whom boarding should be involuntarily denied:

The priority of all other confirmed passengers may be determined based on a passenger’s fare class, itinerary, status of frequent flyer program membership, and the time in which the passenger presents him/herself for check-in without advanced seat assignment.

Were any of these criteria used on Monday’s flight? Not according to any news that has been reported thus far. Instead, individuals who were targeted for removal were randomly selected by the airline, even though “random selection” is not a criterion included in United’s contract terms. Judging by the clear language of United’s terms and policies, it appears as though the carrier actually violated its own rules in its attempt to remove a ticketed passenger from the plane to make room for a handful of United employees.

Based on what I've read and heard (including the article you posted and a few others), I'm inclined to agree that this is a "refusal to transport" issue and not a "denied boarding" issue.  However, I disagree with your statement, "It would seem to me that once passengers have boarded, the only way to have them get off the plane is through a voluntary system, by offering compensation that they agree to."  Unless of course, you mean except in cases that qualify under the "refusal to transport" section.  Because once the refusal to transport rules come into play, I think it's pretty obvious that the passengers can be forcibly removed.  I have little doubt that United will argue that at least one of those reasons to refuse transport is in play.  But at this point, all they're really going to be doing is trying to create some leverage to remove a zero from the amount they pay this guy.  This is going to be expensive, and I suspect now that they've muzzled Munoz they've got someone calling the shots that realizes that attacking the passenger is not a winning strategy.

The only interesting "new" thing I heard about the case recently was that the doctor and his wife had agreed to accept the $800 and take the next flight, but then changed their mind and went on the plane.  Has anyone else heard that?  There has been so much effort to discredit the passenger that I'm not inclined to believe this unless confirmed. If that is true, depending upon how far down that path they got, it could change the legalities under the contract (i.e., if he was no longer a ticketed passenger).  Frankly, I'd be amazed if that was the case because it would be a pretty important fact left out of the initial reporting.  And even if it is true, United screwed this up horribly.

[StillAWarrior]

There is a shuttle system running between Cleveland and Cincinnati that several of my colleagues have used that is really nice.  They sell individuals seats on a 20-30 seat private jet.  It flies out of a small airport and runs several times a day.  Seats are in the $300-400 range -- not cheap, but not bad at all.  It flies out of the small executive commuter airports; there is no TSA; no baggage fees; no parking fees; and drinks and snacks.  Apparently it's categorized as a "public charter."  I wasn't aware of this category.  The people I've talked that have used it absolutely love it.

[Dr. Blackheart]

United First class passenger threatened with handcuffs. I wonder if they would be fuzzy furry? These stories keep popping up...

http://www.latimes.com/business/lazarus/la-fi-lazarus-united-low-priority-passenger-20170412-story.html

[Tugg Speedman]

Um. What middle class family of 5 can afford a 5k flight?

They cannot and they are not the intended audience.  As I noted above, the audience is the upper end that is price insensitive, buys club membership and has status on the airlines.  It is also intended for the price insensitive business traveler.

If private air travel cost come down enough and this takes off among high-profit customers, it kills the commercial carriers, all that is left is the low margin middle-class flyer meaning the airline's profitability goes down further and the current business model gets thrown into chaos.

And regarding who can afford $5,000?  Current private jet travel costs runs about $3,000 to $5,000/hour and you paid several hundred thousand for the privilege of paying these hourly fees.  (flight from Chicago Executive in Wheeling to New Jersey Teterboro can run $15k to $20k spread between 6 to 8 seats).  So Jet Smarter, if it works, is collapsing that price structure to a point and a lot more people can afford it.

[dgies9156]

United First class passenger threatened with handcuffs. I wonder if they would be fuzzy furry? These stories keep popping up...

http://www.latimes.com/business/lazarus/la-fi-lazarus-united-low-priority-passenger-20170412-story.html

As a regular United first class passenger, I've never been threatened with handcuffs, furry or otherwise.

There is a reason for this. United makes serious money off people like me and MUDish, who travel very frequently. We tend to be treated better than the common folk, or General Members of Mileage Plus, as United calls them. For example, it was amazing what happened with my wife after I finished logging my first million miles on United.

Once you are a million mile flier, you are allowed to designate one person in your household to receive your Premier Status. At that point, my wife too was a 1K. Before, they treated her like cattle. Suddenly, she was somebody and gate agents, ticket agents and assorted United personnel suddenly noticed her. She had almost too much service.

At some point, if you're able to skim off high value passengers from the airlines, then they'll collapse. That's travel as long as we've known it. The airplanes simply aren't big enough to cram enough steerage in (though they've tried) to make a low cost option consistently successful.

My final thought on this whole incident though was this: There is a belief that if you yell loud enough and you become dis-temperate enough and make a big enough jackass of yourself, you will get what you want from the airlines. I can't judge a man's motives  but I gotta believe that when the doctor told he was the lonesome loser, he got stubborn and started a hissyfit hoping the airline would look somewhere else. Heck, it usually works and as Machiavelli said....

[Strokin 3s]

They cannot and they are not the intended audience.  As I noted above, the audience is the upper end that is price insensitive, buys club membership and has status on the airlines.  It is also intended for the price insensitive business traveler.

If private air travel cost come down enough and this takes off among high-profit customers, it kills the commercial carriers, all that is left is the low margin middle-class flyer meaning the airline's profitability goes down further and the current business model gets thrown into chaos.

And regarding who can afford $5,000?  Current private jet travel costs runs about $3,000 to $5,000/hour and you paid several hundred thousand for the privilege of paying these hourly fees.  (flight from Chicago Executive in Wheeling to New Jersey Teterboro can run $15k to $20k spread between 6 to 8 seats).  So Jet Smarter, if it works, is collapsing that price structure to a point and a lot more people can afford it.

Agreed they can't but....say a family of 5 and another family of 4 or 5 are going on vacation together.  $7,000 or so divided by 10 people suddenly doesn't seem that outrageous considering you are likely on a direct flight with people you know and don't have to worry about all the other hassles of regular airline travel.

[Jay Bee]

My final thought on this whole incident though was this: There is a belief that if you yell loud enough and you become dis-temperate enough and make a big enough jackass of yourself, you will get what you want from the airlines. I can't judge a man's motives  but I gotta believe that when the doctor told he was the lonesome loser, he got stubborn and started a hissyfit hoping the airline would look somewhere else. Heck, it usually works and as Machiavelli said....

Yes. Combine some fake cops with a convicted felon who is pissed off and the end result will often be bad.

[Tugg Speedman]

Yes. Combine some fake cops with a convicted felon who is pissed off and the end result will often be bad.

Especially when the airline pissed off the felon in the first place and was not forthright with the fake cop about why he was pissed and why they wanted the fake cop to physically remove him from the plane.

Again, pissing people off and then calling the cops to beat them up because they got pissed is arguably the single worst business strategy ever invented.

[Eldon]

Here is how the industry will change.

https://jetsmarter.com/

Private jet service for as low as $5,000 (plus other fees)

OUR BUSINESS MODEL EXPLAINED

We do more than just private charters.

It’s our innovative shared flight services, advanced mobile technology, and members-only approach that set us apart. And the more members who join, the better our service gets.

First, we give members access to empty seats – what we call JetDeals – and establish fixed routes between major cities, called JetShuttles.

The initial flight availability from new JetDeals and JetShuttles then attracts new members.

When popular routes reach critical mass, we allow members to start creating on-demand SharedCharter flights.

The balance of SharedCharter seats are then offered as new JetShuttles and JetDeals, and the cycle repeats.

In effect, our members drive the creation of new routes and flight frequency. We then partner with additional aircraft operators to meet the increased demand of our growing community.

------------------

The point is technology is driving the cost of private jet travel down, way down.  this cuts out the most important commercial air customer, the high-end consumer and business traveler.  Should they leave for private planes (for the 14,000 airports that private planes can land on) this will destroy the commerical airlines, turning them into the old grayhound terminals.

I like John Cochrane's take:

The one economic point that I haven't seen:  the whole issue also comes down to airlines' use of personalized tickets to price discriminate. (And most of the TSA's job is to enforce that price discrimination by making sure you are the name on the ticket.) If you could resell tickets, the problem would go away. Then the airline must sell only as many tickets as there are seats on the plane, as concerts do.

http://johnhcochrane.blogspot.com/2017/04/united.html

[Tugg Speedman]

Regarding customer service, after they beat him and dragged him off the plane, they made everyone deplane so they could clean up the blood.  That delayed the flight another two hours.

[Pakuni]

Yes. Combine some fake cops with a convicted felon who is pissed off and the end result will often be bad.

They're actually sworn and certified police officers. They have to go through the academy, pass the state certification exam, etc. They just don't work under the auspices of the Chicago Police Department, and they aren't armed with guns, the latter of which has been debated over for more than a decade.

[DegenerateDish]

As a regular United first class passenger, I've never been threatened with handcuffs, furry or otherwise.

There is a reason for this. United makes serious money off people like me and MUDish, who travel very frequently. We tend to be treated better than the common folk, or General Members of Mileage Plus, as United calls them. For example, it was amazing what happened with my wife after I finished logging my first million miles on United.

Once you are a million mile flier, you are allowed to designate one person in your household to receive your Premier Status. At that point, my wife too was a 1K. Before, they treated her like cattle. Suddenly, she was somebody and gate agents, ticket agents and assorted United personnel suddenly noticed her. She had almost too much service.

At some point, if you're able to skim off high value passengers from the airlines, then they'll collapse. That's travel as long as we've known it. The airplanes simply aren't big enough to cram enough steerage in (though they've tried) to make a low cost option consistently successful.

My final thought on this whole incident though was this: There is a belief that if you yell loud enough and you become dis-temperate enough and make a big enough jackass of yourself, you will get what you want from the airlines. I can't judge a man's motives  but I gotta believe that when the doctor told he was the lonesome loser, he got stubborn and started a hissyfit hoping the airline would look somewhere else. Heck, it usually works and as Machiavelli said....

I'm not Global Services level (my father is), I'm only Gold with United, but to DG's point, how they treat their big money customers is exceptional (because they have to). About a month ago, I flew back from Austin, not many flights direct, and instead of waiting for a 7:30pm flight, I was able to show up literally a minute before a 1:15pm flight. I got on the Standby list, there were already 10 people on that list, and not only did I get a seat first, I got an Economy Plus window with middle seat open. My point being is I would have sat middle seat next to the crapper to get on that earlier flight, and even I didn't think it was fair that I got better treatment than the 10 people who showed up for standby ahead of me.

United/All Airlines don't care about the family of 5 flying once a year to Orlando at the cheapest rate they can find, they absolutely do not care about them.

[Babybluejeans]

The point is technology is driving the cost of private jet travel down, way down.  this cuts out the most important commercial air customer, the high-end consumer and business traveler.  Should they leave for private planes (for the 14,000 airports that private planes can land on) this will destroy the commerical airlines, turning them into the old grayhound terminals.

It's not true that the high-end consumer and business traveler is the most important customer for commercial airlines. Spirit and Frontier *shudder* have built hugely profitable airlines on the idea that regular consumers will fly with them despite lacking amenities (or even moderately comfortable seats) because they're cheap. Now, the business traveler is the most important customer to SOME airlines, like United, AA, and Delta, but even that is starting to change as they observe the profitability in cheap, stripped service. To wit, AA and Delta have both introduced "super-economy" tickets that are cheaper and offer little in the way of amenities. And they'll need to, because you're correct that private jet travel is going to edge in on their high-end consumer business.

As someone who travels a lot for work and pleasure, I've seen how the big carriers try to have it both ways. But the premium product isn't that great on any of them (United's domestic first crams in a ton of seats nowadays and don't get me started on their 777 international product) while the "super economy" isn't normally cheap enough to compete with the ultra low cost carriers. My bet is that Spirit and Frontier continue to flourish, and United, AA, and Delta eventually become more and more like ultra low cost carriers. Meanwhile, business travelers/high-end consumers will move to private jet travel.

[Tugg Speedman]

It's not true that the high-end consumer and business traveler is the most important customer for commercial airlines. Spirit and Frontier *shudder* have built hugely profitable airlines on the idea that regular consumers will fly with them despite lacking amenities (or even moderately comfortable seats) because they're cheap. Now, the business traveler is the most important customer to SOME airlines, like United, AA, and Delta, but even that is starting to change as they observe the profitability in cheap, stripped service. To wit, AA and Delta have both introduced "super-economy" tickets that are cheaper and offer little in the way of amenities. And they'll need to, because you're correct that private jet travel is going to edge in on their high-end consumer business.

As someone who travels a lot for work and pleasure, I've seen how the big carriers try to have it both ways. But the premium product isn't that great on any of them (United's domestic first crams in a ton of seats nowadays and don't get me started on their 777 international product) while the "super economy" isn't normally cheap enough to compete with the ultra low cost carriers. My bet is that Spirit and Frontier continue to flourish, and United, AA, and Delta eventually become more and more like ultra low cost carriers. Meanwhile, business travelers/high-end consumers will move to private jet travel.

Market Capitalization

Spirit $3.7 billion
United $22 billion
American $23 billion
Delta $33 billion
Southwest $34 billion



Spirit is a rounding error.  It is so small it does not even qualify to be in the Russell 2000.  Frontier, privately owned is who knows if it is profitable or how big.

Cut out the high end flyer and you're left with a smaller than small cap company.

[keefe]

More like six, but I am sure no one thought outside the box on this one.

While driving might seem to have been a reasonable alternative I am fairly certain that a six hour drive would have essentially negated their operational effectiveness due to crew rest requirements. I would also guess that APA/ALPA has very strict rules concerning crew repo procedures that would prohibit making cockpit crew drive anywhere, much less for 6 hours.

[rocky_warrior]

Market Capitalization

Spirit $3.7 billion
United $22 billion
American $23 billion
Delta $33 billion
Southwest $34 billion


Cut out the high end flyer and you're left with a smaller than small cap company.

All this discussion about "business" travelers, and nobody's mentioned southwest.  My company loves them - no change fees/cancel fees - just rebook for whatever is most convenient.  I love them - no baggage fees, good points credit card, treat everyone with respect.  The only thing "priority" gets you is better boarding (which I do enjoy...).  But once you're on the plane, you're all one happy class of herded cattle.

They're at the top of the market cap for a GOOD reason.

Yes, they overbook too.  But I've never seen them fail to resolve that situation BEFORE boarding.

[StillAWarrior]

Spirit and Frontier *shudder*...

This got my attention.  We're considering Alligiant for a flight in June.  The price is very good.  Honest question if anyone here has experience:  how bad is it?

[keefe]

Flying on any American flag carrier is a brutal Bataan Death March experience. Having lived in Asia for a couple decades I can state unequivocally that air travel does not have to be such an ordeal. SG. CX, TG, EK, and NH offer superlative service.

When I was with GE we were limited to flights on airlines that used GE power plants. At the time CX used Rolls Royce Trents exclusively. Not being able to fly in and out of Kai Tak on CX was absurd and I routinely signed off on CX flights for my team in Hong Kong.

Flying long haul on United or Northworst was 10-14 hours of sheer hell. The cabin crew were 50+ year old battle axes who needed to grease their thighs to make their way down the aisles. Their idea of service was to loiter in the galley like water buffalo grazing on the leftover business class meals. Compare that with the Asian flag carriers where young, lithe cabin crew delivered exquisite service with impeccable precision.   

Fortunately, I rarely fly commercial as I can check out twin engine aircraft from a nearby military aero club. Not only do I give the whole TSA nightmare a miss but I am able to avoid the malodorous hordes of travelers and boorish airline staff while shaving hours off of each trip at a fraction of the cost.

We recently went skiing at Taos where 4 commercial tix would have cost almost $3,000 and taken almost 12 hours each way including the drive from ABQ. Instead, I checked out a Baron for just over $300 and flew straight into Taos Regional in about 4 hours. But the best part was avoiding the whole nightmare of air travel in America.

         

[Babybluejeans]

This got my attention.  We're considering Alligiant for a flight in June.  The price is very good.  Honest question if anyone here has experience:  how bad is it?

It really depends. For me, the math often favors big carriers because if I fly with them, I enjoy perks like free premium econ and possible first class upgrades, dedicated customer service, etc. Plus, I'm way deep into the miles game and also normally need wi-fi for work (lack of wi-fi is my chief issue with the ultra low cost carriers). If all that weren't the case, I don't think a big carrier would be too different from an ultra low cost carrier. Indeed, the actual in-flight experience in coach on United and on Spirit is similar.

So, I think the rule should be this: after adding up all the extras (luggage, seat choice, etc.), if Allegiant/Spirit/Frontier is still cheaper, then do it. If it's a long flight, pay the extra coin for an exit row. Then load up ye olde tablet with a few episodes of "Stranger Things" and you'll be fine.

Edit: and to answer your specific question, I flew Allegiant once a few years ago and it was totally OK.

[dgies9156]

This got my attention.  We're considering Alligiant for a flight in June.  The price is very good.  Honest question if anyone here has experience:  how bad is it?

Go check Seat Guru. Check out the seat pitch and decide whether you can fit. They'll give you the pitch in inches.

Hint: Anything below 30" is not fit for human habitation. You better hope the woman sitting next to your is gorgeous and likes close company!

[dgies9156]

It's not true that the high-end consumer and business traveler is the most important customer for commercial airlines. Spirit and Frontier *shudder* have built hugely profitable airlines on the idea that regular consumers will fly with them despite lacking amenities (or even moderately comfortable seats) because they're cheap.

Let's debunk this one once and for all:

  -- Spirit and Frontier fly point to point between generally large cities. You'll see Frontier on Denver/Milwaukee. Hell will freeze over before you see them in Fargo.

  -- Hugely profitable in the airline industry? I don't think so. No one is hugely profitable in airlines. It was once said about airlines: "Want to know how to be a millionaire? Be a billionaire and invest in airlines!"

If you want three flights a day from ORD to MCO, yeah, the ultra-low cost carriers make sense. They are uncomfortable as hell (Satan reportedly avoids them like they're a good deed or something -- he flies United these days) and their service rules really don't favor the passenger. Ever try to get your money back for any reason and... uggghhh

But keep in mind how they do it. For those of you who have a sense of business ethics, they get their low costs by hiring at the lowest possible rate, using green pilots and having a level of customer service that would make even Walmart blush with embarrassment. Ask a Spirit flight attendant what a living wage is and she might tell you enough to get out of Mom & Dad's basement. And she's probably 40!

[#UnleashSean]

Frictionless tubes (in the way future) and self driving cars (In the near ~10year future) will kill the airlines for all but NEED TO BE THERE IN 3 HOURS travelers.