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Old 10-20-2021, 12:35 PM
  #21  
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Originally Posted by KirillTheThrill View Post
Serious question, is the 550 actually profitable? With rising fuel prices that won’t help the margins. Continuously being forced to pay your pilots 300% because you’re so understaffed doesn’t sound like a winning strategy either.

Actually yes. With 10 first class seats you have 1K members coming back for more. Mileage plus members can’t stand the 145 or 200. Instead of losing valuable customers to Delta cause they barely have any 50 seaters left. The 550 is the new 50 seater. Keeping valuable customers is profitable


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Old 10-20-2021, 05:33 PM
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Originally Posted by MrIncredible View Post
Actually yes. With 10 first class seats you have 1K members coming back for more. Mileage plus members can’t stand the 145 or 200. Instead of losing valuable customers to Delta cause they barely have any 50 seaters left. The 550 is the new 50 seater. Keeping valuable customers is profitable


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That's not really how it works.

The overwhelming majority of 1Ks are getting complementary upgrades. Sure, some on are paid tickets but the majority of corporations no longer have business class travel for most of their workers, especially on lengths a 550 would operate.

The CASM for the 550 is astronomical, and the premium seats are, by and large, not being paid for.

The airplane is a scope-buster, and nothing more. The better question is, does United care if the 550 is or isn't profitable, if the alternative is losing those passengers to another carrier?

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Old 10-21-2021, 06:46 PM
  #23  
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Originally Posted by Longhornmaniac8 View Post
That's not really how it works.

The overwhelming majority of 1Ks are getting complementary upgrades. Sure, some on are paid tickets but the majority of corporations no longer have business class travel for most of their workers, especially on lengths a 550 would operate.

The CASM for the 550 is astronomical, and the premium seats are, by and large, not being paid for.

The airplane is a scope-buster, and nothing more. The better question is, does United care if the 550 is or isn't profitable, if the alternative is losing those passengers to another carrier?

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You missed his point, the 550 flight may not directly make money, but overall product offering gives United a fighting chance to keep their valuable repeat customers (if you are 1K United, you have spent a good amount of coin) to contribute to their overall bottom line by not losing their bookings to Delta or AA.

For example, as a 1K customer myself. I would avoid booking United with a itinerary with a leg on a 145 or CRJ200 if Delta or AA is offering 76 seaters or mainline jet on competing itinerary. That was his point.
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Old 10-21-2021, 07:42 PM
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Originally Posted by Swakid8 View Post
You missed his point, the 550 flight may not directly make money, but overall product offering gives United a fighting chance to keep their valuable repeat customers (if you are 1K United, you have spent a good amount of coin) to contribute to their overall bottom line by not losing their bookings to Delta or AA.

For example, as a 1K customer myself. I would avoid booking United with a itinerary with a leg on a 145 or CRJ200 if Delta or AA is offering 76 seaters or mainline jet on competing itinerary. That was his point.
I didn't miss that point, I even commented on it at the end of my post.

But the calculus is nowhere near as simple as "they're keeping high value customers so the 550 will stick around." That was my point. Someone with far more data than either your or I is sitting in Chicago analyzing how many "high value customers" they might lose. That number is nonzero, and there's no question the 550 has value to UA in that regard. But the already bad economics of the plane are getting worse with oil prices on the rise, and at some point losing some small percentage of their high value customers won't matter. Of course, that also presumes, as you pointed out, that AA or DL have a better product to offer. Given both of them currently have single-cabin 50-seaters aplenty, there probably aren't many markets where UA would lose a meaningful number of elites/high value customers to AA/DL if the 550 ceased to be.
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