I am the Chief Commercial Officer at United Airlines.
In April we split business class into three tiers and started charging people to pick a seat in the most expensive cabin on the plane. We call it a fare family, which is, technically, a family, and which is, actually, the same seat with three prices and a velvet rope.
We are the first airline in America to do this.
On the slide it is "more choice," which is officially a benefit and naturally the word that gets bigger every quarter. The board loved that phrase.
I did not make flying more expensive. I made it free, and then I sold it back to you one piece at a time, the way a magician hands you back your own watch and waits for applause.
The fare is the bait. It buys the seat and the air, and nothing else, because I price it to win exactly one fight: the top row on Google Flights.
Everything that makes the seat survivable is what we file as an option, which is technically an option and operationally a toll.
The first bag is $45. It is $50 if you wait until the airport, because waiting is a behavior, and we price behavior the way a casino prices the walk to the exit. We call that a convenience differential, which is, technically, your convenience, and which is, actually, mine.
Here is the part I am proudest of.
The fare is taxed by the federal government at 7.5 percent. The bag fee is not. The seat fee is not. Every dollar I move from the ticket to the fee is a dollar the government cannot reach, which is technically a tax efficiency and which is actually the same dollar wearing a different coat.
I have a slide that calls this Fare Optimization.
The seat is my cleanest product. I built the standard seat at 31 inches. I removed nothing from the airplane, of course. It is the same airplane. I just stopped including the seat in the seat, which is on paper a debundling and which is actually the oldest trick in any store: take the thing out of the price, then sell the thing.
If you fly Basic Economy you get no seat at all. You can pick one for $15, or I will put you in a middle seat in row 41 and separate you from your eight-year-old by four rows unless you pay. We call that family seating optimization, which is, in the deck, a service, and which is, actually, a hostage negotiation where I own the building. A parent at the gate watching the seat map load is, to me, the most beautiful thing in aviation: a customer who has already decided.
Families are my highest-converting segment.
A parent will pay anything. I modeled it.
I invented a number called the Comfort Index. The standard seat scores a 4. The seat seven rows forward scores a 7. I made both numbers up, naturally. The difference between them is three inches, and I charge $79 for the three inches. That is value-based pricing, and the value is your spine.
We are a premium airline. We invented the lie-flat bed. So this year I took the most expensive ticket in the building and found things to remove from it, the way you might keep selling a house by quietly taking out the windows. The cheapest business class now loses the lounge, loses a bag, loses the right to change the flight. That is what premium means now: the floor it costs to stop me from taking more.
Nobody believed you could unbundle business class. I did.
The bag fee floats now. It reads the route, the date, and how many times you have searched this flight, and if you came back a third time, you are committed and the fee can feel it, the way a fever feels a pulse. Demand-responsive pricing, which is officially responsive to demand and which is actually responsive to your desperation.
I board the airplane in nine groups. Not because the airplane needs nine groups, but because nine groups means eight things to escape, and I sell the right to stand up earlier. Group 9 is, on paper, a boarding zone. That is the absence of a product, sold back to you as one.
I have lifetime Global Services. I have never paid a bag fee. I have never folded myself into 31 inches. None of the executives have.
We have a phrase for it. We build the zoo. We do not live in it.
Ancillary revenue hit a record. The word ancillary means a side item, officially, and means the entrรฉe now, actually. So next quarter I am charging for the overhead bin, the seatback screen, and a carbon offset on the carbon I burn flying you there.
I am being given Latin America. I will be President by Q4.
I have already started unbundling the word "included," which is, in the FAQ, a courtesy, and which is now a SKU.
People ask me why the seat is so bad.
Have you ever stood in a showroom and not known you were the one being shown? The bad seat is the showroom for the good seat, and I price the good seat at the exact moment you cannot leave the building.
I still do not know how to fly the airplane.
But I know what the airplane is for. It is not for taking you somewhere. It is for finding out what you will pay to make the next four hours hurt a little less.
The ticket was never the price.
The misery is the price. And the misery is the only thing I have left to sell.
@gothburz 1.5m flyer on United, 1k for decades. This is the most accurate thing ever written about UAL. Recently found out my life time miles donโt go into my status. Never have so many people understood so little about customer LTV, while also never giving a shit to start. From 37F
@TerryMoran This is exactly right. Even the Heritage fund has come to the conclusion that โfraudโ has never risen to a point where it would be meaningful in any election ever .
@WarMonitorClips For the guys who servedโฆ.why do I see the Ukrainians using suppression technology on nearly all their firearms but you donโt see the U.S. doing the same here?
If I invented a time machine the 1st thing I would do is go back and never start flying #United. 1.5m lifetime miles, 1k for years. Plus Pts. are fucking useless. Take my seat after non-upgrade. ($1k ticket to SFO).3 UA employees sitting in FC. UA=SHiIT UX. LTV is myth to UA
@neontaster Ohhhh man, humanity will be so better off. Imagine those two fucking clowns in fetal position begging for thier mom as the drone hovers for all of us to watch.