phan quang

@phanquang1

part-time photographer. New to #NFT and #cryptoart

Joined March 2012

527 Following

92 Followers

403 Posts

phanquang1 retweeted

Peter Girnus 🦅

@gothburz

about 2 months ago

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 entrée 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.

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phan quang

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