Don't let it get away!
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I'm at Fool HQ this week. To get here, I once again flew UAL's (Nasdaq: UAUA ) United and its see-us-at-the-podium-because-we're-overbooked skies. I like what I'm seeing.
I'm impressed by how UAL is using services to earn more from the seats it flies. The latest? A program called Award Accelerator. Pay a fee and United will double or triple your Mileage Plus mileage haul.
For $37, UAL offered to give me double credit for the 1,313 miles I flew from Denver to Washington, D.C. That's 2.8 cents per mile. I didn't pay the premium because I don't travel that much, and because UAL doesn't participate in American Express' Membership Rewards program, which I use to maximize vacation options. But I could easily see this system working for the regular business traveler who lives near a United hub city such as Los Angeles or (ahem) Denver.
Investors, meanwhile, should love the profit margins for this program. Charge $0.03 to fill unsold inventory? No wonder a Bear Stearns analyst estimated the Mileage Plus program to be worth $7 billion in a spinoff.
Award Accelerator is no panacea, of course. But I like the spirit of the idea: make more from every seat. That's the only strategy worth considering when labor relations are at an all-time low and oil prices routinely threaten to reach new highs.
And yet I see more that could be done with in-flight services. Make onboard Wi-Fi an option as Delta (NYSE: DAL ) and AMR's (NYSE: AMR ) American plan to. Rent premium audio or noise-canceling headsets. Install new video screens for pay-as-you-go in-flight entertainment. All are viable options for raising revenue.
Oppressive fees, on the other hand, are an instant turnoff. Just ask US Airways (NYSE: LCC ) passengers. They're now paying a buck for a cup of coffee and $2 for a Coke. These astounding charges lend credence to Southwest's (NYSE: LUV ) claim that peers are making ends meet at the expense of passengers.
As blogger Wayne Schulz put it last month: "US Airways introduces new free beverage service called bathroom sink." Funny? Yes, hysterical. But only because it's so freaking sad.
Join me in a golf clap for United, please. For all its faults, the carrier is trying to deliver value and make our overcrowded skies just a little friendlier. It's about time someone did.
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