United Airlines has launched a new corporate discount program, Propel, targeting midsize travel programs, a segment where the carrier previously had a "product gap," Americas VP of sales Jake Cefolia said.
Propel offers five tiers of point-of-sale discounts ranging from 2 percent to 6 percent at the entry level. While there is a volume component—about $250,000 in annual spend is the starting point—discount levels are based on market share the corporate client provides to United on routes the client flies, Cefolia said. The carrier will reevaluate each client's discount level every year, and they could reach as high as 19 percent, he said. Discounts apply across all fare classes except Basic Economy.
In the fourth quarter of this year, Propel also will apply discounts on United's joint-venture partners—including Air Canada, ANA and the Lufthansa Group airlines—for all travel with a point of sale in the U.S. or Canada, which the carrier claims is an industry first. "Customers have been asking us that for a long time, particularly growing companies," Cefolia said.
The program also will offer each corporate client as much as $10,000 for amenities, Cefolia said. Propel clients also will be able to use United's Jetstream portal for reporting and managing funds and amenities.
Chasing the Midmarket
United hopes to win more midmarket business, Cefolia said. The carrier's points-based PerksPlus program has done well with small travel programs, and its prepaid PassPlus program, for which it relaxed the entry threshold last year, is a fit for certain midsize programs. However, United needed "a more robust offering" for the segment, he said. "We developed this program to fill that gap, to have something that offers customers discounts at the point of sale without requirements for the prepay," he said. "The concept is that it will be for more of a lightly managed program, from a sales standpoint."
Propel will replace United's CPA program, which offered an across-the-board 2 percent discount. Companies using that program will convert to the Propel model, Cefolia said. They also will need to provide Prism data feeds, which was not a requirement for using CPA but is necessary to measure market share for Propel, he said. Most CPA clients already are providing Prism data, according to Cefolia.
Converting CPA customers will be the main priority for now, and United will turn its attention to winning new customers once that is complete, Cefolia said. "We're not going to start prospecting and pushing hard until later in the year," he said. "This has been in development for several months, and we have a lot of pent-up demand."