DCF

Alastair,
Thanks for your replies. Very sporting, and much appreciated.

Since you are responsible for ancillary revenue, but are new to this site, can I please make my argument for why Plusgrade aka OneUp isn't just antagonistic to HVCs, but is rank bad business too?

Many of us who are Gold Elites have always taken our families on discretionary additional leisure travel, and have tried to judiciously use the upgrade system to convert Premium Economy tickets into Business Premier travel where possible.

Until you axed Confirmed Upgrades from U class I used to buy 4 U class tickets for my family to Los Angeles every year as an additional discretionary trip, which delivered around A$15,000 in fare revenue and around $4,000 in Confirmed Upgrade revenue, although that was denominated in Airpoints. Now you've removed the Confirmed Upgrade incentive and for the same money we can get 1.5 Business Class (purchased, not upgraded) trips to Hawaii on Hawaiian or Virgin or Jetstar, and we do. I ask my wife if she'd like to play lotto with OneUp and she cannot conceal her contempt - she ensures that we just buy a Business Class trip to Hawaii on the opposition.

Your airline's accounting and departmental model means that the revenue appears not to have shown, but in my family's case I am certain that you used to get considerably more revenue than Plusgrade now delivers, it's just that it wasn't accounted for in a way that clearly showed it.

Confirmed Upgrades: which genius axed them?
Confirmed Upgrades made a lot of business sense.

Firstly, you needed a high-yielding ticket to be allowed to use them: Y or B or M or H or U. Not, for example, the lower 3 of the 4 Premium Economy fare buckets.

Secondly, they delivered a lot of revenue - at least twice as much as Standby Upgrades per sector long-haul.

Thirdly, they could only be used towards cheaper fare buckets in the higher class cabin - Z or O class.

Because Airpoints were used this was hidden in the Airpoints results. But it had the potential to deliver more revenue than Plusgrade, left higher fare buckets available for sale, could prioritise HVCs to their satisfaction and you didn't have to pay another company to run it for you.

Really, you shouldn't have been dazzled by Plusgrade and you needn't have paid them a cent.

How Confirmed Upgrades could have generated more profits then OneUp
You should have just:

1) increased all Confirmed Upgrade costs by 50%
2) introduced Cash instead of Airpoints payment for Confirmed Upgrades
3) Discounted Confirmed Upgrade costs by 35% for GE pax, 20% for G pax and 10% for Silver pax.
4) At 7 days before departure, allow any passenger to pay for a Confirmed Upgrade into Z or O class provided they have a YBMHU class ticket.
5) At 2 days before departure (after G upgrades have cleared) allow any passenger with any ticket to apply for a Confirmed Upgrade into any unsold premium seats, but at 150% of the normal cost.

Job done! Forget Plusgrade, forget auctions, just do it yourself. A GE wanting a Trans-Pacific Confirmed Upgrade from Premium Economy into Business Premier could pay $800 provided they had bought a U ticket. A G could pay $1000, a S could pay $1100.

And then, at two days out, anyone could pay $1500 for an upgrade from Premium Economy into any unsold Business Premier seat.

It's simple, there's no external company to share the profits with. You get to sell as many C and D class seats as you would have anyway. And you provide elites a motivation to buy U or YMBH tickets in the first place.

You sell your cheapest premium inventory, but your HVCs get first bite of the cherry - the only bite from Days -355 to -7. And you get payment in cold, hard cash.

There is a reason why this matters. My family has 4 GEs (well, currently 2 GE and 2 G, but only because you are driving our business away so successfully).

We book these trips 355 days out, and where there used to be 4 R class seats to upgrade into, we took them. When there were only 2 R class, we took them AND we paid for dearer tickets (U class) for the other 2 passengers to buy Confirmed Upgrades into Z class.

When you axed Confirmed Upgrades you drove us to downgrade from U class Confirmed-Upgradable tickets into cheaper A or O class ones.

There are many, many of the reductions in Gold Elite and Gold perks and introduction of rigid ancillary charges which have driven HVCs away or driven us into cheaper fare buckets.

If you'd just talk to us here first, we could come up with suggestions which would satisfy us but deliver you the revenue you want.

Honestly, subcontracting out to Plusgrade instead of optimising Confirmed Upgrades is monumentally dumb business.

And Alastair, every single one of us on this board will tell you the same story about every recent change. We are the HVCs: we understand the system. You think we "game" the system to freeload something for nothing, but it's not that - we just weigh up the rewards for our loyalty that a range of airlines is willing to offer, and when we pick a program we make sure that we use the fruits of our loyalty. I live in Australia, and Air NZ's loss in my custom has seen me acquire elite status with Qantas and Virgin and Hawaiian Airlines.

We know when changes are neutral to us or negative to us. And for two years, the airline has been kicking us in the nuts, then has had the cheek to spin it to us as good news we should be grateful for.

It is the spin and the lies that really piss us off the most. For example, you take away seats in Premium Economy for us on a 777-300, then replace them with the same number of crappy super-narrow 10-abreast seats in Economy, and you tell us that we have the same number of premium seats.

We're not stupid. We fly on the airline all the time.