Originally Posted by
FD1971
IIRC, I recommended a good book to you, however I did not even write the foreword. To be honest with you, writing books about such topics is the least-attractive thing you can do on the planet.
IIRC, I also gave you some examples about transfer pricing, I even stated the amounts the mother company charged the in-house LCC division for certain services. But let me ask one question.
YDNRC.
Originally Posted by
FD1971
How do you account for a slot at a congested airport, a slot used by mainline in the past, which is now transferred to their LCC? How do you account for the usage of the terminal in case a long term contract had been signed by the mainline division and most of the space is now used by the LCC division?
So I am suprised about your disbelief.
No disbelief whatsoever. Tweaking transfer prices and other things in a way that favours the business entity that the corporation wants to grow going forward is a widespread phenomena in many industries. I just wanted to know what it was that IAG was doing specifically with Vueling. You have given some generalist answer, which may or may not be the one that applies to IAG/VY, you just don't say so. Could you enlighten us whether the levers you mention are also the ones that are used by IAG/VY? "Slot at congested airport previously used by mainline, now by LCC", I assume that is London Heathrow you are talking about? At LHR, Vueling has exactly two flights. Or what other airport do you have in mind? Is BCN - where indeed VY has replaced IB mainline - congested? Or is there another congested airport where either IB or BA have reduced their own capacities in favour of VY? Please don't misunderstand my question, I am not saying this isn't the case. I am just asking because I don't know the answer but you seem to.
Originally Posted by
FD1971
Just take a look at many new route pairs operated by low cost divisions, didn't you mention Belfast-Rome, a 1200 mile trip resulting in a 6-7 hour rotation?
I hope we can agree that you need all the accounting skills in the world to make that one look profitable.
But an airline like easyjet which does not have the possibility to tweak group-internal transfer pricing the way IAG has can run routes like that on a profit. So it can't only be accounting tricks.
Originally Posted by
Goldorak
I have to disagree on this. Sky Priority has been one of the most successfully and consistently deployed Skyteam benefit.
True. But if I understand his post correctly, he said that it is not very
differentiating for highest status customers. Everybody and their momma has access to SkyPriority. It is only now that AFKL has done something about that by de-prioritising FB Silver members.
Originally Posted by
NickB
I would question your premise that there is a clear relationship between a good First class product and a good FFP for elites members. For instance, SQ is usually regarded as a very strong airline in premium classes. Yet, its FFP is beyond woeful. You could probably generalise that to a number of other Asian airlines with a strong ethos of service in premium classes and yet a poor FFP.
+1
Originally Posted by
FD1971
Many studies have the same outcome, people fly the nonstop as long as the alternative incl. a connection is not really far less expensive.
I also tell you that routes with old C configurations never suffered from that according to data from major airlines, so your statement is factually correct, the schemes of US airlines used to be more generous during the days they were not able to invest into a premium product, but there is no direct 'connection'.
Sounds all very plausible. But if as you say the large contracts stick with AFKL, LH, IAG, why then do some of them complain so loundly about the "invasion" of the ME3 and the market share they take? If in any case they do not take away the profitable customers from the EU3 as you say, what's all the fuss about? Why restrict landing rights? Why complain about (supposedly) unfair competition? Reading your convictions the EU3 enjoy "packed flights" to Asia, great loyalty from the profitable customers whatever their product is, and only the lower yielding passengers go to the ME3. So all should be fine. But AFKL and LH complain massively about the ME3 - why?
Originally Posted by
orbitmic
....
3) You mention F lounge access as a perk for this top tier, but here, we might run into some problems. BA does it in broad terms for GCH but have effectively had to create some 'fake' F lounges by name to keep all those emeralds out of the 'real' F lounges at LHR and JFK. They do it more literally at CCR level but despite a much higher threshold than AF-KL could ever consider, this still makes the CCR crowded and participate in an F experience that is much less exclusive (or good) than AF's. So this possible perk raises very serious question, because my guess is that if it is indeed awarded, then the quality of the P lounge will almost mechanically reduce as AF won't be able to sustain the costs of extending the offerings to even, say, 20 additional daily users who are not flying F or paying for the lounge access (that would be a fraction of BA or L numbers).
(bolding by me)
True only as long as you keep the lounge capacity fixed. The CCR experience is poor, but that's only because it is too small. The AF Premiere lounge experience would indeed become much poorer, but only because it is too small for a larger number of pax. The Lufthansa FCL/HON lounges on the other hand don't have that issue (although Munich sometimes feels that way), simply they are much larger and designed to keep a high level of quality even for larger number of pax.
So the issue is not a general one where opening F lounge access to top status card holders will necessarily impact the quality of the lounge. The Lufthansa experience belies that rule. The issue is that current CCR/Premiere lounges in LHR and CDG are too small to accomodate more pax.