Originally Posted by
michael2K
A large volume of asiamiles has been resold by the Standard Chartered Bank and other banks recently in Hong Kong..... this creates a higher demands for redemption seats and CX's current tactic is to force this group of customers to redeem Choice and Select seats .... this will make CX P/L statement looks better , at least in the short term , and hence the new management team will get a more decent bonus this year.
This is only part of the story, and I do see you mentioning that this is the supposed "short term" effect. I find it hard to see how the new management team can expect a decent bonus unless they are pulling in more money via sales of seats and/or miles.
Let's look at the possible gains for CX first. Drying up miles might sell some more seats but I doubt the significance since many will use LCC, especially the short haul leisure travellers. So these passengers go elsewhere and their miles will remain unused and therefore liabilities on the books. For premium cabin leisure passengers who cannot find seats to redeem, I doubt if many will buy CX premium class J/F at CX prices out of their own pockets. A few of the less savvy ones might pay choice prices and redeem if necessary and if available, they empty their mileage holdings and call it a day, realizing that AM is too expensive and not a good bargain, and/or that there are better options elsewhere. Others might buy discounted revenue Y with CX or rivals. Seasoned FF users will not burn their miles at such rates and are too savvy to fork out premium revenue CX fares. So the gain for CX is small . As for business travellers, they seldom use miles for tickets which they can claim as expenses anyway. So, no revenue improvement for CX. That flights are going out quite empty in this high season is good indication. Little improvement in ticket sales and miles remain as liability on books.
As for possible losses: Most people will complain not only because awards cost more miles, but also that choice/tailored awards are outrageously costly and worse, there are no award seats. After getting exasperated, people will say that AM are not usable as one cannot find seats for redemption. As a result, banks like Standard Chartered will find it a lot more difficult to attract customers via AM handouts. Ready examples we see on this thread are Michael2K an Percysmith. Will Standard Chartered still buy as many miles from CX then? No. CX will be honking off its big corporate customers. They are in fact a big, constant source of revenue, which CX dearly desires. Do the banks have alternatives? Yes. As QRC3288 pointed out, banks have lots of choices and offer a lot of choices to customers as to which FF program to get miles for.
On this analysis, losses to CX far outweigh gains.