Originally Posted by
San Gottardo
Because, respectfully, you keep repeating "someone else does it, I think they should do it, therefore they are wrong and I am right" without accepting the possibility, however remote, that AFKL actually
does know this is a thing that exists, and maybe, just maybe, they have decided that it's not in the best interest of their business to offer this.
Originally Posted by
San Gottardo
Yes. And - sorry to say it that bluntly - they are wrong. It basically refuses to recognize that airlines do inventory and revenue management, it basically refuses to recognize that airlines use different fare buckets to make them available to different markets/customer segments, it refuses tomrecognise the fact that airlines overbook their flights using forecasting methods in such a way that they sell more seats than there are on a plane but still almost never have to bump someone.
For those that don't believe that it exists or understand how it works: this video
https://youtu.be/i7OgtWAdlsU explains how airlines do forecasting, protect certain fare classes for certain segments of customers, use nested inventory.
With all due respect, I
know that inventory management exists. I wasn't born yesterday.
Originally Posted by
San Gottardo
Booking guarantee is exactly that: letting the inventory management system set availability for certain buckets, by simply adding one bucket which is used for people that book last minute.
I still fail to see why people think that introducing booking guarantee suddenly creates a problem of bumping pax. Inventory management is an existing and proven approach, using existing and proven instruments, with existing data.
Because the only way you can prevent bumping pax is knowing ahead of time
exactly what flight the booking guarantee is going to be used and not sell the
exact number of seats that will be filled by booking guarantee using pax... or else keep entirely too much reserve inventory free, which will prevent you from selling the available seats at close-to-full fare anyway.
You seem to think current inventory management is good enough for that, I think it's not.
Originally Posted by
San Gottardo
And which routes are the ones where this guarantee would most likely to be used (you seem to suggest that you know)?
And why do do you think that seats would go out empty?
The only point when a booking guarantee is needed is on a flight that would otherwise be full.
At the same point, that is also the flight where AFKL faces the highest lost revenue if the last seat is not sold.
Your solution to the capacity issue was to keep some seats in a separate bucket and release them only if unsold at point of last guarantee. That could work, but only if you assume 100% reliable inventory control and/or some reliable very, very last minute demand (<24h).
Originally Posted by
San Gottardo
So it's better to piss of high value customers? What is the business case for preferring low value customers?
You're expecting that AFKL considers business class pax on high-demand routes low-value customers. Just because a pax doesn't have AFKL Platinum card, doesn't mean they aren't valuable.
Originally Posted by
San Gottardo
Wouldn't it be safe to assume that we simply don't know whether they haven't looked at it (didn't have the idea that this was something worthwhile looking into) or did look at it and came to the conclusion that their pax wouldn't value it? Maybe you do know, I at least don't.
You say you don't, but you act like you know they didn't and you want them to.
I rather presume it's more likely they did.
Originally Posted by
San Gottardo
- And you believe that the inventory algos that AFKL uses today are not taking that into account? We can be certain that they do inventory management with the inventory that they have
Yes, certainly the inventory and revenue management takes these factors into account. How is that even relevant?
Originally Posted by
San Gottardo
2. Not sure how more F seats make a difference for the short haul network
I am not talking about short haul network. The whole discussion is about the longhaul business guarantee
Originally Posted by
San Gottardo
Yes. And that is exactly what the business proposition is all about: "we get our most valued customers out before the meltdown."
Which only makes the problem worse. While it's possible to predict loads fairly well in regular operations, it is impossible to predict when meltdowns will happen exactly. So you might aim to have 1-2 empty seats at T-48 and get to that goal, but suddenly the French ATC announce a strike and you have 10 Plats trying to make use of the booking guarantee, which leaves you with 8 people
who already bought the highest cabin available that you need to bump or reroute. Rerouting someone on dirt-cheap eco ticket has far lower impact than rerouting someone in business class.
Anwyay the point in relation to LHG here is, that regulating IRROPS by rerouting via 3/4 hubs is a lot, lot easier than rerouting via 1/2 hubs, lessening the commercial impact.
Originally Posted by
San Gottardo
Still puzzled how people accept the fact that airlines do yield and inventory management, accept the fact that airlines overbook flights so as to optimise yield - but when the suggestion comes along to merely create another bucket in the inventory those same people question the very workings of inventory management.
Yes, and that's why IDBs never happen... unless they do.
Originally Posted by
San Gottardo
Exactly my point. We know that it isn't an inventory management problem (the likelihood of people being bumped does not go up compared to today). Unless AFKL's inventory management is inferior to LHG's - which nobody has a reason to believe. But I can only speculate why AFKL doesn't offer it. My hypothesis is the same as yours, it's cultural and a different business philosophy. Fair enough
Maybe I don't give AFKL inventory management enough credit, but I don't think the likelyhood of people being bumped stays the same. After all, you
are removing the concept of "sold out" for a certain class of customers.
Cultural factors, that I don't want to say there is no impact of them on the decision. after all the simple look at tiers with both benefits and ease/difficulty of achieving suggests, that LH values their high-tier flyers relatively more compared to paid J pax in general in comparison to AFKL.