What happens if A3 goes bankrupt?

Old Jun 10, 12, 2:01 pm
  #31  
 
Join Date: Feb 2011
Programs: BAEC, A3 Blue (*A Silver), HHonors Gold
Posts: 55
Originally Posted by intuition View Post
Dear fellow FT'ers! This is an interesting thread but the last few posts are OT, both in terms of subject and in terms of the tone we use in A3 forum!
Originally Posted by Richelieu View Post
Star Alliance didn't have a problem with AC very low threshold for years, even if they were much lower than Lufthansa's, at least until the introduction of a new level. My guess is they don't care as long as the status granter pays for its dues.

You can certainly speak about flying A3, but have you credited these flights to A3's loyalty program? This is the M&B board here, and M&B doesn't really care whether you fly Aegean. Or they wouldn't be matching DC's refugees left, right and center but offer them a challenge instead.

Actually, whether A3 is running a scam by granting *G status with low threshold or whether people are scamming A3 by crediting flights with them to get *G (the post was a little unclear w/r/t to who was scamming who...) _is_ relevant IMHO to the A3 forum. I agree the rest is not, and that's why I limit my answers to that.
Bringing this back on-topic, i.e. an A3 bankruptcy, the consensus is definitely that A3 doesn't care if M&B members ever actually fly with them—but will other *A carriers care if push comes to shove and they're being asked to status match?

I'm also wondering in particular if OZ will match in the event of a bankruptcy (I'm aware that they don't match in normal conditions), since 40k over 2 years and 20k over one year are essentially the same requirement.

(Somewhat tangential, but speaking of YQ: what is YQ like on A3? I've never heard anyone talk about it, so I'm assuming no one had cause to complain.)
Philosofaux is offline  
Old Jun 10, 12, 6:56 pm
  #32  
 
Join Date: Aug 2010
Location: YYZ/YUL/YOW
Programs: TK*G/E+ SPG (G)
Posts: 2,932
Originally Posted by Philosofaux View Post
Bringing this back on-topic, i.e. an A3 bankruptcy, the consensus is definitely that A3 doesn't care if M&B members ever actually fly with them—but will other *A carriers care if push comes to shove and they're being asked to status match?

I'm also wondering in particular if OZ will match in the event of a bankruptcy (I'm aware that they don't match in normal conditions), since 40k over 2 years and 20k over one year are essentially the same requirement.

(Somewhat tangential, but speaking of YQ: what is YQ like on A3? I've never heard anyone talk about it, so I'm assuming no one had cause to complain.)
Will other carriers help? At the very worst, they may ofer *S and tell you to work your way up (which is fair, I think).

Personally, I think *A is fully aware of the program and may think it has some utility in maintaining the loyalty of infrequent frequent fliers. 20k may be a fraction of the 40k normally required, but its not a small amount either. In effect, iA3 strikes me as a *S+ that suits people who would have dismissed *S as meaningless/ the equivalent of non-status (it generally is) and been less loyal. In my own case, I tend to travel 30-40k annually. That would put me in *S across the board, and *G in good years.

I don't rate *S (as is evident above), and if it comes to price vs loyalty for lowly *S, lowest price will always win. In fact, that was the case till I 'discovered' A3. A3*G is essentially *S+. It doesn't offer the eUpgrades of AC, or the upgrade credits/vouchers being used by many other airlines.

Some observations:

1. Unlike other programs, A3 does not offer a Tier bonus (which would cost other airline members more). *A airlines are probably happy about this, since they get the loyalty without having to cough up more for frequent fliers on other airlines.

2. A3 does offer a generous class of service bonus, but it should be noted that A3 members will be paying anywere from 3x to 6x more (for J/F) and will only be getting 1.5x - 3x more miles for it, so again, I doubt the partner airlines are too miffed.

3. A3 is cashing in in each case by selling the miles to the airline which are then deposited into one's own account.

4. A3 does not offer upgrade vouchers/credits. It isn't incurring any costs in this regard. As such, this is also a disincentive for frequent fliers from other *A airlines to switch, since they will keep flying their own airlines (out of geographical necessity), and will place a high value on these credits/vouchers, which are valid on their own airline. In other words, don't expect too many *Gs from UA or AC to come flooding in (unless R inventory dries up completely, rendering their upgrade benefits useless).Similarly, members of those programs who rely on tier benefits(see no. 1) will not leave because of the opportunity cost of signing up to A3, namely no upgrades/tier bonus.

5. Every time A3 FFs use a lounge, A3 is billed for it. However with A3 pax typically being infrequent 'frequent' flyers, I suspect the numbers aren't too alarming, since money is also being generated by the miles they're selling to the airlines. I don't think UA or AC would be miffed with having A3 *Gs roaming around in their overpriced low-service lounges.

6. Priority check in and handling are marginal costs (if that). In fact, I doubt there is any cost associated with them. The same applies to priority boarding.

7. Not all booknig classes qualify for miles. Its not very easy earning the miles. This is beneficial both for partner airlines (who sell higher fares) and A3 (who aren't handing them out willy-nilly).

As such, A3's *G is almost completely in line with AC's new revised *S+ in terms of benefits. The only additional benefit for A3 over AC*S+ is priority luggage handling, which, as I've noted, is unlikely to be more than a very marginal cost.

I dare suggest that A3's program gave AC and *A some leeway in allowing AC to increase its threshold, since it acted as a secondary net to catch people like myself from going from potentially quitting *A altogether. For the vast majority of us A3ers, *S is meaningless (the fact that A3 hands it out at 4k miles says it all, really. If they used a UA or AC logic, Gold would have been *s times 2 = 8k. Its not. Its 20k.). AC now gets to limit the benefits it hands out to maintain loyalty, while A3 picks up the disenfranchised.

That, IMO, is why *A has not come down hard on A3. A3's benefit to *A is precisely that it is generating loyalty in other parts of the world that might not have existed. From A3's point of view, as long as the costs don't exceed the benefits, what do they have to lose? In fact, i think they've deliberately put 300% class of service bonus on F on some carriers - a rather straightforward demand for a part of the cut for getting these pax to choose *A airlines.

In any event, if it folds, we will all become *S (at the very worst). When it happens, we can deal with it. Hardly worth worry about. I am fairly confident that TK, with its apparent desire to expand, will likely be willing to take us on, rather than see us all go to dust/LH etc.

As such, I think A3's program only benefits international and longhaul infrequent 'frequent' travellers. It is of very limited use to people who travel domestically frequently. I suspect that's a key part in A3s (and *As) calculation.

For instance, using my own case, getting to 20k miles (for me) is one YOW-LHR trip (6.6k miles) and one YOW-DEL trip annually (15k miles). On those trips, I can really only use the lounge 6 times (4x before departure, 2x transiting). Presumably a pax like me would generate more revenue than the cost of using the lounge. Now if I were to use the A3 card on non-mileage earning flights within Canada, this would be costly to A3, but then again, if I were doing that, it would be more sensible for me to stick to AC, since it would be easier for me to earn segment-based status with AC as well as additional benefits (upgrade vouchers and whatnot). I can only guess that similar situations arise with other arilines.

Last edited by yulred; Jun 10, 12 at 7:06 pm
yulred is offline  
Old Jun 10, 12, 7:20 pm
  #33  
 
Join Date: Jun 2004
Location: SXB
Programs: Flying Beurk Silver, BA Gold, BD Gold rememberer, A-club Platinum, Hilton Gold
Posts: 2,472
Originally Posted by yulred View Post
1. Unlike other programs, A3 does not offer a Tier bonus (which would cost other airline members more). *A airlines are probably happy about this, since they get the loyalty without having to cough up more for frequent fliers on other airlines.

2. A3 does offer a generous class of service bonus, but it should be noted that A3 members will be paying anywere from 3x to 6x more (for J/F) and will only be getting 1.5x - 3x more miles for it, so again, I doubt the partner airlines are too miffed.

3. A3 is cashing in in each case by selling the miles to the airline which are then deposited into one's own account.
I am no expert on how airlines deal with this, but I suspect the situation is much simpler: the operating airline pay a flat fee for each pax to the crediting airline. The crediting airline then uses their own guidelines to award miles in their own program. So stinginess in cheaper booking classes and lack of elite bonus should help A3, not the operating airline.

In any event, if it folds, we will all become *S (at the very worst). When it happens, we can deal with it. Hardly worth worry about. I am fairly confident that TK, with its apparent desire to expand, will likely be willing to take us on, rather than see us all go to dust/LH etc.
TK is matching BD eagerly, a more distant market than A3's.

As such, I think A3's program only benefits international and longhaul infrequent 'frequent' travellers. It is of very limited use to people who travel domestically frequently. I suspect that's a key part in A3s (and *As) calculation.
People who travel domestically frequently don't matter to *A : Greek airports aren't exactly full of *A lounges.
Richelieu is offline  
Old Jun 10, 12, 8:40 pm
  #34  
 
Join Date: Aug 2010
Location: YYZ/YUL/YOW
Programs: TK*G/E+ SPG (G)
Posts: 2,932
Originally Posted by Richelieu View Post
I am no expert on how airlines deal with this, but I suspect the situation is much simpler: the operating airline pay a flat fee for each pax to the crediting airline. The crediting airline then uses their own guidelines to award miles in their own program. So stinginess in cheaper booking classes and lack of elite bonus should help A3, not the operating airline.

TK is matching BD eagerly, a more distant market than A3's.

People who travel domestically frequently don't matter to *A : Greek airports aren't exactly full of *A lounges.
I m equally unsure about how exactly it works. Maybe a premium passenger flat fee is higher? I would imagine that the length of the journey and fare paid is a factor in all of it. It would be very odd if A3 got the same flat fee for a YYZ-YOW flight and YYZ-PEK flight (hypothetically speaking). Furthermore, if it is, in fact, a flat fee, then I imagine it would be based, in some way, on the cost of lounge access.

I m glad to hear about TK doing its bit.

When I said people who travel domestically, I meant people who travel domestically in the US/Canada, not necessarily Greece or within Germany.IE - a frequent flyer on YOW-YVR or IAD-SFO would find no benefit in using an A3 card for these fairly long journies that offer nought miles on discounted Y. In such cases, discounted Y fares count for nothing. I don't know what types of fares qualify for intra-Euro miles, but I imagine theres no/low mileage for discounted fares?
yulred is offline  
Old Jun 10, 12, 8:43 pm
  #35  
A FlyerTalk Posting Legend
 
Join Date: Aug 2010
Location: DCA
Programs: UA US CO AA DL FL
Posts: 45,088
If A3 goes belly up:

1. It's unlikely that any *A carrier will honor A3 miles. They have no value to other carriers and they've basically been paid for.

2. It's even less likely that any *A carrier would status match.

This isn't the same situation as a more global carrier where there's an affirmative business case for Carrier A to honor Carrier B's program.

I can't predict the future better than the next person, but I can assure you that I wouldn't be transfering or crediting points to A3 until the crisis is resolved, if it's resolved.
Often1 is online now  
Old Jun 10, 12, 9:15 pm
  #36  
 
Join Date: Aug 2010
Location: YYZ/YUL/YOW
Programs: TK*G/E+ SPG (G)
Posts: 2,932
Originally Posted by Often1 View Post
If A3 goes belly up:

1. It's unlikely that any *A carrier will honor A3 miles. They have no value to other carriers and they've basically been paid for.

2. It's even less likely that any *A carrier would status match.

This isn't the same situation as a more global carrier where there's an affirmative business case for Carrier A to honor Carrier B's program.

I can't predict the future better than the next person, but I can assure you that I wouldn't be transfering or crediting points to A3 until the crisis is resolved, if it's resolved.
1. No *A carrier will honor any other airlines miles. The best one can get is a status match.

2. I think *A carriers will status match to a *S level, if not a *G level, depending on account statements. For instance, if I fly 40k miles inside a calendar year, with 22k miles on TK, I imagine TK will have no issues status matching me. It will, of course, depend on a case by case basis, but I don't think *A will tell everyone to take a hike.

3. There's not very many airlines that are doing well right now. To be honest, I m not bothered about losing my miles or status. I don't think anyone on this board is. Most of us aren't churning miles through Credit cards. At the most, we stand to lose a year or two's worth of miles (those who haven't redeemed already). If A3 hadn't existed, I (and I suspect many others here) wouldn't have angled for *S anyway, so we aren't really losing anything more than a few thousand miles that cant be gained back through Credit Card churning if nothing else.

I don't think its ever going to get resolved. And I don't think A3 is going away in a hurry. As a longtime 9W member, I've seen worse. Much worse. Like all airlines, A3 will continue along.

Point being - if you don't want to credit your miles to A3, don't. Suffice it to say, if A3 goes under, I (and I suspect many others here) will be more concerned about the A3 employees losing their jobs than a couple of thousand miles.

I have to say I am a bit amused by the fact that many non A3 members are commenting on this thread. What gives? Just generally out to stir the pot?
yulred is offline  
Old Jun 11, 12, 3:26 am
  #37  
 
Join Date: Jun 2004
Location: SXB
Programs: Flying Beurk Silver, BA Gold, BD Gold rememberer, A-club Platinum, Hilton Gold
Posts: 2,472
Originally Posted by yulred View Post
I m equally unsure about how exactly it works. Maybe a premium passenger flat fee is higher? I would imagine that the length of the journey and fare paid is a factor in all of it. It would be very odd if A3 got the same flat fee for a YYZ-YOW flight and YYZ-PEK flight (hypothetically speaking). Furthermore, if it is, in fact, a flat fee, then I imagine it would be based, in some way, on the cost of lounge access.
By flat fee, I meant a flat fee depending on the itinerary and class, opposing that to paying different carriers a different sum depending on how many miles they credit their members.

Originally Posted by Often1
1. It's unlikely that any *A carrier will honor A3 miles. They have no value to other carriers and they've basically been paid for.
This would be an unreasonable expectation, yes. I don't think anybody has suggested that.

2. It's even less likely that any *A carrier would status match.
It would be much more likely, though, for the same reason they are status matching BMI members, which is quite comparable as an airline as A3. The cost of getting one-time *G status to someone is quickly repaid if they lure customers to their flights. Especially high-yield customers that are susceptible to be attracted to A3's programme (there is too many non-earning fares with M&B to be attractive for those who fly mostly on the cheapest fares).

This isn't the same situation as a more global carrier where there's an affirmative business case for Carrier A to honor Carrier B's program.
Spanair and BMI? More global carriers?

I can't predict the future better than the next person, but I can assure you that I wouldn't be transfering or crediting points to A3 until the crisis is resolved, if it's resolved.
One shouldn't maintain a large mileage balance in any programme, as currently very few airlines are in a good financial shape, and they can always be devaluated at the airline's whim.
Richelieu is offline  
Old Jun 11, 12, 10:29 am
  #38  
 
Join Date: Feb 2011
Programs: BAEC, A3 Blue (*A Silver), HHonors Gold
Posts: 55
Originally Posted by yulred View Post
When I said people who travel domestically, I meant people who travel domestically in the US/Canada, not necessarily Greece or within Germany.IE - a frequent flyer on YOW-YVR or IAD-SFO would find no benefit in using an A3 card for these fairly long journies that offer nought miles on discounted Y. In such cases, discounted Y fares count for nothing.
I don't fly *A much—probably only about 10k a year.
As someone who 'pays my own way', I'm not as loyal and much more fare-conscious: I've travelled across the border to take B6 before, and I'd do it again if it was substantially cheaper than AC. (I prefer B6 anyway: B6 is probably the only airline I would—and have—paid more to fly on)
More often than not nowadays, I use my BA Miles to take AA flights rather than pay some egregious fare on AC. I make a lot of short-haul journeys that are less than 5k BA Miles and that I otherwise would pay out of pocket for. It's going to take a long time to get status on AC with 500 and 750 mile flights, and they're going to charge me a fortune along the way.

But I was taking an AC flight anyway where I would earn enough miles to qualify for silver on A3, and said, "Well, why not credit it to A3? Aeroplan is a horrible programme anyway, and with silver, I'd get a free checked bag on UA and US."
US/UA can't complain because it makes me more likely to fly with them, A3 can't complain because they're generating the mileage revenue off my *A flights, and AC.... well, I don't really care about AC.
And if I were likely to qualify for G, it would make me much more likely to make my TATL travel with *A, mostly for the lounge benefit. Again, UA/US/AC win, because I otherwise would've looked elsewhere.

So the A3 programme is benefitting other *A carriers by directing traffic to them that would otherwise be more fare-conscious.

Originally Posted by Often1 View Post
2. It's even less likely that any *A carrier would status match.

This isn't the same situation as a more global carrier where there's an affirmative business case for Carrier A to honor Carrier B's program.
Wasn't some sort of formal program set up after JK went under to match them on other *A carriers?

Not that I really care. It really just is a curiosity in many ways for me.
Philosofaux is offline  
Old Jun 11, 12, 10:42 am
  #39  
FlyerTalk Evangelist
 
Join Date: Mar 2008
Location: Netherlands
Programs: Platinum: KL Gold: A3 Silver: AZ, BA
Posts: 24,452
Originally Posted by Shareholder View Post
That EK's business plan is predicated on sucking up customers from other airlines and undermining the financial viability of national carriers (ask QF about that one) and not on taking customers to and from the Emirates which is how bilateral agreements were intended to work?
EK wouldn't be able to carry many passengers if they were not taking customers to and from the UAE. (This would only leave routes like SYD-CHC, SYD-AKL, BNE-AKL, MEL-AKL, SIN-BNE, KUL-MEL, BKK-SYD, BKK-HKG, CMB-SIN, CMB-MLE, MLA-LCA, HRE-LUN, ABJ-ACC, etc)

Don't bilateral agreements usually cover all the freedoms?

QF has long had many Asian competitors on its Asian/European routes. EK didn't invent the concept of flying the Kangaroo route with its home base as the intermediate transfer point!
irishguy28 is offline  
Old Jun 11, 12, 11:01 am
  #40  
 
Join Date: Feb 2011
Programs: BAEC, A3 Blue (*A Silver), HHonors Gold
Posts: 55
Originally Posted by irishguy28 View Post
QF has long had many Asian competitors on its Asian/European routes. EK didn't invent the concept of flying the Kangaroo route with its home base as the intermediate transfer point!
The moderator politely asked that we ignore some of the more absurd things that have been said and focus on A3 for this thread.
Philosofaux is offline  
Old Jun 11, 12, 12:10 pm
  #41  
FlyerTalk Evangelist
 
Join Date: Mar 2008
Location: Netherlands
Programs: Platinum: KL Gold: A3 Silver: AZ, BA
Posts: 24,452
Sorry. As I just discovered the thread this afternoon, and felt compelled to reply to some points as I read through, I hadn't got to the part where the mod told us to zip our lips.
irishguy28 is offline  
Old Jun 11, 12, 4:46 pm
  #42  
 
Join Date: Aug 2004
Location: Germany
Programs: LH SEN, BA Gold, Bonvoy Plat. GHA Black
Posts: 754
Originally Posted by irishguy28 View Post
QF has long had many Asian competitors on its Asian/European routes. EK didn't invent the concept of flying the Kangaroo route with its home base as the intermediate transfer point!
SwissAir did excatly the same for years. Very small homemarket but traffic from anywhere to anywhere in the world via ZRH.

And the same does SQ. 5 Mio population. How many % of their pax are really originating or ending their journey in SIN?
Olip is offline  
Old Jun 12, 12, 6:18 am
  #43  
 
Join Date: Mar 2002
Location: DUB - Ireland
Programs: EI-GCE, BD-G, BA-G, A3*G, TK*G, FB-G, HH-G, Hyatt-Dia
Posts: 8,526
Ahem! It's not the done thing to post about what the Moderator wants.

And I'm sure he'd never use an expression like 'zip our lips'.
GoldCircle is offline  
Old Jun 13, 12, 6:12 am
  #44  
FlyerTalk Evangelist
 
Join Date: Sep 1999
Location: Toronto, Ontario, Canada
Programs: OWEmerald; STARGold; SPGPlat; PCPlat/Amb; HiltonDiamond; CarlsonGold; A|ClubPat; AirMilesGold
Posts: 38,108
Just to clarify with actual facts: AC's 35K for STARGold came about for very logical and specific reasons based on the Canadian market but was actually consistent with threshold levels set by the majority of other STAR carriers (as is its shift to 50K for next year). When the threshold was set, AC (and its competitor CP) both only gave 50% status mileage for domestic discounted economy travel. Since the majority of its members earned their status from domestic travel, it was acknowledged that 35K would be a fair number to offset the differential between granting 100% versus 50% for these flights.

Similarly, A3 has a low threshold because the majority of its members who actually live in Greece or the region, fly ultra-short flights within the country, and thus should be able to achieve a parity of STARGold status with less mileage than those in programs of airlines operating in countries where the average flight segment was well over 500 miles.

In LH's case, it uses the 35K threshold for STARSilver instead of Gold because its program is biased towards the high dollars spending corporate fliers who travel internationally in LH's premium classes. This also explains the generosity of mileage credit for C and F fares (200% and 300% respectively).

So each program's thresholds are designed with the particular nature of the country's frequent travellers and the benefits the airline program wishes to bestow. AC decided it didn't want to be a patsy any longer for bottom feeding STARGold aspirants and thus instituted a minimum flights/mileage on AC metal requirement. One hopes A3 sees the wisdom of paring down its STARGold ranks (and thus costs) by similarly instituting a requirement to actually fly A3 for a good percentage of the required mileage. It's a pretty good airline BTW, though most of you would never know it because you've never flown it.

(I now expect the Mod to tell me I have been banned from FT for trying to clarify the record -- and thus being off topic -- but I suppose I can bear a second banning during more than 10-years of postings.)

Last edited by Shareholder; Jun 13, 12 at 6:20 am
Shareholder is offline  
Old Jun 13, 12, 6:15 am
  #45  
FlyerTalk Evangelist
 
Join Date: Sep 1999
Location: Toronto, Ontario, Canada
Programs: OWEmerald; STARGold; SPGPlat; PCPlat/Amb; HiltonDiamond; CarlsonGold; A|ClubPat; AirMilesGold
Posts: 38,108
Originally Posted by yulred View Post
Is it a scam? Is arbitrage a scam? If so, I expect you to stop buying goods in China since they rely on labor arbitrage and therefore all products made in China are products of a 'scam'. There were plenty of people (Americans mostly) who signed up to AE to take advantage of the 35k threshold for Star Gold not so long ago. That was 15k less than what MP required at 50k. Was that a scam as well? Should we be criticizing the ranks of American AE members who did that? Because, as I see it, A3 is only offering a threshold that is 15k miles of AC's former *G threshold. If AC could play that game with MP, why shouldn't A3 be allowed to play it now?

Futhermore, I think you'll find that A3's program is not exactly a secret to other airlines. Everyone knows the thresholds. If *A has a problem with it, they can bring it to bear on A3.

And no, I don't see it as taking advantage of A3. As I understand it, everytime I credit my flight to A3, AC has to purchase the miles from A3. If its generating revenue for A3, I m happy with it.
As I have just posted above, the AC threshold was quite justified and appropriate at the time. Had you looked into it, you'd know the reason, but you are still not addressing your allegations against me so I ask you to apologize for making them. Those who make charges that AC is keeping the surcharge money for awards issued on several STAR carriers have no proof of this spurious charge but continue to post it as a fact. Until such time as you can prove it, I suggest you stop bandying it about as a fact.
Shareholder is offline  

Thread Tools
Search this Thread
Search Engine: