Ken hAAmer

Here's another direct comparison between the original 2011 benefits and the 2011 benefits with the revised upgrade credit scheme. This example uses a Super Elite travelling YVR-SYD (for no other reason than that's what I'm most familiar with):



While it is better than it was, it still leaves a Super Elite with insufficient upgrade ability to duplicate the 2010 program, even though every flight is in the medium fare M class (unlike the 2010 program which allowed up to 3 return trips on low fares, using red Special SWUs). A Super Elite frequenting this route will still be short of upgrade credits on at least 3 one-way trips, even though they would end the year with 18 upgrade credits.

Even if a 2010 Super Elite was short of SWUs, it's still possible they could earn additional (S)SWUs using NAUs if they had any North American travel. However, with the upgrade credit system, there is simply no way that it is possible to earn additional upgrade credits. It is simply impossible for even a Super Elite to duplicate their 2010 performance, even though they are paying the (ostensibly) medium fare on every trip (~$4000 return).



I would encourage others to post their examples and/or experience as well. I will be posting other examples (most likely YVR-LHR), as well as an example using a modified upgrade credit earning scheme where upgrade credit earning is accelerated, but results in the same or fewer upgrade credits being awarded.

Ken hAAmer

Here is the YVR-LHR comparison. Note that flight pass activity is not accounted for. But if someone was travelling this route regularly, the London Flight Pass would make good sense. If upgrade certificates/credits were selected as the benefit, there would be enough certificates in 2010 to upgrade every flight. I have not yet made the calculation for the 2011 program (original or revised), but I suspect the additional credits earned combined with the reduced number of credits required would allow upgrading on every flight in 2011 as well.

This is different from YVR-SYD, as for SYD there are no flight passes.

Ken hAAmer

Here's the same YVR-SYD chart using the revised redemption rates.

However, in this case instead of 15 credits for every 20000 status miles flown, the awarding of credits is accelerated to 3 credits every 4000 miles. This results in exactly the same number of credits being issued at the current thesholds. But it reduces the likelihood of someone being just a few credits short of an upgrade. In the YVR-SYD example, it results in one less denied upgrade opportunity, and at the end of the year fewer upgrade credits are "left over."

skofz

Here's my example. Most of my travel is between SEA and YWG, let's say once a month. I'm frugal and will not pay anything other than cheapest T+ fare.

Under 2010 system, I'd get 2x SSWU, use them on a round-trip, and that would be the end of it. My NAUs and SWUs would be wallpaper except for the summer / Christmas promos.

Under 2011 system, I chose 25 eCerts + tier bonus. 12 r/t SEA-YVR-YWG works out to 39,888 miles. Let's assume I do one trip on UA via DEN to hit 40k, I'd earn another 20 eCerts. With 45 eCerts total I can upgrade 7x YVR-YWG flights.

New system is clearly a winner in this scenario.

Let's throw in some other travel. Suppose I have a business trip to NRT, and I fly SEA-YVR-NRT r/t. My company will only pay lowest economy fare, so I use 28 eCerts to upgrade YVR-NRT r/t. I still have 17 leftover to upgrade another 2x YVR-YWG flights. eCerts are still a winner.

Cancel the NRT trip and replace it with a trip to LHR, flying SEA-YVR-LHR. That'll cost me 34 eCerts to upgrade, 11 leftover, still enough to upgrade 1x YVR-YWG. eCerts win again.

The only downside I see in my situation is that if my overseas trip happens earlier in the year, before I've hit the 20k threshold, I won't have enough certs to upgrade it both directions.

Ken hAAmer

Indeed.

The program itself, and particlularly the revised redemption rates seem to be a preferential nod to those paying lower fares. For example, the redemption rates were reduce for Tango+ fares, but not for the Latitude fares.

I haven't seen his analyis, but a work colleague tells me "Still not as good as last year unless you fly exclusively domestic. If you are a London flyer, they are slightly worse. If you are a Sydney flyer they are much worse." Again, it seems those interested in paying the lowest fares, and those in what I understand to be the least profitable segment, got the best deal and the biggest concessions.

Ken hAAmer

Here is the chart for an SE flying exclusively YVR-LHR return, on Latitude Flight Passes:




This is one example where the flyer comes out ahead, well ahead, ending the year with more flight credits than they began the year with.

Ken hAAmer

If AC ever came out with a similarly priced SYD Latitude Pass, I'd be all over it. But problems would arise elsewhere. For example, if YVR-LHR does not have any upgrade space available, you have lots of alternatives, such as connecting in YEG. That translates into lots of different flight options every day.

But on YVR-SYD, there's only a single option, and either there is R space available, or there is not. Not alternative options. As well, R space seems to be getting tighter on this route.

Jasper2009

I ran the numbers for Es using different scenarios and received the following results (sorry, no spreadsheet I could easily put up on FT):

1) E flying within NA on Lat fares, 500miles

will benefit from new program, as upgrades only require 1 credit

2) flying within NA on Lat fares, 1200miles

will benefit from new program, as upgrade only requires 1 credit, will have the ability to confirm upgrade on all segments

3) flying within NA on Lat fares, >1500miles

will benefit slightly from new program, but not as much as those flying short-haul NA segments

4) flying within NA on T+ fares

-will benefit assuming they only used SSWUs in the past (no SWUs during the holiday/summer promo) due to the flexibility of the new program (2.5 long-haul NA upgrades or 4 short-haul NA upgrades if E chooses tier bonus)

5) flying internationally on T+ fares, <5000miles

These Es face drastic cutbacks, they have to forego the tier bonus in order to upgrade one roundtrip (or wait until they cross a threshold with not enough credits left for upgrading a Lat roundtrip)

6) flying internationally on T+ fares, >5000miles

These Es face drastic cutbacks, they have to forego the tier bonus in order to upgrade one roundtrip and won´t even have enough credits to upgrade an int´l Lat roundtrip after crossing the next threshold

7) flying internationally on M fares, <5000miles

These Es also face massive cutbacks of about upgrade 50%
Es used to get 6 SWUs + tier bonus, now 3 roundtrips + tier bonus, threshold credits don´t improve this situation (formerly 2 SWUs, now 1.25 upgrades)

8) flying internationally on M fares, >5000miles

similar to group 7, but cutbacks are even more significant due to the differentiation of >/< 5000miles
Es used to get 6 SWUs + tier bonus, now 2 roundtrips + tier bonus, threshold credits is not even enough for upgrading one segment

9) flying internationally on Lat fares, <5000miles

Es used to get 6SWUs + tier bonus, now upgrade credits is enough for upgrading 4 segments + tier bonus
Threshold bonus is slightly devaluated (2SWUs vs. 10credits), but not significantly

10) flying internationally on Lat fares, >5000miles

Es used to get 6SWUs + tier bonus, now upgrade credits is enough for upgrading 3 segments + tier bonus
Threshold bonus will only upgrade 1.25 segments (vs. 2 segments under the old system)

---------

The trend of the above analysis is quite clear:

Es upgrading Lat fares within NA benefit from the new program.
Es upgrading from T+ fares within NA benefit due to the added flexibility.
Es upgrading from any fare internationally face massive cutbacks, it is important to notice that these cutbacks do not only apply to those Es flying on T+ fares internationally (who may have been the target of the cutbacks), but also greatly affect those buying M and Latitude fares.

As I almost exclusively fly internationally, it shouldn´t be hard to figure how much of an "enhancement" the new program is for my flying pattern. (and that of most int´l travellers)

While the cutbacks for Es buying T+ fares on int´l routes may be necessary from AC´s point of view (I respectfully disagree), I find it very hard to find a plausible explanation for the drastic cutbacks Es are facing who buy int´l M/Lat fares.

The easiest way to solve this IMO is to lower the credits required for int´l Lat fares and/or awarding additional credits for purchasing Lat/Exec. First fares.

CdnFlier

Well, I setup a similar chart to look at my flights/upgrades over the year.

When I finish 2010 I'll have flown just over 100k, having upgraded a significant majority of my flights - Domestic flights tend to be in M (had some personal travel in cheap T+ during summer promo period), international in cheap T+. I'll be going into 2011 with a couple of SSWUs that hopefully I'll use up in Jan/Feb before they expire.

Putting the same flight pattern into the 2011 program, assuming that the summer promo would have meant short distance domestic/transborder flights would have been 2 credits to upgrade (rather than 6) I would be okay for upgrades until the fall/the 70k mark. At that point I wouldn't have been able to upgrade my last 1.5 long haul trips as in one case I wouldn't have had enough points until midway through the trip and for the other trip I just wouldn't have enough points. As a result of this and the 30 points at 100k I would be ending the year with at least 20 eCredits (and having done some extra long haul flying in Y).

So, in my case the biggest impacts seem to be from the timing of the threshold bonuses in addition to the very limited number of eCerts that come with the T+ flight passes. However, if eCerts earned late in 2011 the year and valid into 2013 then the front loading of extra eCerts for 2012 might be enough for my early year travel.

Not a great outlook for 2011 - when I have flexibility, I'm going to have to plan carefully. I don't have the flexibility to "buy-up" to Y/B/Z so it certainly won't be encouraging additional spending. The chance at upgrades and the new lifetime program made me stick to AC for most flights this year but not sure how that'll translate next year.

CdnFlier

Well, the only saving grace is that the Latitude Passes 48-hour upgrades come directly out of J which may give some opportunities better than just being waitlisted for R.

Ken hAAmer

That's just on the North American passes. The international Latitude passes still require upgrade certificates/credits.

FlyerGoldII

In our family, I am a SE, and my wife and daughter are each Es.

This past year, they chose the SSWU option, and I did not chose the SSWU option - for the beginning year select privileges.

I did get 4 SSWUs for my upgade thresholds.

Between the 3 of us, we would have used the 6 SSWUs, for North American upgrades, and 4 more SWUS, for North American upgrades while the summer promotion was taking place (for T+ fares last summer). that is (depending upon how you convert last years SWUs to this year's eupgrade credits) 80 ecredits.

This year, I have again only chosen the 20 ecredit option with my select privilege; my wife and daughter have chose 35 ecredits each. So we are already up by 10 ecredits.

In terms of ecredits we will receive with the various threshold levels, last year the SWUs could not be used. This year, we can use the eupgrade credits, which we earn at the various thresholds. So we are significantly ahead in terms of upgrade ability, compared to last year.

So customers like us, who did not use SWUs or NAUs, except possibly during the summer and winter upgrade promotions, would gain by the new system.

BUT

the customers who have posted on this and the other threads who use most to all of their SWUs and NAUs as well as their SSWUs - esp for the overseas trips - they would lose with the new system.

Taking the whole AC SE/E/P customer base - are there more customers like us who would gain with the new system, or more customers like those - esp as indicated in the hypothetical examples on this thread - who would lose with the new system.

jlisi984

I'd say more that'll lose out - otherwise why would AC make the change?

Shareholder

While these tables are very informative, they do illustrate something that I have continued to reject: the notion that upgrading is an entitlement of elite status. I have always taken the view that upgrading is a benefit of holding elite status, but not an entitlement. We are given the benefit of a finite number of upgrades depending upon our elite status initially in our annual elite kit, and then after achieving certain levels of actual mileage accumulation (thresholds).

The original notion of the upgrade benefit was that the majority of our travels are business-related and paid for by our respective employers, but when we're vacationing on our own dime, we deserve a bit of comfort most of us would not normally be able to afford as a thank you from AC for our regular patronage. Depending upon employer policies and resources, we are able to buy fares in T+, Latitude or J. Those fortunate to have wealthy employers and be of high enough status in the company will get paid J. Others may benefit from Latitude passes and get 24-hour confirmed upgrades. Many more may make us of their NAUs and SWUs to upgrade regular Latitude fares. Those limited by restrictive "lowest fare" employer policies must sit in the back and hope that they can at least get T+ fares to earn status. (I don't consider buying T+ to be "bottom feeding", but rather prudent use of my, my company's or my client's money. So must AC as they consider it an elite-eligible fare class.)

Again, the original rationale for the upgrade benefit was to let us sit up front when we are footing the bill personally, on vacation, and with our parters (i.e. the companion upgrade). That means not expecting to earn enough upgrades (certs or now credits) to upgrade every business trip we take. But alas it does appear that many believe they are entitled to sit up front as long as their employer pays a high enough economy fare. And perhaps AC has created this impression by the liberal upgrading made possible through the Latitude pass, and flooding us with NAUs and SWUs. While AC has enhanced the J product, and boasts of the revenue it generates for them, we have also witnessed an increase in marketing C and Z Exec fares, and heavy discounting of this product. (Does anyone other than top CEOs buy full J? With all the upgrading opportunities from full-Y/B fares why would anyone pay for J?)

Each year I fly between 60K and 120K on AC metal and credit those flights to my AE account. Over the course of a decade, I will go from SE down to E and back up to SE, usually maintaining SE for two or three years before dropping down to E (mainly because I use awards to keep my account in order and not run up against the 7-year sunset of a few hundred thousand miles). Most of those flights I earn my miles with are in the back because of the nature of my work. I generate income for my own companies, and I keep tight tabs on how I spend that money. No excuses, but it means T+ and planning well enough that the flexibility of Latitude is not required. And the variety of destinations makes even Latitude passes impractical.

So I have accepted the benefit of a moderate number of upgrade opportunities, but certainly not an entitlement to upgrading on all my flights. This has been the case for the past 40-years of business travel. In the pre-FF and non-discounted economy fare days, I would pay the differential between the Y my employer or client would cover, and (then-) F. In those days the fare differential between Y and F was maybe 20% on NAmerican flights, quite affordable in my own cost-benefit relationship. Exactly what my annual spend on AC (and CP) was in those days, I could not say. All I know is it was good enough in the pre-FF days for both airlines to invite me to join their exclusive commercially important customer clubs, enRoute for AC and Kanata for CP. When FF programs were established in 1984, I was able to measure my travel and as a member of both programs, averaged about 60K each year in each program. (I was based in western Canada through the 80s and 90s, so CP was my preferred carrier -- and treated me quite well as one of their better customers ex-YEG/YXD -- but AC got a fair bit of business too.)

But as fares changed over the decades, the differential between T+ and Latitude could be double, and the cost-benefit relationship was no longer justifiable. So my upgrading would come from the limited number of certs we earned through elite status, or the occasional welcomed opup. And I have been quite content with this system.

Like other long-timers here, I have witnessed the steady erosion of elite benefits but recognize the economics for this. I run my own businesses, know what the bottom line means and the need to meet a payroll as projects dictate. The airline industry has been through considerable turbulence, which I also know first-hand as a shareholder in AC among others. So I can recognize the pressures to control costs and maximize the return from each seat.

But I also believe in the notion of loyalty and that it is a two-way street. I believe in an upfront relationship where both parties respect one another and treat one another with a degree of dignity. So I and others have stayed with AC even though our benefits have decreased year after year. However, this current set of changes really does demonstrate that AC no longer respects my loyalty or four decades of patronage. It has so significantly betrayed the "social contract" we had forged that I feel quite insulted by it. I can only ask Mr. R and his exec team if they have any dignity left after what they've done to tens of thousands of similar customers like myself? (I posted the major issues I still have with the changes to Elite elsewhere, so won't repeat them here.)

So I have been given the bum's rush by a company I had respected, and by a management which on many levels has done a supreme job of improving the products on offer, but just failed miserably to recognize the importance of customers like me. Most of my 1st quarter travel was booked last month and I have three transAts with AC and one transPac with UA. One of those transAts is in Latitude and I have confirmed my upgrades with SWUs. Two others are T+ on which I hope to use my last pair of SSWUs...and if it arrives in time, the "bonus" SSWU. (I'll fly the fourth in the back, unless one or more of the other three aren't upgraded.) When I am permitted to select my benefits for next year, I will likely opt for the maximum eUpgrade credits of 35 as an Elite, but will resent being the only tier that must decide between max credits and the elite mileage bonus. (Not to mention that the 60K threshold this week's flights will pass will result in another pair of useless, 45-day validity SWUs instead of the promised but now renegged upon eUpgrade credits, another major betrayal on the part of AC.)

How I will use my eUpgrade credits next year I am unsure. If AC does not make any further changes to the Elite benefits offering, I will most likely shift all my overseas and transborder flights to other STAR carriers, focusing on UA/CO. (I don't mind the US transfer and cross my fingers that in a couple of years time Canadians will be able to participate in the US Global Entry program. UA's upgrade policies will move me up front more often than was the case with AC, so many upgrades that I might well succumb to the entitlement syndrome after all!) I will continue to fly AC domestically and thus likely upgrade from my T+ fares more frequently than I have in the past (one of the benefits of the flexible eUpgrade credit program, a move that I have stated before that I find a most positive move by AC). My usual domestic travel pattern will see me at least achieve Elite, though I am not likely to any longer be a 60K-120K customer for AC. (I should not be that far from 1MM by AC's count, by my own tally since 1984 I am well past the mark.) What that means in lost revenue to AC, can't say exactly, but likely $10K-$15K per year.

So while Ken's tables are instructive, I for one reject the very premise that we should be able to generate enough upgrade certs or credits to sit in the front on all our travel. So in that sense, decreases are to be expected. However, in the case of what was done to Elites versus other elites, the cutback is gruesome and a true diminution of a key benefit of status.

If AC claims its reason for decreasing benefits is that they are just too costly as there a too many Elites who are just earning the minimum mileage required for this status, then increase the threshold to 50K as on other FF programs. But if there are enough Elites in the same circumstances I am in, AC will find it has just created many more who will aim for 35K (or maybe 40K to get the threshold eUpgrades) and shift their business elsewhere and into another FF program.

Global guy

I find myself in a situation similar to SH this year. I have been SE for only two years and flown AC metal for at least 2/3 of the 100+ miles each year.
This year I retired and my travel pattern changed. with 68k status miles I finish the year as an E.
I find SH's analysis and Ken's charts quite revealing. Even with the latest changes, my situation will not be equal to what E status gave me a few years ago.
I already have a TransAt booked for the first quarter and am looking to book a South America trip for Feb or March. Add our usual jaunt across the pond in the warm season and a few domestic trips here and there and I should make E again (perhaps go to 40k for the etreshold bonus) but any other travel after that- possbly another 10-15K worth I really don't see why it should go to AP.