PreferBulkhead

Indeed. I have communicated this to my colleagues and they look at me with blank stares; until the first time the find out they are not getting the full status miles which will happen shortly I know for them. I am not going to belabour the point with them. They will learn the hard way.

antirealist

They've just opened a new MLL at LaGuardia - why would they do that if they intend to cull Elites and reduce costs?

I'm not suggesting that you and AC888 are wrong, but there are a few inconvenient facts that need explaining.

Absolute

For select members only. I'm a 2012 E, currently at 74K miles for 2013 (will be SE), and never received that email.

antirealist

Well, I suppose it might be that there are certain classes of Elites that they want to hold on to - high spenders perhaps, flight pass purchasers etc, as Zorn suggested here. I do fall into that group. It would be interesting to know if the promotion was targeted in that way - I suspect not, though.

YYCYYZ

I think many of the posters here have hit on the key issues.

AC wants to cull the herd of bottom feeding SE and E to allow for higher profit
AC wants to make members pay a higher fare to have a realistic chance of upgrading to J
AC wants to realign its top tier levels with those of other SA members (I think 35k is gone for 2014)
There is a plan to shift routes to the LCC to allow for non union staffers and Tango fares are prepping those destinations.
R games making it hard to impossible to consistently upgrade as an E

However what annoys me the most is that there are all these items which dont align with any of those points. 50% bonus status miles promo (I got that email as a 50k Elite), new MLL in NY etc

Like many Es I dont have the option to go with a T+ on a TPAC if T is available. So rather than me buying T fares it makes me book with UA (right now) as they both have zero potential to upgrade but one gets me miles and costs less. There is no way AC is making up the incremental cost of upgrading me by selling a bunch of T fares. It is absolutely a net loss situation for them as I am shifting spending en mass.

If DL offered me a status match I would be there in a second and could do all my flying with them and CX.

jarusoba

Well, my wife and I have always been traveling together. The only difference now is that while she has already got SE status because she has deposited all her flights, while I have one flight held back until November, hoping to extend the shelf-life of the 30 threshold upgrade credits.

I got the email but she never did. AC might sent me the email to encourage me to get to my 100K but they didn't have to send it to my wife because she has already qualified. Why giving miles away to encourage her?

Shareholder

Which AC doesn't seem to recognize since many of us have over the weekend pretty much warned all our friends and business associate to reconsider their FF program and flying AC in the future. AC hasn't seen fit to even send them an email announcing these wonderful changes to fares and upgrades for obvious reasons. I can now recognize why most AC staff don't trust management because they -- and now we -- will betrayed at the slightest instance of the bean counter's insistence that we're costing the company too much money with out benefits.

Shareholder

Because it applies to routes on which carriers like AF and KL have offered very attractive fares, even lower than AC's "new" Tango fares. AC figures the only way to keep the sheep buying its new fares is to bump up the SMs a bit.

Shareholder

What is the cost of providing elite benefits to AC? A few dollars a lounge visit but that's already been made up in the difference between a Tango and T+ fare. The full AE miles? That too is more than made up by the fare differential paid. Free checked bags and advance seat selection...maybe but again when paying $200+ difference each way for T+. Once in an economy seat, there's no cost difference serving a Tango versus at T+ passenger...and often it's the Tango passenger sitting further back that gets the open centre seat, seldom if ever the T+ elite in the front "preferred" seating section.

Okay, upgrades. With windows a few days before departure and tight control of R inventory, there is very little likelihood AC will lose a full J sale of a seat because an upgrade has been confirmed. If anything it is the Latitude fare person who is taking a likely purchase J seat out of inventory for half or more of what could otherwise be obtained by AC. Since upgrades are seats not sold, the inflight cost is marginal for meal and drinks. And the upgradee is highly unlikely (unless buying Latitude) to be buying a J ticket, so there's no lost revenue there either.

So upgrades really don't cost AC much if anything other than good will. And most of those using them are regular business customers who are flying with family and not likely to be buying up to T+ or Latitude on a vacation flight.

No this move is pure mean spiritedness on the part of AC.

Shareholder

Because with the merger of UA and CO, and the closing of one of the two clubs those airlines operated, there's little room for AC customers so UA has told AC to move out. Plus WS has aggressively moved back to LGA.

capedreamer

I think the biggest cost of E/SEs from AC's perspective is forgone J revenue. The disincentive to purchase J tickets is very hard to quantify accurately, but I wouldn't be surprised if AC's beancounters have taken a very simplistic approach and consider each upgraded J pax as a "loss" of the difference between the J fare and the actual fare paid. If that's the case, and with no way to accurately assess the incremental revenues these E/SEs bring in out of loyalty, I'm sure the program can be portrayed as very costly.

Additionally, I was also thinking more broadly and long term. With fewer E/SE members going forward, I assume AC would eventually reduce infrastructure costs (shut down / open fewer lounges, pay for fewer visits to *G lounges, scale down the dedicate SE contacts / concierges, and ultimately reduce J inventory).

I hear ya...As pointed above, I don't have a lot of faith that they've done the math correctly either. However, going by the anecdotal evidence LockheedElectra referenced, 2Q12 results compare somewhat favourably to 2Q11. In addition to revenue being up slightly, yield and RASM both improved slightly as well. And given the introduction of TPAC Tango, I found this quote especially interesting / disconcerting (for us): "Our Pacific performance was especially strong, with a revenue increase of 18.5 per cent year-over-year."

Unfortunately, there is no yield, RASM, or cost breakdown by region, so we have no way of knowing whether that meaningful increase in revenue was from more people shelling out for T+ or hordes of T pax flooding the plane, or whether the revenue increase flowed through to the bottom line.

LockheedElectra

My thoughts exactly seeing the TPAC numbers from last Q. doesn't look like the addition of T fares hurt them at all. Your point about the bean counters may be right as well, but with an astounding lack of knowledge of the customer. In my position, I can buy a higher fare on our corporate travel web site without authorization, but I have about 50 technicians/engineers that HAVE to take either DL or the lowest fare, and cannot override this. I could probably override this, but then my costs would go through the roof. Lot's of TT flyers on AC in there as well, and several have already transitioned to DL as they love the UDU, and they only fly occasionally TPAC or TATL

Cozmo456

I was loyal to AC because I was forced to fly lowest fare by my employer and the only reasonable chance of flying better was an upgrade. AC cannot force me to fly J (or Z).

If my employer paid for J, I would then choose which airline gave me the best service. KE, CX and BA are far better in J and are lower priced.

So in either case now, AC loses.

As a business man, I understand the overpopulation of elite flyers and trying to return to a more elite experience for those who make the grade. This while reducing costs. However the plan as it is now is counter-intuitive and will result in a huge correction some time after March 1 when people leave after their status expires and there is no hope to regain it.

capedreamer

Unfortunately, I think AC and other full-service carriers are seeing situations like this (albeit an extreme example) and questioning whether their business model works in the current operating environment. I'm not 100% sure, but I believe UA and DL don't allow TPAC/TATL upgrades on discounted Y fares, nor for sub-100K elite members. LH is making HON/SEN more difficult to attain. SQ and CX don't have upgrades (other than op-ups) period. When even the best in the full-service business (SQ, CX) are having a tough time making money, it's no surprise that AC et al are re-evaluating their strategy. Going forward, I think legacy airlines will attempt to cater to two distinct markets with more pronounced customer segmentation: 1) a very small group of premium passengers paying for F/J and full Y fares, and 2) a vast majority of passengers who just want to pay as little as possible. It sucks for those of us who are somewhere in the middle, but when you see the likes of SQ / CX / LH struggling, while Ryanair / Spirit / Air Asia continue to do well, can you really blame them for wanting to try something different?

Lllahim

You did it again: raise fares to upgrade. Now that you know that fewer and fewer TT buy M class fares to upgrade, you are now calling M fare T+. What used to be T+ is now T. Goodluck with the change. I normally travel to Asia on T+ now that that fare is out of reach, I will travel with UA at lower than T for 100% status miles.