Does AC pays for lounge access?
 

I mostly visit SK lounges around the world and then I enter with my AC Aeroplan Elite card and everytime they swip the card through some kind of reader and now to my question.

Why do they do that? Just to have statistic or do they charge AC for every time I enter the SK lounge?

UA RCC in HKG does the same thing everytime I enter, they copy down my AC FF number. However, the US RCCs and the one at NRT didn't do it. The SQ one at SIN did it last week but only to keep a list of who's in the lounge.

My guess is that they DO pay for lounge access but probably not on a per visit basis. Most likely some sort of annual fee that each *A carriers pay each other?

I believe there is a reciprocal charge of about US$20 airlines pay each other when their members/customers use affiliated lounges. So this can add up to a real cost to airlines in the course of a year's travel by elites who have lounge access given their Aeroplan status. That's also why I believe it to be unfair of those from outside AC's primary market [and who do not use the carrier], obtaining Elite status on AC just to have access to the STAR lounge system by flying significantly fewer miles than would be required by their own STAR carrier's program. But I have already become embroiled in this debate with Goldlust, and won't pursue the matter further with kempis.

There are costs associated with running these lounges, staffing and the actual supplying of food and drink. Given the increased use brought about by affiliated carrier customers using these lounges, cost recovery is important. This is particularly the case with US carriers who see lounges as profit centres. Most charge for drinks [domestic], have an annual membership fee, and have been shutting down unprofitable lounges across the USA.

Nothing is free any more. That's also why AC started the guest charge for Elites and Diners ML cardholders.

All these frills we enjoy -- Aeroplan miles, lounge visits -- do have a very real cost that affects the net AC receives from each ticket purchased. As I have demonstrated in the past, there is not very much left to operate the flight -- let alone generate a profit -- when these elements are deducted. For example, on a Q-fare between YYZ and LAX, which may run $450 before taxes and fees, AC must account for about $40 just to cover the Aeroplan miles offered [at 1-cent Canadian per mile, probably lower than the actual] and another $40 for lounge use at both ends of the trip. That brings the net going to the trip to $330.

While most here would not consider these to be real costs, to AC they are since these must be accounted for by each respective division, even as a book transfer. The point is, once these costs have been taken off, the ticket price is even cheaper, and less likely to cover the cost of flying you to your destination: $165 each way to LAX is a pretty cheap price by any measure. [Hey, and that doesn't even account for the cost of taking the reservation, processing the ticket/or e-ticket, checking you in, handing your bags, etc. so even less goes to flying you!]

These are the reasons why full-service carriers are losing money, and really cannot compete with the likes of SouthWest of WestJet who have none of these costs associated with their operations, let alone the rest of the infrastructure related to international operations. [You think WestJet will fly into the US or Mexico, or SouthWest across either border? Forget it: the costs would be too high and eat into the bottom line.]

The arguments presented almost sound you are making excuses for AC's inability to properly price its product. Yes, the company has certain costs that are built into its product.

As far as frequent flyer program costs go, your comments are misguided. Southwest runs a frequent traveller program with no restrictions and offers credits regardless of the fare paid. It consistently makes money and does not "whine" like AC does when it has to redeem a free seat. I would also venture to say that AC earns considerably more selling Aeroplan miles, than SW does selling credits in its program.

As far as international costs go, the costs you cite are ones of doing business. If you don't like the market, don't participate in it. To try and make an excuse for AC giving benefits to elites not from Canada is very misguided. AC has a CHOICE to be part of the Star Alliance. They are the ones that set the parameters for participation in the program for everyone. To say that certain people should be excluded because they don't fly AC is completely false. If AC didn't like the Star conditions for offering benefits, or Aeroplan benefits for overseas members, the only ones to blame are themselves. Perhaps the people working in these areas for the airline are incompetent for allowing a situation to be created that is disadvantageous for the airline.

Quite frankly, AC's customer service leaves a lot to be desired. To make excuses for the airline of this nature, makes you sound like many of the customer unfriendly AC employees who lurk on this board.

I don't believe it's on a per use basis. I've never had a RCC in the US take down my membership number and I've never seen the MLLs take down a passenger's FF number if they are getting in with a UA membership.

To say that an airline is losing money because of things like these is nonsense.

Nickles and dimes. If what you say were true then NO free family members should be allowed. They should be normal guests! Plus it subjects the front-line employees to the extra stress of having to act like interrogators/taxmen at the MLLs. I wonder how many times the fee is actually collected? And speaking of costs, I wonder if the $$ that is collected covers the costs of setting up a collection system, the calculation and remission of the GST and PST, the printing of the silly little cardboard notices for each MLL etc., etc.,..... or did they actually think that out?


With respect to YYZ-LAX, the fare is the problem not all the alleged costs. But Shareholder I guess that's what happens when's there's competition in the market unlike elsewhere in Canada.



[This message has been edited by PunishedEdmontonian (edited 05-06-2002).]

I used to work for Air Canada i believe we paid 15-20 dollars to United per AC person that used their lounge

In 24 months of flying AC as a UA RCC member, and exclusively showing the RCC card: once. In YEG.

Quote:

---

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">
To say that an airline is losing money because of things like these is nonsense.

---

Agreed. I think $.01 per Aeroplan mile is overstated as well.


[This message has been edited by skofarrell (edited 05-06-2002).]

Interesting. Given that I've accessed RCCs numerous times over the last 4 months with my MLL Diners, and they've never taken a number down or given me more than a waive though and "welcome", how on earth does UA bill AC?

$15-20 for any domestic RCC except MIA is a rip off...

[This message has been edited by skofarrell (edited 05-06-2002).]

I'm just about to ask the same question.

Maybe they just bill for the quantity, not the individuals? Or the UA agents are sloppy and don't bother writing it down.

andrew

What about the travellers who sometimes pop into a couple of different lounges while in the same airport...just to see what the difference is between lounges.

Do you mean to say that each time they walk into a different lounge, AC is getting billed for $15-20?

I am guilty of that... In LHR, I went into MLL for an hour and then walked across to the RCC to see what it was like.... I was only flying on one of the airlines that morning. (UAL)

If this is the case, where we are costing these companies so much money, I think then it is reasonable to ask us to use only one lounge.

Mind you, all I had in MLL was a cup of tea that morning...

And it would average out anyway. At least in theory, there should be as many United passengers using MLLs as there are AC passengers using RCCs.

You just have a cup of tea one time, you might have a drink another, and actually eat the snacks on another occasion. Someone else has two cans of beer then sticks four more in his carry-on. They could track all that (e.g. by charging for the bar, which means someone manning it, taking change, etc.) or just average it out. It makes sense to do the latter.

And yes I do believe they're supposed to charge each other for reciprocal lounge use. Even if they didn't, they should still be tracking usage for their own information -- the fact UA agents don't make a note of it doesn't mean they're not supposed to, and AC always seems to mark down which flight I'm on when I use an MLL! (Again so they can tell how much the MLL is used by international flyers, by domestic, by J class, by Elite).

andrew

Would you pay an invoice for X number of flyers accessing the RCC at $15 a head on a vendor's say so, without verification?

I wouldn't.

Yes, but you know how to run a business! http://www.flyertalk.com/forum/smile.gif