Whither business class? Who pays for J?
 

With all the moves AC is making to "enhance" the flight experience - tangoization, rouging, changes to eupgrades, HD seat configuration, and so on - made me think of a more existential question: is there a future for business class travel in Canada?

On AC for example, are there any statistics on how many customers in the front cabin are actually paying customers (I'd include LMU in this category) and how many are using eUpgrades or other means to get into a J seat without buying a J ticket.

Furthermore, how many paid J tickets are actually purchased on corporate accounts for bona fide business travel? My experience in working for a major multi-national corporation is that the purchase of business class tickets is becoming highly restricted, such that the vast majority of travel is in economy, even for long distance travel - basically you need to be on a plane for 10 hours before qualifying for business class. To add another wrinkle, just today a new policy was rolled out - cold hard cash ($750) for anyone who elects to travel in economy class if otherwise eligible for business class. Sort of tells you just how expensive paid J really is, if the company can pony up that kind of cash and still save on the total cost.

So after all this, who's really in the "business" section on a typical flight? Is it FFs using upgrades, business travelers with lax expense policies, the self-employed, wealthy leisure travelers? Do we really think that there are enough people in the Canadian market to sustain traditional business class on most flights? Or is it all going to Rouge from here on out...

I believe the J cabin will be reserved for staff travel.

I can chime in with some very specific route experience (I travel YYC-YYZ heavily). In my experience, paid J consists of lawyers, bankers or individuals in the banking industry, and people involved in the oil patch in one way or another. I used to see some representation from union leaders (don't see that much any more). Sometimes folks in the media (CBC). Sometimes politicians. I would guess that somewhere around 2/3 of the J cabin is paid J. Obviously that depends on day of the week and time of the day, but that would be my guess for times when business travel is more likely (i.e. not at 4:00 on a Saturday afternoon). I think this is also specific to the route--YYC-YVR for example doesn't see a lot of paid J in my observation any more.

On international J, I leave that to others who have more experience, but would just say I would/will/have purchased J for leisure travel when the price is right.

Final observation: lets assume that only half the cabin is paid J domestically. I bet that AC has figured out that it is still worth it to retain 12-20 J seats in order to capture people like me who fly a lot and get upgraded a lot vs. having people like me do a strict pricing analysis on AC vs. WS, and potentially losing a bunch of traffic to WS. Put another way: would you pay a 5-10% premium on an economy fare (vs. the competition) if you were consistently upgraded? And is it worth it to the airline if you spend $30k+ per year?

Not as simple as that.

AC clearly is using the upgrades business as a revenue enhancement vehicle. Basically, the front cabin gets filled not just by paid J but low business class (Z), and people who pay latitude or even Flex rather than Tango.

Although I have no facts, I believe the AC sells enough seats in the front on domestic and US flights to justify the cabin and the size if the cabin. Compared to the US carriers, AC normally has one extra row in J. They wouldn't bother unless they are selling the seats. If it was just an upgrade perk, they would certainly reduce the cabin size. As a recent example, I flew YWG -YYZ last Wednesday afternoon. J=0 and R=0 at T-7. No upgrades were called at the gate. AC appeared to sell most if not all of the J seats.

All of the above- I eup from Y fares; use FP Lat 48hr J up; purchase Z outright. Business (self-funded via contracts) and leisure travel. Domestic but mostly international.

re the add on factor- should I drop below SE, just another factor that would go into the cost: convenience:comfort blender as to which airline I would choose- AC Y plus add on to get into J vs someone else's Z/J.

But you can't know who is traveling on paid J/Z and who isn't, can you?

I also wonder how many of those lawyers & bankers are billing their clients for the comfort... must be nice. I work for the asset management arm of a bank and am never able to buy anything but tango (or flex if not available) for YYZ-YYC, or anything domestic/transborder for that matter. This would be the same even at the EVP level.

From what I understand, MPs have some sort of points system for "buying" flights, probably ripe for abuse.

Sort of. If the flight was R>0 at T-7, and a seat next to me was assigned, it is a pretty good bet they are paid J. Conversely, you can see who is called at the gate. And as I do pay reasonable attention to R and J/C/Z space at expert flyer, I can make some guesses. Not totally accurate, but enough to convince me that there is certainly reasonable paid J traffic on the route (and bear in mind my sample size is in the large # of hundreds at this point!).

In answer to the OP's question, at least where AC is concerned it depends on the route. On some routings (YYZ-GRU, for example, where AC has the only direct flight) the J cabin often sells out completely two weeks or more in advance of the travel date. That flight has always been very difficult to upgrade on, via LMU or ecredits/certs. YVR-SYD, YYZ-FRA, YYZ-MUC, YYZ-ZUR are further routes that are historically hard to upgrade because they are heavily populated by travelers paying for J to begin with.

Although we as FF's hoping for an upgrade might like to believe otherwise, the majority of AC's J seats on a majority of routes are, in fact, sold to paying customers - a mix of wealthy leisure travelers and business travelers with the ability to expense riding up front (along with AC staff, mainly commuting on domestic routes). There are obviously some exceptions to this, but system-wide, I do believe the vast majority of J passengers pay to put their butts in the big seats.

As time goes on I believe fewer of AC's J seats will be occupied by upgraded FFs, as miles become (1) harder to earn, and (2) increasingly expensive to redeem. Even someone who flies daily will simply have fewer opportunities to redeem upgrades. The glory days are over.

I think the OP was including Z in "paid J", but I agree with you.

So far this year, I've purchased a Z fare to Europe, a Y flight pass for North American travel, and a W fare to Calgary on AC, because I wanted to upgrade (instead of cheaper on UA).

Would they though? I bought my Latitude FP knowing that I could upgrade easily. If they made the cabins just big enough to accommodate paid J, I'd have no incentive to buy anything above the cheapest ticket.

And more than that - I bought my Z fare to Europe on AC with only minimal checking of other airlines because I'm SE, I generally like AC, and it's on the 787.

Eliminate the upgrades, and I'll start shopping around when I do pay for J.

I've definitely had flights clear the upgrade around T-5, and then become J0 before gate upgrades have been done. It was R0 from about two weeks out, and I was waitlisted on a Y fare. R0 from T-7 to departure does not mean no upgrades were processed in that time. It just means there were people on the waitlist.

But anyway, to reiterate, I'm willing to pay a premium on AC because AC rewards me. I know that if I want to fly somewhere in a few weeks, I can buy a Flex fare, and probably upgrade it. And as long as that remains true, AC can have all* my business, including premium products (flight passes, paid J, etc.).

*I recently had to buy a UA P fare because apparently AC won't fly me from SFO to CUN :)

Not really, I frequently use e-Upgrade credits on Latitude fares to get assigned J seats before T-7.

This. ^

That describes me pretty well.

And this. ^

AC has had plenty of opportunity to reduce the amount of J domestically. In addition to the wishful thinking of millions of FTers, there must be good evidence within AC to show that offering flyers the possibility of upgrades drives lots of incremental revenue, or they wouldn't do it.

While that is true, it only works when there is R space. And I think that during business travel days and times, R on YYC-YYZ is almost never greater than 2. Again, just my general belief based on lots of observation, but I can't imagine that accounts for more than 20% of sold seats at T-7. What happens at T-2 I don't know and don't really pay much attention to, because by that point I have either cleared or know that I am waiting for the gate to clear me.

I think you are engaged in very wishful thinking. AC is most definitely going to smaller J cabins (probably wisely) and has calculated the incremental rev from FFers isn't worth it - hence the effective removal of international upgrades from E50s/E75s:

• The 787 J cabins are significantly smaller than the 767s they replace.
• IMO the 777s will be cut from 42J to around 30J when the new business class seat is installed
• Increased "Rogueing" of routes effectively further reduces J as a % of capacity

Canada is (with a few exceptions) a low yield market and AC will continue to shrink J cabins and shrink the ability of FFers to upgrade. All FFers other than SEs have largely given up on any hope of upgrading. AC has obviously not been hurt financially - the next logical step is to do the same with SEs

Bolding mine.


Best laugh of the day:D