AC says Elites "cheapen" their business class
Oct 26, 2014, 1:39 pm
#106
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Original Poster
Join Date: Dec 2010
Posts: 4,153
From an investor point of view, I would say no.
I put in the money to buy planes and the infrastructure to bring people from A to Z. And I am taking all the financial risks of running this company.
Either you pay the price that I charge in order to pay for these costs and get a decent return for the risk I am taking, or take one of the following two options:
1. Fly on another company.
2. If #1 is not available, then build your own airline and try to undercut me.
If both 1 and 2 cannot be done, then basic economics indicate that I should maybe charge even more for the service I am providing.
I put in the money to buy planes and the infrastructure to bring people from A to Z. And I am taking all the financial risks of running this company.
Either you pay the price that I charge in order to pay for these costs and get a decent return for the risk I am taking, or take one of the following two options:
1. Fly on another company.
2. If #1 is not available, then build your own airline and try to undercut me.
If both 1 and 2 cannot be done, then basic economics indicate that I should maybe charge even more for the service I am providing.
Oct 26, 2014, 1:43 pm
#107
Join Date: Nov 2010
Location: YYZ
Programs: NEXUS; *A Gold
Posts: 990
Great .... Sounds like we can look forward to more whining from flyers unable and unwilling to move on and less actual input from insiders and leaders within AC.
Isn't this just delightful.
Winners in life pull up their big-boy pants, wipe the tears away and move on to the product that best suits their needs in the marketplace. Sure, announce the changes AC have made will cost them your business. Let your actions speak.
Winners don't throw pity parties for pages and pages, winners don't slice and dice words to gin up some anger/pushback, winners don't callout company reps like some internet basement keyboard warrior
How embarassing
Isn't this just delightful.
Winners in life pull up their big-boy pants, wipe the tears away and move on to the product that best suits their needs in the marketplace. Sure, announce the changes AC have made will cost them your business. Let your actions speak.
Winners don't throw pity parties for pages and pages, winners don't slice and dice words to gin up some anger/pushback, winners don't callout company reps like some internet basement keyboard warrior
How embarassing
Oct 26, 2014, 1:53 pm
#108
Join Date: Nov 2013
Posts: 492
From an investor point of view, I would say no.
I put in the money to buy planes and the infrastructure to bring people from A to Z. And I am taking all the financial risks of running this company.
Either you pay the price that I charge in order to pay for these costs and get a decent return for the risk I am taking, or take one of the following two options:
1. Fly on another company.
2. If #1 is not available, then build your own airline and try to undercut me.
If both 1 and 2 cannot be done, then basic economics indicate that I should maybe charge even more for the service I am providing.
I put in the money to buy planes and the infrastructure to bring people from A to Z. And I am taking all the financial risks of running this company.
Either you pay the price that I charge in order to pay for these costs and get a decent return for the risk I am taking, or take one of the following two options:
1. Fly on another company.
2. If #1 is not available, then build your own airline and try to undercut me.
If both 1 and 2 cannot be done, then basic economics indicate that I should maybe charge even more for the service I am providing.
It is to provide incentives for repeat business.
If the incentives are poor, then there would be less repeat business.
With less repeat business, EBITDAR may go down.
Judging from comments on the other threads people are already buying tickets with other airlines as a result of the Altitude program changes.
Oct 26, 2014, 1:53 pm
#109
FlyerTalk Evangelist
Join Date: Jan 2002
Location: Canada
Programs: UA*1K MM SK EBG LATAM BL
Posts: 23,314
There are declarations made year after year, after enhancement after enhancement, and the behaviour is not unique to the AC forum.
.... and after a keyboard vent session - people dont act on any of it.
Oct 26, 2014, 1:55 pm
#110
Join Date: Sep 2014
Location: sqrt(-united states of apologist)
Programs: *$ Green
Posts: 5,403
It's used to type messages, not hit people on the head.
As far as I am concerned, in this thread, people are discussing Air Canada's business practice/decisions.
I am commenting on why they seem to be taking the actions they are taking, and why they would be.
As long as people don't follow option 1 or 2, nothing will ever change, and opinions will not matter.
Oct 26, 2014, 2:03 pm
#111
Join Date: Sep 2013
Programs: AC SEMM DL DM
Posts: 393
So here's a question for people:
What percentage of your flights in Y are you able to eUp, and what fare classes do you buy?
Last year, when I started at E35K, and went through 50K and 75K before early recognition, I had enough eUps to attempt every flight in M (so not that many credits required), plus my EYW run.
This year, most of my flights have been paid J or a Y FP with complimentary upgrades, so I'm not getting to use my eUps for normal flying.
However, I can't imagine that someone flying V fares is really spending that much time in the J cabin. We just don't get that many credits, right? Or am I missing something? Is there some way to buy cheap Y fares and upgrade them all?
What percentage of your flights in Y are you able to eUp, and what fare classes do you buy?
Last year, when I started at E35K, and went through 50K and 75K before early recognition, I had enough eUps to attempt every flight in M (so not that many credits required), plus my EYW run.
This year, most of my flights have been paid J or a Y FP with complimentary upgrades, so I'm not getting to use my eUps for normal flying.
However, I can't imagine that someone flying V fares is really spending that much time in the J cabin. We just don't get that many credits, right? Or am I missing something? Is there some way to buy cheap Y fares and upgrade them all?
Just looked through my spreadsheet, I'm counting 14 domestic/transborder routes upgraded from lower Flex fares out of about give-or-take-a-few 30 opportunities. Not all of those opportunities were attempted to Upgrade though.
The majority were 10 credit flights, but also a number of 6 credit flights, and a few 4s early in the year when I was burning credits with a Feb 2014 expiry date. It would appear I had 38 "holdover" credits from 2013 that account for the early-2014 upgrade spree -- 6 of those 14 domestic/transborder upgrades were in January and February.
Oct 26, 2014, 2:10 pm
#112
Join Date: Sep 2014
Location: sqrt(-united states of apologist)
Programs: *$ Green
Posts: 5,403
You forget the whole reason why there are frequent flier programs
It is to provide incentives for repeat business.
If the incentives are poor, then there would be less repeat business.
With less repeat business, EBITDAR may go down.
Judging from comments on the other threads people are already buying tickets with other airlines as a result of the Altitude program changes.
It is to provide incentives for repeat business.
If the incentives are poor, then there would be less repeat business.
With less repeat business, EBITDAR may go down.
Judging from comments on the other threads people are already buying tickets with other airlines as a result of the Altitude program changes.
And if I was running an airline, the first thing I would think about is how I could integrate a FF program to increase my business.
Nonetheless, the environment is not static, and I would have to constantly balance my FFP depending on how the business is running, and the kind of FF the program attracts.
If the FFP starts to become more of a hindrance than something that drives my bottom line, then the rational thing to do is to close the FFP (or "enhance" it).
If running the program makes my revenues go from $100 to $200, but my N/I goes from $20 to $22 after all the costs of running it, maybe it seems logical to keep the program running. But if I have to double my NWC in order to maintain the program, then my ROIC falls by a lot, and I would be better off just putting my money in a savings account instead of going out of my way to please people that would take their business elsewhere in a heartbeat.
I don't really like the EBITDA metric. Unless when trying to evaluate how much a company is worth, it's a poor metric to gauge company performance/profitability. A company can have a rising EBITDA, but really ...... ROE, as it pumps capital on running projects that yield inferior/negative returns, and would've been better off not investing in the project in the first place.
Last edited by SparseFlyer; Oct 26, 2014 at 2:16 pm
Oct 26, 2014, 2:13 pm
#113
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Original Poster
Join Date: Dec 2010
Posts: 4,153
Ben S
I don't want to second guess your business decisions. But I can explain my own.
Our little family does nearly 20 trips to Asia (BKK and TPE)
Let's cut the crap and tell me how much you want me to pay per flight and sitting up front all the way, with or without code share portions.
I used to average $2500 with code share connectors in Y in the days of paper certificates.
In recession years it went as far as under $1000
Now it's back to $2500-3000
If I want the connectors in J I buy a separate ticket. Add $850 or so.
Now you will ask me to keep buying around 2 round trips in flex with upgrades and the rest in Z. Cheapest Z is around $4500-5000 but with AC I don't get the codeshare connections in Business. That's a non starter. Because other airlines give me all J when booking discounted business
To make SE I need 4 round trips if two are Y and 2 are J.
How much revenue do you need from me for those 4 trips to make you feel that as SE I don't cheapen your premium product? Obviously it's more than $11-12,000 but less than $17,500 (cost of 4 discount business).
We are talking about a $5000 delta over 4 TPACs here. Average of $1200 per trip.
But because of my eUPs I choose to make far more than 4 trips because it allows me to make shorter trips and spend more time at home. That gives you another $10-12,000 now which I wouldn't spend otherwise if I had to pay $5k a trip.
So, if you want to fly me in business on the connectors I think $5k per trip is the max I can spend or have to spend based on competitive and even AC's discount J dates. But based on your new system of restricted upgrades you'll only get the $5k for the upgraded flights and the rest will go to another airline because you want me to sit in Y on the Hkg BKK connection.
Tell me how the above sample is good for your bottom line. Remember, AC is going from $20+k total spend to less than $5k and I still am super elite.
Isn't that weird to you? This rinses and repeats twice more in our household of three top tiers in Altitude.
I am happy to be more exact if you want me to PM the details.
I don't want to second guess your business decisions. But I can explain my own.
Our little family does nearly 20 trips to Asia (BKK and TPE)
Let's cut the crap and tell me how much you want me to pay per flight and sitting up front all the way, with or without code share portions.
I used to average $2500 with code share connectors in Y in the days of paper certificates.
In recession years it went as far as under $1000
Now it's back to $2500-3000
If I want the connectors in J I buy a separate ticket. Add $850 or so.
Now you will ask me to keep buying around 2 round trips in flex with upgrades and the rest in Z. Cheapest Z is around $4500-5000 but with AC I don't get the codeshare connections in Business. That's a non starter. Because other airlines give me all J when booking discounted business
To make SE I need 4 round trips if two are Y and 2 are J.
How much revenue do you need from me for those 4 trips to make you feel that as SE I don't cheapen your premium product? Obviously it's more than $11-12,000 but less than $17,500 (cost of 4 discount business).
We are talking about a $5000 delta over 4 TPACs here. Average of $1200 per trip.
But because of my eUPs I choose to make far more than 4 trips because it allows me to make shorter trips and spend more time at home. That gives you another $10-12,000 now which I wouldn't spend otherwise if I had to pay $5k a trip.
So, if you want to fly me in business on the connectors I think $5k per trip is the max I can spend or have to spend based on competitive and even AC's discount J dates. But based on your new system of restricted upgrades you'll only get the $5k for the upgraded flights and the rest will go to another airline because you want me to sit in Y on the Hkg BKK connection.
Tell me how the above sample is good for your bottom line. Remember, AC is going from $20+k total spend to less than $5k and I still am super elite.
Isn't that weird to you? This rinses and repeats twice more in our household of three top tiers in Altitude.
I am happy to be more exact if you want me to PM the details.
Oct 26, 2014, 2:22 pm
#114
Join Date: Sep 2014
Location: sqrt(-united states of apologist)
Programs: *$ Green
Posts: 5,403
Ben S
I don't want to second guess your business decisions. But I can explain my own.
Our little family does nearly 20 trips to Asia (BKK and TPE)
Let's cut the crap and tell me how much you want me to pay per flight and sitting up front all the way, with or without code share portions.
I used to average $2500 with code share connectors in Y in the days of paper certificates.
In recession years it went as far as under $1000
Now it's back to $2500-3000
If I want the connectors in J I buy a separate ticket. Add $850 or so.
Now you will ask me to keep buying around 2 round trips in flex with upgrades and the rest in Z. Cheapest Z is around $4500-5000 but with AC I don't get the codeshare connections in Business. That's a non starter. Because other airlines give me all J when booking discounted business
To make SE I need 4 round trips if two are Y and 2 are J.
How much revenue do you need from me for those 4 trips to make you feel that as SE I don't cheapen your premium product? Obviously it's more than $11-12,000 but less than $17,500 (cost of 4 discount business).
We are talking about a $5000 delta over 4 TPACs here. Average of $1200 per trip.
But because of my eUPs I choose to make far more than 4 trips because it allows me to make shorter trips and spend more time at home. That gives you another $10-12,000 now which I wouldn't spend otherwise if I had to pay $5k a trip.
So, if you want to fly me in business on the connectors I think $5k per trip is the max I can spend or have to spend based on competitive and even AC's discount J dates. But based on your new system of restricted upgrades you'll only get the $5k for the upgraded flights and the rest will go to another airline because you want me to sit in Y on the Hkg BKK connection.
Tell me how the above sample is good for your bottom line. Remember, AC is going from $20+k total spend to less than $5k and I still am super elite.
Isn't that weird to you? This rinses and repeats twice more in our household of three top tiers in Altitude.
I am happy to be more exact if you want me to PM the details.
I don't want to second guess your business decisions. But I can explain my own.
Our little family does nearly 20 trips to Asia (BKK and TPE)
Let's cut the crap and tell me how much you want me to pay per flight and sitting up front all the way, with or without code share portions.
I used to average $2500 with code share connectors in Y in the days of paper certificates.
In recession years it went as far as under $1000
Now it's back to $2500-3000
If I want the connectors in J I buy a separate ticket. Add $850 or so.
Now you will ask me to keep buying around 2 round trips in flex with upgrades and the rest in Z. Cheapest Z is around $4500-5000 but with AC I don't get the codeshare connections in Business. That's a non starter. Because other airlines give me all J when booking discounted business
To make SE I need 4 round trips if two are Y and 2 are J.
How much revenue do you need from me for those 4 trips to make you feel that as SE I don't cheapen your premium product? Obviously it's more than $11-12,000 but less than $17,500 (cost of 4 discount business).
We are talking about a $5000 delta over 4 TPACs here. Average of $1200 per trip.
But because of my eUPs I choose to make far more than 4 trips because it allows me to make shorter trips and spend more time at home. That gives you another $10-12,000 now which I wouldn't spend otherwise if I had to pay $5k a trip.
So, if you want to fly me in business on the connectors I think $5k per trip is the max I can spend or have to spend based on competitive and even AC's discount J dates. But based on your new system of restricted upgrades you'll only get the $5k for the upgraded flights and the rest will go to another airline because you want me to sit in Y on the Hkg BKK connection.
Tell me how the above sample is good for your bottom line. Remember, AC is going from $20+k total spend to less than $5k and I still am super elite.
Isn't that weird to you? This rinses and repeats twice more in our household of three top tiers in Altitude.
I am happy to be more exact if you want me to PM the details.
That's probably one of the most cohesive and relevant question I have read in this thread so far.
Oct 26, 2014, 2:23 pm
#115
Join Date: Oct 2013
Location: YOW
Programs: AC SE, FOTSG Platinum
Posts: 5,734
Please don't get me wrong, I also enjoy using this forum to better understand business travel, but if your mindset is so skewed that you want to compare receiving slightly fewer premium airline upgrades to homelessness, it's time to step back and re-evaluate.
Oct 26, 2014, 2:27 pm
#116
Join Date: Sep 2014
Location: sqrt(-united states of apologist)
Programs: *$ Green
Posts: 5,403
Okay, now you need to pull your head back out into the sunlight, please. You're talking about flying on airplanes so much that the airline decides to start occasionally comping you into the rich-people section of the plane, and then comparing this to a bloody homeless shelter?
Please don't get me wrong, I also enjoy using this forum to better understand business travel, but if your mindset is so skewed that you want to compare receiving slightly fewer premium airline upgrades to homelessness, it's time to step back and re-evaluate.
Please don't get me wrong, I also enjoy using this forum to better understand business travel, but if your mindset is so skewed that you want to compare receiving slightly fewer premium airline upgrades to homelessness, it's time to step back and re-evaluate.
In 1-2 months, we will see the usual "So, what are the most efficient MR routes" threads again, and all will be back to normal...
Oct 26, 2014, 2:28 pm
#117
Suspended
Original Poster
Join Date: Dec 2010
Posts: 4,153
Okay, now you need to pull your head back out into the sunlight, please. You're talking about flying on airplanes so much that the airline decides to start occasionally comping you into the rich-people section of the plane, and then comparing this to a bloody homeless shelter?
Please don't get me wrong, I also enjoy using this forum to better understand business travel, but if your mindset is so skewed that you want to compare receiving slightly fewer premium airline upgrades to homelessness, it's time to step back and re-evaluate.
Please don't get me wrong, I also enjoy using this forum to better understand business travel, but if your mindset is so skewed that you want to compare receiving slightly fewer premium airline upgrades to homelessness, it's time to step back and re-evaluate.
And I did step back. See my post just above yours.
Oct 26, 2014, 2:55 pm
#118
Join Date: Sep 2014
Location: sqrt(-united states of apologist)
Programs: *$ Green
Posts: 5,403
Ben S
I don't want to second guess your business decisions. But I can explain my own.
Our little family does nearly 20 trips to Asia (BKK and TPE)
Let's cut the crap and tell me how much you want me to pay per flight and sitting up front all the way, with or without code share portions.
I used to average $2500 with code share connectors in Y in the days of paper certificates.
In recession years it went as far as under $1000
Now it's back to $2500-3000
If I want the connectors in J I buy a separate ticket. Add $850 or so.
Now you will ask me to keep buying around 2 round trips in flex with upgrades and the rest in Z. Cheapest Z is around $4500-5000 but with AC I don't get the codeshare connections in Business. That's a non starter. Because other airlines give me all J when booking discounted business
To make SE I need 4 round trips if two are Y and 2 are J.
How much revenue do you need from me for those 4 trips to make you feel that as SE I don't cheapen your premium product? Obviously it's more than $11-12,000 but less than $17,500 (cost of 4 discount business).
We are talking about a $5000 delta over 4 TPACs here. Average of $1200 per trip.
But because of my eUPs I choose to make far more than 4 trips because it allows me to make shorter trips and spend more time at home. That gives you another $10-12,000 now which I wouldn't spend otherwise if I had to pay $5k a trip.
So, if you want to fly me in business on the connectors I think $5k per trip is the max I can spend or have to spend based on competitive and even AC's discount J dates. But based on your new system of restricted upgrades you'll only get the $5k for the upgraded flights and the rest will go to another airline because you want me to sit in Y on the Hkg BKK connection.
Tell me how the above sample is good for your bottom line. Remember, AC is going from $20+k total spend to less than $5k and I still am super elite.
Isn't that weird to you? This rinses and repeats twice more in our household of three top tiers in Altitude.
I am happy to be more exact if you want me to PM the details.
I don't want to second guess your business decisions. But I can explain my own.
Our little family does nearly 20 trips to Asia (BKK and TPE)
Let's cut the crap and tell me how much you want me to pay per flight and sitting up front all the way, with or without code share portions.
I used to average $2500 with code share connectors in Y in the days of paper certificates.
In recession years it went as far as under $1000
Now it's back to $2500-3000
If I want the connectors in J I buy a separate ticket. Add $850 or so.
Now you will ask me to keep buying around 2 round trips in flex with upgrades and the rest in Z. Cheapest Z is around $4500-5000 but with AC I don't get the codeshare connections in Business. That's a non starter. Because other airlines give me all J when booking discounted business
To make SE I need 4 round trips if two are Y and 2 are J.
How much revenue do you need from me for those 4 trips to make you feel that as SE I don't cheapen your premium product? Obviously it's more than $11-12,000 but less than $17,500 (cost of 4 discount business).
We are talking about a $5000 delta over 4 TPACs here. Average of $1200 per trip.
But because of my eUPs I choose to make far more than 4 trips because it allows me to make shorter trips and spend more time at home. That gives you another $10-12,000 now which I wouldn't spend otherwise if I had to pay $5k a trip.
So, if you want to fly me in business on the connectors I think $5k per trip is the max I can spend or have to spend based on competitive and even AC's discount J dates. But based on your new system of restricted upgrades you'll only get the $5k for the upgraded flights and the rest will go to another airline because you want me to sit in Y on the Hkg BKK connection.
Tell me how the above sample is good for your bottom line. Remember, AC is going from $20+k total spend to less than $5k and I still am super elite.
Isn't that weird to you? This rinses and repeats twice more in our household of three top tiers in Altitude.
I am happy to be more exact if you want me to PM the details.
Seems like $10000 in spending would yield around $410 in cash value plus 1 Canadian trip and one international trip. But scam-charges don't count in the $10000, so maybe ~$12000 in 'real' money spent?
You have to get the CC for the other cool stuff though.
I wonder how that would compare to AC's FFP?
Oct 26, 2014, 2:56 pm
#119
Join Date: Sep 2010
Location: YVR
Programs: AC*SE MM, Marriott Lifetime Titanium
Posts: 4,604
Oct 26, 2014, 3:05 pm
#120
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Original Poster
Join Date: Dec 2010
Posts: 4,153
AC should be, and probably are, grateful for the cheap feedback they are getting here. I hope they put the money saved into scrubbing their smelly pods.