For maximum economic efficiency, confirmed J passengers should also be able to enter a bid to sell their seat at the last minute. :D

Potential Pareto Improvement identified but still not Pareto Efficient :p

Won't happen.

There is an incremental cost of moving you from Y to J (they may have to cater an extra meal, you will likely consume more beverages, etc.), which would set some floor on it, though it would likely be around $50.

However, the bigger issue is that if you know you can always buy Tango and bid $50 and win, you'll stop buying Flex/PY+eUp or J. And this is what would result in a much higher floor.

They could do interesting things like not ranking bid. Who should get the seat? Latitude bidding $500 or Tango bidding $501? Though I'm not convinced they're clever enough to implement this in a sensible manner.

[QUOTE=canadiancow;27464243]Won't happen.

There is an incremental cost of moving you from Y to J (they may have to cater an extra meal, you will likely consume more beverages, etc.), which would set some floor on it, though it would likely be around $50.

QUOTE]



Yes. I think I added too much personal-experience bias to this quick thought as I tend to only fly at peak travel times when Y is oversold and that incremental cost is incurred as a result of op-ups. I know that some of those op-ups are awarded based on status, but I suspect that a few have gone to the lingering no-status GTEs. In either of those cases, the incremental cost is borne by AC, not the passenger, in exchange for the opportunity to oversell Y without actually leaving any confirmed passenger behind. With an auction, the winning bidder pays at least some of that cost.

From the economic efficiency side, I am not thinking that a the R games should be played concurrently with the auction. However, in respect of the fact that some people will pay more to better position themselves for the R games, I would suggest that higher fare classes could come with a fixed amount of non-transferable bid money.I.e., A flex fare comes with $200 bid money, but if the flex buyer does not add $51 cash, he will lose to a Tango bidder's $251 bid. The R games already has a similar risk. I buy a flex fare, but cannot use my eUps because a Tango flyer took an LMU while R=0.

You know a lot for someone with 2078 miles to your name.

I was thinking the same thing.

Well in my case it is mode rather than total.

Do you usually take AC156? Or you prefer the day time flights?

If AC implements a no-floor bidding system for its J cabin, it would remove the incentives (for me at least) to buy Flex/Latitude/PE fares, and I fly more than the average SE. Think about how much money they would lose from people like me.

I am of the opinion that the minimum should be set at a level where the bidder wonders why s/he didn't just buy J in the first place.

I usually take one of the overnight flights.


The unknown demand function here is whether passengers like you and I who are regularly paying a premium to buy Flex or higher so that they can play the R games and maintain status would pay or more less of a premium in accepted bids if they bought tango and really did not want to stay in Y. Would you buy a $500 flex fare over a $250 tango fare if it gave you $250 of bid money (which may or may not be enough)?


But why give any bid money to someone who has to pay flex or higher because nothing else is available when they book? In that case, it is only to encourage them not to use another airline.

That would be too high, in my opinion.

It has to be at a level where it does save money and entice people who would NOT just buy J, but not so easy to get that you can do it every time.

The idea here is that AC will monetize a couple empty seats while collecting massive amounts of Data on how much pax would pay for the J cabin.

I'd pay good money to see that data.


Now, in true FT fashion, let's figure out a way to sabotage this.

I say we skew the data and bid the minimum on all our flights.

This is the best strategy because:

It'll skew their data downwards, making them think they should lower J prices.

The statistical analysis will lead them to believe that there's a potentially huge demand below their reserve price.

I can bet minimum + $1 and outbid everyone on FT.

I like your way of thinking. :D

Hey thanks!

This is Canada, and the majority of the population dislikes the "bargaining" associated with the purchase of a low value product or service. Canadian consumers want a fair price on consumer items so that they can just do the transaction and be done with it.

Yes, I understand the concept of bidding for an upgrade, but it will be perceived as insulting and unfair by many consumers. It will be labeled "unfair' open to "rigging" etc. Canada is a country renowned for its inherent corrupt fixed bidding schemes particulary on government service and supply contracts. It is not to be unexpected that the Canadian perception of it being a rip off will attach. Oh sure, someone will come along and say, relax, it is only the clearing of an inventory. Maybe so, but in a consumer product and services market it is all about peceptions. Canadians dislike this type of approach to clearing inventory. People know that retailers often inflate the cost of goods before the 50% off or the "clearance" sale. It's an issue of transparency and of perceived unfairness.

Sparseflyer offers a tongue in cheek approach, but it is more than that. The comment demonstrates what the Canadian perception is of this type of scheme: A scheme easily manipulated and played with and not one to be held in high regard.

I expect that this is another idiotic idea brought to us by the Pickle Group.
My impression is that Air Canada has assembled a crack group of idiots to come up with the most assinine and useless options that don't have an immediate physical cost, but will eventually cost the company significantly in respect to the erosion of its already devalued brand image and diminished market goodwill. It is called the Pickle Group because their claim to fame was the substitution of junk pickles for actual food in the MLL and then mocking customers by referring to the pickles as a "delicious snack option".