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Why doesn't AFKL offer booking guarantee on short/medium haul flights, why only in Y?

Why doesn't AFKL offer booking guarantee on short/medium haul flights, why only in Y?

Old Mar 28, 19, 9:16 am
  #1  
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Why doesn't AFKL offer booking guarantee on short/medium haul flights, why only in Y?

AFKL offers a booking guarantee to FB Gold and Plat customers for long haul flights, in Economy class if booked at least 24 hours before departure, flying on a full fare ticket. I would like to suggest that they extend that mechanism also to Business Class, and to short/medium haul flights, at least on their own metal.

Some forum members seem to be in regular exchange with AF to provide them customer feedback, maybe they can relay that suggestion.

The business logic for AFKL is quite compelling: it allows them to offer a true benefit to their most loyal customers, customers who often happen also to be the ones that would value the benefit of being certain to be leaving at a certain time so that they can be where they want/need to be at the time they want/need to be. These customers are prepared to pay top money (full fare) to have that certainty, so AF gets the additional benefit of at least not losing revenue.

They can play around with the exact rules: is it 24 hours before departure or would it be more sensible to have 36 to shut down things before OLCI opens (on longhaul, 24 hours seems to work despite OLCI opening 30 hours before as well). They can run some numbers and see whom they offer it to: still Golds and Plats, or only Plats, or maybe even only ULTI (a benefit that some might find worthwhile getting ULTI for); for comparison, LH Group does it for Senator and up.

The underlying mechanics are quite simple: already today their yield management algorithms can do a pretty precise forecast of what customers will book which flight. Already today they use that to overbook flights. The only thing they have to change is for flights where space gets tight is to zero them out a bit earlier/when there are still the number of seats available that they expect to be claimed by booking guarantee. That way non-priority customers don't get the immediate confirmation any longer but they go on the wait list or to flights with less demand (which is good for the airline as well). That then leaves enough seats that can be given with a confirmed status to top priority customers under the booking guarantee rule. It wouldn't be any revenue loss, as the seats that go out under the booking guarantee rule will be purchased at the highest fare anyway. And if they don't get taken up by top customers under the booking guarantee rule they can still give them to those on the wait list and/or to the overbooking capacity. In the end it's a mere re-programming of the algos to set the slider for managing overbooking capacity a little differently.
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Old Mar 28, 19, 9:46 am
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Not sure for the business class: if it's full, they would have to bump a business class passenger. Would be quite bad... and expensive. Much cheaper to bump an economy class passenger.
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Old Mar 28, 19, 11:29 am
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Originally Posted by yno View Post
Not sure for the business class: if it's full, they would have to bump a business class passenger. Would be quite bad... and expensive. Much cheaper to bump an economy class passenger.
Err, no. That is the point. You do not have to bump anyone. See above for the explanation why and how.
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Old Mar 28, 19, 1:43 pm
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Originally Posted by San Gottardo View Post
Err, no. That is the point. You do not have to bump anyone. See above for the explanation why and how.
I am not sure I follow you. I understand your point having such a benefit of a guaranteed J booking for top tier members of the FFP, but if the booking is guaranteed, it may mean that they have to bump someone if the flight is really full in J.
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Old Mar 28, 19, 3:46 pm
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Originally Posted by Goldorak View Post
I am not sure I follow you. I understand your point having such a benefit of a guaranteed J booking for top tier members of the FFP, but if the booking is guaranteed, it may mean that they have to bump someone if the flight is really full in J.
It works the same way as it works today in Y. Why would it make any difference if the mechanism was applied to J?

As for bumping: "Bumping" means that you do not transport someone who has a confirmed booking and who was going to travel. To avoid bumping somebody you just don't give that person a confirmed booking. In the end it works like described above. Just don't sell all the seats but zero out before it gets full, so you have a few seats left for booking guarantee.

In detail, using a hypothetical date and route:
take the Business cabin of the A380 for a flight on a certain day from CDG to LAX. There are 72 seats in Business Class that can be filled. From all the data that it has collected over the years and fed its algorithm Air France expects that it can sell all 72 tickets and that the flight will show zero availability 5 days prior to departure. It also expects that there are 2 Platinum customers that will book 3 days prior to departure. With availability at zero and no booking guarantee in place, Air France would not confirm their bookings and put them on the wait list.
In order to give those three passengers a guaranteed seat it sells only 70 confirmed seats and then sets the availability that is shown to the public in booking systems to zero - despite two seats still unsold. Any further booking requests coming from non-Plats would then go to wait list. That still leaves two seats free, but they don't show in public availability. So when the 2 Platinum customers come 3 days prior to departure and ask for a booking guarantee, Air France can confirm their reservation by giving them those two seats that it hadn't sold before and that it hadn't shown the public. It's the Plat status of the customers that "unlocks" those seats.
When the flight departs, 70 seats will be filled with all the people that have booked without booking guarantee and before availability was set to zero, plus the two Platinums that got their seat thanks to booking guarantee, i.e. after availability had been set to zero.

Result:
  • Air France doesn't lose any money, because all 72 seats are filled, and the last two are filled with people paying highest booking class
  • Platinum customers can take the flight despite it "publicly" showing zero availability
  • Nobody is bumped, because all the 70 people that had received a confirmation can take the flight
And before someone asks: the risk of having unsold seats is being managed by the algorithm as well. If for instance Air France algorithm expects 2 Platinum customers to book until 3 days before departure but it sees that none has done so, then it can release one seat from that "hidden capacity" and show one available seat for purchase (if you use expertflyer you may have seen many cases where availability for days is zero in all classes, and then suddenly a day or a few hours before departure there suddenly is one seat in J and/or one seat in Y, which then often disappears after a few hours. That is when the algorithm does its adjustment between the forecasted and the real booking situation).

There is a case where there might be some bumping of passengers: if the algorithm completely underestimates the number of Plats that will use the booking guarantee. In the above example with 72 seats, that would mean that 70 seats are sold before availability is set to zero, but then five Plats turn up 3 days before departure (instead of two Plats as the algo had predicted). In that case, there will be bumping just like in any other overbooking situation. As they'll protect Plats from overbooking the bumping will happen among those non-Plats that don't check-in before all 72 seats have been checked in.

But all those things are absolutely nothing new: booking guarantee already exists, but it's only in Y. So they have those mechanisms, and only need to apply it to J. The probability of over- or underselling is one that is being managed by algorithms today already, and the underlying logic and mechanism does not change whether booking guarantee is involved or not.

Long explanation, sorry, I hope it shed some light on how the mechanisms works with those airlines that already offer booking guarantee to their customers in both classes and on all flights in their network.
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Old Mar 28, 19, 5:02 pm
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Did you have a bad experience, where you wanted to book a seat on a flight and couldn't? Otherwise what is the underlying reason for your post?

I totally get your logic (so please don't tell me to read it again) but I fear the bottom line would be that in reality (that is where your logic falls short, it is more theoretical than practical) every flight would have to be undersold until x hours before departure. Just incase 2 or 3 Plats may want to book a seat. Of course, in reality, this will rarely happen, so the seats will be opened for sale. But the potential customers who would have wanted to book these seats will now be booked on Lufthansa, or BA, or Turkish, or whoever had those seats available at the time they wanted them. These potential customers are not going to wait until 72 hours before departure just in case the seats open up. And then, in reality, how many Plats (or even Golds) will want to have a guaranteed J seat just before departure? Multiplied throughout the whole network. I think you can be sure that AF/KL has already run these numbers and decided against it.
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Old Mar 28, 19, 11:58 pm
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Hi

The reason that AF/KLM will not agree with your logic is quite simple.
You assume a J traveler without STE+ status has a lower priority compared to a J traveler that has STE+ status.
AF/KLM sees a J traveler as equally important in this part of the booking process.

A J traveler will not be bumped, in the worst case they will be downgraded from J to Y, which covers the essential need which is travel from A to B in a crisis situation. I never heard of a SKE+ J passenger getting bumped actually, do you?

On top top of that, managing the J bookings in the fashion that you discribe will cost money because regardless how you calculate, you propose to lock out some seats for SKE+ members a certain time before departure, so you are taking away sales possibilities.

I do not see the need of this.
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Old Mar 29, 19, 12:05 am
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Originally Posted by sbams View Post
Did you have a bad experience, where you wanted to book a seat on a flight and couldn't? Otherwise what is the underlying reason for your post?
Yes! Three times this week! That's why my thought was "If they can do it on long haul, why not on short haul. And if other airlines with a very similar network and fleet can do it, why not AFKL"

Originally Posted by sbams View Post
I totally get your logic (so please don't tell me to read it again) but I fear the bottom line would be that in reality (that is where your logic falls short, it is more theoretical than practical)
That's the point, it is not theoretical, it is practical, it already does exist today! AFKL and all Skyteam partners do it - but only on long haul and only for the back of the bus. The Lufthansa Group companies offer it for all classes and on all flights.And by the way, so do some hotel chains and car rental companies: guaranteed bookings for top members. It's all a matter of inventory management. The technologies exist to do that, the companies have the data to run those technologies and make good forecasts and inventory optimization - so why not do it.

So it's not my logic that falls short. You're basically telling all those airlines and their professionals that what they do doesn't work.

Originally Posted by sbams View Post
every flight would have to be undersold until x hours before departure. Just incase 2 or 3 Plats may want to book a seat. Of course, in reality, this will rarely happen, so the seats will be opened for sale. But the potential customers who would have wanted to book these seats will now be booked on Lufthansa, or BA, or Turkish, or whoever had those seats available at the time they wanted them. These potential customers are not going to wait until 72 hours before departure just in case the seats open up. And then, in reality, how many Plats (or even Golds) will want to have a guaranteed J seat just before departure? Multiplied throughout the whole network.
1) Don't ask me. Ask the airlines, including AFKL, that do that already today. They seem to be living happily with it.
2) What is the problem? If there is a low priority/one time customer that goes to BA or TK that one time, and AF instead sells the seat at the highest price to one of its priority customers, that is the thing that makes business sense.

Originally Posted by sbams View Post
I think you can be sure that AF/KL has already run these numbers and decided against it.
Two possible explanations:
  1. They did not think of it. I find this the more likely explanation. AFKL took that concept of being that reliable partner of business travelers never very far, they didn't really think practicalities and needs of frequent travelers, but depending on which period of time you look at thought more in terms of "let's win the price war on the bottom against the LCCs" and "let's win on the top end and emphasise luxury, good good, French-ness, etc". I am talking more AF than KL here as I am more familiar with their way of thinking and how that translated into products. They just never really undertstood what a certain segment of customers needed, and didn't offer those products. Also, there at least was (still is?) that prevailing logic that pampering new customers with the hope to attract them is more important than trying to keep existing ones. Which explains why often nobodies get the op-ups and inexpensive upgrade offers, whilst top prio customes don't. All evidenced on this board
  2. They thought of it and came to the conclusion that they wouldn't need it and that it wouldn't be a benefit to some of their customers. For the same reasons as before.

Last edited by San Gottardo; Mar 29, 19 at 1:26 am
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Old Mar 29, 19, 2:56 am
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Originally Posted by San Gottardo View Post
It works the same way as it works today in Y. Why would it make any difference if the mechanism was applied to J?


You gave an example of a rather "extreme" use case with the A380 that have 72 J seats, it also have 9 P seats, should AF also offer this mechanism in P?

If we go back to most airplane configurations with only 30-40J seats it is obviously much harder to manage than the 200-300 seats in the back, the revenue lost from having an empty Y seat is much lower than that of an empty J seat, and you are talking here about waitlists but do how often are those being used (except for IRROPS and the likes)? If I try to book a flight that is zeroed out on AF/KL website it simply doesn't show up, then I choose another flight or book with another airline.
Not to mention you limit yourself to a very small amount of PAX who would actually be willing to pay a full J fare when the alternative of flying in Y (or, choosing another flight/airline) is possible.

I'm not saying it's impossible to do, rather that it is more complicated to do, and AF/KL may think that it's not worth the effort.
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Old Mar 29, 19, 3:28 am
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San Gottardo,
let's assume they do as you want it, the A330 Business cabin is full with J/D paying passengers. At T-1 hour i came along, buying a full fare J ticket and demand that somebody else get's bumped from the flight as i have "a booking guarantee". Should they pick you?
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Old Mar 29, 19, 3:52 am
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Wih the above theory, it would require the algorithms to be 100% right, otherwise there is still the risk of someone getting bumped or risking not selling a seat. Keeping seats free because an algorithms shows a likelihood that an elite would book a ticket on a full fare basis is risky.
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Old Mar 29, 19, 5:35 am
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Originally Posted by Ditto View Post
You gave an example of a rather "extreme" use case with the A380 that have 72 J seats, it also have 9 P seats, should AF also offer this mechanism in P?
Not for me to judge, as I don't have the data the airline has. My hunch would be no, not to offer booking guarantee in P, because you (i) have too little inventory to play with and (ii) you cannot even take the 0.00001% chance of bumping a P passenger (in case the algo got it wrong). However, Lufthansa some years ago has changed its policy and started overbooking First Class (but not provide booking guarantee). Seems they found that their algos were good enough.

If we go back to most airplane configurations with only 30-40J seats it is obviously much harder to manage than the 200-300 seats in the back,
You are right. But this is where algos help. Again, I am not trying to sell my invention.

and you are talking here about waitlists but do how often are those being used (except for IRROPS and the likes)?
1) Overall? Very little I suppose, I guess it concentrates around some high travel periods. But I have been on flights where I was waitlisted and they told me they were 6 or 7 other people on the WL as well (this was not in IRROPS, where you can find yourself with a planeload-long wait list where people try to get on the next flight)
2) Individually? Myself, three times this week with AF. Not that this happens every week, but just this week this resulted in 1 case where the wait list confirmed, 1 case where I flew on easyJet but 2 hours later than I needed with some unpleasant impact on my agenda, 1 case of just cancelling the entire trip and all the professional commitments that
3) The fact that it doesn't happen that often makes it all the easier to roll out, you run less risk of getting it wrong

If I try to book a flight that is zeroed out on AF/KL website it simply doesn't show up, then I choose another flight or book with another airline.
Good. But there are people for whom in certain situations that is only a very painful option. GIving them the possibility to fly nevertheless is great.

AFKL already today offers Golds and Plats the highest priority on wait lists - so why not program the algos in such a way that they can get a confirmed seat 36 hours before?

Not to mention you limit yourself to a very small amount of PAX who would actually be willing to pay a full J fare when the alternative of flying in Y (or, choosing another flight/airline) is possible.
Good then. Another reason to introduce it. If it's few people, it's not really disruptive.

I'm not saying it's impossible to do, rather that it is more complicated to do, and AF/KL may think that it's not worth the effort.
What effort? They don't have to invent anything. They have the data, they have the algos for their inventory management, put a data scientist to work for two days to change the algos and you're done.
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Old Mar 29, 19, 5:37 am
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Originally Posted by BER Flyer View Post
San Gottardo,
let's assume they do as you want it, the A330 Business cabin is full with J/D paying passengers. At T-1 hour i came along, buying a full fare J ticket and demand that somebody else get's bumped from the flight as i have "a booking guarantee". Should they pick you?
See above. This is designed in a way to not bump anyone. That's the point.
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Old Mar 29, 19, 5:41 am
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Originally Posted by yno View Post
Wih the above theory, it would require the algorithms to be 100% right, otherwise there is still the risk of someone getting bumped or risking not selling a seat. Keeping seats free because an algorithms shows a likelihood that an elite would book a ticket on a full fare basis is risky.
You are right. If the algo gets it wrong then the airline may end up with an unsold seat (forecasted more booking guarantees than turned up) or with having to bump someone (more booking guarantees turned up than forecasted).

But that problem exists with inventory management already today. Airlines *do* overbook their planes, based on how many pax they expect to actually turn up. If they get it wrong today, they may end up with an unsold seat or with having to bump someone. This problem is not introduced because of booking guarantee.

The only thing that is new is the point at which you show zero availability. That has to be calculated differently, taking into account how many booking guarantees are to be expected.
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Old Mar 29, 19, 5:43 am
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It's interesting to see how people treat this as if it was a new invention and come up with all kinds of reasons why this wouldn't work - when in fact it does exist, it works, it's just that AFKL hasn't introduced it yet. The question is not "would this work" (we know it does), the question is "If it works elsewhere, why shouldn't AFKL also offer it?"

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