Legality of AFKL price discrimination for upgrades

Old Mar 9, 2024, 11:10 am
  #31  
ofj
 
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I would happily pay if the upgrade meant earning extra miles (and more importantly) XP. Since these upgrade offers are presented at OLCI or after, they don't earn credit, so generally I don't take the offers I get.
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Old Mar 9, 2024, 11:17 am
  #32  
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If the upgrades would be offered at around 50€ for intra-Europe flights I would take them when the flight looks quite busy in Y or when I wouldn’t have time to eat etc. The main value proposition would be the empty middle seat and the meal, but that would never be worth more than 50-60€ and for shorter flights not even that.

They could easily predict how many seats would go out empty and try to offer them to the elite members at a reduced rate, even if a certain number of hours before the flight when most people who could have upgraded otherwise didn’t.
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Old Mar 9, 2024, 12:51 pm
  #33  
 
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Originally Posted by jerry_greece
I am bit puzzled by the 2 lines of thought here, because I am 200% in line with BubbaX: As FB Plat, I would not pay even 5 euro to get upgraded to C for intra-Europe flights since the added value is not worth it for me. On the other hand, I am a little bit concerned by how many people would consider the proposition of f0zzyNUE and bite on these (overpriced) upgrades. I totally understand that people (and in this case frequent fliers) have different needs and value things differently but it would still be interesting to have some numbers. Shall we do a poll?
I never said I would buy these upgrades - it was just an addition to the comment that flying business class (buying upgrades) on these European legs is of no additional value for frequent flyers. there is still a few perks tat you don't get when you seat behind the curtain as elite flyer that I value on my travels.
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Old Mar 9, 2024, 2:02 pm
  #34  
 
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Next time during check in at the desk, ask if you have the abbreviation NDPU (Non Discount Paid Upgrade). You get this “status” if you have take the upgrade offer to often. Technically not only for loyal customers but I’m quite sure that 99% are loyal customers.
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Old Mar 9, 2024, 2:28 pm
  #35  
 
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Originally Posted by Brendan88
Next time during check in at the desk, ask if you have the abbreviation NDPU (Non Discount Paid Upgrade). You get this “status” if you have take the upgrade offer to often. Technically not only for loyal customers but I’m quite sure that 99% are loyal customers.
haven't bought an upgrade in the last 7 or 8 years - it was AMS-LIM and LIM-AMS by that time (329€ outbound and 309€ inbound)
last year I was offered a 1689€ upgrade from biz to La Premiere on CDG-SIN that I turned down maybe to lure me into another service class furher in the front 🤣
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Old Mar 9, 2024, 8:37 pm
  #36  
 
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Originally Posted by Brendan88
Next time during check in at the desk, ask if you have the abbreviation NDPU (Non Discount Paid Upgrade). You get this “status” if you have take the upgrade offer to often. Technically not only for loyal customers but I’m quite sure that 99% are loyal customers.
I actually now wonder about the legality of this. Because the conditions are not published. Yes, you can do a welcome offer, like credit cards, but conditions are public and it's fair for everyone. These upgrades are not. Given the same conditions - booking class/fare paid - everyone should be receiving the same price through a verifiable fare structure. Imagine if Amazon did that, it wouldn't be allowed, unless they publish the conditions of the offer.
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Old Mar 10, 2024, 12:02 am
  #37  
 
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Originally Posted by Fabo.sk
It's simple enough: The algo is not tied to status.

The algo is tied to million other things that may or may not be correlated with status.

Consider this if you are travelling with your spouse:

You are a Platinum on your way to Ulti. Your spouse is Explorer.

You fly together for a weekend in Italy.
Your upgrade offer is 200 EUR. Theirs is 80.

Status! you cry.
But what about your purchase history?
You routinely purchase J tickets for work. Occasionally you have to slum it in PE because a client is cheap, but no worries, you upgrade yourself to J whenever possible and just up your hours sold to compensate.
Your spouse buys 3-4 tickets a year, always in Y, always Light, always sub 200 EUR fare component.

Is it that unreasonable to expect that it's good business to offer your partner a cheap upgrade and you the expensive one?
Nothing to do with status, not directly.
AFKL forgets that a lot of PAX cannot choose their travel class ; the travel policy imposes under which conditions employees are eligible for Y, W or J.

So considering the travel habits to customize the upgrade offer is not super rational for corporate PAX.

As many companies have more and more restrictive conditions, I believe a lot of corporate PAX would be interested to spend a bit more on their own if a descent upgrade offer would be offered to them.
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Last edited by Bullspread; Mar 10, 2024 at 4:57 pm
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Old Mar 10, 2024, 11:00 am
  #38  
 
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Originally Posted by Bullspread
AFKL forgets that a lot of PAX cannot choose their travel class ; the travel policy imposed under which conditions employees are eligible for Y, W or J.

So considering the travel habits to customize the upgrade offer is not super rational for corporate PAX.

As many companies have more and more restrictive conditions, I believe a lot of corporate PAX would be interested to spend a bit more on their own if a descent upgrade offer would be offered to them.
I would think that demonstrating that you're not willing to buy J when you're spending your own money and in full control of the ticketing decision (as is the case with someone whose company buys J/W but who buys Y when traveling with spouse/family) is exactly the flyer it doesn't make sense to make cheap upgrades available to. Conversely someone who mostly flies Y for business trips but buys (cash or miles) W/J for leisure is someone for whom it may make sense to give cheap upgrades to (this is the main logic behind the North American complimentary upgrades: businesses in NA have basically standardized on not paying for more than Economy Comfort (perhaps with exceptions case by case to be approved by management with P&L responsibility... The ability to upgrade is then the primary value of status (since there's no lounge and not much priority security)).

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Old Mar 10, 2024, 12:41 pm
  #39  
 
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Originally Posted by hhdl
I would think that demonstrating that you're not willing to buy J when you're spending your own money and in full control of the ticketing decision (as is the case with someone whose company buys J/W but who buys Y when traveling with spouse/family) is exactly the flyer it doesn't make sense to make cheap upgrades available to. Conversely someone who mostly flies Y for business trips but buys (cash or miles) W/J for leisure is someone for whom it may make sense to give cheap upgrades to (this is the main logic behind the North American complimentary upgrades: businesses in NA have basically standardized on not paying for more than Economy Comfort (perhaps with exceptions case by case to be approved by management with P&L responsibility... The ability to upgrade is then the primary value of status (since there's no lounge and not much priority security)).

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The savvy business travellers that sign up for FF programs are absolutely determining what benefits they gain from their business travels in their personal life which is both the status and the miles they earn. They might be allowed to fly J in long haul (many companies only allow this for longer flights and all the rest is Y), but it is unrealistic to expect the same business traveller to have the funds to travel long haul J all the time in personal life. I am in the camp that doesn’t care less about C/intra-EU business class.

Those business travelers can direct spending often because there are many ways to game that system towards your preferred airlines/alliance/hotel chains etc. If they think they can’t realistically use their status for cheap upgrades or in the case of AF/KLM where the algorithm might not specifically target them but does seem to disadvantage them as a (perhaps unintended) result: they can use that data point in combination with various others (food quality, hub efficiency, etc) to redirect company spending (perhaps not through policy change) but by simply asking their secretary or travel company to book another alliance instead or they can pick travel dates where another alliance provides a fare within company policy which will be offered then by the secretary and/or corporate travel agency. I’ve seen plenty of situations where different people in same company had elite status on different airlines based on which one provided the best benefits for them personally (same company, so same travel policy) and each valued different things from different airlines. And no, I don’t expect a traveller to make the decision solely based on the upgrade algorithm, nor do I think they would do so solely based on the ripped up sofa’s in Lounge 25 in Amsterdam. But I think we can all agree that corporations aren’t infallible and neither do their algorithms have to be so. Assuming they picked the exact perfect criteria is assuming AF/KLM are operationally perfect, which we all know they are far from that. They can’t even get their IT to work properly.
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Old Mar 10, 2024, 10:02 pm
  #40  
 
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I don't know folks. They probably give a bunch of data to some folks who toss out most of it and then create a few "typical" customers. Those archetypes then haunt decisions and communications, down to marketing copy as well. Those stock photos they
​​​​​​People play the game a variety of ways. I recently saw a form for German government travel reimbursement, where the person had to declare what, if any, loyalty programmes were providing benefit on that travel, and to promise only to use those loyalty benefits for work purposes.
Mind you, this is for reimbursement, because heaven forbid the government pay directly for employee travel. What happens if the employee gets sick and can't travel? The government would be on the hook to pay! Besides, by stretching the process out for six months, the government gets an effective half-year interest-free loan from its employees.

About my rant above concerning the difference in upgrades to intra-Europe business class: while the difference to me is basically a meal, a blocked middle seat, and a drink, it may be more complicated for the airline. When I use priority security or go to a lounge as a FB Plat on a Y ticket, they bill AFKL, and it wouldn't surprise be if AFKL charged that as a FB expense. When I do those things on a C/J ticket, I would imagine that they're billed as part of the ticket fare.
In other words, you're never going to see a 50-Euro OLCI upgrade, because the organizational unit's additional cost is at least half that before you even get to the gate. On the other hand, if you take the upgrade, the FF program saves money. So it is in the interest of the FF program for me to take the paid upgrade, but it's not their department.
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Old Mar 11, 2024, 5:48 am
  #41  
 
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Originally Posted by BubbaX
​​​​​​People play the game a variety of ways. I recently saw a form for German government travel reimbursement, where the person had to declare what, if any, loyalty programmes were providing benefit on that travel, and to promise only to use those loyalty benefits for work purposes.​​​​
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What's that got to do with anything? It's for tax purposes. German courts have deemed that because miles have utility, any miles earned for private use are non-monetary compensation and need to be taxed as income. If you can't/won't use the miles for private purposes, only work, then it's not your income and doesn't need to be taxed.
Same principles as having a company car available for private use is taxable, having a company car available strictly for work use (incl. commute, but not other private trips) is not taxable.
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Old Mar 11, 2024, 9:05 am
  #42  
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The initial question was whether it is illegal discrimination to offer an upgrade to only some customers and/or at different prices.

I am not a lawyer. But it seems to me that it would be a difficult question to be solved by the courts.
Is it illegal to make an offer that depends on the travel pattern and past upgrade uses by a customer?

In a somewhat related vein, one could ask whether it is illegal to offer a lower price to some customers (status) if they wish to book a seat or check-in bags..

At best, it might be required for the airline to state that the opportunity and cost of an upgrade depends on the pax travel pattern.

Some airlines/countries include upgrades as a benefit to status pax. But this is not the case for AF (or most European airlines). Like many commercial companies, AF makes periodically a targeted offer, that needs not be accepted. The target is often not to the most active customer, nor available to everyone. It is not a discount on the fare paid, but for ancillary services. The companies do not have to reveal how they determine their target. It can be that some category of customers get some an offer for additional service at 200, others at 100, other no offer. If all companies had to reveal the detailed algorithm for such offers it would open a pandora box.

I do understand the frustration of status pax given AF policy of trying incentivize infrequent pax to taste a higher travel class. Clearly AF considers that such upgrades are not a status benefit. Whether AF makes a mistake and that lounge, priority, free seat assignment and extra luggage for Y pax with status is not sufficient to motivate frequent flyers is a different issue.
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Old Mar 11, 2024, 9:45 am
  #43  
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Originally Posted by brunos
The initial question was whether it is illegal discrimination to offer an upgrade to only some customers and/or at different prices.

I am not a lawyer. But it seems to me that it would be a difficult question to be solved by the courts.
Is it illegal to make an offer that depends on the travel pattern and past upgrade uses by a customer?

In a somewhat related vein, one could ask whether it is illegal to offer a lower price to some customers (status) if they wish to book a seat or check-in bags..

At best, it might be required for the airline to state that the opportunity and cost of an upgrade depends on the pax travel pattern.

Some airlines/countries include upgrades as a benefit to status pax. But this is not the case for AF (or most European airlines). Like many commercial companies, AF makes periodically a targeted offer, that needs not be accepted. The target is often not to the most active customer, nor available to everyone. It is not a discount on the fare paid, but for ancillary services. The companies do not have to reveal how they determine their target. It can be that some category of customers get some an offer for additional service at 200, others at 100, other no offer. If all companies had to reveal the detailed algorithm for such offers it would open a pandora box.

I do understand the frustration of status pax given AF policy of trying incentivize infrequent pax to taste a higher travel class. Clearly AF considers that such upgrades are not a status benefit. Whether AF makes a mistake and that lounge, priority, free seat assignment and extra luggage for Y pax with status is not sufficient to motivate frequent flyers is a different issue.
Indeed I think it’s a very complex legal issue, and it also depends which legal assumptions we are working with.

Maybe it’s more of a “small details” situation as well. For example, it is never said to the non-status/less frequent flyers that they are receiving a discounted upgrade offer. So legally it is also not a “special promotion”, you simply see a price on the seatmap and your spouse/colleague/friend sees another price for the same services (irrespective of whether one of the passengers is already enjoying most of those services anyway). Neither of you would know on what basis that price was set.

It would be like we would go to buy a tshirt in a shop together with a friend. When you checkout, your friend would be asked to pay 50€ for that tshirt, and you are asked to pay 75€ for the same tshirt. When asked why, you could be given various reasons informally (the seller would say they are completely unaware what is behind and you can open a support ticket if you want to find out more, because the headquarters is deciding this):
  • Your friend is buying a tshirt for the first time in the shop and doesn’t have a history with the company, so they receive a smaller price to stimulate demand and future purchases (note that we are not speaking about a discount here or a voucher, sign-up for newsletter promotion etc which of course would be a totally different story);
  • You seem to have purchased more expensive tshirts from premium brands in the past, so your profile is one of a high-revenue client, which means you can afford to pay extra. Based on existing data collected by the company, which you might have consented or not to, they think you are less price sensitive and can sell you the same product for more. In a way you would subsidise the smaller price of your friend.

So it’s indeed a complex issue. And it touches on GDPR, on the automated decision-making regulations (which are new), commercial law and on general consumer rights pieces of legislation.

Note on revealing the algorithms: I might be wrong, but from what I read large companies are now required to disclose the algorithms to the national regulatory agency on consumer protection when they are making automated decisions on consumers. So they should not be making them public, but they should reveal them to the authorities to ensure laws are not being broken. The public however needs to be informed largely how the decision is made and on what basis, but it doesn’t have to go into all the specifics (for example, I guess they can say that your previous purchase history is used to determine future upgrade pricing, but without telling you all the details on how that works - this also of course brings the question of consent, what would happen if you withdrew your consent for your data to be used for this purpose?).
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Old Mar 11, 2024, 7:14 pm
  #44  
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Originally Posted by Fabo.sk
What's that got to do with anything? It's for tax purposes. German courts have deemed that because miles have utility, any miles earned for private use are non-monetary compensation and need to be taxed as income. If you can't/won't use the miles for private purposes, only work, then it's not your income and doesn't need to be taxed.
Same principles as having a company car available for private use is taxable, having a company car available strictly for work use (incl. commute, but not other private trips) is not taxable.
Not to get this thread off-topic, but wait a moment - are you saying that if I reside in Germany, any miles/points I earn from credit cards, airline/hotel FFPs, can and will be taxed??
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Old Mar 11, 2024, 8:01 pm
  #45  
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Originally Posted by ofj
Not to get this thread off-topic, but wait a moment - are you saying that if I reside in Germany, any miles/points I earn from credit cards, airline/hotel FFPs, can and will be taxed??
In the past decades, the issue was raised in several countries for miles earned on work-paid travel.
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