curiousexplorer

I was wondering if there was any reflection on whether the practice that AFKL uses to discriminate its own elite members when offering upgrades (consistently offering higher prices to gold/plat/ulti compared to non-elite members) is actually fully legal?

In the EU price discrimination is allowed only if the consumer is clearly informed that the price that they see if influenced by an automated decision-making process or based on profiling on consumer behaviour. As far as I know, even if that is buried in some terms and conditions, this is not clearly communicated and most consumers would basically be unaware that this is happening if not for websites like FlyerTalk or social media. And lately the EU is moving more and more towards not merely justifying that the disclaimer is present at page 100 in the terms and conditions, but clearly informing consumers about their rights upfront.

irishguy28

But why should everybody get the same "offer"?

When someone buys up "properly" to the next cabin, they're paying the fare difference between what was paid for the original ticket, and the current price of the new cabin. So you might have to pay €150 and I might have to pay €250 (just as an example).

It's not discriminatory to charge me more (because, in my example, I originally paid less for my economy ticket than you did).

How can you be sure that there is any "discrimination" in place, when you have no idea what the two classes of customers you mention originally paid for their ticket? I genuinely don't think it is breaking any laws to offer a different price to different customers; to view this as "discrimination" against elite members is not an accurate portrayal, I would say.

If anything, this system seems more fair than the "upgrade bidding" used by other airlines - whereby any such upgrades are only secured by those who offer, and then pay, the biggest amounts.

Ben Lipsey

It's also not true. There is no link between status and the upgrade pricing algorithm.

Ioan Constantin

Ben, thank you for this insight but the anectodals here are so numerous, even from personal experience, that it seems highly unlikley that this is just coincidence.
I've seen AT LEAST in 5 ocasions spanning the previous 3-4 years when the algo clearly favoured non-elites to elites. Myself & the SO, both Plats/Ulti + our friends, a couple, both Explorers. We travel together and have been travelling in this setup for some time now. We consistently get offers for upgrades ranging in the x2 -x4 the asking price they are gettin in-app, at OLCI, for the same flights, same dates, same itineraries.

L.E.: this had happen for identical itineraries on identical fares for all travelers.

curiousexplorer

I was referring to the OLCI upgrade offers, not the ticket change which indeed is strictly based on the difference between what you paid and the price offered at the time of making the change. However it seems odd that many people have reported here several times that their non-elite companions are consistently getting better upgrade offers, and it also happened to me a few times, as otherwise I wouldn't have brought up the issue just based on what others have said. It happened that in some cases I wasn't on the same ticket with some colleagues, and they were usually getting "normal" priced upgrades while I was always getting absurd pricing of 180-380 EUR for short/medium-haul flights (even if I didn't upgrade anything at OLCI for over 6 months, as this was also debated here as an issue with the "upgrade purgatory"). And I also know the priced they paid for the flight, and there was actually a reverse connection or none at all (I once even had a 500 EUR intra-EU ticket in Y and a colleague a 180 EUR ticket and they got a normal 70 EUR upgrade price and I got 200 EUR...).

As Ben clarified - thank you, Ben! - it seems there is no link between status and the upgrade price alghoritm, but maybe it would help to have some transparency about the criteria used to determine that? Of course full details cannot be published to consumers and cannot be expected for obvious reasons, but I think it would help to have a more clear overall idea of how this works? As a consumer I'm confused when I get to the point where I expect that being platinum I won't be able to upgrade on European flights, but when traveling with others with no status they get normal prices. And this is not about me, I see that people are complaining on social media and on here about the same situation, and if it's not visible when traveling solo or in J, it's a bit annoying when you see it happen with no explanation.

And yes, price discrimination is actually legal in the EU and companies can offer different prices to different consumers, provided they do not discriminate based on country (and other criteria such as gender, sexual orientation etc. but that's a different story and not the point of the debate - although how do you know if the criteria are not transparent?) and as long as they inform the consumer. From what I was researching, the legislation was not yet tested in court, and further improvements are under discussion at the European Commission to strengthen this. There are also debates at EU level on how to regulate personalised pricing / price discrimination as it becomes a more widespread practice and consumers are becoming increasingly unhappy as they discover it (which is quite normal).

As pricing algorithms evolve, and might eventually be applied for pricing flights (including based on frequent flyer history/profile, if it's not happening or being tested already), I think this is actually an important debate for consumers to have.

TomMM

Are OLCI upgrade offers calculated differently than upgrades bought at the gate? I've bought a few PE -> J upgrades at the gate where the agent never referred to my status.

curiousexplorer

That’s also an interesting point. Same with phone upgrades. Last year I got an OLCI offer to upgrade for 1000€, while on the phone they said in the system it appears as 500€. So there is some personalisation happening at OLCI.

DuyT

This. I think we need to start collecting PNRs with actual fare codes, combined with upgrade offers per passenger and status level, so we can build enough data points to show it is no coincidence anymore but some algorithm result. Maybe we should start a thread or use this thread, but in a way that protects user privacy.
example, we should always post:
- PNR code or codes
- route + date of flight
- Status of passenger A + upgrade offer
- Status of passenger B + upgrade offer
- upgrade offer type (gate/OLCI/FA). When OLCI, add screenshots.
- fare code
- rule 1: has to be same fare code
- rule 2: has to be same type of offer (can’t be that A gets offer at gate and the other on board).
- rule 3 has to be same route (obviously).

If we can collect over time at least 20-30 examples, we can ask Ben (if willing at the time) or someone with connections into AF/KLM look into this to see if we are seeing ghosts or provide an explanation why there is a difference between passengers A and B which is not related to status that explains the upgrade offer difference.

DuyT

This is not the issue that was raised. There is, albeit anecdotal, evidence that on exactly the same fare prices and codes, fellow travellers are consistently getting different upgrade offers which seem correlated to their status where higher status holders are offered a higher price. I don’t think this is discriminatory in a legal sense, I just think it goes against the concept of treating your elites fairly (I am not asking preferential in this case: merely not getting penalised).

now admittedly, we don’t have a water tight case or anything; we’re looking at a black box algorithm and even Ben Lipsey indicates there is no correlation. But if there is no correlation, then are we all seeing things? Most FT flyers and especially elites here are reasonably informed enough to guess something is off, although there undoubtedly will be some ‘false positive’ signals which can be explained by identical price but different fare codes or something. But right now, it still ‘feels’ like the evidence points to algorithm more than misinterpretation by the FT users. I myself have also seen differences on various occasions between myself and non or lower status fellow travellers who all booked exact same time and same price.

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.

DuyT

That kind of comes down to the exact same thing doesn’t it? It means you penalise the flyers that do most business with you, who… oh wait… happen to also have elite status due to them spending a lot of money.

so even if it is correct that it is tied (in large part) to purchase/spend history: it penalises those who spend the most. So yeah, I am not penalising my elites, I am just heavily favoring low spending customers. Comes down to the same effect: plats and ulti’s will get worse upgrade offers.

I am not saying AF/KLM doesn’t have a right to do so, but then just come out and say: high spenders and elites: yes, our upgrade algorithm is heavily skewed toward trying to hook incidental travelers on our premium products, so just suck it.

fine, thanks for the clarity and we can all decide whether we will let our wallets answer or not. For some it might not be an issue, for others it might.

hhdl

I would politely suggest that AFKL may view someone who would change airlines based on the ability to buy a discounted upgrade from a relatively cheap fare as a customer they're not particularly interested in having/keeping.

Mayanja

Apologise for not finding the source but I read somewhere the algorithm doesn't consider status, but it does consider how many times you have used upgrades before vs an upgrade naive person. The reasoning is that they want to tempt any many people to experience business class.

I don't know whether that is discrimination or not but it's at least a grey area. All other things equal it would appear I pay more because I have used a similar offer in the past before. At the very least, they should publish that.

They should also make it clear that they collect data specifically for that purpose.

BubbaX

The algorithm is all wise and inscrutable. Recently I bought some tickets, on the same day and time for myself and Bubba-spouse originating in different cities and connecting CDG-JFK, both basic economy, and both L to Paris. My ticket was then R to NY about 400 Euros and hers was V and around 320. This is pretty much normal: while my originating airport doesn't levy excessive departure fees, tickets are consistently more expensive, and TATL can cost 1000 more for the cheapest Business ticket (and yet on the flight to Paris, Biz class can be ten rows deep).
We're both plats from XP, but I've bought more upgrades recently.
The OLCI upgrade price to J for the CDG-JFK leg was 700 Euro, and JFK-CDG 800. Hers was around 1800 dollars each way. So I had to stay in the back.

​​​​In short: Al-Kwarizmi's namesake can now be equated with God: it seems to work in a meaningful way, but is all-powerful, inscrutable, and unknowable, at least in this life.

f0zzyNUE

but it's experienced that way. last times I flew with non status friends - my upgrade offer was much higher than the offer for the nonstatus friends. (NUE-AMS: 149€ for me, 59€ for my friends, AMS-BUD 79€ for my friends, 179€ for me - I had been on a paid ticket, my friends on award tickets issued by me)
it rather looks like the discounted prices are to lure new customers into the front cabin.
within the last four or five years - I just bought business class tickets and didn't have/use any kind of discounted upgrade. so not much incentive for AF/KL to "reward" me for purchasing a "cheaper" ticket than all the other times.

wonder how this will develop for my next economy class tickets because since becoming PFL there is no more incentive to continue purchasing these overpriced European business class tickets.