Originally Posted by ntddevsys

Welcome to Flyertalk and thank you for taking the time to understand the impact of your decisions on the future profitability of Air New Zealand Limited.

Could you clarify a few things for me:

1. Why did you think it was acceptable to launch these changes without issuing the seatmaps that are in John Walton's article to your customers, the travel industry or indeed the airline's own staff, and with a barely functional IT system behind it (which still is not even close to working properly)?

Air NZ has 10 different aircraft types that fly to a number of different destinations and as a result we have over 30 different seat maps that we currently manage. Providing this level of information to everyone would simply mean that most people would never read the communications. Also, apart from Space+ Air NZ does not publically disclose the location of seats reserved for HVC's as these seat maps are dynamic and change based on customer demand for the products we offer

2. Why does Air New Zealand Limited feel that it serves its fiduciary duty to its shareholders to squash its Airpoints Gold Elite members specifically into the worst seats on the plane if they do not part with a bit of ancillary revenue? In particular, have you analysed changes in average revenue from these customers over the last 12 months (for example, large decreases in longhaul travel spend because simply, they have other options)?

I would disagree with this comment as if you look at the seat maps in Johns article it is very clear that we do reserve a lot of the best seats for our HVC's - take space+ on the Tasman and Domestic for an example. When Space + was introduced on the Tasman and Domestic a few years ago (for the sole benefit of our HVC's) - we effectively had to remove a row of seats from our aircraft which consequently had a material revenue impact.

This group of customers have swallowed checked luggage fees (although I cannot name another airline in the world that charges its top tier elites to check baggage, although I am sure if you look hard enough you can probably find an example) because it looks like a value added service. They have also noticed and kept flying through extreme cost cutting and service reductions in practically every area. But everyone has a limit of what they will put up with. It only takes 3 hours in a crappy seat because of what someone else booked for you to fly to form the view that it is wise to move your longhaul Business business to an airline which values it.

When we introduced seat only fares this effectively allowed you to save money if you did not wish to take a bag. As such, this change has allowed you to save money if you wish, and if you want to take a bag you get the same benefits that you used to.

It is also difficult to understand that Air New Zealand Limited spends large amounts of money sending us products and hosting us at events, and providing additional care in-flight yet does not provide decent seating regardless of fare because of a obscene average spent (which would not cost a cent and be the easiest thing of all the airline could do to keep this group of customers from defecting to other airlines).

are you talking about if you buy a seat only fare on the tasman that you dont get advanced seat request into space+?

3. Why does Air New Zealand Limited provide the same seating options to Airpoints Gold Elite members as it does to Koru Club members?
The ability for Korus to access space+ etc has been around for a number of years and is not part of any of the current changes.

4. Do you acknowledge that this is misleading and deceptive given that all 'HVC' have a lesser selection of seats for free than previously? To give you an example, I was selecting seats for a domestic fare which was in excess of NZD 1000 return this week as Gold Elite and it wanted to charge NZD 5 to select seat 03F on an Eagle Air flight.

On the beech there used to be 4 seats reserved for HVC's and post this change there still are - as such there are no impacts.


Additionally, this figure is distorted by longhaul. What % of shorthaul customers currently get free ASR and will keep it?

The % of customers for shorthaul depends on how many of these customers continue to purchase a product that entitles them to it (ie Works on the Tasman/PI or smart saver and above domestically). There is no intention to remove seating from these products.

Thank you for your time in answering these straightforward questions.

Originally Posted by DCF

Alastair,
You are a brave man, and welcome.

I can't believe you have the guts to appear here after the Australian BT article which exposed this process, but good on you.

You seem not to be aware that while all airlines' HVCs are usually a bit disgruntled at any given time, Air NZ's have been spectacularly pissed off for the last year or two. My family spend (from Australia) has fallen from $100K to around $20K and I'm well aware that this is a common pattern.

I have a number of ideas about how you could increase ancillary revenue from HVCs while actually pleasing us, but I won't put them in the public domain - if you want to know just PM me
.................................................. ............................
I will tell you my own personal bugbear though.

I live in Australia and buy a mix of long-haul Business and Premium Economy fares to the USA and UK.

I still get pissed off that my Premium Economy ticket entitles me to an inferior product (Works) on the Tasman than Economy ticket holders who have purchased Works Deluxe. (Please don't reply that there is no such thing as Tasman Premium Economy. You sell me a BNE-LAX Premium Economy fare in competition with Qantas and Virgin Australia's non-stop fares, at similar fare levels. If you choose to make an operational decision to refuse to let me sit in Premium Economy seating on the Tasman leg then you are simply driving me into their arms).

My family used to be probably Gold Coast (OOL)'s most HVCs,and probably accounted for around 2-3% of annual OOL Business Class seats. But now that the A320 has gone all-Economy when we buy a Premium Economy fare we actually drive past OOL to Brisbane to avoid sitting in A320 Works.

So why can't you just come up with a way of allowing Economy or Premium Economy long-haul ticket holders with A320 sectors to buy an Upsell into Works Deluxe at, say, $100 per sector?

If you did, OOL would instantly get back my family (for example) and at $800 per return trip that would be around $3200 of additional ancillary revenue created by commodotising unsold Works Deluxe inventory which long-haul Premium Economy passengers currently cannot buy.

Originally Posted by trooper

I'll add 2 very simple questions Alastair....

1. If one reads the Seat Select FAQ's under "Why have you introduced paid Seat Select" one finds the (unqualified) statement that:

"No existing seating entitlements are being taken away"

That is simply untrue.

We Golds/GE's used to be able to select exit rows at time of booking without payment.. in fact I booked a long-haul flight the night before these changes took effect..and selected exit row seating without charge.

Please tell us just HOW this is NOT an entitlement being taken away... given that - words fail me - it is an entitlement that has been taken away!


2. Charges for firearms.

The case containing my main competition handgun is about half the size of a 19" rollaboard type carry on bag.. and when the handgun is inside and the locks are in place it weighs about 4kg.

So a small locked box weighing less than you allow for a carry on is going to cost me $200 to check in SYD-LAX?

I am very interested in hearing the justification for such a charge.. especially given that coming home (LAX-SYD) no such charge applies.

Given the relatively generous treatment of other sporting equipment when checking in, it is difficult not to feel one is being discriminated against for choosing the "wrong" sport.. at least in the eyes of NZ.

So.. why institute such a charge?

Originally Posted by baldingeagle

Actually, can anyone clarify that the policy of carrying the first piece of sports equipment at half the first bag rate is even still in effect? I can't find any mention of it anymore on the web site and am worried that it's been silently cut as part of this whole process.

Originally Posted by Placebogirl

Alistair, I have a couple of points/questions:

1. For this HVC with a new baby, this charge has a significant impact. Before the change I could simply select a bassinet seat at the time of booking and it cost me nothing. Now I have to pay for it--even in J class, which feels like petty nickel-and-diming. I know the advantage is supposed to be some certainty that I will, in fact, be allocated the bassinet seat, but TT ex MEL there are frequently enough changes d/t operational issues that this guarantee does not hold much water for me.

2. The ability to choose a seat ahead of booking is being sold as an advantage of the new system, however the two are not intrinsically linked. I happen to know that this part of the system was trialled at least two years ago and deemed to be "too confusing". It's pretty irritating that something that could have been of great benefit to a few of us years ago was too confusing when there was no money to be made, but somehow acceptable now.

3. You are selling exit rows that used to be reserved for airport use. How are you ensuring that those who purchase these seats are suitable for exit row seating? I suspect that having paid for such a seat makes it more difficult to reseat someone who should not be seated in an exit row--this seems like a conflict of interest to me.

Originally Posted by smeags_nz

I bet Alistair is regretting his appearance in here, but good on him for fronting up and let's hope that he hangs around long enough to answer the valid questions that everyone has raised.

Originally Posted by Placebogirl

Alistair, I have a couple of points/questions:

Originally Posted by craver

It's great that Alistair has fronted up. Some of us have called for this and now here we have it. Nice move!

Originally Posted by smeags_nz

I bet Alistair is regretting his appearance in here, but good on him for fronting up and let's hope that he hangs around long enough to answer the valid questions that everyone has raised.

Originally Posted by brenrox

Welcome Alistair.........I hope you havnt been scared off and you come back

Originally Posted by stephen2d

Call me a cynic, but I would be surprised if Alistair reappears here, although hats down for the attempt (and egg on my face if he does come back to answer all these additional questions).

Originally Posted by AlastairR

To be honest I am enjoying it. You may be surprised to know but the first slide in all my presentations on Ancillary is about the customer and understanding the customer and what they value as for me this is the key to have a successful business.

Originally Posted by AlastairR

Re your infant question – I actually have young children as well and along with a number of other customer with young children appreciated that for a small fee ($25 for a long haul sector where the majority of our bassinets are is a small fee) you now have certainty as to whether you have the bassinet or not. Also as you can now see seating before you pay for your flight this lets you move to another flight if no bassinets are available on the flight you selected. Further we do not charge for bassinets (or any other seats) in J class.

Originally Posted by AlastairR

Yes this has been removed. Previously this policy only used to appy if you travelled internationally – ie no discount on Domestic sporting baggage. The sporting discount was very complex for us to enforce both from an Airport perspective which involved a manual process and also from a customer perspective in terms of what actually constituted a sporting allowance.

In summary the charge used be 50% of the first bag rate which on the Tasman was $75 = $37.5, and on our Longhaul sectors was $115 = $57.5. Now that we have introduced prepaid baggage these rates have actually decreased to $55 on the Tasman and $95 internationally which you can now utilise for your sporting equipment or any other baggage you wish to carry.

Originally Posted by AlastairR

Air NZ has 10 different aircraft types that fly to a number of different destinations and as a result we have over 30 different seat maps that we currently manage. Providing this level of information to everyone would simply mean that most people would never read the communications. Also, apart from Space+ Air NZ does not publically disclose the location of seats reserved for HVC's as these seat maps are dynamic and change based on customer demand for the products we offer

Originally Posted by AlastairR

I would disagree with this comment as if you look at the seat maps in Johns article it is very clear that we do reserve a lot of the best seats for our HVC's - take space+ on the Tasman and Domestic for an example. When Space + was introduced on the Tasman and Domestic a few years ago (for the sole benefit of our HVC's) - we effectively had to remove a row of seats from our aircraft which consequently had a material revenue impact.

Originally Posted by AlastairR

When we introduced seat only fares this effectively allowed you to save money if you did not wish to take a bag. As such, this change has allowed you to save money if you wish, and if you want to take a bag you get the same benefits that you used to.

Originally Posted by AlastairR

are you talking about if you buy a seat only fare on the tasman that you dont get advanced seat request into space+?

Originally Posted by AlastairR

The ability for Korus to access space+ etc has been around for a number of years and is not part of any of the current changes.

Originally Posted by AlastairR

On the beech there used to be 4 seats reserved for HVC's and post this change there still are - as such there are no impacts.

Originally Posted by stephen2d

OK Alastair, egg on my face - you did come back

Picking up on the quoted post above, infants already pay for the bassinet, that's the 10% of the adult fare, right? So, why an additional fee (for, in this case, non HVC customers)?

Originally Posted by ajnz

As an Alastair myself, my twitching just went into overdrive.

Originally Posted by samnz

Overall, I am much less bothered about these latest changes than many (though I am also much less of an HVC than most here). However I do take issue with the above assertion of any kind of decrease, as the trend has clearly been an upswing in baggage charges, especially for sports equipment.

I travel a bit within and out of NZ to ski, and if I look back...

Domestically:
I used to get an extra 10kg of allowance under the old 20kg-free system, which took care of it, and encouraged me to fly NZ.
Then it was $15 for a 2nd piece with no sporting allowance, then $20.
In 2012 I was looking at $30 each way for a second piece. On top of already higher fares on NZ, this actually saw me flying JQ to Queenstown this year .
Now it will be $30 for the 2nd piece + $60 for oversized = $90 each way, more than the total I paid JQ this year including 30kg of baggage and skis.

Internationally: (looking at my historical trips):
In 2005 and 2007 to North America, I could take 2 bags free of charge
In 2010, I paid 50% of the $75 fee = $37.5 for the second piece
Up until now I would have paid half of $115 = $57.5
Now I will pay $95, PLUS a $200 oversized charge = $295!

I don't see the complexity in a sporting allowance from a customer perspective - I was clear on what my allowance was, and equally clear that its removal has made Air NZ uncompetitive for me, unfortunately.