garykung

As I said...not news...

This is the influence of FT culture - when you hear rumor, act before too late...

kaka

i wonder the background of Ivan Chu - not his CX background, but his background.

i'm pretty sure every former CX CEO knows about the op-up situation - just that most of them are smart enough not to deal with it. let your cream of the crop pax to enjoy a bit whilst you fill a few full Y fares, rather than to cheapen the entire cabin in front of row 39 (or 30 back in the days).

i guess in a way oneworld is cheapening itself by following the footsteps of BA/AA. oh what goes the saying? Bad money drives out good?

hadsst

To be honest this response is very disappointing corporate speak - CX hears and acknowledges but never acts based on the feedback. So many FFers oppose this (especially the PEY to J upgrade part) but CX decides to go ahead. Many of us don't feel it's a 'win-win' situation as suggested by Ivan Chu.

While it takes ages for CX to deliver proper ticketing-related IT services (and even the simplest online booking change function still frequently doesn't work), it just takes CX so fast to develop an online upgrade bidding function. What is the CX management thinking?

As a MPO member for 10+ years, this is the most disappointing change in direction by CX I've seen. I'm deeply concerned what more changes Ivan Chu will bring.

ICLP and CX - If this is how you plan to use FF in the future (i.e. 'consulting' FFers on a pretty much finalised project), please don't waste everyone's time.

SeeBuyFly

"Fake consultation" is a bit strong, but of course, they are consulting only because they have decided to do this and want to be seen as doing their homework. Of course your feedback won't affect the corporate decision fundamentally. However, it will be received as follows:

Corporatespeak? of course. But what more did you expect?

sscywong

The news that worry me most is Chu's statement to make CX from a "better airline" to a "better business"... Particularly focusing in cost cutting... Seems he don't understand a "better airline" will become a "better business" and aiming to make a "better business" will only results in worse results...

percysmith

Non-discretionary revenue customers: you're going to fly CX no matter what due to CX's stranglehold on landing slots. Consider it a devaluation of benefits. Tough - blame HK's competition policy for giving even travelers down under more options than you.

Discretionary revenue customers: not going to "leave" CX, but will be a lot more price sensitive - CX will need to offer a lot of seats under the bidding process cheaply to keep their patronage. Otherwise they will go for cheapest carrier. - they will no longer maintain status with CX.

Infrequent travelling CX loyalists (my parents and their friends): news from heaven. Now they can buy a PE seat and play their standby game from the 80s for last minute upgrades. Wonderful.

Asia Miles hoarders who give CX little fare revenue (me): not sure - will award inventory also be put on the market? If yes, people like me will stop hoarding and take more QR/QF (I still feel it's highly unlikely I'll buy CX). If award inventory unaffected then I go on hoarding.

I never got an op-up on my own account - not even for my wedding with morning dress in hand. Then again I don't think I've paid for a CX ticket since 2008 - even when I pay for tickets I normally find some option cheaper than CX.

ZenWorld

Looks like I am spot on for most of the stuff, especially on the implementation.

But at least CX heard it: in some ways or another, give CX regulars more weight, at least via AsiaMiles i hope.

I think CX can offer a tier system and award its top elite more miles for AsiaMiles, and put more weight on AsiaMiles during bidding.

And sorry, op-up days are likely to be gone, and in place, auction system. So remember to put in some miles/cash for bidding.

(I actually like all miles bidding. Currently, members can only buy 15k a year. Maybe cx can sell more to elites, or increase the max for everyone, but sell cheaper to elites. AsiaMiles will be a more limited commodity, and will have to think carefully how much to bid for. Cash on the other hand, is freely available)

garykung

This means a few things:

1. CX is targeting non-local customers. Non-local customers, like those from AA, in fact are willing to pay a few more for better experience. They don't care the locals.

2. The cost of the top-tier Y tickets will go up

This is airline survival 101 - how to make more money before it is too late.

Mark this time - it will only go even worse...

CrazyJ82

I'm not fussed about the effect this will have on op-ups. I suspect it won't be as much as we think. BA have operated a form of cheap buy-up for some time (at a fixed price) and you'll still see frequent reports about op-ups there. While CX can capture some marginal revenue from this auction scheme, I suspect the universe of people who will bid in the end is smaller than they think.

My bigger concern will be award availability either for full redemptions or upgrades. This, unlike op-ups, is a published benefit (even if not guaranteed on any specific flight). Already I see a huge problem insofar as it sounds like auction upgrades will be processed four or so days before the flight. To the extent people do buy upgrades, it will cut down on availability for instant mileage upgrades on day of departure, let alone close-in redemptions. I'm generally not for threatening to leave over any little thing, but if award availability materially decreases I would take my business elsewhere.

Not that CX cares, given this sham feedback process, but if they're now willing to lower the revenue bar for premium cabins by instituting an auction process, they could ease the blow by making E fares upgradeable with miles. Other than lower award availability, I can't think of a quicker way to alienate their most frequent customers than to offer a discounted way for occasional fliers to upgrade with cash while soaking loyal customers by making us buy R fares to use CX's own loyalty currency.

northernhawk

CX started the survey about a bidding system from 24 May 2014. CX asked a marketing research company named ICLP (http://www.iclployalty.com/ja-jp) to investigate and gather the opinions in Flyer Talkers and a guy named AgencyGuy greeted and posted this thread. Then each Flyer Taker started to describe an opinion about it individually.

However, on 2 June 2014, Apple Daily broadcasted that CX's CEO had said CX would start the bidding system by a specific route from this month and he was going to perform the introduction to all routes in this September after having watched examination of the reaction and situation (I do not know whether the bidding system can be used an online or a telephone).

I was so surprised that this news was broadcasted just only 10 days after AgencyGuy started to gather our opinions in this thread. But it should be a real decision matter because it is a remark of the CEO of CX, I think.

If CX absolutely wants to know and investigate our real opinions through a marketing research company and watch the reaction of the upper grade member at the stage of the decision matter, this measure what CX's CEO showed this time should be too early. If CX is going to adopt reactions and opinions of Flyer Talkers sincerely, CX's CEO would not show this rough-and-ready measure with such a sudden development. I am suspecting that this measure what CX's CEO showed might have been already decided before an ICLP's guy posted this thread. This thread and this survey may looks so superficial, artificial and forced. This thread may make a fool of a customer, especially Flyer Talkers.

I believe that many Flyer Talkers are angry with and do not welcome this measure.

midlevels

^ Yes, soliciting customers opinions after the deal is already done is in poor taste. And to assume that we are so stupid that we won't realise what happened just rubs more salt into the wound.

JALPak

The survey started way back

http://www.flyertalk.com/forum/catha...t-upgrade.html

Lafite82

Well, it looks like a done deal ! I checked with a "friend" working at CX and was told that the upgrade bidding program will definitely come into being, although nothing has been set in stone yet (i.e. they haven't got a clue how to proceed....). Something firm will be announced within the next few weeks.

Don't know about the rest of you, but SQ and NH loyalty programs are starting to look pretty decent.....

percysmith

I'll translate the middle bit of the Apple article. Gives some insight over the future layout for the bidding process:

"Easier to obtain upgrades on short-haul routes:

"You may choose or bid on upgrades or not. For example, you can bid US$200, if we're OK with the bid we'll process the upgrade." Chu also noted NZ and EY already provide similar bidding processes, which assist in increasing the airlines' revenue. "We have spare seats in any case, passengers can pay a bit more for Business, we earn more, it's worth "playing" [literal translation]."

Chu also estimates, long-haul routes will be more in demand in the bidding process, but supply will be less "We sell most of the seats anyway. Say there are five flights a week, only two flights will be available for bidding". In contrast, short-haul Business loads are only 50-60%, so there will be more seats made available for bidding. Also, passengers cannot process two-class upgrades - Economy passengers can only upgrade to Premium Economy, Premium Economy will upgrade to Business etc.

Using NZ for example, FFPs will be invited to bid for upgrades at 7 days prior to departure. Using NZ passengers' experience, most successful bids are those between HK$1,300 and HK$2,000. Applying it to a HK to Beijing CX flight, Economy fare is about HK$2,200 (excluding taxes and surcharges), but Premium Economy is $5,000, almost twice as much."


My observations:

1. Seems like CX is contemplating upgrade bidding for non-overbooked flights - just whenver premium seats are available.

2. They want to do it for short haul, but I doubt they'll receive any bids - for those with discretionary budgets in short-haul just getting the desired flight will do.

midlevels

So, is CX going to offer Club Miles & Sectors for the upgraded class? That, at least would soften the blow.

FWIW, BA credits Avios/TP for upgraded class when you pay for their cheaper upgrades at the airport.