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How would this theoretical Titanium affect DM-Y? Interesting question, are we really upset about nothing?
1) Op-ups? Not really, the Titaniumites are, assuming, flying F/J when they have a choice, so the effect here is minimum (I can see in some cases J is oversold and they are stuck in Y fare, but J opened up and they get upgraded first over DMs, but again, cases like this will be rare as being a Titaniumite means you generally buy F/J fares straight-up) 2) Lounge - yes. By having a special Titanium/F only lounge that would mean the future maintenance of CX "F" lounge will be doomed to the current BA "F" lounge: i.e. worst then the J lounge. So in this respect there will be an effect, and "F" lounge will be by name only, with little if any investments. 3) Seat block - this is huge lost. When seats are open and you know you will sit next to any empty seat, especially on long-haul, is a huge deal. It makes the trip that much better without CX actually losing anything but lifting a finger to make sure as a DM you get an empty seat next to you. If Daniel's claim is correct that CX is really just adding benefits to a superclass of DKYWIAs that's fine, let them get more. But the reality I'm afraid is that CX will not just invest in a super tier without taking something away from existing tiers. But so far we are just guessing, let's see what really happens. |
Wouldn't the simplest way to give better recognition to premium flyers is to increase the cabin bonus of F/J/Y+, and then to raise the mileage bar for more advanced tiers (DM or maybe GO)?
A revenue based system like PPS is too complicated as ticket prices fluctuate. And it creates confusion and uncertainty to non-HK (or US based, assuming the required revenue for a certain tier is a HKD-based amount) flyers due to currency fluctuations. |
Originally Posted by JALPak
(Post 24149947)
Once miles are credited to AA, it's AA's problem. CX doesn't have to pay for those (extra) miles AA prints and it is AA who has to bear the redemption costs.
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Originally Posted by percysmith
(Post 24150399)
I think CX pays AA for AA (BIS) miles earned on CX flights. But at some pre-agreed rate which may or may not cover AA's cost of making the CX passenger an AA status pax.
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Originally Posted by mitwg
(Post 24148824)
This change probably will piss off a lot of people but I think it makes economical sense to have a revenue based system, favoring premium classes. I've no idea in terms of how an airline operates so I write this accepting 110% that I may be wrong and have no basis other than my own thoughts, but I feel somehow achieving 100% load in Y isn't always the most profitable for the airline.
I get this idea after having a look at some of these ridiculously low fares in Y for ULH flights, like a QR flight I recently saw from SYD-DOH-CDG for like AUD$1400. I mean, take off the operating costs and the margin is already probably very thin on this fare (few hundred dollars tops), then if the airline was to offer a Y passenger F lounge access due to status, this will further eat away from whats remaining of that little profit. Assuming that each lounge visit will cost the airline an average $50, that is already $200 they are loosing further (not to mention the fixed costs to have people running the elite program, fast track passes etc.). So I think we'd all agree that status pax on average cost more for the airline to carry. So if an airline had the choice of 90% Y loads with no-status pax vs. 100% Y loads with status pax, I have a feeling the optimal economic point where additional marginal revenue and cost interacts best would be closer to the 90% mark than it is to the 100% mark. I'd even go further to say carrying that last 1% most expensive customers (12 hour layover lounge-hopping tours anyone? :P) would probably cost the airline more than carrying the cheapest 5% of customers who just wants a transport from A to B. It is obviously expected that these elites will bring in this margin more frequently, however say if the bottom margin for a super saver fare is $250 for the airline per Y pax, an elite visiting 4 partner lounges may dwindle that profit to $50 already. That means CX would have to carry the elite five times before they even meet the profit levels of a non-status pax. Contrast that to a F pax dropping HKD$250k on a HKG-JFK flight. Sure the seat probably costs USD$500k to install, but once the initial capital expenditure has been met, these F pax are probably worth at least a good 100x at the operating profit level compared to a discount Y pax that is paying HKD$6000 for that same route. The point I'm trying to raise here is that while us customers would probably like the airline to look at our overall spend, it is probably more logical for the airline to not look at that but instead look at the overall contribution to the net profit after all costs have been met. In that sense, a Y pax spending USD $200k a year with CX may not be more valuable to the bottom line than a J flyer spending $50k a year. As well, supposing I would fly on this fare as an AA EXP, I would only get Oryx lounge access, and AA would pay QR for it. If I could enter DOH without paying the fee for the visa on arrival, I would consider going into the city for 12 hours, but, without it, I would stay in the lounge. Further, the lounge costs for me are not the highest-I probably cost more when I consume beverages/food in the air. The food/booze that I consume probably costs USD 5 at the very most when purchased in bulk, and wifi is a fixed cost. Power use for a few hours is also negligible. (CX fares on the kangaroo route are closer to £800-1000 in V/L/M last time I checked as well, so they likely enjoy higher margins than QR.) |
Originally Posted by alphaod
(Post 24147261)
Never thought of this either.
Interesting; the best of both worlds? Or maybe CX will realize this and only allow folks who credit to AM to earn MPO credit?
Originally Posted by QRC3288
(Post 24147137)
ahh, nice I hadn't thought of this! Fairly pathetic how little I know of mileage programs given the excessive amount I fly on CX. So what you're saying is, I could still fly a good chunk of CX and perhaps hit the high level MPC (assuming I spend enough $), but accrue to AA or BA or somewhere else?
For now it is just a guess they will allow us to put AA FF# and still track $$ spent on CX. I hope that is how it will work out for those that travel more than 120k a year. |
Originally Posted by AA_EXP09
(Post 24150541)
Was this AUD1400 fare RT or oneway?
As well, supposing I would fly on this fare as an AA EXP, I would only get Oryx lounge access, and AA would pay QR for it. If I could enter DOH without paying the fee for the visa on arrival, I would consider going into the city for 12 hours, but, without it, I would stay in the lounge. Further, the lounge costs for me are not the highest-I probably cost more when I consume beverages/food in the air. The food/booze that I consume probably costs USD 5 at the very most when purchased in bulk, and wifi is a fixed cost. Power use for a few hours is also negligible. (CX fares on the kangaroo route are closer to £800-1000 in V/L/M last time I checked as well, so they likely enjoy higher margins than QR.) Say if I did that 6x a year, that'd be enough for CX DM for a $8000 gross revenue. I'd probably say CX would make less than $2000 out of that $8000 after all operating costs are taken out (without thinking about elite status or anything at this point). Then would the remaining $2000 be enough to pay for the MPO staff, provide DM amenities (which lets you tow 2 guests to lounges as well), pay for CRM software to manage elite members, provide occasional op-ups, revenue lost from fare guarantee at V class etc.? I wouldn't say there'd be much left for CX after all that's taken out. I know I'm not complaining for these cheap fares but I'm just amazed how they can offer these discounts almost on a consistent basis and still remain profitable. |
Originally Posted by AA_EXP09
Further, the lounge costs for me are not the highest-I probably cost more when I consume beverages/food in the air. The food/booze that I consume probably costs USD 5 at the very most when purchased in bulk, and wifi is a fixed cost. Power use for a few hours is also negligible.
As a much of fact, most people would drink/eat more at HKG's lounges pre departure as opposed to the on board catering. Think about all those DM's in Y or those doing short haulbregional hops. |
Originally Posted by HongKongVisitor
(Post 24154158)
The beverage/food you consume in the air would be the same regardless of your status.
As a much of fact, most people would drink/eat more at HKG's lounges pre departure as opposed to the on board catering. Think about all those DM's in Y or those doing short haulbregional hops. I do agree that I enjoy dining in the lounge before boarding. Things taste different 10km up. F food is better, but the only things I like in J and Y are congee and soup. |
Originally Posted by cxfan1960
(Post 24154204)
Beverage/food consumed in the air can be different. I was offered food from F and J while flying Y years ago (not any more :().
I do agree that I enjoy dining in the lounge before boarding. Things taste different 10km up. F food is better, but the only things I like in J and Y are congee and soup. |
Originally Posted by cxfan1960
(Post 24154204)
I do agree that I enjoy dining in the lounge before boarding. Things taste different 10km up. F food is better, but the only things I like in J and Y are congee and soup. I think the best tasting food across all of the CX menu I had was the breakfast congee they serve in Y... I just can't seem to enjoy food up in the air regardless of what it is (they all taste 'citruscy-acidic' to me) but the congee is pretty good. Serve some of that with Krug (don't shoot me for saying congee & Krug in one sentence) and pretzels, I'd be pretty happy not eating anything else on a 10 hour F flight. |
[QUOTE=Cathay Boy;24154706]I've always made sure to eat up at Maxim HKG (not the lounge) before I board. Wing F Lounge food to me is no better than cafeteria food. I only go there for drinks and salads and fruits. Yes, I have high standards in food, which is a reason why I will never pay 6K for J fare, I much rather use the money I saved to eat at Morton's in Sheraton.[/QUOTE
To me I am all in favour of cx making these changes, there are too many people in lounges flying on the cheap. The lounges should be for those paying for it. |
Originally Posted by flyinghighinthesky
(Post 24154920)
The lounges should be for those paying for it.
So, let's say for arguments sake that this HK$10,000 should go towards providing me with MPC benefits. I think it more than covers my share of the cost of annual lounge usage with plenty left over to spare. In fact, when I put it like this, it almost makes it seem like I'm stupid to do what I'm doing and throw money at the airlines like this when I could eat in airport restaurant for less cost and get much better food. |
I spent 1430000 hkd this year with cx. Hence I am all in favour of the new scheme.
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Originally Posted by flyinghighinthesky
(Post 24155116)
I spent 1430000 hkd this year with cx. Hence I am all in favour of the new scheme.
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