KACommuter

It does, but the same issues will bite into CX too. Just as SQ depends a lot on ASEAN, CX depends a lot on China transfer passengers. That will erode as mainland carriers get their act together. They're already investing heavily into upgrading their hard product with some success. At the same time North American carriers are building out their codesharing networks into CX's "natural" markets.

percysmith

And how will MPC help CX maintain its market share?

I suspect if CX prices some tickets at 30,000 for pek-hkg business return and then gives the pax 25K in Apple gift cards, they'd get more PRC business travel.

CXBA

Another article today on the SCMP. Basically it is confirmed ufficially that CX is revising the whole MPO/AM approach, and any change will be implemented starting from next year.

380Flyer

Care to share the link or contents of the article.

TerryK

Seems awfully long lead time for a news leak!?

sxc

The SCMP comment sounds like the same boilerplate that AgencyGuy has shared with us.

Cathay Boy

http://www.scmp.com/news/hong-kong/a...r-major-review

Actually it does add something new:

If the article is believable, it claims CX will make Asiamiles a pure earn-n-burn problem (redeeming flights and upgrades), but MPO will be the one that offers lounge access, and priority boarding.

Again, if the article is right, it may look something like this:

Everyone has an Asiamiles account, but it exists only for you to earn miles and burn them.

There will be a second, associated, MPO account that to advance in tiers have revenue-based restrictions. And based on your tiers you get the extra benefits associated with flying such as check-in, boarding, etc.

percysmith

I'm being totally cynical here

But if Cathay disqualifies certain BIS flyers such as QRC3288, forcing them into another program say AA's, wouldn't that be slightly good news for people who manufacture substantially all of their miles such as myself?

I'm assuming QRC3288 and others like him will credit both their FQTS and FQTV miles both to [AA], meaning there are less Asia Miles in issue and less competition for T+360/waitlisted flights.

Guy Betsy

Where to find this article for those who can't access SCMP - as its a paid service?

percysmith

...as SCMP has a limit on # of article to be accessed free for non-paying readers/subscribers, including those from abroad...
Use google chrome incognito window. Will reset the number every time opened.

sxc

But that is the way it already is today except the MPO tiers are based on miles and not revenue.

QRC3288

ironically, I think you're right for availability. I'm a possibility to bail given my suspicions. I'm in a situation where I will likely qualify for CX's highest revenue tier some years, but not all. My butt-in-seat direct spend is probably at least 250k and less than 400k USD on CX/KA metal in the last 6 years, but the high-spending years are much greater than the low-spending years. It is not a smooth line.

In the years I spend less, I can still easily qualify for DM as it stands now. In those other years, I could get "Titanium", but I would need to be proactive and really skip my travel on other carriers which I still do from time to time. Obtaining "Titanium" every single year will require effort, whereas obtaining DM for me does not.

These last 6 years, it has been an absolute no-brainer for me (IMO) to book to MPC/AM because I am DM, I live in HKG, I have consistency in my travel, and the soft service is, by and large, outstanding on CX and KA towards DMs. There are some serious weaknesses - lounge overcrowding and terrible earn/burn (and increasingly difficult to burn in the first place), but I put up with it because I get consistently superior soft product service as a result of being CX's highest tier year in and year out. Selfishly, I wish CX would just make DM harder to obtain - maybe 120k miles plus some spending minimum over a certain number of years - or even made DM 150k miles and some spending minimum. I don't know the $ yet they're considering, but if they do it every 12 months rolling and choose a # high enough ($50k USD) then I won't be able to do it every year, and I'd rather bail entirely than have one year on, one year off, etc.

To me, CX is doing what they think they have to do, and it's a very serious decision. Frequent flier programs are at the core of airline marketing strategies. If CX's program is uncompetitive, as I've said before here, I think they are being downright foolish and will pay for it in their revenue line. CX is already going to earn the business of every investment banker in Hong Kong whether or not MPC is "good" or "bad" program. High salaries does not translate into travel discretion. And CX is already going to earn the business of wealthy travelers who don't care about frequent flier programs anyway. CX will lose, however, those travelers who value the mileage program and have discretion over their own travel spend. I really don't know what kind of constituency we are. But count me as one traveler who flies premium classes, cares about getting the best "value" out of a mileage program, and has absolute discretion over where I spend my money.

Handing out Amex DM and GO told me a lot. The decline of my ability to burn miles has, over time, worn old. A silly marketing promotion in SFO two years ago gave me a good idea of how CX thinks about lounge crowding High "Klout" score gets you entry to Cathay Pacific SFO lounge).

The reason I stay loyal is because DM is absolutely an incredible soft-service experience and I have amazing predictability with CX/KA when I travel. If I will have that predictability one year (as "Titanium"), but not the next (maybe I spend less the second year, and only earn "Diamond"), the value of that predictability is lost. In that case, I'd rather just go somewhere where I can accumulate miles at a much faster pace.

APeverell

I guess the rationale behind this new revenue based tiers is to drive more revenue spend for their loyal customers and to not alienate those that do not spend as much to still be willing to fly CX even if it means no status for them.

Under this scenario, those last minute purchases of any class or any non-restricted fares or pure J/F flyers would be their target for the new elite tiers. And those that mostly travel on less AM accrual lower priced tickets would probably start to see only AM accrual rather than MPO qualification.

At the end of the day, everyone still gets to earn/burn their AM, but only those that contribute certain amount of revenue would be granted status.

This is what I would do if I run the airlines!

KACommuter

= SQ Krisflyer and PPS which is exactly what many Y flyers are unhappy about.

oatsmeal

If you bail, it would be CX's loss as discretionary spending in the range of USD$400k is no small sum. Investment bankers fly on corporate account tickets that are at least 50% off the base fare, but I presume someone like QRC3288 pays published fare.

My questions to QRC3288:
(1) Would you keep flying CX J/F class, just accumulate the miles in another program? If you answer yes, CX gets to keep your premium travel business, while manages to lower the "mileage" liabilities on their books at the same time.
(2) You would likely stop using CX for Y travel, no? Wouldn't that be better for CX because they can just treat all Y passengers as good (or as bad), rather than offering soft-product enhancements for their DMs as it stand now?
Pardon me for the questions directed to you, but I thought your response would be more helpful as you do have discretion over which carrier you choose.