NYC212

This is complete nonsense, and makes you wonder if that source, who is clearly close to the process, reflects his/her own shoddy thinking or if this is the airline's official "analysis", which would be shocking given that CX typically runs a very rational operation.

If CX was capable of filling aircraft with paid passengers, it would simply limit awards and/or reduce its capacity, which would hurt both its own and partner airline loyal customers. But this flies in the fact of the whole loyalty thing. In fact what CX does, very smartly in my opinion (and unlike some other airlines), is release award seats in the last minute, presumably because they are not going to be sold. Advanced awards are hard to come by, and waitlisting is only possible for MPC members, which gives them a clear advantage over other airline program members. Last-minute award inventory is of limited use for most passengers, in particular on long-haul flights which not many take on a whim, and where the mileage discrepancy between AA and CX is most pronounced.

I suspect what is going on here is that a major devaluation is coming, and the airline concluded that in order not to piss off many loyal customers they will come up with a bogyman - other airline's loyal customers, specifically AA - and sell the restriction of their award availability as a new benefit to MPC members. MPC members who think they will gain anything from it are fooled.

QRC3288

I hear what you're saying, and I can only offer my experience. But as a pretty loyal CX flyer for 8 years, I feel like something needs to change - particularly in F class. I have flown between 150k and 300k miles with CX each year, most in long-haul in CX J and F, and spent corresponding amounts. I am based in HK. Working in financial services. I suspect I am their typical loyal customer.

I am somewhat optimistic for these changes if partner F awards are restricted. Because the situation today is bizarre. F class is is filled with AA redeemers or holidaymakers who got the 2 early award tickets, and possibly 3. Then, maybe there are a few cash tickets, and an op-up. On at least 2 occasions (including last week), I have gotten an op-up to F on a flight I tried for months to waitlist for using Asia Miles. That strikes me as bizarre. I have spent quite a pretty penny and very loyally with CX, through good parts of the cycle (2007, recent years) and bad (2008-2010), yet it is impossible for me to get an F upgrade or award with Asia Miles in any reasonable period of time (3 months out? 1 month out?)...meanwhile, on the same flight, it's a virtual lock that award seats have already been scored by partners, burning a cheaper currency. I don't think it makes solid business sense to in essence be rewarding travelers who might fly on CX a few times a year via rewards, at the expense of guys putting dollars in CX day in and day out. I simply do not have the travel flexibility that allows me to book way in advance. And I hear you about our ability to waitlist, but I don't want to play roulette and cross my fingers I'll clear a few days in advance. I often take myself off the waiting list when CX won't clear me immediately.

I have also put my money where my mouth is. I am flying regularly on competitors to CX this year. I have booked premium tickets on BR QR and EK, and am booking F on SQ on an identical route CX flies (SFO). Why not. I'm getting annoyed. It's not just this issue - this is just one of many - but the partner award situation in F is definitely grating. I have already followed the mantra "if you can't beat 'em, join 'em." I signed up for a credit card and am earning AA miles now too. But I fly heaps on CX, earn most of my miles in Asia Miles, and this strikes me as a strange situation where I am incentivized to ditch MPC/AM to fly on CX's own metal.

The main changes that have exacerbated the issue are the 747 (9 F seats) became 77W (6 F seats), CX has greatly restricted overall awards (which inevitably favors guys booking waaaaay in advance, aka holidaymakers), and CX no longer allows DM to convert cash ticket inventory into Asia Miles award inventory.

There are other ways for CX to deal with this. For example, I don't understand why CX doesn't just charge AA more for partner redemptions in F (instead of 67.5k miles). CX seems to be tacitly permitting the obvious miles arbitrage. I don't have a good answer for why they don't. But I do know that right now, the situation for F awards is bizarre. I make a point of chatting with other passengers in the F cabin (I usually fly North America routes), and there are a lot of AA redeemers in there. There have been a number of flights where I've just taken myself off the waitlist because I don't want to play roulette. I have one peer who is also a CX DM, and does the same thing. It just feels petty. (and the fact that at the airport "Instant Upgrades" with Asia Miles, CX's system dictates to the onboard staff we are op-ups, and hence you don't get a full meal load and get last choice, which is also kinda annoying). There's a lot of silly things CX is doing that are unncessary.

However, I don't think CX is as beholden to AA point people as many in the US would like to believe. The arbitrage situation is a little out of hand and I think it would go a long way for CX to show loyal MPC/AM members that they will charge AA more miles for an F award (ending the arbitrage), significantly restricting partner F redemptions, or giving MPC some way to get F redemptions in a normal period of time (1-6 months in advance) that is more akin to the scheduling habits of its business traveler constituency.

Those are my 2 cents.

ijgordon

CX has no control over what AA's redemption chart looks like. Nor should they. Presumably the OneWorld alliance sets the intra-carrier reimbursements for award ticket, and I have to assume that the $ CX gets from AA when an AAdvantage customer books an award seat is the same as what AA would get from an AsiaMiles customer booking on AA, on the "same" route. AA has decided that it can afford to pay CX whatever that $ is in exchange for a 67.5k mile redemption.

I have no idea how much influence CX has over the reimbursement rates, but obviously it works both ways.

Where they do have more control is in the release of award inventory to partners.

ijgordon

That's not at play here -- that discussion is in the context of UA's Starnet blocking, which was an issue when, say, LH made reward seats available for partners, but UA blocked its own elites from booking them. It does NOT talk to a carrier having to make the same award inventory available for its own members and partners' members. That's clearly never been the case.

We still see issues where CX seats visible on the JL or BA websites aren't visible to AA agents, but I do think that's a timing/syncing issue, and/or an agent incompetence issue (and it could be a married segment issue as well if one is only looking up individual segments on BA/JL).

bagold

I completely agree with QRC3288 here! I pay for F for all long haul and J for short haul or basically I pay for highest class available. When on holidays I use the miles I earned the miles for my family (I still pay for my own holiday tickets). Naturally, I would like my wife to fly with me in F. As QRC3288 say a lot has already been taken up by AA redemption and we waitlist for ages. I feel I'm one of the more loyal CX passengers but don't always feel treated that way.

Whenever possible I fly SQ as I prefer the way SQ keeps their F cabins to those that actually paid for them or used more miles to redeem in. SQ basically shuts out most of their F seats from partner redemption. And when needed SQ has actually released Suites award tickets for my family when they travel with me.

I'm not complaining about my fellow AA passengers... they used the proper system to book an award ticket in CX F. But I do find fault with CX for not (at least until now) doing something about the problem.

Rivarix

Can you elaborate your chain of thoughts? I feel like I'm missing something as the statement above doesn't make business sense.

Cathay Boy

And CX lets AA people pretty much get everything they want, and then CX turns around and cut its own loyal-based FFP members benefits, claiming it's hurting their bottom line....

Rivarix

And you know this ... how? You work for CX?

Agreed. Advanced awards are hard to come by and last-minute awards inventory is of limited use for most passengers, in particular on long-haul flights which not many take on a whim. And yet here we are where AA folks take most advance F redemptions and we MPC members have to wait-list and hope there are those last-minute awards inventory. The current arrangement is untenable for MPC members for the very reasons you mentioned above.

After the Y stealth devaluation last year, many MPC members already suspect a J/F devaluation is coming (I certainly did). The only question is what, if any, do we MPC members get in return.

Lets see. My choices are:

Given these choices, I would go with #2. Afterall, what's good about the current (bad) F redemption/upgrade chart if all the advance award seats are already taken by AA folks who are able to book them as soon as they are released?

As you rightly pointed out, last-minute award inventory is of limited use for most passengers, in particular on long-haul flights which not many take on a whim. Yet under the current arrangement, that's exactly where most MPC members find themselves in - on a wait-list hoping to get those last-minute award inventory. I use my miles mostly for J to F upgrade so being on a wait-list for last-minute award inventory is still better than nothing but for straight redemption, it is not acceptable because as you mentioned, one doesn't take long-haul flights on a whim.

This is one of those instances where 'honey, it's not you ... it's me' truly applicable. This issue isn't with AA. This issue is with CX. If I didn't know any better, I would say that CX is treating us MPC members as an afterthought ...

Btw, anyone know/have an idea about the devaluation rate? Hopefully not as bad as the Tier 1 and 2 rates? I mean at Tier 2 rates, might as well just give all the F seats to AA ...

ijgordon

I guess I'm a bit . AsiaMiles members get access to the seats a month earlier than AAdvantage members, and often/usually have access to additional seats. So I'm not sure what the issue really is.

Rivarix

The issue is that unlike AA members, we don't plan our vacation 365+ days in advance. We don't book our flights on the same day the seats are released. Hence why LH arrangement with UA is something that I think we all can live with (personally I think SQ or LX arrangement is better but I can see the merit of releasing last-minute award space to other FFP members once your own FFP members don't want them).

NYC212

I truly don't understand this point. Why does everybody here think that AA members are somehow able to snag all the award seats before MPC members get them? since when are HK people more hapless than Americans when it gets to getting a good deal? I find this argument bizarre.

Full disclosure: I wrote my original post this morning after landing at LAX, where I flew CX F on AA miles, after booking the night before (had a problem with my original booking on AA via DFW). I won't deny that I was pleased, but the cabin still had one seat left, so I'm pretty sure any MPC who wanted a seat or was waitlisted could get one, at least in this particular case. I am also a MPC member and often redeem Asia Miles, which for certain itineraries and in certain situations are the better choice. So not a black and white thing.

JWo

To sum up the argument:
1. AA members may redeem CX premium cabin flights for (much) less than MPC members.
2. AA members have better earn opportunities through (i) significant CC sign up bonuses (i.e. churning the 100K Citi AA Exec Card), (ii) MS and (iii) BIS credits for most (all?) AA fare classes; all of which are unavailable to MPC/AM members.
3. AA members tend to redeem CX premium cabins 330 days in advance. [Not sure if this is empirically true, but travel bloggers have extensively recommended this approach to AA members.]

In sum: increased earn rates/supply of AA miles has led to a decrease in the number of CX J/F seats for MPC members (especially in North American routes).

MPC members believe that:
A. A greater number of CX J/F awards should be available to MPC/AM members in light of their loyalty to the airline.
B. CX should limit redemptions by AA and other OW members, to increase supply of J/F rewards for MPC/AM members.

The solution seems to be, as others here have discussed, (i) limiting redemptions by partners to “last minute” rewards only (and eliminating all upfront availability to partners) or (ii) limiting upfront availability of partner redemptions to 1 seat in J/F, for mid-week flights only.

I’m not sure where increasing the AM/MPC redemption rates fit into this solution. If CX chooses to limit partner redemptions to last minute redemptions, it is still likely that demand from partner members will exceed this “last minute” supply, and as such, CX will retain the same incremental revenue associated with selling redemption seats to partners. Further, it does not follow that supply issues for what is essentially a handful of North American flights should trigger a system wide devaluation for all CX flights. Seems like CX is just looking for an excuse to devalue.

Rivarix

It doesn't. Whether or not the rates goes up is independent of limiting access to AA but as you suggested CX is planning to bundle the two together and somehow trying the justify the increase by claiming there will be more seats for MPC members which it is going to achieve, if we are to believe the article, by limiting access to AA.

The question is whether it is a fair trade. The answer ... only time will tell. I will let you know what I think after it is implemented (assuming i'm still with MPC )

I think you sum up the issue pretty neatly. Others may disagree but in my opinion this is part of the broader problem with this alliance. As with any partnership in any line of business, frictions are bound to appear when, whether it is real or perception, there is unequal 'contribution' by and 'benefit' for the partners involved (in this case there are two sides of each 'partner' - contribution by the airline and benefit for its members). Hence why you don't see this as problem between CX, JL, QF and BA because again, whether real or just perception, all four airlines seem to make roughly equal contribution (in terms of lounges, premium products, etc) and all four FFP members seem to get roughly equal benefit (all four miserable redemption rates. LOL. Not sure about JL but definitely CX and BA).

With that in mind, and the fact that each FFP have its own rules about earning and redemption, it makes sense to put up barriers to 'equalize' the playing field so to speak. I think the problem here is similar to what SQ and LH were facing with UA and hence why I think CX is looking, if we are to believe the article, for similar solution.

Rivarix

AA members are entitled to their opinion but a reasonable person would agree that when it comes to access to premium award seats, independent of the miles required, the current arrangement SQ and LH have with their members is superior to what CX has with MPC members.

brunos

This thread is fun. Posters exhibit their personal bias in a strong manner. If they are MPC, they want more benefits and discrimination against members of other OW programs. if they are not, they do not care about MPC benefits but wish no discrimination regarding lounges benefits and award availability. That thread could go on and on and repeat the same arguments.

For a moment, I would like to take the viewpoint of the airline. Hong Kong is small relative to its airline. Even if you include the numerous MPC members in China and in the region, the number of members must be quite small relative to BA or AA members. CX desperately needs paid pax from OW on its longhaul network. For example, CX flies 5 daily to LHR (compared to 2 BA daily) and I would bet that there are more paid BA/AA members in CX premium cabins that MPCs.
The objective of CX is to increase the number of paid pax, not the number of MPC members. A dollar from an AA or BA member is as good as a dollar from a MPC member.

CX cannot try to woo many non-MPC OW members and, at the same time, provide them with limited benefits compared to MPC members.. That would be suicidal for an airline based in tiny HK.

But there are many ways an airline can "favor" its members. For example, BA gives huge bonuses to its member if they fly on BA rather than other OW. BA has introduced an award pricing which basically makes it much more expensive to get an award on other OW airlines, like CX (in the tune of 50%).

It is clear that a lot of posters wish that AA award levels on CX be increased. But that is AA decision (just like BA increased it dramatically for CX premium cabins). The only thing that CX can do is raise the price they charge AA for a given award (probably after lengthy OW negotiations). That might induce AA to raise the number of AA miles required for that award.
But CX has limited maneuver room as it is small compared to AA mammoth. Anything that will make it less attractive for paid pax will impact its bottom line.

Another question I have is how CX views its FFP. Some airlines view it as a profit center. The new boss comes from an airline with a very profitable FFP. I remember that DC of BMI was also very profitable. Will the new boss move to make MPC very profitable too? My guess is that BA/AA awards are profitable to both CX and MPC. They fill the airplanes at a reasonable price level (good for CX) and there contribute to the bottom line of MPC. There is already a discrimination against non-MPC members for awards as premium awards, when released, are first open to MPC members (say for a couple of weeks) and they released to other OW if not taken. Going much beyond that could run against the profit motive outlined above by alienating the much-needed non-MPC members. Like many, I fly a lot in J/F on CX eventhough not MPC, so I care how CX treats if I cannot redeem on CX, then it is unfair and I have to make choices. The basic question is how CX values the OW alliance. My guess is that it is essential to CX and that would dictate many of their choices.