hkflyer2014

But you realize that means that there will be many more DM's using their coupons to get into F... before burning 85,000 miles was a significant question but if you have a coupon...its easy.

Cathay Boy

Knowing CX, they will go cheap and not allowed you to get all the mid-tier benefits until you "earn" them in renewal. You will probably just be converted to the corresponding tier in the new program and that's that.

QRC3288

I don't think so. I actually think partners will lose out on some inventory while AM F inventory won't necessarily be too impacted. I do suspect op-ups might be slightly affected as well, since they're part of the same last minute CX F scramble with partner awards in my opinion. So I think the losers are partners, and DMs who won't hit the 1800 points because op-ups may be reduced.

Obviously we're going to have to see how it plays out in reality.

Where i completely agree with you is this will have a significant impact on F loads. That I have no doubt (see my math estimates at the bottom). I guess we just differ on who will lose out.

Here are my observations and logic:

1) F redemptions for AM/MPCs are a real pain in the backside to score right now anyway. Availability is tight across the board. Meanwhile, you've probably read some of my rants elsewhere about partner redemptions etc, I'll spare everyone the headache again and avoid retyping an essay....just overall it's not like an F redemption is a walk in the park, even as a DM. Meanwhile partners have distinct advantages at scoring F awards over MPC due to the unreliable MPC waitlist and what effectively is "partner redemption program rules arbitrage" over the inferior and stricter AM/MPC (no ticketing holds, date change fees, and the dreaded "ticketing deadline" with no slack given even if you want to upfare). This "program arbitrage" tilts the advantage for incrementally-released F awards towards partners, particularly at the last minute.

2) Meanwhile, these new DM upgrade coupons *apparently* book into a revenue class! If true, this means you can effectively get redemption availability out of A fare inventory like the good old days 4+ years ago. So this will reduce seat inventory, which ultimately will probably impact last minute partner availability, who already are "favored" to get that inventory. As well as possibly reduce op-ups.

3) Math: I estimate roughly 0.5 F seats (or slightly less) per flight will be occupied by one of these DM upgrade certificates. My math is below, obviously making a lot of assumptions here so feel free to pick apart.

*12-14k CX F sectors per year (~40 sectors per day).
*10k DM members
*30pct of DMs fly enough to get the upgrade certs (3k)
*12k total upgrade certs issued (3k x 4)
*50pct of certs are used from J to F, hence approx 6k F upgrades.
*some small pct of certs will go unused, unless loopholes are left in place that allow resale or transfer (even if against rules, if possible it will happen).

Cathay Boy

Quick math shows now (for North America travels) you need to fly at least 3 round trips (Y, PEY) to get just SL (assuming one city stop-over mostly for people returning home and college students). I wonder how many SL will cease to be loyal to CX and just go with the cheapest airline, or an airline easier to earn equivalent of SL because of this. I personally think CX will be surprise at the drop of people flying with them.

sscywong

But I think:

Short term:
Leisure flyer / Student: Since many of them fly V so CX probably won't care...
Business Y flyer: Schedule comes first so... Sort of forced to fly, no choice

Longer term: Assuming the short term loading drop doesn't affect frequency, people will gradually return due to flight schedule...
and probably after other FFP also revamp... AA in particular for NA routes... HK based flyer may also back to CX as it may not be easy to fulfill the minimum requirement on AA metal...

G-CIVC

Unfortunately, I think the change will be minimal. My college is in ORD area and well, EVERYONE flies CX instead of UA - for catchment area as wide as CAN, WUH, TPE, SIN...basically people think you're joking if you fly UA. For the weekend before school starts again next year CX has Y+ and Y all zeroed out already...And funny enough the mainlanders don't even credit/join a FFP at all. So I guess the effect is minimal...these quite high-yielding bucks will still keep rolling in...

QRC3288

Personally, I don't think it's wise to reduce the "ease" of status acquisition for Y fliers. IMO, CX is blessed geographically (connecting all of Asia to both N. America and Europe, from China's doorstep), and should have a globally competitive mileage program that successfully captures loyal fliers across different price segments, including both premium and non-premium fliers, corporate and self-funded, etc.

That said, this recent change lines up with CX's economy class pricing strategies of the last year and I see what they're doing now.

Their strategy
CX has been releasing dirt cheap, non-mileage accruing (or low mileage accruing) economy class fares for both LH and SH in abundance in the last year. CX also releases some very cheap PEY fares ex-North America, say 1.5-2k USD ex-JFK in E class. Some fares are jaw-dropping cheap, like 1200 HKD specials to SIN round-trip IIRC. I personally fly a lot of CX's super discount economy fares traveling around Asia after re-qualifying for DM. Given that observation plus these recent changes, I think CX is planning to fill up the back of the bus with cheapo fares, and instead of using loyalty to fill up Y and PEY, use the incentive of cheap fares instead.

It seems like they're making the bet to either a.) give up on the loyalty of less price sensitive (aka, higher spending) PEY and Y fliers, or b.) they're assuming those customers will stick with CX regardless, perhaps accruing instead to other mileage programs but still flying CX metal. Say a formerly loyal, former DM, Y-class customer who flies to Asia a lot becomes an AA EXP as a result of this change.

Before, as Y class DM
Lower-than average revenue for DM
Standard DM "costs" (lounge access, extra luggage, guests, etc.)
Must pay Asia Miles for mileage issuance....but Asia Miles is wholly owned by CX.

After, as Y class EXP
Wash: Similar revenue and load factor to CX, due to flying on CX metal like before.
+ve: No DM "costs"
+ve: EXP "revenue", due to AA paying CX for lounge access and whatever else.
-ve: CX pays AA, as AA had to issue AAdvantage miles to the customer.

I think this customer becomes a profit center for CX by switching the costs to revenues....he still flies on CX to/from Asia, but now AA pays CX each time that customer uses the CX lounges! There is a little more cost to CX now that AAdvantage issues the miles instead of Asia Miles, but I doubt that offsets the other factors.

I'm not sure what's right or wrong here, but that's the bargain I think CX is making.

cxfan1960

It is true that the no-AM Y fares has dropped back to the 2006 level, but my family always pay V fare or higher, not just for Club Miles or AM, but because we usually bought tickets in very short notices.

CX may have PEY promotions for JFK, but for us flying SFO-HKG, I never saw fare below USD18xx (there may be promotions for lower fare, but I might have missed them), and the lowest I ever bought was at USD1994, not close to USD 1.5K.

sxc

I also personally feel like I've now seen "the light" in that previously I was compelled to fly CX in order to maintain Gold so that I could continue to get the seat guarantee. With that benefit gone, I'm happier to fly Y / Y+ on non-CX airlines. In the back of the bus - service between CX/QF/BA is pretty much a wash. If it was a calculated move to lose this demographic's loyalty, then I guess they have done their sums.

wandering_fred

The biggest unknown for the CX Y/PEY status people is what will AA do in the 2016 program. PEY (and not just on CX) in particular, is very attractive when priced reasonably and credited to AA.

Alternatively, can I afford one long haul biz class ticket each year to maintain CX status?

Happy wandering

Fred

Jane's Addiction

CX should be careful if they are designing a loyalty program focused on premium travel, because they are losing a competitive product offering vs peers in the premium classes:

• Their F suite is great, but food and wine subpar compared to peers.
• J cabins are no longer anything special on longhaul, and are below average on a regional product.
• The new program will make it easier for me to retain DM than old system, the GO companion card has v little value for my wife.
• They don't offer that much in hard or soft product (a chance to get in F via opup, F class check in) for someone who always flies J to keep me from straying to others

I might highly value the upgrade vouchers if it means we can reliably upgrade to F on US and Euro flights. But I can probably hit that level with only giving CX 60% of my flightspend. Given such leeway (and little reason to do more than the minimum), I:

• no longer go out of my way to fly CX (e.g. will pay more for KL direct for SGN to ICN rather than flying CX via HKG).
  
• on ex HK routes I increasingly find myself choosing competitors for their superior offering in J (though have to admit I miss Pier F access . Don't miss the Wing at all..)

JeCCo

+1

This echoes my thought process also. As a predominantly Y longhaul flyer, I will renew gold for the last time just before the new program kicks in and shift my travels to other airlines and / or SNQ fares where they are available on CX.

Nicc HK

+1

I will retain DM just after the programme changes. Having done the numbers for my travel patterns I am probably better off with AA, assuming they do not devalue too much, but I would probably get top tier on UA/DL even with their current programmes, so doubt if AA would be worse in the future. Alternatively there is Star Alliance.

CX has obviously made a decision to move PEY/Y loyalists down a tier as part of their 'enhancements' on the basis that enough will accept the changes, and those that don't will switch to other OneWorld Partners and get charged lounge fees, or simply replaced by the growing number of mainland travellers.

I believe they are probably close to being right. Many of the hard core PEY/Y loyalists are ex-pats, many are small business owners, many send their staff and families flying on CX.

These will be V class buyers and PEY buyers, so there are alternatives.

For me I do not get op-up often, nor is redemption that important.

So for me:

1. Switch to AA keep Diamond while earning to AA EXP Platinum.
2. Fly AA/AA Code Share to North America not CX.
3. Fly BA not CX to UK/Europe on V.
4. Use AA codeshares on CX wherever possible regionally.
5. My contractors will move from CX as preference to best rates, as long as it is at least a decent airline.

I personally think the hardest hit are going to be Gold Holders and regional travellers, DMs will have choices.

After 17 years of Gold and Diamond, rather sad, not likely now to hit 100 flights on a CX 747, but business is business for CX, so I need to change too.

Nicc HK

jackrussellterrier

been flying a lot of paid J with a certain Singapore girl recently ( she lowered her prices somewhat ex SIN if you booked 30/90 in advance) and a lot more in the pipeline over the next few months. Enough to secure PPS.
Even with no status, I've been very impressed with the way I've been treated, the excellent quality of the food, on-time performance.comfy seat - both regional and long haul, name recognition...
This week flying to HND from SIN (very frustrated with the unreliable CX542) they forgot my book the cook meal or rather gave it to someone else as the Chief Stewardess freely and transparently admitted. Essentially she said we stuffed it up. Offered me 3 choices from F as compensation AND a voucher worth 100$ to say sorry. Thats the way to keep me thinking I want to fly them more!

Daffie

You could. But how many DMs will fly out of their way on these routes just to use it?