Cathay Boy

this "high spender" is repeatedly saying the same thing (not good enough, I am economically able to go elsewhere easily, I can fly whoever I want for better...) ever since I saw his posts. This is exactly what some of us have been saying before. It doesn't matter what CX does about MPO but "high spenders" will always be economically mobile enough to do what is best for them, and not stick with CX. Like this guy said, how has these changes, aim to appease to the premium flyers, make them more loyal to CX? The answer - it doesn't.

Cathay Boy

Looks like AA is a messed recently. All the recent bad press has made me wonder about flying with AA, and of course the soon to revamp AA FFP doesn't really make me want to jump ship that early.

Perhaps it's time for me to seriously look into other FFP such as Delta (which double-dips into my SPG account) or heaven forbid, China Airlines?

Honkygal

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.


But I wonder why then, they would keep benefits for GRs if pricing is the strategy. I think they did the numbers for the "high spending" Y/PEYs and think (dropping from GO into) SL will satisfy us. I was planning to start flying PEY (low fares) but the points are the same as Y. I thought PEY was quite a profitable cabin for them because, beyond wider seats, they give little extra above Y service but charge relatively a lot more.

77W_12A

I have no doubt that AA will fall in line with BA, QF, QR, and CX. You'll get the points when you fly AA and its JV partners such as BA, JL, IB, QF, AY, etc. If you wanted to bank your CX, QR, or UL flights. Probably a much lower earning rate.

Imagine being forced to fly AA on HKG-DFW. They have the same J, which is fine, but having to compete with every other EXP to apply their SWU isn't fun. I can't imagine being stuck in EY in 3-4-3 on such a long flight.

We MPO members complain about the queue with a bunch of GR members using the priority queue. Imagine that queue on an AA flight. Substitute those GR members with EXP.

CXFlyerBoy

Question though, with the change in the program, is MPC shipping out new cards and membership packages?

d00t

AA could very well not roll over and take the same approach as the others. There is a very real opportunity for AA to totally screw over CX, BA and QF and make slight adjustments to their program so that it will instantly draw across all the top premium flyers into their program without breaking any agreements about poaching flyers.

However if they did roll out similar changes - one could argue there is a degree of collusion.

77W_12A

I think AA has screwed over a lot of their own FFs. Look at AA members based in the US trying to redeem flights to Europe. They dump them on BA, which taxes end up being around USD 1000. With C/J class fares as cheap as they are, may as well just buy a ticket.

Ask people that try to redeem mileage saver flights. Hard to come by.

There is one saving grace to the AA program and we all know what that is.

QRC3288

Ha! Spot on.

NYC212

The chances of scoring a SWU on that flight these days are pretty much nil. Or for that matter, on most TP flights, with the occasional open flight on the PVG and PEK routes. And they all clear in the last minute. Gone are the days of the early confirmation SWU, except on totally useless routes, like short-haul domestic flights.

To be fair, there is actually a few -- I know we are in the business of obsessing over CX award availability to AA members here, but there are other benefits, not least a very accessible, friendly and effective EXP calling center, infinitely better experience than calling the MPC line (especially for anyone south of DM).

QRC3288

Ah, you have missed a key point in CX's strategy - part of the value of being DM (vs GO, SL, GR or AM) is precisely because of the ability to reach a call center agent without having to wait an hour! By cutting lower tier benefits, CX implicitly raises the value of DM. Brilliant.

Being serious, I didn't think of this before but it's yet another point of weakness for MPC/AM vs partner programs. It must be a hair-pulling experience trying to call as a SL or GR with the intention of making an Asia Miles award booking.

QRC3288

I actually think it makes sense.....*if* CX follows through with the GR "reforms", then the #s of GRs are going to drop precipitously. Right now, I bet half the population of HK is a Green member. AFAIK, CX doesn't enforce the 4 annual flight rule and you only pay $50 USD once (or in many cases, people got comped). Those people have been subject to much vitriol in here...personally I'm not convinced they're the ones clogging the lines, but anyway I must concede GR membership in HK has to be extremely widespread b/c CX never downgrades anyone. Going forward, the annual $100 fee in perpetuity won't make sense for a price-conscience leisure traveler flying CX once every year or two. I bet tons of GR members will lapse when this is enforced. Of course....this depends on CX actually enforcing the GR membership rules and downgrading GR memberships if fees/qualifications aren't met. Let's see.

In theory this goes along with the cheapo pricing in Y strategy, because CX can "reward" regular fliers buying cheapo fares who won't otherwise qualify for status. In essence these customers can "buy up" (via purchasing GR) a slightly better traveling experience. So there is some ongoing "loyalty" (instead of pure a la carte, one-off buy-ups that has become widespread...and profitable...in the N. American market). Presuming GR membership is enforced, you can consider GR going forward like a real "membership" fee or something for a year that provides tangible value over the alternative (jack squat in extra benefits, but still can enjoy cheapo fares). This goes along with CX's apparent strategy of clearing out certain Y fliers from their elite programs, while still allowing those fliers a pathway to limited elite benefits by paying for GR. GR is definitely a good tier if the #s drop, since you can board early, get overhead bin space, and might have a speedier check-in counter to use.

Nicc HK

I can only find a way to make the future MPC DM work by flying cheap business on Malaysian and Qatar and others. There is a certain irony in that it will cost a little more to fly Business on them than Premium Economy on CX.

Also there is the option of good priced BA Business fares out of Europe as well.

Again a certain irony in that the best way for me to remain a DM is to reduce my flying on CX.

There is one thing though, under the new scheme the points are slightly less value than current mileage earning for partner business class with D and I fares, so flying HKG-London:

1. CX get 90 Points in Business.
2. Malaysian get 100 Points (25+75)
3. Qatar get 105 Points (45+60)
4. BA going Europe-UK-HKG get 90 Points (15+75)

Definitely CX has devalued partner airline business class earning as well.

From what I can tell it means for current MPC members flying Business class passengers on partner airlines they will be worse off, and who will probably be better off switching to those partner airline programmes.

While previously loyal CX DMs and GOs flying PEY/Y can trade up to partner airlines business class, albeit though paying incrementally more money, with longer time in the air.

QRC3288

My guess is PEY is underperforming CX's yield and mix expectations. The reason I say this is CX has already implemented downsizing PEY on mid and long-haul A330 routes (India and ME elimination, Australia cut backs), and I can't imagine they're doing it unless the yields aren't performing.

The opportunity cost of onboard real estate is presumably the most relevant variable here, which is another way of just asking "is CX yielding up the aircraft optimally?" Back of the envelope, there's an easy comparison: 77D to 77H, which conveniently have identical F and J cabins. Conversion changes from 77D to 77H all came after the last row in J, Row 26.

77D: 238 Y seats, 0 PEY seats
77H: 182 Y seats, 34 PEY seats (-56 Y seats)

Break even
So to "break-even" on this config change, assuming all else equal (ignoring ancillary weight issues like seat & pax weight changes, lavatory changes, etc.), CX needs to get 65% more revenue/seat in PEY (56/34 - 1). While this is the ratio for 77W, I imagine the A330 can't be far off.

This is why I think even N. America might be underperforming CX's yield expectations for PEY, considering some fare specials I've seen - $1500-$1800 all-in round-trip ex-USA to Hong Kong. It seems "normal" prices for E fare are in the $2,000 USD range for JFK-HKG. @ $2,000 for PEY round-trip, this would be equivalent to a break-even yield with a corresponding Y class fare of $1,200, which IMO sounds like a pretty competitive rate. PEY fares in the $1500-$1800 range would correspond in extreme cases to Y fares under $1,000 for yield comparisons. I think those #s are probably not sustainable, and why we're seeing CX tinker with the A330 fleet.

Mind you, the whole purpose of a premium cabin to begin with is to bump up the average yield per square foot on the plane, not achieve the same as Y class. If PEY isn't yielding any better than the regular Y cabin, and CX figures it can still sell oogles of Y tickets, it begs the question why invest in the PEY product in the first place, dedicate resources to it, etc. There is ongoing operating expenses involved with servicing another cabin. At the extreme is if yield is truly identical, then eliminate the product to cut complexity and the related expenses.

Anyway, I say this as food for thought....I don't think PEY will be eliminated, I think it's is a much needed product. But my bet is CX has a few too many of those seats in the fleet, and we'll continue to see some downsizing to the PEY cabin to get yields where they want. We could presumably see a change at some point to the 77Ws again with fewer PEY seats, or we'll see fewer PEY seats/plane on the soon-to-be-delivered A350s.

sxc

Just a sidebar - up until today, I still have not received any email from Cathay regarding these changes.

Daffie

Wow, someone's still a little sour