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Class Upgrade Bidding Initiative - your feedback sought

Class Upgrade Bidding Initiative - your feedback sought

Old May 23, 14, 9:17 am
  #1  
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Class Upgrade Bidding Initiative - your feedback sought

I work for ICLP, a loyalty marketing agency retained by Cathay Pacific. We are working with them on the development of a new passenger initiative that CX are considering piloting in the coming months.

For some time now passengers on certain routes have been offered alternative ways to upgrade from Economy or Premium Economy. The process to date has been a highly manual and informal one; local Reservations offices would call eligible passengers a few days before departure and offer them the chance to upgrade from their class of travel for a flat rate cash fee.

In common with what some other airlines are already doing, CX are now looking at introducing an online based platform which will give members and customers the chance to buy single sector, one cabin upgrades to either Premium Economy and Business Class cabins. Customers would be invited to place an offer for their booked flights via a website prior to their departure date. If their offer was successful they would be advised around 4 days prior to departure and the offer payment collected.

I should stress that this initiative is not confirmed, but it is at a point where feedback from frequent travellers would be really useful. To that end, all comments are welcome and valued, but some areas of specific interest we have would include:
  • Has anyone had experience of this on other carriers?
  • Would such a proposition be of interest?
  • Should Marco Polo Club or Asia Miles members be differentiated from other passengers in the bidding process?
  • Does the proposed timing for the bidding work?

Thanks in advance for your help and support.
AgencyGuy is offline  
Old May 23, 14, 10:27 am
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Personally, I don't think this is a good idea to implement. By implementing such system, pax will be more discouraged to buy high cabin up front as they will expect to have a system where they can pay less to fly in premium cabin. This system will also be potentially complicated to implement, and doing so will make CX appear 'cheap' and again discourage payed pax from paying upfront for their ticket
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Old May 23, 14, 10:35 am
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I think the existing system should be kept. Bidding for a paid upgrade will devalue the CX product.

However, if this system is implemented, Marco Polo Club members and Asia Miles members should be given priority according to their Club status. Alternatively, it should only be offered to Marco Polo Club members and Asia Miles members, and not to non-member passengers.

Please see this thread on this exact topic:

http://www.flyertalk.com/forum/catha...t-upgrade.html
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Old May 23, 14, 10:36 am
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AgencyGuy - welcome to the board. Genuinely hope for some positive takeaways for CX, ICLP and the travellers via your discussions here.

I think that this has come up before in a post about someone in HKG being contacted for an upgrade for a flight to Australia.

On the points that you raise:
- No personal experience, but know of people, who have used optiontown.com (largely in the Indian context)

- Yes.

- As a CX status holder - Yes!
At the least, it should not be dilutive of CX status benefits (a status holder, not getting the option to, and seeing a non-status traveller getting the upgrade). Not a direct corollory, but believe that a fair few US programs' frequent fliers are fairly annoyed at missing their upgrades to cheap kiosk-offered upgrades. Yes the programs are different, with upgrades being a published benefit for elites there, but CX wouldn't want to run this program in a manner that makes the frequent fliers feel negatively about it (cant figure out how they could - but am sure that its possible)

- Again, with no other hard data to go by, sounds reasonable! Though I would want to watch out for a high status passenger, booking in a high fare class at the last minute, losing out to an infrequent traveller booked in the cheapest fareclass (but long in advance)

Good luck!
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Old May 23, 14, 10:37 am
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Originally Posted by jona970318 View Post
will make CX appear 'cheap'
Absolutely agree - CX would / should definitely want & try to avoid gaining the image of one thatwould do anything for a few extra pennies.
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Old May 23, 14, 10:42 am
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I think bidding from Economy to PEY is a good idea, but for PEY/Y to J, a big no no for me. Probably just Dragonair flights for Y to J flights.
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Old May 23, 14, 10:52 am
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Originally Posted by kokku View Post
I think bidding from Economy to PEY is a good idea, but for PEY/Y to J, a big no no for me. Probably just Dragonair flights for Y to J flights.
I agree with the above. And also that this 'bidding' (and potentially getting an upgrade for a very low price) should only be open to MPC members, and probably to those of a certain tier and above only - if only to keep the MPC a somewhat attractive programme.

Personally, one of the big draws of a premium class, i.e. J, for myself is that there tends to be fewer passengers, and hence the cabin feels a more tranquil space. This is especially true of daytime flights, regardless of the configuration of the aircraft (i.e. regional - more open plan - or the long-haul - more private). I will pay for a J seat when I want or need that 'tranquility', otherwise I don't actually mind flying in Y/PEY. As such, I think that upgrading too many people (by bidding or by 'free' upgrades) isn't too great of an idea in general.
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Old May 23, 14, 11:06 am
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CX will do it if it makes money. I doubt that our opinions are really important; they just want to say that they have done due diligence. The problem is that the results of surveys are not always related to what people do (passengers might say it's a bad idea but still do it once it's available, or say that having the option is a good idea but not actually take advantage of it). The devil is in the details and surveys don't capture actual market conditions relevant to an untested program.

CX has been good about releasing awards in the last few days if seats are empty, unlike airlines that would rather fly with empty seats than issue award tickets. However, upgrade bidding may reduce last-minute awards in higher classes while increasing the availability of last-minute Y awards.
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Old May 23, 14, 12:09 pm
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Agree with comments that a bidding system will devalue CX product and will alienate customers.

Bad idea
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Old May 23, 14, 12:15 pm
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If bidding on points, sure why not. This is flyertalk. But on money- no way. Passengers should fly as they book
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Old May 23, 14, 12:40 pm
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As someone who regularly purchases CX J/Y+ tickets, I agree with comments that a bidding system will devalue CX and will alienate premium customers.

Last edited by cks30; May 23, 14 at 3:21 pm
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Old May 23, 14, 3:08 pm
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CX, as a profit seeking company, sees empty seats as lost revenue. Will bidding devalue J? I really don't think CX cares, they want to max revenue, not to make F/J class pax feel they are "exclusive", I think we can safely assumed that they are not SQ by now.

Also, I don't think paid-J flyers will risk flying in Y+ and go the bidding route and potentially risk not getting a J seat and have to settled for Y+; when they can comfortably guaranteed a J seat by paying for it up front. The perspective is that this is "not fair", but this has been the rule of flying forever. Airlines adjusts their prices based on demand, and if there are plenty of seats left prior to departure date they will lower these seats prices, I don't see the airlines doing anything different then what they have been doing all along, they simply made it simpler to grab empty seats in the last minute. In any given class you will have people paying from the range of 100% full fare to as low as 50% of full fare. This has not "cheapen" the classes flown before. So why does making it easier for people to access price differentiation all of a sudden "cheapen" the airlines when they have been doing it forever?

As to answer the OP:

Yes, I believe priority should be given to status ladder that CX has: DM - GO - SL - GR - AM

There should also be a "Cash and miles" option, similar to what SPG has for their program. A pax can pay a mixture of cash and miles. For example: an option of either paying extra $1500 USD for one sector upgrade to J, or a mixture of $500 USD plus 30,000 miles for one sector upgrade to J. Just an idea.
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Old May 23, 14, 8:02 pm
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Interesting concept - but it depends a great deal on how it is implemented.

If used to reduce the number of op-ups, it obviously generates more $$ for CX. OTOH MPC DMs and GOs might consider this less favorably, since they would be the likely persons remaining in their paid for cabins in some cases.

1. Wait listed upgrades - to be paid for with miles - must be TRANSPARENTLY processed first.
2. The option must be offered to CX elites and then OW elites and then non status passengers in sequence. Ideally stating how long (12 hours?) before the next "group" has access to the bidding.
3. The program must clearly state whether Club/Asia Miles (or partner miles) will be earned for the original or upgraded cabin.
4. Airport upgrades/bidding, if offered, should be more restricted/expensive than if completed on-line/in advance. Perhaps reduced mileage upgrade values (at check-in) with a nominal processing fee would be appropriate, if otherwise op-ups were going to be required.

If CX's PEY fares ex-Australia were anywhere close to the ex-USA fares, they would likely have to expand the cabin. But most Australians would not be aware of the fare differences. And CX would likely have to reduce the ex-Australia Y cabin fares as well. So, whatever the market will support.

Happy wandering

Fred
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Old May 23, 14, 8:06 pm
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Don't go near this my friends. Threaten to revolt and give every cent of your flying activity to competing LCC's.

I've tried the bidding system with Virgin Australia. Some detail and experiences follow :
Bidding use to only be available to internet bookings - this recently changed to include all bookings.
Only the top bucket of each fare class is invited to bid for the next level.
Bidding is only for a cash upgrade.

I attempted a upgrade twice (on a 2 class flight) and did the math - what I'd paid for my Y seat, subtracted from the bottom J bucket, and bid the $ difference (minus $20, looking for a bargain, as you do). The bid failed.
Next trip, I offered exactly the difference between what I had paid for Y and the bottom J bucket. The bid failed.

On both these flights, J flew with 2 people in it.

I surmise that, unless Y becomes oversold, you low J bid will fail.
This means that their no such thing as a "cheapie upgrade".
If you were to bid the $$ to take your bid up to the value of the top J bucket you would probably be successful, but what's the point of doing this.
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Old May 23, 14, 8:34 pm
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Y to PEY YES.

PEY to J to F NO.

It will devalue the product and led to a assortment of scummy ways to fly J cheaply and make the product into something United/Air Canada esq.
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