Rumor: MPC will go way of PPS
Jan 23, 2015, 5:53 pm
#346
Join Date: Dec 2008
Location: Hong Kong
Programs: CX DM
Posts: 1,140
Instead of frequency cuts you can change configuration to reduce capacity i.e. change to 100% J/F. This is what SQ did on their SIN/LAX and SIN/EWR non-stops. So loyal SQ passengers in Y faced frequency to both destinations dropping from 2x a day to 1x a day. And what a surprise - SQ couldn't fill those A340's on J alone. then they cut frequency from daily to 5x a week and that was the death knell for that product.
Last edited by KACommuter; Jan 23, 2015 at 6:06 pm
Jan 23, 2015, 6:10 pm
#347
Join Date: Dec 2008
Location: Hong Kong
Programs: CX DM
Posts: 1,140
Thanks to everyone for all their comments and feedback on this, it’s a great thread.
I’ve been fairly quiet up to this point, but would like to jump in with some opinions of my own. I’d like to strongly stress these are my own views as both a loyalty industry professional and as a frequent traveller. These are not from CX or the Marco Polo Club and not any sort of official line from them. Nor is it any sort of defense, purely my views.
In closing, and perhaps this is for the benefit of the media (so they can report this a little more accurately), my understanding is that nothing has been decided at CX and this evaluation is an ongoing process which is being done very, very carefully for all the obvious reasons. And you can be sure that every post on this important thread is being followed with interest at Cathay City.
Look forward to continuing to read this thread.
I’ve been fairly quiet up to this point, but would like to jump in with some opinions of my own. I’d like to strongly stress these are my own views as both a loyalty industry professional and as a frequent traveller. These are not from CX or the Marco Polo Club and not any sort of official line from them. Nor is it any sort of defense, purely my views.
- Revenue recognition is the way to go. Almost every other industry (hotels, retailers, banks) rewards and recognizes spend / revenue, so why should an airline be different. We all know that miles are a poor measure of revenue and as we have seen in the airline industry, that is changing. I would expect most of us work in business, and in a business (which CX is) we are all trying to encourage revenue.
- Whilst a very good programme, I disagree with the PPS model of not providing any recognition of Economy Class travel. As someone that travels predominant in Economy class, I believe that it should be recognized. But let’s get real, a 25% mileage/sector bonus in Business Class over Economy comes nowhere close to recognizing the value of the business traveller vs. the economy traveller. This is an industry legacy from way back and the recognition of class of travel needs to align to revenue delivery for the entire airline industry. (Incidentally over the same period an airline industry that has changed beyond recognition)
- In the same vein, if a member is buying their tickets ex-TPE at perhaps half the cost of the same ticket ex-HKG, it seems odd that the TPE ticket holder can actually get more mileage credits, and thus more status credits, than the HKG ticket holder.
- In any industry, a loyalty programme needs to act to increase loyalty (mostly yield and share). From personal experience, I think the club does a good job at that, but if someone is going to buy the lowest market fare, or ticket ex-TPE, both on a superior product, the loyalty programme should be looking to act to change that behaviour, for example by trading up fare types. Otherwise, it does not play a relevant role in the transaction. If the programme has no effect why is it being offered? After all, its relatively easy for any airline to sell market fares without the need for any loyalty
- If you look at a tier like Gold, it’s a very, very broad tier in terms of member revenue delivery, so you have a very broad group of members enjoying the same set of benefits, without any differentiation. That does not feel right to me.
- To get anywhere in the club in Economy class you need to have a lot of frequency. Debatably, there is a difference between recognizing value / revenue delivery vs. rewarding high frequency. Anyone who lives in Hong Kong will recognize this anomaly whenever they go into any branch of HSBC Premier (typically very crowded). And perhaps programmes like Asia Miles are better vehicles for rewarding that frequency, after all with your miles you can still access things like lounges, upgrades etc.
In closing, and perhaps this is for the benefit of the media (so they can report this a little more accurately), my understanding is that nothing has been decided at CX and this evaluation is an ongoing process which is being done very, very carefully for all the obvious reasons. And you can be sure that every post on this important thread is being followed with interest at Cathay City.
Look forward to continuing to read this thread.
Jan 23, 2015, 6:17 pm
#348
Join Date: May 2009
Posts: 6,978
All of you will be more likely to adjust ticket prices and load factors.
..........Ticket $.....Seats......Total Rev.......Rev%
Y.......$1,639.68.....182.......$298,421.76.....34 .3%
PE......$2,749.68......34........$93,489.12.....10 .7%
J........$6,909.00.......53.......$366,177.00..... 42.0%
F......$18,849.00........6.......$113,094.00...... 13.0%
.......................................$871,181.88
(pardon the look... there does not seem to be an easy table tool in the editor.)
Jan 23, 2015, 6:32 pm
#349
Join Date: Dec 2008
Location: Hong Kong
Programs: CX DM
Posts: 1,140
I'm not going to repeat what KA said about P&L, but just wanted to say we all know CX never sold out F/J pure revenue. If anything this forum keep reminding us F cabin is mainly an AA redemption cabin, and some of the J cabin too, and they are rarely full of revenue pax unlike Y
Strangely enough in spite of my moniker my annual DM renewals have always been achieved through long haul J as I do ~10 a year so I guess I should be one of those screaming for the PPS model...
Jan 23, 2015, 8:34 pm
#350
Join Date: Oct 2014
Posts: 174
We must not forget what is FREQUENT flyer program and if such program targeted at LOYAL customers. Why reinvent the wheel where we already have a set of good working program which has been proven for years. If one intention is to have a higher than Diamond tier, then put Diamond plus in the book and let them have the highest priority in all aspects.
To change or revise one already working program, to me, in my opinion, is the respective team KPI to prove to the management they have something new.
BUT, if they change the name of the program from FREQUENT flyer program to PREMIUM flyer program then i wouldnt complaint.
To change or revise one already working program, to me, in my opinion, is the respective team KPI to prove to the management they have something new.
BUT, if they change the name of the program from FREQUENT flyer program to PREMIUM flyer program then i wouldnt complaint.
Jan 24, 2015, 2:29 am
#351
Join Date: Nov 2014
Location: SIN and Medway, UK (so... LCY/LGW/BRU)
Programs: A3 *G, BA OWS, IHG Diamond Amb, Bonvoy Plat
Posts: 749
We must not forget what is FREQUENT flyer program and if such program targeted at LOYAL customers. Why reinvent the wheel where we already have a set of good working program which has been proven for years. If one intention is to have a higher than Diamond tier, then put Diamond plus in the book and let them have the highest priority in all aspects.
To change or revise one already working program, to me, in my opinion, is the respective team KPI to prove to the management they have something new.
BUT, if they change the name of the program from FREQUENT flyer program to PREMIUM flyer program then i wouldnt complaint.
To change or revise one already working program, to me, in my opinion, is the respective team KPI to prove to the management they have something new.
BUT, if they change the name of the program from FREQUENT flyer program to PREMIUM flyer program then i wouldnt complaint.
As usual, no one really gives a flying flute if any of us are outraged at CX, unless our spend there is high. And that's the point of "reinventing the wheel" so to speak - to appease those of the higher echelons on the overcrowding of lounges and priority queues, etc etc.
Jan 24, 2015, 2:38 am
#352
Join Date: Oct 2014
Posts: 174
[QUOTE=MeltingAlf;24224559]By that proposition, the cabin crew should be getting the most benefits since they fly the most, ja?
Most ppl will understand it as Paid Customer at certain fair class that counts perhaps?
Most ppl will understand it as Paid Customer at certain fair class that counts perhaps?
Jan 24, 2015, 2:57 am
#353
Join Date: Oct 2012
Programs: CX - DM; Hilton - Diamond, Marriott - Titanium
Posts: 542
As a very loyal DM for the past 9 years, I just want to chip in my 2 cents having read and digest this thread (which is amazing btw!).
As a business owner based in HK, I have a choice to pick who I fly and also for my staff travel. And admittedly, when I had the luncheon/dinner with senior management last year, I was one of the members who raised the question on how CX needs to address those who pay for premium cabin vs otherwise but enjoying the same benefit. Don't get me wrong, I have been in Y and PEY...and by no means I am discriminating my fellow DMs (as I was and will be one of them).
In a way I am glad CX finally listens to feedback from pax but at the same time I think CX really needs to carefully evaluate their options. FYI I primarily fly J and F both long and shorthaul, occasionally PEY for shorthaul. I am no where the top of the DM but avg spend for my own travel would be 100-120k USD a year roughly. As said in another thread, the consistent downgrade on service (especially the woeful and truly embarrassing F&B in J and F) and the fact that other carriers are catching up quick in both soft and hard prodcuts, I am not too sure if I would actually spend all my travels with CX ever again. I think I will still make it to their whatever 'Titanium' elite status they call but with the apparent and consistent downgrade that I first-hand experienced in F & J....it really makes me think twice on how I spend my money.
Put it simply, going forward (and with the potential change of MPO) I will evaluate how I spend my travel expenses. As someone mentioned earlier, if I fly to LHR...BA charges 38k and CX charges me 48k...why would anyone pays CX for the same club miles and sectors. 10k is hard earned money and that's basically the cost of 2 night stay at Four Seasons Park Lane. The only reason I would justify to fly CX for that extra 10k (if ever) is that they provide a truly far superior experience than BA in all aspect. Frankly, CX is somewhat better than BA for sure but only marginally and for 10k extra I'd def take BA instead!
As a business owner based in HK, I have a choice to pick who I fly and also for my staff travel. And admittedly, when I had the luncheon/dinner with senior management last year, I was one of the members who raised the question on how CX needs to address those who pay for premium cabin vs otherwise but enjoying the same benefit. Don't get me wrong, I have been in Y and PEY...and by no means I am discriminating my fellow DMs (as I was and will be one of them).
In a way I am glad CX finally listens to feedback from pax but at the same time I think CX really needs to carefully evaluate their options. FYI I primarily fly J and F both long and shorthaul, occasionally PEY for shorthaul. I am no where the top of the DM but avg spend for my own travel would be 100-120k USD a year roughly. As said in another thread, the consistent downgrade on service (especially the woeful and truly embarrassing F&B in J and F) and the fact that other carriers are catching up quick in both soft and hard prodcuts, I am not too sure if I would actually spend all my travels with CX ever again. I think I will still make it to their whatever 'Titanium' elite status they call but with the apparent and consistent downgrade that I first-hand experienced in F & J....it really makes me think twice on how I spend my money.
Put it simply, going forward (and with the potential change of MPO) I will evaluate how I spend my travel expenses. As someone mentioned earlier, if I fly to LHR...BA charges 38k and CX charges me 48k...why would anyone pays CX for the same club miles and sectors. 10k is hard earned money and that's basically the cost of 2 night stay at Four Seasons Park Lane. The only reason I would justify to fly CX for that extra 10k (if ever) is that they provide a truly far superior experience than BA in all aspect. Frankly, CX is somewhat better than BA for sure but only marginally and for 10k extra I'd def take BA instead!
Jan 24, 2015, 3:16 am
#354
Join Date: Oct 2014
Posts: 174
As a very loyal DM for the past 9 years, I just want to chip in my 2 cents having read and digest this thread (which is amazing btw!).
As a business owner based in HK, I have a choice to pick who I fly and also for my staff travel. And admittedly, when I had the luncheon/dinner with senior management last year, I was one of the members who raised the question on how CX needs to address those who pay for premium cabin vs otherwise but enjoying the same benefit. Don't get me wrong, I have been in Y and PEY...and by no means I am discriminating my fellow DMs (as I was and will be one of them).
In a way I am glad CX finally listens to feedback from pax but at the same time I think CX really needs to carefully evaluate their options. FYI I primarily fly J and F both long and shorthaul, occasionally PEY for shorthaul. I am no where the top of the DM but avg spend for my own travel would be 100-120k USD a year roughly. As said in another thread, the consistent downgrade on service (especially the woeful and truly embarrassing F&B in J and F) and the fact that other carriers are catching up quick in both soft and hard prodcuts, I am not too sure if I would actually spend all my travels with CX ever again. I think I will still make it to their whatever 'Titanium' elite status they call but with the apparent and consistent downgrade that I first-hand experienced in F & J....it really makes me think twice on how I spend my money.
Put it simply, going forward (and with the potential change of MPO) I will evaluate how I spend my travel expenses. As someone mentioned earlier, if I fly to LHR...BA charges 38k and CX charges me 48k...why would anyone pays CX for the same club miles and sectors. 10k is hard earned money and that's basically the cost of 2 night stay at Four Seasons Park Lane. The only reason I would justify to fly CX for that extra 10k (if ever) is that they provide a truly far superior experience than BA in all aspect. Frankly, CX is somewhat better than BA for sure but only marginally and for 10k extra I'd def take BA instead!
As a business owner based in HK, I have a choice to pick who I fly and also for my staff travel. And admittedly, when I had the luncheon/dinner with senior management last year, I was one of the members who raised the question on how CX needs to address those who pay for premium cabin vs otherwise but enjoying the same benefit. Don't get me wrong, I have been in Y and PEY...and by no means I am discriminating my fellow DMs (as I was and will be one of them).
In a way I am glad CX finally listens to feedback from pax but at the same time I think CX really needs to carefully evaluate their options. FYI I primarily fly J and F both long and shorthaul, occasionally PEY for shorthaul. I am no where the top of the DM but avg spend for my own travel would be 100-120k USD a year roughly. As said in another thread, the consistent downgrade on service (especially the woeful and truly embarrassing F&B in J and F) and the fact that other carriers are catching up quick in both soft and hard prodcuts, I am not too sure if I would actually spend all my travels with CX ever again. I think I will still make it to their whatever 'Titanium' elite status they call but with the apparent and consistent downgrade that I first-hand experienced in F & J....it really makes me think twice on how I spend my money.
Put it simply, going forward (and with the potential change of MPO) I will evaluate how I spend my travel expenses. As someone mentioned earlier, if I fly to LHR...BA charges 38k and CX charges me 48k...why would anyone pays CX for the same club miles and sectors. 10k is hard earned money and that's basically the cost of 2 night stay at Four Seasons Park Lane. The only reason I would justify to fly CX for that extra 10k (if ever) is that they provide a truly far superior experience than BA in all aspect. Frankly, CX is somewhat better than BA for sure but only marginally and for 10k extra I'd def take BA instead!
Jan 24, 2015, 5:08 am
#355
Join Date: Sep 2001
Location: Singapore
Posts: 2,317
Agreed HK$10000 / £860 is a lot of hard-earned money but given how terrible BA is compared to CX it's optically a fair premium.
Jan 24, 2015, 8:01 am
#356
Join Date: Nov 2014
Location: SIN and Medway, UK (so... LCY/LGW/BRU)
Programs: A3 *G, BA OWS, IHG Diamond Amb, Bonvoy Plat
Posts: 749
Therefore, I don't see why you should complaining about CX moving the bar up. No one with enough spend on CX and other oneworld carriers will see this as a pain; and no one at CX should be overly worried about losing a little more than few marginals to ensure the loyalty on the few with more spend - especially if that means better business from top-spenders in return.
---
Also, I'm not sure what you are trying to get at by asking HKGglobaltrotter if he's DM+. He's going to face the crowding everywhere no matter how high his status is; and frankly that is the point of CX dealing with this in the first place.
Jan 24, 2015, 8:21 am
#357
Join Date: Nov 2014
Location: SIN and Medway, UK (so... LCY/LGW/BRU)
Programs: A3 *G, BA OWS, IHG Diamond Amb, Bonvoy Plat
Posts: 749
I haven't given my take on this; and to be frank, while I can see MPC going towards the way of PPS, I'm sure CX can use other methods to increase ultra-loyalists' satisfaction whilst ensuring that (most) others will not get sidelined.
1. Implement Al-Mourjan/CCR-esque lounge access for those flying Biz/First on CX/KA
Like with BA's Concorde Room which is limited to passengers travelling on First on BA, or with a Concorde Room Card; and the Qatar Airways' Al-Mourjan and Al-Safwa lounges which are restricted to QR customers flying certain classes, CX can certainly do the same thing by providing select access to those travelling on Biz/First on CX/KA in a certain lounge, while barring access to others travelling on other oneworld carriers or MPC members for that certain lounges.
With CX having quite a number of lounges in HKG itself, I find this should be rather reasonable to implement without much difficulty. Certainly, it would be one kind of meh to evict one lounge now for that; so maybe building a new lounge to perform this might be a better choice.
2. Create a CX-type "Krisflyer Gold Lounge" for MPC Silver
Unlike on many other oneworld airlines, CX MPC Silver (oneworld ruby), have access to all CX Biz Lounges when certain conditions are met (like flying on CX). In order to reduce crowding in the lounges, CX can certainly create a new lounge to cater to this group of people, without alienating them entirely by taking away their lounge access.
3. Staff more people
I'm not sure about queues on boarding the plane, but if there are queues for checking-in, the most foolproof method is to open more counters for people to check-in?
1. Implement Al-Mourjan/CCR-esque lounge access for those flying Biz/First on CX/KA
Like with BA's Concorde Room which is limited to passengers travelling on First on BA, or with a Concorde Room Card; and the Qatar Airways' Al-Mourjan and Al-Safwa lounges which are restricted to QR customers flying certain classes, CX can certainly do the same thing by providing select access to those travelling on Biz/First on CX/KA in a certain lounge, while barring access to others travelling on other oneworld carriers or MPC members for that certain lounges.
With CX having quite a number of lounges in HKG itself, I find this should be rather reasonable to implement without much difficulty. Certainly, it would be one kind of meh to evict one lounge now for that; so maybe building a new lounge to perform this might be a better choice.
2. Create a CX-type "Krisflyer Gold Lounge" for MPC Silver
Unlike on many other oneworld airlines, CX MPC Silver (oneworld ruby), have access to all CX Biz Lounges when certain conditions are met (like flying on CX). In order to reduce crowding in the lounges, CX can certainly create a new lounge to cater to this group of people, without alienating them entirely by taking away their lounge access.
3. Staff more people
I'm not sure about queues on boarding the plane, but if there are queues for checking-in, the most foolproof method is to open more counters for people to check-in?
Jan 24, 2015, 8:59 am
#358
Join Date: Oct 2014
Posts: 174
Precisely the point - cabin crew will never be rewarded, nor will people who always book into fares that earn 0 miles (not really a CX thing, anyway).
Therefore, I don't see why you should complaining about CX moving the bar up. No one with enough spend on CX and other oneworld carriers will see this as a pain; and no one at CX should be overly worried about losing a little more than few marginals to ensure the loyalty on the few with more spend - especially if that means better business from top-spenders in return.
---
Also, I'm not sure what you are trying to get at by asking HKGglobaltrotter if he's DM+. He's going to face the crowding everywhere no matter how high his status is; and frankly that is the point of CX dealing with this in the first place.
Therefore, I don't see why you should complaining about CX moving the bar up. No one with enough spend on CX and other oneworld carriers will see this as a pain; and no one at CX should be overly worried about losing a little more than few marginals to ensure the loyalty on the few with more spend - especially if that means better business from top-spenders in return.
---
Also, I'm not sure what you are trying to get at by asking HKGglobaltrotter if he's DM+. He's going to face the crowding everywhere no matter how high his status is; and frankly that is the point of CX dealing with this in the first place.
Jan 24, 2015, 12:13 pm
#359
FlyerTalk Evangelist
Original Poster
Join Date: May 2000
Location: Little dot in Asia
Programs: AA-EP, TK-*G, HL-DM, HY-GLO, MR-LTP
Posts: 25,932
I have a better idea...
Let's restrict all award possibilities in F except to MPC/AM members. Kick out AA and other partners. Do like what SQ does for its Suites and Business Class awards. No redemption possible for anyone except Krisflyer members.
Or go the extra step in restricting F award redemptions even to only their top tier members, like LH's M&M programme where only their Senator and Honors members may redeem them. Or Air France's Flying Blue - where also only Gold and Plat elite members can redeem their F awards. None of their partners can do that.
So will be hear howls of protests coming over from AAdvantage or BAEC? No, I think MPC members will be celebrating.
Let's restrict all award possibilities in F except to MPC/AM members. Kick out AA and other partners. Do like what SQ does for its Suites and Business Class awards. No redemption possible for anyone except Krisflyer members.
Or go the extra step in restricting F award redemptions even to only their top tier members, like LH's M&M programme where only their Senator and Honors members may redeem them. Or Air France's Flying Blue - where also only Gold and Plat elite members can redeem their F awards. None of their partners can do that.
So will be hear howls of protests coming over from AAdvantage or BAEC? No, I think MPC members will be celebrating.
Jan 24, 2015, 12:37 pm
#360
Join Date: Nov 2014
Location: SIN and Medway, UK (so... LCY/LGW/BRU)
Programs: A3 *G, BA OWS, IHG Diamond Amb, Bonvoy Plat
Posts: 749
I have a better idea...
Let's restrict all award possibilities in F except to MPC/AM members. Kick out AA and other partners. Do like what SQ does for its Suites and Business Class awards. No redemption possible for anyone except Krisflyer members.
Or go the extra step in restricting F award redemptions even to only their top tier members, like LH's M&M programme where only their Senator and Honors members may redeem them. Or Air France's Flying Blue - where also only Gold and Plat elite members can redeem their F awards. None of their partners can do that.
So will be hear howls of protests coming over from AAdvantage or BAEC? No, I think MPC members will be celebrating.
Let's restrict all award possibilities in F except to MPC/AM members. Kick out AA and other partners. Do like what SQ does for its Suites and Business Class awards. No redemption possible for anyone except Krisflyer members.
Or go the extra step in restricting F award redemptions even to only their top tier members, like LH's M&M programme where only their Senator and Honors members may redeem them. Or Air France's Flying Blue - where also only Gold and Plat elite members can redeem their F awards. None of their partners can do that.
So will be hear howls of protests coming over from AAdvantage or BAEC? No, I think MPC members will be celebrating.
To be fair though, SQ does open up FC and Biz space to other *A carriers - just that it's a bit light.
I really suspect CX's problem stems from a bottom-heavy issue - ie having too many MPC Silvers rather than people redeeming. After all, SQ has a terrible FFP that makes anything below PPS useless (you'll really be better off with Aegean), and iirc Flying Blue isn't as sweet as MPC for low-to-mid-tier members.