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Vietnam to US mistake fare discussion - 2019 Cathay New Year's gift

Vietnam to US mistake fare discussion - 2019 Cathay New Year's gift

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Old Jan 2, 19, 10:01 pm
  #136  
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Originally Posted by Happy View Post
From normal business stand point, CX should not eat the losses. Yet they chose to...
Legal no
Business is argurable either way
(I include goodwill as a business decision)

Originally Posted by Happy View Post
but after It has gone over the actual revenues from 2018 incl both the normal revenue and the revenue from both Asia miles and partner redemption, then may be the money brought in from this feeding frenzy would be more than offset the revenue from partner redemption? Asia miles redemption should also be accounted for as well... Instead of settling the cost of redemption with the partners, CX now rakes in similar or even more, cash for 2019 in just a few hours...
So US$1,000 > reimbursement value of 220k AM/AA? *Ouch*. But I can't agree or rebut your theory.


Last edited by percysmith; Jan 2, 19 at 11:27 pm
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Old Jan 2, 19, 10:41 pm
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Originally Posted by percysmith View Post
Business is argurable either way
(I include goodwill as a business decision)
Yes, indeed It may be the case that CX are trying to balance quite a number of factors.

They are certainly receiving some worldwide publicity on their decision to honour these fares.

Similarly, brand identity and brand loyalty should not be underestimated.

At the same time they wouldn't want to incur substantial losses or disadvantage their premium customer base (cf. QRC388's perceptions / position).

Sales of these fares may not be nearly as extensive as some are presuming herein...and the cancellation rates may be atypically high due to rush purchases and need for positioning flights (CX gets cancellation fee and the chance to resell the inventory at the higher price).
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Old Jan 3, 19, 12:04 am
  #138  
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Originally Posted by s0ssos View Post
My friend said it was good advertising to honor the fares. I countered that it wasn't, because it is too expensive an ad campaign. And most of these passengers wouldn't have bought premium class tickets anyway (or cannot afford to).
But in terms of the name, reputation, that might be something. Because maybe some passengers will come into money later, and remember how Cathay did something nice for them once, before they made it ...
hmmm I wouldn't comment on the proportion of the people who bought this fare who are able to afford flying in a premium class. Though, especially for those who, as you said wouldn't be able to afford such tickets otherwise, it would be possible that they then would have favourable views of CX, and choose CX on their subsequent flights, whether in Y, PEY, or even J as opposed to rivals like AC, given their experience. This can work in the long term in terms of building some sort of loyalty, but how significant this is to CX's revenue is still questionable.
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Old Jan 3, 19, 12:19 am
  #139  
 
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Originally Posted by Platy View Post
But there is an element of discrimination in your argument, if only to the extent that you do not consider that those who have bought these fares should have their contracts honoured. And the reason for that (apparently) is that you expect to be able to access an A class fare personally just when you want and the purchasing of a "mistake" from the airline is a good enough reason (in your personal perception) to put yourself apart from those folk.

Would you extend that argument to other forms of deep discounting - staff travel, a group discount, whatever?

The weakness in your argument is that your access to the A classic inventory is not a right, but rather totally subject to the commercial decisions / yield management strategy adopted by CX of which honouring the mistakes fares is just one element.

In any case, your fears may be somewhat over inflated:

1. The seats sold may not be in the numbers you fear
2. Many purchasers (accepting a strong US based audience of the frequent flyer blogs) may cancel once they confront the reality of two positioning flights, arranging the eVisa, etc., etc.

The latter case may even result in the release of an unpredicted bonanza of A class inventory in due course.

Your perfectly entitled to your position of course.
Briefly, to your well-reasoned reply:

I definitely don't extend the argument to other forms of discounting like ID, etc, and I think that's disingenuous. Why? Because those types of ticketing are well planned for. It is regular. This is a serious, unplanned for upset that significantly changes how I will have to travel this year, because it seriously upsets the way CX has been selling tickets in my nearly 15 years living in Hong Kong and buying these fares. Their perogative? Definitely. Disruptive to some of us very loyal passengers who rely on CX? Absolutely. End of world? No. Highly inconvenient? Definitely. Let me put it another way....there are consequences and losers in this game. I think it is us.

If CX said "we're letting all staff book into A fare going forward," I would expect I am equally in opposition. But that's obviously not what we're talking about here, so let's not stretch to make it so. Otherwise we can really argue anything.

I agree its not our right have A fares. If CX wants to, at any random moment they can sell (X) pct of any fare (Y, R, J, F). But if X = a big enough number to be highly disruptive to HK people's normal travel patterns and way of life, regardless of class, I do think some acknowledgement needs to be made of the disruption and unintended consequences / collateral damage of their decision.

I believe folks in Hong Kong - those of us who live here, work here, and must fly Cathay Pacific at least sometimes - are genuine stakeholders in Cathay Pacific. We live here for the most part, neighbors and friends are pilots, management and flight attendants, and some of us are genuine captives to fly CX a lot. The captive argument is a real one: we loyally contribute to CX, in part because we must(without seriously inconveniencing ourselves). Hell I have diversified a lot of business to JAL, Emirates and SQ mostly, but I still must fly CX to North America in particur if I am being honest with myself and my time.

CX has locked up a lot of HKG slots and also pulled some funny business with things like air certificates to India with the shameless dance with KA (pretending a different carrier), slots in Japan, and keeping LCCs out of HKG for years through meausres which can be fairly described as crony capitalism, at a cost to the local population. Our return for this is in theory a stable airline, nice airport, etc. But the last 6 years CX has really not kept up its end of the bargain, has been totally unstable. The local population, not the intl one (who appears to have disproportionately benefited here) does not pay the price for this poor management for the most part. the Hong Kong captive stakeholders do via fares, decline of MPC/AM, etc.. This is getting a bit out there, but I tink the loyal travelers to CX, particularly those in Hong Kong, have a real stake in CX, like any population does in a local airline that is given a de facto quasi monopoly. ANd this an airline that had demonstrated extremely poor management the last 5-7 years (fuel hedging being the most egergious, and costly measure), for which which stakeholders have all paid for disproportionately via crappy ex-HKG fares, staff who are disgruntled and didn't received wages to match inflation (and those staff don't just serve us, but they live next door and patronize local business), and other things.

I don't expect much sympathy. I am talking about paying for first class tickets and getting upgraded from paid J. But, still I see this as another mark where mostly overseas travelers benefit, at the expense of those (few) of us locals who pay the price. Again. And it's not like we had a hand in deciding this poor decision, but we bear the cost of it. The consequences would be far more apparent if CX accidentally sold half a million economy tickets to overseas travels by mistske for $10 instead of $1000 (instead of mucking up premium classes as they did), since then a lot of HK people legitimately wouldn't be able to fly to see family overseas, and it would be a helluva ruckus. But I see the logic as the same except we are talking about us pampered F travelers being disadvantaged.

i agree with all the rest of your logic and I am hopeful a) some positioning flights are too cumbersome, b) CX doesn't allow changing to other A fares (aka locking people in to the dates they booked), and c) the numbers aren't as high as some were speculating. Hopefully it's a manageable number.
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Old Jan 3, 19, 12:34 am
  #140  
 
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Just a couple data points from friends who booked the "special" fare re: impact on redemptions --

1. one booked April CX 888/9 HKG-JFK with the intention of a friend from Vancouver joining him on the YVR-JFK segments. that friend was able to redeem Z on those shorter segments.
2. another booked December CX 840/5 HKG-JFK in J. he was able to get a standard award to ugprade the 840 to Z. 845 was also available but at a higher category.

While surely impacted, seems there is still decent availability in Z.
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Old Jan 3, 19, 12:47 am
  #141  
 
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I was checking EF these past few days I've been seeing A0 but F5....so was only 1 sold for that particular flight?
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Old Jan 3, 19, 1:15 am
  #142  
 
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Originally Posted by percysmith View Post


Legal no
Business is argurable either way
(I include goodwill as a business decision)



So US$1,000 > reimbursement value of 220k AM/AA? *Ouch*. But I can't agree or rebut your theory.


Agreed that we normally weight 10k AM as US$100, so no way that US$1,000 > reimbursement value of 220k AM/AA

Actually in this case the ticket cost CX most maybe be the codeshare F/J sold and operated by AA/VN, as it can be expected that there's no way AA/VN will help in bear the loss and CX still need pay a decent cost to them
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Old Jan 3, 19, 1:18 am
  #143  
 
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Originally Posted by AJ747M View Post
Is A inventory fixed? I want to apply BUDs to the cheapo J tickets I bought, but my flights are all F3/4 A0. Yes, I know I've been given an inch and am taking a mile...
Originally Posted by FlyPointyEnd View Post
I was checking EF these past few days I've been seeing A0 but F5....so was only 1 sold for that particular flight?
CX is indeed heavily restricting F inventory, though I'm not sure that's entirely intentional. When I was on the yield team in RM, there was a mechanism that automatically pushes the inventory upwards, or gates a certain fare class when there is unusually high demand. I suspect that the strong restriction on A is a result of such mechanism kicking in, and availability should normalize in the next few weeks once the system picks up on the lack of demand
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Last edited by jona970318; Jan 3, 19 at 6:06 pm Reason: spelling
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Old Jan 3, 19, 1:30 am
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Originally Posted by jona970318 View Post
CX is indeed heavily restricting F inventory, though I'm not sure that's entirely intentional. When I was on the yield team in RM, there was a mechanism that automatically pushes the inventory upwards, or gates a certain fare class when there is usually high demand. I suspect that the strong restriction on A is a result of such mechanism kicking in, and availability should normalize in the next few weeks once the system picks up on the lack of demand

Referring to this there's an interesting discussion that after honoring this, should CX allow/or encourage ppl booked code shared F/J (operated by AA/VN) change to same date's CX own flight (MU do a similar thing when they sold bug PVG-LAX J class on AA codeshare flight). It may help lowering down the loss of paying high cost to AA/VN, but on the other hand will further clean out the F/J inv in high season.
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Old Jan 3, 19, 1:34 am
  #145  
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Originally Posted by jona970318 View Post
CX is indeed heavily restricting F inventory, though I'm not sure that's entirely intentional. When I was on the yield team in RM, there was a mechanism that automatically pushes the inventory upwards, or gates a certain fare class when there is usually high demand. I suspect that the strong restriction on A is a result of such mechanism kicking in, and availability should normalize in the next few weeks once the system picks up on the lack of demand
Stop buyers of the fare from rebooking and making their tickets actually flyable https://www.flyertalk.com/forum/30601996-post768.html

But I'm not sure how long they can keep this up.
What to do to re-release A seats for sale without allowing rebooking? Call them A+?
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Old Jan 3, 19, 1:43 am
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All the cheaper F, J fares are booked, so now CX is left with higher (and less competitive) F, J fares for this route. This is a double sword to CX. They will be yielding minimum or below minimum profit for this.
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Old Jan 3, 19, 2:12 am
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CX always wants to be stingy here and there........something about check-in upgrade that didn't include lounge access has people debate a couple of pages.

And now they did this (made a mistake but getting so generous to honour those purchases), which is good for publicity and the ones who got them, but a slap in the face for Asiamiles/Marco Polo members.

I don't think other than a DM invite, Cathay Pacific has done anything like this to please its members. How about a bunch of F tickets for discount prices as a lottery? Any lifetime FFP on elite tier?

Meanwhile AM is doing quantitative easing in a way not dissimilar to the Federal Reserve Bank during the bailout, with multiple cards offering huge bonuses.

I still like CX for the service and its lounges, but that's really about it and quite done with MPC as my preferred FFP....
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Old Jan 3, 19, 2:14 am
  #148  
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So I usually fly F, occasionally J, hardly on CX, I booked one of these fares, Iím not greedy, or riff-raff or indeed a backpacker. If I get a good service, this is likely to encourage me to diversify to CX.

As for all these further suggestions of how CX May inconvience pax further, Iíll fill them in the same draw as those who said there was 0% chance of CX honouring the fares, that CX would downgrade everyone to J (or indeed Y), that CX would unilaterally charge a cancellation fee once theyíve downgraded them to Y or indeed laughed at a blogger whom I have upmost respect for presenting a balanced view of the situation (subsequently proven to be correct unlike said poster).

They have stated they will honour the contract. They havenít stated they will renegotiate the contract. The contract stands.

Whilst I do have sympathy for those who think they will be inadvertently affected by the loss of inventory, this is little different from many other factors (like a dramatic cut in oil prices) that can take away F or J seats, it may of course require you to adjust your plans much like when you see a fare but wait 24 hours to book to find it has doubled in price.

As I said Upthread, loyal frequent flyers represent only a small percentage of the business (I could make up a random figure to support an argument like some have done on this thread but I wonít). Across programmes, only 1 in 5 members of loyalty programmes are active, or which only 2% are equivalent of Emerald. This number is tiny compared to the number of people moved daily by a major airline such as CX and those not tied in to loyalty programmes find it far easier to switch airlines and airlines therefore have to work harder to attract and retain their business. Having said that, obviously those small number of elite flyers do spend money- but as demonstrated this is mostly at the marginal profit margins, those who can afford F bucket fares donít need to worry about airline loyalty.

Whilst historically people were trapped by their flag carriers, this is no longer the case. Iíd suggest people are better served if they consider air travel to be a commodity and take out their emotion from the situation - it can be of benefit to be loyal, but it is often not, with lounge access easily purchased these days, operational upgrades often going to non-loyal customers in an attempt to upsell their travel and app based IRROPS management devaluing the additional values of loyalty programmes.
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Last edited by navylad; Jan 3, 19 at 2:20 am
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Old Jan 3, 19, 2:16 am
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Originally Posted by percysmith View Post
Looked around (Apple/OD/SCMP/HK01). Can't find the 15-16k figure. Danny said "thousands" but he's not sure.

If you do come across the source again pls post here.
Here you go, it is in the link name:

https://nypost.com/2019/01/02/airlin...bargain-price/

But, I only scanned the link and did not read the article, which has a different message. So, the actual Qty is still open. Sorry.

Originally Posted by s0ssos View Post
Ironically many people booked J. For reasons incomprehensible to me.
And many times there was no difference in price
Source ?

Originally Posted by AJ747M View Post
I booked J for two reasons:
1. I thought there was absolutely 0% chance they'd honour the F fares. Many people predicted the F fares would be downgraded to J as well; I'm sure I'm not the only one who booked J with this line of reasoning.
2. I have DM upgrade certificates I thought I could use to get me into F anyway. This seems unlikely now...

There was probably no difference in price, but I could barely find dates for J anyway and booked after many thought the deal was already dead. Kinda wish I booked F, but definitely not complaining about J for under 1000USD. I'm still shocked they didn't cancel all tickets...
Apart from the HKG-NA leg capacity, the capacity of the feeder leg VN-HKG is also relevant (HAN:A321:24J, DAD:A320:24J, SGN:330:30J+772:42J), which gives a total of 120 J seats a day. That is far less than the HKG-NA F+J capacity. Assume some 25% of the VN-HKG leg was already booked and half of the remaining J capacity was reserved for the lowest -action- booking class, this gives: 45 seats a day, over the year: roughly 16K seats.

Which might explain that the J action offer VN-HKG-NA was also exhausted, where probably the J inventory HKG-NA is not exhausted. Check,check, check.

Feel free to comment on this calculation.
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Old Jan 3, 19, 2:34 am
  #150  
 
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Originally Posted by navylad View Post
.....
As I said Upthread, loyal frequent flyers represent only a small percentage of the business (I could make up a random figure to support an argument like some have done on this thread but I wonít). Across programmes, only 1 in 5 members of loyalty programmes are active, or which only 2% are equivalent of Emerald. This number is tiny compared to the number of people moved daily by a major airline such as CX and those not tied in to loyalty programmes find it far easier to switch airlines
I have some figures for you: On a low yield LH leg (EUR-HKG), I verified on the number of DM's several times, which was over 30%. That's for the number of DM's, let alone the Golds in J. I do leave out the Silver and lower, because it's that easy to reach that level, when flying J. This leg does not have F. For SH destinations, DM percentage in J cabin can go up significantly.

Yes, in the galley, there is a seat overview displayed, which includes name, meal pref and DM status.


Higher qualified loyalty members need to be active, otherwise, their loyalty status will be lost. In your reasoning, you mixup the Booking class with loyalty program.
As such, when F/J inventory gets wiped out for a whole year, that does influence the higher tier FF quite a lot, to put it mildly. Non-active FF don't count in a situation like this.
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