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-   -   First Class Monetization, or FCM: The Definitive Thread (https://www.flyertalk.com/forum/delta-air-lines-skymiles/1230437-first-class-monetization-fcm-definitive-thread.html)

bubbashow Jun 5, 2012 1:17 pm


Originally Posted by BobRoss (Post 18691665)
Is this a good explanation of FCM:
---------------
DL's Y and F price curves tend to converge close-in to the departure date as Y fares creep up (typically HQK fares at high prices) and F drop as P/A fares are opened.

Medallion upgrades typically have not cleared (V/X inventory held back w/in the window) but last-minute coach PAX (Medallion or otherwise) "buy up" to the P/A fare. Upgrades, if any, clear at the gate.

The proposal would be:
---------------
Provided there is P/A inventory, offer a variable-rate add-on upgrade for existing reservations that is the delta between purchased fare class and currently advertised F inventory?

This would be found within the itinerary online (like wifi) and possibly offered at check-in. I assume if there was no P/A fares you wouldn't even see the option in your itinerary.

This add-on would be offered to all ticketed PAX, not just Medallions (I'm not sure how DL could market it as a Medallion-only benefit).


Other than the IT implementation cost, what would the downside to DL be in this scenario?
---------------

The current system seems to favor last-minute purchases regardless of loyalty. How many business travelers can't upgrade to F because of corporate travel restrictions?

If there are many, this incentivizes last-minute non-loyal PAX to "switch" to DL and get a cheap F upgrade. If anyone could upgrade, DL may lose this non-loyal PAX (they may pick a lower cost carrier?). Perhaps DL has the data that suggests these non-loyal PAX become "loyal" due to the F experience?

If a business traveler doesn't have a restriction (I assume high level execs have the latitude to override these silly restrictions), then this incentivizes them to pay for expensive last-minute DL travel. These folks are HVC by definition, then.

Although I don't think it would "hurt" the F cabin "integrity" (whatever that's worth this day and age) to have buy-ups for existing reservations I am not so sure that offering everyone a buy-up to F would really help the general Medallion population.

If it's for everyone then there's a strong chance *no one* will ever get an upgrade as random PAX logging into their account see Upgrade for $75! and snag it while you're asleep.

So, instead of hoping that no one buys a last minute ticket, we'd have to contend with *everyone* already ticketed buying up.

This system would really only benefit folks with, say, an ExpertFlier paid account that can set up an alert when P/A buckets become available for sale... I guess that is probably many people here on FlyerTalk, but most folks don't know that.

So...just give it away...that is the logical business decision. :rolleyes:

To hell with the guy on an M fare paying 10x what the guy on the T or E is paying. Loyalty is everything. Hell, DL shouldn't even offer the front cabin for sale. Just keep it for Elites. Don't they know how valuable you really are?

sethb Jun 5, 2012 1:29 pm

DL gets another cash benefit from FCM: if I get upgraded at the gate rather than in advance, they can charge for my third checked bag.

BobRoss Jun 5, 2012 3:32 pm

Yeah, I'm not really sure what the upside is to Delta and the general Medallion population by allowing any existing fare a buy-up to discounted F? We've then got to compete with the whole plane for upgrades - I don't see how DL can legitimately make it Medallion-only (the marketing doesn't work).

The real "problem", if one exists, is that last minute, very expensive coach fares can upgrade cheaply, but I think those people are predominantly HVCs, in the truest sense of the word, not Mom-n-Pops, so it seems to make business sense. I can't fault DL for that.

How much does it harm Medallion "loyalty" and what impact does that have on the bottom line? I have no way of knowing. DL seems to think "not so much as to not implement FCM".

As a NYC-based PM I've been very happy with my upgrade % (knock wood!), even on the vaunted NYC-(LAX|SFO) BE-lite routes (I fly weird times, so not very Medallion heavy).

If offering FCM allows DL to maintain a competitive edge *and* a great product (most 2 class RJs, little/no tuboprops, reasonable F/J cabin, etc.), I'm all for it. My status isn't worth anything if they go out of business. *shrugs*

Thomas Hudson Jun 5, 2012 3:33 pm


Originally Posted by bubbashow (Post 18702901)
So...just give it away...that is the logical business decision. :rolleyes:

To hell with the guy on an M fare paying 10x what the guy on the T or E is paying. Loyalty is everything. Hell, DL shouldn't even offer the front cabin for sale. Just keep it for Elites. Don't they know how valuable you really are?

I purchased a B fare with 2 days notice last week $1200+. My coworker had a schedule change and flew on the same flights on a same day fare. I am a Diamond and he is a FO. He paid less for a P fare same day than I did for the B fare and he got FC and I did not even get EC seats. I fly damn near every week and I fly on high fares...

explain how this made sense for Delta?

I am not the type to make rash changes, but when I have had enough, I will....

BobRoss Jun 5, 2012 3:37 pm


Originally Posted by Thomas Hudson (Post 18703751)
I purchased a B fare with 2 days notice last week $1200+. My coworker had a schedule change and flew on the same flights on a same day fare. I am a Diamond and he is a FO. He paid less for a P fare same day than I did for the B fare and he got FC and I did not even get EC seats. I fly damn near every week and I fly on high fares...

explain how this made sense for Delta?

I am not the type to make rash changes, but when I have had enough, I will....

So he bought a P fare on a different flight and SDC'd or was moved by DL IROP/change?

Thomas Hudson Jun 5, 2012 3:44 pm


Originally Posted by BobRoss (Post 18703772)
So he bought a P fare on a different flight and SDC'd or was moved by DL IROP/change?

No, he was supposed to go to Chicago on Southwest and then cancelled that trip and he went with me... got tickets late the night before for AM trip... He still thinks it was the funniest thing ever...

sethb Jun 5, 2012 3:56 pm


Originally Posted by Thomas Hudson (Post 18703817)
No, he was supposed to go to Chicago on Southwest and then cancelled that trip and he went with me... got tickets late the night before for AM trip... He still thinks it was the funniest thing ever...

So the day he bought it was still within your cancellation window.

dcline414 Jun 5, 2012 4:07 pm


Originally Posted by sethb (Post 18703876)
So the day he bought it was still within your cancellation window.

Great definition of Delta's guarantee... They GUARANTEE that you will pay more to get less unless you CONSTANTLY check the fares on your flights, night and day. Hell, sometimes you could pay the change fee to upgrade to P fare and still get money back.

This makes perfect sense, and keeps everyone happy. Not. :rolleyes:

Thomas Hudson Jun 5, 2012 6:31 pm


Originally Posted by sethb (Post 18703876)
So the day he bought it was still within your cancellation window.

Yes, I have been doing this a very long time and have not gotten into the habit of checking prices after I purchase a ticket 2 days before the gaddmm flight....:rolleyes:

GYEWorldTraveler Jun 5, 2012 7:16 pm


Originally Posted by dcline414 (Post 18703941)
Great definition of Delta's guarantee... They GUARANTEE that you will pay more to get less unless you CONSTANTLY check the fares on your flights, night and day. Hell, sometimes you could pay the change fee to upgrade to P fare and still get money back.

This makes perfect sense, and keeps everyone happy. Not. :rolleyes:

I paid $1,300 to go to the Final Four and sat in so-so seats. Had I waited to buy my tickets until several hours before the game I could have sat center court lower level for that price. Seats on a plane (to me) seem to be a scarce resource which makes the price fluctuate so the vendor can maximize profits. This economic model could be applied to pretty much anything with a limited (fixed) quantity. Any good business will try and maximize its profits so I don't think you can really fault delta for doing business this way. I think many on this board would be shocked to find out how many seats are sold below Deltas true cost per seat for their itinerary. We should all be thankful that there is that 10-20% on each flight that help keep fares low for the other 80-90% of us.

bubbashow Jun 5, 2012 7:32 pm


Originally Posted by Thomas Hudson (Post 18704665)
Yes, I have been doing this a very long time and have not gotten into the habit of checking prices after I purchase a ticket 2 days before the gaddmm flight....:rolleyes:

If the F cabin is empty, and Y is relatively-full, I can understand why DL would discount the F product. Sure, it sucks to be on the short end of that stick. However, if you subscribe to the idea of a revenue-based FF program, you would do better under such a plan.

Thomas Hudson Jun 5, 2012 7:34 pm


Originally Posted by GYEWorldTraveler (Post 18704842)
I paid $1,300 to go to the Final Four and sat in so-so seats. Had I waited to buy my tickets until several hours before the game I could have sat center court lower level for that price. Seats on a plane (to me) seem to be a scarce resource which makes the price fluctuate so the vendor can maximize profits. This economic model could be applied to pretty much anything with a limited (fixed) quantity. Any good business will try and maximize its profits so I don't think you can really fault delta for doing business this way. I think many on this board would be shocked to find out how many seats are sold below Deltas true cost per seat for their itinerary. We should all be thankful that there is that 10-20% on each flight that help keep fares low for the other 80-90% of us.

ya...no... I think Delta will be shocked when dudes like me get sick of the BS and start flying on price and schedule...

you have to be trusted, by the people that you lie to...

http://www.youtube.com/watch?v=nlJWis5wH54

Thomas Hudson Jun 5, 2012 7:37 pm


Originally Posted by bubbashow (Post 18704912)
If the F cabin is empty, and Y is relatively-full, I can understand why DL would discount the F product. Sure, it sucks to be on the short end of that stick. However, if you subscribe to the idea of a revenue-based FF program, you would do better under such a plan.

Dude, I had a freaking B fare and was not upgraded 2 days before and then they sold P fares last minute. I have DM status and a gazillion miles... what is some new program going to do if they are selling P fares and not upgrading DMs on B fares that cost more than P fares? It is dirty...

GYEWorldTraveler Jun 5, 2012 7:42 pm


Originally Posted by Thomas Hudson (Post 18704917)
ya...no... I think Delta will be shocked when dudes like me get sick of the BS and start flying on price and schedule...

you have to be trusted, by the people that you lie to...

http://www.youtube.com/watch?v=nlJWis5wH54

I guess I'm confused what the BS is....I can't think of an airline that sells every seat at the same price and that has an F cabin that it doesn't sell at discounted more restrictive prices than full Y. If you are paying full Y Im sure DL doesn't want to lose you and that probably is the reason of the rumored new tier above DM that would be revenue based that would have more benefits for you.

AA_EXP09 Jun 5, 2012 9:12 pm


Originally Posted by GYEWorldTraveler (Post 18704963)
I guess I'm confused what the BS is....I can't think of an airline that sells every seat at the same price and that has an F cabin that it doesn't sell at discounted more restrictive prices than full Y. If you are paying full Y Im sure DL doesn't want to lose you and that probably is the reason of the rumored new tier above DM that would be revenue based that would have more benefits for you.

Try again.
CX W fare >I fare.
AC Y fare >Z fare.
AA Y fare > A fare.
Routes: YVR-HKG, YVR-DFW.


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