SAA Upgrade at counter?
Jun 17, 2011, 11:30 am
#16
Join Date: Dec 2007
Location: Johannesburg
Programs: QRPC Plat, Hyatt Globalist, Hilton Diamond, IHg Diamond Amb, Sixt Diamond, Avis Pres, AmexCenturion
Posts: 488
As far as smart economics go, it's in the best interest of SAA to collect the funds just as TravelinWilly states. They are a business and needing to do whatever they can do to up revenues on otherwise "money left on the table". Airlines struggle these days, and charge for everything else... so it amazes me that they wouldn't do it. I've flown to Hawaii a few times and it's definitely been offered at the gate on multiple airlines -- sometimes I've taken the offer, other times I have declined. Lets face it, collecting those extra monies before departure costs the airline nothing... there is no added expenses for upgrading those passengers since they were going to be on the aircraft anyway (so they would have to have the customer service contact at the gate, service in cabin, luggage handled, etc).
And it's in an airlines best interest to expose as many travelers to their biz class for it's word of mouth that gets many of the passenger seats it booked in an upper class. And the next time someone who's enjoyed the luxury and comfort of biz class is about to book another trip, you bet they are going back to their memory and probably realizing that its worth the price for their comfort vs. sitting in economy. Its like once you drive a Mercedes its difficult for you to drive a Yugo.
Its all about price yielding. Airlines/Hotels will charge as much as they can at the highest prices and then discount when they think they cannot fill seats. It's a game with a certain strategy that sometimes they win and sometimes they lose.
And it's in an airlines best interest to expose as many travelers to their biz class for it's word of mouth that gets many of the passenger seats it booked in an upper class. And the next time someone who's enjoyed the luxury and comfort of biz class is about to book another trip, you bet they are going back to their memory and probably realizing that its worth the price for their comfort vs. sitting in economy. Its like once you drive a Mercedes its difficult for you to drive a Yugo.
Its all about price yielding. Airlines/Hotels will charge as much as they can at the highest prices and then discount when they think they cannot fill seats. It's a game with a certain strategy that sometimes they win and sometimes they lose.
Think especially platinum members and people who generally fly last minute, both could engineer a gate upgrade and save on the higher fare.
For those that don't think it's fair... go seat to seat and see the major price differences people paid for their same exact experience. It doesn't change, and the price difference is even greater in economy. Same thing at a hotel, knock on each door and find out what people paid for their same room on the same night to get the same bed with the same sheets. It's no different. Obviously there is a cost per guest in a hotel situation (housekeeping, etc)... but once that's been met it's only revenue to the books. So they are stupid to not fill the hotel at a discounted rate with surplus inventory. And airlines are just as stupid to not take advantage of it.
I often wonder if "miss I never travel" (seasoned travellers never pay extra luggage, they usually pack light or tier FF's) is travelling on the cheapest bucket fare available,
and poor 'slim', who has to sit next to this cow is probably flying for work, doesnt want to be there and his company booked him last minute Y fare.
Jun 17, 2011, 3:52 pm
#17
Company Representative - South African Airways
Join Date: Mar 2010
Location: Fort Lauderdale, FL
Posts: 67
This is, obviously, a sensitive subject where the airline needs to balance the desire to maximize short-term revenue with the long term objectives.
While it would seem like a no-brainer to jump on any additional revenue one can get at the last minute, the long term effects of such a program could be detrimental to the balance sheet. As SAWorldVoyager points out, the incentive to purchase a Business Class ticket would be removed if there was a guarantee of an upgrade from a lower-fare ticket.
That said - keep the discussion going... we're enjoying the friendly banter :-)
All best for the weekend!
While it would seem like a no-brainer to jump on any additional revenue one can get at the last minute, the long term effects of such a program could be detrimental to the balance sheet. As SAWorldVoyager points out, the incentive to purchase a Business Class ticket would be removed if there was a guarantee of an upgrade from a lower-fare ticket.
That said - keep the discussion going... we're enjoying the friendly banter :-)
All best for the weekend!
Jun 19, 2011, 9:35 am
#18
Join Date: Nov 2000
Location: The World! Home Base = DCA/IAD
Programs: HHonors, Hyatt GP, Marriott, Varying Levels w/ UA /AF /DL /SQ /AA
Posts: 2,665
Golly, am I obedient or what? 
Here's what you do:
You start the offer for the upgrade at the gate for only the pax who are on full/fullish fare tickets. So start with Y. Then B, M, H, or whatever the higher fares are. Price it so that the "discount" for the gate upgrade is only $500 or so (meaning that the net revenue for SA is only $500 less than the full or discounted business class fare (YOU can decide this, SA - I spoil you. )).
Simultaneously, offer the upgrade to those on lower fares for a higher price. So someone on a T or Z or whatever discounted fare will need to pay more for the upgrade than those on the higher fare, netting it out so that the upgrade yield is only $500 less than the full or discounted business class fare (YOU can decide this, SA! Aren't I kind, letting you run your own business and all? ).
And you can play around with the $500. Make it $600 and see what the conversion is, then the next day make it $400 and see what the conversion is. Simply put, seats on a plane are a perishable good, and if you price it right (meaning high enough), you'll find additional revenue w/o peeving those who paid more earlier and you gain revenue for what would have been empty seats. The only additional cost is the (marginally) more expensive meal and wine in business plus the additional time it takes a FA to spend with the additional pax.
Finally, there are many people (at least many that I know) who are paying to fly in first and business for long-haul flights, and we're not going to start playing a guessing game by purchasing econ. and then hoping to buy up at the gate. Also, if there are really people who will make a habit of not buying business because they're banking on paying for an upgrade, their lives are gonna suck when business class is sold out. SA will have a duty to manage customers' expectations, and if done correctly, SA will realize substantial monetary gains without p!ssing off anyone.
Here's what you do:
You start the offer for the upgrade at the gate for only the pax who are on full/fullish fare tickets. So start with Y. Then B, M, H, or whatever the higher fares are. Price it so that the "discount" for the gate upgrade is only $500 or so (meaning that the net revenue for SA is only $500 less than the full or discounted business class fare (YOU can decide this, SA - I spoil you.
)). Simultaneously, offer the upgrade to those on lower fares for a higher price. So someone on a T or Z or whatever discounted fare will need to pay more for the upgrade than those on the higher fare, netting it out so that the upgrade yield is only $500 less than the full or discounted business class fare (YOU can decide this, SA! Aren't I kind, letting you run your own business and all?
).And you can play around with the $500. Make it $600 and see what the conversion is, then the next day make it $400 and see what the conversion is. Simply put, seats on a plane are a perishable good, and if you price it right (meaning high enough), you'll find additional revenue w/o peeving those who paid more earlier and you gain revenue for what would have been empty seats. The only additional cost is the (marginally) more expensive meal and wine in business plus the additional time it takes a FA to spend with the additional pax.
Finally, there are many people (at least many that I know) who are paying to fly in first and business for long-haul flights, and we're not going to start playing a guessing game by purchasing econ. and then hoping to buy up at the gate. Also, if there are really people who will make a habit of not buying business because they're banking on paying for an upgrade, their lives are gonna suck when business class is sold out. SA will have a duty to manage customers' expectations, and if done correctly, SA will realize substantial monetary gains without p!ssing off anyone.
Jun 28, 2011, 1:15 am
#20
Join Date: Mar 2004
Location: CPT
Programs: BA BD SA
Posts: 4,467
TK has for years offered paid upgrades on the day of travel. They are not exactly a steal but if you have paid a low fare in economy or business can be substantially less than the fare in the upgraded cabin. I think it's a win all round and that fact that the prices are known in advance makes it even more transparent and even handed.
Personally I don't really see the argument that there is less incentive to buy J or F seats. Folks on business will buy what the travel policy allows - they aren't going to enter into a lottery for an upgrade. If their policy only allows Y they are more likely to consider upgrading on their own dime if last minute paid upgrades are available. Likewise those who travel in Y at their own expense.
Most airlines do a lot of operational upgrades anyway - for free. Much better to get volunteers to pay their way to the front and make space for more at the back I would think. Pax that know that paid upgrades are diminishing their chances of status based free upgrades are actually incentivised to stop relying on op-ups and either buy the J/F seat or pay for the upgrade on the day. I am pretty sure some elementary modelling of behaviour, based on the typical loads in each cabin on a specific route, would quickly show which model is most financially rewarding to the airline.
But isn't this academic anyway: I was under the impression that SA's J cabins on intercontinental routes are pretty fully booked most of the time?
Personally I don't really see the argument that there is less incentive to buy J or F seats. Folks on business will buy what the travel policy allows - they aren't going to enter into a lottery for an upgrade. If their policy only allows Y they are more likely to consider upgrading on their own dime if last minute paid upgrades are available. Likewise those who travel in Y at their own expense.
Most airlines do a lot of operational upgrades anyway - for free. Much better to get volunteers to pay their way to the front and make space for more at the back I would think. Pax that know that paid upgrades are diminishing their chances of status based free upgrades are actually incentivised to stop relying on op-ups and either buy the J/F seat or pay for the upgrade on the day. I am pretty sure some elementary modelling of behaviour, based on the typical loads in each cabin on a specific route, would quickly show which model is most financially rewarding to the airline.
But isn't this academic anyway: I was under the impression that SA's J cabins on intercontinental routes are pretty fully booked most of the time?
Jun 29, 2011, 7:08 pm
#21
Join Date: Nov 2000
Location: The World! Home Base = DCA/IAD
Programs: HHonors, Hyatt GP, Marriott, Varying Levels w/ UA /AF /DL /SQ /AA
Posts: 2,665
TK has for years offered paid upgrades on the day of travel. They are not exactly a steal but if you have paid a low fare in economy or business can be substantially less than the fare in the upgraded cabin. I think it's a win all round and that fact that the prices are known in advance makes it even more transparent and even handed.
Personally I don't really see the argument that there is less incentive to buy J or F seats. Folks on business will buy what the travel policy allows - they aren't going to enter into a lottery for an upgrade. If their policy only allows Y they are more likely to consider upgrading on their own dime if last minute paid upgrades are available. Likewise those who travel in Y at their own expense.
Most airlines do a lot of operational upgrades anyway - for free. Much better to get volunteers to pay their way to the front and make space for more at the back I would think. Pax that know that paid upgrades are diminishing their chances of status based free upgrades are actually incentivised to stop relying on op-ups and either buy the J/F seat or pay for the upgrade on the day. I am pretty sure some elementary modelling of behaviour, based on the typical loads in each cabin on a specific route, would quickly show which model is most financially rewarding to the airline.
But isn't this academic anyway: I was under the impression that SA's J cabins on intercontinental routes are pretty fully booked most of the time?
Personally I don't really see the argument that there is less incentive to buy J or F seats. Folks on business will buy what the travel policy allows - they aren't going to enter into a lottery for an upgrade. If their policy only allows Y they are more likely to consider upgrading on their own dime if last minute paid upgrades are available. Likewise those who travel in Y at their own expense.
Most airlines do a lot of operational upgrades anyway - for free. Much better to get volunteers to pay their way to the front and make space for more at the back I would think. Pax that know that paid upgrades are diminishing their chances of status based free upgrades are actually incentivised to stop relying on op-ups and either buy the J/F seat or pay for the upgrade on the day. I am pretty sure some elementary modelling of behaviour, based on the typical loads in each cabin on a specific route, would quickly show which model is most financially rewarding to the airline.
But isn't this academic anyway: I was under the impression that SA's J cabins on intercontinental routes are pretty fully booked most of the time?
Anyway, when I fly internationally it's usually in first, occasionally in biz., and I would never (and nor would anyone I know) buy into a cheaper cabin and cross my fingers and just hope I get an offer to purchase an upgrade. I know I'm speaking only for myself, but zero of my friends and colleagues would ever do this either.
From what I *hear* from those that fly on the JFK-JNB/v.v. and IAD-JNB/v.v. routes, the front of the cabins have been 100% occupied for the last few months, but obviously I have no empirical evidence to prove that every day has been sold out, etc.
Jul 15, 2012, 8:20 pm
#23
Join Date: May 2008
Location: SFO
Programs: UA 1K, DL, AA, AS
Posts: 305
SAA -- Paid Upgrades on Day of Departure
I was wondering if SAA offers paid upgrades from Y to C on the day of departure for flights from JNB. I'm looking at the JNB-HKG flight and wondering if anyone has any success and how much it costs.
Last edited by sfonorth; Jul 15, 2012 at 9:13 pm
Sep 28, 2012, 7:05 pm
#24
Join Date: Jul 2007
Location: Tampa, FL
Programs: BA Gold, US Airways Silver, SAA Blue, Hilton Diamond, Fairmont Platinum, Marriott Silver
Posts: 73
I upgraded my 'cheap' coach ticket from IAD to JNB earlier this week. Had to pay to upgrade my ticket to an upgradeable fare bucket, then the $999 for the upgrade. Gladly paid it, as every seat in coach was taken (at least on the IAD to Dakar route). Enjoyed every minute of it.
Oct 19, 2012, 4:20 pm
#26
Join Date: Jul 2007
Location: Tampa, FL
Programs: BA Gold, US Airways Silver, SAA Blue, Hilton Diamond, Fairmont Platinum, Marriott Silver
Posts: 73