Thai-Kiwi

I guess the question in this case is "does the UA reimbursement for redemptions offset the potential sale of a paid F fare'?

kittiyut

Of course it doesn't! (Monetary-wise)

But it is TG's decision/discretion to release those seats for redemption based on future forecast (based on whatever algorithm they use), not UA or other airlines. Nobody forced them to.

Look at it this way, if TG can't sell those seats and end up giving it away to VVIPs or TIPs or whatever they are called, TG does not see a single dime. On the other hand, TG is paid for when someone like me uses miles for upgrades (into "O" - only 30K for D,C,J -> O great deal!) or out right redemption (145,000 for BKK-LHR/FRA/CDG/MUC in F, used to be 115,000 and 95,000 before that).

Seats are in a sense a "perishable" commodity - once the flight takes off, they can't generate revenue anymore (you know what I mean). So TG would rather generate some income rather than let it go empty. Same goes with LH, where I can use my GPUs to upgrade - and LH would rather give away the upgrade to UA pax using GPUs than to their own FF because they actually get paid for it!

Thai-Kiwi

Academic discussion I know - I find this an interesting contrast with Air NZ (and QANTAS) - who will often let premium cabins fly with empty seats rather than be 'too' generous with making award seats available. And Air NZ is making a good profit too, despite carrying empty premium seats at times, so their revenue folks must have things 'well tuned' for their position in the market to accept NOT making available empty J seats for awards.

Air NZ does have a bidding system for Y->PE and PE-> J, which does assist with revenue, but reporting indicates that those who fail to succeed in a bid for an upgrade have sometimes noticed empty seats in the J cabin.

RTWFF

I understand their point of view is that by releasing premium seats below a certain price point they are "debasing" the product

eponymous_coward

I'm suggesting that if your F and J cabins regularly have empty space that doesn't sell or can only be filled by giving it away for pennies on the dollar (via FFPs), or for nothing at all (employees, TG VIP, whatever), you have probably configured your airplanes and routes incorrectly, in such a way that you are not maximizing the profit that plane could produce for you. That's entirely different from the FFP being or not being profitable. Airlines make most of their money on FFPs by selling miles to third parties (banks), and it's a statistical impossibility (a fortunate one for the airline) to have everyone redeem their miles all at once, which is why the schemes work; they keep printing the miles like Zimbabwean dollars, and inflating the miles requirements, but let's not go there. Let's just say consistently empty cabins (or cabins you can't come close to filling save through offering *A redemptions) represent bad choices in how you provide service.

The US3 have very profitable FFPs. They've also nearly abolished international F on their longhaul routes, in favor of J, Y+ and Y. Longhaul F reductions aren't just limited to the US3 though; LH, CX, the list goes on of airlines that are reducing F cabin size or taking it entirely out on some longhaul routes. That is essentially my point: smart airlines rationalize the service levels to fit the route and route network. If TG F isn't selling, perhaps the solution is to get rid of TG F for lie-flat J, Y+ and denser Y. The cabin space that is used for a mostly-empty or full of redemption F cabin can be turned into space for paying passengers (and also increases cabin density if it goes into J/Y+/Y).

If the reimbursement rate isn't profitable compared to the services rendered, it most certainly CAN be unprofitable. F occupies a lot of space that could be used for J, Y+ and Y pax. It generates services that have to be put out: Dom Perignon, swank lounges, and so on.

kittiyut

I should've added the word "total" ---> not a total loss for the airline.

But you are absolutely right and I agree with everything you said, especially where TG's aircraft configurations is concerned. Too many aircraft types, too many seat variations (in Biz).

One thing I hope TG will never do is go 3-4-3 on their 777s - to differentiate themselves and be a good selling point (not that it matters to me personally because I don't do Y, but I do care about the airline in general)

Kacee

Based on the F loads I've seen on TG, that "potential" is very very low, and TG is wise to take whatever cash it can for the seats.

alanslegal

Love the debate about why some (premium) seats go empty

Back to topic I guess, any longer term projections about those pesky 747s? I am looking from September 2019 onwards and whether I risk booking now (using points) and then plane swapped / downgraded etc.

kittiyut

Booking in Biz or First?
If Biz, then you're more likely "Upgraded" if swapped

alanslegal

Usually I book F award; esp SYD-BKK vv leg is the often discussed flight that expects a downgrade

THR

Also interested in this response - looking for BKK-SYD next year in first.