Airlines make upgrades a bidding game online

[markis10]

It was rather weird to read this as I sat in my J seat having been upgraded yesterday, no doubt it's a trend that to a certain extent is not one many frequent fliers with status will like:

Air New Zealand carried 13.1 million passengers last year but had 100,000 premium seats unsold. It plans to introduce eBay-like bidding for upgrades in May, and its elite members will have to bid along with everybody else.

This drew a furious response from some, with one customer posting a photo of his chopped-up frequent-flyer card to an online forum and asking who it should be sent to. Another posted that it was “not a proud day to be a Kiwi”.
Penny Spencer, managing director of Sydney-based corporate travel agents Spencer Travel, said online auctions of flight upgrades was likely to have a negative impact on business travellers and travel management companies.
She said a business-class fare from Sydney to Manchester was usually worth about $11,000. If a traveller was successful with low bids on the Plusgrade system, the same journey would cost less than half that amount.
“This will ruffle the feathers of travel management companies and frequent flyers,” Ms Spencer said.

http://www.afr.com/p/national/airlin...qYJ5GVlvcXHA2J

[harvyk]

Yeah, this can only end badly...
They will either stop being able to sell J seats using anything other than the bidding method, and \ or they will lose their collection of frequent flyers who will see themselves being out bided for the seats by non-status pax.

A far better approach would be to offer a set number of seats for upgrades in the months and weeks before, and then go onto a standby system, where you can put in points to be upgraded at the gate, thus any unsold Y+ \ J seats will have the maximum amount of time available for sale, and will not go empty if there is a status pax with points who would like to use those points to nab a better seat.

[cove]

We have just signed up for a pair of new credit cards that could earn points with Air New Zealand.
I think I will warehouse the points and watch the developments on who joins this new system before picking the ultimate carrier.
Currently I am warehousing a chunk of points with a Visa card so I will do the same with this new Platinum set of cards.
Thank you Markis10 for posting this as I missed this article in AFR on 4th April.
It is a game that we need to play well as the rules can change!!

[oz_mark]

It was rather weird to read this as I sat in my J seat having been upgraded yesterday, no doubt it's a trend that to a certain extent is not one many frequent fliers with status will like:

Certainly, Air New Zealands Frequent Flyers weren't overwhelmed by the idea! It drives their OneUp product: http://www.australianfrequentflyer.c...ter-37184.html (Standby Airpoints Upgrades gone after May 30th [Now July 12th].)

[markis10]

Certainly, Air New Zealands Frequent Flyers weren't overwhelmed by the idea! It drives their OneUp product: http://www.australianfrequentflyer.c...ter-37184.html (Standby Airpoints Upgrades gone after May 30th [Now July 12th].)

Air NZ aside, it does affect VS and Etihad patrons as well.

[cove]

Pretty underwhelming stuff if you have been running up points for a "rainy day" with these 3 airlines.

[oz_mark]

Air NZ aside, it does affect VS and Etihad patrons as well.

I didn't say they weren't affected. I was addressing the fact that FF'ers did in fact perceive it negatively.

[samh004]

I’m getting deja vu, and assume this must have been posted here a while back, but can’t say where I read about this before. It sounds like a good way to bring newer members into the business of using their points, at the expense of their very frequent flyers who rely on the current system working as it always has.

[serfty]

If you look at the FT thread on the NZ forum, you can see is has disgruntled many, including me.

Airpoints Upgrades Gone! - FlyerTalk Forums

I no longer have the cost/benefit in chasing Gold Elite with them. I did pursue GE for the confirmed upgrades from any booking class.

As I posted there on March the 3rd:

Originally Posted by serfty
I don't spend as much money as some in maintaining Gold Elite status; but it is not insignificant.

Being top level with both Qantas and AirNZ I do have a choice. I find QF generally works better for me travel-wise, especially with the introduction of S2S by AirNZ. Also, with Qantas travel I have access to better lounges at AKL International, Sydney and Melbourne.

For T-T travel, QF fares have been generally comparable with NZ Works fares. However, I chose to pursue GE.

With that, last year I travelled Trans-Tasman much more on NZ than on Qantas last year (22 v. 4 times). Also, I did generally, pay the additional for works

Last year I travelled on over NZ$7500 worth of "New Zealand" flights - this could easily have been on other airlines if it were not for the need for those 810 SP's for GE requalification.

I also flew internally within NZ 9 times rather than on Jetstar+; I find prices are comparable when the plus is taken into account and booking well in advance (as 99% of my bookings are).

With this change I find no further reason to pursue Gold Elite status; I can go back to row four on Jetconnect trans-tasman 73H's and not have to pay extra for Food, Beverages, IFE and luggage.

Oh, yes, I'll also go back to earning FF points as well rather than just SP's.

I could just be that I am not the type of passenger that Air NZ is really interested in - if that is the case then so be it.

also:

Originally Posted by serfty
JASA/FASA anyone?

I have bookings through to May that will give me GE until mid 2014; It was getting tenuous whether to continue to pursue this but with this change I doubt I will.

If I choose not to pursue GE I will make bookings to utilise the "Recognition" upgrades I'll get through then, but that will be the end of GE for me.

I may maintain *G as it's cheap and easy to earn with Air NZ, but merely for the DJ status in oz and *G status worldwide.

[Passport Premiere]

In this example, the seat is only worth 11K if there is an established market for a specific flight with buyer wiling to pay the premium. Not just NZ, but carriers the world over are finding that the biz class premiums have run up too far to fast. On some flights there is sufficient demand, on other there is not. The more relevant trend that all premium class travelers need to be aware of is that the market does not close when you finalize your purchase. The market closes when the plane takes off. A common mistake is that once a traveler completes their research and finalizes their purchase, they don't think about it again. Like the U.S. housing market, pricing can just keep climbing and climbing right? Not really. What is the 11K seat worth without a buyer? Its worth nothing and is unrecoverable spoiled inventory. The other trend is for shotgun fare sales to be launched for two days where pricing drops by 70% or more for a short window of time....


Airline seats are commodities and whether we like it or not, entering into a contract for air travel is more of a trade than a straight purchase. The smart buyers keep tabs on the market BOTH pre and post purchase