First Class Flying: A Solution

[KCFlyer]

It's hard to keep track of all KC's changes of the subject but if you look you'll find that his initial comment on the topic was that the cockroaches supposedly revolted over proposed reductions in perks. "Perks" and miles are in many cases perhaps indirectly related to some degree but that isn't where he started (check his earlier signature lines...)

[post="259094"][/post]​

If you checked my earlier signature lines, it would look something like this:. See, this is my FIRST signature line.

And I really haven't changed the subject (much to the chagrin of many, I'm sure) - it's been the same all along.

 

[longing4piedmont]

I feel another attack of class envy coming on!!!!

Speaking of which, KC, you change avatars more than you change your mind. But I’ve got to admit, you are one good looking fellow.

 

[KCFlyer]

I feel another attack of class envy coming on!!!!

Speaking of which, KC, you change avatars more than you change your mind. But I’ve got to admit, you are one good looking fellow.

[post="259097"][/post]​

I changed my avitar over the weekend to have some fun. Now I'm back to my good old self. And hey...ladies love a musician

 

[longing4piedmont]

I changed my avitar over the weekend to have some fun. Now I'm back to my good old self. And hey...ladies love a musician

[post="259101"][/post]​

Ok In the spirit of having a little fun. How do you like my new one?

 

[mweiss]

[KC's] initial comment on the topic was that the cockroaches supposedly revolted over proposed reductions in perks.

And you have to do an awful lot of hair-splitting to say that it wasn't. See below:

In any event BBB's play wasn't a direct attack on "perks". ... It was, as you say, a change to mileage earning that might have eventually and indirectly led to a reduction in perks if DM members didn't go along with his ideas about what sorts of tickets they should buy.

Which means that, for many of you, it was a reduction in perks. If you don't get the perk, and you used to, it's a reduction. That it would have taken two years to have that effect is irrelevant. Had you waited for two years to act, it would have been much harder to reverse.

I understand your motivation; it was the same thing that drove me away from CO. What I don't understand is your defensiveness when it is suggested that the Cockroaches formed when there was danger of something being taken away from you.

 

[TomBascom]

I see a distinction between "perks" and miles.

There was no attempt to change the perks -- only who might be able to enjoy them.

That's different from eliminating their existence.

If that's hair splitting and "defensive" then you're right, I'm guilty. I think that it's an important distinction.

IMHO KC has said and will continue to assert that the perks themselves are the problem. He'll occasionally dance into a corner and wave his hands about reserving them for high value customers but it is clear that he doesn't really believe that. He believes that FF programs are essentially all loss and no benefit. I believe that the benefits outweigh the costs. By a considerable amount. Since we're talking beliefs I guess that it must be a religion

Unlike KC I do occasionally try to dig up some data. So I, naturally, think my church is more rational than his. Of course he has the example of SWA actually being profitable on his side... But IMHO that has little to do with superficial differences (aka "perks") like assigned seats, preferred lines, or F cabins and a whole lot to do with much more fundamental differences between the management of the two carriers.

In my personal case I doubt that those specific changes to DM would have ever directly impacted me (his other moves re: standby and use it or lose it did though, and they are largely still in place.) I was much more upset by the "customer is the enemy" rhetoric and its implications for the future. Which I suppose is equivalent at some level but not equal.

 

[KCFlyer]

IMHO KC has said and will continue to assert that the perks themselves are the problem. He'll occasionally dance into a corner and wave his hands about reserving them for high value customers but it is clear that he doesn't really believe that.

I'll always believe that if someone is willing to pay for a first class seat, then by all means they should enjoy it. In these reams of data you cite -I haven't seen one that supports your and others assertation that "the seat would have gone unsold anyways, so there is no loss of revenue".

He believes that FF programs are essentially all loss and no benefit.

Not really - witness Southwest and their RR program. At the same time, the roaches ridicule the SWA RR program because it only lets them take a romantic vacation to Amarillo. But I would submit that the lovely panhandle vacation costs the airline a whole lot less than a free trip to Amsterdam. But yes, if RR were to be abolished, the impact on Southwest's bottom line would be positive.

I believe that the benefits outweigh the costs. By a considerable amount. Since we're talking beliefs I guess that it must be a religion

But you can't find data to support that, other than a Canadian airline offer several million for 1/3 of a bankrupt airline's FF plan. Others have tried to tell you that the true costs of a FF program are not as simple as taking the costs of the program alone....there are other costs that are incurred but are NOT included in the "profitablity formula" of the FF program.

I was much more upset by the "customer is the enemy" rhetoric and its implications for the future. Which I suppose is equivalent at some level but not equal.

Good for you that you wouldn't have been impacted by the DM changes. But if there was an outcry, I don't think it was because the roaches were acting on behalf of the other frequent flyers...after all, if the changes don't impact you, what do you really have to complain about? No, I believe the cockroaches got started because Bob (who admits that he will buy what they are selling) would have been impacted by the changes to DM. Read that again...the changes impacted THEM. That means that they are most certainly NOT 'preferred customers' from a business point of view - regardless of how many miles are in their accounts, or regardless of what precious metal name they carry in the program.

And as much as you feel that the move was a "customers are the enemy", I have to say that I would agree with that thinking - any customer who "buys what they sell" and isn't willing to accept a trade-off in the award benefits, really is an "enemy customer".

 

[whlinder]

Of course he has the example of SWA actually being profitable on his side... But IMHO that has little to do with superficial differences (aka "perks") like assigned seats, preferred lines, or F cabins and a whole lot to do with much more fundamental differences between the management of the two carriers.

[post="259121"][/post]​

I disagree (to a degree). Simplicity is the key to keeping your costs down in the airline business (that and properly hedging fuel). Everything about loyalty programs for US adds complexity to their operation, thus adding costs. Now the additional costs are ok if they are being offset by additional revenue brought in by having the complex loyalty program/F class. Do they bring in additional revenue? Certainly, but I don't think it is enough to offset the costs right now for US. Alaska spent considerable time and effort revamping their F fares and upgrade program to make sure that F class was revenue positive.

BBB tried to change the way US measured how good of a customer you were. The end is a good idea but the means to get there were not smart and gave the impression of the 'customer as the enemy'. Alaska took a different approach. Instead of changing how they measured your value as a customer, Alaska made sure you only got the best benefits of your status (upgrades) when you were on more expensive tickets.

Then again, all my yammering is basically in agreement that the differences come down to differences in management philosophy between WN and US.

 

[mweiss]

There was no attempt to change the perks -- only who might be able to enjoy them.

That's what I mean by hair-splitting. The Cockroaches didn't form because it would become easier for them to enjoy the perks. They formed because, for that subset of US's customers, the effect was the same as eliminating their existence. If you can't enjoy it, it might as well not be there.

Again, that's why I left CO. They made it harder for me to remain a Platinum Elite, so I left. No hard feelings. They didn't want me because I wasn't among their most profitable customers, and yet I was always sitting in First. Good for them; the program worked as intended.

IMHO KC has said and will continue to assert that the perks themselves are the problem.

That's not how I read it. He's been asserting that the way the perks are allocated is the problem. On that point, I agree.

 

[TomBascom]

It's a good thing today is a day off for me...

I'll always believe that if someone is willing to pay for a first class seat, then by all means they should enjoy it.

Except when you're arguing that F cabins are in and of themselves an unsupportable cost and that the size of that cost is approximately equal to the asking price of an F ticket.

In these reams of data you cite -I haven't seen one that supports your and others assertation that "the seat would have gone unsold anyways, so there is no loss of revenue".

The minor detail that F seats remain unsold right up to departure apparently means nothing to you.

They're for sale. People don't buy them. Inventory remains right up to the gate dance. They aren't being filled by upgrades until the last minute. What more is there to know? Go ahead and prove me wrong -- find some flights (on planes with an F cabin) where you cannot buy an F seat. If you do manage to find such flights you'll have to also show that those seats were taken by freeloading upgraders rather than F purchases, but since you'll come up empty handed we don't really need to worry about that.

If your point is that a more reasonable F fare might result in people actually buying them then I agree. I've said that over and over and over. I'm pretty sure that all the other roaches have said it as well. And I will repeat that, even with reasonable F fares, the sales prevention process that is currently in place is a huge barrier to that.

Not really - witness Southwest and their RR program. At the same time, the roaches ridicule the SWA RR program...

Piney is one roach among many. Personally I happen to think that RR is perfectly fine -- for SWA. They may need to change it someday -- after all times change. But it's a good program and I'm sure the relevant people at SWA are quite happy with it. And to the degree that I fly SWA (yes, it does happen) it serves my needs just fine.

But yes, if RR were to be abolished, the impact on Southwest's bottom line would be positive.

SWA is a pretty insightful and hard nosed outfit. If it's so obvious that eliminating RR is a good idea then why haven't they done it? Are they suddenly a charity?

But you can't find data to support that, other than a Canadian airline offer...

Your memory is fading. There's more data than that out there. In particular you should look into the sale of miles to third parties (like credit cards and hotel programs.) Back in the late summer or early fall there were numbers kicking around in one of the bk filings (I think it was Ben's "why we should be allowed to continue operating" filing) that seemed to show annual revenue from sales of miles as being in excess of $100MM -- or maybe that was the quarterly number. I forget, but it was a ton of money and way, way more than the liability side of the equation.

Others have tried to tell you that the true costs of a FF program are not as simple as taking the costs of the program alone....there are other costs that are incurred but are NOT included in the "profitablity formula" of the FF program.

I acknowledge that and strive for a better understanding of those costs. But you'll have a hard time getting them to add up to more than a few percent. Unless you're thinking that its ok for the sum of all the costs to exceed 1,000% Actually you'll probably just assert that they're huge. Michael might provide some believable data though.

There are an awful lot of things that are costing this company money and increasing complexity. DM isn't by any means the largest of them. It would, none the less, certainly be worth finding practical ways to reduce the complexity associated with DM. Eliminating paper upgrade certs was, for instance, a very good move and a win/win to boot. I'm sure there are more.

Good for you that you wouldn't have been impacted by the DM changes. But if there was an outcry, I don't think it was because the roaches were acting on behalf of the other frequent flyers...after all, if the changes don't impact you, what do you really have to complain about?

Stupidity offends me.

No, I believe the cockroaches got started because Bob (who admits that he will buy what they are selling) would have been impacted by the changes to DM. Read that again...the changes impacted THEM. That means that they are most certainly NOT 'preferred customers' from a business point of view - regardless of how many miles are in their accounts, or regardless of what precious metal name they carry in the program.

And the airline backed off because we're all such demonstrably bad customers right?

I'm sorry but I don't believe that. If we were such bad customers then they would have stuck to their guns.

And as much as you feel that the move was a "customers are the enemy", I have to say that I would agree with that thinking - any customer who "buys what they sell" and isn't willing to accept a trade-off in the award benefits, really is an "enemy customer".

Without an understanding of who those customers are, or are not, and why they do what they do any such customer differentiation is doomed. BBB and airline execs in general have clearly and repeatedly demonstrated that they have no idea who their customers are -- in general or as individuals.

Have you ever once acknowledged a single statement that we roaches are more than willing to make trade-offs? That we are willing to pay more for value? No, you just sit there and sneer at those statements with your snide "it's all about the miles" balogna. Just like an airline marketing executive who is convinced that price, and only price, is what drives purchase decisions. BBB didn't offer a trade-off. He followed the grand tradition of airline managment and tried to use a stick to beat his customers into submission.

 

[TomBascom]

That's not how I read it. He's been asserting that the way the perks are allocated is the problem. On that point, I agree.

The perk in question is upgrades.

KC has suggested that they should be reserved for those on higher priced tickets.

That is already how it works. If you buy a Y, B or A fare you get to upgrade immediately. Lesser fares are upgradeable at your preferred window if inventory is available. Inventory is allocated based on the history of that flight -- much like oversales they have a pretty good idea of what will happen most of the time. (It's one of those few things they seem to be able to do reasonably well at CCY.) F seats are never completely sold out prior to departure (or if it does happen it's pretty darned rare, they err on the side of holding back too many.) Thus there is pretty much always an opportunity for a high fare paying customer to snag an upgrade or just buy the F seat.

You might argue that the priority should be based entirely on the fare paid and that preferred levels should be eliminated altogether as a method of prioritizing upgrades. I suppose that's a valid approach too but I would counter that it is a narrow minded view of a customers value that is unsuitable for me. For lack of a better analogy -- I want to store the value of my relationship and spend it over time. It does raise some interesting possibilities for pricing though -- perhaps all seats should be auctioned Perhaps a secondary market could be created...

The current method is comfortable and IMHO fair. It balances a lot of different needs reasonably well. I wouldn't change it in isolation. If changes were part of a comprehensive plan that involved trade-offs and improvements that might be different.

 

[KCFlyer]

Except when you're arguing that F cabins are in and of themselves an unsupportable cost and that the size of that cost is approximately equal to the asking price of an F ticket.

No Tom, that's not at all what I said. I said that F cabins are an unupportable cost when the seat is filled with a guy who paid $250 for a round trip transcon. I am saying the opportunity should be given for the airline to sell those seats. Any seats remaining at flight time should be "awarded" to the folks who paid the most for their tickets - regardless of their level is, or regardless of if they are even a member of the FF program.

SWA is a pretty insightful and hard nosed outfit. If it's so obvious that eliminating RR is a good idea then why haven't they done it? Are they suddenly a charity?

Not at all. But here's a thought that's been rolling around in the back of my mind. Southwest is a very shrewd outfit. The costs to them for the RR plans are significantly less because quite frankly, it's not as complex as others. Southwest is also the financially strongest airline of all the "major" carriers. So they might just be keeping RR around to assist in bleeding some of their competitors. Sounds crazy, I know, but let's face it, when the response of their bankrupt competitors is to sell tickets for less than Southwest, why not bleed them even more by forcing those other airlines to keep their complex and costly FF programs in place as well?

And the airline backed off because we're all such demonstrably bad customers right?

I'm sorry but I don't believe that. If we were such bad customers then they would have stuck to their guns.

. Naw....they stuck to their guns because they are fools. That's why they are "out-Southwesting Southwest" on the Florida routes.

Have you ever once acknowledged a single statement that we roaches are more than willing to make trade-offs?

You know why I haven't acknowledged that? Because anytime I suggest something like, say - a restructuring of fares to provide "fair fares" in return for cutting out things like full CP credit for a $250 transcon, the topic shifts to something about 'service'. The only thing I have seen where roaches made a trade off was their acceptance of plastic cups over glass in first class.

 

[KCFlyer]

One other thing Tom, my really big issue is that the cockroaches have never answered this - Why is the airline the one responsible for providing you perks in your job?

A cop runs the risk of getting shot every day he goes on his beat. It's part of his job. Should he expect Krispy Kreme to comp him donuts? A solider runs the risk of being away from home for a long time...it's a part of his job. Should he expect a discount at Walmart for his family for that? YOu and the other roaches have jobs that require travel - it's a part of your job. Why is it then that the airline is responsible for providing you the perks to make your job a little more comfortable? Shouldn't that be something that is provided by your employer?

 

[Rob]

What about restoring the "amenities pack" that still exists internationally in business and first?

Instead of little sewing kits, whisk brushes, and shoe horns that nobody uses, update the pack to include premium brand samples that would cost US $0 and would at least get the passengers' attention while they admired the cheap sleep mask and booties that are actually useful.

 

[mweiss]

Michael might provide some believable data though.

I would if it weren't so buried in other places. I doubt that any airline knows how much the complexity is costing.

And the airline backed off because we're all such demonstrably bad customers right?

Well...maybe, and maybe not. After all...

BBB and airline execs in general have clearly and repeatedly demonstrated that they have no idea who their customers are -- in general or as individuals.

Perhaps they backed off because they didn't know. After all, CO didn't back off. My SWAG is that CO has a better handle on the airline business than does US. I'm quite interested in seeing evidence to the contrary, though. :huh: