Via The South China Morning Post: In a move to boost earnings, the Hong Kong carrier - whose net profits tripled to HK$2.62 billion last year - is exploring a pilot project to sell premium economy and business class seats at cheaper prices, allowing it to fly fully booked more often.The plan would open up…
Continue reading: Cathay Pacific Auctioning Off Business Class Seats
Share your questions, experiences, and thoughts below.
What customers think of the benefit isn't nearly as important as whether it would actually cannibalize business class seat sales and, as a by-product of this, actually cheapen the product in the eyes of those consumers. Why bother paying retail on a route that usually goes out pretty empty inn business but still commands high yield? I don't think it is a good idea for premium airlines like CX or SQ.
It's interesting because in the case of NZ, J awards have disappeared completely on most routes, but with OS, VS and EY, there is still decent J award space. So clearly it can go both ways in terms of award redemption depending on the airline and specific routes. I would say though that there is no way this could be net positive for those wanting to redeem awards. The hope is just that it's not too negative an impact.
@AJ - the advantage of these opaque auctions is that the airline can (and will) take into account your previous success rates with bids. So although they may not be able to completely prevent cannibalization of yields, they can certainly limit individuals from repeatedly winning bids for upgrades.
Think this Flyertalk thread ( http://www.flyertalk.com/forum/cathay-pacific-asia-miles/1579501-class-upgrade-bidding-initiative-your-feedback-sought.html) summarises it pretty well...
Inventory management is a function/division within revenue management; the two aren't separate (unless CX is specifically different than other airlines).
If they can do it without impacting J/F award availability, this may not be the end of the world but people on FT seem to be concerned.