New VA Fare Structure

[Mattg]

From a customer point of view, the less 'intelligence' in fare pricing the better. These systems aim to gouge as much money from you as possible so why would I want that....

I wonder if said systems would also reduce fares if they discovered that I wanted to fly but wasn't prepared to pay what the airline was asking?

 

[Pleb Status]

I wonder if said systems would also reduce fares if they discovered that I wanted to fly but wasn't prepared to pay what the airline was asking?

Maybe. However you do not need 'intelligent' pricing if you are just going to cut fares to make a sale. You can just cut the advertised fare and sell the cheap seat to anyone.

What companies want to do is to extract the maximum you will pay for the seat. If you normally pay $500 return to fly every three weeks between two cities, there is no need to discount to you between these cities. So others may see lower fares for the same route but you will not as they know you will pay and travel anyway.

 

[trippin_the_rift]

I wonder if said systems would also reduce fares if they discovered that I wanted to fly but wasn't prepared to pay what the airline was asking?

Exactly.

Hotels, for example - have very different revenue management systems to airlines. Hotels base pricing off a number of factors including what their competitors charge. It's not necessarily priced by availability like airlines.

Some sophisticated airlines for example have what's called a "360 degree view of the customers share of wallet". So they know what you're spending and with which airlines. Now let's say VA knows they have 1% of your air spend and they know this is worth $100. This means they're missing out on $9900 of spend and could take real-time steps to lure you into purchasing a flight. Of course they would need to couple this intelligence with the 'persona' or 'customer segmentation' data to know if price is a driving factor behind your flight search choice.

Again, armed with this information - VA may know you have a fully flexible SYD-LAX booked on Qantas in business class. Imagine if you were to receive pinpoint marketing with a special sale, just for you on the exact dates you have booked with Qantas, at a lower price and included bonus points. It's a tempting offer...

Personalised pricing is coming in a big way. VA certainly don't engage in this yet and I have no doubts in my mind it's costing them a FORTUNE. This intelligent pricing is wonderful because it goes straight to the bottom line. It might help explain why VA is one of the least profitable airlines flying in Australia, but I wouldn't want to make any conclusions.

Note: I help airlines deploy these big data intelligence systems... VA you should contact me ;-)

What companies want to do is to extract the maximum you will pay for the seat. If you normally pay $500 return to fly every three weeks between two cities, there is no need to discount to you between these cities. So others may see lower fares for the same route but you will not as they know you will pay and travel anyway.

An excellent example is me! 95% of my Virgin Australia flights are in business class and yet I'm bombarded with $79 specials.

 

[medhead]

For all the talking up of intelligent pricing not being used by VA, with the implication other airlines in Australia do track share of wallet. it's interesting that QF are constantly offering pricing of a particular flight that I'm simply not prepared to pay.

 

[drewbles]

Another option would be to keep fly ahead but increase the price of the last flight. This might force passengers to put more thought into selecting a particular flight.

Or, they could have thought laterally and actually enforced their own T&C's.

The T&C's state that fly ahead is only available if the same fare class is available. Up until now, they've simply said 'sure' if there's a seat, regardless of the fare bucket.

By starting to enforce this, it would mean they could zero out buckets if they wanted to be strict, and charge a fee to up to the next available fare bucket. Even more, they could flag 'abusive' accounts (ie those who may book the last fare of day on a routine basis, and fly say more than 2 hours earlier) and charge them to change whilst permitting free changes to others. It would be discreet with a simple "I'm sorry sir, there's no availability on the fare you booked, but we can move you for $xx" or "Certainly there's space let me move you". The passenger need never know which it actually is. This flexibility could even apply when a bucket is zeroed out.

There were many ways of enforcing rules without this being so publically negative. Then again, it's what i've come to expect from most loyalty schemes. Piss your customers off and to hell with the consequences.

 

[kevrosmith]

Interesting to see the VFF Rep having a look through this thread.

 

[Major]

Interesting to see the VFF Rep having a look through this thread.

View attachment 77070

It would be more interesting if they actually did something

 

[Milefest]

It would be more interesting if they actually did something

Don't confuse VFF with VA

 

[Happy Dude]

snip..../ Again, armed with this information - VA may know you have a fully flexible SYD-LAX booked on Qantas in business class. Imagine if you were to receive pinpoint marketing with a special sale, just for you on the exact dates you have booked with Qantas, at a lower price and included bonus points. It's a tempting offer...

Great reading this stuff, Trippin - really interesting!! Can you elaborate on how they might know this? My Orwellian senses are tingling.....

 

[esseeeayeenn]

An excellent example is me! 95% of my Virgin Australia flights are in business class and yet I'm bombarded with $79 specials.

Not unique to VA though, I receive that from QF as well. Also the QF website consistently defaults to economy even when you're logged in and searching for J or F.
It also won't show me all sorts of premium fare options I can find on QF on third party sites.

 

[trippin_the_rift]

Great reading this stuff, Trippin - really interesting!! Can you elaborate on how they might know this? My Orwellian senses are tingling.....

Much of the intelligence comes down to structuring data they already have in a way which can be used on the backend. Of course, this is useless until the database is segmented and this includes non-member segmentation which a lot of large companies struggle with because of the vast volumes of unstructured data. Also, this task is highly specialised as it requires a commercial head to understand which pieces of data are important and how they can be linked into the greater vision for the airline/ffp. Expedia does hotel sales very well and most of their platform is machine learned. Expedia (like all big OTAs) have product specialists whose sole job it is to optimize the heck out of 1 single web page. This includes granular details such as which shade of green works best on the "Find Now" button.

While there are many more factors which contribute towards best practise of utilizing data, and I can't possibly list them all here - this may satisfy some of your Orwellian senses for now: http://bit.ly/2bbl5oj

 

[grubbidok]

"I'm sorry sir, there's no availability on the fare you booked, but we can move you for $xx"

"Nah, it's alright, I'll wait"

*wanders over to bar*

"I'll have $xx worth of whatever's in that fridge thanks. Be back in 10mins for $xx more"

 

[Happy Dude]

Much of the intelligence comes down to structuring data they already have in a way which can be used on the backend. Of course, this is useless until the database is segmented and this includes non-member segmentation which a lot of large companies struggle with because of the vast volumes of unstructured data. Also, this task is highly specialised as it requires a commercial head to understand which pieces of data are important and how they can be linked into the greater vision for the airline/ffp. Expedia does hotel sales very well and most of their platform is machine learned. Expedia (like all big OTAs) have product specialists whose sole job it is to optimize the heck out of 1 single web page. This includes granular details such as which shade of green works best on the "Find Now" button.

While there are many more factors which contribute towards best practise of utilizing data, and I can't possibly list them all here - this may satisfy some of your Orwellian senses for now: http://bit.ly/2bbl5oj

Huh, wha? Didn't get a word of that....

The link was interesting reading - ta for that. I'm none the wiser as to how QF would know that I have a VA flight (hotel and credit card tracking??) but I do have an urge to buy a tinfoil hat.

 

[smeacs]

The big data and corresponding increase in market discrimination opportunities is absolutely fascinating.

 

[Shudai1]

Oh well, just in case someone from Virgin is reading this thread.

My wife and I have both been Platinum with you now for the last 5 years, but will move to QANTAS once these changes take place.

Anyone from QANTAS reading? Match status, guys - I 100% assure you, it will be worth your while.

 

[pyne]

Is that a gee-up from VA?

I thought this was coming, have tried to book award flights for next year and after weeks of trying ---900k points for flights that should be 150k I gave up and transferred all my points to Singapore airlines and found award seats at reasonable rates. Have flown with SQ before so shall stay with them for longhaul and go with Qantas (but not jetstar) for domestic

 

[coco50]

Not worried. Don't fly VA anymore. Points zero. status zero.

 

[dudekramer]

This will probably make my decision easier not to try to maintain Gold or regain Platinum - after a few health issues my International travel was curtailed over the past 2-3 years, and after being Platinum with Virgin, I have dropped back to Gold but this year, having used points for travel, it meant less status and hence by October, a fall to Silver. As we always travel Business internationally, where we still get benefits of priority, seat selection, etc, it just means spreading the flights across a small number of airlines who offer the best deals at the time of travel. On our most recent holiday to Europe we used a mix of Emirates, BA, SAS, and Qatar, all of which were quite acceptable. Obviously because we have accrued a large base of points across a number of airlines it does give some flexibility, and in many cases can mean paying for one fare and points for my wife's fare. In summary, Virgin has been my airline of choice, but if they are going to make it more difficult, then I guess I will slowly fade away.

 

[Jack_OC]

"Nah, it's alright, I'll wait"

*wanders over to bar*

"I'll have $xx worth of whatever's in that fridge thanks. Be back in 10mins for $xx more"

Yeah, that would be my reaction too! However, when you say "worth" do you mean what it's worth to you, or what it costs VA? Because the reality is, if you mean cost to VA, the xx is not likely to be a very high number. You can buy the beer they supply for less than $2.50 a bottle in Dan Murphy’s, and VA would obviously be paying a lot less than that at wholesale rates. The wine is cheap too, and of course they don’t serve spirits. So let’s say you have 10 or even 15 (!) drinks while you’re waiting – that would still be no big deal in terms of cost to VA, and clearly very few people would consume anything like that amount. I know there is “food” too, but again, the cost to VA is negligible, and most people won’t decide to just continuously eat for several hours because they’re waiting for a flight! I know in my case, the difference in what I consume over a 3 hour period in the lounge versus 45 mins is probably less than $10 - in terms of cost to VA that is. The value to me - i.e. my saving compared to retail prices outside - would be much higher, but that’s irrelevant to VA.

So the only real impact of no fly ahead that I can see are (a) causing annoyance to customers who want to avail of it but can't and (b) overcrowding in the Lounge, which will cause serious annoyance to a whole load of other people too.

By the way, I have still had no response to the email I sent VA early last week on behalf of my wife and I (both Platinum), to complain about these changes. So unfortunately, it's clear that VA couldn’t care less about annoying its customers, Platinum or otherwise. Definitely the end of the road in either of us making any effort to fly with VA or its partners.

 

[Tassieoptom]

Reading this thread has just about ruined my day. Am Velocity gold with 860 SC's and was planning two things to help me advance. 1st, am buying some new medical equipment through BOQ for immediate 64000 velocity points, and 15000 points per year for the next 5 years. 2nd am looking at flights via Virgin/Singapore airlines, Hobart to Paris next month, earning SC worth 160 each way which will give me platinum. So very unhappy.

Does anyone have any information on status matching from Qantas? Is it more likely from Gold-Gold or Platinum-Platinum? Can always spend the points with Singapore airlines.

Thanks in advance.