Upgrade Bidding Study - Auctions & Thoughts

[Michaela]

Hi all.... I'm a journalist, (ex TMC travel agent), looking to write an article on global upgrades with auction style bidding. I know a large proportion of you enjoy your FOC & points upgrades but I'm wanting to hear from everyone regarding the rise of this market segment...

SQ is about to join the growing list of airlines offering their own inhouse upgrades, mostly using PlusGrade, but with IATA's NDC enhancements we have VX using Seatboost and Sydney based Seatfrog is due to launch later this year also, (and any others I have missed?).

Can I ask for everyone's opinions, experiences & thoughts in this space please? I know there's already a thread here on VA Upgrademe success so I'm wanting to know on a global scale with all airlines, what you want to see, for those times when you cant upgrade with points but are still willing to pay?

 

[Mattg]

Welcome to AFF. I should probably point out that there is a forum for media requests.

You're probably aware of this, but the vast majority of airlines appear to be utilising the PlusGrade system. Many of the airlines using it appear on their website: Plusgrade | revenue upgrade platform for the airline industry

Personally, I don't mind airlines using it as a way of monetising premium cabin seats that would otherwise fly empty. However, I think most frequent flyers would agree that paying customers and frequent flyers upgrading with points should always have priority over these seats.

I personally have bid a few times when the price is right, however there have been times where the offer definitely wasn't worth it. An example of a time I did bid was when the minimum bid was $110 + 3,000 for a QF Y to J upgrade SYD-BNE. I did not bid when VA wanted a minimum of $180 for an upgrade on SYD-OOL. I also did not bid when Airberlin wanted around 40 Euros for a "guaranteed free neighbouring seat" on a flight that appeared to be empty anyway. (And sure enough, I ended up with several rows to myself anyway!)

I am generally happy to pay a little more for an upgrade, so it would be nice if this was extended to more airlines. It would also be nice if it was offered more of the time! I've been on flights with empty business seats where I would have been prepared to pay for an upgrade - but it was never offered! It also wouldn't hurt to proactively offer more reasonably-priced paid upgrades at check-in.

 

[Daver6]

Flying QF Y, I've never been offered the opportunity to even place an upgrade bid.

One experience with VA when offered was that I thought the minimum bid amount far exceeded what I was willing to pay for a short flight in J.

 

[Michaela]

Thanks Mattg and apologies if it appeared to be a media request, since I'm not after official information... There's a wealth of knowledge and experience on these forums with some extremely intelligent industry minds also, so I was wanting to validate my own experiences also, but feel that with increased competition in this space, it may also make it easier to pay for a last minute upgrade. The airlines have to be careful they don't alienate existing paying customers of course by devaluing their premium products and pricing. I was trying to spark some healthy debate since I too have felt that if the minimum bid was more realistic, they'd make more money. Qantas have held two Hackathons now, one just last week, but I had read about another Hackathon where the developers came up with a concept to upgrade in flight. Have you done a long haul upgrade bid with an airline Mattg?

 

[Mattg]

I agree that the airline would probably make more money if they offered more "realistic" minimum upgrade bids. However, this would devalue their business class product, meaning people would be less likely to buy J tickets/upgrade with points, and it also risks annoying their most valuable customers. So I understand why they keep the minimum bids a bit high.

I've only once been offered an upgrade bid on a long-haul flight (Eurowings from CGN to BKK) but sadly it was declined as the premium cabin ended up being completely full. I hear that Sri Lankan Airlines often has 100% full J cabins on its long-haul flights though, and while their J fares are often very competitive, I suspect some of that is due to their aggressive offering of upgrade auctions.

Some airlines do also already offer paid upgrades in-flight. I've been offered an in-flight upgrade from Y to a "premium flatbed" on an AirAsia X flight MEL-KUL. It was $399 but I declined as it was a day flight and had a row to myself anyway. Various other airlines do this - KLM is one. I've also heard that Emirates let you upgrade with points on board, but I haven't personally done this.

 

[williamsf1]

I was trying to spark some healthy debate since I too have felt that if the minimum bid was more realistic, they'd make more money. Qantas have held two Hackathons now, one just last week, but I had read about another Hackathon where the developers came up with a concept to upgrade in flight. Have you done a long haul upgrade bid with an airline Mattg?

When it comes to bids and the levels charged, these are closely controlled by revenue management. They have many years of data to predict what loads will be on a flight and what seats will go empty, that could be filled by a upgrade bid. They know the true cost of the seat and price at a level where a profit will be made to provide additional revenue.

As for the Qantas hackathon suggestion about upgrade in flight – many airlines already allow a passenger to pay a flat rate onboard after the doors have closed to sit in a premium seat if seats are available and payment collected via credit card, so this is hardly a innovation or new concept.

 

[Michaela]

many airlines already allow a passenger to pay a flat rate onboard after the doors have closed to sit in a premium seat if seats are available and payment collected via credit card, so this is hardly a innovation or new concept.

The youtube clip was for a third party app allowing upgrade inflight bidding. You're right that the idea of inflight upgrades is not new but it was a different way to sell it. I kinda feel that if I was going to upgrade, I would have made up my mind before checkin, so I could enjoy the extra benefits before boarding.... for lower ff status... anyway....

 

[travelislife]

Thai Airways have an openly published 'standby' upgrade price. It is flat rate thought not bid. And can only be done at check in so you can't guarantee a seat beforehand.

 

[Mal]

Several airlines (including BA) have an official/unofficial Airport paid upgrade policy. So you pay a reduced charge at the airport (compared to buying J) and are upgraded. So it's not just the auction scheme in use. BA also have online upgrades that are set using some pricing formula. Googling for POUG will give some background material. (I'm not going to directly link).

Iberia have an auction scheme. Not a fan of it really. I don't think it provides value with the minimum upgrade costs they set.

Generally, and in particular where I don't get additional status credits / miles, I find the value in upgrading most European flights to be negligible as I already have most of the soft ground benefits (eg lounges, priority boarding etc), and the additional £10 meal and champagne is poor value.

 

[williamsf1]

upgrade bids are also looked at by airlines marketing tool giving people who would not normally travel in a premium cabin a taste of the other side of the curtain.... as many on here will know ... once you taste J you never want Y again!

 

[Michaela]

... once you taste J you never want Y again!

[FONT=&quot]How True is That!

Airlines seem to be trying to maximize loadings in premium cabins, (which is obvious), and are only going to allow a set number of seats for bidding, but still keep enough seats for FOC and points upgrades. From the Wall Street Journal..... "Delta Air Lines, says that as a result of offering discounted first-class fares and paid upgrades for fees, 57% of its first-class seats have customers who paid their way in rather than free upgrades, up from 11% a few years ago. And Delta wants to push that to 70% in the next two years, Delta told investors in December".[/FONT][FONT=&quot]
[/FONT]

 

[travelislife]

The US domestic market is a very different beast. Doesn't have as much relevance to international travel.

 

[UP4014]

When QF send me an 'invite' to bid and upgrade I rarely do it and when I have done it I only ever put in the minimum. After doing this since they started offering I got a call asking why I don't bid to upgrade. I said if you want me to upgrade just give me an upgrade and stop asking for more money and points. Funny thing since saying that I think they look after me better.

If QF offer an upgrade for $$s and points then they should acknowledge that with the upgraded level of SCs. Just my view. I guess they don't want to get onto the slippery slope of being like other airlines and lowering their own business or first standards. And QF do have a good product at all level in my view.


Matt

 

[Michaela]

Googling for POUG will give some background material.

Wow, thanks Mal... There's a massive amount of information on BA's POAG' s / ProActive UpGrades, including upgrade pricing of over 100 sectors. I can see an insider posting a screendump of GDS booking class availability too. Judging by the length of the threads on the BA forums, it would appear to be very popular so I wonder if BA have found the right formula and pricing with offering inhouse upgrades?

 

[wandering_fred]

There is a bit of difference in the airlines' philosophy when offering "upgrades". BA's POUG offers will award tier points for the upgraded cabin in the BAEC program but it is still unclear whether partner airline programs get the upgrade benefit. UL's program does upgrade into a "cash" fare class (benefits partners) though they have been a bit less generous with minimum bids recently. MH's program still has upgrades at very reasonable prices, but the upgrade fare class credits "additional benefits" nowhere. QF's upgrade program would normally be classified as stingy both in terms of availability (either classic awards or bid) and prices. AA's program is reasonably generous but limited to AA elites with some routes being notoriously difficult - ie 50+ requests for a small handful of seats. CX tested a few routes - though I would argue the sample they chose was flawed - albeit that I actually succeeded with a bid (once).

And the marketing outlook for the premium cabins seems to be changing with some airlines (perhaps mostly US based) with fares being reduced to to entice SALE of the seats - eliminating the need to offer upgrades of any sort. Somehow I doubt that QF (or SQ or BA) will follow that path.

Best of luck with your data collection. Don't follow my example with too much wandering

Fred

 

[JohnK]

I have requested upgrades on both UL and RJ on the BKK-HKG and vv sectors. Successful each time except for one failure and my upgrade bid is usually USD95-USD100 and never more.

I have received and continue to receive offers from both QF and VA for SYD-BNE and vv flights. I have not submitted a single offer to date as the minimum bid is too high in my opinion.

QF has not sent upgrade bids for any of my international flights so can't comment but VA has and the upgrade was totally overpriced.

 

[wandering_fred]

...
QF has not sent upgrade bids for any of my international flights so can't comment but VA has and the upgrade was totally overpriced.

Which might be a way of saying the VA international business class is over-priced?

Happy wandering

Fred