Redemption on 777-300 ER Etc

[emperorsr]

Hi

Came across this:

http://www.emmanueldaniel.com/index....on=blog&bid=34

Would love to see what SQTalkers have to say about what this guy feels about KF's strategy for redemptions on the 777-300 ER and A380. Particularly interested in his view that future redemptions will not have Savers as more routes take on these two planes.

Also, he mentions that if you have an alternative *A FFP that you can redeem miles on these planes at the standard rates, and that SQ is bounded to honor these rates (eg say for example 100,000 miles for return SINCDGSIN on C) as opposed to SQ's own KF double miles requirement it charges its own members for the same flight. Is this true?

[SQflyergirl]

and that SQ is bounded to honor these rates (eg say for example 100,000 miles for return SINCDGSIN on C) as opposed to SQ's own KF double miles requirement it charges its own members for the same flight. Is this true?

one caveat: There must be availability.

[Singapore_Air]

What a long... statement (I'll be diplomatic). I do sympathise if he does feel his miles are devalued however.

Too long to read now so I read the beginning and just scrolled to what conclusions he drew.

If you examine the pattern of the pricing for their new premium products, not everything is working in Singapore Airlines favour right now. There was a time when Singapore Airlines the company could make its customer jump loops for it, pay a little more, even defend it. They have lost all that now.

I don't think he really researched his conclusion. If he means that measured by the hoards of passengers who value the Singapore Airlines product, are willing to pay for it and, most importantly, actually do pay for it day in and day out, as can be seen by the loads in the premium cabins, then his conclusion is on a shaky foundation.

Furthermore, it should be noted that FFPs make up a only a part of a firm's brand equity (an airline in this case). There are many other variables, notably the core service, the consistency of the service and the reliability of the service. However, it would be follow to dispute that if a customer, for whatever reason, feels that a component of the value proposition is devalued that the overall value proposition is not devalued by any quantum.

OK so I read some of the middle. He forgets that the higher mileage requirement reflects the superior product that he is getting. The New Business Class is a great leap from the old SpaceBed that was serving CDG.

Rightly or wrongly, it appears that the Star Alliance, when it costs SIA something (lost revenue), means very little to the Airline.

The verdict of the traveler has been made

Indeed. And long may they come to the same verdict?

[kelvgoh]

Hmm, I have some thoughts about this. And I mean no offence to anyone in particular, but just thought it best to speak my mind about it. And obviously I bear no ill thought to Uncle E.D. who had helped me many times when I was a young kid (we used to be neighbours).

First and foremost, like most consumer products, the consumer has a choice as to their patronage. If one feels that a product/service provider is not giving one good value, one can (and arguably should) simply give another product/service provider their patronage.

This is especially true with regard to SQ products. For almost every destination SQ flies to, there is always another comparable product by another airline on offer.

One is then free to make a consumer choice, which product presents you best value for your money? If one makes a choice based on the FFP they are on, or even "patriotism" by flying one's national airline all the time, how can this attest to rational consumerism?

I know, and accept that there is an argument for maximising FFP benefits. but to my mind at least, KrisFlyer and PPS bonuses are simply bonuses. The bottomline for air travel for me, and I suspect to many other people is simply this: which airline gets me to my destination at the time I want, and at the price I am willing to pay?

To my understanding, the changes in the KF and PPS programme affect three particular types of traveller particularly badly with regards to redemptions:

1) Business travellers who pay for their travel out of their own pocket, i.e. Directors of your own company (not corporate employees)

2) Business travellers who amass corporate mileage (on competitive corporate rates) for premium travel while on personal use

3) Frequent economy passengers who collect miles for the occasional J class experience.

Objectively assessing each one, I don't think it represents a huge enough income stream for SQ to align their policies to suit these travellers.

I could be very wrong here, but I believe that SQ's primary income stream in the premium cabins are by and large corporate fares. The company pays for the traveller to fly. and as long as SQ's corporate rates remain competitive, this income stream is probably assured. (and the great news to SQ wrt to this stream is that FFP miles don't matter to conglomerates)

Non-corporate economy travellers are usually the most price-elastic of passengers. very little loyalty arises from the Y cabins. Business clients on personal travel can be put in this category too. And whether the number of passengers in the first category of travellers is large enough to justify a policy favour, I don't know.

E.D. falls into the first category of traveller (he's the editor of the Asian Bankers Journal) . It is unfortunate no doubt, but beyond the "illusory" tie down due to FFP or Solitaire status, no traveller in his shoes is obliged to continue giving a devalued KF/PPS programme their patronage. It is their choice to continue their custom.

Investments, whether financial or personal, always have a possibility of going south. If financial investments do go wrong, we usually sell up and move on. If a romantic relationship goes sour, we go our separate ways and move on in life, hopefully to someone better.

I don't see why we can't apply that approach here.

SQ's new direction is clear. A very clear demarcation between premium cabins, and economy cabins. and within the premium cabins, a clear line between cash fares, and priviledge fares.

SQ is free to make its choice as a commercial organisation, and has made its choice. As travellers, we should make ours too.

just my two cents, and I apologise in advance if any feathers have been ruffled

[Singapore_Air]

KelvinGoh, I think you make very excellent points. Most importantly they are rational and conform to the rationality of marketing and economic theory at least.

It is so unfortunate that in the real world we have to cope with irrationality and by default have to factor this into our daily lives, company strategy etc....

I think Mr. Ed is on a path. I did a quick search on his blog and there was another post on something to do witht he B77W seats. I didn't read it though.

[LionCity]

Uncle Ed was probably a very loyal passenger to SQ for many years that has been upset with SQ's more economic driven recent approach. No doubt the changes in redemption and PPS have upset a number of loyal passengers including myself.

If there has been a less sentimental past connection with SQ, he probably would not have been so critical of the new more economic approach. I am indeed sympathetic to his complaints.

In my line of business an important factor is loyalty towards your key customers. I have done many free services for them in order to retain their loyalty. It is important to listen to the customers. The problem is that loyalty cannot be that easily translated into profitability while cost is much easier to measure. Hence the greater the tendency to ignore loyalty in good rolling times. Frankly, I do think SQ does need a jolt on the importance of their customer. But it is entirely up to SQ to decide how much they value our loyalty.

As customers, we again have freedom to choose the airline we fly. If we don't want to swallow it anymore and can't get SQ to move...better to move your spending bucks elsewhere.

As far as I AM concerned Uncle Ed is expressing his frustrations on his favourite airline or formerly his favourite airline. It is a very frank opinion like many expressed in this forum and we are actually doing SQ a favour straight from the horses' mouths of a community of SQ customers (this is not my original thought but came from a frequent contributor that I will not mention his blog name unless he has given me permission to do so). The airline may or may not monitor this website, but it is a very good feedback channel for them and drawing attention of our love and dislike of the airline's practices.

I once met a very wise strategic investor and he told "I never fall in love with anything otherwise you never made the correct investment or purchase decision". He always fly F Class and he is not in love with SQ or any other airlines.

[jjpb3]

KelvinGoh, I think you make very excellent points. Most importantly they are rational and conform to the rationality of marketing and economic theory at least.

It is so unfortunate that in the real world we have to cope with irrationality and by default have to factor this into our daily lives, company strategy etc....

I find it amusing that there is so much obsession with rationality, when observers of our forum might consider some people's obsession with SQ as anything but rational.

Besides, consumers are not rational, at least not by the standards of traditional economic theory (i.e., optimizing stable [in mathematical terms, convex] preferences against known or knowable budget constraints). The main reason mainstream economists are becoming comfortable with that idea -- brought up decades ago by cognitive psychologists -- is that their mathematical tools have finally begun to capture that insight.

I would argue that marketing depends in large part on consumers making decisions based on their emotions.

Sometimes moving on is an emotional decision. That's a good thing. That means there was passion in the beginning. What you see as "irrationality" may just be the human aspect of the path to a new equilibrium -- it ain't always pretty, but it's legitimate and makes life more interesting.

[jhm]

the great news to SQ wrt to this stream is that FFP miles don't matter to conglomerates

I'm not sure I agree with this. If FFP benefits/miles don't matter to corporates, then SQ would simply have the KrisFlyer programme and not a separate PPS programme for J/F fares.

SQ's new direction is clear. A very clear demarcation between premium cabins, and economy cabins. and within the premium cabins, a clear line between cash fares, and priviledge fares.

I'm not sure I agree with this either if by "privilege" fares, you mean miles redemption seats. To me (and many others), it's still a paid fare but using miles (previously paid for by the pax by buying more expensive mileage eligible fares) rather than cash. It's not as if SQ are giving the seats away for free.