Cathay Pacific

Cathay Pacific explores online auction for seat upgrades

PUBLISHED : Thursday, 29 May, 2014, 12:40pm
UPDATED : Friday, 30 May, 2014, 7:44am

Cathay Pacific is considering an online auction - similar to ones on eBay - where passengers can bid to upgrade their seats.

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 all available premium seat upgrades to all passengers. "Customers would be invited to place an offer for their booked flights via a website prior to their departure date. If their offer was successful they would be advised around four days prior to departure and the offer payment collected," said a spokesperson from International Customer Loyalty Programmes representing Cathay Pacific on Flyer Talk, a popular aviation forum.

Members of the airline's Marco Polo Club climb faster up the company's tiered membership system depending on how often and how far they travel. Currently, customers who gain the higher tier are more likely to receive better rewards.

But concerned frequent flyers fear free upgrades could be scaled back, a benefit that is offered to Marco Polo Club members, particularly on flights where economy class is fully booked.

The auction is designed to attract the highest bid, while currently, full-fare economy passengers and Marco Polo Club members are offered seat upgrades by Cathay sales agents for a one-off fee before the flight. Separately, at the airport, Marco Polo Club members are often upgraded to a better seat for free.

Air New Zealand is among a handful of airlines that introduced online bidding and initially encountered resistance from loyal passengers fearing cash upgrades would overtake reward upgrades.

It is unclear if available premium seats after an auction would be released to Marco Polo members to purchase last-minute upgrades in higher-class cabins or use air miles outright for a premium-class seat.

Reward seat purchases and free upgrades for frequent flyers could be scaled back, said one analyst. "Operational and staff upgrades could certainly decrease," said Will Horton, an analyst at the Centre for Aviation.

Horton added there was likely to be distrust from passengers, but he urged Cathay to be "transparent" about upgrades and the priority frequent flyers would receive over non-status passengers.

Marco Polo members reacted on the Flyer Talk forum with scorn. One post said the move would make Cathay appear "cheap" and discourage passengers from paying upfront, while another threatened to switch to competing low-cost airlines.

"This is a direct threat to being able to obtain free tickets using [air] miles. That said, from a business point of view, it is quite smart. If Cathay can fill an F [first] class seat which would cost US$15,000 for US$7,500 it is better than flying empty," the post read.

A Cathay spokeswoman said: "We are examining new initiatives that will allow us to offer passengers, including our Marco Polo Club members, different ways to get an upgrade. At this stage the project is still in the study phase."