Air New Zealand's decision to auction off unsold premium economy and business class seats on long haul flights could benefit its revenues as long as it doesn't devalue its "premium" brand, a specialist business travel agent said.
The airline's new OneUp programme allows passengers to bid for a cabin class upgrade on flights from New Zealand to Los Angeles, San Francisco, Vancouver, Hong Kong, Shanghai or Beijing.
Air New Zealand announced last week that economy and premium economy class ticket holders who had booked directly with Air New Zealand either online, through its contact centre, or at an Air New Zealand Holidays store, may receive an email inviting them to make an offer to upgrade to the next cabin class.
Passengers whose offers were accepted would receive email confirmation several days prior to travel.
Passengers travelling between Los Angeles and London, and Hong Kong and London would also be eligible to bid for an upgrade.
The airline said high level Airpoints members, who might usually expect to be given the chance of an upgrade in the same situation, would not be beaten to the punch by OneUp bidders. OneUp upgrades would only occur after existing Airpoints upgrades had been allowed for, the company said.
Business World Travel managing director Grant Bevin, who handles travel arrangements for 130 or so New Zealand companies, said he hoped the discounted upgrade price didn't devalue the airline's product.
"We have many clients who are happy to pay the money for the exclusivity and privacy associated with business class and premium economy, and so this needs to be carefully managed."
Bevin said the offer would help Air New Zealand cope through the business traveller off-season.
"In January when all our business travellers have well and truly put their passports back in their undies drawer and gone to the beach, they certainly do have empty business class cabins but so do all airlines that fly out of New Zealand in January.
"It's actually a good way for them to fill up the cabin in the short-term for the off-season, but as an ongoing facility it wouldn't be a product you could rely on if you really wanted to fly business class."
Bevin said Air New Zealand's premium and business class products were world-leading, with a price at the higher end of the market, and he hoped that OneUp would not devalue it.
"I don't believe they'll be bargain basement prices; Air New Zealand will still want a fair return from those seats but it does introduce people to premium economy or business class where there are seats available, and they do have a lot of spare seats at the front end on holiday and leisure routes like Beijing and Shanghai.
"It's a bit like these one-day deal sites that attract a market that's just buying on price and are not loyal, long-term customers, but I certainly hope it doesn't devalue what is a very good quality Air New Zealand business class product."
STA Travel general manager Andrew Gay said it was a "very innovative way of increasing their yield" and might enable the airline to sell more economy seats, he did not expect it to have a lot of appeal to his company's target audience.
Air New Zealand had been trialling OneUp in North America, the United Kingdom and Australia but would not reveal how the promotion had gone in those markets, other than to say the introduction in New Zealand meant it was "pleased with the results to date".
"Like all airlines there are always some seats unsold across all cabins. We upgrade people today into the few unsold premium seats, and in addition to that we've now developed this offer process which enables us to earn additional revenue and give customers an opportunity for a last minute upgrade."
Bevin said a full return fare from Auckland to Los Angeles in economy class could cost between $NZ2250 and $NZ4600 return [ex taxes] ($A1714 and $A3500), while premium economy could cost between $NZ4300 and $NZ5500 ($A3270 and $A4190) and business class between $NZ7500 and $NZ12,000 ($A5700 and $A9140).
- © Fairfax NZ News