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Qantas online auction lets you bid for a business class upgrade

By David Flynn     Filed under: qantas, business class, Qantas Frequent Flyer, upgrades

Qantas is the latest airline to offer economy passengers a business class upgrade via online auction through the launch of its new Bid Now Upgrades scheme, with the highest bid winning the cushiest seat.

To be rolled out from this week on domestic and international flights, Bid Now Upgrades will offer selected travellers a chance to be bumped up from economy or premium economy to business class using a mix of Qantas Frequent Flyer points and a cash payment.

Also read: Success strategies for Qantas 'Bid Now' business class upgrade auctions

Bid Now Upgrades will start from 3,000 Qantas Points on domestic routes and 5,000 Qantas Points on international flights (including flights to Asia, the USA and London), with travellers adding a cash component to sweeten their bid.

For example, here’s a sample Bid Now Upgrades screen for a transcontinental flight between Perth and Melbourne.

This bid has a floor of 4,000 Qantas Points, which can be combined with a cash component as high as $975 (the minimum and maximum dollar range is based on how many points you bid).

There’s no ceiling on how many Qantas Points you can put on the table, apart from what your account balance and common sense might dictate.

By comparison, a standard points-based Qantas Frequent Flyer upgrade on that same route would require upwards of 10,000 Qantas Points depending on the type of economy fare you’d purchased. 

Point-based upgrade requests trump auctions…

Qantas is aiming Bid Now Upgrades at infrequent travellers and Qantas Frequent Flyer members who don’t have enough points in their account to put in an upgrade request under the Classic Upgrade Rewards scheme.

Bid Now Upgrades will complement conventional points-based Classic Upgrade Rewards requests rather than replace them, and Qantas is adamant that Classic Upgrade Rewards will always take priority over Bid Now Upgrades.

“This new initiative will in no way impact the chances of members securing a Classic Upgrade Reward” pledged Qantas Loyalty CEO Lesley Grant. “These will always be confirmed first regardless of their Frequent Flyer tier and they remain the best value option.”

Grant added that Bid Now Upgrades will not change the process or priority for frequent flyers applying for a Classic Upgrade Reward “more than 24 hours out from their scheduled departure”.

Successful Bid Now Upgrades will be allocated after all Classic Upgrade Rewards have been processed, with the airline saying the scheme is designed “to unlock revenue opportunities” by turning unsold business class seats into cash.

Qantas says the new auction system “ranks below Classic Upgrade Rewards in terms of priority and value, but gives members the flexibility to supplement points with a cash payment.”

… but auctions trump at-the-gate upgrades

However, as Bid Now Upgrades will be locked in around 24 hours before the flight, they’re expected to reduce the availability of what Qantas terms an ‘On Departure Upgrade Award’.

These are points-based business class upgrade requests available to Platinum and Gold Qantas Frequent Flyers and Qantas Club members on domestic flights, but which are confirmed at the airport within three hours of the flight’s departure.

By that time, Qantas will have handed out business class seats to all successful Bid Now Upgrades. 

How the Bid Now Upgrades system works

Selected flights only: Bid Now Upgrades will only be made available on flights where Qantas expects there will still some spare business class seats remaining after Classic Upgrade Reward requests have been processed.

This will likely rule out many popular routes during peak times, instead favouring off-peak periods with lower demand for both business class sales and points-based upgrades.

Selected passengers only: Bid Now Upgrades operates as an invitation-only scheme and not all passengers will be given the opportunity to lodge a bid. First in line will be travellers booked on the more expensive economy fares such from the Flex, Semi Flex and Saver categories, rather than the cheaper sale fares.

Passengers chosen to bid for a business class bump will receive an email invitation seven days before their flight’s departure.

Making your bid for business class: the range of a bid spans from with a minimum number of points and a minimum dollar value, depending on the flight. The minimum and maximum dollars values will then shift depending on how many Qantas Points are bid, so travellers should first enter how many points they’re prepared to part with and then adjust the slider to choose the cash component of their total offer.

What’s the trick to a winning bid? Qantas is understandably cagey about the ‘formula’ behind Bid Now Upgrades, especially in terms of the split between points and cash. What we know is that as part of the Bid Now Upgrades system the airline assigns a set dollar value to each Qantas Point, which is added to the cash element of each bid to arrive at the total amount each bid is worth. But would an offer of 4,000 points + $800 trump an offer of 8,000 points + $700? Your guess is as good as ours.

Boost your odds: travellers can modify or cancel their bid at any time up until 24 hours before departure.

Tie-break: if two people on the same flight lodge the same bid but there’s just one seat up for grabs, factors which decide who gets the upgrade include the type of economy fare bought, each traveller’s frequent flyer status and who put their bid in first. 

Winners are grinners: passengers are advised via email the day prior to departure if their bid offer has been successful or not. If your bid didn’t make the cut there’s no points lost and nothing to pay.

Bid for business class with points + pay

Virgin AustraliaAir New ZealandEtihad AirwaysMalaysia Airlines and Cathay Pacific all run upgrade auctions using either money or frequent flyer points to help fill seats at the pointy end of the plane.

Qantas says its approach is unique because travellers can bid for an upgrade using a combination of points and cash.

In November last year Qantas presented the Bid Now Upgrades concept to focus groups consisting of selected Qantas Frequent Flyer members.

However, an Australian Business Traveller reader who attended one of the 90 minute market research workshops reported that during his session, “most of the Qantas Frequent Flyers in attendance” voiced their preference for an ‘upgrade at the gate’ system in which Qantas would offer fixed price upgrades directly to top-tier frequent flyers.

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About David Flynn

David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

 

Have something to say? Post a comment now!

1 on 10/2/15 by OJA

Interesting development. I would assume you only receive Status credits and points based on the original class and fare purchased and not business class?

2 on 10/2/15 by DB

Great idea Qantas.  You guys are moving in the right direction.

1 on 10/2/15 by TheRealBabushka

I disagree. Just because everyone else is doing it does not make it a great idea or the right thing. Unless airlines are able to, a) provide transparency to the bid process and b) provide historical data of the dollar value of successful bids for specific city pair in both direction, the balance of power will decidedly stay with the airline. 

I much prefer the system where inventory is set aside for upgrade (based on the airline's historical/trend analysis). Subsequently further unfold seats are released as upgrade inventory, where there is a set price for upgrades, be it through points/miles or cash. This approach is fairer, treats passengers on an equal footing and lowers the risk of gouging.

3 on 10/2/15 by gippsflyer

And the possibility you might end up with a spare seat next to you in J shrinks further (pretty much getting a rarity as it is)... Can't roll-out direct aisle access seating across the fleet fast enough. Oh Shadow, wherefor art thou? Lol

4 on 10/2/15 by MissBasset

Seems a bit more complex than it could have been. Who knows what is a reasonable bid to be in with a chance, and the optimum mix of points and cash? I do like the idea that FFs with Upgrage requests on booking will get priority, and hope QF are not seduced by stupidly high offers from 'infrequent' flyers at the expense of their loyal high status members.

1 on 10/2/15 by TheRealBabushka

On that point MissBasset,

i wonder if any consumer advocacy group may take up our cause and perform an experiment to identify the total cost of flights purchased outright versus through the bid process.

I suspect these airlines that offer a bidding process are hoping that passengers have not obtained the a) business class fare at the point of purchase and b) the cost of their Y or PY ticket to facilitate comparison and identify a reasonable bid amount. Anything that aids irrational purchasing behaviour by customers is a boon for the airlines.

5 on 10/2/15 by Zac

Reading the very careful wording of Qantas's email, it's almost as if they've got a copy of the "lessons learned" from AirNZ's poorly thought-through introduction of upgrade auctions (which for many frequent travellers - me included - was the last straw after a long line of tweaks, changes and "enhancements").

So key point is it doesn't replace the existing upgrade system, and auction upgrades are processed after regular FF upgrades - so I guess it is actually an enhancement.

6 on 10/2/15 by Serg

Seems to be overcomplicated. IMHO they should do it strictly on point base and it should be completely transparent - i.e. number of available seats on each flight should be known and it should be like ebay when current bid visible and when you place a bid you immediately know if you a highest bidder. Then we will know how people value those points.

1 on 10/2/15 by MissBasset

That would be a great system Serg, but it would thwart the irrational purchasing raised bt TRB above, which is something QF would wish to capitalise upon! A bit too groundbreaking for QF don't you think?

2 on 10/2/15 by Hugo

Such a system would be in the customer's interest, but not the airline's. I don't have any problem with the airline acting in its own best interests in a case like this.

Besides, how would that work in practice? People standing around with their smartphones in the airport terminal desperately trying to outbid each other by one point for the last available J seat before the cutoff time? Not necessarily in the customer's best interest either.

I've never bothered to put in a bid for the VA or NZ systems. The "minimum bid" always seems to be rather close to the fare difference that it would have taken me to buy the next cabin up outright.

1 on 10/2/15 by Serg

Such system will rid off plenty of points from people hands, I bet more in fact much more than classic or even any seat award, so it is for company interest as well. For system to work it must guarantee J seat to highest bidder – I do not think that Qantas loose anything if release few such seats per flight. And of course bidding should be closed 24 hours before flight to eliminate bedlam that you described. And those who like gamble for unsold seats could opt for last minute upgrade.

7 on 10/2/15 by MissBasset

I can see on the more sparsely populated flights in off-peak seasons J packed out, with Y not so full. I recall Feb. last year a SYD-JFK A380 where every Y passenger on the lower deck had a choice of at least 3 seats to stretch out over. Not sure about J as had a Y ticket with no upgrade request in. A 100% full J cabin is not so nice.

1 on 10/2/15 by gippsflyer

Agreed MissBasset, while you can't expect empty seats you haven't paid for, it's always pleasurable to find one next to you (particularly for ease of access to/from aisle, and minimal disturbance). 

It's always ironic when the J cabin is chockablock, yet behind the curtain into Y, people are enjoying rows of seats to themselves (not the norm by any means, by it does happen occasionally).

8 on 10/2/15 by Louise

Maybe AusBT should start a page where travellers can post their successful bid figures??

1 on 10/2/15 by Hugo

There will no doubt be such a thread over at flyertalk, whose larger userbase and forum format make it more useful for that purpose.

1 on 10/2/15 by TheRealBabushka

I'd support Louise.

It makes more sense to have that information on this site. Plus, it really is a pain to read flyertalk, loaded with Americanism and poorly written prose.

9 on 10/2/15 by Chris_PER

I dont understand why all these airlines are doing this only now??  As premium cabins go, they're uncommonly full, so as long as a bid is seen as profitable and the customer has placed a bid that they're happy with, then everyone's a winner....

10 on 10/2/15 by Frank

The phrase 'buying a pig in a poke' entered my mind after having perused the article.

Much the same system coming into vogue in Perth lately when purchasing a home, no asking price but written bids must be lodged by a closing date so no transparency there either.

11 on 10/2/15 by bluntrazor

This seems to be bad news for those seeking complimentary upgrades. Platinum & Platinum One flyers hoping for recognition of their loyalty in at-the-gate upgrades are now likely to be disappointed, as it is much more unlikely that inventory of available business class seats will be depleted.

12 on 10/2/15 by Mal

If Qantas will definitely process 'upgrade rewards' before bids then I have no problems with this, it seems like a smart way to handle those empty seats, but I agree with the focus group that the ability to buy an upgrade at the gate for a few hundred dollars would be a great system, especially if it was limited to Gold frequent flyers and above.

13 on 16/6/15 by DB

Does anyone know if Qantas Club membership is also taken into consideration when they determine whether or not to upgrade someone? I know AirNZ does this with Koru members, and they have an increased chance of winning the bid.  Not sure if Qantas does.

 

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