1. David Mangold Tiffany Lau Emily Nguyen Xiang Zhang
Lakers
David Mangold
Tiffany Lau
Emily Nguyen
Xiang Zhang

2. How Success is Measured
If the bids offered are higher than the amount Air New Zealand would have charged for seat upgrades
Profits from the higher bids must exceed the revenue lost from customers that will switch to a different airline
Factors:
Airline sets a minimum bid
Accuracy of the sliding scale
Customer preferences

3. Will Air New Zealand Succeed?
Pros
Could gain more revenue and attract more customers that think they would get a better deal
People would be attracted to this marketing scheme because it is unique to Air New Zealand
Takes into account tier statuses from the Loyalty Program

4. Will Air New Zealand Succeed?
Cons
Frequent flyers tend to be business people
Business people don’t want to deal with the hassle of bidding
Negative backlash from HR who work in conjunction with business professionals to plan business trips
Low flexibility regarding upgrade options will deter customers
The value of Airpoints is upgrades, but by introduction of OneUp program, Air New Zealand takes the one and only good thing about Airpoints away
Difficult to plan trips because turnaround time to find out flight status is 3-7 days
Will need more customer support
What happens to large parties?
Program only appeals to non-frequent fliers
Frequent flyer programs usually upgrade for free
No, Air New Zealand will not succeed

5. Comment – Auction Fan
Suggested have the 10 highest bidders pay the highest unsuccessful bid
Some merit to this suggestion; this way everyone will pay the same amount for the same service (in this case seats)
If there is a minimum fee, the airline could maintain their current revenue levels but there is also the possibility of gaining substantially from this program
Customers will feel a sense of fairness because they are all paying the same amount for the same seats but still paying less than they even bargained for
Suggests to keep the “minimum upgrade fee” low, possibly zero: airline will not generate extra revenues
Could be a problem though if people bid extremely high in the hopes of getting somewhat discounted seats
What if they were not even willing to pay the amount they set their bid at and are stuck with a price that they still aren’t happy with?

6. Comment – Frequent Flyer
“I seriously hope that this initiative is treated with the scorn and contempt it deserves!! What a disgraceful way to treat loyal customers!”
There is a very large possibility that there will be backlash from loyal customers
Frequent fliers would probably expect to be able to upgrade without having to bid for a spot
Air New Zealand could lose frequent fliers to other airlines that offer free upgrades or upgrades that have a low price for frequent fliers

7. Comment - Deweese3
Busy professionals; don’t have time for such nonsense
Frequent fliers tend to travel for business, not pleasure
Most executives would probably not appreciate having to fly coach if their offer was outbid
Potential to make a lot of money for Air New Zealand if businesses give a very high bid to outbid everyone else
Bidding would be bad for business trips that are decided on within days of the flight; travelers would not have time to bid at least seven days beforehand