Cathay Pacific has announced changes to its Marco Polo Club elite frequent flyer scheme. The changes come into effect on 15 April 2016.
The move follows months of speculation and press coverage, as first reported by Miles Down Under in May 2015. At that time, the South China Morning Post reported that Cathay Pacific had hired Jason Adessky, an experienced former senior manager from Qantas Loyalty, to assist with the changes.
Cathay Pacific, and its regional carrier Dragonair, have separate redemption mileage (Asia Miles) and status recognition (The Marco Polo Club) schemes. Its worth noting upfront that the changes announced today are only to The Marco Polo Club and not to Asia Miles (which remains unchanged – at least for now).
A new approach to earning status
A new points-based system (dubbed Club Points) will replace the alternate Club Miles and Club Sectors calculations currently used to determine qualification for Marco Polo Club status.
The upshot is that:
Those buying premium class tickets will find it faster to earn status than before. For example, reaching Diamond used to require approximately 21 one way Sydney / Hong Kong business class flights, and will now only require just over 14 (when booked in the higher fare bucket).
Those flying on discounted fares, especially longhaul economy fares, will find it harder to earn status (although as a consolation, some lower fare classes will count when they did not used to).
The qualification system will be biased towards Cathay Pacific / Dragonair flights over those of oneworld alliance partners (something Qantas Frequent Flyer members have already had to get used to on routes which Qantas compete with its oneworld partners such as Australia to Hong Kong and Australia to Kuala Lumpur).
It will be possible to park membership status for up to one year in a ‘Membership Holiday’ (although during the Membership Holiday it will not be possible to earn Club Points or use any of the benefits of membership). Virgin Australia also have a similar offering, albeit as a parental leave benefit.
While the new Club Points scheme is similar to Qantas’ Status Credits (and indeed the absolute thresholds to be reached for status are similar), the earn rate for status is much lower with the revamped Marco Polo Club than with Qantas Frequent Flyer.
Brand new: Complimentary confirmed upgrade certificates for Gold and Diamond members
Gold members that earn 1,000 Club Points will receive four complimentary one-way each year on shorter flights (in terms of Australian destinations, only flights between Hong Kong and Cairns will be eligible to use these upgrades).
The upgrades are only valid for one class: so Economy to Premium Economy would be a poor use of them.
Diamond members will receive four one-way upgrade certificates on Cathay Pacific / Dragonair annually. For Diamond members only, these will be valid system-wide.
Another four of these upgrades will be awarded to Diamond members that earn more than 1,600 Club Points in a membership year, and a companion Gold membership will follow at 1,800 Club Points.
Upgrade certificates offset by cuts to other benefits?
While the addition of confirmed upgrade certificates for Gold and Diamond members is significant, there are other major benefit devaluations to consider.
Gold and Diamond members’ guaranteed availability in economy class (V bucket) will be shifted to the highest fare type (Y bucket). This basically guts the value of the guarantee: this should be looked at as Cathay Pacific abandoning an effective means to lock-in repeat business by guaranteeing a fare cap. This benefit had been something which Cathay Pacific had stood out from the rest of the industry on.
The additional Diamond benefit of guaranteed business class bookings in the second-highest booking class (C) will be hiked to the top: (J).
Additionally, Diamond members lose anytime lounge access to Cathay Pacific lounges – from 15 April, these members will need to be flying a oneworld carrier to access Cathay Pacific’s lounges.
Overcrowding of Cathay Pacific’s premium facilities will continue
Most controversially among higher-tier frequent flyers, Cathay Pacific will continue to provide base-level (Green) members of the Marco Polo Club with priority check-in and priority boarding privileges. The priority boarding lanes for Cathay Pacific flights are often crowded, partly fueled by Green members who have paid the low fee to join the scheme.
While Cathay Pacific will double the Marco Polo Club’s joining fee to US$100 and phase in a re-qualification requirement for the base-level ‘Green’ status of 100 Club Points, it will be possible to get around this requirement by paying a US$100 annual renewal fee. The phase in process will mean that any Green members with membership expiring before 15 April will get another year gratis, and those that expire after 15 April will also be graced a year provided they have earned at least some Club Points.
More significantly, Silver members will still be accorded lounge access despite the comparatively low threshold required to earn Silver status.
By comparison, Qantas Silver members receive neither priority boarding nor lounge access.
In fact, these changes to The Marco Polo Club might make Cathay Pacific’s lounges more crowded. Members of the lowest tier (Green) will be accorded one lounge entrance once they cross 200 Club Points. At higher tiers, passing thresholds of Club Points will accord the member with a certain number of lounge guest passes.
Will these changes help Cathay Pacific to better compete with Qantas and others? We’re not so sure.