Suppose that a class-based system of privileges existed, in which you achieved high status through long participation in the rituals of the society. Those in the upper classes receive access to luxury goods not available to those of low status. Now suppose that the governing body of our society decided that luxury goods should really be available to everyone with the means to pay for them, rather than just the high status individuals. In fact, the luxury goods will now be sold to the highest bidder, who has the greatest desire for them (and means to pay). Well, that would seem pretty reasonable to most people, given that’s how most markets for goods work. We might worry about inequity because of ability to pay, but nobody would doubt that the luxuries will now go to people who really care about them. Economists would crow about the increase in efficiency in the system and the removal of deadweight losses.
Obviously, the people you’d expect to object would be those of high status, who’ve suddenly had their special privileges, that they’ve toiled to achieve, removed from them. The governors understand that they’d object so a scheme is devised by which people can get discounts on their luxury goods if they buy a lot of them, much as you’d get from many customer rewards programs where you can save up reward points and then spend them on goods from the store. The governors hope that grandfathering in the upper classes so that they have greater means than commoners will placate them. Unfortunately, they’re wrong: nobody likes getting their trinkets of status stripped from them.
Air New Zealand is being accused of driving away its most loyal customers with a recent overhaul of its Airpoints rewards system. …frequent flyers using their Airpoints to book flights on the national carrier will have to bid against each other to get seat upgrades. …The changes have sparked outrage among frequent flyers, with many threatening to shift their support to rival
Previously, the frequent flyers got preferential treatment for upgrades. Now they will have to bid against everyone else to ensure the upgrade goes to the person who most values it. All the frequent flyers have on their side is the wealth of Airpoints they’ve accumulated to bid with! Apparently relaxing their budget constraint in return for customer loyalty isn’t as important as status, which really shouldn’t be surprising at all (eg. any Robin Hansom post.)
Now, it is plausible that the reduction in certainty is the real problem that the frequent flyers are complaining about.
Bids can only be placed a week or more out from a flight, with the airline telling people whether their offer has been accepted between three and seven days before departure.
Under the airline’s previous system, Airpoints users could a get an upgrade if they paid a fixed price before a flight and a seat was available.
I skimmed the forum that the Herald linked to to see if that was the case and found:
Now all the Airpoints feartures can be replaced by cash and they are taking away all the meaningful elite benefits.
So what is the difference between a [low status] member who bids compared to a [high status] member – and if the [low status] member offers a higher bid?