QF Flight Change fee: does that reflect real costs ?

[legroom]

Red-e-Deal = $99

Change Fee = 88$

With the recent news about RBA clamping down on CC interchange fee including the CC surcharge fees applied by various airlines etc...., I wonder if that $88 change fee is really reflective of the IT real costs to QF.

Would you behave differently if that fee were not there ? I doubt very much if I would.

So, why should QF charge so much (~ 90% of the actual fare in this case) for a flight change done online with zero human intervention ?

Should it be

1) abolished altogether ?

2) a percentage of the new (? old) fare ?

3) complimentary to status pax (say SG or above) ?

It is highly discriminatory against a lowly Y ticket as if I were to change my fully paid J ticket ($$$$), it would cost the same amount.

QF would be expected to argue of "... IT costs ..." but that costs are factored into every fares sold already.

Thoughts ?

 

[opusman]

If the change fee was less there'd be no incentive to pay for a flexible fare.

 

[moa999]

And you could buy heaps of cheap sale fares and just flip them around to suit.

They make the t&cs for each individual fare - you can choose whether or not to accept them

 

[offshore171]

I guess no one would pay for flexible fares if there wasn't a change fee.

In this case I don't think it's an IT cost, but more to do with their forward load planning. The idea is they get a certain number of cheap seats "locked in" to a flight. These are the people who have paid for inexpensive, but non-flexible tickets. Only a small % of these get changed, due to the high change costs, so the airline can be pretty confident that 90+% of these seats will be utilised as per the forward bookings.

Then they have a proportion of what you might call "floating" seats - these may or may no end up unoccupied on a given flight, but it costs the airline more to keep these available - so people pay more for a flexible seat.

If there wasn't a substantial change fee for the non-flexible seats, then this system wouldn't work.

 

[serfty]

When red-edeals were introduced, there were no change fees ... none ... nor were there cancellation fees either.

It was basically a case of use it (as booked) or lose it.

 

[Mr_Orange]

When red-edeals were introduced, there were no change fees ... none ... nor were there cancellation fees either.

It was basically a case of use it (as booked) or lose it.

So you could say that the situation has improved then?

 

[JohnK]

Flight change fees are too high. In my opinion something like $30 would be more appropriate.

Take note some credit companies have reduced some of their ridiculous fees. Missing payment fee is now only $5 as opposed to $30 in the past.

 

[legroom]

Flight change fees are too high. In my opinion something like $30 would be more appropriate.

Take note some credit companies have reduced some of their ridiculous fees. Missing payment fee is now only $5 as opposed to $30 in the past.

Your post is the only one so far addressing what should be done, instead of why it was introduced in the first place.

The Flexi fare argument is flawed in that its price far exceeds the change fee + the original cost.

Someday the ACCC / RBA may have a look at this, I hope.

 

[serfty]

So you could say that the situation has improved then?

Nah. ... back then fares were pretty cheap like MEL-SYD for $55 on QF.

When change fees were introduced they were about $35 so somewhat proportional.

 

[SeatBackForward]

And why are flight change fees on international flights GST free? Surely its the same service occurring in Australia?

 

[Hvr]

And why are flight change fees on international flights GST free? Surely its the same service occurring in Australia?

For the same reason that international flights are GST free.

 

[hutch]

Your post is the only one so far addressing what should be done, instead of why it was introduced in the first place.

The Flexi fare argument is flawed in that its price far exceeds the change fee + the original cost.

Someday the ACCC / RBA may have a look at this, I hope.

Suppose they did and ordered that change fees be reduced to meet what you consider to be the 'actual cost'... how would the airlines react?

 

[JohnK]

Suppose they did and ordered that change fees be reduced to meet what you consider to be the 'actual cost'... how would the airlines react?

Reduce their change fees just like the credit card providers did recently with overlimit/missed payment fees.

 

[andye]

They would have either have to make the cheap fares 100% non-refundable or put up the cost as it has effectively become a semi-flex ticket

 

[incumbent]

Reduce their change fees just like the credit card providers did recently with overlimit/missed payment fees.

The analogy is completely flawed. Airlines are entitled to provide an incentive to purchase more flexible or fully refundable tickets. Remove that ability and watch the cheapest fares disappear. In other words, view the cheapest fares today as having been discounted due to their comparative inflexibility.

 

[SeatBackForward]

For the same reason that international flights are GST free.

But the change fee, which is essentially an admin fee borne within Australia.

 

[trippin_the_rift]

The analogy is completely flawed. Airlines are entitled to provide an incentive to purchase more flexible or fully refundable tickets. Remove that ability and watch the cheapest fares disappear. In other words, view the cheapest fares today as having been discounted due to their comparative inflexibility.

This ^^.

Sale fares are marked as 'deeply discounted' meaning they're not the standard rates but need to come with conditions. Standard fare prices are 3-4x higher than the sale/red-e-deal type fares.

 

[Pleb Status]

The change fee is not just an administration fee. It is also a cost penalty that helps keep the plane full (and profitable) when it departs and therefore keeps the overall level of airfares down. It is arguable if $88 is not gouging however.

What may be a more equitable system is to vary the fee with respect to the date of departure. Changes more than say three months from departure should be far cheaper (say $15) as this gives the airline plenty of time to fill the seat. Changes between say one to three months from departure should be higher (say $30) as it will be more difficult to fill the seat, particularly during quiet times of the year. Changes less than one month from departure would be the most expensive (say $45).

Do not want to pay a fee, book a flexi fare and change for free.

What needs to be looked at is the 'telephone service fee' and other 'service' fees. Either the QF staff cost about $200-300/hr to employ or someone if making serious money from those fees.

 

[hutch]

Reduce their change fees just like the credit card providers did recently with overlimit/missed payment fees.

Of course they would... And then either make fares completely non refundable or reduce the number of discounted lead in fares (or reduce the discounts).

 

[AnonymousCoward]

Flight change fees are too high. In my opinion something like $30 would be more appropriate.

Take note some credit companies have reduced some of their ridiculous fees. Missing payment fee is now only $5 as opposed to $30 in the past.

Irrelevant comparison. Revenue for a seat on a plane is either there, or the seat is gone forever (barring the invention of time travel). Missing a payment for a CC incurs ongoing financing costs for a credit provider, but there's nothing that's 'gone forever'