Changes to ODU's?

[opusman]

I was told in an honest and open manner there was only one available seat for upgrade (out of ~15 empty) due to catering orders etc.

Quite often I've been given an ODU on the condition that catering was "not assured"; it's even been printed on the boarding pass. I've never actually missed out on food but was prepared to, so it's odd that sometimes they would simply say "no" because of catering.

 

[oz_mark]

Quite often I've been given an ODU on the condition that catering was "not assured"; it's even been printed on the boarding pass. I've never actually missed out on food but was prepared to, so it's odd that sometimes they would simply say "no" because of catering.

Notwithstanding it being printed on the BP, I imagine that many upgraded PAX would bleat relentlessly if they didn't get the catering.

 

[NM]

If the flight shows J2 then they are still willing to sell two J seats. So its not about catering since the same catering requirements exist for a paying J passenger and an upgraded Y passenger.

They may well be holding those seats back for possible sales. Its all a black art and purposely not clearly defined.

In may QPs they are willing to hold your boarding pass at the desk and process an upgrade if seats remain available when the flight "closes". Perhaps they were already hold at least two BPs for other members who had requested upgrades earlier and just had not actually processed them yet??? All we can do is speculate while chooms steams.

 

[bambbbam2]

I don't mean to be picky, but it's only a short flight anyway..

 

[meloz]

I was denied an ODU today and observed 2 empty seats in J.

Dem da breaks!

 

[Platy]

The flight that I think Choom was on was delayed until at least to 1745 from 1700.

Arguing that the J2 tix could be sold (or the infamous catering thingy) don't make a lot of sense to me given they became available in a short time frame in front of scheduled departure and then flight was delayed at least 45 mins.

'Fraid that QF just isn't that serious about facilitating ODUs.

Choom's experience confirm's this view IMHO.

BUT still just speculation - like the rest of you fellow posters!!

Suspect new system ain't that friendly for ODUs - to be confirmed (or refuted) with further evidence. Hopefully refuted for all our sakes.

Personally can't be bothered jousting with QF on these sort of upgrade situations anymore...rather get a good seat in Y and stock up on QP goodies!!!

 

[simongr]

I don't mean to be picky, but it's only a short flight anyway..

I have two whY flights coming up and have upgraded 1 to J using points and couldnt upgrade the other - I am unsure what I am going to do as I have not flown whY on QF since Sep 06.

 

[chooms]

OK - back in Brisvegas after a pretty uneventful flight and some awful crackers and dip in whY.

Yep - 2 empty J seats.

I spoke with 3rd lounge dragon on way to gate and she explained the deal a hell of a lot better than the first two lounge dragons.

It is all to do with the new computer system.

Each flight is allocated a certain amount of 'U' fares and ODU's. This cannot be overridden by lounge dragons - unlike previously.

Apparently, even CL lounge dragons must seek approval from higher authorities to process ODU's (but if you are CL, most likely you are flying J anyway).

As said by others the topic of whether we should be allowed to use points if we have them and not be dictated to by QF on upgrades has been discussed before, however, after seeing it first hand today I have come to the conclusion it stinks.

I mean, Qantas would want us to blow our points on short haul ODU's than saving up and getting long haul in F for free (+fines) right?

Anyway, my two cents.

 

[v8Statesman]

(but if you are CL, most likely you are flying J anyway).

Careful not to stereotype. The 2 CL members I know fly almost always on Paid Disc Y tickets.

 

[Platy]

I have two whY flights coming up and have upgraded 1 to J using points and couldnt upgrade the other - I am unsure what I am going to do as I have not flown whY on QF since Sep 06.

Here's my strategy for dom Y travel

1. Have lots to drink in the QP so you don't care too much about the flight
2. Take a sandwich zip lock bag into QP and make yourself up a bread roll with cheese and ham filling to take with you on the plane in case you feel like a snack
3. Sit at the back where there most likely spare seats to spreadout over (if any) and close to back loos to divest yourself of aforementioned extra drinks in P and lots of galley space for a leg stretch
4. Befriend back galley cabin crew who are normally surprised, but delighted to find high status fliers at the back
5. Walk very casually and nonchalantly off the aircraft (last) as if you really are not at all in a hurry and thus appear super cool

 

[Platy]

I mean, Qantas would want us to blow our points on short haul ODU's than saving up and getting long haul in F for free (+fines) right?

Anyway, my two cents.

At risk of repeating previous posts (OK things have changed since we discussed this with AnySeat introduction) - IMHO QF has a huge incentive NOT to let you use your points.

This is because they get the benefit when you earn points (through your purchase loyalty and sale of points to program partners) and only write down the cost when you claim the points. If points are not redeemed, there is no cost to them, although an unrealised liability is accruing undermining the true value of the FF scheme (which they want to sell off)

Now that is where the AnySeat system comes into play. With a given seat costing typically 5 times more plus to redeem the effective cost to them per point is greatly reduced, whilst that unrealised liability can be reduced if folk are willing to part with excessive numbers of points for a flight redemption. They want folk to redeem points at one fifth or less their previous value so are quite happy to open up to any seat.

Providing they drip feed just enough U class seats etc for program members to get the odd upgrade and redeemed flight (on old system) to keep one step ahead of the ACCC and whinging folk who realise they are being duped when they see empty seats in J etc they can maintain the semblance of an attractive loyalty program without giving too much away...

Many regular fliers are being paid for by employers anyway so are quite happy to take the benefits when they can get them as a nice little extra and obviously QF realises this too.............

By making us pay fuel fines and all sorts of booking, cancellation etc fees QF further lower the cost/increase benefit (revenue) as the FF system evolves to their benefit and the customer's detriment over time.

IF ODUs have become more resticted in the new check in system, then it would appear they have created the vehicle with which to lower the number of available J seats open for upgrade and are content to continue or intensify their policy of allowing aircraft to fly with empty J seats. In contrast AA aim to fill their seats. Opinions on this blog are keenly divided between the merits or otherwise of these two strategies. Personally like Chooms, I would like to see QF honour the spirit of its FF scheme and make all reasonable effort to let folk use their points eg to upgrade when seats are plainly available.

I personally decided a couple of years ago to save my points for F class travel to Europe having become disillusioned with the upgrade system and frustrated with declining service and catering standards in domestic J. I take the hit on the fuel surcharges (unhappily) but at least get to experience what QF do very well without having to spend $15,000 plus (which I could never afford). It takes me about 3 yrs to accrue the 390,000 odd.

IMHO the fuel surcharges make it very unattractive to redeem points on domestic flights in Y class and the points required for domestic J class are too high when compared with an international F class redemption!

 

[AnonymousCoward]

At risk of repeating previous posts (OK things have changed since we discussed this with AnySeat introduction) - IMHO QF has a huge incentive NOT to let you use your points.

This is because they get the benefit when you earn points (through your purchase loyalty and sale of points to program partners) and only write down the cost when you claim the points. If points are not redeemed, there is no cost to them, although an unrealised liability is accruing undermining the true value of the FF scheme (which they want to sell off)

Hmm - under most accrual accounting systems, they wouldn't get any benefit when you 'earn' points because any asset would need to be offset by a corresponding liability (though they might make some provision for points that will never be redeemed). This is how most "paid in advance" (i.e. unearned revenue) schemes are accounted for.

Only when you redeem the points (i.e. use the services that you prepaid for), would QANTAS recognise the original revenue, and also put through the relevant cost of carrying you on that award flight.

 

[docjames]

Careful not to stereotype. The 2 CL members I know fly almost always on Paid Disc Y tickets.

As do the two i know, but they get about 75% upgraded to J, even from disc Y.

 

[Platy]

Hmm - under most accrual accounting systems, they wouldn't get any benefit when you 'earn' points because any asset would need to be offset by a corresponding liability (though they might make some provision for points that will never be redeemed). This is how most "paid in advance" (i.e. unearned revenue) schemes are accounted for.

Only when you redeem the points (i.e. use the services that you prepaid for), would QANTAS recognise the original revenue, and also put through the relevant cost of carrying you on that award flight.

I am not an accountant (as you can probably tell!) and was basing this on an article I read in a Financial journal a year or two ago.

In the accrual system you mention (forgive the ignorant question):

- surely when QF get cash for points from partners for us to earn, there is actual cash sitting in an actual QF bank account way before you redeem them points that QF just got paid for? How would a liability be calculated against that - as an equal amount (ie totally a fudge figure?) or what?

 

[simongr]

- surely when QF get cash for points from partners for us to earn, there is actual cash sitting in an actual QF bank account way before you redeem them points that QF just got paid for? How would a liability be calculated against that - as an equal amount (ie totally a fudge figure?) or what?

It would actually be an actuarial valuation based on the probabilities of points being redeemed in the future. So the liability would need to cover the expected future cost (I assume based on some present value discounting as well).

So if QF are paid 1c for each point of liability it is very unlikely that a 1c liability will be recorded.

 

[AnonymousCoward]

In the accrual system you mention (forgive the ignorant question):

- surely when QF get cash for points from partners for us to earn, there is actual cash sitting in an actual QF bank account way before you redeem them points that QF just got paid for? How would a liability be calculated against that - as an equal amount (ie totally a fudge figure?) or what?

It would have to be an equal amount initially, but QANTAS can then reduce that liability by some justifiable amount being what they think will never be redeemed.

 

[Platy]

It would have to be an equal amount initially, but QANTAS can then reduce that liability by some justifiable amount being what they think will never be redeemed.

Many thanks for the insight (thanks also to Simongr for saying, I think the same thing).

No disrespect intended (to your good self or any accountants out there), BUT whatever the accounting trickery (100% offset in liability of any asset accrued - I wish I could cook the figures in my small business to that extent) the fact is that QF have had the benefit of the cash (from program partners) and revenue (from loyal customers) up front and therefore BENEFIT up front.

The cost of that is only realised later (in reality) when points can be redeemed (if at all).

When the cost is indeed realised it is easily outweighed by the benefit (on paper). Otherwise tghe F scheme would not be such an attractive sub business to hive off.

Whatever the accounting trickery, it is clearly in the best interests of QF to limit access to redemptions/upgrades unless ridiculous amounts of points are required to redeem a benefit.

Someone please tell me I'm wrong...

 

[medhead]

Many thanks for the insight.

The cost of that is only realised later (in reality) when points can be redeemed (if at all).

When the cost is indeed realised it is easily outweighed by the benefit (on paper). Otherwise tghe F scheme would not be such an attractive sub business to hive off.

Whatever the accounting trickery, it is clearly in the best interests of QF to limit access to redemptions/upgrades unless ridiculous amounts of points are required to redeem a benefit.

Someone please tell me I'm wrong...

This discussion has been very insightful. I have puzzled over this from following the QF profit annoucements since they started separately accounting for the FFP.

It seems (and I'm puzzled by this so I don't really understand it) that the FFP earns money by people redeeming points, they spend money by buying the airfares from QF to provide the benefit for those points. This seems to match the idea of only realising the value of the points when they are redeemed. I think.

THe account trick is making sure that they spend less buying seats than the value of the redeemed points. There doesn't seem to be any reason for them to stop you redeeming points as long as they spend less getting the airfare. The situation in the OP with last minute available seats, could it be that the cost to FFP would be more than the value of the redeemed points for the ODU?

 

[oz_mark]

It would have to be an equal amount initially, but QANTAS can then reduce that liability by some justifiable amount being what they think will never be redeemed.

Qantas refer to this as breakage, and last I saw it was less than 10%. Some of the Qantas accounting basics can be found starting from Page 45 of the following document: http://www.asx.com.au/asxpdf/20080221/pdf/317kqrh3frdhpf.pdf

Basically when you get a point the Billing for that point is treated as deferred revenue. When the point is redeemed the deferred revenue makes its way to the P&L

 

[Platy]

THe account trick is making sure that they spend less buying seats than the value of the redeemed points. There doesn't seem to be any reason for them to stop you redeeming points as long as they spend less getting the airfare. The situation in the OP with last minute available seats, could it be that the cost to FFP would be more than the value of the redeemed points for the ODU?

Ahhh, thank you, thank you, thank you! Some logic, raw brain power and honest genuine enquiry!!! Good on ya, Medhead!!!

The point is that the real benefit to the frequent flyer is only a few real % gain in redeemed awards. Now in marketing terms, this is a very low amount to pay for customer loyalty by the supplier (airline) and a stupendous achievement to lock in customer loyalty for such a paltry cost (which is fudged in accounts anyway). This this whole blog (brilliant as it is) is largely driven by folk aiming to increase this pay back, BUT in reality it remains small and we'd all be better off taking a great discount (if we can find it) rather than letting our egos be pandered by the odd upgrade etc.

Now to the all important question (bold, italics in the quote above). We have already seen than this whole charade depends on accounting trickery. So the stupidity is the figues used by the airline have driven it to a situation where it is more cost effective to leave a seat empty than let a loyal frequent flyer sit in that empty seat, use their points, feel great and lower the liability ledger (as happened to Chooms last night onm the CNS-BNE). The point is the airline sets the figures and their own accountancy practices to their advantage and our disadvantage as customers.

Many argue empty seats depend on catering - thus cost of meal (a few measley dollars) in the yield management/FF calculation system is allowed to outweigh any value on customer loyalty.

That is NUTS !!!

Go figure.

Bring on more competition!!!