FFP program once again the star of QF financials.

[markis10]

QF results are out and the FFP contributed 75% of the total GP:

http://www.asx.com.au/asxpdf/20100812/pdf/31rv2t7b7t0phy.pdf

A 50% growth in profit for the year is a good result, its also good to see the mainline having a much better contribution as well.

 

[medhead]

Do you think the FFP contribution is related to take up of JASAs.

 

[NM]

Do you think the FFP contribution is related to take up of JASAs.

I am sure it has some impact. However, I expect programs like Every Day Rewards and Credit Cards are the big contributors.

 

[markis10]

I am sure it has some impact. However, I expect programs like Every Day Rewards and Credit Cards are the big contributors.

ASAs added 5.7M to the bottom line in terms of an increase, of course they were unpopular until April for some strange reason! Apparently they increased 21%!

I also note that 5 aircraft are to be retired this year which seems a little low.

 

[medhead]

It makes me wonder whether selling or keeping the FFP is the better option. I would keep it for the income. But maybe they want cash now?

 

[samh004]

It says at the end of FY09 they had 5.8 million members of the FFP, and this year it’s at 7.2 million. However I joined at the start of 09 roughly, and my membership number would put me at about 6.3 million. They have funny books.

 

[markis10]

It says at the end of FY09 they had 5.8 million members of the FFP, and this year it’s at 7.2 million. However I joined at the start of 09 roughly, and my membership number would put me at about 6.3 million. They have funny books.

Some members do cease to be members and the number is not recycled.

 

[samh004]

Some members do cease to be members and the number is not recycled.

So you think the membership numbers (on the card) are a lot closer to 8 million now, though active members is approx 7.2 million?

So when I joined I got number 6.3m, though they had less than that active… and they know how many are active…?

Seems plausible, I’d have just expected them to give the total number of cards/numbers they’ve got to, rather than being truthful and limiting it to active members.

 

[oz_mark]

So you think the membership numbers (on the card) are a lot closer to 8 million now, though active members is approx 7.2 million?

So when I joined I got number 6.3m, though they had less than that active… and they know how many are active…?

Seems plausible, I’d have just expected them to give the total number of cards/numbers they’ve got to, rather than being truthful and limiting it to active members.

You are also assuming that every number from 1 -> 6.3 million was being used. You will find there are gaps, particularly from the early days.

 

[markis10]

So you think the membership numbers (on the card) are a lot closer to 8 million now, though active members is approx 7.2 million?

So when I joined I got number 6.3m, though they had less than that active… and they know how many are active…?

Seems plausible, I’d have just expected them to give the total number of cards/numbers they’ve got to, rather than being truthful and limiting it to active members.

Markis 10 jr got 792xx_x on the 1st May so their numbers stack up, obviously they dont know for sure how many members are active versus deceased/bankrupt but they would know how many memberships they have cancelled because of those events.

 

[kamchatsky]

If that is the case, sooner or later, one day the number of QF members would be greater than Australian population!

 

[NM]

If that is the case, sooner or later, one day the number of QF members would be greater than Australian population!

I suspect with the introduction of Everyday Rewards, there are few people's pets that are now members of both Everyday Rewards and Qantas Frequent Flyer

 

[Oneworldplus2]

Alan Joyce was on Lateline Business last night.

Lateline Business - ABC

Scroll down.
2nd from the bottom

 

[MrJetset]

Alan Joyce was on Lateline Business last night.

Lateline Business - ABC

Scroll down.
2nd from the bottom

I watched this last night. He states that Jetstar and the FF Program were the "stars." When questioned about the FFP he commented that Woolworths has done very well for them. Surely there is a proportion of those 7 million that, like my father, have the card, only travel OS once a year, and will probably only ever claim a domestic flight every two years. It does, however, ensure consumer loyalty.

 

[Oneworldplus2]

Correct. This is the point l was trying to make on another thread some time ago, but my point was missed. The amount of people competing for redemptions has risen, and will continue to rise as more and more people gain points over the years. My mum is like your father. Doesn't fly often, but will get enough points in about 2-3 years for a free flight. Add those 1.4 million new customers into the mix and bingo, congestion for Award seats. Many members have already stated that trying to redeem Award Int J Seats, you literally need to book 350 days in advance. That's crazy.
Alan Joyce did mention that there was $2.5billion worth of orders (planes) in the pipeline, guess we just have to wait and see what happens.

 

[kezsco]

Qantas is currently enjoying the profit of FFP with Woolworths and banks. However, this short term profit is on points given out in the expectation that in the future some of the points will be redeemed.

So, there will be hurt for Qantas down the line (maybe not 2010,2011, but around 2012 onwards). This will mean hurt for all members of QFF as Qantas won't proportionally adjust award seat numbers to reflect the great increase of QFF members. Instead, they will probably adjust the scheme on the spend side... ie more points required for flights, extra surcharges to be paid as well as points, classifying a greater amount of tickets as 'discount economy' making it more expensive to upgrade, making the PE award flights cost business and business award flights cost first, etc...

It's why we should generally "burn 'em as we earn 'em"

 

[markis10]

Qantas is currently enjoying the profit of FFP with Woolworths and banks. However, this short term profit is on points given out in the expectation that in the future some of the points will be redeemed.

There will be no hurt down the line, qantas are not calculating the points sold as being at zero cost, instead their FF profit is based on the redemption margin.

 

[kezsco]

Of course there is a hurt. And it's not to Qantas. They will just amend their program as they see fit.

Qantas becomes a 3 brand operation: FFP, LCC & regional airline. Domestic yields still sees pressure | Centre for Asia Pacific Aviation - CAPA

In this case, classic redemption (the original and cheaper redemption) has decreased as they shift people onto Any seat redemption. No doubt there will be the day where the classic redemption is practically non existent, and we have to calculate all possible redemptions at the any seat rate.

So, the hurt here is for the consumer.

 

[rechoboam]

My little one's number is 82xx_xx. But members surely don't give up their frequent flyer number because they are made bankrupt?

 

[markis10]

Of course there is a hurt. And it's not to Qantas....
In this case, classic redemption (the original and cheaper redemption) has decreased as they shift people onto Any seat redemption. No doubt there will be the day where the classic redemption is practically non existent, and we have to calculate all possible redemptions at the any seat rate.

So, the hurt here is for the consumer.

You were indicating the hurt was for Qantas in the previous post

"there will be hurt for Qantas down the line "

, that was what I was referencing my reply to, if a corporation is making a profit then that has to come from somewhere so by direct correlation that means someone is hurting, afterall the opposite of profit is loss.

My little one's number is 82xx_xx. But members surely don't give up their frequent flyer number because they are made bankrupt?

Your membership ceases if you are made bankrupt previously but that has been removed, you dont give up your number, its just that your membership ceases to be active by death or by being caught breaking the rules.