Flying QF on AA FF number - getting an upgrade process?

[simongr]

Sadly I have no control over the booking process and flght selections - which has good and bad points. For my trip to Japan I would have been flying JAL where I have no status (mind you I think would have earnt AA points).

S

 

[Dave Noble]

It's great the effort some companies will put in to ensuring that staff do not save the company money on travel

Dave

 

[simongr]

Yep - and teh sad thing is that for my singapore trip I emailed my PA the flight numbers and times required and the hotel I wanted to stay in - not sure exactly what value was added by the travel agents....

 

[Kiwi Flyer]

not sure exactly what value was added by the travel agents....

the report back to your boss that says you either did or did not comply with policy

BTW looks like business loads on some NZ flights are very light at the moment, I see lots of availability on those specials (ex-SYD/MEL/BNE as well as ex-AKL/WLG/CHC).

 

[simongr]

Thanks for the info re the loads - still waiting for my flight to be ticketed - not sure what else FCM need to do :evil: as I just want to get this all sorted so I can focus on the important things - pricing up a new digital camcorder

 

[NM]

Sadly I have no control over the booking process and flight selections - which has good and bad points. For my trip to Japan I would have been flying JAL where I have no status (mind you I think would have earnt AA points).

S

Remember that it is unlikely that the actual final cost to your companys is going to be the fare price quoted to you. That will be the initial amount deducted from the credit card (your or someone else's), but Qantas will likely be paying your company a rebate at the end of the month (or quarter) that could be in the order of 20-30% of the amount paid.

This seems to be a more common method now of securing business by airlines. They put various conditions in place with your company regarding minimum spends and commitment to use QF as the preferred carrier, and if you meet those conditions they pay a rebate on a regular basis. This seems to have changed from a little while back when they offered the discounted price up front and hoped you conformed with their request to use QF as preferred carrier.

So on the surface its looks like you are paying rip-off fare prices and could do much better using various discount fares. However, the final cost to the company after the rebates may still be attractive.

And in some cases where your company may be re-charging a customer or someone else for the travel costs, they may choose to on-charge the original ticket price and not the net cost after the rebate, thus making 20-30% margin on a pass-through expense :evil:. The accountants like this one :shock:.

 

[simongr]

The accountants like this one :shock:.

Yep we certainly do

 

[Dave Noble]

Yep we certainly do

Hmmm.. Does overcharging expenses to a client by 42% seems entirely ethical and honest?

Dave

 

[NM]

Hmmm.. Does overcharging expenses to a client by 42% seems entirely ethical and honest?

Dave

Ahh, but the client is charged what the company paid for the fare. Then the "loyalty scheme" kicked in and they received a loyalty rebate. I guess it could be considered similar to the whole debate about FF points going to the company or the employee. Does the rebate belong to the company that demonstrated the loyalty, or the client who was ultimately charged for the trip? I guess the client could negotiate a similar loyalty rebate scheme with the company?? Now this is an area which I am not going to debate.

 

[Dave Noble]

Ahh, but the client is charged what the company paid for the fare. Then the "loyalty scheme" kicked in and they received a loyalty rebate. I guess it could be considered similar to the whole debate about FF points going to the company or the employee.

Im afraid I don't see any similarity at all to that . If the company is given a specific discount whether upfront or in retrospect and that discount is not passed on to the client ( assuming the client is being billed for the flight ) then I cannot see that as being ethical

Dave

 

[NM]

Im afraid I don't see any similarity at all to that . If the company is given a specific discount whether upfront or in retrospect and that discount is not passed on to the client ( assuming the client is being billed for the flight ) then I cannot see that as being ethical

Dave

Does the same apply of the company purchases a widget from their supplier and sells the widget to their customer? Would there not be some difference between the purchase price and the price paid by the client?

Are they entitled to recoup additional costs such as the overhead of processing the expense and administration? Could it be suggested that the rebate is used to cover such admin and overhead costs?

I am not saying I agree with this method. I was just explaining the reality of what happens.

 

[simongr]

Hmm - accountants... ethics - interesting combination

Seriously though I dont like the pratice. However there are certain things to consider. Firstly I havent worked anywhere we have charged an admin fee for travel and often didnt charge for travelling time. Now its not right to not charge with one hand and overcharge with the other - and in one case that the negotiated deal and in the other its hiding charges. One thing to note though is that its not always practical to match the rebate to the airfares charged. Rebates come in a lump sum at the end of the period/quarter and it would be a serious amount of admin to then apportion the rebate on a flight by flight basis and then refund that amount to the client - probably would wipe out the rebate on domestic travel...

 

[Dave Noble]

Does the same apply of the company purchases a widget from their supplier and sells the widget to their customer? Would there not be some difference between the purchase price and the price paid by the client?

Are they entitled to recoup additional costs such as the overhead of processing the expense and administration? Could it be suggested that the rebate is used to cover such admin and overhead costs?

I am not saying I agree with this method. I was just explaining the reality of what happens.

There is a difference between charging for incurred expenses and with a company selling a product

In this case a company charges a client $x per hour for the services and travelling time plus expenses incurred. To inflate expenses incurred by 42% ( assuming a 30% rebate ) seems unethical. The margins for the business are covered by the hourly rate charged ( as fare as admin costs go, I suspect that the client gets charged for the time spent by company staff in arranging the travel )

Consider..
Employee of a company is booking travel for company business. He goes to a friends agency who charges a rate such that the agency can give a 30% rebate to the employee. Is it ethical for the employee to then claim the full amount back from his company and then pocket the 30% himself?

Dave

 

[NM]

Employee of a company is booking travel for company business. He goes to a friends agency who charges a rate such that the agency can give a 30% rebate to the employee. Is it ethical for the employee to then claim the full amount back from his company and then pocket the 30% himself?

Dave

I would suggest such practice would be in breach of most companies travel and expense claim processes, as well as being very questionable on the ethics side.

Of course the client paying the costs would often have the option/choice available to arrange and pay for the travel directly, and to earn their own loyalty rebate. I know some of my company's clients choose to pay for our staff travel directly and hence gain the price benefits of their own travel provider contracts. And sometimes our staff get the benefits of using the client's travel policy that is more generous than our own (when it comes to class of travel, hotels etc).

 

[Dave Noble]

I would suggest such practice would be in breach of most companies travel and expense claim processes, as well as being very questionable on the ethics side.

I see no difference in this to , say, taking a more expensive QF flight over taking a JL flight which is cheaper and then billing the client for the full fare on Qantas and then pocketing the 30% rebate. How is it ethical for the company to do it to a client but be unethical for an employee to do it to a company?

Dave

 

[Yada Yada]

Um.... hang on a sec. Whilst we are discussing ethics, has anyone considered that purchasing QF flights via AA.com to avoid paying Australian GST and selecting a bogus country of residence in order to do so might be considered unethical also?

 

[oz_mark]

Hmmm.. Does overcharging expenses to a client by 42% seems entirely ethical and honest?

Dave

On the projects I have worked on, we state to the client that we will be charging them the invoiced amount for the travel. Strikes me that this is quite honest.

 

[simongr]

Glossing over the ethics issues - just to confirm that I finally applied formy upgrade MInd you I have resorted to booking under my QF number, getting those privilleges and then I will change my AA number shortly before checkin...

 

[Dave Noble]

Um.... hang on a sec. Whilst we are discussing ethics, has anyone considered that purchasing QF flights via AA.com to avoid paying Australian GST and selecting a bogus country of residence in order to do so might be considered unethical also?

I select "US and others" and avoid a tax for which there is no liability if ticketed outside of Australia

Dave

 

[NM]

I see no difference in this to , say, taking a more expensive QF flight over taking a JL flight which is cheaper and then billing the client for the full fare on Qantas and then pocketing the 30% rebate. How is it ethical for the company to do it to a client but be unethical for an employee to do it to a company?

Dave

I guess if the customer only wants to pay the lower JL fare, then they can include in their contract the fact that they will book and pay the airfare directly rather than have the service provider pay and re-charge it.

I am not trying to defend that policy, just merely pointing out that the fare quoted and billed to the traveller is not necessarily reflective of the net financial outcome for the company. Whether that is ethical or not is a different question to be considered by those who undertake the practice. Since my travel is always funded internally by my company, there is no such ethical issue involved. I just wish my cost centre and my travel expense reports reflected the net cost and not the published list price.