Platinum "anytime" lounge Access ceases from 1 February 2011

[ozbeachbabe]

Shareholders work out how to get their best return. If that means, like Gucci or Goldman Sachs or CitiGold, that they look after their best customers well, then that's what the shareholders will want.

It can sometimes be a case of shareholders think they know how to get their best return. They also have a tendency to be pennywise and pounds foolish. They don't know enough, if anything about aviation to make informed decisions without relying on 'help' from beancounters with a separate agenda to steer them in the 'right' direction.

Remember that shareholders are everything from people with a bit of money to invest to the everyman's Superannuation fund, to everything in between. Would *you* accept a 1% cut in your super return per year so that a company could spend more money coddling certain customers? I think you'd be asking some hard questions before you did.

No I wouldn't however there are times when you may have to make a short term loss for a long term gain. Trouble is as long as beancounters are given bonuses for short term gains they don't give a toss about the long term losses as they will have completed their contract, got their hefty bonus and moved on to their next train smash.

:shock:


. . . . .

 

[ric_melb]

"Sir" Richard Branson has been conspicuously unsuccessful with his three point philosophy therefore. Not so sure his staff are happy, not all his customers are happy, and the shareholders in VBA certainly aren't happy. Miserable profits, and virtual complete lack of dividends!

 

[ozbeachbabe]

...meanwhile back on topic...

Just refused entry at PER as not flying same day... Just wanting to rest my bones for an hour before Mrs Paddy arrives from Syderney.

Pissed off Paddy :evil::evil::evil:

So QF saved themselves maybe the cost of maybe a light beer & a Neil Perry party pie by not allowing you access to the lounge but in dollar terms how much will QF lose by way of yield on Mrs Paddy55's airfare when she chooses to fly Virgin next time?

 

[ozbeachbabe]

"Sir" Richard Branson has been conspicuously unsuccessful with his three point philosophy therefore. Not so sure his staff are happy, not all his customers are happy, and the shareholders in VBA certainly aren't happy. Miserable profits, and virtual complete lack of dividends!

I don't believe QF shareholders were paid any dividends last financial year either. :shock:

 

[JohnPhelan]

I would also ask you about my ADL-SYD flights. The advertised base red-e-deal fare is $137. Except the flight that I have to regularly take is set at $201 as standard. During the April school holidays it was about $230 or $250 IIRC. If I buy that red-e-deal, tell me again how I'm not providing profit to Qantas.

Medhead, I suspect that QF is making a small profit from each of those fares, presuming that the overall passenger load is reasonable. (And I'm aware that on ADL-SYD they don't tend to have the $79 red e-deals that you can find on BNE-SYD or SYD-MEL). But that's not my point; I've never said that QF doesn't make profit from a lot of these cheaper fares.

From the fares you've quoted, let's take $230 as the average, as it's about mid-range. I've just done a search on J class fares on the ADL-SYD route (direct) for a weekday flight later this month. Cheapest J class available is $741, dearest is $930.
(As an aside, the cheapest red e-deal shows at $137, exactly as you quoted in your example.)

Now the point in terms of profitability is simply this -on those J fares, the pax who buys a J ticket would be paying either $511 more, or $700 more, than a $230 Y ticket. Now, I'm sure you would agree that there is no way in the world that providing that J seat and its associated benefits actually costs QF anything like $500 more than it does to have provided the discount Y seat. So, clearly, QF is making much more profit on the J seat than on the discount Y.

If QF is only making, say, $10 profit per flight on a deeply-discounted Y ticket, even if that person travels 100 times a year, the profit is only $1,000. The profit on one J class ticket to JFK return would be more than that, I suspect.

Now, that's really off at a tangent to the question of ATA, but is relevant because of a couple of posts from people who were arguing that WPs are where QF makes all its profits. As I've now said a couple of times, some WPs are highly profitable, others are not. It depends on the profit QF makes on each of their tickets, multiplied by the number of times they fly.

As far as ATA goes, I've said previously that I support any time access in all bar one instance - that is, where a passenger chooses to fly one of QF's competitors on a route that QF flies, but still wants to use QF's lounges. (Incidentally, when I was a WP, I had several instances when I could have done this, but chose not to, because I don't agree with it - but that's just me!) It's a shame QF couldn't have worked out a way to prevent access in that situation, but continue to allow it in all the others.

 

[medhead]

I don't believe QF shareholders were paid any dividends last financial year either. :shock:

It has been at least 2 years between drinks for qantas shareholders if not more.

 

[Paddy55]

So QF saved themselves maybe the cost of maybe a light beer & a Neil Perry party pie by not allowing you access to the lounge but in dollar terms how much will QF lose by way of yield on Mrs Paddy55's airfare when she chooses to fly Virgin next time?

Ozbeachbabe, you are spot on!

Paddy

 

[Mal]

Now the point in terms of profitability is simply this -on those J fares, the pax who buys a J ticket would be paying either $511 more, or $700 more, than a $230 Y ticket. Now, I'm sure you would agree that there is no way in the world that providing that J seat and its associated benefits actually costs QF anything like $500 more than it does to have provided the discount Y seat. So, clearly, QF is making much more profit on the J seat than on the discount Y.

There are a few flaws with this idea.
- J Fares often have huge rebates for corporate purchasers - so the difference is a lot less than $511-$700.
- Cheap Y fares have limited refundability/changeability (esp at the last minute) so much more reliable source of income for QF.
- Looking at prices point-point for tickets is fraught with issues as you have various alliance products, staff tickets, FF redemptions, various corporate discounts, various through fares etc etc etc that all have their own costs.

 

[Alanslegal]

Keep it coming, I love this moot court!

I'm going to keep on pushing my argument that;-

QF REMOVED a WP ATA benefit because they felt WPs were overcrowding the lounges. They SPUN this an an enhancement - and whilst the spinning was going on - they decide to SELL CHEAP QP memberships to get more people into the lounges. This is very hypocritical of QF and we should all remember that :!:


However from reading all the comments, I believe the effect of ATA as this:-

Those who are pro,for or don't care about ATA removal, will not fly QF more than what they are presently. No gain for QF.

Those who are against the removal of ATA, are trying out and flying on QF's competitors both domestically and some internationally. A loss for QF.

Sadly, I haven't read anyone say "I will fly QF more because ATA is removed" and have seen some QF frequent flyers move their flights to others carriers. Lose-Lose situation QF.

 

[Alanslegal]

If QF is only making, say, $10 profit per flight on a deeply-discounted Y ticket, even if that person travels 100 times a year, the profit is only $1,000. The profit on one J class ticket to JFK return would be more than that, I suspect.

At least that person flew QF 100x - that's loyalty, goodwill, brand recognition which the value could be worth alot more than dollars and cents.

The other person who flies once to JFK in J class, could easily switch to a competitor eg. a cheaper J fare on a competitor.

Its logical that a business needs it loyal customers, it also needs new customers. But your argument that flying J/F once or twice is worth more than a 100x economy sector flyer, is an issue. FWIW that J/F again could easily switch and QF loses out entirely.

 

[JohnK]

QF REMOVED a WP ATA benefit because they felt WPs were overcrowding the lounges. They SPUN this an an enhancement - and whilst the spinning was going on - they decide to SELL CHEAP QP memberships to get more people into the lounges. This is very hypocritical of QF and we should all remember that :!:

Well I will continue to say it for years. Very poor decision and I don't really care what QF thinks it is going to save. Customer loyalty and continuity of benefits are a lot more important than saving a diet coke or a coffee from someone using Anytime Access to lounges.

And an even poorer decision is to then advertise on this board arrivals access to all lounges and when the crunch comes only Domestic lounges have arrivals access.

At least that person flew QF 100x - that's loyalty, goodwill, brand recognition which the value could be worth alot more than dollars and cents.

But the person who flies business class with QF once a year is more important. Now it doesn't matter that the same person also flies business class with SQ twice a year, with TG once a year, with Emirates 2-3 times a year.

I flew 68 sectors on QF last year. According to some of the people on this thread I actually owe QF money. Who is more loyal to QF? Me or the person who flies business class with QF once a year and would just as easily move their business away from QF?

As mentioned countless times if it was not for people like me then QF would not have the schedules in place nor the aircraft to service all routes.

Thankfully QF has setup a system to recognise value to them and this means that a Platinum who earns status purely on cheap domestic red e-deals is seen to be more important when put side by side with a Gold who has spent tens of thousands on a few business class flights. This is reality. If people are not happy with that idea then head off to SQ where they look at $ spend to determine top tier status.

 

[AnonymousCoward]

The DYKWIA attitude seems to stick around those who claim to be worthy because they fly F.

Not at all.

I don't fly F (except on awards). However I'm fully aware that there are people who are far more commercially valuable to QF than I am. My opinion is that is that people are naive if they think that flying a lot of miles makes them extremely profitable to QF.

(Again: Let me re-iterate what i said many posts ago: lots of flyers are valuable to QF in lots of different ways - doesn't mean you are the most profitable though)

 

[Danger]

I'm going to keep on pushing my argument that;-

QF REMOVED a WP ATA benefit because they felt WPs were overcrowding the lounges. They SPUN this an an enhancement - and whilst the spinning was going on - they decide to SELL CHEAP QP memberships to get more people into the lounges. This is very hypocritical of QF and we should all remember that :!:

Here, here. I would only add that whether it was alleged overcrowding or alleged giving of 'free kicks' to its competitors, QF appears to have absolutely no statistics on anytime access usage (save for some reports of a tally sheet at the lounge in CNS, hardly an appropriate cross-section).

Well I will continue to say it for years. Very poor decision and I don't really care what QF thinks it is going to save. Customer loyalty and continuity of benefits are a lot more important than saving a diet coke or a coffee from someone using Anytime Access to lounges.

And an even poorer decision is to then advertise on this board arrivals access to all lounges and when the crunch comes only Domestic lounges have arrivals access.

I'll be point all this out in my second letter to QF, hopefully later this month, once the new rules have had time to kick in (or, fingers crossed, not) and, hopefully, more people have made their discontent heard.

 

[JohnK]

I am sorry I did not think this discussion was about working out who was most profitable.

I have earned Platinum status (one way or another) so Qantas sees me as a valuable frequent flyer. Who cares if there are others who are more profitable? As I said erlier if people want an airline to recognise them for their $ spend then they should seriously consider joining SQ PPS.

The most important thing right now is we have lost Anytime access to the lounges and that has nothing to do with how profitable we are to QF but rather greediness on the part of QF to fill up more lounge space with paid Qantas Lounge memberships. I honestly hope this decision backfires on them....

 

[oz_mark]

Keep it coming, I love this moot court!

I'm going to keep on pushing my argument that;-

QF REMOVED a WP ATA benefit because they felt WPs were overcrowding the lounges. They SPUN this an an enhancement - and whilst the spinning was going on - they decide to SELL CHEAP QP memberships to get more people into the lounges. This is very hypocritical of QF and we should all remember that :!:

Small point about this. They did not discount the membership - what they did was waive the joining fee for 90 hours (as part of the 90th birthday). The actual membership fee was still the normal amount. The joining fee is a once of payment.

While the offer may have pushed a few people into signing up, I suspect that in the 90 hours it was on offer, there would not have been huge numbers signing up.

 

[medhead]

Medhead, I suspect that QF is making a small profit from each of those fares, presuming that the overall passenger load is reasonable. (And I'm aware that on ADL-SYD they don't tend to have the $79 red e-deals that you can find on BNE-SYD or SYD-MEL). But that's not my point; I've never said that QF doesn't make profit from a lot of these cheaper fares.

From the fares you've quoted, let's take $230 as the average, as it's about mid-range. I've just done a search on J class fares on the ADL-SYD route (direct) for a weekday flight later this month. Cheapest J class available is $741, dearest is $930.
(As an aside, the cheapest red e-deal shows at $137, exactly as you quoted in your example.)

The fact is that Qantas has already worked out that it can profitably fly the route at another time with a standard base fare of $137. When I purchase the $201 fare, then in my estimate the profit is $64 more than the profit from the $137 fare. That gets to the point that it is just wrong to claim that someone flying only red-e-deals is not making much profit. It is not possible to know how much was paid for that red-e-deal that the person is buying and it is not possible to claim that someone only flying red-e-deals if not profitable.

As an aside I fly this route weekly and book my own flights - I'm fairly familiar with the prices.

Now the point in terms of profitability is simply this -on those J fares, the pax who buys a J ticket would be paying either $511 more, or $700 more, than a $230 Y ticket. Now, I'm sure you would agree that there is no way in the world that providing that J seat and its associated benefits actually costs QF anything like $500 more than it does to have provided the discount Y seat. So, clearly, QF is making much more profit on the J seat than on the discount Y.

If QF is only making, say, $10 profit per flight on a deeply-discounted Y ticket, even if that person travels 100 times a year, the profit is only $1,000. The profit on one J class ticket to JFK return would be more than that, I suspect.

An interesting discussion, but to repeat you can't compare fares on a seat to seat basis (yes I realise I just did that ). This is a game of averages, one seat doesn't make the flight profitable, all of the seats makes a flight profitable. On the ADL-SYD route there are 12 J seats and 156 Y seats, usually a 738. That means a max of $11,160 J for the $930 fare and a minimum of $21,372 (@$137) from Y, increasing to a minimum of $31,356 (@$201) for the 6 am flight. That's a minimum for Y, sure there are cheaper fares than $137, but there are also much more expense fares $280, $400, $500. Based on my observation of fare availability and people on board, I doubt that they are making that J maximum on flights - there are usually 1 or 2 staff sitting in there and availability usually shows J availability unto an hour before the flight. In my estimation Y is pulling in at least 3 times as much as J.

No matter how much profit is involved in a single J fare, that aircraft isn't moving if the seats down the back aren't full. BTW my usual flights on this route are just about always full, hence the high pricing on the red-e-deals.

Now, that's really off at a tangent to the question of ATA, but is relevant because of a couple of posts from people who were arguing that WPs are where QF makes all its profits. As I've now said a couple of times, some WPs are highly profitable, others are not. It depends on the profit QF makes on each of their tickets, multiplied by the number of times they fly.

And as already noted Qantas provides different levels of non-published benefits to more commericially important platinums. (e.g. 1 Op-up for me in 30 odd flights, others here report a much higher rate of op-ups) But that doesn't mean that the platinum doing 100 ADL-SYD flights, earning 1500 SC, is less worthy of platinum benefits compared to someone who does 1 F flight. Qantas has determined that person is eligible for platinum benefits. (full stop)

As far as ATA goes, I've said previously that I support any time access in all bar one instance - that is, where a passenger chooses to fly one of QF's competitors on a route that QF flies, but still wants to use QF's lounges.

And you continue to ignore that someone still has to do those 100 QF flights to be platinum to then use the lounge twice when flying on the competition. That's is 100 bums on seats that they have helped to make those flights viable and profitable. I did something like 6 DJ flights last year, I've already done about 7 since ATA removal was announced with another 6 booked. Loyalty is about goodwill, ATA buys goodwill and that gets me flying more with QF.

Not at all.

I don't fly F (except on awards). However I'm fully aware that there are people who are far more commercially valuable to QF than I am. My opinion is that is that people are naive if they think that flying a lot of miles makes them extremely profitable to QF.

(Again: Let me re-iterate what i said many posts ago: lots of flyers are valuable to QF in lots of different ways - doesn't mean you are the most profitable though)

You say not at all; but then describe exactly my point. BTW I've never claimed the most profitable tag. Simply saying that the variation in flying is equalised by SC, that's is how Qantas measure the value of flyers who fly in lots of different ways. And to reiterate, once you get enough SC then Qantas have decided that are worthy of platinum. That is a fact and there is no point in people trying to claim that certain flying is not-profitable and hence those people are not worthy of platinum benefits.

Small point about this. They did not discount the membership - what they did was waive the joining fee for 90 hours (as part of the 90th birthday). The actual membership fee was still the normal amount. The joining fee is a once of payment.

Besides the 90 hour offer there has been 1 or 2 other offers and at least one of them was discounted.

 

[drewbles]

(posting semi on topic here so please remove it if it's deemed too on-topic after the recent 'back and fro' between selected people)...

Sitting in BNE J lounge, and it may as well have been any time access. No one asked for any BP's.

It was also empty. No idea about the regular QP though...

 

[JohnK]

Sitting in BNE J lounge, and it may as well have been any time access. No one asked for any BP's.

It was also empty.

From experience both BNE Qantas Lounges are relatively empty on weekends moreso Saturdays.

No idea about the regular QP though...

Too late now but you could have walked across to have a look.

 

[drewbles]

From experience both BNE Qantas Lounges are relatively empty on weekends moreso Saturdays.


Too late now but you could have walked across to have a look.

Not too late. My aircraft just went tech. Waiting on a replacement aircraft in the J lounge again (I could pop next door, but i'm quite settled here with some reasonable sav blanc!).

 

[JohnPhelan]

As I said erlier if people want an airline to recognise them for their $ spend then they should seriously consider joining SQ PPS.

The most important thing right now is we have lost Anytime access to the lounges and that has nothing to do with how profitable we are to QF but rather greediness on the part of QF to fill up more lounge space with paid Qantas Lounge memberships. I honestly hope this decision backfires on them....

JohnK, you're entitled to express your unhappiness with what QF has done. You've called QF greedy and dishonest, and hope they suffer financially, etc. etc. Fine. If you're that unhappy, then I'd suggest you take your own advice (from the first para above) - go to another airline. Vote with your feet!