Potential changes to QF awards - amount of points and cash needed, & number of award seats released

[kpc]

Thoughts? Just received a survey from Qantas:

"Qantas is considering making changes to our classic flight rewards in order to better address the needs of our customers. These changes will include changes to the number of points required to get to different destinations, as well as to the portion of cash required in addition to points (made up of Government tax, carrier charges, and fees). These changes will help Qantas to increase the number of seats we can set aside for customers to redeem for a classic flight reward. The percentage of flights where a seat is available for a classic reward will also increase, depending on the route and cabin. A summary of the changes being considered is below (please note these are examples only)."

 

[Daver6]

As always, the devil will be in the detail. The old up to 10x. Ie, there will be one instance of 10x and barely any change on anything else most likely.

 

[GoldCanyon340]

Initial thought on the SYD-LHR J is the $ saving does not pay for the points received for a dozen wines to make up the shortfall.

 

[Doctore1003]

I think this is positive for long haul J if there really is a big increase in award seat availability.

 

[GoldCanyon340]

QF has been very profitable recently: RPKs have increased meaning more FF accrued across the member base. Obviously a good chunk of the profits has been from greater efficiencies and fuel savings but more people are flying.

Is this is a cunning plan to reduce the liability of FF points on the books? The FF points accrued from multiple DSC offers would have a lower wastage than 'regular' points as they're mainly, almost exclusively, earned by people who travel enough to keep their points active.

 

[I love to travel]

They will most likely do short term increase to seats. This change will only benefit Qantas

 

[GoldCanyon340]

This change will only benefit Qantas

We can safely assume that.

 

[Must...Fly!]

Oh how interesting, the routes they chose. No coincidence I can assure you.

SYD-MEL - lots of flights as it is and certainly not hard to get an award seat at most times of the week.

SYD-LHR - A380 via Singapore not getting great loads with a huge cabin to fill, given they codeshare on everything out of Australia going in to Dubai? More room to soak up some of the points.

MEL-SIN - Ah yes, a daily A380 in a saturated market feeding not much else other than 3K (why bother if you were paying for J) and the QF1/2 passengers... but who's taking this option if paying cash when QF9/10 is available and quicker, or any other combination of flights via OW partners or EK codeshare?

I bet you won't see 10x seats on any 787. Just look at the seat map. Number of seats is comparatively small, so no matter what happens there is never going to be a high number of redemptions available on these services, if booked a long way out.

I may be a cynic but I don't feel anything other than high suspicion here.

 

[Saltywings]

'Up to 10x increase*'

The asterix'd small print should read:

*10x of 0 available seats is still 0. /facetious

 

[MEL_Traveller]

All they need is positive feedback to the '10x more' and they'll use that as the excuse to introduce the changes.

Then the 'up to' will come in to play and we'll see little to nothing in terms of actual seats.

 

[kermatu]

Looks nice for economy. Not so or business. My reaction is negative.

 

[odysseus]

Given they're introducing planes with lower business capacity (787s) on international long haul, I can't see how the bean counters would let them turn over a greater proportion of seats to FF redemptions even if the FF point revenue increased.

Agree with Must fly that this is only likely to result in an across the board increase in FF redemption costs, but with only limited routes gaining from an increase in availability.

In the end, a gain for Qantas.

 

[JohnK]

Stop flooding market with cheap points would be a good start.

 

[Rangalad]

Simpler and fairer?

 

[trippin_the_rift]

Looks similar to the move Asia Miles made earlier in the year...

Decrease the cost of economy and release more seats to QFF members on specific routes. This improves rask on weak and leisure routes, improves realisation of points under IFRS15, and increases member engagement. Lowering the points required is a nice PR message and keeps the points currency attractive to low earning members. Great!

For business class (where there is typically higher demand on redemptions/upgrades etc), a price increase probably justifies the member demand. The decrease in carrier charges ("taxes") is a way to transition from collecting cash into required currency buy-in. Krisflyer made the same move last year and it has two main benefits.

1) Lowers the risk profile on redemptions away from "taxes". QF have had media beating on this over the past year and the last thing they need is government investigations into their billion-dollar money making machine.

2) Members justify the change as "well we decrease cash and increase points so it works out in the end".

The underlying business objective requires more points to be earned (thus, increased billings for QF Loyalty), and very few members ever utilize 100% of points balances and thus the new cash generated from banks/partners drives new billings. QF Loyalty saw 1% increase in billings last year, so they need to make program tweaks to ensure billings continue to increase.

QF is due for adjustments to points burning as there have been no major changes since 2005. Their only real risk is if Velocity doesn't follow and increase their own rates. My guess is Velocity needs to increase their redemption rates after the flood of %bonus transfers from banks which is probably a driver to hit a checkpoint in the deal with a certain PE firm.

...that's my 0.007 worth

 

[Gold Member]

Use these enhancements to your AAdvantage.

 

[cove]

We have more QF points this year than last year because a few redemptions went off to Virgin when QF had dust. SQ has been so easy and my sons are using SQ ,Emirates and QR points redemptions more and more.
Lowering the cash component will be popular for some.

 

[amaroo]

I'm all for it. Being point rich, I don't really care how much they charge.... what they release is far more important to me. Even better they release more / earlier for higher status members.

 

[MEL_Traveller]

QF is due for adjustments to points burning as there have been no major changes since 2005.

They made awards more expensive by decreasing our earn rate through simpler and fairer. Same difference as just increasing the award levels (to us, not to them).

 

[trippin_the_rift]

They made awards more expensive by decreasing our earn rate through simpler and fairer. Same difference as just increasing the award levels (to us, not to them).

Yeah you're right there has been a heap of changes but ultimately it's about the headline number. xx_ points to go to YYY destination. That's what most folks care about as the rest is not so transparent