"The good news is we've released a lot of premium reward availability. The bad news is that none of you can access your accounts to book any of it. Toodleoo."
QF probably should release 100% of all seats as award seats, bookable in the next 30 days.
If done right, they could turn it into the biggest marketing windfall in the history of the airline.
I'll explain:
The Good:
- Loads of new cashflow from banks as folks transfer points into the program for new bookings
- Loads of new QFF members join to take advantage
- Corp/SME will still book these seats as cash fares, so making 100% available for awards won't dilute cash bookings
- Clean out the backlog of complaints around no award seats available
- Lets Alan do another video saying how great things are
The risks:
- Might near bankrupt the airline
- Totally screw up their RM systems
- For a short timeframe, competitor pricing will look favourable
On balance, I think it would work in QF's favour because:
- The difference between points redemption (with fees) and cash ticket is the true 'cost' to the airline, and it's not that much in the big scheme
- Value of QFF points increases temporarily, and could use this as leverage with bank contracts to do certain key measures...
- No other airline would dare copy this (by nature airlines are risk-averse, and VA,SQ are in hyper-conservative mode so def wont copy)
- If QF were to run short on cash (to operate the flights), it's a lot easier to raise more when the people you are raising from are happy that they got their biz class london redemption because of a one-time 'burnoff' the airline did (see the previous point)
- Huge swing in cash fares after the initial burn of points (QF has models showing this effect from pre-covid days)
- QF Loyalty biz valuation would increase by more than what QF overall value decreases from this move (thus providing a clear strategy to list QF Loyalty separately).
- Alan gets to create another feel good video
- Legit goodwill toward QF...probably for the first time in 2.5yrs
- It's a one-time deal, easily justified to stakeholders using the above logic
Ultimately, the loyalty business has saved Qantas and many other airlines globally.
Now that folks have higher than usual points balances, and finding it difficult to use those points on aspirational flights -- if QF were to provide an outlet for those points, where very few airlines are doing so -- QF once again becomes the loyalty hero.
But you know...when management bonuses are pinned on the next QTR....the next FY.... strategic decisions like this are sidelined in favour of whatever the junior consultants at bain come up with.
Sometimes it takes new thinking...
