Qantas Credit Card Service Fee - Important

[equus]

You work for Qantas right? Cabin crew?

But anyway neither here nor there, but being that you seem to be defending them, answer me this.

Far from it, Financial services (and not Qantas or any way connected), so I do know something about credit cards and the payments system.

I am not defending them so much as pointing out that your are being highly selective in the way you are quoting inappropriate statistics as "facts" to bolster your arguments.

The very fact that you say "That is why it's called an 'average' it includes:" illustrates the point. "Average" covers the entire population - and does not translate to a specific sub-set of the population unless that sub-set is representative. You are assuming Qantas transactions are a representative sub-set of all Australian credit card transactions. I don't believe they are. At this point, all validity disappears from the calculations.

Personally I think the RBA needs to ammend the policy so that businesses can only charge what the bank charges them in merchant % fees and nothing more.

Sorry, I have to disagree. That would be the thin edge of a very dangerous wedge. Should there also be a percentage that they can only charge exactly what the caters, fuel companies and other business inputs charge? The airline is a business, and it needs to make a profit. I believe that the need for "transparency" is fine. If what you were to suggest were brought in, the very simple result would be a return to the old days - all fares would go up (and do you want to be it would be by only $7.70), the surcharge would disappear, and there would be no way to avoid it.

 

[medhead]

The calculation is used only to demonstrate that the average cost per flight is and how when you use the CCSF to calculate the average - it doesn't work. It should, but it doesn't..

Ok, mate no need to be defensive, I really, really, really like the way your thinking and want you've tried to do and I agree with you conclusion.

But, I think you are really missing my point. I am pointing out why you calculation doesn't work, beside that qantas are misleading us on CCSF. It is because of the things I pointed out that your calculation shouldn't and doesn't work. For a start, I regularly pay 1 surcharge for 3 or 4 flights. If we assume that this is normal for a lot of people at some level then taking your number of domestic flights we shouuld divide by 3, imo.

that gives:

Total domestic flights in 2008= ( 28,905,000/3) * $747.57 = $7.2 billion

They don't charge on ff flights because there is no CC involved.

Well, I did use my CC to pay the taxes on my last award booking. So there can be a need to pay cash money for award booking and hence a CC can be involved.

And because they don't charge the CCSF on flights orginating outside of Australia it makes their merchant fees so much higher that they can keep increasing our CCSF and still legitimately claim they don't make a cent.

And this is another reason why dividing the number of flights by 2 is not correct. I'll also say again that the average cost of these oversea purchased flights might be a lot less than the average you calculated. These purchases might have substanial benefits in terms of currency hedging or fuel price hedging.

Finally, some thoughts on the credit card usage rates. It is very brave to assume that the usage rates at qantas follow the whole of Australia average. I've just spend 3 days at a conference where one big issue was some recent international guidance. A key point of why that guidance is wrong was this exact type of use of averages.

Thinking about the airline business the people who buy the most seats are businesses or frequent flyers. These people are much more likely to use AMEX - either corporate AMEX, would probably picks up 70% of business flights. FF would also preferentially use AMEX because of the better points earning. People who are less frequent travellers, who don't have AMEX, probably don't care too much about points and would also what to save the CCSF and hence would use the alternatives besides their visa.

Basically, everyone so far has pointed out a number of alternative explaination for why your calculations don't work. Again I don't think that the information required to address these issues is available publicly. But that doesn't mean I don't agree with your conclusion.

 

[Steve Franklin]

Sorry, I have to disagree. That would be the thin edge of a very dangerous wedge. Should there also be a percentage that they can only charge exactly what the caters, fuel companies and other business inputs charge? The airline is a business, and it needs to make a profit. I believe that the need for "transparency" is fine. If what you were to suggest were brought in, the very simple result would be a return to the old days - all fares would go up (and do you want to be it would be by only $7.70), the surcharge would disappear, and there would be no way to avoid it.

But hang on..Qantas factors all those things into the cost of running an airline, it's already factored into the price. This is specifically now about method of payment. You pay with a card, they get charged a fee, they want to pass that fee onto you for the convenience of paying with a card - and although I don't agree with it, I accept that it seems reasonable.

The gripe here is that fee bares no relevance to the cost incurred.

And I note that in your reply you neglected to comment on the body of the email which was my example of charging per passenger leg, rather than the total of the transaction.

And I know what you're saying about the averages, and I do accept that there is some wiggle room. However the RBA uses merchant information from the sum total of all transactions, so as a guide, over hundreds of millions of transactions, I think it's more than fair to cite them. Remember, that Qantas is in a very powerful position, I don't believe for a second that they can not negotiate a very good rate.

 

[docjames]

This is a very interesting thread. I too agree it's a rip off (as ive posted) but whilst people keep paying it, Qantas can keep charging it. Great first thread by a new member, but........

You work for Qantas right? Cabin crew?

<snip>

You're right saying that people can chose another airline, that is what I'm trying to achieve here. I'm trying to inform people that perhaps there are other airlines that don't charge as much as what Qantas do.

Do you have a conflict of interest to declare, or else why are you so determined for us to use other airlines?

 

[Steve Franklin]

Do you have a conflict of interest to declare, or else why are you so determined for us to use other airlines?

No conflict of interest what-so-ever. I just want to create pressure on Qantas to change their ways. The best way to do that is to get people to write to Qantas and complain and get a grass roots response from their clients. It would only take a few hundred people to tell Qantas that they might go elsewhere in future for them to re-examine their fees and charges.

I don't have a problem with Qantas staff or aircraft, I'm happy to pay their costs, but not a cent more.

You can't be more fair than that.

 

[Dave Noble]

I don't have a problem with Qantas staff or aircraft, I'm happy to pay their costs, but not a cent more.

You can't be more fair than that.

You could just simply pay by bpay / debit mastercard and no problems at all

Dave

 

[dajop]

It would only take a few hundred people to tell Qantas that they might go elsewhere in future for them to re-examine their fees and charges.

A few hundred thousand perhaps. The alternatives? Virgin Blue - $3.30 per sector, Tiger $6 per sector.

Internationally - SQ and NZ have now shadowed QF. Basically it's a fait accompli.

And those that really provide a lot of their revenue - at the pointy end of the plane are getting a good deal.

I think the answer is really only BPAY.

I too think a % charge is fairer and better, but the RBA let them get away with it, and the competition has done the same thing, so really there's no going back, unless there is a new competitor or the govt changes the rules.

 

[medhead]

But hang on..Qantas factors all those things into the cost of running an airline, it's already factored into the price. This is specifically now about method of payment. You pay with a card, they get charged a fee, they want to pass that fee onto you for the convenience of paying with a card - and although I don't agree with it, I accept that it seems reasonable.

Yes, all those things are part of the cost of running an airline. Ohh but then so is the cost of the payment method :shock: That's the point given a change any business will try to charge a fee for all there costs. look at fuel surcharge and as you rightly point out there is the CCSF that the airline have jumped at.