Qantas fees 'devaluing' flight points

[Yada Yada]

Qantas fees 'devaluing' flight points
Steve Creedy, Aviation writer
September 09, 2006

QANTAS has been accused of unfairly devaluing the points of its 4.3 million frequent flyers with taxes and surcharges that can now add more than $600 to what is supposedly a free ticket.

Additional fees on domestic frequent flyer tickets have now hit $100 for a return flight - only slightly less than buying some cheap sale fares - and international travellers are slugged with charges ranging from $200 to $626.

Travellers wanting a frequent-flyer ticket from Sydney to Paris are among the hardest hit, shelling out 128,000 points and $626 in taxes and surcharges on a return economy ticket. A return economy fully inclusive sale fare costs $1970.

The airline hopes to sooth angst over the surcharges, imposed to cover the soaring cost of aviation fuel, by allowing domestic travellers to use points to pay for them.

Frequent flyers wanting to use this system face a flat levy of 6500 points on each domestic flight, but the move has been criticised as a backdoor way to raise the cost of redeeming tickets.

"What it does is reduce the value of the points because if you choose to pay the levy using points it increases the number of points it takes to get a free ticket," said frequentflyer.com.au website founder Clifford Reichlin.

Australian frequent flyers were slugged with higher charges than many countries where the fuel surcharge and taxes are often included in the ticket price for travellers using points, he said.

More...

Another mention for AFF founder/owner Clifford!

 

[one9]

Whilst I don't agree with fuel surcharges being counted as taxes for reward tickets, I do think it is a good idea to allow people to use more points and then get an actual free ticket.

Whilst it may not represent good value, it gives people more choice.

 

[Dave Noble]

Whilst I don't agree with fuel surcharges being counted as taxes for reward tickets, I do think it is a good idea to allow people to use more points and then get an actual free ticket.

Whilst it may not represent good value, it gives people more choice.

I just disagree with charging fuel fines on awards

The normal taxes and charges are costs which are incurred and need to be paid to the appropriate airports/authorities, so charging them is quite reasonable.

Fuel fines are just part of the normal operating cost of a flight and there is no justification for it

The Qantas representative stated that taxes n charges have always been charged, which is true, however the airline did not use to consider normal operating costs as being an additional charge

By "allowing" people to pay extra to avoid paying normal operating costs is blatent devaluation imo

Dave

 

[one9]

By "allowing" people to pay extra to avoid paying normal operating costs is blatent devaluation imo

Dave

It is unlikely that Qantas would remove fuel surcharges.

So you have two options:

(a) Allowing people to use more points and thus get a free ticket.
(b) Keep it like it is and you have less choice as you must pay surcharges/taxes in cash.


More choice is always better, even if the new choice(s) are not good value.

 

[JohnK]

Another mention for AFF founder/owner Clifford!

And I agree with what Clifford has to say on this matter. By allowing people to use ff points to pay the taxes & fuel surcharges you have in effect reduced the value of ff points.

 

[superchris]

Last December, I used points on QF for 2 Adult and 2 Childrens tickets to Wellington,NZ.
$800 extra in taxes and charges later, the idea of using points certainly helps but OUCH

 

[simongr]

The interesting thing re fuel fines is that I dont hear a chorus of joy that as the price of crude is falling at the moment then fuel fines should fall... and yes I know that most airlines work on forward contracts for fuel and those prices were set at the peak - I would assume that the next forward contracts will be being set now and they should be passing on some benefit.

Just in relation to the use of points to pay fuel fines. I had a bit of a think about this today. MY initial reaction was to agree with DN in that we shouldn’t be change our burn rate for FF points in relation to changes in the price of fuel. Effectively that is what QF are doing – historically (and I am making these numbers up) a return flight SYD-MEL was 16000 points plus 100 taxes. Now its 16000 points plus 100 taxes plus 100 fuel or its now 20000 points.

Then as I thought it through that isn’t actually unreasonable – if the cabin crew negotiated a 20% rise Qantas could easily say well the baseline for our operating costs is now higher so we need to charge more FF points for flights. It’s the same with any pricing decision – if costs increase then so do prices. But at least under this system as fuel costs fall then the FF points required fall.

However as I thought more about this the difference is that FF points are not currency – they are not something I buy form QF directly. I effectively receive them as a rebate for my flying. As prices change for those flights I pay for – I pay a higher charge – but earn the same number of points. The same goes for falls in prices – I still earn the same number of points. However by charging fuel fines fro my rewards they are effectively saying I earn at one rate and burn at another. One concept might be to earn points based on the price of the ticket – now that would penalise the highest flying members who get super discounted flights due to their volume – but I don’t care about them

 

[NM]

I think the airlines (and this is specific to QF in this case) should just be honest and identify that their costs have gone up and hence they will be requiring more FF points for the award flights.

And then if they want to offer a "Points + Pay" option, that is fine and it gives people choice. But that is how it should be sold - as a co-payment to reduce the number of point needed for the award, not as a points-surcharge to remove the imposition of a cash co-payment to recoup increased operating costs.

Instead, they try to use the same deceptive approach that the increase in fuel costs is not an operating cost but some new extra cost being imposed on them in the same manner as government taxes. Including the increased fuel costs in the "extras" and lumping it in with legitimate government taxes and airport-imposed user-pays fees is, in my opinion, extremely deceptive. And I believe Qantas (and most other airlines) are deliberately lumping the revenue collection called "Fuel Surcharge" in with the legitimate Taxes and Levies in order to make their fares appear artificially lower than they really are.

If the costs have gone up (and I don't think anyone would believe they have not), then raise the price! That goes for award flights as well as paid fares. But continuing to hide behind the deception that fares are low and hoping the travelling public will somehow believe the yarn that the fuel surcharge is really a tax is just pure deception in my view.

 

[garyjohn951]

This fuel surcharge debate is all bulls..t, as the o/s fuel charge by qantas almost double last week, yet their sale price to London inc all charges is the same as it was last sale.

 

[one9]

BTW: When does the using more points instead of paying taxes come into effect?

 

[serfty]

A Qantas spokeswoman said taxes and charges had always been paid on redemption bookings ...

This is simply not true! Up until ~1997 all taxes and charges were absorbed by Qantas for award redemptions.

As an extreme example, I did an "under 11000Km" J class trip MEL-PER-ASP-DRW-CNS-BNE-MEL trip in 1996 for a total 'cost' of 37,500 QFF points! No additional +++ needed to be paid.

 

[kyle]

This is simply not true! Up until ~1997 all taxes and charges were absorbed by Qantas for award redemptions.

As an extreme example, I did an "under 11000Km" J class trip MEL-PER-ASP-DRW-CNS-BNE-MEL trip in 1996 for a total 'cost' of 37,500 QFF points! No additional +++ needed to be paid.

Get the spokesperson to issue a retraction!

 

[simongr]

If the costs have gone up (and I don't think anyone would believe they have not), then raise the price! That goes for award flights as well as paid fares. But continuing to hide behind the deception that fares are low and hoping the travelling public will somehow believe the yarn that the fuel surcharge is really a tax is just pure deception in my view.

This is the conceptual problem that I have. If costs have risen and prices have risen to match that then there is no need to increase the FF point cost - if we assume that 1% of my fare goes to FF miles - then if their costs rise by 10% and fares rise by 10% then my 1% is effectively increasing at the same rate - thus the measure of that 1% (being the FF points earnt/burnt) should be stable...

 

[Mal]

Where's a gutsy ACCC representative or federal member when you need them?

Of course nowhere to be seen. Neither have any teeth when it comes to certain things.

 

[vt01]

Where's a gutsy ACCC representative or federal member when you need them?

Of course nowhere to be seen. Neither have any teeth when it comes to certain things.

Of course the only government department which may take some interest at some point in time will be the tax office. They'll want us to declare FF points as income!

 

[wandering_fred]

Any chance of convincing a government to require that "taxes" are fully refundable within 14days with only a nominal service charge.

Certain airlines might then more quickly roll the more questionable "taxes" into the base fares.

I'm not willing to hold my breathe on this.

Happy wandering

Fred

 

[Dave Noble]

Any chance of convincing a government to require that "taxes" are fully refundable within 14days with only a nominal service charge.

There is such a rule in some countries. I am not sure what the legal state is in Oz, though I suspect that a visit to a small claims court might well be successful .

Dave

 

[dajop]

Any chance of convincing a government to require that "taxes" are fully refundable within 14days with only a nominal service charge.

About 6 week ago I wanted to bring my non-flexible $120 fare SYD-MEL forward 2 hrs, of course couldn't. Being a work trip, I organised another flight for $145 (still cheaper than K class anyway), and cancelled my non flexible flight and request a refund of my taxes. About 2-3 weeks later around $40 was returned to my credit card, so this does happen if you request it.

 

[Kiwi Flyer]

Any chance of convincing a government to require that "taxes" are fully refundable within 14days with only a nominal service charge.

Certain airlines might then more quickly roll the more questionable "taxes" into the base fares.

I'm not willing to hold my breathe on this.

Happy wandering

Fred

Some FTers on LH forum are actually in favour of fuel surcharges, because they make cheapie fares almost fully refundable.

 

[simongr]

Some FTers on LH forum are actually in favour of fuel surcharges, because they make cheapie fares almost fully refundable.

Why is this? Do taxes/fuel charges get refunded if you cancel the tix? I dont fly on cheapies so have never had to cancel a flight like that

And the reason that I dont fly cheapies is not because I am some smug w**ker its just that mrs sim isnt keen to fly so we dont fly anywhere for personal travel really