Qantas frequent flyers unleash over ‘almost worthless points’ in submissions to Senate

[oz_mark]

Why does that matter? Qantas has determined that when it comes to selling a revenue flight for points, the points are worth 0.61 cents. Are you suggesting that if we lose classic awards, the dollar price for revenue fares would also fall? You seem to be clinging to moonbeams hoping that somehow abolishing classic rewards would make prices fall.

It is also quite likely that Qantas Frequent Flyer are paying Qantas something in the same vicinity (0.6 c per point) when redeeming a classic reward. QFF won't be paying anywhere near a revenue rate.

 

[Quickstatus]

How much do you honestly think Qantas would value QF points for QF flights at if they abolished classic rewards?

Who knows?. No one does and yet they persist as though they do

No leave Classic Rewards in place, they are all I use and your proposal would make it more expensive than if Classic Rewards remain.

I suspect it will make redemptions a more expensive. On the other hand redemptions will be more transparent, available as they are redeemed against $$.

...Winners and losers....

 

[Mr H]

...Winners and losers....

Yeah. Qantas the winners and everyone else the losers. Except it would knock the value out of the scheme so Qantas would lose too.

You still haven’t explained why you think the absence of classic rewards would make the cost of revenue flights purchased through points any cheaper than they are now. You have just asserted that they might be.

Abolishing classic rewards might also lead to an increase in the fertility rates of unicorns - and nobody can prove it won’t until we try it and see…

 

[Tiki]

I say again: Get rid of award seats

And again Put a $ value on each FF point
The FF point is the redeemed against $$ which is then used to buy revenue tickets
Then there is no need for award seats

Your Status credits balance can be used as a weighting mechanism. Higher SC balance increases the dollar value of FF point.

I disagree. My best redemptions have been on obscure routes that fall within the same region but would be very expensive because of using smaller airports. Last year I redeemed 20k QF for MTY-DFW-MIA-BON on AA. These flights would have been over $1000 if I had to pay cash.

 

[Mr H]

I disagree. My best redemptions have been on obscure routes that fall within the same region but would be very expensive because of using smaller airports. Last year I redeemed 20k QF for MTY-DFW-MIA-BON on AA. These flights would have been over $1000 if I had to pay cash.

And they would have been over 164,000 points using @Quickstatus’s dream method. Spot the “winners and losers” LOL.

 

[Tiki]

And they would have been over 164,000 points using @Quickstatus’s dream method. Spot the “winners and losers” LOL.

I couldn't get that many points in 3 years of shopping at Woolies! LOL

 

[Dr Ralph]

If you read the submissions, it's clear that many have little understanding as to how to programme actually works.

 

[Kangol]

If you read the submissions, it's clear that many have little understanding as to how to programme actually works.

Many have little understanding of how a half billion dollar annual revenue business works, too.

 

[Mr H]

If you read the submissions, it's clear that many have little understanding as to how to programme actually works.

...and also the very small amount of points that many members are dealing with and their fairly modest aspirations for using those points.

Having said that, this may not be a representative group. People don't write to Senate inquiries to say how happy they are with the the status quo.

 

[CaptJCool]

...and also the very small amount of points that many members are dealing with and their fairly modest aspirations for using those points.

Having said that, this may not be a representative group. People don't write to Senate inquiries to say how happy they are with the the status quo.

No they don’t

When the last big devaluation was done around Sept/Oct 2019
I booked a one way F to Europe before it

The idea it’s now 30,000 points more (but $400 less) is utter BS especially seeing EKs ever increasing extras surcharges)

UNLESS
You’re credit card churning or biting into Qantas Wine bonus points
That involves a whole pile of cash to make-up the extras

Seeing COVID-19 has well and truly burnt a hole in plentiful CR seats and 2-3 years of no annual travel, many travellers have accumulated a pile of cash to just pay outright.

I’m relying on a substantial tax cut to fund my next adventure.

 

[Quickstatus]

You have just asserted that they might be.

Huh?

I'm sure that Qantas with its bean counters can value points in a system where all inventory seats are redeemable and there are no classic rewards and the $ value of the point is transparent. Will it be 0.61?. Who knows but people are already saying they are junk. Will it be at the equivalent level of a classic reward, who knows. Possibly not but at least more people can redeem their FF points in a reasonable and timely manner when the value is somewhere between a classic reward value and a points and pay. It comes down to the tension between value for the airline Vs value for the customer,

Of course Qantas will have a commercial imperative to make a profit - this is fine. But I think there is a better way than the current system where it is very difficult to redeem for a classic reward. That you are quick to write it off suggests to me that you are happy to continue with the status quo while being blind to the actual issues surrounding this program.

 

[anyonebutqantas]

The reality is QF needs to operate more J capacity on international routes and negotiate a better deal with EK.

 

[equus]

There will never be a blended version of the current situation - perhaps the abolition of Classic Rewards to benefit Qantas, but if you think they will reduce the any seat 0.61 cent conversion rate, you are dreaming.

The current set up is actually a blend of two entirely different scenarios,.

1. Classic rewards. These are the original "loyalty" program offering, tied to actual flying. Primarily used to build loyalty by giving value redemptions of distressed inventory to valued customers who actually fly a lot. Seats that were not going to be sold, along with a few token gems to sweeten the deal are made available at fixed rates. Whilst it remained an actual flyer program, the earn rates to acquire points were linked to actual flight revenue, so the ratios of available seats were maintainable as the possible earnings related to the number of seats in planes, and it is a proportion of those seats that could be acquired via the points earned from the others.
2. The cash cow associated with selling points to banks and anyone else willing to pay. Apart from the breakage of people dying (now gone) or giving up, there is effectively unlimited revenue that is NOT connected to actual flying volume available by flogging off points. However, the rate earned for each point is fixed - banks and merchants will only pay so much per point, as they have to build it into there cost of doing business. The only sustainable approach that can be taken to balance the books on an unlimited earn that is capped to a certain value per point is to allow an equally unlimited redemption, but at less per point than what they were sold for. There is a clear limit to what third parties will pay to offer points, and I suspect it tops out at a maximum of about 1c per point (equal to about 1%). Bigger partners are not doubt paying less, and some may pay a little over the odds. Qantas is always going to want to make a margin, so an uncapped "any seat" scheme is never going to offer anywhere near the value of the original loyalty scheme. As the pool of points becomes more and more skewed to those purchased rather than awarded for flying, the whole redemption opportunity will likewise head the same way.

The current situation is a blend of two issues. The ever increasing trend to more and more of the scheme revenue being derived from selling points to third parties, and the demand and willingness of people to pay cash for seats, reducing the availability of distressed inventory. It is no coincidence that more and more loyalty schemes are abandoning the loyalty carrot and moving to a fixed margin approach that guarantees the points vendor a sustainable profit - but does not allow the poor punters the chance to obtain over the odds value.

 

[RooFlyer]

Many have little understanding of how a half billion dollar annual revenue business works, too.

But most of them would understand an airline intending to keep half a billion dollars of customer's (their) money because the airline made it too difficult to redeem. I still don't understand why, before they were forced by the ACCC to extend beyond December, why as a 'last resort', the airline didn't plan to repatriate funds back to customers CCs. Would have accounted for it all, but would have made a big dent in Qantas' customer cash stash and intended profit. ... Oh .....

If you read the submissions, it's clear that many have little understanding as to how to programme actually works.

Possibly - but whose fault is that? Isn't it a case of understanding how a program should work, but the convoluted way to find CR seats that Qantas imposes means, as discussed above, they mistake points+pay for all that's available. Redeem on other programs and its just so much clearer and straightforward. I've redeemed on QF, SQ, QR, AS and Aeroplan in the past 8 months, the last 3 only once in at least 5 years. Went straight through, got what I wanted.

 

[Mr H]

Ive redeemed on QF, SQ, QR, AS and Aeroplan in the past 8 months, the last 3 only once in at least 5 years. Went straight through, got what I wanted.

Is some of that down to complexity of the route? QF OWAs are difficult but complex. I have redeemed recently also on BA and VA - went through instantly online but they only allow you to book sector by sector.

 

[RooFlyer]

Is some of that down to complexity of the route? QF OWAs are difficult but complex.

Yes; I'd never attempt anything like a OWA. Planning and booking revenue RTWs is difficult enough! My QR, AS and Aeroplan itineraries weren't complicated, but were multi sector (up to three).

 

[aikman]

I see three potential solutions to this demand and supply problem.

1. Qantas drastically reduces or stops issuing new points
2. Qantas converts a lot of its revenue seats to classic reward seats
3. Raise classic reward redemption rates

Qantas is a for-profit company so realistically options 1 & 2 are out. Which leaves option 3. Not good for consumers but they will forgive and forget.

 

[encryptededdy]

Personally, I suspect any realistic sort of change to resolve this situation would be net detrimental to myself. I benefit a lot from the Status Quo, planning trips with short notice when they randomly drop (especially on Asia routes) at relatively low prices (with the recent devaluations on other programs, QFF is still much cheaper than Asia Miles or Krisflyer* for getting to Japan), or requesting platinum economy seat releases for last minute domestic trips where even VA and Rex are expensive in cash. I earn about 500,000 points a year and have no problem spending them on premium class flights or upgrades for myself in that time period.

I recognise though that others are not as fortunate to be able to book trips like I do, however as I note any change to benefit them would probably be detrimental to myself, so

*as far as I'm concerned, I can almost never see any Saver availability so I'm going off Advantage pricing

 

[Mr H]

I see three potential solutions to this demand and supply problem.

1. Qantas drastically reduces or stops issuing new points
2. Qantas converts a lot of its revenue seats to classic reward seats
3. Raise classic reward redemption rates

Qantas is a for-profit company so realistically options 1 & 2 are out. Which leaves option 3. Not good for consumers but they will forgive and forget.

I think I read somewhere that Olivia Wirth said that in the year to 30 June Qantas issued 175 billion points and 155 billion were redeemed. While that does add to the pool of unused points, it also suggests that most points are used. I don't think there's a huge supply/demand imbalance - but if people find they can't get the flights they want they will find some other way to redeem (gift cards...)

 

[jase05]

Yes; I'd never attempt anything like a OWA. Planning and booking revenue RTWs is difficult enough! My QR, AS and Aeroplan itineraries weren't complicated, but were multi sector (up to three).

Yep, for next years trip in March I managed to use Aeroplan to book ADL-SIN-BKK in SQ J and MRU-KUL-SIN-ADL in MK/SQ J with no problem and instant ticketing aswell as CDG-MRU on AF J through VS ( at least 9 J seats available) and ticketed immediately yet I’m trying to do a simple BA redemption on QF and website won’t allow it so numerous calls and hours wasted to be given misinformation and lies and flights still not booked for something that should take a minute to do online. Going to attempt again when I have a spare day up my sleeve to deal with the incompetent imbeciles via phone