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

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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.
Some of this is predicated on the actual pool of points sitting on the sidelines as RRIA Revenue Received in Advance
It’s been heading ever upward and is UNTAXED until such time as it’s actually used to but toasters or seats


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The revenue margin is also healthy

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So there is some wriggle room in all this

The other issue perhaps is more and more members vying for the same seats. More and more partner programs vying for the same seats

We are also coming off COVID with pentup demand
So if you want to go to Shanghai well plenty of Y POINTS SEATS there
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This was an interesting 11 pages to catch up on!

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 :(
Agree. Within QF's balance sheet there's a certain amount of value to be shared, and if it is redistributed, those currently getting a bigger share are likely to lose out.

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...)
Indeed, much of the discussion on the last pages has been that Qantas makes it easier to see the more expensive redemptions. If people are willing to part with points at lower value, that's their call. I burned a bunch of points on lower value redemptions during covid because I couldn't foresee the next time I'd escape fortress WA, that was my call.

Now I'm flying again I have my preferred way to extract value and if I didn't feel like I was getting value then I'd stop trying to earn QF points.
 
Within QF's balance sheet there's a certain amount of value to be shared, and if it is redistributed, those currently getting a bigger share are likely to lose out.

I'm not sure it is even about redistribution. The current model is that some seats that are expected to remain unsold (distressed inventory as someone upthread described it) are made available for a very modest amount of points. For everything else - Points Plus Pay seats, gift vouchers, toasters, etc. the value of a point is set somewhere between 0.5 cents and 0.75 cents per point (0.61 cents per point for revenue seats). I presume this means QF internally values the classic reward seats also at 0.61c x number of points - hence a business class OWA would be valued at $1,940. Much less than the revenue price, but they (and their partner airlines) are covering the costs of the fuel, the catering, the baggage handling etc. that are the marginal cost of putting a passenger in the otherwise empty seat. So I think from the airline's perspective, everyone is getting roughly the same value for their points. The "bigger share" comes from customers who look at the value of Classic Reward seats not as distressed stock or as seats they would never have paid for, but as full fare one way last minute walk-ups. So they (we) delude themselves they are getting 3-4 cents of value per point when the airlines think (know) they are really getting 0.61 cents of value per point.

Sorry - that's a wall of TLDR - but I've typed it so I might as well post it.
 
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 .....
I was referring to the QFF arm of the business only. A lot of these people don't realise that the reason why the loyalty arm generates 500m is because the business is designed to make a profit.

What you refer to belongs in a different thread.
 
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...)
Though that means that 20 billion points in a year weren't redeemed or ~ 11.55% in one year. my guess this is probably the same for most years so the numbers must be getting quite high in unused points.
 
Though that means that 20 billion points in a year weren't redeemed or ~ 11.55% in one year. my guess this is probably the same for most years so the numbers must be getting quite high in unused points.

And I’d guess those are the points that are lost through inactivity or just never redeemed due to general lack of interest.
 
Though that means that 20 billion points in a year weren't redeemed or ~ 11.55% in one year. my guess this is probably the same for most years so the numbers must be getting quite high in unused points.
They made a small dent in the non-currents $76 million lower
It’s likely this includes the breakage rate (expired points & loss at death)

The gap between earn and burn yes has been reducing 20 billion being the smallest annual gap
See the photos from the 2023 annual report figures my earlier post

Of course as the party that sets BOTH EARN AND BURN rates

This is MONOPOLISTIC

Qantas submission to the Senate inquiry is #147
Worth a look at page 8-9
Submissions

147
 
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They made a small dent in the non-currents $76 million lower
It’s likely this includes the breakage rate (expired points & loss at death)

The gap between earn and burn yes has been reducing 20 billion being the smallest annual gap
See the photos from the 2023 annual report figures my earlier post

Of course as the party that sets BOTH EARN AND BURN rates

This is MONOPOLISTIC
Maybe the smallest because travel and spending dropped and desperate people went with th points plus pay option to at least get some travel in the last 12 months.
If the difference gets lower again expect QF to put up points required for CRs.
 
QF points required for long haul J CRs are already some of the highest in the industry when compared to their equivalents, though given the ubiquity of Qantas points you might fairly argue this isn't a direct comparison.

They might equalise the points needed for QF bookings with other airlines so it's 159,000 for a J to Europe across the board though.
 
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.
Nooooooooooooo!
 
QF points required for long haul J CRs are already some of the highest in the industry when compared to their equivalents, though given the ubiquity of Qantas points you might fairly argue this isn't a direct comparison.

They might equalise the points needed for QF bookings with other airlines so it's 159,000 for a J to Europe across the board though.
You've very neatly given a great reason why this won't be a thing.

Earning rates vary across carriers. just calling them "points" or "miles" doesn't mean they're the same thing from one carrier to the next or have the same value - they don't.

It actually is an argument for joint FF currencies - such as Avios - now in use with BA/IB/QR and soon AY - and that would definitely make for a more meaningful system to compare.

Not saying QF should go avios, but it does seem to have some appeal within the grouping who do use it. I'm not familiar enough with it to make any really informed comment about it though.
 
You've very neatly given a great reason why this won't be a thing.

Earning rates vary across carriers. just calling them "points" or "miles" doesn't mean they're the same thing from one carrier to the next or have the same value - they don't.

It actually is an argument for joint FF currencies - such as Avios - now in use with BA/IB/QR and soon AY - and that would definitely make for a more meaningful system to compare.

Not saying QF should go avios, but it does seem to have some appeal within the grouping who do use it. I'm not familiar enough with it to make any really informed comment about it though.
Oh I think you've misunderstood me here.

This is purely for QFF - booking award seats on QF metal for the same mileage band is a little cheaper points wise than on partner airlines. So it's 144,600 Qantas points for one way in J to the maximum mileage one way in J with QF (and until around three years ago EK), whereas for others airlines it's 159,000 Qantas points.

I do wonder whether QF might slightly increase the price of J awards on their own metal so they're in line with what they charge for other airlines. Won't move the dial massively but might take a few more points out of circulation and make a few more seats available as a result.
 
Oh I think you've misunderstood me here.

This is purely for QFF - booking award seats on QF metal for the same mileage band is a little cheaper points wise than on partner airlines. So it's 144,600 Qantas points for one way in J to the maximum mileage one way in J with QF (and until around three years ago EK), whereas for others airlines it's 159,000 Qantas points.

I do wonder whether QF might slightly increase the price of J awards on their own metal so they're in line with what they charge for other airlines. Won't move the dial massively but might take a few more points out of circulation and make a few more seats available as a result.
I do not think @RichardMEL has misunderstood you. When redeeming flights on QF metal, using QF points it has always been cheaper at some point in time AA and EK were at the same rate as QF but AA changed to the Partner rates after the JV was knocked back and the EK rates quietly slid to the partner rates some time in 2020 or 2021. I would suggest that if QF increased the CR redemption rate the partner redemption rate will also increase. Each carrier sets they own redemption rates for their metal and partners and it can vary based on the carrier and the program.
 
I do not think @RichardMEL has misunderstood you. When redeeming flights on QF metal, using QF points it has always been cheaper at some point in time AA and EK were at the same rate as QF but AA changed to the Partner rates after the JV was knocked back and the EK rates quietly slid to the partner rates some time in 2020 or 2021. I would suggest that if QF increased the CR redemption rate the partner redemption rate will also increase. Each carrier sets they own redemption rates for their metal and partners and it can vary based on the carrier and the program.
Each carrier does set their own redemption rates BUT surely not for a different carrier's FF program. JL decides how many JL miles are needed for one of their seats, it doesn't dictate how many QFF points are needed for one of their seats.

Ultimately the decision to charge 144,600 or 159,000 points is decided by Qantas, though of course it will be influenced by the costs QFF bear for one of their members to redeem on another airline than their own.

I can't see how QFF charging its own members eg an extra 14,400 points for a J CR redemption to Europe will automatically make the other partner rates increase, though QFF might choose to increase it in order to keep that difference.
 
IMO with respect to redemption values for QF on QF services vs partners...

As I understand it, it's not really about what airline X charges in their program currency aligning with what program Y charges and that they should somehow be equivalent.

Each airline, per inter-airline agreements for such things, will charge a set rate for the redemptions as part of their agreements. That amount may even be in the pseudo "NUC" currency airlines often use to equvalence across ticketing, or it may more simply be in an agreed upon exchange rate - much like codeshare agreements specify set amounts for the seats the codesharing carrier "buys" under the agreement (to then onsell at whatever rate they want - which is why you might see a codeshare flight offering seats on the codeshare at odds - either more or less - than the operating carrier for the same CoS on the same flight)

So if you're say JL, and you're selling a reward seat to QF for a flight, you charge them an amount for it (after determining that the seat will be offered at this rate of course) and take that. QF can then charge what it likes.

As for why QFF charge less in QFF points for QF (and JQ) services? pretty simple - it costs them less to offer their own seats up for redemption - you're not dealing with another airline and the ticketing clearing house to pay them for the seat. You still pay yourself of course, but it's far easier for QF to control their own inventory to themselves (and of course allow for things like reward seat release to top tier flyers etc).

This is not really unusual in terms of redemptions for partners from most FF programs imo.

This is my general understanding at least. Happy to be corrected of course.

So actually if QF decided to "enhance" the reward tables and charge the same (higher) amount for partner and QF/JQ rewards that would be a loss for the QF punters.
 
Might not be completely relevant, but it looks like Qantas has quietly increased the taxes on domestic classic reward flights. It is now showing me $51 in taxes/surcharges to fly between Sydney and Brisbane. I booked a reward booking at the end of September for travel between these two cities at the end of September and it only cost $46 in taxes/surcharges, so a $5 jump.

MEL/SYD is now $45, which I think is up from $39 or $38 when I last booked one a few months back. Also, bizarre that surcharges to Brisbane are more expensive than flying to Melbourne.
 

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Qantas points are rubbish, mostly because they don't fly much anywhere useful, and many of their partners who do, don't like Qantas. Even Emirates whom they borderline prostitute themselves to, do not give QF any sort of preferential treatment when it comes to reward seats.

Qantas should start flying to Frankfurt and Paris and make a lot more CR seats available, it will solve the problem.
 
Qantas points are rubbish, mostly because they don't fly much anywhere useful, and many of their partners who do, don't like Qantas.
These are the destinations I have redeemed QF points to get to/from in the past couple of years:

Melbourne
Colombo
Delhi
London Heathrow
London City
Milan
Doha
Tehran
Tunis
Amman
Helsinki
Lahore
Sydney
Hong Kong
Dubai
Baghdad
Male
Kuala Lumpur
Tokyo Narita
 
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