Qantas Introduces New Domestic Fares and Further Frequent Flyer Enhancements

[nlagalle]

Not happy Jan..

"Existing domestic bookings will remain in the same booking class as originally ticketed and the fare rules are those which apply to the ticketed fare at the date of purchase".

I have flights booked before 7th.

So why aren't you happy? that you can't upgrade?

 

[AnonymousCoward]

Yes - from the points provider. And in many cases this will be credit card companies, stores that have signed up to the QFF program, etc - not necessarily Qantas itself.

Qantas may in fact be making more money by allowing easier point burn, particularly on products like business seats, which if a domestic ODU, isn't amazingly better than economy; an extra glass of water or juice, a bit of alcohol and maybe a little extra food in the lounge. It's nicer, but does are costs to QF the same as say the same points to provide an economy seat if the points were spent as a flight?

At the least, this may be a mitigating factor in any cost burden.

QFF earns the points when they are sold. Not when they are redeemed. The cost of providing SCs (and corresponding benefits) is borne entirely by QANTAS, not shared by credit card providers etc.

Sorry, but this is a net cost to QF: if they were going to make money out of this they would have done it a long time ago.

 

[dfcatch]

QFF earns the points when they are sold. Not when they are redeemed. The cost of providing SCs (and corresponding benefits) is borne entirely by QANTAS, not shared by credit card providers etc.

Sorry, but this is a net cost to QF: if they were going to make money out of this they would have done it a long time ago.

QANTAS pays QFF when you earn points via flights.
CC companies pay QFF when you earn points via spend.
QFF pays QANTAS when you redeem the points for flights.
QFF gets paid more for points earned than it pays QANTAS for redemptions.
You may find that QANTAS pays QFF less for x points, than a CC company does.
Therefore when you redeem the points for a seat, there is no net loss (maybe even a profit) for QANTAS.

So in that sense - CC points are subsidizing redemptions so that QF and QFF don't lose out.

SC's and benefits are the 'pure loyalty program' within QF (separate from the "alternative currency" of points).

These costs are borne by all pax so that QF can fund benefits for status pax.

 

[Danger]

Not happy Jan..

"Existing domestic bookings will remain in the same booking class as originally ticketed and the fare rules are those which apply to the ticketed fare at the date of purchase".

I have flights booked before 7th.

I don't have a problem with this from the point of view that it could go (and from memory, has gone) the other way. For example, if FF point redemptions were to increase, QF wouldn't turn around and say 'Well, we know you booked your FF points RTW fare for you and the family of four for 11 months time but, unfortunately, as redemption levels for an RTW will be increasing in six months by 115k points per person, you'll now need to fork out 460k more'. My point is, as long as all the changes (whatever, whenever they are) don't 'double penalise', I think it's fair.

 

[Limewood]

Must be missing something?. Have Red E Deal tickets booked a week ago, my understanding is, because it was booked before the 7th July can't be upgraded.

one leg is domestic return to my home port (from overseas in J) so if i can upgrade then any extra baggage would help.

 

[Zippy7]

Must be missing something?. Have Red E Deal tickets booked a week ago, my understanding is, because it was booked before the 7th July can't be upgraded.

one leg is domestic return to my home port (from overseas in J) so if i can upgrade then any extra baggage would help.

From what I read of the email (and what Red Roo has posted) you CAN upgrade, you just have to wait until after the 7th to put your request in.

I thought it was slightly strange that I was sent an email to clarify these changes (but not notified of these changes at the time!).
But hey, little impact on me - I bought a red e-deal ticket and I will still be happy to sit up the back of the bus

 

[AnonymousCoward]

QANTAS pays QFF when you earn points via flights.
CC companies pay QFF when you earn points via spend.
QFF pays QANTAS when you redeem the points for flights.
QFF gets paid more for points earned than it pays QANTAS for redemptions.
You may find that QANTAS pays QFF less for x points, than a CC company does.
Therefore when you redeem the points for a seat, there is no net loss (maybe even a profit) for QANTAS.

So in that sense - CC points are subsidizing redemptions so that QF and QFF don't lose out.

SC's and benefits are the 'pure loyalty program' within QF (separate from the "alternative currency" of points).

These costs are borne by all pax so that QF can fund benefits for status pax.

Despite all the words, not a single point has been made. If you think QANTAS is somehow profiting through this, then why hasn't QANTAS done this years ago?

If you think that, maybe ~$50 worth of points (5000) is the value (or total cost to QF) of providing an upgrade, then why doesn't QF just provide unlimited upgrades provided there is space available?

They don't do this for very good reasons: they make less profit in the long run. They are only doing this now because of competitive pressure. But someone, somewhere, will have to pay the cost of this. Whether it's through further service cuts, lower returns to shareholders or higher prices. Airlines are some business where there is a huge amount of "fat" that can be cut without impacting frontline service, returns or prices.

 

[extracta]

If you think that, maybe ~$50 worth of points (5000) is the value (or total cost to QF) of providing an upgrade, then why doesn't QF just provide unlimited upgrades provided there is space available?

This is a very good question. In the past they have had no competition in J class and have been able to run rough shod over their QFF members.

Hopefully that will change.

The more loyal that QFF members are the less reason there is for QF to provide them with extra incentives.

Other airlines provide upgrades on request and there is no reason why QF can't.

If you want the QFF benefits to improve you need to let QF know that you will use another carrier.

 

[markis10]

QFF earns the points when they are sold. Not when they are redeemed. The cost of providing SCs (and corresponding benefits) is borne entirely by QANTAS, not shared by credit card providers etc.

Sorry, but this is a net cost to QF: if they were going to make money out of this they would have done it a long time ago.

Qantas Frequent Flyer have a margin in the sale of points and also their redemption since 2009:

 

[dfcatch]

Despite all the words, not a single point has been made. If you think QANTAS is somehow profiting through this, then why hasn't QANTAS done this years ago?

If you think that, maybe ~$50 worth of points (5000) is the value (or total cost to QF) of providing an upgrade, then why doesn't QF just provide unlimited upgrades provided there is space available?

They don't do this for very good reasons: they make less profit in the long run. They are only doing this now because of competitive pressure. But someone, somewhere, will have to pay the cost of this. Whether it's through further service cuts, lower returns to shareholders or higher prices. Airlines are some business where there is a huge amount of "fat" that can be cut without impacting frontline service, returns or prices.

They have held off award redemption availability because their yield management projections and assumptions have been based around being able to charge premium prices to fill those seats to cash pax at the last minute.

However - if the seat would have otherwise flown empty, then they would rather make the revenue from the points redemption.

It's quite simple really. QF profits from selling the seat either for cash or for points, but not empty.

They have obviously realized that unnecessarily restricting red e-deals was costing them money by having empty j seats for which they could have received revenue for from QFF.

Markis - thank you - "margin" was the word I was looking for.

I do wonder if QF gets to buy the points at the gross rate..??

Otherwise, published "losses" from mainline may very well be explained by a portion of QFF's profit

 

[JohnK]

I thought it was slightly strange that I was sent an email to clarify these changes (but not notified of these changes at the time!).

I did not receive the original email and neither did my father. Both the same email address anyway.

 

[Limewood]

From what I read of the email (and what Red Roo has posted) you CAN upgrade, you just have to wait until after the 7th to put your request in.

Had another read of the Q email, yes can upgrade to J domestic on our return from OS (if available) even though ticket already purchased, so wife now can shop more as weight not a prob!.

 

[proskyneo]

Had another read of the Q email, yes can upgrade to J domestic on our return from OS (if available) even though ticket already purchased, so wife now can shop more as weight not a prob!.

I think these are just domestic changes? Or is that just for the fare classes not the upgrading of Red E-deals.

 

[Limewood]

I think these are just domestic changes? Or is that just for the fare classes not the upgrading of Red E-deals.

Yes only domestic.

 

[medhead]

On the question of losing money. Qantas is forgoing revenue in the sale of the underlying fare as people no longer have to buy a more expensive fare to get an upgrade. The money made, by whoever, on the redeemed points remains the same, for now. There is no suggestion that more upgrades will be available after 7 July. So you are still going to see empty J seats. As I did last Wednesday night even with no U available on my domestic flight.

I think these are just domestic changes? Or is that just for the fare classes not the upgrading of Red E-deals.

It is entirely domestic changes.

 

[avi8or]

Was flying out of SYD on Saturday morning and asked the lounge dragon in the QP about ODU for discount Y-fares. She said that from the 7th all fares will be eligable for ODU by SG/WP/CL members in the lounge (this includes discount Y as well as YASA X class fares). Good news I think as I wasn't sure if the discount Y fares would be eligable for ODU.

 

[proskyneo]

Yes only domestic.

Oh I see now you said J Domestic, I only read the OS part X) I didn't think that you could upgrade coming from OS.

 

[simongr]

They don't do this for very good reasons: they make less profit in the long run. They are only doing this now because of competitive pressure. But someone, somewhere, will have to pay the cost of this. Whether it's through further service cuts, lower returns to shareholders or higher prices. Airlines are some business where there is a huge amount of "fat" that can be cut without impacting frontline service, returns or prices.

Not necessarily. I agree there is a cost to QF for these changes but they might not be able to pass on this costs due to the increased competition from Virgin Australia - they may have to absorb the costs and live with a lower margin.

One thing that has been said here that I can't confirm on the QF website is that Flexi Savers now earn full SCs? This is a major improvement for me if true. I just checked out some random dates in the future and can see SYD-MEL is now a standard $117 in red-e-deal and $200 for flex. I can live with $200 for flex as that is cheaper than I have been paying recently.

Based on these changes and my travel in Aug/Sep I might actually now make PG... or at least take the 50K points...

 

[dfcatch]

On the question of losing money. Qantas is forgoing revenue in the sale of the underlying fare as people no longer have to buy a more expensive fare to get an upgrade. The money made, by whoever, on the redeemed points remains the same, for now. There is no suggestion that more upgrades will be available after 7 July. So you are still going to see empty J seats. As I did last Wednesday night even with no U available on my domestic flight.



It is entirely domestic changes.

Well maybe....

We're talking domestic here....

Unless upgrading at time of booking (and thus selecting a higher fare so that you can upgrade immediately), I'm not convinced that people are buying a higher (upgradeable) fare over a red e-deal on the "chance" that they may be able to snag an ODU.

I believe that (which the upgrade-at-booking exception), those who purchase a higher fare do so because they want more flexible conditions/lower change penalties. Therefore folks flying on red e-deals can now be milked for at least some additional spend for the ODU.

However - if red e-deals are eligible for upgrade-at-booking, then yes, there will be a small revenue hit - somewhat padded by the points redemption revenue. And additionally padded by more ODU revenue.

No doubt that YM will control U inventory like the masters that they are.

 

[serfty]

...

One thing that has been said here that I can't confirm on the QF website is that Flexi Savers now earn full SCs? This is a major improvement for me if true. I just checked out some random dates in the future and can see SYD-MEL is now a standard $117 in red-e-deal and $200 for flex. I can live with $200 for flex as that is cheaper than I have been paying recently. ...

See this informative post:

While the name 'supersaver' is going, the underlying fare classes are not. What exists as 'S' class now, is being moved into the red-e-deal bucket, while the rest of the supersavers are being moved into the flexi-saver bucket. So, all other things being equal, the red-e-deal bucket will have more in it, while the jump to flexi-saver should not be so steep.

As to the classes, there is a link here: Latest Qantas News

Fare Family Changes
Fares in the Economy cabin will now be grouped into three fare families, each of which provides varying levels of flexibility for our customers:

• The Red eDeal fare family now consists of E, O, Q, N and S classes;
• The Flexi Saver fare family now consists of V, L, M, K and H classes; and
• The Fully Flexible fare family now consists of B and Y class.

...

The new Australian Domestic fare structure allows Qantas Frequent Flyer members to use points to upgrade to Business Class on all Australian Domestic fares and improves the Status credit earn rate
for some fares.

• Fares in V, L and M booking classes will now be classed as “Economy” instead of “Discount Economy” for the purposes of Qantas Frequent Flyer Status credit earn.
• In addition, the points needed for Flight Upgrade Awards on domestic Qantas flights from V, L and M class fares will reduce from the “Discount Economy” rate to the “Economy” rate.
• All Red eDeal fares, including E, O, Q, N and S classes, will now be eligible for Flight Upgrade Awards on domestic Qantas flights.
• X class fares, when booked as part of a Qantas Any Seat Award, will now also be eligible for Flight Upgrade Awards.