Qantas rolls out Classic Plus Flight Rewards

[Rich]

It doesn’t pass this former Bondi tram passenger’s test .It is exactly the same cash per point that you get.

What exactly did the email say (I don't seem to have it)? The qantasnewsroom site reads "...the chance to book one million discounted Business and Economy seats, using their Qantas Points or cash.."

 

[drron]

What exactly did the email say (I don't seem to have it)? The qantasnewsroom site reads "...the chance to book one million discounted Business and Economy seats, using their Qantas Points or cash.."

The discounted CR+ is because the cash price is discounted. So no change in the value of your points. Exactly the same cents per point value.

 

[dairyfloss]

It doesn’t pass this former Bondi tram passenger’s test .It is exactly the same cash per point that you get.

But you're not paying cash - you're using points, and a material amount less of those points than you would have the day before. Anyway; the great thing about it is, if you don't think it represents good value, you don't need to redeem anything on them while the points cost is lower, or even at all!

 

[drron]

But you're not paying cash - you're using points, and a material amount less of those points than you would have the day before. Anyway; the great thing about it is, if you don't think it represents good value, you don't need to redeem anything on them while the points cost is lower, or even at all!

But that is irrelevant. It would be a CR+ sale if it were less points for the same cash price.
The sale advertised is for the cash price and the points merely reflect that change.

 

[oz_mark]

But that is irrelevant. It would be a CR+ sale if it were less points for the same cash price.
The sale advertised is for the cash price and the points merely reflect that change.

I don't see that it matters. You either use less cash, or you use less points. It's a discount (sale) either way.
(Mind you, some of those fares, I'd just pay the cash, and keep my points....)

 

[levelnine]

(Mind you, some of those fares, I'd just pay the cash, and keep my points....)

Better not hold onto them too long as they're about to lose considerable value come the devaluation later this year.

 

[oz_mark]

Better not hold onto them too long as they're about to lose considerable value come the devaluation later this year.

There is that, but I think they'll still be better than CR+.

 

[levelnine]

There is that, but I think they'll still be better than CR+.

As I've calculated elsewhere, after the devaluation, there will only be a marginal difference between classic awards and classic plus outside of sale times. During sale times, the difference will be reduced to almost 0. That's how bad the devaluation is.

 

[Rich]

The discounted CR+ is because the cash price is discounted. So no change in the value of your points. Exactly the same cents per point value.

I understand but there is nothing wrong with that wording by Qantas. It is a concise way to explain the discount.

 

[Doctore1003]

Nothing in Qantas' profit result suggests Classic Plus will be the demise of QFF, like some in this thread have suggested.
- Points earned +10%
- Points redeemed +6% (+9% after adjusting for one-off customer campaigns conducted during 1H24)
- 1.2 million new QFF members
- Points transferred from flexible currencies (Amex?) +31%
- 2x growth in earn from members who have redeemed on ClassicPlus
- Underlying EBIT expected to grow ~10% in FY25

 

[levelnine]

- Points earned +10%
- Points redeemed +6% (+9% after adjusting for one-off customer campaigns conducted during 1H24)
- 1.2 million new QFF members
- Points transferred from flexible currencies (Amex?) +31%
- 2x growth in earn from members who have redeemed on ClassicPlus
- Underlying EBIT expected to grow ~10% in FY25

As you are peddling this as a sign of strength in another thread, let's look a little closer at these figures:

- Points earned +10%

Points earned in the same period the previous year was +12.5%. The growth rate in points accumulation has slowed by 20%.

- Points redeemed +6%

Points redeemed in the same period the previous year was +13.8%. The growth rate in points redemptions has slowed by 56%.

In other words, growth in the QFF program is currently going backwards.

- Points transferred from flexible currencies (Amex?) +31%

Definitely a good sign for Qantas.

- 2x growth in earn from members who have redeemed on ClassicPlus

Now we get to the metric that Qantas is hanging its hat on to sell investors on the wisdom of Classic Plus. Let's look at the fine print.

What Qantas is specifically claiming is that members who have used Classic Plus have grown their points from external partners twice as much as non-redeemers. The comparison here is crucial. Who are non-redeemers? Are they people who have not redeemed on Classic Plus (but redeemed on Classic)? Or are they people who have not redeemed on Qantas at all? If it is the latter, the statistic is meaningless! Non-redeemers are inactive or borderline inactive members earning next to nothing. It is not hard to earn 2x next to nothing. Huge numbers of QFF members earn and redeem nothing — they signed up once and have long forgotten their account existed.

And it appears to be the latter as footnote 5 talks about 'new' redeemers as people who have not redeemed in the last 5 years — that presumably means non-redeemers are those who have never redeemed.

As I've long said, Qantas are going to do everything they can to sell this program as a success. This is the most profitable part of Qantas. It needs to succeed.

They would have collected a thousand statistics related to Classic Plus. And this is the best one they could find?

What about %/# of members redeeming for Classic Plus? Or %/# of seats redeemed for Classic Plus? They happily tout those figures in relation to classic awards (9% of all seats are classic awards).

- Underlying EBIT expected to grow ~10% in FY25

EBIT declined. And more importantly, operating margin is down for the fourth consecutive year, sliding from 28.5% in 1H21 to 19.1% this period.

 

[SCM]

The operating margin (the only thing that actually matters) is down since the introduction of classic plus, if I were a major shareholder or a board member, I would be asking some serious questions.

The rising liabilities of the program (ie. consistently more points earned than spent by far) is also not good, and it's equally not good for us, because that will generally lead to further devaluations unfortunately. It basically represents that Qantas isn't providing enough value and/or supply (of things customers actually wnat) anywhere in it's loyalty programme to make use of points.