Qantas to "even out" fares between city pairs

[Mal]

http://www.qantas.com.au/agents/dyn/qf/news/200606/0675

"Effective for sales made and bookings ticketed on/ after 01 July 2006 adjustments will be made to domestic base fares and the way Qantas collects noise levies and baggage screening charges from passengers. These changes will ensure that the all-inclusive domestic one-way fares between two city pairs is the same regardless of the direction of travel (eg. the SYDMEL Red e-Deal fare will equal the MELSYD Red e-Deal fare) "
...
"New all-inclusive one way fares will not be greater than the higher price currently advertised for fares between those cities. For example, MEL-SYD is currently advertised at $121 while SYD-MEL is advertised at $118. The new all-inclusive price between SYD and MEL will be $121 in either direction."
...
"These changes will result in some all inclusive fare levels increasing, and others decreasing. On average, the fare change for a one-way fare is 54 cents or for a return fare $1.08. "

 

[DPG]

...
"New all-inclusive one way fares will not be greater than the higher price currently advertised for fares between those cities. For example, MEL-SYD is currently advertised at $121 while SYD-MEL is advertised at $118. The new all-inclusive price between SYD and MEL will be $121 in either direction."

Got to love it... Fuel Surcharge Increase, Credit Card Fee Surcharge increase, then 'even out the fares' increase!

When will it end... Surely if Qantas was wanting to even out the fares, they could have picked the number in between rather than the higher of the two...

Little things like this are really starting to take the piss!

D P G

 

[JohnK]

Little things like this are really starting to take the piss!

Don't forget that they are only posting a A$670 million profit this year.

They have to find another way of funding Geoff's bonus. :mrgreen:

 

[DPG]

What frustrates me is that I am an ardent supporter of QF in an industry which has been completely kicked in the head by QF! I often have debates with my colleagues (who have not flown QF recently) as to the improvements that have occurred internationally.

But stupid price hikes like this make it more difficult for me to support QF. It is just petty changing the base fare as the taxes are different out of one port when compared to another.

Grrrr this just irritates me!

D P G

 

[JohnK]

Grrrr this just irritates me!

You are not alone.

I just wish this penny pinching would just stop and QF to finally show some honesty to their loyal customer base. But unfortunately the arrogance shown by the current management continues to shine through.

 

[Kiwi Flyer]

If it was truly evening out the fares the average change would be zero. Grrrr.

I didn't think QF could levy taxes on its own so they're really making increases to selected base fares.

Let's see - in 6 months time if they dont try to even out the base fares (again at the highest level).

 

[jasonja3]

IMO, just another reason why we should have more competition both domestic and international.:evil:

 

[DPG]

If it was truly evening out the fares the average change would be zero. Grrrr.

Kiwi Flyer you have hit the nail on the head... Another example of QF 'spin'...

You are right, evening out should equal zero!

D P G

 

[Mal]

BTW, the title of "Qantas to "even out" fares between city pairs" was my creation - not Qantas spin, although there is already enough in the press release to make up for it

I can't see this as revenue neutral. Not with an average change of +$0.54/sector. (remember to times that by the high number of QF domestic flights per year)... We won't know for sure until 1 July, but I don't foresee any cheaper fares from this change - at least not on the popular routes.

The article also discusses some "tax" changes happening:

"Domestic tax changes include:

* Noise levy (QK) of $1.35 applying per jet passenger on both arrival and departure in SYD and ADL airports
* Baggage Screening charges (WG) applying as a flat rate of $3 per domestic departure

These tax changes will not materially impact the total amount collected by Qantas to cover these charges. "

I think it's time for the ACCC to wield a big stick at Qantas. All I see from them are examples of them trying to gouge me in as many different ways as possible. I wouldn't be suprised if they're set for another "fuel fine" increase soon as well.

 

[NM]

I have no problem with a rise in airfares. The fares should reflect the cost of delivering the product, and if the cost goes up then so should the fares. But this theory should apply equally to aspects of the cost base, including fuel. So if the cost of fuel goes up, then so should the fare - the base fare, not add it as a surcharge.

The same thing should apply to all aspects of costs, including airport fees and noise levies etc. These should not be quoted separately, but just included in the air fare.

When my company charge me out to our clients, they don't charge them for my base cost and then add a surcharge for my superannuation costs, payroll tax, insurance surcharge, professional affiliation membership levy, laptop provision, mobile phone costs etc. There is an all-inclusive cost that then has a margin applied to obtain the selling price. The customer is not told exactly how that price was determined and industry competition plays a significant part in determining the selling price. The company needs to understand all the components that make up the cost to ensure the margin between cost and sell price is positive.

 

[JohnK]

I have no problem with a rise in airfares. The fares should reflect the cost of delivering the product, and if the cost goes up then so should the fares. But this theory should apply equally to aspects of the cost base, including fuel. So if the cost of fuel goes up, then so should the fare - the base fare, not add it as a surcharge.

The same thing should apply to all aspects of costs, including airport fees and noise levies etc. These should not be quoted separately, but just included in the air fare.

You won't get an argument from me. Isn't this how it used to be anyway?

The problem now is that it is a nice little money spinner for QF and most airlines it is hard to let go of the +taxes and surcharges component to the base fare.

If enough people complained to ACCC or to their local member of federal parliament are we likely to see changes? If so then why don't more people complain?

 

[dajop]

The problem now is that it is a nice little money spinner for QF and most airlines it is hard to let go of the +taxes and surcharges component to the base fare.

I guess three good applications of taxes and surcharges.
1) FF tickets (this is the most appalling - so much for rewarding loyal customers - if costs increase, increase the points required not whack on a surcharge (or in the case of QF increase points & implement a surcharge). 2) RTW/Circle Fares
3) Industry Discount tix (do surcharges apply to these??)

If enough people complained to ACCC or to their local member of federal parliament are we likely to see changes? If so then why don't more people complain?

Trouble is enough people don't care or don't know any different. Aside from those of us frequenting the board, people probably just ring up and book those flights from MEL to LST, pay their 16,000 pts & $100 and don't realise they could have bought the whole thing for $120.

 

[Yada Yada]

Unfortunately the ACCC had all of its teeth removed when the Federal Govt replaced Mr Fels. QF seems to have strong support within the current govt so we won't see anything changing soon.

As I've said in other threads, thank God for Virgin Blue. Imagine the fares QF would be charging now if DJ was not a strong competitor.

 

[thadocta]

The article also discusses some "tax" changes happening:

"Domestic tax changes include:

* Noise levy (QK) of $1.35 applying per jet passenger on both arrival and departure in SYD and ADL airports

This would be illegal, IMNSHO.

The QK levy is only applicable on passengers arriving in to SYD, it is not payable on departures FROM SYD. Some people are known to fly out of SYD and use other means of travel to get back (or vice versa).

I will often fly to MEL and get the XPT back home (for a bit of comfort).

I am not liable to the noise levy on the outbound sector, yet QF all of a sudden seeks to impose it on me? (Sure, it is only a small amount, but it is for me a charge applicable about 6 times a year, and then you spread that across everybody else!)

Dave

 

[oz_mark]

This would be illegal, IMNSHO.

The QK levy is only applicable on passengers arriving in to SYD, it is not payable on departures FROM SYD. Some people are known to fly out of SYD and use other means of travel to get back (or vice versa).

This is what I had thought. I wonder if anyone will bother to lodge a complaint though?

 

[serfty]

OK, Today Noise levy (QK) is $3.74 ($3.40 + 34¢ GST) for arrivals both to SYD & ADL.

Correct me if I am wrong, but $1.35 for arrivals and departures at SYD and ADL gives $2.70. Is there a deliberate mis-print here? Should that not be $1.85?

As to the WG tax becoming $3 flat, this is another revenue earner for Qantas.

Domestic PAX ex SYD are going to pay 9¢ less, but BNE are to pay 77¢ more and MEL 82¢ more. None of that takes GST into account.

Now Qantas are indicating an increase of 54¢ per domestic passenger seat. Given they had over 16million occupied passenger seats last finacial year that's a nice little revenue earner.

Here a list of the WG taxes as at 19th June 2006. It can be found here: TAXES/ LEVIES/ CHARGES:

NAME: SAFETY AND SECURITY CHARGE
CODE: WG
AMOUNT: Tax to be collected on all tickets/MCOS/PTAS issued for passengers departing on
international and/or domestic services from the below airports, irrespective of place of
issue. Please note Flight numbers 1-399 depart from international terminal, remainder
depart from domestic terminal

CITY/CODE DOMESTIC TERMINAL INTERNATIONAL TERMINAL
            ADULT  CHILD         ADULT CHILD
              AUD    AUD           AUD   AUD
ASP          3.00   3.00
ADL          3.52   3.52          4.96  4.96
AYQ          2.97   2.97
BNE          2.23   2.23          8.21  8.21
BME          6.80   6.80                       TL / FY
CNS          2.73   2.73          7.54  7.54
CBR          1.16   1.16
CFS          5.08   5.08
DRW         14.08  14.08         15.52 15.52
OOL          3.46   3.46          4.24  4.24
GOV         11.35  11.35
HTI          0.49   0.49
HBA          1.19   1.19
ISA         14.00  14.00
KGI          3.50   3.50
KNX         10.77  10.77
KTA          4.23   4.23
LST          0.97   0.97
MKY          1.69   1.69
MCY          2.46   2.46
MEL          2.18   2.18          5.04  5.04
NTL          4.50   4.50
PBO         14.70  14.70
PER          3.26   3.26          7.57  7.57
PHE         12.39  12.39
PPP          1.45   1.45
ROK          1.04   1.04
SYD          3.09   3.09
SYD          0.87   0.87                        DR
TSV          2.66   2.66
ZNE         14.04  14.04

 

[NM]

Now Qantas are indicating an increase of 54¢ per domestic passenger seat. Given they had over 16million occupied passenger seats last finacial year that's a nice little revenue earner.

Any number multiplied by 16,000,000 is a big number!

I have no issue with them trying to make the actual fare paid the same in each direction, but to do it by fudging the taxes, surcharges and levies is misleading again. Just don't separate it out and alway quote fully-inclusive fares. How much the airline pays the airports and governments should not be of concern to the passenger.

So next are they going to even out the departure taxes for a SYD-AKL-SYD fare?

 

[dajop]

It is probably worth monitoring what happens to fares out of DRW, ISA, PBO & ZNE as the clock ticks over from 30 June to 1 July. With each of these ports having WG's of $14 or greater, there should be a $11 drop in the fares from each place.

 

[JohnK]

It is probably worth monitoring what happens to fares out of DRW, ISA, PBO & ZNE as the clock ticks over from 30 June to 1 July. With each of these ports having WG's of $14 or greater, there should be a $11 drop in the fares from each place.

Here is some analysis. It would appear that the popular city pairs have had a sizeable increase in airfare. Justified? Make up your own mind.

Airfares mentioned by dajop on 30th June and 1st July. But these are not popular destinations. Some wins and some losses but overall a gain on the return airfare. DRW-CBR and CBR-DRW have both increased though.

DRW-ADL was $313 now $301 and ADL-DRW was $297 now $301
DRW-CBR was $361 now $364 and CBR-DRW was $347 now $364
DRW-BNE was $239 now $230 and BNE-DRW was $226 now $230
DRW-MEL was $345 now $336 and MEL-DRW was $332 now $336
DRW-PER was $309 now $301 and PER-DRW was $297 now $301
DRW-SYD was $279 now $267 and SYD-DRW was $263 now $267
ISA-BNE was $252 now $243 and BNE-ISA was $239 now $243
ISA-MEL was $396 now $387 and MEL-ISA was $383 now $387
ISA-SYD was $369 now $357 and SYD-ISA was $353 now $357
PBO-PER was $218 now $209 and PER-PBO was $205 now $209
ZNE-PER was $243 now $235 and PER-ZNE was $231 now $235

These other airfares are some common city pairs from SYD but have changed before the 1st July so cannot compare old airfare to new airfare. I can see they have evened out but have increased a sizeable amount from what I remember. I may be wrong but SYD-BNE was $108 and BNE-SYD was $106 and now it is $111. SYD-MEL was $116 and now $121. SYD-ADL was $155 and now $161. It would make sense to increase the popular destinations as this is where they will make money.

SYD-ADL now $161 and ADL-SYD now $161
SYD-BNE now $111 and BNE-SYD now $111
SYD-CBR now $111 and CBR-SYD now $111
SYD-HBA now $188 and HBA-SYD now $188
SYD-MEL now $121 and MEL-SYD now $121
SYD-PER now $262 and PER-SYD now $262

A couple of weeks ago I looked at availability for SYD-MEL-MQL travelling mid-October and airfare on front and booking page was $200 and for ABX-SYD airfare on front and booking page was was $140. Now looking at front page SYD-MEL-MQL airfare is now $200 but the booking page airfare is now showing $196 and looking at front ABX-SYD airfare is now $140 but the booking page is now showing $137. That is a decrease in airfare.

 

[Kiwi Flyer]

Here is some analysis. It would appear that the popular city pairs have had a sizeable increase in airfare. Justified? Make up your own mind.

Airfares mentioned by dajop on 30th June and 1st July. But these are not popular destinations. Some wins and some losses but overall a gain on the return airfare.

While I'm not defending QF's decision as I think it is wrong, I think your comments on DRW/ISA/PBO/ZNE are unduly negative. Based on the figures you've posted most round trips have reduced.