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- Jul 27, 2015
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- 909
It’s kinda amazing than Qantas thinks it can sell so many more points, given they are already ubiquitous.
Aiming for another quasi monopoly, perhaps!
Aiming for another quasi monopoly, perhaps!
I’ve not got near holding that amount of pointsGiven I save my points for J / F bookings ... or last minute classic Y rewards when it's $300 to fly SYD-BNK... I'm not wiling to pay 1,000,000 points for a $10,000 ticket to London in business class.
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By this argument, wouldn't the value of points be also pegged to the dollar at a rate, although possibly not to the same level. My argument is that inflation affects airfares as well, thus allowing you to get higher cash value for your points?One of the drawbacks of the FF model is that the price of points remains pegged to the dollar. As the value of the dollar erodes through inflation, there are more points chasing the same number of awards. So awards are jacked up in price, devaluing the points.
If the proposed model is to increase the dollar cost of points while leaving the point cost of redemptions alone, then it preserves the value of existing points while devaluing newly issued points. That seems fair.
What I am missing is the logic suggesting that adding a new tier of redemptions at a higher points price (compared to classic awards) is going to lead to an increase in value of the points - unless they really do believe that the lack of awards is so serious that their points have become worthless and that more (but more expensive) awards would turn worthless points into valuable points.
In order of preference, would definitely pick 2 > 3 > 1.If customers value them more, then you as a supplier can afford to raise your prices.
In the credit card space, I think we'll see a combination of the following:
1. Higher annual fees.
2. Higher minimum spend requirements
3. More multi-year sign-up bonuses, requiring you to pay two annual fees to get the full bonus.
That way banks can continue to offer the blockbuster offers (100K+ points) while preserving margins.
"changes are expected to focus on improving member engagement, increasing the value of a point to partners. Over time, these higher billings are expected to offset the higher program cost and lower breakage"
So, Qantas plans to sell more points at a higher price to partners (banks etc) to maintain its margins.
That's relatively easy to answer.How does Qantas plan to convince banks/partners to buy points for well over 1 cent each if their redemption value is set at 1 cent each?
Malaysia Airlines Enrich tried a few years ago to assign a fixed redemption value to their points. Surprise surprise, banks started asking why they should pay more than that to buy said points.
It's no where near that complicated for the purchasers of points (ie banks, insurance companies, supermarkets).It’s too simplistic to see the value of a point isn’t fixed at all stages of the lifecycle.
The house always wins on aggregate but it doesn’t beat everyone.All of which is a long way of saying - try not to be too literal about points values and that the house always wins.
Banks simply assign each point a higher cost basis and therefore giver fewer of them out to customers per transaction.
So banks will start awarding 0.25-0.5 Qantas points per dollar spent on cards rather than the current 0.7-1.25 Qantas points per dollar.
It'd be fascinating to know if Qantas have already upped the sell rates to banks and other partners, or if that is yet to come. The mega bonuses were during COVID, so Qantas may have been discounting points sales at that point. So the loss of the mega bonuses of 130K+ may simply be a product of Qantas' sale of points to partners ending, and the devaluation is yet to come.I'm pretty sure this already took place last year when almost all the sign up bonuses and earn rates dropped 30-40%
QF to have a $69 ticket..... MEL to SYD.AFR Insiders reporting that:
“The new scheme was likely to be called Classic+ and convert one Frequent Flyer point to 1¢ for economy flights, two sources close to the discussions who were not authorised to speak publicly told The Australian Financial Review. The conversion is likely to be more generous for higher cabin classes, they said. At its base, however, that would mean a $100 flight would cost 10,000 Frequent Flyer points under the proposed scheme.
“The existing program offers two ways to redeem points. Travellers can secure Classic Rewards seats, which use a set number of points, although these are often hard to find. Alternatively, they can use some points and pay the remainder – known as Points Plus Pay. This values the points at 0.7¢. The number of points needed for Classic Rewards is always much lower than those needed for Points Plus Pay.
Under the proposal being discussed internally, expected to be finalised next month, Classic+ seat costs are expected to be based on the lowest possible fare when Classic Rewards tickets are sold out. If a ticket from Melbourne to Sydney is on sale for $69, Classic+ would cost 6900 points, less than the 8000 needed for a Classic Rewards seat.”
Paywalled link at Qantas closes in on biggest frequent flyer revamp yet
AFF Supporters can remove this and all advertisements
QF to have a $69 ticket..... MEL to SYD.
Healthy dose of humour right there.
Those figures seem far too steep, they'd rule out almost all FF redemptions in Australia.My internal rule of thumb (moreso when using Asia / US / Europe programs)
. Y awards: aim for > 4c/point value
. J/F awards: aim for > 10c/point value
Good luck to you Qantas - I'm going focus on collecting program-flexible miles (Chase / Membership Rewards) to suit my needs
If only Marriott would partner to open a credit card in Australia.....
10c per point???? How and where - am I doing calculations wrong?My internal rule of thumb (moreso when using Asia / US / Europe programs)
. Y awards: aim for > 4c/point value
. J/F awards: aim for > 10c/point value
Good luck to you Qantas - I'm going focus on collecting program-flexible miles (Chase / Membership Rewards) to suit my needs
If only Marriott would partner to open a credit card in Australia.....