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Wirraway
16th Jun 2004, 06:36
Crikey

The Qantas frequent flyer farce

Robbie Ansett
A frequent flying Australian
16 June 2004

Going to London in the next month or so? Flying business class? Well, good luck.

There's no capacity and frequent flyer points are all but useless - even to Platinum status Frequent Flyers with Qantas. It's a sellers market on the 14 flights week through Singapore and seven through Bangkok. For business travellers, it's bad luck. Even full economy is tough.

Why the shortage? Those new business class sleepers, which take up a lot of room.

In fact there's been a 40% reduction in capacity in business because of the airbeds, according to a business class travelling acquaintance of Crikey's who has tried booking a seat next month. Qantas staff revealed the capacity reduction during the booking.

It's perhaps why so many normal business-class flyers are travelling on other airlines and route hopping their way to Europe. Qantas doesn't need to do any sort of discounting up the pointy end of the plane or in full economy.

Load factors and yields are climbing, giving Qantas a boomer of a profit for the year to June. As senior staff were told earlier this week.

Oh, it's a similar situation on the Trans-Pacific route to the US and the sleeper class seats aren't fully deployed there. Quite amazing what a duopoly and an innovation designed to help passenger comfort can really do to the bottom line.


Reader feedback:

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Qantas's frequent flyer fibs

I just returned from a trip to Frankfurt with Qantas. I had originally tried to book a frequent flyer ticket but I couldn't; all gone, barely any seats left for paying customers, I was told. Well, there were certainly empty seats on the way over and, on the way back, the plane was less than two thirds full. Not impressed.

Ben Aveling

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Empty planes heading for Europe

It is really interesting hear about the load on Qantas flights to Europe, as I had the exact opposite experience last week flying Thai Airways from Perth via Bangkok to Germany. On the Bangkok-Europe leg our massive 747-400 had a grand total of 40 or so passengers, without a single soul in either Business or First class. Most were given several rows to themselves to stretch out and being a top-level frequent flyer I had my choice of the seats upstairs.

I haven't seen a plane so empty since the peak of SARS, and I really wonder if the huge disparity can only be linked to the lay flat beds in business class. Given most frequent travellers I know actively avoid Qantas on the kangaroo route for the better treatment given by airlines like Singapore, has the flying kangaroo really improved that much in recent times?

Kim

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Second class treatment

I'm flying to London on 29th of June. I'm a Qantas gold member, and have used frequent flier points for three business class return tickets (got tickets for Wimbledon final, just thought I'd throw that in). The only way Qantas could get us there and back was to pass us off to British Airways, who have routed us through Singapore on the way over and a one night stop in Tokyo on the way back.

Interestingly they have advised us the seats are the older style (not the newer beds) however we still have to surrender the same amount of points. Also, there were no business seats available between Heathrow and Tokyo so we have had to travel that leg economy. Yet for some reason, they still charge business points for that sector.

I have flown Qantas all over the world in business class (and economy) for over thirty years and like many other travellers have noticed the decline in both Qantas's onboard service levels and the routes they fly. I discovered to my amazement two months ago that when I booked a Qantas flight to San Francisco, I had to go via LA, then pay for a flight from LA to San Francisco. No frequent flier seats available for that Qantas flight either, so I flew United, directly from Sydney, and saved about $600.00 on the fair. United, like Qantas and British airways is now just another run of the mill airline. Long gone is the "premium service" we used to expect from these airlines.

Towards the end of last year I flew to a conference in Helsinki. Travelled Qantas business to Bangkok, then connected, for my first time with a Finnair business flight to Helsinki. The difference in service, attitude, friendliness, quality of wine and food were so far superior to the previously mentioned carriers, (like Qantas was in the early 80's) that in future when I travel to Europe I'll be going via a Finnair flight, then connect to UK. Four business colleagues who flew to Helsinki on the same flights as me to attend the same conference all commented what a superb airline, and how it stood out from anything they'd flown in recent times.

Craig

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How to fix the Airline Duopoly

I commiserate with the many subscribers who complain of poor service and gouging by the Australian airline oligopoly. There is only one way to improve service, lower prices and make the airlines responsive to the consumer, and that is to increase competition.

Studies in the US have shown that on air routes where only two carriers operate, airfares are on average 30% higher than routes with three or more carriers. Studies of competitive markets in the US have shown that a market only exhibits the traits of perfect competition when there are six or more competitors. So six competitors is incrementally better than five, which is better than four. etc.

The fact that Qantas earns one third of its profit from the Sydney - Los Angeles route is proof of this principle.

Just to put this into perspective, Qantas operates over 5,000 flights per week and makes one third of its profit from approximately 30 flights to LA each week. Its only competitor is the bankrupt United, which is unlikely to start any price competition while still under bankruptcy administration.

What the air travel market needs is more competition by opening international air routes to all competitors. This will dramatically reduce prices on all international routes, particularly those with only two competitors. And the more competitors attracted, the closer to perfect competition the market gets.

If the minister for transport, John Anderson, really wanted to take on the airline oligopoly in Australia he would fight to open up our domestic skies to all entrants, foreign and local.

Additional fuel taxes and credit card fees would be the first charges eliminated as the airlines begin an inevitable price war. The public will benefit as travel costs decline. The only casualty will be Qantas' monopolistic profits which will eventually decline to levels more in line with a competitive market place.

The consumer will be the ultimate winner, and the reasoning behind this is the same used for the proposed Free Trade Agreement with the U.S. That is, lower airfares will lower business input costs for all companies which use air travel, and competition ensures the majority of these savings are passed on to consumers.

I urge those who want to vent their airline horror stories to send them to the transport minister John Anderson. Let him know what you think of the airline duopoly, and tell him only more competition will fix it. Ask him what he's going to do about it, and if anyone gets a meaningful response, please share it with Crikey readers.

To e-mail the Federal Minister for Transport send e-mails to: [email protected]

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missy
16th Jun 2004, 10:06
Last week I spent time looking at FF tickets for Sydney-London Heathrow next April. NOTHING available. NOT impressed.

Don Esson
16th Jun 2004, 11:19
How surprising to hear punters complain about how they can't secure free trips with "their" frequent flyer points? When THEY want, where THEY want. Like most things that come free, they attract the most complaints. But what annoys me is that the vast majority of frequent flyer points are accrued as a result of travel and other services purchased by employers. But are they redeemed for the employers benefit? Not on your life. Whilever something is 'free', people will always grumble that it is not enough. They should get a bloody life and find out what life is like when one has to pay for everything from one's own pocket!

Wheeler
16th Jun 2004, 12:32
Never mind flying to Europe, try getting an ff ticket from Sydney to Brisbane or Melbourne at any half reasonable time. I usually end up paying and getting VB these days. I wish QF would give on this stupid scheme and just be competitive on price. Cannot think VB will be bothering with an FF scheme anytime soon. Then again, charging higher fares and giving useless ff points is perhaps a more profitable way!

Southern handler
16th Jun 2004, 17:29
its a freebie. book in advance for the popular date and you will get it, if you dont bad luck try againg a s@#tload of frwquent flyer seats still go unsold

Wirraway
16th Jun 2004, 19:58
Tues "Australian Financial Review"

Virgin Blue to reconsider flyer points
Date: June 15th, 2004

Virgin Blue will dust off its file on starting a frequent-flyer program within three to six months as it considers ways to stay ahead of new low-cost rival Jetstar .

The airline's co-founder, Richard Branson , has been an advocate of implementing a loyalty program, but chief executive Brett Godfrey had steered away from the plan while the airline was establishing new routes and travelling with near-full planes.

"When you're running around with 80 per cent load factors it won't be a loyalty program, it will be a sh!t-off program because you will not be able to give people seats,'' Mr Godfrey told The Australian Financial Review.

Virgin Blue's load factor has dropped in the past few months as the airline ramped up capacity through the introduction of extra flights and new routes to combat its reinvigorated competitor Qantas. Now there might be room for frequent-flyer passengers.

"Now we are national with 46 jets, not 26 jets, and you start to see that maybe a frequent-flyer program if it's done in such a way could work,'' Mr Godfrey said. ``It's more relevant now.''

Virgin Blue's growth prospects are slowing after the airline grabbed more than 30 per cent of the market in just over three years, helped in part by the collapse of Ansett. Analysts believe further incremental growth will be more difficult to achieve.

And like other low-cost airlines around the world, Virgin Blue is looking to branch out from the no-frills model because of increased competition from rivals and as traditional full-service airlines start to better compete on airfares.

Europe's easyJet lost more than a fifth of its market value after providing bleak comments in the past week about a price war on top of rising fuel costs. EasyJet chief executive Ray Webster admitted last week that he was considering a frequent-flyer program to boost customer loyalty.

Mr Godfrey said that Virgin Blue would consider its options over the next three to six months.

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Rongotai
16th Jun 2004, 21:57
It is really simple Don Esson. Airlines have FF schemes for the same reason that supermarkets have specials.

I have been loyal to QF (or rather One World) - for travel that I pay for myself - for some years. It now turns out that the bargain is not being kept by the airline. The specials turn out not to be specials. My friend and colleague is not having the same problem to the same extent with his NZ (Star) scheme, so I think I'll switch, because I use both NZ and QF anyway.

FF schemes are not 'free' and I have never thought they were. They represent a commercial bargain - no more, no less.

Three Bars
18th Jun 2004, 07:21
The opinions expressed under "how to fix the airline duopoly" above highlight the current problems that we face in Australia today. Namely:

"Competition is the ultimate prize for the masses and whatever it takes to lower prices - globalisation or the "level playing field" - is worth it."

I contend that this is BULLS&*T!!

Take the example of primary producers - let's say, sugar.

Imported sugar from South America in the supermarket is cheaper than Australian sugar - so therefore the consumer is better off. Right?? Right?? This is what the champions of the level-playing field would have you believe.

Let's take the example a bit further. What happens to the Australian sugar farmer whose crop is no longer profitable. What does he do now that he cannot sell his sugar? He only knows how to grow sugar - has done it all his life. Well, he either tries to find another crop to grow - about which he probably knows very little - or he tries to enter the mainstream workforce. He will probably have to sell his sugar farm - but who would buy it? Sugar isn't profitable anymore. Can't happen? I seem to recall a recent housefire in North Queensland which was suspected to be a tragic murder-suicide by a totally depsondent former sugar farmer.

So, if the sugar farmers can't find work, then they go on Social Security. Who foots the bill? The same consumer who gets to pay less for his sugar in the supermarket. Extrapolated further and further as "competition" on the level-playing field of globalisation increases, we find a decreasing pool of consumers left to pay a bigger and bigger social security bill as the country loses its primary industry and manufacturing base. Makes that cheap sugar look pretty expensive doesn't it?

What has this got to do with the airlines?

Well, the correspondent on Crikey believes that cheap airfares must be the ultimate benefit for the consumer. So, he/she would open up Australian skies to whoever wants to operate here - Singapore Airlines would, I'm sure, be the first cab off the rank. So they immediately enter the market offering a "superior" product to Qantas at the same (or lower) prices than Qantas. How do they do this? By having more cabin crew per aircraft who are paid much less than their Australian counterparts. But hey - the airfares are cheaper, must be good for the Australian consumer, right? So eventually, poor old Qantas who can't compete against low-wage carriers goes under and another 25,000 people enter the dole queue. Their dole will be paid by those who are still lucky enough to have a job and pay taxes. Meanwhile, the profits from the low-cost carriers goes to Singapore, Bangladesh, Fiji, New Zealand, India or wherever. Be assured that they will not help the Australian consumer pay their by-now more expensive dole bill.

Is this really what some people want? But hey, the airfares would be cheaper, that must be a good thing right???

:mad: :mad: :{

Animalclub
19th Jun 2004, 05:01
Well said Three Bars. Can I suggest that you post it again on the thread that refers to the QF LON base?

MrWooby
20th Jun 2004, 10:01
I think one of the worst aspects of the QF frequent flyer scheme isn't the fact that there are bloody few seats available anyaway, but that it is very hard to search for those precious few seats. I recently tried to find a economy or business seat from Sydney to Johannesburg. The website responds by saying there are no seats available on your requested date, and gives you the option to search the next 7 days. I think I did about 12 searches for the next 7 days before I finally found a seat. Surely a simple option of "find the next available date available" would be a more logical option. Or maybe its just Qantas trying to piss Freq Flyers off so much that they just pay full fare.

fire wall
20th Jun 2004, 13:39
Freq Flyer points are not free.....they come at a premium and anyone who purchases a ticket pays that premium regardless of whether they are a FF member or not. By the same analogy, if you are not a FF member and not acrueing points then you are paying too much for your ticket.....guess that's you Don!