Cause and Effect - The 1st two weeks of QF commission revision.

[Eastwest Loco]

Well, here we are a fortnight in to the revised commission levels with QF. For those unaware, down from 9 to 7% on most international and 5 to 1% on New Zealand and New Caledonia.

They have been 2 solid weeks at our Agency, but the only 2 QF international flights sold have been Sydney - Jakarta as there is no code share available.

Here is a little insight into how we get around this:

Global fare originating SYD trans pacific - AA side of the code share - AA paper. 9%

Trans Tasman - EK flights at excellent prices with great inflight service - 9%.

Into CHC - QF domestic followed by NZ. We can't connect the EK A345 ex here unfortunately. 5%

South Africa - SA side of the code share on full published J class. 9%

Beijing - 10 passengers full published - CX and KA - 9%

UK-Europe - Offer CX (generally taken up too at good pricing) 9%.
also SQ Earlybird until 01 FEB and Austrian.

Santiago and beyond including one world explorer tickets and full published - LA at 9% on the outbound.

Full J SYD NBO DXB HKG PEK SEL SYD - SA on outbound leg - issued on CX paper with CX overide and KE overide on last leg - 9%

With all of the above - save EK, full frequent flyer points and tier credits are earned and the punters are happy. I lose flown revenue overide on QF, but this is less than the 2% plus in somecases overide commission on other carriers.

Over the last 2 weeks, our little Agency which turns over only 3.8 million a year has written around $160,000 on BSP of which I calculate only $8,000 maximum has been plated QF. Normal was around 70% Do the maths. The slowdown of dollars into the QF coffers, assuming one in two agents Australia wide is doing the same must already be cataclysmic.

Looks like their restructure is going to plan - NOT. Maybe not all have seen how to get around the new regime, but after all of our group receive my "how to" email early Monday, maybe they will rethink things.

I have a little feeling that around about March, the Rat will be trying to figure out just where the flown revenue figures are.

May be a good time to offload your QF shares guys and girls.

It's going to be a bumpy ride!!!

Best all

EWL

[topdrop]

Can't say I blame you. I fly JAL business class ex CNS (QFA codeshare flight) and then onwards on JAL - better service at close to half the cost. I have 900,000 freq flyer points with QF which are consistently being devalued - not that that matters much as I never seem to be able to use them.

[Frank Burden]

Off to Fiji mid-year and the travel agent insists on booking Air Pacific rather than Qantas code-share. I think I know why now. Thanks. ;)

[Eastwest Loco]

Hi Frank

You are most probably correct, but no harm is done as you earn points at the same rate, and I have ye to see a points or tier credit upgrade succeed on another airline's metal.

The agent would probably have had to add fee for service to use QF, so they have done you a favour.

This is shaping up to be very interesting.

Best regards

EWL

[Uncommon Sense]

QANTAS: It's Australian for Bully.

[Howard Hughes]

Eastwest Loco,

You really seem to know your stuff!!

How about Eastwest Loco Consulting??;)

Perhaps help out some of your colleagues Australia wide, who might not be thinking quite as laterally as your good self.

Cheers, HH.

:ok:

PS: I have turned on the fasten seat belt sign!!;)

[HotDog]

I have just ordered a couple of ID90 tickets on QF for my son; SYD/ABX/SYD.
Fare quote: $ 51.00
Taxes : $ 82.05
Total : $133.05, each.

Seems a bit farcical to have to pay more tax than what the ticket is worth.:(

[Eastwest Loco]

Uncommon - Yes - and they are trying to steal the lunch money of the little blokes yet again!! We are bloody fed up though!

Howard - No need to start a cottage industry. We are much like Pilots, and take care of each other where we can. The similarities are quite astounding, with outsiders (read Fright Centre) who employ non-industry people to totally follow their corporate line as they know no better. Only difference is that we are civil and friendly to them at functions and do not for a second begrudge them an income in the industry, but I digress even though there is something there for ALL of us.

I did steal the receivers list off an incoming industry email today, but used it to broadcast this topic and the purpose and value of PPRuNe nationwide so those (and there would only be less than 50%) that had not realised the mouse could roar could join in. Some great replies so far. One regional Agent has Corporates who are swapping to Rex and taking $1.2 million of traffic over with them rather than pay the service fees we "had to have according to Dixon". Sic 'em Rex!!!

It is indeed going to be a bumpy ride Howard, and I have throttled back, dropped the gear and gone to 16 deg flap to maintain stability. Hopefully we can fly out the other side of this mess and make a living without the industry being totally bastardised by money grubbing bean counters.

HotDog - A good deal of the taxes are fuel surcharges, which are simply commission free fare increases. If Dixon is talking dark skies ahead, I know where the frontal system is coming from. From the source of the majority of their sales, at least until two weeks ago.

What is that big red blob on the radar Skipper?


Best regards

EWL

[Eastwest Loco]

Another example today - Full J and F class SYD QF SIN SQ KUL MH SYD.

Plated it MH - 9% - would have lost $100.00 plus on commission, but there is another way around he beast. Not totally IATA guidelines, but totally legal.

I was speaking to a lady at consolidator (issuer of tickets for agencies who are not IATA) today, and she indicated that en masse, he customers are avoiding QF.

This may be a very nasty few months, as I cannot see the juggernaut not trying to bight back.

Best all.

EWL

[rescue 1]

Wasn't there a similar stout some time ago when QF reduced commission, while AN remained at the then 10% level?

As sales reduced, QF returned the rate to the status quo.

[Woomera]

I am going to sticky this for a time as a quintessential example of Australian resourcefulness in the face of adversity visited by another Aussie icon.

We used to be famous for working together as a nation at the same time as having regard for others in the world. The generosity exhibited by Aussies as a nation in the Tsunami appeal suggests we have not forgotten how.

Seems like the QF shareholders, who used to be all Aussies, have other ideas.:{

Perhaps we should insist that if QF are going to use that national characteristic to their sharehoplders benefit, which BTW belongs to us Aussies, then they should conduct their business in a manner that supports Aussies. NOT to motivate them to spend their dollars elsewhere.:ok:

[Lake Moondarra]

rescue 1

Was the other way round - Ansett was to cut commission and was "not negotiable"!! - guess what - (EWL will recall) - within two weeks back to normal (empty AN flights everywhere).

The industry which EWL (and myself) stuggle to make a living can have an effect on Principals.

[Eastwest Loco]

I am not so sure that 'stickying" of this topic is warranted in such august company Woomera, but I honestly appreciate the sentiment/compliment.

UA backed off to 7% commission several years ago, and 12 months later, they were back to 9%. Funny that.

I have found a way on full published and Explorer fares into Europe as well, for all the Travel dudes on mass mailout that now read PPRuNe. AY (Finnair) On codeshare on the QF1 bird ex SYD over BKK and plate AA. Using CX is also an option.

East West (yes I am bleating on about a now dead airline again!!) came in at a steady 7%, and had massive agent support. The associated costs of fielding your own staff to handle the costs if the industry turns it's back on you are far greater. I suppose Rajih and his mates in Madraas will take the calls cheaply enough!:sad:

It makes me feel ill to turn my back on QF. I have a large number of good mates working at all levels (for the time being at least) with the Rat, and I personally like flying with them and am a QF Club member. I have staff to think about, and they rely on me for a living. Fee for service is all very well, but that must be passed on to the passenger. That passenger is paying taxes only topped by El Salvador, and why should I slug them as well? If only QF would realise that they are saving one million to cost themselves 100, maybe some sense would prevail.

Best regards and thanks Woomera

EWL

[Freehills]

I don't know much about the Oz travel industry.

How much of the 9% and overrides do you kick back to the client? Certainly where I am, most clients will insist on nett plus a percentage or ticketing fee, regardless of the the "official" commission of individual airlines

When QF went from 9 to 7%, did they do it by raising the nett 2%, or lowering the "published" 2%?

[Eastwest Loco]

Hi Freehills.

The nett fares have been unaffected, but are a little thinner on the ground with QF opting to published discount fares on many markets.

The published fares are the ones that have fallen from 9 to 7%. Unfortunately, we have corporates that only want published fares (and fortunately too from out point of view, as these are the only ones that attract overirdes) as it is nearly impossible to reroute an Australian issued nett ticket in another country, and in most cases they travel multi carrier and are thus outside the nett remit deal scope anyway.

It is not unusual to have a multi port multi carrier European fare on full published J and I have seen fares getting well over AUD14,000, even up to AUD17,000 plus with 25M mileage surcharges after one leg goes over MPM to the max. (25M surcharge is an addon of 25% to a mileage fare for exceeding the maximum permitted mileage on the routing by over 20 and under 25% for those who do not know - and why the hell would you need to know anyway??) Sort of secret travel agent business.

On nett fares, we as policy gross up by 9%. The gross fare may be $2000.00. but if the nett of the deal code is $1000.00. we sell for $1100.00 plus tax. Fair to the punter, a living for us in my mind at least. With that they get full access to me 24/7 via mobile or home number if it all goes pear shaped, and on the rare occasions I or my staff screw up, we take ownership of the problem and fix it at our cost. Gross (published fares) are sold at the going rate plus taxes, and I currently pull an override of around 1.8% on QF after the revenue is flown. At this stage I am not looking to instigate fee for service on the 7% but I may have to review.

I am charging fee for service on ex USA originating bookings to approximate the 9% commission, and have had no issues with client rejection of the practice once the situation is explained.

Basically, it is a new world order, and where I can cut around corners and earn the same or more by getting funky, I will.

Like I said, I have a loyal and lovely staff to keep employed, and 2 boys in Hobart at Uni this year, so I will happily forgo the QFand SQ plaques if needs be to make sure I don't have to sell one of them for medical experiments.

That is also why I am driving a 20 year old car that cost me $6000.00. It is a 300ZX Targa though, and stolen at that price, and if I was making a million a year, I would still be driving her. She is gorgeous!!

Best regards

EWL