Qantas - Qantas Frequent Flyer
Member since 01 May 2013
Total posts 54
Random question/thought/discussion topic, with the constant talk of QFF points being taken over, taken away, devalued, etc, what would seriously happen to Qantas if everyone logged on today/tonight and redeemed for anything and everything, such as all the gifts/present etc, vouchers, hotels, car hire, and of course flights..... would it be like everyone going to the bank to withdraw there money. Could it send Qantas to the brink (as i'm writing this question another thought comes to mind) would they then flood the market with points to recoup the money i.e Hugh bonuses from bank credit cards, everyday rewards bonuses, hotel bonuses and even flight point bonuses.
Member since 02 Jul 2011
Total posts 835
Qantas's Cash balance would go pretty quickly.
But reality is, unless they cancel everuy route on Thursday (instead of a chunk), redeeming for airline flights (which have marginal cost) will always be the better option for most.
Member since 19 Jan 2012
Total posts 138
Kim, please consider that those QF points are like cash to QF. So, QF has already been paid good cash by those third parties to be able to offer them for credit use, sign bonuses, whatever. If people "cash in" their points, thus buy merchandise, gift cards, etc., QF can't lose because the pay back rate is a fraction of the sell rate.
Hence, people rushing to use their points as effective cash probably ain't a big problem (unless QF has got it's figures wrong, which it probably hasn't given the huge profits from the FF scheme).
Now, as far as upgrades and reward seats are concerned, QF is already controlling the supply side - the number of seats made available - they can and do control this all the time. Nothing new there. If there was a rush on seats, the seats allocated simply get used up and supply is exhausted within budget. Or if they don't want to book up the liability as a cash liability (which happens when the reward seat is actually used) they can pull the inventory from the booking engine. Simple.
The real problem for the consumer is if
1) the supply of upgrades/reward seats is reduced
2) the cost of upgrades/reward seats goes up (more points needed = devaluation)
3) cash components of reward seats (so called fuel surcharges = devaluation) goes up
Again, QF has total control!
The obvious counter argument to QF doing 1 to 3 is a reduction in perceived value in the FF scheme by the customer dribing churn to rival airline F schemes, but since most never earn significant numbers of points and many frequent flyers are paid by their companies to fly, most won't even notice when the devaluation occurs, and those that do will probably forget within a short period. QF knows this.
The temptation to devalue could be overwhelming in harsh economic times (read bad management decisions). If smartish (and as has previously happened) QF they would devalue the premium rewards hugely (United just did this) and leave the low end awards untouched or very slightly improved, which would enable the QF-loving media to headline a good news story about QF whilst the rare high end highly loyal and ironicvally high yield frequent flyer gets fleeced yet again.
But then the smart high end customer will have:
1) already booked reward flights (which are refundable) in case of a devaluation
2) signed up for alternative frequent flyer schemes which give 2 to 3 times better value for the points earned/amassed/bought (read American, Alaskan, etc) once they hit their desired status with QF (e.g. Gold or Platinum for the year and/or Lifetime Gold).
3) transferred their business to Virgin who don't charge the excessive "fuel surcharges" on reward seats and cough up points on a dollar spend not milesage basis domestically
A simplification and all individual travellers have different preferences and optimal strategies...
Member since 24 Mar 2013
Total posts 33
Good question Kim great response Platy.
Member since 21 Dec 2012
Total posts 43
PLATY, sorry but dont agree.
A couple of thoughts on what I think is the unlikely event of a run on QF point redemptions:
Member since 22 Jul 2011
Total posts 18
Actually this would be a godsend for Qantas. FF points are treated as a liability in the accounts and once redeemed, can be treated as revenue. This would massively affect their expected $300m expected 2nd half loss, in a good way.
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