QF Economy and Business service decrease yet same cost

7 replies

Dan22

Qantas - Qantas Frequent Flyer

Member since 07 Aug 2013

Total posts 112

How do QF flyers feel about onboard Business Class (and Economy for that matter) service being diminished yet paying same if not more inflated fares then pre Covid? Qantas saving money but not reflecting that in the price for their tickets in contrast to VA Business class for example where fares can be found for 50% of QF albeit with a current snack box offering until their relaunch in Q1'21?

In QF Business, gone are boarding drinks, entree and salad (nothing to rave about that anyway just a few lettuce leaves) and less service where all comes out on 1 tray.

What if QF kept this going?

Economy gone was the boxed meal but rather a boxed snack and this was on a 4hour flight.

Across the board - no AVOD streaming - I get it is cost saving for QF but are people happy with this?

And the biggest one of all - mostly B737 Business class seating can be found on flights these days east west, good luck if you picked an a330 in few months time and it doesn't get switched out for a B737. Although pre Covid QF never differentiated pricing between A330 and B737 Business fares.

Thoughts? I'm also interested to know the VA flyers who said they will jump ship to QF but knowing they have to pay 2-3x the price now.


jrfsp

Qantas - Qantas Frequent Flyer

Member since 04 Mar 2014

Total posts 88

In some ways its unsurprising.

My strategy - dont fly. All the fun has been removed with masks, border closures, apps, lounge closures....etc etc

Im QF plat, flying minimum 4 times a month (Pre covid). Since April, ive flown 3 times with no further plans to do so until this is "over".

XWu

Member since 09 May 2020

Total posts 67

I am sure most regulars of more than 10 years duration realised QF upped their game from the capacity wars starting almost 8 years and the product we see in mid-2019 is a lot more attractive and varied (with 3 kind of lounge services) than in early 2000s.

For QF, the pandemic killed 3 birds with one stone, knocking out VA as a full service airline, allowing QF to downgrade their product (meals, counter service, call lines) and putting the transport/pilot union on a back foot under the guise of cost savings and survival.

Regardless of whatever spin VA Mk II chose, and whatever REx will settle on, the premium market is secure for QF dominance of large corporate business, whereas those mid size or small business who still allow their staff to travel J class (for some reason) will be more attracted to the “mid market” (read “cheaper”) pricing by these 2 airlines. AJ might want to launch another capacity war to snatch back those clientele but QF is probably too weaken to do that for the next 5 years while they try to consolidate their control staff/union (and the capacity war will require taking back the staff they just let go 6 months ago in the right-sizing move then).

Interestingly the changes in the flexible fares capacity with respect to M and K class into the Y fare range may be a move or precursor to renegotiation with large companies with internal policies regarding the purchases of economy tickets with and without flex options, and QF may be making a play in right sizing their capacity available to corporate travel in the brave new world.

In all, I suspect QF products will improve from what it is now, but not much more, while prices will remain the same or return to 2019 levels.

What is probably worrying for QF is how all these hair-trigger border lockout measures (which is essentially what it is), under the guise of health advice (with basically 6 different versions on show to the same news, and it is clear that for some states, they are making decisions based on what is thrown at the media rather than getting info directly from the state health ministry in question), is really forcing many businesses to make permanent changes to interstate travel pattern far more than the healthcare concerns for the staff involved, and QF can’t really tell how much corporate business will be left for grabs by 2022.


Grannular

Member since 31 Mar 2014

Total posts 214

I just flew east/west over Xmas. Was my first flights since the start of covid. Unfortunately I suspect these downgrades are here to stay. Qantas doesn't have any competition currently and nobody to keep them on their toes. Perth lounge was basically back to normal, which was good. Excluding the lack of showers

GBRGB

Qantas - Qantas Frequent Flyer

Member since 21 Jan 2014

Total posts 267

QF can’t maintain its price excess for too much longer, no matter what size any business is it can’t justify paying that sort of gap on domestic services and I would expect heavily indebted governments of all levels to slash travel costs heavily in the future which will effect both the amount of travel taken but also the price, QF will have to come back to the market at some point.

KW72

Member since 17 Jun 2020

Total posts 29

This is unsurprising. Qantas for a very long time has only been an airline that invests the minimum amount required in the product, and is reactionary to competition.

levinn

Etihad - Etihad Guest

Member since 19 Mar 2018

Total posts 18

Actually, Economy travel is hovering at about $2,400 for Economy Fles, the only choice you'll get. Good news is that a return long-haul flight in Economy earns you Silver or Business earns you Gold.

IMHO, Qantas has been resting on its laurels, just fine to do the same, never aiming for 5-star even though it's so obvious that a greater focus on service on a small international network should've been the focus and not too difficult a accolade to reach. This will become very obvious in the future. I'm very sure there will be a convergence in a few years where suddenly everyone is 5-star except Qantas. Yes, even Emirates.

kimshep

Qantas - Qantas Frequent Flyer

Member since 11 Oct 2014

Total posts 375

This 'service quality' drop can be deemed a 'temporary' measure attributable to COVID-19. However, in practice, it is probably a 'training' test to see how many passengers complain long term.

Whilst some may see QF's market share of Business as 'unassailable', I am not altogether convinced. Yes, Qantas can turn it on, when needed. However, as we move closer to March 01 and not only a stronger Virgin Australia and Rex, the prices these two carriers are offering in the marketplace for Business seats are significantly lower than Qantas.

Now, should this have just been a VA vs QF fight, then we would have seen the same outcome that we did previously. Millions of dollars would have been wasted and QF would still emerge the victor.

The circumstances, this time around, are definitively different. Instead of one competitor, we will now have two. Both these two each have a defined cost base which is significantly lower. And because of COVID, border closures, lack of tourists, business travellers and, as well, the current flying environment - the entire market structure has changed. Every carrier is hungry for market share and bums on seats.

Some (above) have noted that QF will not be able to maintain its current high level of fares. This is a point that I agree with wholeheartedly. Fares generally (including Economy) have increased over the past 12 months. Yes, that may be attributable to the lack of business and the COVID 'cost of doing business'. But this should be a temporary (and valid) measure in the short term.

However, long term, is QF's current policy defensible? So, a smart marketer will slowly reduce the service level - which lowers unit cost without passing on savings - and tries to maintain current fare levels with justification of COVID issues. Once costs (staff reductions, streamlined schedules, lounge savings etc) are effected, then you are left with a thinned out product which better identifies and aligns with the market competitors. The major variable then becomes the dynamic of pricing.

Naturally, QF will want / need to maintain its predominant market share in Business, but that won't happen with business airfares twice (or more) than that of the competition. Think I am kidding? Take a look at the current Business airfares in the USA (a comparable air distance) and what is offered. Also, remember the ultimately famous exercise from American Airlines where the elimination of one olive from a side salad saved the carrier more than a million dollars per year (note: this dates back to the late 1970's but still holds true).

Finally, QF management is smart. You can be assured that they know what Zoom, Team, Webex, Go-To-Meeting and Skype are. They are also probably in use at Mascot to talk with other bases. You can be assured that Qantas will be aware that - while not perfect - these programs have developed the idea of conference calls significantly. More businesses are using them - and dangerously - even the general public is using them to keep in touch with family. This is a factor that will have some bearing on the business market. How big that will be or how finite will its effects, it is here - like it or not.

I note that this is a discussion regarding pricing on east west services to Perth and the preponderance of carriers to price the product identically irrespective of whether it is on a B737-800 or a widebody with lay-flat. Logical and valid question to ask (and push). After all, it's all about the new buzzword in the market place: VALUE .. and I'd lay long odds that SME and even large companies both understand the concept and will be looking for more of it. But ultimately, the larger questions looks at the entire market for Business in Australia.

Last editedby kimshep at Jan 22, 2021, 11:57 AM.

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