Qantas FF announcement 20 June - "biggest overhaul" in program history

[wandering_fred]

The liability could be mitigated to a degree with a fixed expiry period of points after they're earnt, aka Krisflyer. The 'breakage rate' would likely increase significantly as well, pushing up their paper profits further for that reporting period.
So it is interesting (purely from a financial perspective) they have yet to move in this direction - I'd hazard a guess though that there would be significant backlash if they did implement a fixed expiry.

CX / Asia Miles also have an expiry date associated with your flight earnings. And the earning (at least from flying) is more difficult than with QF. Though I suspect for those who simply want seats (Y or W) for middle range travel (OZ to SE Asia or within SEAsia comes to mind), the reduced earning is offset by seriously reduced costs and increased flexibility (re: stopovers with some restrictions are still permitted).

Net effect of the "QFF changes" for me? Qualify for QFF LTS and maybe retain QFF SG (MAX fares using DPS as a transfer point are "interesting"). But it will be well worthwhile keeping MPC Green and a parcel of Asia Miles. My latest 10K redemption with AM would have been 30K or 40K with QFF or American.

Just wandering
Fred

 

[Max Samuels]

The liability could be mitigated to a degree with a fixed expiry period of points after they're earnt .....

And that's the rub. Does money expire? If I pay you real money for something that I cannot actually ever use (assume the "reasonable" test is applied), and you expire it and not give me a refund, where does that leave us?
My point about gift cards.... I don't know where it ended up but the ACCC was looking into it... gift cards are worth $$ - paid for in real money. To put an expiry on them is questionable at best, downright criminal at worst. Especially if said gift card is for services that are hard to redeem.....

 

[rock86]

And that's the rub. Does money expire? If I pay you real money for something that I cannot actually ever use (assume the "reasonable" test is applied), and you expire it and not give me a refund, where does that leave us?
My point about gift cards.... I don't know where it ended up but the ACCC was looking into it... gift cards are worth $$ - paid for in real money. To put an expiry on them is questionable at best, downright criminal at worst. Especially if said gift card is for services that are hard to redeem.....

The consumer is not paying real money for it though, the business buys it off QFF and includes it as an auxiliary benefit of that particular product. Gift cards are a different beast altogether, so the same rules do not apply.

The ACCC would have a mammoth task arguing otherwise. That's only my opinion though and would honestly love some insight from a consumer law silk, it'd be interesting.

 

[Max Samuels]

The consumer is not paying real money for it though, the business buys it off QFF and includes it as an auxiliary benefit of that particular product. Gift cards are a different beast altogether, so the same rules do not apply.

The ACCC would have a mammoth task arguing otherwise. That's only my opinion though and would honestly love some insight from a consumer law silk, it'd be interesting.

I don't think it would be a mammoth task.... if it was shown that QF makes 100s of millions of dollars by selling a product that nobody can use....

I think that's why in the US more and more cards are doing cash backs instead of miles... because the value of miles has been devalued to the point that they are worthless to many people.

But 100% agree - would be good to get some insight from an expert in this matter

 

[RichardMEL]

My Cynical beanie is on my head (it's chilly in Melb)

1. LTP is only there to reward a few (hindred?) souls who are already so sick and tired of QF it's not funny from all their flying For the rest it's basically, to me anyway, saying hey you people demand it.. here it is... now shut up abou tit. The hiugely inflated and not in any way logical hurdle makes it, more or less, one of those hollow promises.. like after a break up "We'll stay friends ..." or "If you have a job come up call me? Sure!" that most of us experience. It's a goal there on (digial) paper so they can say it's a program benefit.. but realistic to the extremly very few as to ALMOST make it meaningless (as I wrote the other day like trying to get a date with the hottest girl at school)

2. All these extra award seats, specially premium. Yes, they've put some oht here and that's great. The beanie warming my noggin sys this is as much a carrot as it is a factor of the current demand climate. They have the seat sto make available knowing pretty much it will be hard to fill them (Hence people reporting there's STILL nothing for HNL-SYD - one of the real cash cows for QF). Further, if/when conditions improve in an econmic sense and they're not dying to fill seats and get revenue (and remember FF seats redeemed, specially on QF metal, are still revenue in a pure accounting sense as those points have a value to QF).. anyway as soon as they find demand is back on I guarantee the award availability will dry up again and it will be just as hard to get seats(but more expensive points wise)..

3. Yes, they are pushing people to the Y cabin because they have lots of seats to give up and can extra yield from the FF points vs likely nothing - so win/win and to the every day punters this sounds great if they can get a seat to Bali or LA when they want more easily. woo hoo.

Re the "points club" and affect on status.. honestly I still do not think it will be that much. Remember the ANZ Black CC that sometimes gives 75 bonus SC's.. it's not a huge amount in the grand scheme of things. I can't see high value "ground spenders" getting huge status inroads - I mean I doubt they'll throw 1000 SC or something out there. Maybe they would but I can't see it.

Personally I am old school with regards to status earn. Points sure give them for CC's, churns, spend, hotels, cars, etc.. fine... but STATUS should be earned by your bum on a seat.

Now sure, there are airlines that give away status with other things - eg get a certain linked CC and get some form of status thrown in, or even some allowing paid status to some extent.. Personally not a fan, but I can see why it would be done. Some airlines, like UA, essentially allow for purchase of SC's (or elite status qualifying points if you prefer). For example UA has a general promo out there to buy up to 15k EQM (wit 25k being their lowest elite level, so it's still not giving you status o outright) plus when one books a ticket with UA, or even an award, you can get options to buy qualifying miles up to a certain amunt (the biggest offer I had once was 60,000 EQM for gosh... prob $5k USD or something.. maybe more). The point being that yes, some airlines make it much easier to attain higher status if one has the $$$ to throw at it. I've done the UA thing from time to time in conjunction with earned status (and noting UA at least has a 4~ equivalent, so you still need to get on a plane to actually get the status).

Either way I do not think QF will go anywhere close to this sort of thing via the "points club" thing.

Finally, obviously this is a no brainer here but we all know the QFF program is NOT for the members.. it is for the company.. and we are the product (as TTR noted pages back)... I understand and accept this and set my expectatioons hopefully appropriately....

Indeed I've just booked my 2nd long haul NZ J trip this yea....

 

[rock86]

I don't think it would be a mammoth task.... if it was shown that QF makes 100s of millions of dollars by selling a product that nobody can use....

A product it sells to businesses, who then include it as a 'benefit' of a particular product with associated T&C's to go with it. The consumer of that product is fully aware (they have to agree with the T&C's) that the associated points earned are subject to availability, so if there's no availability of that auxiliary benefit, that consumer was pre-warned and agreed to it regardless.

I think it's a much more difficult link then you're making it out to be.

 

[Max Samuels]

A product it sells to businesses, who then include it as a 'benefit' of a particular product with associated T&C's to go with it. The consumer of that product is fully aware (they have to agree with the T&C's) that the associated points earned are subject to availability, so if there's no availability of that auxiliary benefit, that consumer was pre-warned and agreed to it regardless.

I think it's a much more difficult link then you're making it out to be.

Well I'm keen to hear evidence to contrary. The ACCC did investigate Qantas FF 15 years ago - and so much has changed since then - maybe its time they had another peek? At that time the ACCC found "insufficient evidence to establish a breach of the Trade Practices Act 1974" - but as I said, that was 15 years ago..... the very fact that ACCC did take the case up highlights that it is not exempt from any kind of warranty or guarantee with regard to its program.

I just really really doubt that when American Express, or whoever, signs up to buy points from Qantas, using real money, that they have collected from their customers, on behalf of their customers, that at no point does it ever get mentioned or discussed the actual utility of said points. That's the reason points don't expire, I would bet. Even if the consumer can't make a claim against the airline (and I am not 100% sure they couldn't), the bank certainly could.

There is a fine line between selling something that can never be used and a mere question of "subject to availability". At what point does it become a scam? The very reason that Qantas is even doing this "points club" thing points to the fact that this very issue has become a problem for them. If they truly are under no obligation whatsoever because of the "T&Cs", well then they should continue as they are! What a business model! The ability to sell an unlimited number of points, forever, with no obligation to ensure that the consumer can actually use them! As I mentioned earlier, when I was working on loyalty programs for a bank, this was discussed at great length by legal teams when drawing up the contracts with the airline and designing the products (credit cards) for the customer. I don't know what was actually ever agreed to, but it was certainly a "thing" that was important enough to be talked about....

Anyone want to start a class action with with me

 

[CaptJCool]

There are two breakage points for points

1. 3 years of inactive accounts (even my father lost 18,000 pts, let alone highly publicised)
2. The Grim Reaper

These historically run about 30% of Points

As I understand it Points are stored in Deferred Revenue accounts

Frequent Flyer marketing revenue associated with the issue of Qantas Points is recognised when the service is performed (typically on issue of Qantas Points). Marketing revenue is measured as the difference between the cash received on issuance of a point and the amount deferred as unrecognised redemption revenue.

Frequent Flyer store and other redemption revenue represents the remaining revenue from the issuance of Qantas Points which is deferred as a liability (deferred revenue) and only recognised when the points are redeemed, excluding redemptions on Qantas Group flights which are reported in net passenger revenue. Redemption revenue is measured based on management’s estimate of the fair value of the expected awards for which the Qantas Points will be redeemed. The fair value of the awards is reduced to take into account the proportion of points that are expected to expire (breakage). Also included in this category is redemption revenue from related activities including Qantas Wine (previously epiQure).

page 25

https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/data-book/2018qantasdatabook.pdf

And even savvier would be to make these financial supplies (no GST)

 

[motef]

2. The Grim Reaper

Unofficially that depends if you have access to the account

 

[equus]

Frequent Flyer store and other redemption revenue represents the remaining revenue from the issuance of Qantas Points which is deferred as a liability (deferred revenue) and only recognised when the points are redeemed

And it is this - getting hold of the deferred revenue by getting the points redeemed which is motivating QF - not some fear of the ACCC. Always look for the $ driver.

 

[JB expat]

I stopped reading the individual posts on page 20. And apologies for asking/raising what has most likely already been asked/answered/discussed in pages 20-49, but here it goes:
1. I am less than 1 year away from lifetime gold extrapolating from my current travel. From what I've seen, nothing has changed regarding lifetime gold and nothing has changed re: earning of Status Credits. Is someone able to confirm (and thank you)?
2. life time platinum - a new thing - I will be dead before I hit the total status credits necessary (no need to confirm this)
3. i am saving my points for a One World Around the World business class trip (x4) - assuming nothing has changed, I'm about 1.5 years away from actually hitting the necessary points. Is someone able to confirm that the One World Price (in POINTS) for RTW business class tickets has not changed (and thank you)?
4. on the rare occasion I dig into my points (see above point about saving them), it is for an upgrade for one person (me) when I purchase an upgrade-able econ fare but cannot stomach doing the flight in econ (Melb to LAX). This will cost me more points. But my chances of securing such upgrade have not changed. Is this correct (thank you)?

 

[JB expat]

This omission was noted earlier in this thread. Consensus was its a typo.

Wow - this is one of the top reasons that I am waiting "to achieve" LTG. I'm less than a year away based on anticipated travel. Is this benefit of LTG going ? or has it been confirmed as a typo?

 

[JessicaTam]

Can any one spot something wrong LOL

View attachment 171513

May have to look for some cheap Y flights to the city of churches for those extra Status Credits LOL

See who said it was all Bad News ROFL

Thanks for the screen shot. The next AFFer to fly revenue MEL-ADL should be able to claim 15SC based on that alone!

You are so kind! Can wait until you are back in Oz territory though.

I am not leaving OZ, just driving to Qld for a couple of weeks. Might be out of phone coverage 'though.

 

[p--and--t]

And how many frequent flyers would seriously target Lifetime Platinum? 0.000001%? Or less?

not sure about "targeting - but qualifying already approx 0.001 to 0.004

 

[p--and--t]

Exactly.
This whole business about loyalty being the most profitable arm of the business is total BS.
Its clever accounting where they have completely detached the loyalty business from the cost centre of the airline, so it looks good on paper so it can be potentially sold off... yet it cannot exist without the airline component, so to not share any of the costs with the airline is just stupid and dishonest.... hence why it hasn't been sold, I imagine....

Who on earth would buy a "loyalty" business and have no control over the company to which the loyalty is attached?

try Jetprivilege and air canada ff scheme to name just 2.

 

[RichardMEL]

1. 3 years of inactive accounts (even my father lost 18,000 pts, let alone highly publicised)

3 years? I thought it was 18 months....

 

[p--and--t]

I don't think it would be a mammoth task.... if it was shown that QF makes 100s of millions of dollars by selling a product that nobody can use....

I think that's why in the US more and more cards are doing cash backs instead of miles... because the value of miles has been devalued to the point that they are worthless to many people.

But 100% agree - would be good to get some insight from an expert in this matter

Why cant they use their points, there is an unlimited supply of toasters and hotel rooms food and wine and shopping vouchers you can spend it on amongst hundreds of other "rewards".

 

[Princess Fiona]

I stopped reading the individual posts on page 20. And apologies for asking/raising what has most likely already been asked/answered/discussed in pages 20-49, but here it goes:
1. I am less than 1 year away from lifetime gold extrapolating from my current travel. From what I've seen, nothing has changed regarding lifetime gold and nothing has changed re: earning of Status Credits. Is someone able to confirm (and thank you)?
2. life time platinum - a new thing - I will be dead before I hit the total status credits necessary (no need to confirm this)
3. i am saving my points for a One World Around the World business class trip (x4) - assuming nothing has changed, I'm about 1.5 years away from actually hitting the necessary points. Is someone able to confirm that the One World Price (in POINTS) for RTW business class tickets has not changed (and thank you)?
4. on the rare occasion I dig into my points (see above point about saving them), it is for an upgrade for one person (me) when I purchase an upgrade-able econ fare but cannot stomach doing the flight in econ (Melb to LAX). This will cost me more points. But my chances of securing such upgrade have not changed. Is this correct (thank you)?

1. yes
3. No the amounts are changing. Going up to 318K per person for the J Award.
4. Yes assuming the Points Club members aren’t given some priority.

 

[lovetravellingoz]

For once I agree with JohnK Premium redemptions are excellent value, not just compared with Y redemptions but with the cash price as well. Doesn't mean I like the price increase but they're still good value compared.

Not sure I agree with AJ about the "value of this premium experience" however!

Yes j and f redemptions are excellent value. Well for QFF anyway. Though if you use the discount j prices it is not so valuable as some claim.

But y redemptions are not subsidising them.

I guess I am just a skeptic but personally I do not believe that QFF is about loyalty in the eyes of QANTAS, but rather these days is all about making money. Most aspects of the program are aimed at increasing revenue either in rates bought or points sold.

Personally I think the reductions in points and $ cost to y redemptions is about protecting revenue gained by selling points rather than making bum in seats y paying passengers happier.

MY wild guess but I would imagine that most y paying passengers who earn many points from flying would prefer to spend them on upgrades or j/f awards.

 

[JB expat]

1. yes
3. No the amounts are changing. Going up to 318K per person for the J Award.
4. Yes assuming the Points Club members aren’t given some priority.

Thank you Princess Fiona. I'm most upset about 3.

I have to read more about this Points Club thing - I earn from flying (enough to have WP for 3 years) as well as shopping - I might end up as both depending on the criteria.