07 SALES OFF to an interesting beginning

[d15.in.oz]

Well, I ‘spose it’s time to look at the annual, domestic, post Xmas / Australia Day / Valentines Day AIRFARE SALES with some hind sight!?!

Broadly I can see –

• QF is no longer interested in directly chasing the discount web dollar. With Red-E-Deals much more expensive than the competition, who will buy!? (Obviously, QF has tied up some pretty good win-win discount corporate deals instead? And where it hasn’t, QF is prepared to cede market volume for higher profit per ticket?)
• DJ, briefly regained price leadership on a top 10 route (SYD-OOL) but was all round price trumped by JQ (particularly by the spectacular $22 limited release)… But you gotta luv those EST lunchtime specials, building constant, loyal web traffic!? Add to that a new commitment to brand building, from a disparate brand HQ.) Interestingly DJ currently ends Valentines, by matching JQ prices but only QF date range! Perhaps business has moved to DJ, and it doesn’t need to concern itself so much with guests' price perceptions?
• JQ has firmly positioned itself as the low ticket cost carrier. A notion which means customers “wait for the next sale before you buy” to its load factors. It also seems to be struggling internationally with its premium offering (probably because it’s not premium enough!).

What does everyone else think?

 

[StevePER]

QF is no longer interested in directly chasing the discount web dollar. With Red-E-Deals much more expensive than the competition, who will buy!? (Obviously, QF has tied up some pretty good win-win discount corporate deals instead? And where it hasn’t, QF is prepared to cede market volume for higher profit per ticket?)

Qantas hasn't been interested in competing on price for years. And from what I have observed with my employer, QF doesn't seem too desperate to chase after defecting businesses. My vague understanding is QF asked us to spend $2m more with them and in exchange would only put up prices by 5%. And they're still filling planes, so why would they make it cheaper for us?

Today we were looking at booking PER-SYD flights in a couple of weeks. On the way over we look for the cheapest fare, DJ $369 vs QF $575. On the way back we go for flexi-savers, DJ $529 vs QF $715. So that's a 30% saving before the negotiated corporate discount. Factor in meals and Blue Zone and it's still 25% cheaper. Factor in The Lounge being cheaper than Qantas Club and it's cheaper again. I have never seen QF cheaper on any PER-SYD flights that we've tried to book.

Exhibit 2 is the PER-ADL flights that we booked this week for a trip in May. Sale fares on QF were $198, and on DJ $148. It is very difficult to justify spending an extra $200 between two of us. If it wasn't for the $300 QF voucher we had (from an AVOD problem), we would have been on DJ.

The fact is QF know they don't have to compete on price to fill planes.

Steve

 

[dajop]

The fact is QF know they don't have to compete on price to fill planes.

Agree with you on the west coast, on the east coast it is a different matter, and particularly on the SYD-MEL route, where I don't know if it is QF competing on price so much as DJ is not competing on price. Except during the 7am-9am peak it is pretty much a toss up which carrier has a lower price on this route. With my partner moving from MEL to SYD, I have looked over the next 6 months to work out which weekends to go back and forth. Of these DJ was lower priced on 19 occassions, QF on 27 occassions and they were the same on 10 occassions. Of course, JQ to AVV was best price for most - but not all - weekends (and was significantly more expensive the weekend Airshow is on at Avalon)

 

[SeaWolf]

I have noticed that QANTAS seems to have a general dis-interest in competing. What puzzles me is how they manage to continue to fill planes and make profits with that kind of attitude.
Their red e-deals are usually more expensive than the equivilant Virgin Blue ticket and the number of e-deal seats is usually quite limited on most flights, meaning they sell out quickly.
Hopefully with the entrance of Tiger Australia to the market there might be more of an inclination for QANTAS to expand JetStar and to start becoming more competative.

Having said all this, I think there's a sense of 'snobbery' and brand loyalty that is also helping QANTAS. My flatmate is adament that he will not fly Virgin Blue, adding about $100 to his recent round trip to Sydney (from Perth it's either Virgin or QANTAS).

 

[Evan]

Why do people fly Qantas .... for me lounge access, and flexability, frequency of flights, i get looked after.
And i can fly a single airline to all my domestic and most of my international destinations.

DJ although i have nothing against them the lack of flexability has cost me money in the past (and JQ would be the same situation i am sure), but at the end of the day i have flown them a few times and i just havn't felt i was treated nearly as well as when i fly QF, i am sure not until recently having any way to tell who has status and who doesn't didn't help, i dont have any status with DJ and never would because i earn points from international routes that just happens to translate to being better looked after in domestic.

For every good story there will be a bad one, competetion is good, freedom of choice is great, people will fly who they like to fly.

Having said all that i do check DJ prices when just doing a SYD-MEL run for example (why pay twice as much when any small amount of points you can get 2 flights is just stupid) i find that the DJ prices are nothing special at all, all this new world airline talk hasn't sold me.

Its a free market, the people will decide what is acceptable and what is not.

Evan