Discussion on QF leaving OW

[Mr_Orange]

There's lots of speculation about QF's future in OW cluttering up another thread at the moment so I thought I'd sort a dedicating thread for the discussion.

If a Mod is feeling bored, maybe they could move relevant messages here.....

 

[moa999]

Not going to happen.
QF would lose too much versus VA

The changes to QFF just provide a carrot for you to be more loyal to Qantas (and Jetstar) versus other oneworld airlines.

I don't see it all as a view that QF wants to step outside oneworld.

Like many airlines have discovered the chosen partners in an alliance do not necessarily suit each individual airline the best, and they will enhance the alliance with some additional partners.
- eg. QF with EK, CX with NZ

 

[cmon0005]

I don't think they'll leave, they are (in my opinion) just tightening the rules a bit to make more bucks out of incoming points/lessen incentive to book cheaper OW flights over QF metal.
They would get a lot of inbound codeshare & interline revenue for domestic connecting flights from OW partners.
Not to mention lounge revenue, which looks to be increasing with MH & CX now using QF lounges in most Aust major Intl ports.
For example Melbourne J lounge extended their lounge hours til 11:30pm to cater for MH/CX/QR/FJ flights in the evening, which would net them more revenue.

I think people are reading too much into this, but respect them for being a bit cynical... case of once bitten twice shy!

 

[Barks]

I hope they don't leave and am probably reading too much in the (quite large) reduction of SC earn on oneworld partners. As other members have mentioned, they could have just increased the number of ~'s.

I've always wondered why QF don't codeshare with more of the alliance partners too.

 

[dk4]

They would get a lot of inbound codeshare & interline revenue for domestic connecting flights...

QF do not need to be part of an alliance to continue codeshare and interline agreements with selected foreign carriers.

 

[smit0847]

I dont think there's any chance they'll leave OW - it's probably the biggest benefit of QFF which is the most profitable part of their business. Given their shrinking international network taking away the ability to fly, earn and redeem on OW partners would be disastrous.

I think VA would be extremely smart to join *A now and offer another status match to QFFers - I think they would gain a huge amount of business by doing so. However I suspect EY are telling them they are not allowed to do so and they also believe it is more profitable to have these confusing 'virtual alliances' than to 'beat' QF by joining *A and taking away their business.

 

[samh004]

Without knowing how many OW FF's fly on Qantas every day (domestic I'd be looking at) it's anyones guess, but I'd hope they continue to remain part of the alliance as I don't think EK to the West and AA to the East covers them well enough.

 

[greenfish]

I can't see why QF would leave OW.

Every OW airline would prefer their FF members to fly on their metal first, their codeshare second, other OW third, this change is intended to encourage this behaviour.

If it works out for QF, I'd expect other OW airlines to follow suit with their FF programs.

 

[Supersonic Swinger]

I doubt they will leave. What is clear though is that OW isn't QF's priority...

 

[dajop]

There are precedents, Delta's still a leading member of Skyteam, and Delta Skymiles doesn't make it exactly easy to earn status using it's partners, in fact flying KE in any class will not contribute to Elite Qualification in Delta's program at all. It goes so far as breaking it's airline partners into four tiers, with 19 skyteam partners, it has only 4 in the top tier, then 7, 7 & 1 in the other tiers. Details here. So QF hasn't quite gone that far to differentiate elite qualification earning by airline, instead it is more route based, whether QF competes on the route or not.

 

[ozbeachbabe]

I think VA would be extremely smart to join *A now and offer another status match to QFFers - I think they would gain a huge amount of business by doing so.

However I suspect EY are telling them they are not allowed to do so and they also believe it is more profitable to have these confusing 'virtual alliances' than to 'beat' QF by joining *A and taking away their business.

Have a look at peoples carry on luggage next time you're on a flight - already there's a large number who not only have a Platinum Qtag but a Virgin Platinum bag tag as well.

It would interesting to know whether EK & EY would perceive any advantage/disadvantage should:

a) QF leave OW or
b) VA join *A

 

[JohnPhelan]

I hope they don't leave and am probably reading too much in the (quite large) reduction of SC earn on oneworld partners. As other members have mentioned, they could have just increased the number of ~'s.

I've always wondered why QF don't codeshare with more of the alliance partners too.

Because it takes both parties to agree.

When QF joined forces with EK, you might remember that, in the original announcement, QF said its codeshares on BA to SIN and BKK would continue. BA then turned round and canned them.

Similarly, I believe QF tried for years to get additional codeshares on CX, but CX would have none of it. (BA has had the same problem).

 

[Barks]

Because it takes both parties to agree.

When QF joined forces with EK, you might remember that, in the original announcement, QF said its codeshares on BA to SIN and BKK would continue. BA then turned round and canned them.

Similarly, I believe QF tried for years to get additional codeshares on CX, but CX would have none of it. (BA has had the same problem).

Ah yes, that makes sense. Thanks.

 

[BD1959]

OK, as one of the few protagonists, I'll bite ...

Yes, QF were on one of the founding members of OW but the alliance itself has moved a long way from its founding principles (seemless experience across all carriers, include onboard services etc etc). OW always considered itself to be the alliance of Premium airlines "An alliance of the world's leading airlines working as one." An argument could be made that, over time, the quality of the carriers now in OW has diluted from that founding principle and as an airline which has aligned itself with EK, QF could argue that it can maintain it's principles better outside of what OW has become.

Lounge access revenue is always held up as a reason for QF to remain in OW. When BA and QF (supposedly) came to blows over Galleries access for QP members, I trawled both sets of Accounts and the Net, trying to gage what the revenue impact might be to BA. Nowhere could I find any miscellaneous reference to Lounge Access revenues. I'm not saying revenue isn't earned from such sources, just that if it is so insignificant to call it out in a set of Accounts, why would it be significant enough to keep QF in OW?

Overall, what benefits does QF derive from IB, AB, RJ, S7, JJ? There's also probably some, though little, benefit from AY. I can't see much coming from UL. That's an awful lot of "overhead" on an Alliance cost for which there is little benefit. QF think nothing of working outside of the OW alliance (and directly in competition to some "OW Partners" - AF for HKG-CDG prior to the EK-tie-up) and signing Codeshare partnerships, JSAs etc.

To my mind, QF could go one of two ways:

1. Subject to the QSA being amended, EK buy a majority holding and

2. QF, in a RedQ-type epiphamy, decide that "the only way for QFi to survive in the current competitive market" is to unshakle itself from the constrains of the OW alliance and forge world-practice regional partnerships with the premium carrier from each region: EK for ME/North Africa/Eastern Europe; AA for North America; CZ for North Asia; LA for South America; jury's still out on Western Europe!!

I'll get the popcorn ....

Regards,

BD

 

[moa999]

Overall, what benefits does QF derive from IB, AB, RJ, S7, JJ? There's also probably some, though little, benefit from AY. I can't see much coming from UL. That's an awful lot of "overhead" on an Alliance cost for which there is little benefit. QF think nothing of working outside of the OW alliance (and directly in competition to some "OW Partners" - AF for HKG-CDG prior to the EK-tie-up) and signing Codeshare partnerships, JSAs etc.

What is the overhead?

Sure there is an initial investment in IT and the like, and presumably some sort of annual "oneworld" marketing budget,
but if QF flyers don't step in an IB,AB,RJ,s7,JJ lounge and vice-versa, then there is no cost to either party.

Reality is I am sure many QF FFrs on this board have flown a number of the above airlines and used lounges in MAD, FRA, etc..
and I am sure FFrs of those programs have flown to Australia and used QF domestically.

It may not be big numbers but it does add to the offerings of each, even if not the prime focus of the airlines marketing.

 

[zainman]

An interesting video (albeit slightly old now) but nevertheless relevant, including comments on alliances by EK CEO

Emirates' game-changing deal - CNN.com Video

 

[Himeno]

For example Melbourne J lounge extended their lounge hours til 11:30pm to cater for MH/CX/QR/FJ flights in the evening, which would net them more revenue.

What happened to the CX lounge?

 

[drron]

Will OW still exist in 10,15 or 20 years time?
For me it has been the ability to use RTW or multi continent fares that have been the attraction.EK and QF basically have the ability to do that by themselves.
As well are the generations that come after us boomers going to have the same interest in Loyalty schemes?
I think it is far from certain that QF will remain in OW for the long run.

 

[Himeno]

1. Subject to the QSA being amended, EK buy a majority holding and

I think that might be what QF is aiming towards, despite EK having said publicly that it isn't interested in taking a stake in QF. EK used to have a state on UL to manage it for the government (owner). They didn't renew that agreement mainly because they had issues with the other shareholders. Airlines also have a history of saying one thing and doing another. I can see EK taking a share in QF should the QSA be amended. Though, the ACCC is watching - they might not allow the tie up to continue past the 5 year mark.

2. QF, in a RedQ-type epiphamy, decide that "the only way for QFi to survive in the current competitive market" is to unshakle itself from the constrains of the OW alliance and forge world-practice regional partnerships with the premium carrier from each region: EK for ME/North Africa/Eastern Europe; AA for North America; CZ for North Asia; LA for South America; jury's still out on Western Europe!!

I can see QF trying to set up a JQ band in Europe. Possibly in partnership with AY.

 

[moa999]

Getting ot but can't see QF doing much with JQ anywhere in the short term, and certainly not in high cost nth Europe locations given European openskies.

Would not be surprised to eventually see some kind of deal with IAG owned (ie BA and IB) Vuellig. Or even flydubai (same owner as EK)