Frequent Flyer points a big con

[JohnK]

Interesting story not too far from the mark....

Frequent flyer points a big con

Paul Sheehan
January 14, 2008

Last week another pre-approved credit card application form arrived in the mail, from American Express. It was called Blue Sky. In the business world, blue sky is a term used for potential, goodwill and hot air. This card was aptly named. No annual card fee! Use Blue Sky points to fly 365 days a year! Fly for 50 per cent fewer points! A few days later I received an email from Qantas headed "1000 extra points with hotels on qantas.com".

Who do they think they are kidding? Banks, credit card companies, airlines and retailers are generating millions of frequent flyer miles as incentives but they are doing so in the full knowledge they are making promises that cannot be kept. Too many miles are chasing too few available seats and everyone knows it. The whole system is built on the knowledge that a large proportion of those miles, at least 20 per cent, will never be redeemed.

More...

 

[Reggie]

The whole system is built on the knowledge that a large proportion of those miles, at least 20 per cent, will never be redeemed

I have no proof, but I think that less than 50% of QFF points issued woud be used.

Interesting story not too far from the mark....

Oh well with any seat at least we can all get a reward. Problem being the points required will be so high all we can afford will be a red from SYD to MEL

 

[Yada Yada]

I've always thought that the QFF program was a lot of smoke and mirrors.

The best point this article makes is the way airlines are constantly devaluing the worth of points.

 

[simongr]

I am not sure how one defines it as a con though. Setting aside the devaluation of points over time it seems that the casual punter is blindly collecting points then trying to book something and finding that they are not getting the value that they assumed was there.

It is almost like someone booking a dirt cheap mystery flight and complaining when it isnt business class to LAX.

The terms and conditions are clear, the "cost" of awards is clear and the limited availability is clear. Where is the con in that?

There are two extremes of FFers with a range in between. There are those that are paying for their points through flights and as such have built a premium into their ticket price (potentially) and then there are people who earn points based on credit card spend where the premium is built into their card cost or occasionally the purchase price of the goods.

I just dont see where people are being conned. I agree that there are too many points chasing too few seats but I was able to construct a J class RTW trip for two people travelling exactly where I wanted on the dates I wanted - no con there, just a little bit of work.

People are not paying face value for these flights but they expect to get face value availability.

 

[JohnK]

I have no proof, but I think that less than 50% of QFF points issued woud be used.

I would not be surprised if the actual number of QFF points not used was closer to 50%.

Oh well with any seat at least we can all get a reward. Problem being the points required will be so high all we can afford will be a red from SYD to MEL

The only people I see benefitting from this are the people who have no status and collect all their points from huge credit card spend through their business.

It cannot benefit someone like me who accumulates enough points, a mixture of earning through flights and partners, for a Oneworld RTW every couple of years only to find limited award availibility due to anytime awards.

Anyway just my opinion and wait to see the outcome of anytime awards before speculating further....

 

[novacatz]

I would feel that the Qantas program is a lot less of a con job if there was less smoke and mirrors from Qantas. A big step would be to clearly state how many seats are available for each destination // in each travel class.

At least then I could make some guess at what the points are worth to me (Based on my preferred destinations / travel class).

Using the 'mystery flight' example --- if I knew the list of destinations was all domestic Australia, I wouldn't be interested at all. But if it had a selection of SE Asia - I would be more than happy to try my luck with a 'mystery flight'.

As it is, there is smoke and mirrors in the QFF program so that people cannot make a fair judgement on the worth of the program.

 

[Skoogle]

Redeeming points

I have heard the redemption rate is up to 10% of accrued points.

 

[Yada Yada]

I am not sure how one defines it as a con though. Setting aside the devaluation of points over time it seems that the casual punter is blindly collecting points then trying to book something and finding that they are not getting the value that they assumed was there.

It is almost like someone booking a dirt cheap mystery flight and complaining when it isnt business class to LAX.

The terms and conditions are clear, the "cost" of awards is clear and the limited availability is clear. Where is the con in that?

If you have a look at the page on the QF website regarding use of points (here), it says things like this:

Bookings for most Award flights can be made as late as 24 hours before travel, however you may have to book earlier at some Qantas locations outside Australia. Award seat availability is limited and some flights may not have any available, so we recommend you book well in advance.

I actually do think there is some "con" in that. It's certainly putting a fairly positive spin on things... "Bookings for most award flights can be made as late as 24 hours before travel...". Twaddle.

I think it needs re-wording, perhaps something like this:

Award seat availability is limited and some flights may not have any seats available, especially for locations outside Australia. We therefore recommend that you book well in advance, even up to a year before you wish to fly. Note that some Award flights can be booked as late as 24 hours before travel.

At least that starts with the reality rather than with a statement that may be technically correct yet quite unlikely and therefore results in gnashing of teeth.

 

[lovetravellingoz]

I also note this comment

You will see this from May, when Qantas will revamp its frequent flyer program so that every available seat on every flight can be purchased with frequent flyer points

So is May when it is actually going to start??? I think I remember reading somewhere that 6 months notice had to be given on chages???? Or do the vague mentions to date qualify?

 

[dajop]

I think there is a lot of publicity around limited award availability, so I don't think that is such a big con. However [/climb onto soapbox] I think the bigger con is the fuel fine (as document elsewhere). When I signed up those years ago for QF FF I was under the impression that awards came free with a small fee to cover government imposed charges. I know the T&C give QF the ability to do what they want, but I certainly wasn't expecting that within a few years in addition to the points I'd be paying $$ amounting to approx 1/3rd or more of a typical economy airfare available on the same flight. [\step down off soapbox]

 

[simongr]

I would feel that the Qantas program is a lot less of a con job if there was less smoke and mirrors from Qantas. A big step would be to clearly state how many seats are available for each destination // in each travel class.

At least then I could make some guess at what the points are worth to me (Based on my preferred destinations / travel class).

They dont do that with other fare buckets though do they?

Good point as well Yada Yada -I had not seen that amusingly positive spin.

Buit just to be a little cheeky I have done a quick check to see what availability there is tomorrow on some SYD based QF routes for one person travelling alone:

SYD-HKG - Y

Sadly nothing for SYD-LAX, BNE-LAX, SYD-SFO or SYD-BKK. There is however Y,J,F availability to BKK on 30 Jan... on BA I assume

 

[Yada Yada]

Good point as well Yada Yada -I had not seen that amusingly positive spin.

Buit just to be a little cheeky I have done a quick check to see what availability there is tomorrow on some SYD based QF routes for one person travelling alone:

SYD-HKG - Y

Sadly nothing for SYD-LAX, BNE-LAX, SYD-SFO or SYD-BKK. There is however Y,J,F availability to BKK on 30 Jan... on BA I assume

And I guess that's the thing... availability on routes where there are more carriers flying will always be better, whereas on capacity limited routes such as to the USA, it's not good at present. I guess that's just economics. It will be interesting to see how things pan out when V-Australia begins flying both on the QF side and also on the Velocity side - I will be checking out award availability on V. I only have about 50K Velocity points but in excess of a quarter million Amex Reward points ready to transfer.

 

[JohnK]

I think there is a lot of publicity around limited award availability, so I don't think that is such a big con.

Yes and no. I think there is enough deception portrayed by the airlines and the little clause about changing terms and conditions at their discretion is a joke. We are being deceived left right and centre and the executives continue to reap the benefits we provide for them.

Who expected the enhancement to the QFF program back in May 2005 when FF points for most awards increased 20%-50%.

I think the bigger con is the fuel fine (as document elsewhere). When I signed up those years ago for QF FF I was under the impression that awards came free with a small fee to cover government imposed charges. I know the T&C give QF the ability to do what they want, but I certainly wasn't expecting that within a few years in addition to the points I'd be paying $$ amounting to approx 1/3rd or more of a typical economy airfare available on the same flight.

I totally agree with you but there is a chance that in the not too distant future, remote as it may sound, the cost of a WHY airfare SYD-SIN could be $1 and taxes & surcharges could be $1199. What does that do to your FF points? It has totally devalued any FF points you earn whether this be through loyalty or credit card spending.

This is where the con comes in to a FF program. An airline can do anything it wants and we just have to take it or leave it. Points accrued under certain terms & conditions should never be allowed to be devalued. The ACCC should have been called in a long time ago to act but they are just gutless wonders....

 

[Yada Yada]

I totally agree with you but there is a chance that in the not too distant future, remote as it may sound, the cost of a WHY airfare SYD-SIN could be $1 and taxes & surcharges could be $1199. What does that do to your FF points? It has totally devalued any FF points you earn whether this be through loyalty or credit card spending.

Yep, some international airlines already have fares like this.

 

[Mal]

Mike O'Connor (from the Courier-Mail) also ripped into Qantas today over their Fuel fines.

I think fuel fines in Australia have a short lifetime from this point forward. My best guess is that the next set of Qantas FF changes will see an increase in points redemption, and the fuel fines removed off all tickets.

 

[straitman]

I think fuel fines in Australia have a short lifetime from this point forward. My best guess is that the next set of Qantas FF changes will see an increase in points redemption, and the fuel fines removed off all tickets.

Will certainly be the case if the new Federal Gov't has its way.

 

[oz_mark]

I've always thought that the QFF program was a lot of smoke and mirrors.

The best point this article makes is the way airlines are constantly devaluing the worth of points.

I'm not sure that the QFF program is any more smoke and mirrors than any other program. And like many programs it has grown into something more than what it started out life as.

I would think that the Virgin Blue program, directly linked to dollars as it is will devalue over time as well, but they can do it by creeping the redemption rates up with the ticket values. The structure of the Qantas program means that they tend to be moved in a big noticeable bang.

 

[Yada Yada]

I'm not sure that the QFF program is any more smoke and mirrors than any other program. And like many programs it has grown into something more than what it started out life as.

I would think that the Virgin Blue program, directly linked to dollars as it is will devalue over time as well, but they can do it by creeping the redemption rates up with the ticket values. The structure of the Qantas program means that they tend to be moved in a big noticeable bang.

The big difference is that with Virgin Blue you can redeem on any seat/any flight, whereas with QF you cannot. Now some may say that's not an entirely fair comparison because Virgin & Pacific Blue fly to a lot less destinations than Qantas but nonetheless it is accurate.

The other thing that I feel qualifies QFF for "smoke and mirrors" is the promise of benefits that are rarely given, specifically preferred seating and ODU's. Reading the website, one would be led to believe these are benefits of status. In the three years that I've been QF Gold I have not received them and from reading the forum here, they seem as scarce as hen's teeth.

As we discussed in another thread late last year, it is just as likely that a non-FF passenger could be upgraded to J even though there are a number of Gold and Platinum members on board. I checked in very late for a MEL-SYD last year in Y and scored front row middle section where there are only two seats opposite the crew rest. Great seat, but there must have been a few dozen Plats on board. :-|

 

[oz_mark]

The big difference is that with Virgin Blue you can redeem on any seat/any flight, whereas with QF you cannot. Now some may say that's not an entirely fair comparison because Virgin & Pacific Blue fly to a lot less destinations than Qantas but nonetheless it is accurate.

My point was that while Virgin Blue do this, it does enable them to devalue the points by stealth. Over time, as fares rise, so will the number of points required.

The other thing that I feel qualifies QFF for "smoke and mirrors" is the promise of benefits that are rarely given, specifically preferred seating and ODU's. Reading the website, one would be led to believe these are benefits of status. In the three years that I've been QF Gold I have not received them and from reading the forum here, they seem as scarce as hen's teeth.

While ODU's can be a bit difficult to get, I don't think they qualify as scarce as hens teeth. I have scored a few over time.

 

[StevePER]

I would think that the Virgin Blue program, directly linked to dollars as it is will devalue over time as well, but they can do it by creeping the redemption rates up with the ticket values. The structure of the Qantas program means that they tend to be moved in a big noticeable bang.

Very clever of Velocity to operate this way actually. And with so little information published about the cost of partner awards, they could probably increase those redemption rates as well without anyone noticing.