High status customers on cheap tickets will be the biggest losers. They're probably the most expensive customers QF has, and QF appears to be "firing" those customers. A marginal business probably doesn't want a bunch of loss-making customers hanging around.
Those that value their status will have to pony up more money. Those that value their money will go burden VA with their loss-inducing behaviour.
I'm one of those high status customers who got there by "gaming" the system. I took advantage of double status credit offers and marginal Any Seat Awards for the last few years to reach and maintain WP. I almost always fly discount economy - with the notable exception of taking advantage of the business class MASAs.
But I dispute that I'm an expensive customer and that Qantas loses money on my business. In fact, I'd argue that
I generate a disproportionately high profit for them.
Consider: Before I got caught up in the tier hunt game and well and truly earned the "wanker" tag, I only ever flew best fare of the day. Hardly any of my flying was with Qantas, certainly hardly any of my self-funded flying. (For the past two years 100% of my travel has been self-funded.)
But since I started to chase SCs I essentially changed from "best fare of the day" to "best Qantas Group fare of the day". To this effect I:
- consistently flew Qantas domestically over Virgin, even though Qantas's fares are consistently higher.
- consistently flew Jetstar over Tiger, even though Jetstar's fares are consistently higher, and paid the premium for the Plus bundle on top of that.
- consistently flew Qantas (either Qantas metal or Qantas codeshare) over other airlines internationally, even though Qantas's fares are consistently higher. For instance, I recently paid $1299 for a discount economy flight to Los Angeles when Air New Zealand was selling its SYD-LAX flights for a touch over $900, a premium of almost 50%. Before that, I paid over $3000 for a Sydney/London/New York/Sydney trip on QF when other airlines (IIRC it was a mix of Virgin Atlantic and Delta or maybe United) were charging a tad a bit over $2000, again a premium of almost 50%.
- took advantage of several 50% and double status credit offers and marginal ASAs, which meant that rather than paying $400 economy return each for several flights to Perth (the best fare of the day), I paid over $600 business return in cash plus 88,000 in points (which reduced Qantas's liability by around $880 based on a conservative valuation of 1c/point) per trip. Ie, I effectively paid a premium of somewhere around $1280 or more for each of these flights. Yes, I flew in business, but I would normally never fly in business. I'm content in economy. I've even flown Tiger to Perth and found the experience perfectly acceptable.
- I switched to a credit card that charges me hundreds of dollars in fees simply so that my spend will generate points - Qantas of course sells these points to the bank and earns real dollars that way, and "buys" these points back from me in a way that costs them a pittance in real dollars.
The marginal increase in revenue (or decrease in liabilities, which has the same effect on the bottom line) as a result of this - quite frankly utilitarian nonsensical - behaviour is high.
Increase in revenue/decrease in liabilities: thousands of dollars.
The corresponding marginal increase in cost is low. (Remembering that substantial fixed costs - such as building and outfitting a lounge - are effectively sunk costs.) A dozen or so entries into the lounge where I consume a few dollars worth of food and drink per visit. A business class meal on those flight when I leverage the MASAs. I'm not displacing a full-fare paying passenger because with Qantas's "65% market share" line-in-the-sand and the relative scarcity of MASAs in the first place there's always room in the business class section anyway, so there's no corresponding loss in full fare business class revenue.
Increase in costs: hundreds of dollars.
Probably the only times I've lost Qantas money is the two times I've taken advantage of the First Class international lounge on a cheap Jetstar pseudo-domestic ticket. I paid about $80 for each of these tickets and - factoring in the incremental cost of my lounge meal - may have lost Qantas a few dozen dollars on these two occasions. (It's also possible that my upcoming American Airlines status run may lose Qantas something, depending on the cross-airline transfer costings.) But considering I spent thousands of dollars to get to that point I don't think they should complain about that. Because
net increase in profit as a result of my participation in the QFF snipe hunt: thousands of dollars.
But will I continue with this behaviour as a result of these latest changes that further devalue the loyalty scheme?
No. I will go back to best economy fare of the day, which will rarely be Qantas.
That's how these changes will personally affect me. Everyone's mileage will obviously vary.
Speaking more generally, these changes seem to have been implemented on the assumption that relatively few people will change their purchasing behaviour adversely as a result, thereby generating fewer liabilities/costs for Qantas for the same travel/revenue. And/or it assumes that relatively many people will pay an even higher premium for the same benefits - eg changing from a partner airline flight to a Qantas flight, or a sale fare to a flexible fare, or from economy to business, in order to chase points and status credits. If these assumptions are correct, then the changes will be to Qantas's financial benefit. If they aren't, it will only further erode their profitability and long-term brand loyalty.
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