MH Super Specials Finish 31/1/09 - MH to slash Fuel Levies 1/2/09

[AlphaVictor]

This just plain stinks!

As we know MH have a number of specials ($100 - $200 - $300 - $500 to Asia / Europe / South America / India) with additional taxes (fuel / govt) that start around $700 per person up to $1200/$1300 per person). Good base fares but lousy taxes.

Guess what?

The day after these specials finish (31/1/09) - the 1st of Feb 2009 MH are dropping their fuel surcharges by $320AUD ex Australia.

Malaysia Airlines makes big cut in fuel surcharges - International Herald Tribune
(Prices quoted in this article are in USD)

Ethical? Unethical? or who cares?

 

[dajop]

This will make no difference to fares, but good for TA's and Enrich members. Wonder if it will put pressure on others to do likewise, or whether it simply realigning MH to what the likes of QF & SQ charge anyway.

Don't know what's so unethical about removing the fuel surcharge the day after the sale finishes - as to a consumer it is the total fare that counts not fuel surcharges by themselves (despite the spin that some, such as WorstFlights, put on it ... "never been seen before fares" etc). But I love this quote:

Airline Commercial Director Rashid Khan said fuel still remains the company's biggest cost, and that surcharges only cover about 30 percent of its fuel bill.

Well der! Am I missing something ? Isn't the ticket price supposed to cover costs of running a flight, including fuel? They covered 0 percent of its fuel bill before someone thought of implementing fuel surcharges.

 

[cchau]

To a certain extent, i am with AlphaVictor.

MH has been doggy for a long time in their fare structure, what's the point of promoting a extremely low fare while the "surcharge" is 5 times the fares!!!

It's also kind of doggy they choose the date of reducing fuel surcharge by A$320 (thanks Mr Khan, that's very very kind of MH to do so!!! It still a couple of hundread bucks more expensive than SQ or QF), though it makes no difference to the actual fare, consumer who books the special earlier would still think they are being ripped off! As a marketer, I have to say they made a bad decision!!

it's time to do business a lit bit more open and honest, MH!!

 

[dajop]

To a certain extent, i am with AlphaVictor.

MH has been doggy for a long time in their fare structure, what's the point of promoting a extremely low fare while the "surcharge" is 5 times the fares!!!

Get your facts right. At least in for MH's promotions within Australia (elsewhere such as Singapore they are a lot dodgier). The MH advertisements I read in several newspapers do NOT promote the base fares, all advertised the fully inclusive fares. The MH Australian website promotes fully inclusive fares. If you can buy a fare to CDG for $1441 the day before the surcharge is removed and the same fare is $1441 after removed who cares!

However, it is not MH, but some of the online travel agents which are making me sick in their promotion of these fares. I wonder if I'm not the only person that is over getting WorstFlights or travel.com.au newsletters promoting fares for $100+surcharges. It's about time WorstFlights started promoting fully inclusive fares.

This is not to say I condone the ridiculous surcharges that MH has had, as they devalued Enrich points which became worthless for Y travel. However if they advertise fully inclusive fares for the average consumer whether the fare is $100 and surcharges $2000 or whether the fare is $2000 and surcharges $100 it makes absolutely NO difference.

 

[benhadi]

Pardon my ignorance, but what do Enrich members gain out of it? What difference would it make to them with the "restuctured" fare?

This will make no difference to fares, but good for TA's and Enrich members. Wonder if it will put pressure on others to do likewise, or whether it simply realigning MH to what the likes of QF & SQ charge anyway.

Don't know what's so unethical about removing the fuel surcharge the day after the sale finishes - as to a consumer it is the total fare that counts not fuel surcharges by themselves (despite the spin that some, such as WorstFlights, put on it ... "never been seen before fares" etc). But I love this quote:



Well der! Am I missing something ? Isn't the ticket price supposed to cover costs of running a flight, including fuel? They covered 0 percent of its fuel bill before someone thought of implementing fuel surcharges.

 

[Mal]

Pardon my ignorance, but what do Enrich members gain out of it? What difference would it make to them with the "restuctured" fare?

FF members normally pay Fuel surcharges+taxes when redeeming points for tickets. Lower Fuel surcharges normally = a lower co-pay when redeeming points for flights.

 

[cchau]

Definitely the price is similar to MH's competitors who have a true fare structure, but price is only one of the many factors we consider before purchasing such as brand, value...etc..

If Woolies/Coles said they are doing a promotion of 1 cent for every item, but charge you a "cashier surcharge" of $20 a bag and this make the "all inclusive price" similar to their competitors, will you still shop at there? Not me, sorry. Price is surely not the only thing considered by consumer, and most are willing to pay a little bit extra to support businesses doing the right thing and being honest.

Though the unrealistic fare structure might not affect MH's sales, consumer's brand experience surely will be affected when they see the fare breakdown. It's not going to help retaining customers, and MH can be knocked down by its competitors easily if they match the MH promo fare.

 

[Nigelinoz]

I don't really see it as any different than what car dealers have been doing for years,for instance a dealer in melbourne is offering on his website a 2008 Ford Escape ZD Wagon ,Drive Away Price $29,490.00.
Sounds great till you read the small print which says.
"Prices quoted should be used as a guide only and may change without notice. Prices may not include fees & charges"
Just the same as MH advertising a fare at $500.00 and adding on $900.00 in taxes,when it comes down to it if the price is right it doen't matter how
it's calculated,

 

[ansettrule]

Who cares what the cost of each part of your ticket costs it is the overall cost of the ticket that makes me decide who I will fly with anyway and besides MH are the best airline to fly with anyway so I dont care what the tickets cost.We are flying to heathrow in september and malaysia were by far the cheapest airline compared to even singapore,and as for QF or BA they can get nicked they charge way over the top,even out of australia the asian airlines are cheaper anyway which is a little sad considering you really should fly your national carrier.

 

[cchau]

Myth: MH is the best airline to fly with
Fact: MH never got into Skytrax Airline of the Year's final 3

Again, i'm not saying the fare is not attractive, it is about playing a fair game, for both MH itself and consumers. Customer retention and loyalty are critical for business. Airlines do not and cannot rely on once off flyers who fly them because there is a promo fare, and certainly these unrealistic fare structure is not going to help building loyalty.

 

[ethernet]

Airline Commercial Director Rashid Khan said fuel still remains the company's biggest cost, and that surcharges only cover about 30 percent of its fuel bill.

Quick, can someone please run a back of envelope check of that statement?
For that statement to be true, either load factors are woeful, there are at least 1 in 3 passengers not paying the levy, or they are subsidizing something else, or hedging contract losses went ballistic

I am aware Malaysia has some very friendly pro family and friends customs.
However when your 'extras' are double that of your competitors , you are the proverbial nail who is sticking out. More so when the Australian Krona is even falling against most everything.

Thankfully, most of MAS's subcontinent fliers out of .au are most price sensitive, and it looks like common sense is prevailing again. I flew with em heaps, but the last 4 trips were with other airlines.

I also remember an article that said MAS hoped to snare a lot of pax with their website. I tried a few times, and the prices were never attractive, so I guess that needs revamping too.

If they want more pax, look at Emirates - clever sales timed well, but not well enough to canabalise business pax.

 

[Nigelinoz]

MH never got into Skytrax Airline of the Year's final 3

And your point is what exactly?
Skytrax rated MH a 5 star airline ,along with Cathay,Singapore,Asiana,Kingfisher and Qatar.yet this supposed ranking system has airlines like Qantas,BA,Air NZ,Emirates,Virgin Atlantic etc as 4 star airlines,in fact most of the worlds leading airlines are 4 stars so I would not be putting too much emphasis on the Skytrax ranking.
I agree that MH taxes are (were) way OTT ,but how they set their fare structure is up to them,the market will sort it out for them if they get it wrong.

 

[JohnK]

Well der! Am I missing something ? Isn't the ticket price supposed to cover costs of running a flight, including fuel? They covered 0 percent of its fuel bill before someone thought of implementing fuel surcharges.

Very clever. Fuel surcharges only cover 30% of the total fuel bill but the airfare also contains 100% of the total fuel bill. So once they remove fuel surcharges they will be covering their total fuel bill and won't be deceiving travellers anymore....