Pricing, it's happened.

[dandandan]

Yes actually that analogy could play the way you are thinking and not support my argument. It was basically given more as the reason why I had supported Virgin over Qantas with Virgin in my opinion making all the changes such as service, image, priority boarding status matching etc and Qantas not really acting until recently.

Product wise for a 1hr flight there is not much difference, product wise for an Apple product there is a huge difference and in my opinion currently with paying a premium for. However let's not get drawn into that battle.

Funny analogy given the price premium of Apple products to Microsoft, which the 'general public' are willing to pay.

 

[Justchecking]

Funny analogy given the price premium of Apple products to Microsoft, which the 'general public' are willing to pay.

Agreed not everyone's a price shopper. Its a matter of what you personally value, there will always be some people willing to pay a substantial premium to get
their preference. Not everyone thinks DJ & QF are interchangable products (on both sides of the fence).

In any case I highly doubt a sternly worded forum post is likely to make DJ change their yield management strategy. I'm sure they value your business but I'm also sure they are marking the results on the bottom line and are using that as their benchmark for decision making.

 

[Deleted member 29185]

The price shift has been happening for months now. My favourite to watch (for obvious reasons) is OOL-SYD. There's just been another $6 increase on the normal saver fare (by normal I mean the cheapest available that's not on sale) which means in the past year, OOL-SYD fare has increased by 14%. Not too dramatic but this fact compounds with a few other sneakies, like the once plentiful really good sale fares have pretty much disappeared and it does seem the "normal" base saver fare bucket has become shallower, pushing us onto higher priced saver fares.

I've one more rtn OOL-SYD to do on DJ (to retain gold for another year) and then it's open slather for my flying. Interesting that the OP compares only against QF but also mentions price is dominant. Price is once again becoming dominant for me, so my comparisons will be all and sundry, not just DJ and QF. JQ and TT will also get my business. In fact TT only this week released a statement saying they are going to use price points to regain customer faith and loyalty. They claim they'll be offering $30 OOL-SYD fares which, let's face it, are low enough for me to capitalise on. JQ also roll out frequent promos like a recent one OOL-SYD for $13. Yes, I know these fares aren't sustainable, but they are genuine promos which DJ don't come close to.

As I've suggested before, if price is the most important factor in determining an airline, DJ will start losing business (mine at least). Do DJ care about that.....I'd suggest not at all, in fact the scrooges of the flying public are probably more of a PITA than anything and DJ are in fact displaying all the signs that they want to ditch us anyway. Free up more seats in both lounges and planes to accommodate those who don't mind spending more of their bosses money on overpriced fares. (That was tongue in cheek....here's the wink )

 

[elemist]

Agree with the sentiments mentioned previously. I prefer Virgin's service and style, although my QF flights have always been good too.

I'm currently booking flights PER - BNE Return for 5 people. Would have preferred to fly Virgin so i could start building status with them, however the difference in price is over $100pp each way. The QF Red eDeal is $80 cheaper than Virgin's cheapest deal which is without food and baggage. It's worth noting i've been watching these flights for a few months already for travel in September this year, QF has been consistently cheaper in both standard fares and sale fares. Virgin does have a sale on at present, however it's on limited flights and in my case only applies to the red eye, and ironically the sale pretty much matches QF's standard non sale price once you add in baggage/meal.

Also i found QF's flight timing was better than Virgins - although i guess this is a personal preference really.

Whilst i'm all for brand loyalty, i just can't justify ~$200 extra to fly Virgin. At the end of the day, it's a similar experience in Y, you still get from A - B safely.

At the end of the day, whilst good profit margins are important to share holders. The average joe public that doesn't have status/allegiance to a particular airline will shop based mainly off price, and a smaller margin on a lot of passengers is going to be more profitable than a large margin on no passengers!

I expect the cheaper pricing point by QF may be a retaliation for Virgin's attack on its business class service. It's quite clever in some ways - i understand most people on this forum have tricks etc to gain status quickly. However for Joe Public, they're going to earn it through bum in seat miles generally in Y. So once they get status with QF they'll become more loyal because of the added benefits.

 

[Deleted member 29185]

I expect the cheaper pricing point by QF may be a retaliation for Virgin's attack on its business class service.

QF has openly declared war on DJ by susposedly adding capacity, but to be honest, as a longer time DJ flyer, the DJ prices are considerably dearer now then a year ago (for all the reasons previously mentioned).

 

[simongr]

Funny analogy given the price premium of Apple products to Microsoft, which the 'general public' are willing to pay.

Yes actually that analogy could play the way you are thinking and not support my argument. It was basically given more as the reason why I had supported Virgin over Qantas with Virgin in my opinion making all the changes such as service, image, priority boarding status matching etc and Qantas not really acting until recently.

Well given the "products" where MS and Apple compete are software (OSX would be the primary product) Apple are actually cheaper:

OSX - $69 (upgrade) (note the upgrade to Mountain Lion will only be $20)
Windows Home 7 - $299 (upgrade $198)

alternatively you could look at the "office" suite of products:

iWork - $129
Office for Mac (3 users) - $199
MS Office (3 users) - $149

 

[Baguss]

In reality this is always the case. For years I have believed Virgin takes the approach it doesn't want to be the price leader and is happier for the other airlines to sell the "cheap seats", there is then a point when as their fares raise as they fill up their planes Virgin then becomes the cheapest. I guess you would say they are "middle of the road", which is exactly where JB said Virgin sat in the scheme of things a year ago.
Also, excluding public holidays I am sure if you researched you would find that at every single day of a year is included in some sort of sale.
Moral of the story ... a some point every airline will be the cheapest, it depends when you look and book.

 

[elbarto]

CBR will always be cheap on both. I have done SYD-CBR recently and passenger numbers are very low. No offence to the Canberrian's but who wants to fly to CBR except Politician's

Me because I live there.

Well given the "products" where MS and Apple compete are software (OSX would be the primary product) Apple are actually cheaper:

OSX - $69 (upgrade) (note the upgrade to Mountain Lion will only be $20)
Windows Home 7 - $299 (upgrade $198)

alternatively you could look at the "office" suite of products:

iWork - $129
Office for Mac (3 users) - $199
MS Office (3 users) - $149

But could the software side of Apple be a loss leader because of the huge markup that their hardware has?

Rumor has it Windows 8 upgrade is also going to be cheap.

 

[medhead]

But could the software side of Apple be a loss leader because of the huge markup that their hardware has?

Rumor has it Windows 8 upgrade is also going to be cheap.

Personally I don't find iWork to be cheap compared to office 3 licence pack. Me and close family have 4 macs, add in close friends and that probably gets to 6 or 7 macs. With the proliferation of macs it should be pretty easy for just about anyone to achieve $50 for office vs $129 for iWork.


Sent from the Throne

 

[drewbles]

This may also have something to do with the fact that QF classes peak hour flights on this route (and others) as a 'bucket' for all purposes.

ie, they have '1 flight' in their system with a *lot* of seats. They then sell a certain number of fares in each class based on that overall bucket.

This is an internal system not what you see on EF etc (ie, for Yield management).

This enables them effectively shuffle people around during peak hour. QF's Yield management is one of the best in the business. They also have a lot more capacity on MEL-SYD than DJ. The frequencies may be similar, but QF stack the 767's on that route, and all it takes is that and a few more flights and you have thousands of extra seats on the route.

 

[pauly7]

Last week I booked a CBR-MEL with about a three day lead time and DJ were considerably cheaper and with better times and flexibility than Qantas.

I think they actually work off quite different Yield Management models but find they are both better or worse on occasions.

If there is one route DJ always seem to be cheaper (for me) it is CBR, QF seem to still have the pollies and their staff on board - the CBR lounges make sure of that!

Otherwise I find QF generally competitive with DJ after DJ increased their prices. Are they too expensive now? Clearly some people are paying! Are they of a value to me personally yet to pay same/more than QF? No way.

 

[777]

I have been flying SYD-MEL for the last year or so about once a fortnight. Contrary to what others are observing i'm actually finding i'm getting much better value now than i was 12 months ago. The very cheapest fares seem to be gone but there appear to be a lot more of the savers on a lot more flights than were available before. I put this down to more capacity on the route and the fact that i tend to book a few weeks to a few days in advance on not much earlier than that. YMMV though.

 

[docjames]

Looking across multiple routes, times and flights, flexi-savers and upwards (and equivalent) seem to be improved in pricing / value, and the red e-deals/Go fares slightly more expensive.

The Go fares often still come out cheap when there is happy hour etc.

 

[BAM1748]

Shareholders won't care, they don't look at yield, they look at dividend payments either being fully franked or not.

 

[medhead]

Gotta say it's hard for me to say DJ has got more expensive than QF or even compared to previous years. I've been flying the same route for the last 2.5 years and this is my average prices on that route.

QF
2010 n:76 $114.65
2011 n:62 $115.90
2012 n:42 $128.35

DJ
2010 n:13 $113.58
2011 n:30 $107.77
2012 n:32 $137.71

So far the airlines are roughly the same as each other. DJ is more expensive in 2012, but so is Qantas. This general increase in price being due a change in flight booking patterns, I now book only 2 months in advance. Compared to upto 6 months previously. I've also made more changes incurring the change fee.

I have also started to buy more flexi fares on DJ for the upgrades. 5 this year so far compared to 1 in the previous 2 years. Excluding the flexi fares the DJ average becomes $115.86.


Sent from the Throne

 

[carpenteria]

Shareholders won't care, they don't look at yield, they look at dividend payments either being fully franked or not.

True in most cases, and I understand your point (making money = good business) but I don't think any shareholders in VAH would be holding their breath for a dividend payout anytime soon:

VAH - Dividends Per Share (cents)
​

Period Ending	First Half	Second Half	Full Year
2012-06-30	0.0	0.0	0.0
2011-06-30	0.0	0.0	0.0
2010-06-30	0.0	0.0	0.0
2009-06-30	0.0	0.0	0.0
2008-06-30	2.0	0.0	2.0
2007-06-30	2.0	2.0	4.0

​

Though one would assume if they are getting a better cashflow going it might happen in the future.