Qantas / Jetstar REMOVE domestic fuel surcharges

[medhead]

You are joking surely? International flights have higher fares so extra fuel costs are built into that. It is not about the distance it is the underlying profitability and competition that affects QF's decision to remove the fuel surcharge.

No I'm not joking. The question raised was not about the underlying profitability anyway. It was about how much fuel is used.

Must be possible theoretically to calculate cost per passenger of typical required fuel comparing say a 737-800 travelling BNE-SYD with a 747-400 travelling SYD-SIN or similar assuming an average (85%?) loading

Sure mine is not a sophisticated analysis. But it is based on publically available information that sure be roughly correct. I'm certainly not claiming to be doing the numbers for QF. :shock:

Really if you think about it the airlines are saying "we have this profitable route, but because fuel is higher than expected we have to charge a surcharge to cover the extra cost of the fuel." That is all about the extra cost of the fuel and has nothing to do with underlying profitability, which must have already taken account of the normal price of fuel.

When QF increased the base fare that was apparently due to their deciding that fuel price at a higher level was becoming the normal. That suggests they recalculated the fare, taking account of underlying profitability using a higher long term fuel price assumption. Keeping on the fuel surcharge at that time suggests that the actual fuel price was higher then the long term price assumption.

Clearly fuel surcharge vs fare and underlying profit are being treated as different things, based on the actions and annoucements of QF. The question was asked why the fuel surcharge can be removed from domestic and not International. I've suggested that the order of magnitude difference in distance travelled is probably the reasoning used by the airlines and put forward a somewhat simple analysis, yet still in the ball park of the fuel surcharge. Fairly good rolleyes: or lucky) considering everything I didn't take into account.

No it is not a joke. Why don't you have a go at answering the question posed?

Happy new year

 

[markis10]

Never thought I would see the day that a classic award was dearer than an anyseat award, just booked a return flight to Melbourne for my partner and son for 28K all in, versus 24K + taxes or 35K all in for classic award

 

[Saab34]

SYDBNE $52, SYDMEL $62 MELADL $42 on sale of course

Did they go that low?? They seem to be around $9 less than they were yesterday....MEL-ADL$42???

 

[oz_mark]

Did they go that low?? They seem to be around $9 less than they were yesterday....MEL-ADL$42???

There was a period where they first removed the surcharge when they did go that low, but subsequently seem to have adjusted some of the sale fares.

 

[Soundguy]

Perhpas someone smarter than me can explain whether there is any justification for the QF claim (embedded in the quoted article) that the fuel surcharge for international flights must remain because the basic fuel costs for international flights are higher than those for domestic!!!

Not an explanation, just thinking aloud..... QF loved the fuel fines because they were applied to award flights and because the travel agents didn't get commission on them right?

Well I wonder what proportion of folks these days book domestic award flights (given the way QF have made domestic awards quite unattractive cost wise) and what proportion use travel agents to book domestic flights (rather than directly via the internet)? Thus would it be overly cynical to think that the international fuel fines perhaps remain the more profitable of the two in the long term which may have influenced their retention?

On the other hand QF could fairly argue the impact of the low A$ when they purchase fuel offshore.

 

[serfty]

Interesting levels at the moment.

I remember purchasing in July '04 travel for the following November MEL-SYD-MEL and SYD-BNE-SYD for ~$115 each. (4 flights cost ~$230)

(IIRC This was pre Jetstar)

 

[AlphaVictor]

There was a period where they first removed the surcharge when they did go that low, but subsequently seem to have adjusted some of the sale fares.

The full $18 reduction has not been passed onto pax. Which is what was expected, no full transparency. SYD - MEL went to $73 instead of $64. Seeing the time of the year the change was done, there will be little accountability and little or no press follow-up on how "5 - 2 = 4"

Happy New Year

 

[serfty]

At least domestic award flights become less bad value ...

 

[Platy]

At least domestic award flight become less bad value ...

Unless you're stupid enough to use points to pay for the taxes etc on a classic award flight...

Before - $40 (taxes + fuel) could be offset by an extra 6,000 points
After - $15 can be offset by 5,500 points

Another juicy example of Qantas intent price gouge at every possible opportunity.

 

[Saab34]

Jetstar have removed the entire surcharge of their "All Day, Every Day, Low Fares". Wasn't taken of sale fares for some reason, because they ended it early....

ie- AVV-SYD $59
SYD-BNE- $59
MEL-OOL- $69
BNE-NTL- $39

 

[oz_mark]

The full $18 reduction has not been passed onto pax. Which is what was expected, no full transparency. SYD - MEL went to $73 instead of $64. Seeing the time of the year the change was done, there will be little accountability and little or no press follow-up on how "5 - 2 = 4"

Happy New Year

Well, I have always viewed the sale prices to be "manipulated" a bit compared to their other fares. More a think of a number and work backwards to the base fare, rather than the other way around. What happens in the normal fares is what counts (IMO).

 

[nlagalle]

Unless you're stupid enough to use points to pay for the taxes etc on a classic award flight...

Before - $40 (taxes + fuel) could be offset by an extra 6,000 points
After - $15 can be offset by 5,500 points

Another juicy example of Qantas intent price gouge at every possible opportunity.

Well i just did a dummy flight MEL-PER and it was $11 in taxes or 5,500 points!! there is no point paying taxes with points anymore... it should be only 1500 points tops...

 

[Dave Noble]

Well i just did a dummy flight MEL-PER and it was $11 in taxes or 5,500 points!! there is no point paying taxes with points anymore... it should be only 1500 points tops...

Indeed it isn't worth doing anymore but it probably takes more work in the systems to adjust the site to not have a "use points rather than cash" for taxes than to just remove the YQ from the system. It may be v poor value now, but no one is being forced to use the option

Dave

 

[Platy]

Indeed it isn't worth doing anymore but it probably takes more work in the systems to adjust the site to not have a "use points rather than cash" for taxes than to just remove the YQ from the system. It may be v poor value now, but no one is being forced to use the option

Dave

Yes, that may well be, Dave.

Given they have gone to the time and trouble of changing the points (eg. from 6,000 to 5,500) the same amount of effort could have set up more realistic payment levy in numbers of points (1,500 was sugested above).

Yes, it's their choice to pick a figure (number of points) and our choice as customers to recognise it as bogus and not waste points to offset the taxes levy.

It also has a downside in that observant regular customers will recognise their choice as reflective of a pervasive arrogant attitude towards the customer.

I doubt their yield models account for such niceties.

 

[oz_mark]

Yes, that may well be, Dave.

Given they have gone to the time and trouble of changing the points (eg. from 6,000 to 5,500) the same amount of effort could have set up more realistic payment levy in numbers of points (1,500 was sugested above).

Yes, it's their choice to pick a figure (number of points) and our choice as customers to recognise it as bogus and not waste points to offset the taxes levy.

I would predict that within a week a new points level will be announced.

This change has some hallmarks of being made on the fly without having all the ducks lined up first.

 

[Platy]

I would predict that within a week a new points level will be announced.

This change has some hallmarks of being made on the fly without having all the ducks lined up first.

If true, it doesn't inspire confidence in the management!

 

[Mal]

If true, it doesn't inspire confidence in the management!

Virgin Blue pretty much forced them into it - so I don't think they had much choice.

 

[Standby]

Well, I have always viewed the sale prices to be "manipulated" a bit compared to their other fares. More a think of a number and work backwards to the base fare, rather than the other way around. What happens in the normal fares is what counts (IMO).

Agree with the sale price being manipulated..I wasnt going blind the SYDBNE price was in the $50's and MELADL in the $40's..me thinks QF realised they were equal pricing to DJ which they rarely do and made sure the 10-20 diff on the new sale price was there..I think its the non sale fares of 109 year round down nearly 130 shows the surcharge withdrawal has been passed on to year round pricing..thats the important thing

 

[N860CR]

One could argue that its misleading though. They advertised a sale "fare" valid for purchase until Jan 5th. Qantas decided long ago that the fuel surcharge was not part of said "fare", so what they've actually done is changed the price of their advertised sale during the sale period without providing any formal notice to consumers.

 

[oz_mark]

One could argue that its misleading though. They advertised a sale "fare" valid for purchase until Jan 5th. Qantas decided long ago that the fuel surcharge was not part of said "fare", so what they've actually done is changed the price of their advertised sale during the sale period without providing any formal notice to consumers.

They advertised an all-inclusive price, and that price has fallen, not gone up.