QF $618 million half - year profit

[JohnK]

Thing is that if the the airfare included the fuel surcharge in the base fare they could just jack up the price however they liked anyway - at least this way we have visibility?

Most people could not care less how an airfare is made-up. What component of an airfare is salary/wages, catering, fuel, maintenance and mark-up. I would rather have the airfares increasing than visibility of the fuel surcharges. I think we all know that fuel price is a cost of business and should be absorbed into the base airfare.

If the actual airfares had increased at least 8 times since 2004 then there would have been a please explain required with each increase. Now even if there is a hint that the price of crude is increasing the fuel surcharge is increased and all is justified.

Actually, the price has dropped US$1.49 since yesterday. It was US$98.89 yesterday and is $US97.50 now according to Crude Oil Price Forecast

Looks like they now have another reason to increase fuel surcharges when the price goes above US$100 again.

Why is it that if they increase fuel surcharges when the cost of crude increases they do not decrease fuel surcharges when the cost of crude decreases? And if they do roll back fuel surcharges it is always less than the previous increase. Could fuel surcharges actually be a justified way of increasing airfares?

 

[Platy]

Don't forget that with this model, Qantas airways must also purchase frequent flyer points from Qantas Frequent Flyer whenever a member flys on an eligible flight operated by Qantas Airways (or a partner).

And then....for QF FF to show revenue on the books flights need to be redeemed, so there is theoretical pressure to make awards available!!!

Furthermore, presumably the actual cash revenue (from selling points) is in the bank before the on the books revenue for QF FF...is this an almighty tax rip off???

On this model (separate companies) business drivers are in conflict:
- Qf wants to buy points for the least amount of $ whereas QF FF wants the most $ from the sale
- Qf wants to sell seats to QF FF to honour awards at the best price whereas Qf FF wants to buy at the least price

 

[Alanslegal]

Most people could not care less how an airfare is made-up.

Agreed, I just want to know the total price!

They boast as having the cheapest ever air fare but it's then very misleading to have to then add $50 worth of taxes & fuel fines......

But then again only the travel industry can get away with this kind of behaviour eg. flights, hotels, car hire


If any other business did this, I'm sure they would be out of business very quickly.

 

[NM]

Don't forget that with this model, Qantas airways must also purchase frequent flyer points from Qantas Frequent Flyer whenever a member flys on an eligible flight operated by Qantas Airways (or a partner).

Indeed that would be the case. Though I assume they sell them at a pretty good deal.

 

[NM]

And then....for QF FF to show revenue on the books flights need to be redeemed, so there is theoretical pressure to make awards available!!!

Um, not quite. QFF makes its revenue from selling FF points, and as serfty pointed out, that includes selling points to Qantas Airways.

Qantas Airways makes revenue by selling seats to QFF for reward redemptions. But if Qantas Airways thinks they can make more money by selling the same seat for real cash rather than by selling it to QFF, they will do that.

Furthermore, presumably the actual cash revenue (from selling points) is in the bank before the on the books revenue for QF FF...is this an almighty tax rip off???

When the points are sold, the "cash" is in the bank account names "Qantas Frequent Flyer". When the seat is redeemed, the money transfers from earning interest in the Qantas Frequent Flyer bank account to the bank account called "Qantas Airways".

On this model (separate companies) business drivers are in conflict:
- Qf wants to buy points for the least amount of $ whereas QF FF wants the most $ from the sale
- Qf wants to sell seats to QF FF to honour awards at the best price whereas Qf FF wants to buy at the least price

I expect they have a pricing structure for QFF selling points to QA, and for QA selling seats to QFF that is attractive to both parties.

Now this does mean that QFF probably has an incentive to purchase award seats from Qantas Airways rather than from other partner airlines. So there may be little incentive for QFF to provide on-line award booking capabilities for CX flights (for example).

 

[moa999]

There was a conference call on Fri afternoon as a followup to the HY results for certain investors and analysts with the HEad of Qantas Loyalty.
Have had some of the comments made relayed to me. Overall sounds quite OK.


Went through the relevant slides of the HY presentation

Program launch of 1 July.
Details will probbaly not be released before so as not to confuse the punter - questions as to how many more points a say SYD-LAX flight would cost were not answered.

Key points that were stressed
Existing points scale and availability of seats for those FF seats will not change
The enhancements - CHOICE - are over and above the existing - Choice of Any Seat on Qantas or Jetstar (no other partners). Points cost will be related to the ticket price - will also have the availability to pay +++ with points. Search for seats will be similar to existing search for paid tickets
Will also be additional non-flight award options offered

 

[simongr]

Um, not quite. QFF makes its revenue from selling FF points, and as serfty pointed out, that includes selling points to Qantas Airways.

They only recognise revenue when the points are used though - recognition of revenue and selling points are not related timewise and the market only looks at revenue recognised.

 

[oz_mark]

If any other business did this, I'm sure they would be out of business very quickly.

Why is it any worse than car yards with their '+ dealer delivery'? What the hell is that anyway?

 

[simongr]

It's the cost of getting the car to your house.

 

[straitman]

It's the cost of getting the car to your house.

Yeah right :!:

 

[baswitzer]

Given the record profit, I wonder if Mr Dixon can handle some competition on some of his more protected routes (I.e. USA).

Somehow I doubt it.

Mr. Dixon reminds me of Rudy '911' Guiliani. At the first sign of a threat refer to 911.

I did notice an article in the AFR the other day quoting the new transport minister saying that they would not be opening up the route to protect 'aussie jobs'. This would be great if the protection afforded Qantas actually meant 'aussie jobs' were protected. But Dixon is a past master at the hoodwink and whilst telling Government to 'protect us from those evil foreigners so we can employ more aussies' QF continues to outsource (internationally) alot of its jobs hence bumper profits.

Dixon is a good man to have on your side...

 

[tuapekastar]

Why is it any worse than car yards with their '+ dealer delivery'? What the hell is that anyway?

If you ever want to annoy a new car salesman, ask him to itemise, in writing, the dealer delivery charges.

 

[pauly7]

If you ever want to annoy a new car salesman, ask him to itemise, in writing, the dealer delivery charges.

Really? Why is that?

 

[tuapekastar]

Really? Why is that?

I read an article regarding 'dealer delivery' charges in a motoring publication (or motoring section of a newspaper) some years ago and that is what the author did, and the seller was not at all comfortable. I cannot recall the breakdown of figures but it did, in that instance, show that the charges were not justified, and the implication was that this was common practice.

 

[straitman]

I read an article regarding 'dealer delivery' charges in a motoring publication (or motoring section of a newspaper) some years ago and that is what the author did, and the seller was not at all comfortable. I cannot recall the breakdown of figures but it did, in that instance, show that the charges were not justified, and the implication was that this was common practice.

No surprises there :!:

Then again anything that puts a car salesman off guard is good in my book :!:

 

[oz_mark]

I read an article regarding 'dealer delivery' charges in a motoring publication (or motoring section of a newspaper) some years ago and that is what the author did, and the seller was not at all comfortable. I cannot recall the breakdown of figures but it did, in that instance, show that the charges were not justified, and the implication was that this was common practice.

One expects that when you buy a ticket on a plane, they put fuel in it (part of the operating costs), and when you buy a car, there is an expectation that it will get delivered (just part of the cost). Why there are separate charges for either of these is a mystery to me. Imagine Coles or Woolworths (Safeway in Victoria) introducing a Checkout Processing Fee!

 

[straitman]

One expects that when you buy a ticket on a plane, they put fuel in it (part of the operating costs), and when you buy a car, there is an expectation that it will get delivered (just part of the cost). Why there are separate charges for either of these is a mystery to me. Imagine Coles or Woolworths (Safeway in Victoria) introducing a Checkout Processing Fee!

oz_mark,

I totally agree but let's not give them any ideas.

 

[Platy]

14:35 Auckland 15:25 Brisbane QF126 $1363
19:50 Brisbane 22:15 Cairns QF786

14:35 Auckland 15:25 Brisbane QF126 $1363
21:00 Brisbane 23:20 Cairns QF5942

Ladies and gentlemen, here is one way to make a tidy profit - sell a business class seat for the stupid customer on a LCC no frills service Deathstar aircraft. Observe two flight combinations AKL-BNE-CNS above - both cost NZ$1363 one way on the QF NZ online booking engine - the first gives business class on two dinkum QF flights, BUT the second dumps the unwary sod onto Jetstar in an economy seat for the second sector with no service included and posing as QF flight thanks to a code share.

Blatant rip off!!! And a nice way to gouge extra cash from the ignorant traveller...:evil: :evil: :evil: