QF no more F ?

[Flying Fox]

I was flipping through a copy of Australian Aviation. I stopped at a pic of a QF A380 and there was a caption saying in essence that QF would be reconfiguring its first 12 A380s and would be removing all F.

I knew that F was being removed from all B747s. Is this something that I missed as I thought that QF were going to keep F on the frist 12 A380s with all new A380s only having J, Y+ & Y?

 

[harvyk]

It's certainly a possibility, whilst Joyce has said "QF will always be a First Class airline", I think we would do anything which saves a dollar.
The problem is QF F is very expensive, and there are quite a few other airlines which offer a competitive F product at a cheaper price. It wouldn't surprise me if the majority of first class flyers are on some sort of point redemption \ upgrade or op-up.

 

[jamesatfish]

As far as I know, the only official word I've heard is that all future A380s will be delivered with Y/Y+/J seating. The 747 fleet will be refitted using the same Y/Y+/J seats as on the A380 (presumably without the bar/lounge area), but I believe that the existing Y/Y+/J/F A380s are being kept with a First cabin to service LAX/LHR/SYD/MEL/SIN as the only remaining First class routes.

I would be very sad to see QF lose First, as that's pretty much the main reason I keep flying with Qantas to the US (predominately cash tickets not redemptions or upgrades).

 

[Moopere]

It wouldn't surprise me if the majority of first class flyers are on some sort of point redemption \ upgrade or op-up.

With the pricing often charged for an F seat I'd not be surprised by this.

However, I've seen a few posts mentioning or inferring a lack of value to an airline in their customers consuming FF points. Apologies if that is not what you meant above. So far as I can work out FF points that are on the books and unspent are a liability to the airline and would definitely appear on their balance sheet in big bold lettering. Of course new revenue is always better, but, nevertheless, I'd have thought they'd be extremely happy to provide a service which chews through significant backed up liability - and F seating would definitely do that, wiping away hundreds of thousands or even millions of points in a single trip.

 

[samh004]

The way to solve the problem of not enough premium pax isn't to cut the premium service, despite JQ doing fabulously. But hey, what would I know over Joyce.

I was under the impression that after a few more A380's come online with F, the rest will be without, but that they wouldn't be stripping it from existing A380's.

 

[tuapekastar]

Well they're still selling F ~12 months hence, so it's not happening any time soon (or a bunch of rather unhappy pax).

I know they said the first 12 A380s were retaining F, have not heard anything before this thread suggesting they weren't. I hope they do (retain F, that is).

 

[serfty]

Announcements were made early last year that only the first 12 388 would be delivered with First class.

The remaining eight 388's on order will not have any first class; only Business/PE/Economy.

The existing 388 will be reconfigured to increase PE seating and reduce Business Class seating.

Also, all First class seats in the 744's that Qantas retains will be replaced with Skybed Mk II.

It's possible this may be revised August 24th.

 

[ozmille]

I definitely hope they retain F on the kangaroo route as I want to try it at least once

 

[serfty]

I definitely hope they retain F on the kangaroo route as I want to try it at least once

Assuming they stick with the plans referenced in the thread I linked to earlier, F is likely to remain on QF9/10, QF11/12, QF31/32 and QF93/94.

 

[harvyk]

With the pricing often charged for an F seat I'd not be surprised by this.However, I've seen a few posts mentioning or inferring a lack of value to an airline in their customers consuming FF points. Apologies if that is not what you meant above. So far as I can work out FF points that are on the books and unspent are a liability to the airline and would definitely appear on their balance sheet in big bold lettering. Of course new revenue is always better, but, nevertheless, I'd have thought they'd be extremely happy to provide a service which chews through significant backed up liability - and F seating would definitely do that, wiping away hundreds of thousands or even millions of points in a single trip.

As funny as it seems I don't believe QF see the FF program as a liability, otherwise it would have been long gone. The FF program is actually a significant source of revenue for QF, why do you think they force you to send all credit card points to QF as soon as they've been earnt?What I was more referring to however is I don't think many people would place down $15,000 on QF for an F seat if another airline such as EK is offering an F seat for $10,000.

 

[serfty]

... What I was more referring to however is I don't think many people would place down $15,000 on QF for an F seat if another airline such as EK is offering an F seat for $10,000.

Of course, quite often Qantas offers that same F seat for ex Europe bookings for the $10,000 ...

 

[Moopere]

As funny as it seems I don't believe QF see the FF program as a liability, otherwise it would have been long gone. The FF program is actually a significant source of revenue for QF, why do you think they force you to send all credit card points to QF as soon as they've been earnt?

Yes, I realise it makes them a bazillion dollars, but in accepting the money from woolies and petrol stations and the myriad cards out there simultaneously creates a liability for services... its not actaully 'free' money so to speak.

Whilst I'm sure breakage levels would be as high as anywhere else, I also suspect that by and large a fair number of these points get used and not wasted. To a large extent, QF carries the liability of a heap of pre paid goods and services.

 

[mudvin]

To a large extent, QF carries the liability of a heap of pre paid goods and services.

I would assume that Qantas gets around this by having few good redemption options for people to aim for, as well as a whole heap of poorer ones (frequent flyer shop). The lower points required for things such as shop vouchers, as well as the new auto redeption option (for vouchers) would certainly get rid of a significant number of points.

 

[pshepvic]

Yes, I realise it makes them a bazillion dollars, but in accepting the money from woolies and petrol stations and the myriad cards out there simultaneously creates a liability for services... its not actaully 'free' money so to speak.

Whilst I'm sure breakage levels would be as high as anywhere else, I also suspect that by and large a fair number of these points get used and not wasted. To a large extent, QF carries the liability of a heap of pre paid goods and services.

I don't think it is a liability at all. QFF is a separate division of the company (in fact, the most profitable). Most people never accumulate enough points for an F ticket. After all they have several million FF's but most don't really fly that frequently.

The points you see sitting in your account are actually cash sitting in the bank for QFF. Earning interest. So by definition, that's an asset not a liability.

When someone uses their points, the money goes from QFF to the supplier of the product. If that's a QF seat, it goes to QF to pay for the seat. 8,000 points for a MEL-SYD seat probably earned them between $80-120 back when the credit card co, or woolworths, or whoever bought the points, and then add taxes on top and they've easily made as much profit as a red-e-deal, if not more.

Then the really profitable part is the FF Store. The redemption value is significantly less than the amount they earned for the points, and things like the new auto-reward gift card will get those who don't earn much to convert them quickly and really make a profit. For those gift cards they're
About 3,800 points for a $20 card (even if those points are bought at 1 cent each, that's an $18 profit on a $20 gift card!)

The reality is, the points are earning them money both when they are stockpiled and when they are redeemed. And if they eventually expire for some people, that's just pure profit.

 

[dfcatch]

I don't think it is a liability at all. QFF is a separate division of the company (in fact, the most profitable). Most people never accumulate enough points for an F ticket. After all they have several million FF's but most don't really fly that frequently.

The points you see sitting in your account are actually cash sitting in the bank for QFF. Earning interest. So by definition, that's an asset not a liability.

When someone uses their points, the money goes from QFF to the supplier of the product. If that's a QF seat, it goes to QF to pay for the seat. 8,000 points for a MEL-SYD seat probably earned them between $80-120 back when the credit card co, or woolworths, or whoever bought the points, and then add taxes on top and they've easily made as much profit as a red-e-deal, if not more.

Then the really profitable part is the FF Store. The redemption value is significantly less than the amount they earned for the points, and things like the new auto-reward gift card will get those who don't earn much to convert them quickly and really make a profit. For those gift cards they're
About 3,800 points for a $20 card (even if those points are bought at 1 cent each, that's an $18 profit on a $20 gift card!)

The reality is, the points are earning them money both when they are stockpiled and when they are redeemed. And if they eventually expire for some people, that's just pure profit.

You're correct in everything, except that for QFF, the banked points are also a liability.

The cash received from the points giver (cc/woollies/etc) is an asset.

But the points themselves (until redeemed, or expired) are also a liability (albeit at a lessor value).

Think of it like a gift certificate from dfcatch retail.....

A customer purchases a gift certificate for $100. I receive the cash immediately. But - I have a liability for $100 worth of goods and services (which I internally value at my cost-of-goods-sold/inventory valuation).

Fact is that if I don't count the outstanding gift voucher as a liability then I'm double counting my assets (cash in bank + current inventory).

When redeemed, then I can lock in the exact profit from the transaction, and I no longer have to account for the future redemption liability.

As you rightly point out - I make an even bigger profit if they choose a poor redemption option such as the store, or an expensive ASA. And I make the best profit if they let their points/voucher expire.

 

[connieguy]

So if QF stops offering F tickets then do the Mel and Syd F international lounges become QF's international WP[SUP]x[/SUP] lounges?

 

[samh004]

So if QF stops offering F tickets then do the Mel and Syd F international lounges become QF's international WP[SUP]x[/SUP] lounges?

I think considering they have enough members to fill Platinum One and enough CL's to keep happy, a change to remove all F would be the best way to shoot their own foot.

I would love to know how much those lounges cost to operate though

 

[impartiality]

I sincerely hope they don't get rid of First.

Travelling First on the A380 is incredible - the space, the food, the attention, the luxury.... you get what you pay for and business doesn't really compare.

 

[Flying Fox]

I sincerely hope they don't get rid of First. Travelling First on the A380 is incredible - the space, the food, the attention, the luxury.... you get what you pay for and business doesn't really compare.

I hope that QF keep F cos I would like to try A380 F at least once in my life.

 

[Lucky_man]

Re: QF no more F - Today's J is tomorrow's F

I think posters need a more realistic forward view.

While today it is being touted that Qantas are dropping F, in two years time they will have convinced the world they have dropped Y instead and only offer F,J and Y+, the aircraft wont have changed - just they way the seats are marketed. And as JQ will be stand up rather than sit down in two years time the Y+ (current Y seats) will be a premium economy in comparison.

Cynacism comes easy