Relative value: QFF and Velocity points

[burmans]

I don't think it can be 1c per QF point. I just blew 177,000 x 2 for a PER-DOH-BRU on Qatar in F for over Easter. At an advertised fare of around $11,700 that equates to just over 6.6c per QF point.

I think you are confusing cost (or price) and value, if you would not have been prepared to pay that $11,700, then you don't value it at $11,700 regardless of what QR want to charge.

 

[andye]

In a strictly accurate point value estimation, you ought to account for the points that you would have earned if you had paid cash. This is not insubstantial for premium fares with status.

 

[HS-TQE]

Recent devaluation across VFF and KF, I'd say QFF is the better option at the moment with a lot more options. This is despite the higher surcharges than VFF & partners.

 

[RoMambai]

The best valuation for points is what they actually 'trade' for on OzB. There, VA points tend to advertise for a ten per cent discount relative to QF points. Ie 1.1cpp compared to Qantas' 1.2cpp. Interpret from that what you will, but it suggests Velocity are marginally less valuable than the Qantas. Interestingly, KF points are advertised for as much as 1.6cpp.

TLDR: not all points are created equal.

 

[burmans]

The best valuation for points is what they actually 'trade' for on OzB. There, VA points tend to advertise for a ten per cent discount relative to QF points. Ie 1.1cpp compared to Qantas' 1.2cpp. Interpret from that what you will, but it suggests Velocity are marginally less valuable than the Qantas. Interestingly, KF points are advertised for as much as 1.6cpp.

TLDR: not all points are created equal.

Agree this provides a good guide, but of course individuals do value things differently to the masses, so IMO this should be taken as a guide only, i.e. work out yourself whether Velocity or QF points are worth more based on your own needs.

PS. I certainly agree that KF points are worth more than QF based on my own experience, unfortunately harder to get too.

 

[RoMambai]

PS. I certainly agree that KF points are worth more than QF based on my own experience, unfortunately harder to get too.

I suspect scarcity is a major determinant of the value of points. So too are redemption availability, taxes, quality of the product, range of destinations and so on. OzB is far from a perfect market but it is the closest approximation.

 

[burmans]

Personally I quite like the economist definition of value as it provides a quantifiable and (in my view) quite logical definition, but there is enough periodic discussion on this forum to suggest there are differeing philosophies on value.

Economic value is a measure of the benefit provided by a good or service to an economic agent. It is generally measured relative to units of currency, and the interpretation is therefore "what is the maximum amount of money a specific actor is willing and able to pay for the good or service"?

On scarcity of KF points, while I certainly agree that scarcity can affect the value of some products, not sure it affects the way I value them. The other factors you mention for sure but I mainly value KF points for the redemption opportunities they provide, their scarcity is a frustration but only because I already think they are valuable.

 

[RichardMEL]

yeah I am not sure that measuring value based on illegal(by the T&C of the FF programs) sales on the intenret should be used as a guide... just sayin'

I agree it's about the benefit it gives you.. just like any currency.

 

[RoMambai]

yeah I am not sure that measuring value based on illegal(by the T&C of the FF programs) sales on the intenret should be used as a guide... just sayin'

It's more the supply and demand and the application of market-like forces that makes OzB valuations an interesting reference. It makes for a far more rational baseline than subjective evaluations.

 

[serfty]

yeah I am not sure that measuring value based on illegal(by the T&C of the FF programs) sales on the intenret should be used as a guide... just sayin' ...

In no common law sense is bartering of points in this context "illegal", not even taking T&C onto account.

A more accurate way to put it could be:

"yeah I am not sure that measuring value based on transactions that may contavene the T&C of FF programs should be used as a guide...".

Other than that, I do agree.

 

[Zanzara]

It doesn't matter how much you personally value something if QF restrict availability of J class 'classic' awards on their flights to the extent that they do. Clearly, QF value their J class seats at a considerably higher rate than they sell their points for. It's all relative that when you try to redeem something you find it's very difficult or nigh on impossible to do so.

 

[burmans]

It doesn't matter how much you personally value something if QF restrict availability of J class 'classic' awards on their flights to the extent that they do. Clearly, QF value their J class seats at a considerably higher rate than they sell their points for. It's all relative that when you try to redeem something you find it's very difficult or nigh on impossible to do so.

Scarcity is only a problem if you impose unnecessary conditions on yourself, specifically QF is rarely the only option.

 

[RichardMEL]

Yep Serfty. I agree "illegal" was the wrong word to use (which is why I added reference to T&C). Your version is much better My point being, of course, that it's a violation of the T&C to sell points, even if it's pretty common to do so. In theory buying such points could get one's account wiped/suspended so then the value would be.. very bad

as for QF restricting availability in certain cabins on certain routes.. it's called yield maagement. Why does QF make availability so difficult on HNL-SYD? Because they call sell those seats. Plain and simple. And sure, there are other (often better) options in multiple markets, but that assumes one has the resources (points, dough) to access those.

The other thing, there are often more ways to get to where one wants using points if the direct option is not available. Yes, it's a PITA, but airlines are not going to give up FF seats when they feel they can get higher yield from paying pax.

In a somewhat related note, it's interesting to note that in the USA, Delta used to be like the others and most of it's domestic cabins were full of "free" elite upgrades. That amount has shrunk a whole lot because DL wsed up and started offering F "upgrades" or discounted fares at far more reasonable levels where they could extract a premium on the Y fares they would usually have gotten for those pax who did not want to run the elite lottery and would consider an extra $100 (or whatever) fair to ensure that seat up front vs the much higher amount it was previously. AA's version of this was the Y/KUPP fares and UA had similar.

In turn, those product offerings reduced the value of the elite status for those who saw it as a "free"(but not really) means of getting into a premium cabin.

The US majors also have faced product competion and pressure from the likes of Mint (jetBlue) which is a better offering than mostly what you'd get on the legacies, for a (usually) lower price point.

now QF/VA do not do the comp elite upgrades like in the US, so it's very different here (minor exception being the spuriously seen P1 comp upgrades, which I've had a few, and others have had too, but it's way more of a courtesy than a defined benefit like in the US programs). As such, for those that want to sit in the premium cabins, either you pay with cash or points - which is how most of the world does it.

Anyway, value's where you find it and sure, if the goal is to get 5 people to Hawaii in J, then you'll probably feel little value exists... however there are still value options to be found but it's obviously very subjective based on each members personal requirements/needs and what they are able to secure.