Value of a Qantas point or how QFF makes money

[medhead]

Now that the Qantas booking engine has been changed perhaps we can get some more insight into the cost/value/profit of a qantas point. This is due to the direct, perhaps transparent link between cash fare and points cost. I've done a pretty quick calculation based on a Sale Y fare SYD-SIN return.

This fare can be purchased for $868.08 or 106900 points. On a direct comparison that says a point is worth 0.81 cents. If we take into account the 15632 points earned on the flight that point value rises to 0.95 cents.

The points cost can be reduced via points plus pay, resulting in a points+cash payment. That provides a situation as shown in the following table. Using the points+pay cost at various points levels, I've calculated the Cost that we pay per saved point, basically what we have to pay to not use a point. e.g. at the classic award level you're paying $415 to save 46900 points (I hope that makes sense)
It is also possible to again calculate the value per point redeemed, that is the value of the cash saved per point used or the value that qantas will give us for our points. Again as an example at the classic level 60000 points is saving $452.

The difference between these 2 numbers, I believe gives a good indication of the profit margin QFF achieve per point.

[TABLE="class: grid, width: 441"]
[TR]
[TD]Points
[/TD]
[TD]Dollars
[/TD]
[TD]Points value
[/TD]
[TD]Cost per saved point
[/TD]
[TD]Difference
[/TD]
[/TR]
[TR]
[TD="align: right"]100000
[/TD]
[TD="align: right"]61.07
[/TD]
[TD="align: right"]0.81
[/TD]
[TD="align: right"]0.89
[/TD]
[TD="align: right"]0.08
[/TD]
[/TR]
[TR]
[TD="align: right"]90000
[/TD]
[TD="align: right"]149.59
[/TD]
[TD="align: right"]0.80
[/TD]
[TD="align: right"]0.89
[/TD]
[TD="align: right"]0.09
[/TD]
[/TR]
[TR]
[TD="align: right"]80000
[/TD]
[TD="align: right"]238.1
[/TD]
[TD="align: right"]0.79
[/TD]
[TD="align: right"]0.89
[/TD]
[TD="align: right"]0.10
[/TD]
[/TR]
[TR]
[TD="align: right"]70000
[/TD]
[TD="align: right"]326.61
[/TD]
[TD="align: right"]0.77
[/TD]
[TD="align: right"]0.89
[/TD]
[TD="align: right"]0.11
[/TD]
[/TR]
[TR]
[TD="align: right"]60000
[/TD]
[TD="align: right"]415.13
[/TD]
[TD="align: right"]0.75
[/TD]
[TD="align: right"]0.89
[/TD]
[TD="align: right"]0.13
[/TD]
[/TR]
[TR]
[TD="align: right"]50000
[/TD]
[TD="align: right"]503.64
[/TD]
[TD="align: right"]0.73
[/TD]
[TD="align: right"]0.89
[/TD]
[TD="align: right"]0.16
[/TD]
[/TR]
[TR]
[TD="align: right"]40000
[/TD]
[TD="align: right"]588.08
[/TD]
[TD="align: right"]0.70
[/TD]
[TD="align: right"]0.88
[/TD]
[TD="align: right"]0.18
[/TD]
[/TR]
[TR]
[TD="align: right"]30000
[/TD]
[TD="align: right"]658.08
[/TD]
[TD="align: right"]0.70
[/TD]
[TD="align: right"]0.86
[/TD]
[TD="align: right"]0.16
[/TD]
[/TR]
[TR]
[TD="align: right"]20000
[/TD]
[TD="align: right"]728.08
[/TD]
[TD="align: right"]0.70
[/TD]
[TD="align: right"]0.84
[/TD]
[TD="align: right"]0.14
[/TD]
[/TR]
[TR]
[TD="align: right"]10000
[/TD]
[TD="align: right"]798.08
[/TD]
[TD="align: right"]0.70
[/TD]
[TD="align: right"]0.82
[/TD]
[TD="align: right"]0.12
[/TD]
[/TR]
[TR]
[TD="align: right"]5000
[/TD]
[TD="align: right"]833.08
[/TD]
[TD="align: right"]0.70
[/TD]
[TD="align: right"]0.82
[/TD]
[TD="align: right"]0.12
[/TD]
[/TR]
[/TABLE]


I haven't worked out how to take into account the earned 15000 points but I think it should just even out in the wash to still give the same margin.

Anyway, what do people think about this line of thought. Make sense or am I missing something.

 

[cove]

Medhead the use of QF points on economy flights are quite marginal now and that applies to nearly all of their frequent flyer points redeemers.
i haven't tried calling for a JASA just yet but this will only apply to members who want/ need status credits.

 

[medhead]

Medhead the use of QF points on economy flights are quite marginal now and that applies to nearly all of their frequent flyer points redeemers.
i haven't tried calling for a JASA just yet but this will only apply to members who want/ need status credits.

Economy is just an example. I wouldn't seriously book it. Just interested in the numbers.