Qantas is reportedly considering a “pay as you go” service model on flights between Australia and New Zealand. In a move that would copy the existing models of Air New Zealand and Virgin Australia, Qantas passengers could be charged extra for things like checked baggage, meals, drinks, frequent flyer points, seat selection and in-flight entertainment when flying across the Tasman.
Qantas currently has a competitive advantage flights between Australia and New Zealand as one of the only full-service airlines to offer fully-inclusive airfares. Qantas’ main competitors across Tasman – Air New Zealand and Virgin Australia – offer unbundled fares that don’t include luggage and meals. In fact, Qantas’ advertising in New Zealand is centred around the inclusions customers can expect when booking a Qantas flight.
The idea was pitched in a recent survey sent to Qantas Frequent Flyer members. AFF members have responded very negatively to the Qantas proposal.
Absolutely slammed it with negative feedback. Another who pointed out i’d fly a LCC instead and/or shop purely on price rather than fly a “nickel and dime” trans tasman QF.
I also did it and answered in the negative. Main issue I stated was I would not trust that their low cost basic fares would end up being lower or stay lower for long, and the add-ons would simply become price gouges.
Likewise, I said I’d be booking with a full service airline if QF went down this road.
Surely this survey is redundant? Surely QF wouldn’t be that out of touch that they would think that this is a good idea.
With the Air NZ-Virgin alliance ending in October, it seems Qantas is considering how best to remain competitive across the Tasman. But this would not appear to be a good move. Thankfully, Qantas has since publicly commented that they do not intend to introduce unbundled fares at this time.
Many airlines, particularly in Europe and North America, are moving towards more unbundled fares as a means of competing with low-cost carriers. For example, British Airways flights within Europe no longer include checked baggage or food. And airlines in the United States have recently introduced “Basic Economy” fares which include nothing but a seat. Now it seems Qantas is considering following in the same direction.
Qantas owns low-cost carrier Jetstar, which already offers unbundled fares on flights to New Zealand. The whole point of the dual-brand strategy with Qantas and Jetstar is to allow for market segmentation.
It seems a mad decision for Qantas to consider going to a model that will trash yields for the sake of maintaining cheap bums on basic seats. That’s why they have Jetstar isn’t it? So they can serve the bottom feeder end of the market and keep mainline (or Jitconnict) yields high.
Emirates, Singapore Airlines, LATAM Airlines, Air Asia X and China Airlines also fly across the Tasman. But these airlines fly only one trans-Tasman route each, with no more than one flight per day.
Unfortunately the other full service airlines are the bit players like LAN and Air China etc who don’t really have the schedule to be a realistic alternative.
Join the discussion on the Australian Frequent Flyer forum: Pay as you go Trans-Tasman or Airline.