Qantas Frequent Flyer - Why is Qantas doing this!

Hello all:

I have been flying back and forth between LHR-BKK-SYD in Business class/First class probably every two+ weeks for the past year or so for a project. I flew most Qantas with BA when QF was full.

My planes were almost Always Full! Full in Business, Economy and most time in First. I received a few bumps to F and enjoyed the service and timing....All good. I was always scratching my head as to how Qantas wasn't making any money with these loads?

I was shocked to find that these flights are going away? AND Qantas is going to only fly an Airbus 330 to Bangkok? Where are all the passengers going to go? BA is full most times....QF was full most times...I just don't understand this? Prices are going to Soar and premium passengers will now move to Emirates or Cathay or even Singapore Air.....

Were these routes so unprofitable for them? Amazing.

Glad my projects are over.....Back to the USA go I. Our airlines are all bankrupt or teetering.....

Safe travels to all!

Any reason why you won't fly LHR-SIN-SYD? QF still flies that route so if you're just travelling LHR-SYD then surely that's a suitable substitute?

- James

... Prices are going to Soar and premium passengers will now move to Emirates or Cathay or even Singapore Air.....

Or even TG if going via BKK is important :)

Qantas claimed that SYD-LHR via BKK wasn't making any money. Either they have been doing 'creative' accounting or the yields didn't reflect the loads.

My understanding is that loading on a route does not reflect the earning.. When the load factor is low, the airline will do everything to load it up. Which means some cash better than nothing, but that does not mean costs are met..

Qantas claimed that SYD-LHR via BKK wasn't making any money. Either they have been doing 'creative' accounting or the yields didn't reflect the loads.
You have no way of determining revenue. A flight can be full, but that does not mean that the route sustains enough high fare bucket tickets to be sustained.

SYD-BKK was often >50% QF staff in J/F, hence the poor yields on the route. QF has dropped half it's flights to LHR, reflecting competition not just from EK and EY but also the chinese airlines, as well as the tradition SQ/TG competition. Another problem was a high pilferage rate at BKK, with lots of catering items "lost" esp. the high-end wines (I think QF ended up having to fly in these items per flight which is both expensive and troublesome). I guess running some ground stations is more challenging than others.

...Another problem was a high pilferage rate at BKK, with lots of catering items "lost" esp. the high-end wines (I think QF ended up having to fly in these items per flight which is both expensive and troublesome). I guess running some ground stations is more challenging than others.
Are you sure it wasn't just "gifts" to passengers - we have all seen the bottle wrapped in the cloth serviette carefully passed to a passenger (or even received one personally). Was that more prevalent on the BKK routes?

......I was shocked to find that these flights are going away? AND Qantas is going to only fly an Airbus 330 to Bangkok? Where are all the passengers going to go? BA is full most times....QF was full most times...I just don't understand this? Prices are going to Soar and premium passengers will now move to Emirates or Cathay or even Singapore Air.....

Were these routes so unprofitable for them? Amazing.



There are a couple of things that are affecting Qantas profitability into Heathrow;

1) APD - when Qantas flies to Heathrow, passengers flying on QF get charged for APD up to the final destination. Same with BA. Whereas those flying EK only have to pay the APD as if they are travelling to Dubai even though their final destination might be in Australia. It is a very uncompetitive duty from Qantas perspective.

2) End of the line carrier - previously Qantas needed 2.5-3 aircraft per week to fly the LHR-BKK-SYD route. By terminating the flight in BKK, QF only needs to use 1 aircraft per week. Passengers still have the option to fly to BKK, do a couple days of work, then fly to LHR on BA. I am sure there were many passengers previously who flew QF 1 on the outbound, stopped in BKK and then connected to BA 10 anyway.

There are a couple of things that are affecting Qantas profitability into Heathrow;

1) APD - when Qantas flies to Heathrow, passengers flying on QF get charged for APD up to the final destination. Same with BA. Whereas those flying EK only have to pay the APD as if they are travelling to Dubai even though their final destination might be in Australia. It is a very uncompetitive duty from Qantas perspective.



Are you sure about that? My understanding is that unless the pax actually have a stopover ( rather than a transit) in DXB then the APD will still be based on the ticketed destination.

There are a couple of things that are affecting Qantas profitability into Heathrow

1) APD - when Qantas flies to Heathrow, passengers flying on QF get charged for APD up to the final destination. Same with BA. Whereas those flying EK only have to pay the APD as if they are travelling to Dubai even though their final destination might be in Australia. It is a very uncompetitive duty from Qantas perspective.

That is not true. The rules for APD are the same for all carriers. If a passenger on EK has no stopovers enroute to Australia, the passenger has to pay APD based on UK-AU. If a passenger on EK has a stopover at a spot enroute ( such as DXB, MLE, CMB, SIN, BKK ) then they pay APD based on UK to stopover point; exactly the same as QF/BA. Fly QF/BA LHR-FRA, stopover in FRA and then continue to Australia, APD is based on LHR-FRA

What I find with QF over EK Europe to Australia is higher fares , worse fare restrictions and a lower quality product; those are what influence me

Example. Business class r/t LHR SYD in June
Lowest Qantas Fare is GBP3487 plus GBP494 fuel fine plus taxes = GBP3981
Lowest EK fare is GBP3211 plus taxes

Saving of GBP770

Fare Conditions
Qantas
28 day Advance Purchase
12 month max stay *
NO changes permitted
NO refunds permitted
1 stopover permitted

* effectively 11 months max stay since 28 day ap requirement


Emirates
No advance purchase requirement
12 month max stay
Changes GBP200
Cancellation penalty GBP200
Unlimited stopovers permitted for free ( other than in MLE where GBP200 stopover fee aplies )
Chauffeur drive at departure and arrival airports ( inc stopover points )


GBP770 cheaper, better conditions and , imo, a better product

Rather than whining about competition, Qantas should try being competitive . having much higher fares and worse conditions is only a strategy I would consider if the product is so much better than the competition's that people will want to use it despite the restrictions. In 1st class, when I was buying my ticket recently, QF had a 1st fare that was several hundred GBP more with , again, useless restrictions and was competing against EK suites

Rather than whining about competition, Qantas should try being competitive

...

they are competitive ex UK: economy pricing for a one year ticket in economy class ex LHR to SYD for departures in April is coming in at around AUD1300.

I realise this is about GBP800 - which is quite expensive to what it was several years ago, but compared to the AUD this makes a fantastic fare. Cheaper even than Emirates who was second most expensive at another GBP50 more.

However - if they are undercutting EK ex LHR, when they have a similar (if not slightly better Y product) - do they only have themselves to blame for any losses?

Apologies to anyone for the confusion caused by my misinterpretation of the APD. I read an article a while back (can't find the link) that seemed to imply that the tax would only apply on the first flight leg. I guess that was wrong.

APD has nothing whatever to do with airline profitability. It is just a 1/3 of their own outrageous fuel surcharges which are no longer surcharges as they have been around for so long.
It is surcharges that are driving passengers to those who no longer impose them.

Moreover it is Qantas management incompetence and miss management that is at the root of their financial problems. They have dropped 50% of their LHR services but now have 2 very expensive A380 sitting on the ground at LHR for over 14 hours, that is hardly sweating the assets and demonstrates that QF have no idea what they are doing at present.

They are running around Asia desperate for a partner and whilst they have recently manage to get this finalised it is along way from the premium carrier they wanted.

They have code shares with all sorts of other carriers and have no loyalty or real interest with Oneworld. Can't see how cathay would be happy with the HKG LCC.

And do not forget this is a management that did something that no trade union has ever done. They dumped their passengers around the world mid flight with no help or assistance..... No wonder the ground staff in various airports deserted.

A firm that is managed by incompetent bullies with little integrity and even less business acumen given the LHR experience.

Will not be long till LHR is at just 1 flight via SIN......

Platinum.....APD will be charged at lower rate if there is a break of 24 hours. It is common for finnair for example to have fares based on this ex LHR. As a result APD to Asia can be at the euro level. Even better on KLM over AMS.
So EK and others may be able to undercut the LHR SYD APD rate if the stop is 24 hours.
I still do not believe that APD is a major issue for passengers. For as long as we tolerate file surcharges. 3 x the level of APD and continue to pay such surcharges on redemption bookings then I for one would oppose tooth and nail and move to reduce or eliminate APD. Whilst I enjoy flying I rather like my free health service education for my kids and everything else that we take for granted in the UK.

APD has nothing whatever to do with airline profitability.It does however mean that many people are abandoning stopovers in the UK in favour of transits - which attract no APD - or avoiding the UK altogether, which does have an effect on airline profitability.

.....Whilst I enjoy flying I rather like my free health service education for my kids and everything else that we take for granted in the UK.

Which is now being partially subsidised by foreign businessmen and tourists because of fiscal mismanagement in the UK that has caused structural financial issues? OK I digress....

The APD does however disadvantages airlines such as BA. It also disadvantages QF that has (arguably incorrectly) relied on LHR as its European base.

Whilst I enjoy flying I rather like my free health service education for my kids and everything else that we take for granted in the UK.

Which we get in Australia too, but without an exorbitant APD (which, IIRC, the Chancellor said would be going to environmental projects).

Dave

they are competitive ex UK: economy pricing for a one year ticket in economy class ex LHR to SYD for departures in April is coming in at around AUD1300.

I realise this is about GBP800 - which is quite expensive to what it was several years ago, but compared to the AUD this makes a fantastic fare. Cheaper even than Emirates who was second most expensive at another GBP50 more.

However - if they are undercutting EK ex LHR, when they have a similar (if not slightly better Y product) - do they only have themselves to blame for any losses?

They are not competitive ex UK in a cabin that I am interested in buying ; they are significantly more expensive and have worse restrictions in the premium cabins . I am not interested in buying a 1st or business class ticket which allows no changes , is non refundable and is more expensive... especially with a product which I find of lesser quality

As I highlighted in the post, they are charging GBPP770 more than EK ex London on lowest fare .

Maybe in economy they are better priced

APD has nothing whatever to do with airline profitability. It is just a 1/3 of their own outrageous fuel surcharges which are no longer surcharges as they have been around for so long.
It is surcharges that are driving passengers to those who no longer impose them.

Moreover it is Qantas management incompetence and miss management that is at the root of their financial problems. They have dropped 50% of their LHR services but now have 2 very expensive A380 sitting on the ground at LHR for over 14 hours, that is hardly sweating the assets and demonstrates that QF have no idea what they are doing at present.

They are running around Asia desperate for a partner and whilst they have recently manage to get this finalised it is along way from the premium carrier they wanted.

They have code shares with all sorts of other carriers and have no loyalty or real interest with Oneworld. Can't see how cathay would be happy with the HKG LCC.

And do not forget this is a management that did something that no trade union has ever done. They dumped their passengers around the world mid flight with no help or assistance..... No wonder the ground staff in various airports deserted.

A firm that is managed by incompetent bullies with little integrity and even less business acumen given the LHR experience.

Will not be long till LHR is at just 1 flight via SIN......

oh and by the way they are only one of two investment grade airlines in the world.. so despite all of that rant they must be doing something right and dropping two marginal routes to London may be in fact be sensible

oh and by the way they are only one of two investment grade airlines in the world.. so despite all of that rant they must be doing something right and dropping two marginal routes to London may be in fact be sensibleThe BKK flight I can see as "marginal", the HKG one I can't. The only reason QF29/30 was having problems was because the timings of flights in HKG to/from other Australian cities were not suited to connecting to/from LHR.

I note with interest that QF24 (BKK-SYD) which was showing 330-20 in early June is now reverted to 744 with F class availability. I wonder if QF are having second thoughts about capacity on this route as forward bookings mount? I have booked QF23 (SYD-BKK) which is a 330-20 for late July and already J is almost full.

I note with interest that QF24 (BKK-SYD) which was showing 330-20 in early June is now reverted to 744 with F class availability. I wonder if QF are having second thoughts about capacity on this route as forward bookings mount? I have booked QF23 (SYD-BKK) which is a 330-20 for late July and already J is almost full.

From what I can see, flights revert to A332/333 mix from 10 June, and nothing in the schedules suggest otherwise.

I think the new BKK flights should be better for O+D traffic. Also, flying via BKK provides a VERY quick connection to 9W into BOM (1hr55min outbound; 1hr50min inbound) - perhaps QF should place its code on this flight.

Which we get in Australia too, but without an exorbitant APD (which, IIRC, the Chancellor said would be going to environmental projects).


I don't quite agree that we are talking about the same level of service/user contribution level though. Much of the primary care system in Australia is on a refund-basis - the GP might charge $60 for consultation and you get just under $40 (unless it's gone up recently) back from Medicare, unless you go to a bulk billed place (not so common any more in some areas).

Prescription charges are far higher in Australia than it is in the UK (over double per item). Basically, "co-pay" so to speak in Australia is far higher than it is in the UK. I personally prefer the Australian system because the access to health services is far easier there, e.g. I never have to wait for 3 days when I accidentally burned my throat badly and need to see a GP but don't want to go to A&E, even if I have to pay more for what I receive. In fact I have a private GP in the UK to avoid the NHS waiting time.

BUT going back to the subject of APD, I think it does affect the airlines' profitability. We on FT by and large are quite well-informed bunch and we know what are the fare, tax and fees, and fuel surcharges. However an average member of the the general public does not necessarily know this, and I suspect they only look at the total cost of a ticket. Despite the APD and fuel costs etc I do not think the fares have gone up much in the last 20 years - that represents an effective reduction, a substantial one at that, in fares. I think there is a limit to how much most section of the general population would pay for an economy class ticket to a certain place, resulting in a lower profit margin for airlines over the last 20 years or so (if not a lot more - but I only have personal experience of buying tickets for about the last 22 years and have no data point going further back). APD just adds to the reduction in profit margin.

I, in many ways, suspect that the economy class fares, particularly long haul, have gone too cheap to be sustainable longer-term from the profit point of view.

One point i d be interested in hearing comments on is the effect on the eu pollution tax on Qf s decision to cancel 747 flights via Bkk and Hkg.
I think I read some where that Tg swapped A340-600 flights to 747 on Syd - Bkk flights to allow the less polluting airbuses onto the uk route. Otherwise, the 747 flights to Lhr would have been uneconomic. Perhaps this influenced Qf?
Another example of Qf mistakenly sticking to old 747s and not the 777s that all their competitors use successfully?

Which we get in Australia too, but without an exorbitant APD (which, IIRC, the Chancellor said would be going to environmental projects).

Dave

If you are unfortunate enough to need a trip in an ambulance in Australia (or at least NSW) there is a call out fee of $320 plus mileage. Yes you can get insurance, but you still have to pay the premiums.

An ambulance in the UK comes at no cost at all, without a need for insurance.

As has already been pointed out, a GP appointment also incurs out of pocket expenses.

If you are unfortunate enough to need a trip in an ambulance in Australia (or at least NSW) there is a call out fee of $320 plus mileage. Yes you can get insurance, but you still have to pay the premiums. I pay $30 per annum for ambulance only cover. Nothing to pay.

An ambulance in the UK comes at no cost at all, without a need for insurance. At a cost to the government, so at a cost to the community.

As has already been pointed out, a GP appointment also incurs out of pocket expenses. Every time I see my GP, I pay nothing, she bulk-bills me. Every time I get an INR done, it costs me nothing, they bulk-bill. My last ultra-sound on my leg cost me nothing, they bulk-billed (I saw the slip that I signed, it cost the government just under $A200).

For chronic conditions (and a DVT, which I had, is classified as such) you will find that health providers will bulk-bill, so the government will pay for 100& of the cost, so absolutely no out-of-pocket expenses.

Thrice weekly blood tests, no costs. Rat poison, ok I have to pay for that.

But if you want to see a doctor because you have a headache, sorru, you have to pay for that (a pharmacist is probably a bteer option).

Dave

If you are unfortunate enough to need a trip in an ambulance in Australia (or at least NSW) there is a call out fee of $320 plus mileage. Yes you can get insurance, but you still have to pay the premiums.

An ambulance in the UK comes at no cost at all, without a need for insurance.

As has already been pointed out, a GP appointment also incurs out of pocket expenses.

Dec we were in Paris and my MIL was ill - called the service where the doctor comes to your house/apartment/hotel.....he came, saw the MIL and asked our travel plans. Told him we were heading to London in a few days.

He then said - in that case I'll write you a script as you do not want to go through the hassle of doing it over there..true story.

Sorry to bring the thread back from public healthcare to Qantas....

So we had a forensic examination of a QF airfare above versus EK. How does EK fare (pardon the pun) when something goes tits up?

Part of the equation for me is the service - from end to end, including when things go wrong. Which they inevitably will due to weather, illness, tech issues, lost baggage....

I've been expat in Europe for over a decade, I would concur that QF is always at the expensive end of LHR-SYD (and so is BA, and dont even mention SQ) ....BUT.... when things have gone wrong for me with QF, whether with on board issues or major delays, they have been great at addressing it proactively. Every time. (Ok so I am usually in a premium cabin which might help.)

But dont take my word for it - see the Honolulu diversion thread....

Do I pay QF £700 extra for this ? No - that's why I'm taking AY (codeshare QF) in a couple of weeks from now. Last time I did this, it was lost bags, missed connections, arguing over subsequent flight selection....which I take on the chin because I paid a much cheaper fare.

I've never flown EK premium cabins, or anywhere other than Dubai....how are they with service recovery?