As CO Insider and Wx4caster tipped off in another thread, the awards for Qantas are changing, in which reward travel for travel to Down Under will become significantly more expensive.

While the specifics haven't been unveiled yet (and some have speculated the new awards would be 120k,160k, and 220k respectively, up from the 80k,105k,135k levels they're at now for economy/business/first travel), I'm curious what the dynamics are for these changes.

Qantas dumped US (or vice versa) earlier, which also had similar award offerings to CO's.... and I'm not sure if it was a cost issue or availability issue.

With talk of CO's 787's possibly serving Australia, I wonder how much of a threat Qantas perceives carriers other than AA which it partners with.

With their A380's coming online soon, I hope we'll be able to snag an award or two from their new First Class product before they're either priced prohibitively...or dropped entirely as a CO partner.

I do not know about perceived threats by QF, but I do know that the massive increase in redemption levels represents yet another devaluation of OnePass miles.

Devaluation.

Where is the corresponding increase in earning opportunity?

You're looking at this incorrectly.

High value awards subject to capacity controls are not increasing but the airlines are flooding the markets with miles via selling them to the partners (Chase for CO, AMEX for DL, etc.).

Thus there are not only more miles chasing a finite amount of standard awards, and those that were previously out of reach due to high amounts (QF F @ 135,000) are now in reach. This coupled with increasing LF's throughout the industry will pressure the airlines to 'give' away even fewer seats as they can be sold instead.

As peoples' balances are presumably increasing due to partner distributions, the high mileage thresholds that once served as a roadblock is becoming less effective. For QF I don't think this is really an issue as there was no way to redeem a capacity free reward with them from OP miles but for capacity free rewards we see either the rates increasing (as what's happening on CO) or certain flights becoming ineligible for capacity free redemption (as what's happening on DL).

The airlines must be cautious to match reward inventory expense to revenue received from partner mileage sales or else people will no longer pay a premium to the partners for the ability to accrue miles...and then in turn the airlines will watch their profits on mileage sales erode.

One hopes they have the foresight not to kill the goose laying the golden eggs.

I think a nice solution would be to lower reward amounts, if paid with mileage solely earned from flying. This would directly reward loyalty for flying an airline, without diminishing the value of actually using an airline to obtain miles, rather than a credit-card.

This would require differentiating between CC miles and flown RDMs (adding a layer of complexity to existing systems). Flights paid for with CC points could continue to be redeemed at the now-inflated points levels. Flights paid for with "real" EQMs could be redeemable at the more reasonable levels prevailing a few years back.

Not that this will happen, ever. It's nice to dream, though.

IMO the ratio of flights flown to reward flights earned should stay the same. This means not raising the redemption rates.

J.Edward is right, why not just make the CC card companies pay CO more for the miles? The 1 mile/dollar spent ratio would have to go away, but it would avoid the silliness of a mile not being a mile.

Different methods for achieving the same result (i.e., accurately matching value of miles to the cost of obtaining them). Granted, thinking about it, J.Edward's solution sounds far more practical and efficient.

english please (EP).

Either way, I am still going to be pissed if the QF F award goes to 220. That would be about a 70% increase.

Load Factor

As you note, this will never happen. Airlines make too much money selling the miles.

Regarding the 787, I think that is so far into the future that it doesn't enter the equation yet. The *first* 787 isn't due for a couple of years. It'll take a couple of years past then before flights to Oz can even be considered.

Dont think its in the TERRIBLE decision to remove the 500 miles for co.com booking?


CO is making it hard for me to stay a CO*!!

Right here:

Kenya Airways, one of Africa's top 3 carriers, and the biggest transcon operator.
UX for extra possibilities for transatlantic redemptions
China Southern Airlines, the biggest airline in Asia in terms of fleet size, and 2nd biggest in terms of pax carried, with 9 (!!!) hubs across China. They also fly to Australia, so more Skyteam options for getting there if you have to. (Joining in November)

Can't get much better than this! Having been Elite+ for 3 years, it's great to see that Skyteam has become useful for travelling pretty much everywhere. A S. American carrier is all we need now.

The only problem with CZ is that it is CZ with 777s that put 3-4-3 across in coach. That's before we started on their website. Plus the RDM/EQM earnings on CZ for Onepass members are downright ugly.

Still, it's good to see that things are progressing somewhat. Hopefully CZ will improve its product and we'll see better earnings options in terms of their less-than-full priced tickets.

The whole system is becoming a farce. There are more and more miles chasing fewer and fewer seats.

CO can't easily force outside vendors to pay more for FF miles because OnePass miles compete in a market place with other FF miles.

Frankly, the system begs for consumer protection via regulatory oversight that would mandate award transparency (what game theorists call "perfect information"). Airlines should be required, by law, to reveal the number of seats available for reward redemptions on any given flight so that FF fliers can make informed choices in the marketplace about which program is most competitive. As it stands now, consumers are effectively kept in the dark--"imperfect information" almost invariably impedes consumer decision making and works to the seller's advantage. These regulations should prohibit airlines claiming the availability of certain awards unless there is a minimum percentage of these rewards available on all flights (thus preventing the classic "bait and switch" that is the modus operandi of standard awards today)

These changes would faciliate market responses to airlines that offer too many miles chasing too few seats, and it would limit their ability to devalue miles by offering virtually no rewards. With clear and uniform data we could know if, say, AA offers more rewards than CO and the flying public could make its buying decisions accordingly. These changes would make it more difficult for the airlines to gain advantage by flooding the market with miles.

As it stands now, airlines make lots of tantalizing teasers of free trips and upgrades which are effectively false promises that rest upon a lack of information among consumers.