Airlines are increasingly looking for ways to engage with loyalty program members in non-traditional ways. This week Qantas announced their first ever “points plane,” where they’d fly an A380 from Melbourne to Tokyo on October 21, 2019, and would exclusively make seats available using points.
While this seems like a great way to engage people in general, it’s worth noting that they had an ulterior motive. The whole reason for this flight is that Qantas has a charter customer for the Tokyo to Melbourne flight shortly thereafter, so chances are that they would have otherwise flown the plane empty, or if they had sold it, wouldn’t have been able to maximize the potential of the flight.
Chances are that the charter customer is incurring the cost for both directions here.
My prediction for the Qantas “points plane”
Well, seats for the Qantas “points plane” went on sale Thursday morning (7AM AEST), and even though I had no plans to take this flight, I was curious to see how quickly seats would sell. I predicted that seats in first class would sell out within seconds, while seats in economy would be readily available.
Some readers disagreed with me, and raised good points. For example, one reader said the following (much of which I agree with):
Not sure I agree with you that the premium seats will sell out “in seconds”. Even if a Qantas loyalty member is eager to experience business or first class, why would they prefer this flight in particular:
- They would have no flexibility around travel dates and destination
- They would need to find return flight as well, which may not be available for redemption and expensive if booked as a cash one-way ticket
- They don’t get any discount versus the miles needed for a standard “classic award”
- They would have to fork out to cover the substantial carrier charges
How quickly did Qantas’ “points plane” sell out?
So, how quickly did seats sell on Qantas’ points plane?
- First class sold out basically instantly
- Business class sold out within minutes
- Premium economy sold out within a day
- Economy continues to be readily available
Not that a seatmap is ever a fully accurate indicator of availability, though it often does give you a sense of how full a flight is, especially given that all passengers can assign seats for free, given that there are no group bookings, and given that those engaged in the loyalty program are also more likely to select seats.
Here’s the economy seatmap as of now:
Doing some rough math
Like I said, I suspect Qantas’ charter customer from Tokyo to Australia is more or less covering the cost of the roundtrip flight (since positioning expenses are usually factored into charters).
I still think it’s interesting to look at how many Qantas points and how much in taxes, fees, and “carrier imposed surcharges” Qantas is potentially getting from a flight booked entirely with points:
- 14 first class seats are bookable for 108,000 Qantas points plus 272AUD in taxes, fees, and carrier imposed surcharges
- 64 business class seats are bookable for 72,000 Qantas points plus 272AUD in taxes, fees, and carrier imposed surcharges
- 35 premium economy seats are bookable for 54,000 Qantas points plus 257AUD in taxes, fees, and carrier imposed surcharges
- 371 economy seats are bookable for 35,000 Qantas points plus 182AUD in taxes, fees, and carrier imposed surcharges
That means if the flight were to sell out, Qantas would be looking at collecting:
- 20,995,000 Qantas points
- 97,733AUD in taxes, fees, and carrier imposed surcharges
Let’s assume that each Qantas point is worth about a penny (in USD), which is definitely on the high side. If so, we’d be talking about ~210K USD in points, plus ~67K USD in taxes, fees, and carrier imposed surcharges, for a total of ~277K USD in “value” from this flight.
Again, I think that’s way too aggressive — I doubt all economy seats will sell out, and I also doubt they’re accounting for the value of their points that highly. But just doing some general rough math here is interesting, in my opinion.
Are you surprised by the way in which the “points plane” has been booked?
@ChrisC,
MotoGP not Formula1 (Two wheels good, four wheels bad :)). The Japanese GP is on Oct 20 about 120kms from Narita, and the Australian GP is on Oct 27 at Phillip Island, about 160kms from Tullamarine Airport.
Given the next MotoGP race is in Malaysia, next door to KLIA, I wonder who picked up the MEL-KUL charter around Oct 28?
A points plane flight direct from Sydney to London would be interesting, similar to Delta (so a bidding process), would have to have really reduced capacity but if they could make it work it would be really interesting.
I never understood economy redemptions using QF points, they almost always work out worse off than a straight revenue booking in terms of value - not to mention the availability
@Lucky - I forgot about it and logged on to look a couple of hours after it went on sale, and there were business seats still available.
97,733AUD in taxes, fees, and carrier imposed surcharges
They may have collected that much but how much of it is actually QFs and not merely being passed on to the airports and the Australian and Japanese Governments in their fees and real taxes?
And as for people suggesting the charters are related to events please just look up dates before making suggestions!
They can't be related to the rugby world cup for the simple reason...
97,733AUD in taxes, fees, and carrier imposed surcharges
They may have collected that much but how much of it is actually QFs and not merely being passed on to the airports and the Australian and Japanese Governments in their fees and real taxes?
And as for people suggesting the charters are related to events please just look up dates before making suggestions!
They can't be related to the rugby world cup for the simple reason Australia's first game is on the 21st September and the flight is on the 21st October. And the return (on 26th October) is before the date of the final (2nd November).
And it's not related just to the knock out stages because the dates for that are 19th to the 27th and if Australia made it through they would play their quarter final on the 19th or 20th and semi on either 26th/27th
Can't be the GP either because the dates for that are also before these flights - the Japanese F1 race is 11th - 13th October. The Australian F1 was in March
put it into perspective, an AMEX QF card would get you 100K (sometimes more) bonus QF points, enough to cover a F seat in this case. In Australia, it is very easy to accumulate Qantas points. With the right mind of spending pattern and a few credit card bonuses each year, one can get 200 to 300k QF points each year easily.
While on the face value, QF points are just like the Deltapeso...
put it into perspective, an AMEX QF card would get you 100K (sometimes more) bonus QF points, enough to cover a F seat in this case. In Australia, it is very easy to accumulate Qantas points. With the right mind of spending pattern and a few credit card bonuses each year, one can get 200 to 300k QF points each year easily.
While on the face value, QF points are just like the Deltapeso with the added surcharges, it actually very easy to use: functional website, with a LOT of partners, particularly outside of the OW alliance (for example, you can get MU for China, CI for Taiwan and AS for US).
With the recent Aussie AMEX MR devaulation, QF points become that much better value locally.
Is ~100k points for F to Japan one way a good deal on QANTAS?
Given there is no “points plane” on the return I would bet redemptions would be largely unavailable and paying fares very high on scheduled flights returning with the several days following this flight.
Smart move by the airline, but unless this represented a significant discount or incentive over trying to book redemptions normally, it’s hard to comprehend the rush.
@AussieBen there is another QantasPoints only flight planned to SFO. I received the email yesterday from QFF.
Ha, it was me who wrote that comment. Clearly I was wrong!
I totally underestimated how engaged Australians are with their points, and the amount of PR that went into this.
@Dennis I don’t know why...most charter aircraft try to find something for the outbound trip. You get quoted a price to get from point A to point B...if the owner of the plane decides to sell their seats to get to you at point A what does that have to do with you. Let’s say you get limo to the airport. Does it bother you that someone may have paid to get a ride from the airport to your neighborhood prior to being picked up?
I'd be pretty pissed if I was the charter customer and paid for the entire cost.
Your first sentence hit the nail right on the head. Despite continued devaluations, loyalty programs never stop trying to find cheap (for them) ways to get customers to use up their currencies. The alternative would be to provide better overall value, which is a big no-no. This particular example is a super rare win/win scenario, though, so props to Qantas for creative thinking here.
Hahahaha. A post of told you so to those who doubted Lucky! Oh the shade! ;)
@AussieBen
Perth London points flight will never happen, unless there is another charter. Premium cabins are sooooo expensive and so rare to redeem Qantas will not willingly give up the income.
On the other hand economy redemptions on these flights are not so rare on my searches. But who wants to spend 18 hours in an economy cabin?
Essentially this is a cheap PR exercise. It looks like they are being generous when they are not. Good point about the carrier imposed charges though.
My take here: https://www.2paxfly.com/2019/05/18/qantas-points-plan-flights-how-many-points-will-they-burn/
Now, if I were a scheming Qantas executive I'd cut the budget for all catering on this specific flight. No need to spend money satisfying customers in a points only flight.
Lucky, not surprised that this has sold well in premium cabins. Qantas has long been stingy on releasing availability at the pointy end and Japan is an enormous market for Australian tourists. I think foreigners struggle to understand the Australian mentality:
1. We love our points. Almost every Australian accrues airline points, most being with Qantas
2. We love to travel. And nowadays you haven't had a holiday unless it's overseas. That's the...
Lucky, not surprised that this has sold well in premium cabins. Qantas has long been stingy on releasing availability at the pointy end and Japan is an enormous market for Australian tourists. I think foreigners struggle to understand the Australian mentality:
1. We love our points. Almost every Australian accrues airline points, most being with Qantas
2. We love to travel. And nowadays you haven't had a holiday unless it's overseas. That's the great modern Australian tradition.
3. We love to give things a try. The points sale was unprecedented and was spirited majorly in the media. It was characterised as a bargain, yet a further love.
4. We are aspirational. Given how easy it is to accrue points through daily spend (how most Aussies gain a points balance), it's a no brainer to book premium seats than cheaper seats. I suspect you will find more than a few regular economy denizens in the premium cabins on that flight.
This was a clever decision by Qantas. They've already said they will look at doing this more in the future. Don't be surprised if we see an all points flight on the 787 service from Perth to London in the near future, especially as it ranks as the most favourable flight on its network by customer satisfaction ratings. It has high loads on a regular basis and the next gen product is considered a good use of points. Given how hard it is to snag redemption seats on this route, I have no doubt a similar sale would be enormously successful.
I haven’t looked into it and I’m not an accountant but wouldn’t airlines have to report outstanding points balances as a liability on their balance sheet? I think they definitely would but I’m not sure if they have to publish their logic on how they value those points.
@ Josh -- Yep, airlines absolutely do associate liability with their outstanding points, though the way that airlines account for those points is vastly different. So beyond the accounting exercise, that's why I like to take a middle ground between the "fair" value of the points, and the accounting value of the points, which I imagine is quite a bit lower.
Any idea who charters an ad a380?
@ Troy -- On the previous post, some readers pointed out that the Rugby World Cup is going on in Tokyo on October 20, and Qantas is a sponsor of the Wallabies. Others suggested that MotoGP is in Tokyo shortly before this, and is in Australia shortly after this. So I imagine the charter involves one of those two events.
extremely delayed....
@ Kyall -- Sorry, what is? Are you saying my post is late? If so, I intentionally waited a couple of days because I wanted to see how the economy seat sales were going. Not much has changed since bookings opened, which is why I'm posting about this now.