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Qantas "surge pricing"

Just wanted to mention the “loyalty” of Qantas to its customers.
We are Brisbane residents and were holidaying in Darwin when the recent 3 day lockdown occurred in Darwin. Queensland immediately nominated Darwin a hotspot, but indicated Queenslanders could return home if they did it within about 36 hours. So being concerned that the lockdown could be extended beyond 3 days as has occurred in other states, we decided to fly home. Jumped on Qantas website and noted fares for around $400. Tried to book but website crashed, tried again and wouldn’t accept my credit card, no idea why and no reason for denial. Tried again and finally booked our two seats. Fares went from around $400 each to approx $720 each. Actually the $400 fare is not especially competitive and Qantas usually have cheaper than this. So I have no beef with website being busy, many would have been trying to evacuate Darwin, and no real complaints if Qantas have fares starting around $400 on that day, but one can’t help feeling extorted by the profiteering, exploitation and racketeering of Qantas. With a CEO who likes to tell the government what to do and policies like this surge pricing, they can be last on my list of airlines from here on in, especially when the o/s market opens again. (at our elected governments decision not Joyce’s).

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Thanks for highlighting this issue. I think that Choice might be interested in this @JodiBird @BrendanMays?

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Some counterpoint is it reads like normal profit management. Say it starts with 50% sold. Seats are cheap. As fewer seats are unsold their value (cost) keeps going up. The last seats ask for a premium. It happens with flights all the time. It is based on time utility, eg a product available at the right time costs more than one backordered or next week, hoping that makes sense. I believe American Airlines started the tactic 60 or so years ago and the world followed.

I am not defending it, just explaining it.

It has gone even further in recent years.

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I experienced a similar rip-off back in March when I had to fly from Canberra to Perth for a funeral. On receiving the news I checked out the cost of flights on the Qantas website. The price was hefty but bearable. I then went through the process of getting a G2G pass from the WA Government.
When I had done that I returned to the Qantas website and found that the price had increased by several hundred dollars. It wouldn’t shock me to learn that Qantas has a backdoor into the G2G site.

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Thanks “PhilIT” and Mark, yes normally one doesn’t mind being subject to the normal market place of supply and demand, its just when the supplier knows that your back is to the wall, they have no scruples about exploitation. As to whether Qantas have a link to G2G, I, like Mark would not be surprised, its just software monitoring and then linking it to the cookie they have dropped on your PC. However the good news is that when we return to Darwin for our interrupted holiday, we will not be flying Qantas or Jetstar. Nor will they be our choice for any other travel.

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There are reports that booking sites check cookies on your computer. You get your quote (and a cookie) but if you do not buy, if you return to seek the same itinerary the web site ‘sees’ the cookie and will up the price (or ‘warn’ you there are only 2 seats left at the price, or whatever) to create a sense of urgency; while other times it might only be the pricing algorithm as cheaper fares on their plan get sold so the quote is a different and higher fare.

It is considered good practice to delete the booking site cookies prior to (re)checking fares.

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@kbower @AmyPereira this might be interesting for you.

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All airlines have different seat categories and pricing. It is confusing as all the seats within say economy won’t be sold at the same price. As more and more seats are sold (usually flyers chose the cheapest seat in the class they want), the more expensive the seats become. This website indicates the range of categories within the same seat class. For economy, there can be a range of discounted categories…

  • B = Economy/Coach, but is able to be upgradable to Code M or another type
  • E = Economy/Coach Discounted
  • G = Economy/Coach Discounted
  • H = Economy/Coach Discounted, but usually is able to be upgraded to Business Class
  • K = Economy/Coach Discounted
  • L = Economy/Coach Discounted
  • M = Economy/Coach Discounted, but is able to be upgraded to Business Class
  • N = Economy/Coach Discounted
  • O = Economy/Coach Discounted
  • Q = Economy/Coach Discounted
  • S = Economy/Coach Discounted, but on some airlines it stands for “super comfort” and refers to Business Class
  • T = Economy/Coach Discounted
  • U = Shuttle Service, and there is no seat guaranteed nor reservation needed
  • V = Economy/Coach Discounted
  • W = Economy/Coach Discounted (or Premium, or Award)
  • X = Economy/Coach Discounted Award
  • Y = Economy/Coach

There is also different types of tickets such as flexible etc.

Each of these will have different pricing dependent on what is available.

Years ago…and don’t know if it is still the case…I was told when I enquired why the same seats in the same class are sold at different prices was for a number of reasons. That being cheaper flights are rewarded to those that book early (and allows airlines to better schedule plane sizes on routes)…and those who travel at the last minute (often corporate travellers) pay more. I was also told that airlines make money from the more expensive ticket categories and not from the cheap categories.

It would be great if all tickets in every class was the same price as one could book early or late and get the same seat price as everyone else flying on the same plane…in the same class. But, I would be cautious about wishing for such things as many travellers rely on cheaper ‘early bird’ or ‘special discounted tickets’ to travel…as well as if all seats were the same price, it could remove some of the competition that currently exists (it could move towards fixed prices no matter the carrier). Everyone would also wait until the last minute to book flights making it harder for airlines to manage passenger loads/planes and possibly increase number of low passenger flights.

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Jet fuel, planes and qualified people to keep air travel safe is expensive game. I’m generally amazed at generally how affordable air travel has become. For the benefit that competitive supply and demand brings you sometimes get stuck on the wrong side of that equation.

I think this is risk crossing state borders at the moment, it will possibly be the same with international borders for 1-2 years after opening.

Not sure if travel insurance covers this risk.

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Contrary to our other thread on Food delivery. I see Travel as a service and have no problem with the argument that the price of that service is demand driven.

Consumers booking vacations in advance benefit and late business travellers pay a premium.

There would also be validity in service price varying based on how loaded/booked the plane is as the fuel burn would vary.

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Many of the costs for operating a flight are fixed. Pilots, cabin crew, terminal charges, landing charges, and more.
Forward bookings establish the viability of operating a flight with breakeven number of seats sold.
The rest of the seats are sold on a supply and demand model. More people wanting seats than availability, then price is high. More seats available than takers, then price goes lower, to the point where you can get an hour before takeoff standby seats at greatly reduced prices.

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What you say, also called “yield management” is true. But there is a solution: increase competition, if need be from foreign airlines. After all, why can’t Singapore Airlines flying from SIN to BNE not have a stop in DRW and pick up passengers. Not that it would sell empty seats DRW-BNE to recover cost (ie not look to make a profit), but just by entering the market, QF’s fares will tank.

Case in point: the week before Virgin Blue as it was then began flying SYD-PER, I was considering a holiday in WA, but was appalled to find QF’s prices (published not “surge”) for that sector to be greater than China Eastern’s fare SYD to SHA (Shanghai). I ended up flying to the Middle Kingdom.

The fact that no politician called to temper QF’s monopolistic position at the time is shameful.
Of course, QF and VA would oppose any liberalisation of aviation as a threat to their bottom line. Too bad I say. It’s time politicians acted in the interest of ALL Australian and not just shareholders of QF which continues to charge premium prices for low rent service.

The aviation world operates in a very controlled manner through country agreements. Bilateral treaties. SIA cannot fly domestically in Australia for the same reason QF cannot fly domestically in the US.

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I sometimes fondly (and sometimes less so) remember the days of Ansett and TAA following each other around the country with the likes of Rex getting some regional crumbs and Qantas being only international.

If competition worked in our market we would have some of it. As it is our ‘competition’ at best keeps them more honest than they would otherwise be.

This list is a bit over the top for your argument, but…

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I remember hearing a US aviation expert (in the context about risks of investing in the Australian airline industry) few years back suggesting that the size of the Australian market supports 1 airline, and barely two for most of the domestic carrying capacity. This was also supported by the trend that a third entrant to the market, one of the three fails leaving two (Compass, Tiger etc are examples). With airlines, often more airlines in smaller markets means higher ticket costs, not lower. This is because many routes aren’t operating at full capacity and new entrants make filling planes more difficult…thus pushing up prices to cover relatively constant fixed operating costs.

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Not strictly correct. Some jurisdications such as the US have tossed aside the anti consumer policy where governments seek to protect their flag carrier(s) from competition by closely regulating fares,
entry, and flight frequency.

The US from memory since 1992 has operated under Open Skies where foreign aircraft have unlimited entry rights and determine their own capacities. This has led to higher volumes of seats and lower air fares. Open Skies also allows carriers to fly through a country and onto another, such as SQ flying from SIN to SYD to LAX and carrying Aussies ex SYD.

While Open Skies addresses international travel, there is nothing whatsoever stopping the Feds snapping open the restrictions on foreigners flying within Oz, just as Hawkie did during the pilots’ dispute many moons ago.

Sorry, there is one thing stopping the Feds: QF’s chief megaphone.

As to QF flying domestically in the US, I don’t see a need from a US consumer’s point of view as many fares there are dirt cheap (commensurate with the service provided) and I doubt QF would turn a dollar in that market if it was available to it and it chose to enter it.

Your point may be valid if one was considering establishing more airlines in Oz. But my point is far simpler. On routes foreigners can service, why not let the Australian traveling public choose? Say Malaysian Airlines introduced a SYD-PER-KUL route and sold empty seats for SYD-PER very cheaply, so as to fill them, does anyone think MH would fly empty? The fact that say 2,000 more seats a week were available on that route would apply pressure on QF and VA to lower their prices.

What about Qatar Air that flies CBR-SYD-DOH? Why can’t the fat cats in CBR (or their political masters) fly on those empty seats when visiting SYD?

You mention your fond recollection of Ansett. Me too. A great airline, with IMHO, great advertising https://www.youtube.com/watch?v=xVbduA0QSdY

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The biggest issue is security. Mixing domestic passengers with international passengers on a domestic route will mean that all passengers will need to disembark and get re-security checked for the onward leg. This is a real pain to international passengers and time wasting for flight times. I have experience onroute security checks (refuelling in Auckland on way to South America) and not an enjoyable process.

For last leg domestic like you have used as an example, this also potential issues for quarantine, immigration etc. This would need to be done in Perth…with security screening before embarking on next leg. Possibly 1-2+ extra hours for a international traveller. Won’t happen as the airline will lose passengers.

Open skies is a set of rights agreed by many countries to cover international air travel, but I am not aware of many that allow foreign airlines to operate carrying domestic passengers within their country port to port.

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