Monday, October 10, 2005

In-Frequent Flyers Programs by the numbers

We all know it is damn near impossible to find an available award seat on QF, BA or CX for any most routes that people want (to Europe, USA, etc). Why else would it have this page show it is impossible to find any flights to these locations (Awards Available). Also, using I have seen no inventory for as far as I could go (U0 is a familar code on that site let me assure you).

I thought I would sit down and do the numbers from information available on the Qantas web site to see if it makes sense. Here is a quick summary of what I found:

* Just over 3 Million Seats awarded in 2004 (Awards Given)

* and they carried 27Million (Traffic Stats)

So, a little over 11% of seats are award seats (not sure what % of revenue is attributed towards FF program as it is not in the report).

It is possible to earn points every 1.6km (Earning Points)

Total revenue km is 76Million (traffic stats report) and thus about 47Million points could be issued. We know that they are not all issues but that is a staggering number. It also does not factor in the points given out with credit cards, car rentals, hotels, etc (Partners).

So, looking at a middle point zone 6 flight = 36,000 points (Points Table), this works out to be a possible 4.7Million zone 6 economy flights. So, it seems clear that they are issuing more points than they are giving out - if they published the frequent flyer points as a liability on the annual report we would know for sure but I could not find it.

An alternative way to look at it, is how long does it take to accrue a zone 6 economy ticket. Given that the ratio of award to revenue flights is 3:27, it seems that it should take you about 9 flights to get one. However, it only takes you about 7 zone 6 tickets to earn one free flight. So the odds are against you from the start and that does not factor in any bonus points flyers with status get (Up to twice as much).

To me, this does not makes sense in any way when you do the maths - the system is fundamentally flawed as they are trying to pay back a 14% bonus program at 11%.

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