Qantas ‘Glitch’ Explained.
Not as much ‘Glitch’ as bad timing.
While many are calling this a glitch, really it should just be called an oversight.
The price was changed intentionally, just done in a silly manner.
Many airlines charge a “fuel surcharge” marked on your ticket as YQ or YR.
Qantas charges a whopping $680USD YQ between the USA and Australia.
One main reason airlines do this, is to cut the commissions they pay to agents, as they would pay commision only on the base fare. So if a flight to Australia from LAX to SYD was $1045, Qantas would not pay commision on the YQ ($680) nor the taxes ($165). Meaning they paid commision on only $200 of that ticket.
Quite a steal for the airlines. The other reason was for deceptive practices of offering flights for $300 return, and then charging you $680 YQ + Tax when you came to book.
The second trick became outlawed a few years back, when airlines in a few countries were forced to show the entire ticket price when advertising and flight searching.
Notice underlined in black is the YQ ‘Fuel surcharge’. Even if the base fare was $150 each way instead of $365 as it was on the day of the glitch – this ticket would be selling for $1131.30USD or $1491.00AUD.
With fuel prices falling, governments pressed the airlines to cut the unrealistic fuel surcharges down. Qantas lowered it to $570 departing Australia, and upped the base fares in return, so passengers not only didn’t save, but generally flights last year became more expensive, as airlines posted record profits.
Recently Virgin Australia, amongst a select few trailblazers, finally came clean and eliminated their sly fuel surcharges. This prompted a need for Qantas to respond, by matching their move within a few months of the Virgin announcement, so as not to receive a bad image in flyers’ minds.
So, Qantas removes the fuel surcharge and then – The “Glitch”.
When Qantas removed the fuel surcharge, they made a silly mistake in procedure.
Instead of FIRST raising the base price from $300 to $870, to account for the $570 YQ removal, they first removed the $570 YQ, leaving the fares with a low $293.00 base fare, and $150.90 in taxes, creating a marvelous $443.90USD return flight SYD-LAX.
Only AFTER a few hours did they raise the base fares up high, to match the removed YQ fuel surcharge. The price now was $863 ($293base+$570YQ) + taxes – a little over $150.90 = $1013.90.
This means that the “structure” of the tickets once the YQ was removed, was exactly what Qantas wanted to make it.
A base fare + tax, and no YQ surcharge.
The exact same fare structure they are selling post ‘glitch’. Qantas is in no position to claim this as a mistake fare, because the ticket had a $300 base fare.
About that fuel surcharge? Qantas didn’t seem to think lower oil prices should equal lower fuel surcharges, when oil prices went down.
The entire fuel surcharge was a sly move by the airlines in the first place. This was clearly shown when, as oil dropped, YQ remained the same.
Why Qantas had to honor it.
Qantas couldn’t claim they accidentally removed the YQ, because this announcement was made a while back. We all knew it was intentional. They also couldn’t claim the base fare was a mistake, because that was the same base fare filed for months. It was clear the tickets were fine. No typos. They may have wanted to make more money – but I’m sure that the publicity from this event, which has been covered by almost every travel blog/website out there, will outweigh the fictitious YQ surcharge loss, anyways.
As for why a few hours later the price almost tripled.
That night Qantas filed many brand new fares and the old ones expired or were deleted. Even if they didn’t remove the YQ, the price was set for many dates to go up, due to a fare increase that night.
Here is how the Qantas flights are broken down now – notice there are no fuel surcharges (YQ).
For the future:
The removal of fuel surcharges, hopefully, is being continued on to Qantas awards, where taxes would sometimes cost the price of half a ticket on a redemption – a sly trick many airlines employ, most notoriously British airways. Hopefully as Qantas’ one world partner, they and others are taking note and will follow suit.
The airline industry is stuck in old and deceptive practices, towards consumers and agents. The sooner they learn from the likes of amazon.com, that creating a customer first culture will sky rocket their business and profits, the better – for everyone.
Meanwhile, I’m looking forward to my mother coming to visit us in L.A. in October on the good ol’ Qantas 747 from Sydney for just $443.90.
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