Qantas offers pay delay……….only on big fares!

In a Sydney Morning Herald article Clive Dorman says that there’s a great new deal on downtown: if you buy a dishwasher or a fridge or a home theatre in cash six weeks in advance, you will get it for what it’s actually worth.

The bad news is that if you want it today, you will pay three times the going rate.

Imagine if white goods and electronics were sold the same way airline tickets are.

There’d be a recession in consumer spending. We’d be scouring the internet to see if it was cheaper to buy direct from the manufacturer overseas.

In the past decade, a ballooning number of national chains have worked out ways for consumers to pay for household goods years in arrears, just to get the stuff out the door.

The airlines, on the other hand, are swimming in oceans of “free” money since all their customers, except for corporations with contract accounts, pay in advance for travel – often months in advance.

In the internet era, buying travel online is the cheapest option but, unless you purchase at least a month before the time you travel, the price starts going up.

No other industry on earth enjoys this luxury. And, because paying in advance to get the best fare has always been just how the airlines do it, consumers seem to accept it.

Qantas has decided to go first among the airlines in seeing whether it can gain a competitive advantage among consumers by easing the burden of having to pay hefty air fares in advance.

It has introduced a Buy Now Pay Later option for fares booked on the web for the biggest purchases people will make – on international travel.

But it’s no free-for-all. It doesn’t apply to domestic discount tickets (business class and full economy purchases only) or for its cheapest Red E-Deals across the Tasman.

It may not even apply to some international discounted tickets. Qantas says the availability of Buy Now Pay Later will depend on the fare type and time until departure.

Nevertheless, after a brief road test this week, it appears the system will be most useful for people booking international travel a long way in advance.

This week, I made a dummy booking for travel from Melbourne to Los Angeles two months out (forward travel in October, return in November). This is the low season and the system threw up Qantas’ best fare of $2200 return (ouch! It used to be $1400) available in both directions on the nonstop service. (I deliberately chose a Tuesday for travel in both directions – at weekends, the fare was just under $3000 return.)

Yes, Buy Now Pay Later was available.  I simply had to pay a $25 holding fee to secure the booking, refundable at the time of full purchase.

Then, the system informed me I would have to pay in full just 24 hours later – two months in advance, in other words.

So Qantas isn’t giving much away, since, to secure a best fare, you usually have to book six weeks to two months out anyway.

However, it will be useful for, say, a family of four planning in advance and having to fork out up to $10,000 for a trip to the US or Europe. If you book six months out, the system seems to indicate you’ll get at least four months’ respite before you have to part with the big dollars.

There’s no word yet from Qantas’ competitors about whether they are looking at such a system, or indeed from Qantas’ low-cost subsidiary Jetstar.

Report by The Mole from the Sydney Morning Herald