Back in late May 2018 Qatar Airways devalued their frequent flyer points by around 40% - so overnight points that you could have redeemed to distant destinations could only get you to mid haul destinations.
When the Qatar Airways annual accounts were published in August 2018 - for the year ending 31st March 2018 - there was no mention of any post balance sheet event or upcoming windfall gain.
The only significant change was the hiding of revenue generated from the redemption of frequent flyer points. In the 2017 financial statements there had been a separate "Frequent Flyer programme" line under "Other Operating Income" - but in the 2018 financial statements this had been removed, and the previous year figures restated.
However the "Unredeemed Frequent Flyer Liabilities" line did survive - so we were able to see that it increased 18% from the 514.5m QAR in 2017 to 608.9m QAR in 2018. This increase was significantly higher than the headline Scheduled Passenger Services revenue that went up by less than 2%.
With the recent release of the 2019 accounts, we finally got to see how much of a windfall Qatar Airways made from the devaluation.
This year the headline Scheduled Passenger Services revenue increased by over 14%, with a shift to longer flights following the blockade by other Middle Eastern countries - total passenger numbers increased by just 1.1%
With an increase in revenue, if the devaluation hadn't occurred, I would have expected the "Unredeemed Frequent Flyer Liabilities" to increase by something like 20% - to a total close to 731m QAR. In fact the liability dropped to 462.2m QAR - which is almost 40% below would have been expected. And chimes with the overnight reduction back in May 2018.
So whilst it was Qatar Airway's overall loss that made all the headlines in the news over the past few days - the loss would have been worse by about 58m gbp if they hadn't raided their frequent flyer points programme !
When the Qatar Airways annual accounts were published in August 2018 - for the year ending 31st March 2018 - there was no mention of any post balance sheet event or upcoming windfall gain.
The only significant change was the hiding of revenue generated from the redemption of frequent flyer points. In the 2017 financial statements there had been a separate "Frequent Flyer programme" line under "Other Operating Income" - but in the 2018 financial statements this had been removed, and the previous year figures restated.
However the "Unredeemed Frequent Flyer Liabilities" line did survive - so we were able to see that it increased 18% from the 514.5m QAR in 2017 to 608.9m QAR in 2018. This increase was significantly higher than the headline Scheduled Passenger Services revenue that went up by less than 2%.
With the recent release of the 2019 accounts, we finally got to see how much of a windfall Qatar Airways made from the devaluation.
This year the headline Scheduled Passenger Services revenue increased by over 14%, with a shift to longer flights following the blockade by other Middle Eastern countries - total passenger numbers increased by just 1.1%
With an increase in revenue, if the devaluation hadn't occurred, I would have expected the "Unredeemed Frequent Flyer Liabilities" to increase by something like 20% - to a total close to 731m QAR. In fact the liability dropped to 462.2m QAR - which is almost 40% below would have been expected. And chimes with the overnight reduction back in May 2018.
So whilst it was Qatar Airway's overall loss that made all the headlines in the news over the past few days - the loss would have been worse by about 58m gbp if they hadn't raided their frequent flyer points programme !
