Qantas Frequent Flyer Program Changes

Filed Under: Qantas

Qantas Frequent Flyer has just announced some major changes, which program executives describe as “the biggest overhaul to the airline’s loyalty program in its 32 year history.” If you’re one of the nearly 13 million members of Qantas Frequent Flyer, you may find these interesting.

These changes aren’t what I was expecting, both for better and worse. I’d also argue that these changes are actually fairly minor, all things considered.

Qantas Frequent Flyer isn’t very rewarding

Let me note that on the international stage, Qantas Frequent Flyer isn’t a good loyalty program at all. In other words, sometimes there are arbitrage opportunities by using a foreign frequent flyer program, though there aren’t many such opportunities with Qantas.

Why is Qantas Frequent Flyer not great?

  • They have outrageously high “carrier imposed surcharges” on redemptions
  • Their award redemption rates are steep
  • They are extremely stingy with premium cabin award seats, and that’s really the sweet spot for redemptions; economy redemptions often don’t get you good value due to the high surcharges

Qantas is very stingy with making award seats available

That being said, I also recognize that Australians don’t have many choices, especially for those looking to earn points through non-flying means. So it’s understandable that many Australians are heavily invested in the program, even if it’s not great.

What everyone was expecting the changes to be

The trend in the industry lately has been that programs have shifted towards being revenue based. I think it’s safe to say that most people were expecting that this is the model Qantas Frequent Flyer would move towards.

I’d argue that might have actually not been bad for Qantas Frequent Flyer, given how weak the program is:

  • Qantas releases so little premium cabin award space that at least having access to premium seats at a higher cost is better than nothing
  • Qantas’ points earning rates for travel on Qantas are quite low, especially on discounted tickets; awarding points based on spending might not have made earnings rates much worse

What’s changing about Qantas Frequent Flyer

Qantas is focused on marketing how these changes allow members to “pay significantly less fees for international reward flights, have access to more seats and enjoy more rewards for earning points on the ground.”

The airline claims that this is a $25 million investment, and they justify that math as follows:

The $25 million investment is comprised of making more seats available for frequent flyers as well as the reduction in carrier charges. Increased engagement in the program is expected to offset this within the first year.

I appreciate the concept of what they’re saying, that investing in a program can have a positive return. It’s a novel concept, because I think most programs try to cut engagement and benefits to increase margins. So while I appreciate Qantas’ sentiment, I still question the reality of that statement.

Qantas describes the following changes happening over the next 12 months:

  • Adding more than 1 million extra reward seats available annually on Qantas and new partner airlines
  • Slashing carrier charges – the additional costs associated with flights booked with Points – by up to 50 per cent on international bookings, saving members on average $200 per return journey
  • Changing the points required for reward seats on domestic and international flights including an up to 10 per cent reduction in the number of points required for international economy Classic Reward seats
  • Increasing the points required for upgrades and Classic Reward seats in premium cabins to better reflect the value of this premium experience
  • Creating a new tiered Points Club program to better reward members who earn most of their points through on-the-ground transactions
  • Introducing Lifetime Platinum status, the ultimate recognition for the airline’s most loyal flyers

Here’s a breakdown of those changes:

Qantas promises more award seats

Qantas promises members access to more than a million extra reward seats annually on Qantas and a growing list of partner airlines. Qantas says that members will enjoy up to a 30% increase in their highest demand premium cabin reward seats over the next 12 months.

Maybe it’s just me, but promising “up to” anything is worth nothing to me. I at least appreciate what British Airways did when they last overhauled their program, as they promised two first or business class award seats on every single flight when the schedule opened.

Could we see Qantas make more first class awards available?

Qantas is notoriously stingy with award seats, so I’ll take a promise of “up to” 30% more award seats with a grain of salt.

The airline has also announced new frequent flyer agreements with Air New Zealand, China Airlines, Bangkok Airways, and Air France-KLM.

Qantas’ new “Points Club”

This is intriguing. Qantas Frequent Flyer will specifically recognize members who earn lots of points through non-flying transactions.

The initiative will include two tiers with entry gained based on passing annual points-earning criteria.

This will launch later in 2019. Qantas says the entry level tier will be unlocked with earning 150,000 points in a year, and promises things like “flight and travel benefits for non-flying members, including lounge access and bonus status credits.”

We’ll have to wait to learn the full details of this, though it sounds like it could be interesting, and I’m surprised other airlines haven’t adopted similar programs.

Qantas is changing points requirements

As part of these changes, Qantas Frequent Flyer is:

  • Decreasing points requirements for international economy awards by up to 10%
  • Increasing points requirements for domestic and international premium cabins by up to 15%; they say these rates are changing for the first time in almost 15 years

The new decreased pricing takes effect immediately, while the increased pricing takes effect on September 18, 2019. I appreciate that they’re immediately letting members take advantage of lower pricing, but are providing notice of the negative changes.

For some context, here are their old redemption rates for travel on Qantas:

Then here are their new redemption rates:

So the changes are significant but could be worse, and the negative changes are largely offset by the below.

Qantas 787

Qantas is lowering carrier imposed fees

Qantas is slashing carrier imposed fees by up to 50% on international redemption bookings. They say that members on average will save $200 per return journey.

For economy, these surcharges will be reduced as of today, while for premium cabins they’ll be reduced as of September 18, 2019.

Here’s an example Qantas gives of the changes:

Once again, I’m not putting too much weight into this. Just wait for fuel prices to increase again, and I’m sure we’ll see them increase carrier imposed surcharges.

Carrier imposed surcharges on Qantas redemptions should decrease

Qantas introduces lifetime Platinum

For the first time ever, Qantas will introduce lifetime Platinum status. This can be reached by acquiring 75,000 status credits. Ordinarily you need 1,400 credits to earn Platinum status, and 1,200 credits to maintain Platinum status. So you’d need to requalify for Platinum status for about 62 years to earn lifetime Platinum status. LOL!

I guess it’s better to have the opportunity to earn it than not, even if the requirements are extreme.

Qantas lifetime Platinum comes with oneworld Emerald status

Bottom line

The changes to Qantas Frequent Flyer could have been a lot worse.

There are some positive aspects to these changes, like rewarding people further for earning points through non-flying means.

Then there are some things that are positive in theory, like increased award redemptions and lower fees. But these changes are marketed the form of “up to” a 30% increase, which isn’t exactly a guarantee. In theory members of other programs could also benefit from Qantas’ increased award availability, should it happen.

Then when it comes to redemption rates the sweet spot has long been premium cabin redemptions. The cost of those redemptions go up by up to 15%, though in turn the fees are going down.

So on balance I’d say these changes are mildly negative, though I give Qantas credit for at least being thoughtful about the changes — both in terms of mixing positive and negative new times, and also the timing with which they’re implementing this.

What do you make of the changes to Qantas Frequent Flyer?

Comments
  1. Do you know when the changes for required miles for First Class partners (Emirates) will go into effect?

  2. Who in their sane mind would use their program? Even as an Australian, may be worth more using the AA program than this (and no EQD requirement for them)

  3. Lucky – the BA guarantee promises to release at least 2x Club World and 4x Economy seats for Avios redemption on every flight at T-355.

  4. Is actually quite a good program to use if you’re able to get sign up bonuses on Australian credit cards. The bonuses can often be around 100,000 points with only a minimum spend of 4000 AUD. It’s quite easy to rack up a large amount of points quite quickly.

  5. Doesn’t Delta also have a joint venture with China Eastern? I’ll admit between ICN and PVG, I’d much rather transit through ICN.

  6. Disregard above post (it was for your other post). As for QF, I agree it would be great if QF increases the amount of awards available in their premium cabins (even if they cost a lot more miles/points.)

  7. So let’s talk about what’s important. In light of award costs and availability, what’s the best way to travel US to Australia and back in a premium cabin?

  8. Mjolnir has a good suggestion. I’m trying to get two 1st Class Qantas DFW-SYD and wondering do I transfer points to QANTAS or not.

  9. @Tom because the only way to earn AA points in Australia as far as I’m aware, is via flights. If you live in Australia, it’s very easy to earn points with Qantas. From supermarket shopping at Woolworths to insurance etc etc. I even have an app on my phone that I earn Qantas points by the amount of walking I do.

    @Ray James now writes for TPG & their new U.K. site.

  10. Qantas Frequent Flyer was already the worlds worst loyalty program and now it’s even worse. Example: the J class seat from SYD to PER that would cost you 20,000 miles on the AA program has gone up from an already-colossal 36,000 Qantas miles to 41,500. That’s more than double the miles of AA for the exact same seat (and AA’s surcharge is less too).
    Meanwhile Qantas’ economy redemptions are NOT reduced for any domestic sectors, it’s only the longhaul economy awards that are slightly cheaper in miles but they’re hopeless, you’re still paying the fare in surcharges even at the new rate.
    And as for the “up to 30% extra award seats” as you say that’s worthless too.

    You should change the headline to “Yet another devaluation at QFF”

  11. Lucky, I would love to write a guest post on why qantas frequent flier is great for Aussies and sucks for everyone else. Churning the right credit cards, applying for a mortgage, getting health insurance and buying a case of wine every month along with a few other things could net you 500,000 to a Million points in a year without setting foot on an aeroplane.

    All in all these changes aren’t terrible. I’m interested in the status credit earning opportunities with the points club. Virgin Australia already allows you to earn status credits at coles supermarkets. It won’t get you status on spend alone but it can help.

  12. Comparing 1 mile between AA and QF is not a fair comparison. If it’s easy to earn points then having a higher points award chart does not make it a terrible program.

    Every time you write a qantas post a lot of the misunderstandings around their positioning and their value proposition shows.

  13. This post is focused on changes to Qantas filights only. Qantas has different award tables for different partners. Those tables are changing too. This should have been at least mentioned here.

  14. @Harry Hv – First, you’re not comparing apples with apples. To make an accurate comparison, you need to consider the cost of earning 20k on AA v 41.5k on QF. By way of an example, Hyatt requires 30k for its top properties but Hilton requires 100k. Hilton is not, on the face of it, 3.3 times more expensive than Hyatt. Second, domestic redemptions in Y are down. A SYD-PER, for example, has gone from 18k to 14.4k.

  15. Have to agree with some of the posts above re: Qantas being a decent enough programme for Australians. It’s so easy to earn points that as a Brit, I far preferred it to BAEC. They also might be stingy on their own availability but you can usually redeem on partners (eg Japan Airlines, BA)

  16. I am Platinum and Chairman’s Lounge member and get upgrades to Business and First all the time so I disagree with your comments about the loyalty program.
    If you want to fly in Australia and connect with the world then we get great access to reward seats on every One world airline. When you request an upgrade then being top tier it always comes through … so message here is only stay in the oneworld network using your QF membership and work the points. Even if you have to go to the US then access via Dallas and Chicago alleviates the need to go anywhere near LAX.

    Also remember we only have 25 million population so nearly 50% of us are members.

  17. Will the change impact the number of points required for partner airlines’ premium cabins?

  18. The lifetime platinum status requirement is hilarious. I wonder how much life is left in the average lifetime platinum member.

  19. @Tim

    Whilst I agree with most of what you say I can’t agree with this.

    “Chicago alleviates the need to go anywhere near LAX.”

    Arriving internationally at Chicago means arriving at terminal 5 which is miserable from an immigration perspective, there’s enough regular traffic from all over Mexico that the immigration hall is always busy. Then you have to schlep over to the domestic terminals and I believe the train is currently out of service.

  20. @Tim
    Absolute nonsense, at least from the perspective of one who is not a member of Chairman’s Lounge ( ie 99.99999% of QFFFP): award seating on QF in premium classes is abysmal ( unless it’s a flight to LAX booked 11 months in advance). EG, there is not one single , solitary seat from Bangkok to Sydney in the next 12 months, as Qantas plays the pathetic game of trying to push customers onto Jetstar via Melbourne; it is virtually impossible to find AA seats ( and absolutely nothing on any routs flown, however indirectly, by BA…meaning crazy schedules and preposterous fees/charges).
    The award flight search function is a joke: search Sydney to SAN Francisco for J , and the return will show some availability, but on closer scrutiny it’s usually something like SYD- MEL in J, MEL-SFO in Y ( that’s how contemptuous Qantas is of its passengers). Deceitful, disingenuous nonsense and sleazy to boot.
    While things might be great from your perspective, they are not for the more typical member, even PLTs. One shudders to think just how abysmal things are for those with lesser status.
    These changes are trivial: the promise of chicken feed improvements, outweighed by punitive increases elsewhere. The LT Platinum initiative is nothing more than an insult to members.

  21. While non-Aussies must look at the QF programme with horror, we’re pretty much trapped. Tim’s point is fair in that at least with status you’ve a much better chance of J/F awards (earlier availability released and a knowledgeable and helpful call centre). Yes AA award levels are lower and with enviable “taxes/surcharges/fees, but they may as well be hunting unicorns when it comes to actually finding J awards on QF metal. These recent QF changes increase points required with a lowering of some costs – to pretty much come out where you started if you ask me.

  22. If you are now borderline on having enough miles to get an award just buy a case of wine with the savings on the fees, get the points and enjoy the wine.

  23. Current best offer is 15000 points at 2.4 Aussie cents per point (1.6 US Cents) with 6 bottles of some rather banging Margret River Cab Sav Merlot across a range of vintages thrown into the pot. I’ve no idea what Lucky’s valuation of of Qantas points is but I’ll definitely be buying speculatively at that price.

  24. The big increase in award seats, while a headline grabber, is a bit of a non event. The increase will come from flogging more Y seats on less popular QF flights at quiet times of the year, and some stock from the new partners to be added, but it’s uncertain how generous they will be. For instance, I understand that Air New Zealand, who are incredibly stingy even to their own FFers, will only release awards NZ-AUS, nothing international. I predict that J and F awards on QF metal, on popular routes, will be as hard as ever to pick up, even at increased points cost.
    The new LTP is a bit of a laugh, but certain members wanted it, so here it is! Might be totally out of reach, but it now exists!

  25. There is actually suddenly better availability. Not looking to book but found J and F availability in early April on QF1 SYD – LHR (via SIN) despite being a lowly Bronze member. Others have found better availability to USA almost straight after this announcement. Points changes don’t occur til September so it might be a good time to book!

  26. As a foreigner (Canadian) who visits OZ at least once every18 months, I gave up my QANTAS frequent flier when they required annual activity or you lose your points. Switched over to Virgin Australia and am happy with them.

  27. @ Paolo, you have absolutely nailed it. I used to respect Alan Joyce when he took on the TWU, however these days he’s a publicity seeking tart that is more interested in PC than looking after his customers. As for LTP, why did they bother given Lucky’s analysis. As bad as BA is, at least they offer LTG (QF LTP equivalent) for 35000 SC. Qantas in my honest opinion is a one way airline, everything Qantas’s way. Many complain about VA but it offers a better product in all classes, looks after its Platinum’s better and doesn’t charge as much!

  28. @Ian Maclennan~ You only need one activity every 18 months. Seeing you claim to visit at least once in that time window it shouldn’t be hard to generate minimum activity. There is a myriad of ways to do this while out of the country also. There is a blog: Qantas Frequent Flyers Expired Points Action Group who go on about their expired points (although they like to refer to them as stolen) which may interest you.

  29. Speaking to three strengths of qantas frequent flyer its work pointing out how many airlines you can redeem for.

    All of oneworld plus Jetstar(s) ,Alaska, Hawaiian, Air Tahiti Nui, Air Niugini, el al, China eastern, China Southern Emirates, Air New Zealand, China Airlines, Bangkok Airways, and Air France-KLM.

    If you are prepared to accept the costs and some weird routings you can get where you want to go on Qantas Points in Business.

  30. @Josh~ You only need 4 QF flights per membership year if you are chasing status. Ian is only concerned about preserving his points.

  31. I tend to agree with @tim. One thing that could have been introduced is if you use points to upgrade or full FF tix, they should help you to maintain status. I not suggesting you get the points on a FF tix, but keep status. Similar to what I have experienced with the Hilton Honors program.

  32. @Paolo and @Howard are coming across as entitled Alan Jones supporters who know nothing about what they’re talking about.

    If they offered LTP at 35,000 “, it wouldn’t be exclusive like they want it to be. Keep in mind their only competitor in Australia doesn’t even off LTS. Anyway, move on. I’m sure QF can afford to lose you.

    Considering the profitably of the QFF program and the income it generates for QF, and people openly say QFF points is Australia’s second currency, they have a switched on member base. It’s no wonder they have such an expansive base of companies offering QF points to get people through the door.

    Apart from Velocity, earning points on other airline reward programs for Australian based passengers is a waste of time.

  33. Well written overview and analysis of the changes. I wish more Aussies realised how bad the Qantas carrier charges are, even after the changes. I wanted to shout my relatives a points trip in business or first from London to Thailand to get to a wedding, but it would have cost me 700 AUD per person EACH WAY (about 500 USD), excluding the ton of points also required.

  34. @ Tim

    If you are a member of the Chairman’s Lounge then your experiences are being dictated by that rather than your Platinum status.

    I would be enjoying that rarified privilege whilst you can – holding just Platinum may come with a large reality check!

    And on those changes FWIW the cash savings on a premium reward do not nearly offset the value of the points increases.

    To note that the operation (QF FF) running at greater than 30% profit margin must be taking the piss big time of its loyal members of QF FF and these changes will be seeking to increase that profit margin and thereby screw you all good folk even more!

    Typical QF smoke and mirrors whilst business essentials like actually answering the phone without a one hour wait so a customer can do business erode yet further under the mis-prioritsed stupidity of Joyce et al…

  35. Qantas is one of the worst airlines in the western world so why anyone would want to fly them is a mystery to me. Bad food, bad attitude and swapping crappy aircraft is standard.

    Bought J class seats MEL-AKL on their A330 lie flat. They swapped to a clapped out old 737 with 34″ upright partial reclining seats on an overnight flight. Inedible food on every flight unless grease is a food group.

    I kook at their reward chart. MEL-LAX for 216,800 miles plus $703 for J? You must be jesting!

    If you must fly QA then use Alaska Miles and hold your nose.

Leave a Reply

Your email address will not be published. Required fields are marked *