Value of frequent flyer points in question as some US airlines change their worth

Australia’s biggest airlines argue that unlike US carriers, they have not devalued frequent flyer points. Here’s what the experts say.

Loyalty programs are huge money spinners for airlines, generating hundreds of millions of dollars in earnings a year.

Australia’s biggest airlines argue frequent flyers are getting equal or better value from loyalty programs post-Covid, after a new report mapped out how US airlines have devalued points and miles in recent years to help boost profits.

The IdeaWorks Company examined the points needed for economy seats in 2024 and 2019, finding most of the big US airlines had raised the “cost” of redemptions by 28 per cent, or 7 per cent after inflation was taken into account.

As a result members of programs such as Alaska’s Mileage Plan and Delta’s SkyMiles were receiving less value for points upon redemption.

Similar accusations have been levelled at Qantas in the last year, even though the points needed for classic reward seats have in fact remained unchanged since 2019.

However frequent flyer experts said there was the perception points had been devalued, because of the increased difficulty in landing classic reward seats, on preferred routes.

Adele Eliseo of The Champagne Mile said Qantas was committed to releasing five million reward seats annually, a “ceiling” that was expected to remain in place even as membership continued to grow.

“With a current membership base of approximately 15 million, only about one-third of members are in a position to secure a seat each year, and it’s expected to get harder,” Ms Eliseo said.

“It’s also unclear how many of these five million reward seats are actually on popular long haul routes or in premium classes rather than the harder to fill domestic economy seats.”

Frequent flyer expert Adele Eliseo of The Champagne Mile.

Steve Hui of iflyflat.com.au agreed there was a widely-held belief that Qantas frequent flyer points had become less valuable.

“They haven’t changed the number of points needed to fly but the number of seats available seems to have declined, because more people are trying to get them,” Mr Hui said.

“That has probably become more apparent in recent years, after people kept accumulating points when there was little opportunity to fly, and then when they went to redeem them, they couldn’t find a seat on the route they wanted, or the cabin they wanted.”

Qantas revealed a record number of reward seats had been booked last year and the points earned on flights had not changed since 2014.

The airline was now in the process of “creating more opportunities for flight redemptions” in response to feedback from frequent flyers.

“It’s a significant investment that will deliver great value for members, but it also makes sense for the program and our partners,” a Qantas spokesman said.

Virgin Australia’s Velocity program did increase the points required for redemptions on selected “tier three seats” and business class last year but at the same time reduced the number of points for tier one seats, from 7800 to 6200.

Tier two seats remained unchanged.

Virgin indicated there had been a strong response to the overhaul, with a 40 per cent uplift in Velocity members redeeming flights with points.

On international routes with partner airlines, Virgin had seen almost 60 per cent growth in premium cabin redemptions.

Ms Eliseo said Virgin partner Singapore Airlines had increased the number of KrisFlyer points needed for redemptions, as had Qantas oneworld partner Cathay Pacific.

And Emirates flights booked via Qantas Frequent Flyer now carried higher charges payable on reward flights, particularly in premium cabins.

“As a result, while the points needed hasn’t changed, members are effectively needing to spend more to cover these additional costs,” Ms Eliseo said.

Originally published as Value of frequent flyer points in question as some US airlines change their worth